EXHIBIT (d)(2)
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, is made and entered into this ____th day of ______,
1999, by and between American Eagle Twenty Fund (the "Fund"), a separately
managed series of American Eagle Funds, Inc., a Minnesota corporation (the
"Company"), and Xxxxx Associates, Inc., a Minnesota corporation (the
"Adviser").
1. INVESTMENT ADVISORY SERVICES
The Company, for and on behalf of the Fund, hereby engages the
Adviser, and the Adviser hereby agrees to act as investment adviser for, and
to manage the affairs, business and the investment of the assets of the Fund.
The investment of the assets of the Fund shall at all times be
subject to the applicable provisions of the Company's Articles of
Incorporation, By-Laws and Registration Statement on Form N-1A and any
representations contained in the Prospectus and Statement of Additional
Information of the Fund and shall conform to the policies and purposes of the
Fund as set forth in such Registration Statement and Prospectus and Statement
of Additional Information and (i) as interpreted from time to time by the
Board of Directors of the Company and (ii) as may be amended from time to
time by the Board of Directors of the Company and/or the shareholders of the
Fund as permitted by the Investment Company Act of 1940 and the rules and
regulations promulgated thereunder, as now enacted, promulgated or hereafter
amended (collectively, the "Investment Company Act"). Within the framework of
the investment policies of the Fund, the Adviser shall have the sole and
exclusive responsibility for the management of the Fund's assets and making
and execution of all investment decisions for the Fund. The Adviser shall
report to the Board of Directors of the Company regularly at such times and
in such detail as the Board may from time to time determine to be
appropriate, in order to permit the Board to determine the adherence of the
Adviser to the investment policies of the Fund.
The Adviser shall, at its own expense, furnish the Fund with suitable
office space, and all necessary office facilities, equipment and personnel for
servicing the investments of the Fund. The Adviser shall arrange, if requested
by the Fund, for officers, employees or other Affiliated Persons (as defined in
Section 2(a)(3) of the Investment Company Act) of the Adviser to serve without
compensation from the Fund as directors, officers, or employees of the Company
if duly elected to such positions by the shareholders or directors of the
Company.
The Adviser hereby acknowledges that all records necessary in the
operation of the Fund, including records pertaining to its shareholders and
investments, are the property of the Fund, and in the event that a transfer of
management or investment advisory services to someone other than the Adviser
should ever occur, the Adviser will promptly, and at its own cost, take all
steps necessary to segregate such records and deliver them to the Fund.
2. COMPENSATION FOR SERVICES
In payment for all services, facilities, equipment and personnel, and
for other costs of the Adviser hereunder, the Fund shall pay to the Adviser a
monthly investment advisory fee determined by applying the annual rate of 1.30%
to the Fund's average daily net assets.
For purposes of the calculation of such fee, the Fund's net assets
shall be computed at the times and in the manner specified in the Company's
Registration Statement on Form N-1A. Such fee shall be
payable on the fifth day of each calendar month for service performed
hereunder during the preceding month. The fee applicable during the first and
last months that this Agreement is in effect shall be prorated according to
the proportion which such portion of the month bears to the full month.
3. ALLOCATION OF EXPENSES
In addition to the fees described in Section 2 hereof, the Fund
shall pay all its expenses which are not assumed by the Adviser in its
capacity as the Fund's investment adviser. These Fund expenses include, by
way of example, but not by way of limitation, (a) brokerage and commission
expenses; (b) interest charges on borrowings; (c) fees and expenses of legal
counsel and independent auditors; (d) the Fund's organizational and offering
expenses, whether or not advanced by the Adviser; (e) federal, state, local
and foreign taxes, including issue and transfer taxes incurred by or levied
on the Fund; (f) cost of certificates representing common shares of the Fund
and any other expenses (including clerical expenses) of issuance, sale or
repurchase of the common shares of the Fund; (g) association membership dues;
(h) fees and expenses of registering and making notice filings with respect
to the Fund's shares under the appropriate federal and state securities laws;
(i) expenses of printing and distributing reports, notices and proxy
materials to shareholders; (j) costs of annual and special shareholders'
meetings; (k) expenses of filing reports and other documents with
governmental agencies; (l) charges and expenses of the Fund's administrator,
custodian, registrar, transfer agent and dividend disbursing agent; (m)
expenses of disbursing dividends and distributions; (n) compensation of the
Fund's officers, directors and employees that are not Affiliated Persons or
Interested Persons (as defined in Section 2(a) of the Investment Company Act)
of the Adviser; (o) the cost of other personnel providing services to the
Fund; (p) travel expenses for attendance of Board of Directors meetings by
all members of the Board of Directors of the Fund; (q) insurance expenses;
(r) costs of stationery and supplies; and (s) any extraordinary expenses of a
nonrecurring nature.
4. FREEDOM TO DEAL WITH THIRD PARTIES
The Adviser shall be free to render services to others similar to
those rendered under this Agreement or of a different nature except as such
services may conflict with the services to be rendered or the duties to be
assumed hereunder.
5. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT
This Agreement shall become effective as of the day and date first
above written (the "Effective Date"). Wherever referred to in this Agreement,
the vote or approval of the holders of a majority of the outstanding shares
of the Fund shall mean the vote of 67% or more of such shares if the holders
of more than 50% of such shares are present in person or by proxy or the vote
of more than 50% of such shares, whichever is less.
Unless sooner terminated as hereinafter provided, this Agreement
shall continue in effect through November 4, 2001, and thereafter shall
continue in effect for successive periods of 12 months thereafter, provided
that each continuance is specifically approved annually by (a) the vote of a
majority of the Company's Board of Directors who are not parties to the
Agreement or interested persons (as defined in the Investment Company Act) of
the Company or the Adviser, cast in person at a meeting called for the
purpose of voting on approval and (b) either (i) the vote of a majority of
the outstanding voting securities of the Fund or (ii) the vote of a majority
of the Company's Board of Directors.
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This Agreement may be terminated at any time without the payment of any
penalty by the vote of the Board of Directors of the Company or by the vote of
the holders of a majority of the outstanding shares of the Fund, upon sixty (60)
days written notice to the Adviser. The Adviser may terminate this Agreement
without penalty on ninety (90) days written notice to the Company. This
Agreement shall automatically terminate in the event of its assignment as
defined in the Investment Company Act. This Agreement shall automatically
terminate upon completion of the dissolution, liquidation and winding up of the
Fund.
6. LIMITATION OF LIABILITY
The Adviser will not be liable for any error of judgment or mistake of
law or for any loss suffered by the Fund or its shareholders in connection with
the performance of its duties under this Agreement, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its duties under
this Agreement.
7. AMENDMENTS TO AGREEMENT
No material amendment to this Agreement shall be effective until
approved by vote of the holders of a majority of the outstanding shares of the
Fund.
8. NOTICES
Any notice under this Agreement shall be in writing, addressed,
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate in writing for receipt of such notice.
9. NAME
The Fund may use "American Eagle" as part of its name for so long as
the Adviser serves as investment adviser to the Fund. The Adviser may at any
time permit others, including companies registered under the Investment Company
Act to use the name "American Eagle".
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IN WITNESS WHEREOF, the Company and the Adviser have caused this
Agreement to be executed by their duly authorized officers as of the day and
year first above written.
AMERICAN EAGLE FUNDS, INC.
By: ________________________
Its: _______________________
XXXXX ASSOCIATES, INC.
By: ________________________
Its: _______________________
