INVESTMENT ADVISORY AGREEMENT
Between
XXXXX XXXXXXX TRUST
on behalf of the Xxxxx Xxxxxxx Europe Fund
and
XXXXX XXXXXXX ASSOCIATES, INC.
INVESTMENT ADVISORY AGREEMENT dated June 29, 1998
between XXXXX XXXXXXX TRUST, a Massachusetts trust ("the
Trust"), on behalf of its Xxxxx Xxxxxxx Europe Fund series
(the "Portfolio"), and XXXXX XXXXXXX ASSOCIATES, INC., a
corporation organized and existing under the laws of the
State of Kansas (hereinafter called the "Manager").
W I T N E S S E T H:
Whereas, the Portfolio is engaged in business as an
open-end management investment company and has registered as
such under the federal Investment Company Act of 1940, as
amended (the "Act");
WHEREAS, the Manager is engaged principally in the
business of rendering investment management and
administrative services and is registered as an investment
adviser under the federal investment Advisers Act of 1940,
as amended; and
WHEREAS, the Portfolio wishes to engage the Manager to
provide certain investment management and administrative
services, and the Manager is willing to provide such
services, all on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises and
the mutual promises hereinafter set forth, the parties
hereto agree as follows:
1. Duties and Responsibilities of Manager.
A. Investment Advisory Services. The Manager shall
act as investment adviser to and shall supervise
and direct the investments of the Portfolio in
accordance with the Portfolio's investment
objectives, program and restrictions as provided
in the Portfolio's then current Registration
Statement under the Act, and such other directions
or limitations as the Portfolio may impose by
notice in writing to the Manager. The Manager
shall obtain and evaluate such information
relating to the economy, industries, businesses,
securities markets and securities as it may deem
necessary or useful in the discharge of its
obligations hereunder and shall formulate and
implement a continuing program for the management
of the assets and resources of the Portfolio in a
manner consistent with its investment objective.
The Manager shall for all purposes be deemed to be
an independent contractor and shall, except as
expressly provided or authorized (whether herein
or otherwise), have no authority to act for or
represent the Portfolio in any way or otherwise be
deemed an agent of the Portfolio.
In furtherance of its duties hereunder, the
Manager is authorized, in its discretion and
without prior consultation with the Portfolio, to:
(i) buy, sell, exchange, convert, lend, and
otherwise trade in any stocks, bonds, and
other securities; financial, stock, and stock
index futures and options; swap contracts or
other assets; and
(ii) directly place orders and negotiate the
commissions (if any) for the execution of
transactions in securities, financial
futures, swap contracts or other assets with
or through such brokers, dealers,
underwriters or issuers as the Manager may
select.
B. Administrative Services. Subject to the overall
authority of the Board of Trustees of the
Portfolio, the Manager shall provide general
administrative services and oversee the operation
of the Portfolio ("Administrative Services").
Such Administrative Services shall not include
investment advisory, custodial, underwriting and
distribution, transfer agency, shareholder or
accounting services, or the preparation and filing
of the Portfolio's tax returns, but shall include,
without limitation:
(i) the provision of office space and equipment
necessary in connection with the maintenance
of the headquarters of the Portfolio;
(ii) the maintenance of the books and records of
the Portfolio, and making arrangements for
the meetings of the Trustees of the Portfolio
including the preparation of agendas and
supporting materials therefore;
(iii) the preparation of communications and
reports to investors in the Portfolio and
making arrangements for meetings of such
investors;
(iv) the preparation and filing of all required
reports and all updating and other amendments
to the Portfolio's registration statement
under the Act and the rules and regulations
thereunder;
(v) the periodic computation and, as necessary,
reporting to the Trustees of the Portfolio of
the Portfolio's compliance with its
investment objective and policies with the
Portfolio diversification and other Portfolio
requirements of the Act and, to the extent
required, the Internal Revenue Code; and
(vi) the negotiation of agreements or other
arrangements with, and general oversight and
coordination of the activities of, agents and
others retained by the Portfolio to provide
custodial, net asset value computation,
Portfolio accounting, legal, tax and
accounting services.
It is understood that the Manager may, in its
discretion and at its expense, delegate some or
all of its administrative duties and
responsibilities under this Paragraph 1.B. to any
person provided that the Manager gives prior
notice to the Portfolio.
C. Reports to Portfolio. The Manager shall furnish
to or place at the disposal of the Portfolio such
information, reports, evaluations, analyses and
opinions relating to the Manager and its
investment management of the Portfolio's portfolio
securities as the Portfolio may, at any time or
from time to time, reasonably request or as the
Manager may deem helpful.
D. Reports and Other Communications to Investors.
The Manager shall assist the Portfolio in
providing communications to investors as may
reasonably be necessary.
E. Portfolio Personnel. The Manager will permit
individuals who are officers or employees of the
Manager to serve (if duly elected or appointed) as
officers, trustees, members of any committee of
trustees, members of any advisory board, or
members of any other committee of the Portfolio,
without remuneration or other cost to the
Portfolio.
F. Personnel, Office Space, and Facilities of
Manager. The Manager at its own expense shall
furnish or provide and pay the cost of such office
space, office equipment, office personnel, and
office services as the Manager requires in the
performance of its investment advisory,
administrative and other obligations under this
Agreement.
2. Allocation of Expenses.
A. Expenses Paid by Manager.
(i) Expenses Paid by Manager. The Manager shall
pay all salaries, expenses, and fees of the
officers and trustees of the Portfolio who
are employees of the Manager. The Manager is
not obligated to bear any other expenses
incidental to the operations and business of
the Portfolio.
(ii) Assumption of Expenses by Manager. The
payment or assumption by the Manager of any
expense of the Portfolio that the Manager is
not required by this Agreement to pay or
assume shall not obligate the Manager to pay
or assume the same or any similar expense on
any subsequent occasion.
B. Expenses Paid by Portfolio. The Portfolio shall
bear all expenses of its organization, operations,
and business not specifically assumed or agreed to
be paid by the Manager as provided in this
Agreement. In particular, but without limiting
the generality of the foregoing, the Portfolio
shall pay:
(i) Management Fees. the fees of the Manager as
provided in paragraph 3 below;
(ii) Custody and Accounting Services. All
expenses of the transfer, receipt,
safekeeping, servicing and accounting for the
cash, securities, and other property of the
Portfolio, including all charges of
depositories, custodians, and other agents,
if any;
(iii) Investor Servicing. All expenses of
establishing, maintaining and servicing
investor accounts, including all charges of
agents for account transfers, account record
keeping, and account distribution or
disbursement;
(iv) Distribution and Service Fees. The fees, if
any, payable pursuant to any plan heretofore
or hereafter adopted by the Portfolio
pursuant to Rule 12b-1 under the Act;
(v) Investor Meetings. All expenses incidental
to holding meetings of the Portfolio's
investors;
(vi) Pricing. All expenses of computing the
Portfolio's net asset value, including the
cost of any equipment or services used for
obtaining price quotations and the fees of
any independent pricing service authorized by
the Trustees of the Portfolio;
(vii) Communication Equipment. All charges
for equipment or services used for
communication between the Manager or the
Portfolio and the custodian, transfer agent
or any other agent selected by the Portfolio;
(viii) Legal, Accounting, and Tax Preparation
Fees and Expenses. All charges for services
and expenses of the Portfolio's legal counsel
and independent auditors;
(ix) Trustees' Fees and Expenses. All
compensation of Trustees of the Portfolio,
other than those who are interested persons
of the Portfolio, and all expenses (including
fees and disbursements of their legal
counsel) incurred in connection with their
service;
(x) Federal Registration Fees. All fees and
expenses of registering and maintaining the
registration of the Portfolio under the Act,
including all fees and expenses incurred in
connection with the preparation and filing of
any registration statement under the Act, and
any amendments or supplements that may be
made from time to time;
(xi) Bonding and Insurance. All expenses of bond,
liability, and other insurance coverage
required by law or deemed advisable by the
Trustees of the Portfolio;
(xii) Brokerage Commissions. All brokers'
commissions and other charges incident to the
purchase, sale, or lending of the Portfolio's
portfolio securities;
(xiii) Interest and Taxes. Interest on
borrowed money and all taxes or governmental
fees payable by or with respect to the
Portfolio to federal, state, or other
governmental agencies, domestic or foreign,
including stamp or other transfer taxes;
(xiv) Trade Association Fees. All fees, dues,
and other expenses incurred in connection
with the membership of the Portfolio in the
Investment Company Institute or any other
trade association or other investment
organization; and
(xv) Nonrecurring and Extraordinary Expenses.
Such nonrecurring expenses as may arise,
including the costs of actions, suits, or
proceedings to which the Portfolio is a party
and the expenses that the Portfolio may incur
as a result of its legal obligation to
provide indemnification to its officers,
trustees, employees and agents.
3. Management Fees. The Portfolio shall pay the Manager a
fee at an annual rate computed as follows based on the
value of the net assets of the Portfolio.
A. Method of Computation. The fee shall be accrued
for each calendar day and the sum of the daily fee
accruals shall be paid monthly to the Manager on
the first business day of the next succeeding
calendar month. The daily fee accruals will be
computed by multiplying the fraction of one over
the number of calendar days in the year by 0.70%,
and multiplying the resulting product by the net
assets of the Portfolio as determined in
accordance with the Portfolio's Registration
Statement under the Act as of the close of
business on the previous business day on which the
Portfolio was open for business.
B. Proration of Fee. If this Agreement becomes
effective or terminates before the end of any
calendar month, the fee for the period from the
effective date to the end of such calendar month
or from the beginning of such calendar month to
the date of termination, as the case may be, shall
be prorated according to the proportion which such
period bears to the full month in which such
effectiveness or termination occurs.
8. Limitation of Portfolio's Normal Business Expenses. In
the event that expenses of the Portfolio for any fiscal year
(not including any distribution expenses paid by the
Portfolio pursuant to any distribution plan) should exceed
the expense limitation on investment company expenses
enforced by any statute or regulatory authority of any
jurisdiction in which shares of the Trust are qualified for
offer and sale, the compensation due the Manager for such
fiscal year shall be reduced by the amount of such excess by
a reduction or refund thereof. In the event that the
expenses of the Portfolio exceed any expense limitation
which the Manager may, by written notice to the Trust,
voluntarily declare to be effective with respect to the
Portfolio, subject to such terms and conditions as the
Manager may prescribe in such notice, the compensation due
the Manager shall be reduced, and, if necessary, the Manager
shall bear the Portfolio's expenses to the extent required
by such expense limitation.
9. Brokerage. In the selection of brokers or dealers and
the placing of orders for the purchase and sale of portfolio
investments for the Portfolio, the Manager shall seek to
obtain the most favorable price and execution available,
except to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research services as
described below. In using its best efforts to obtain for
the Portfolio the most favorable price and execution
available, the Manager, bearing in mind the Portfolio 's
best interests at all times, shall consider all factors it
deems relevant, including, by way of illustration, price,
the size of the transaction, the nature of the market for
the security, the amount of the commission, the timing of
the transaction taking into account market prices and
trends, the reputation, experience and financial stability
of the broker or dealer involved and the quality of service
rendered by the broker or dealer in other transactions.
Subject to such policies as the Trustees may determine, the
Manager shall not be deemed to have acted unlawfully or to
have breached any duty created by this Contract or otherwise
solely by reason of its having caused the Trust to pay, on
behalf of the Portfolio, a broker or dealer that provides
brokerage and research services to the Manager an amount of
commission for effecting a portfolio investment transaction
in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction, if
the Manager determines in good faith that such amount of
commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or
dealer, viewed in terms of either that particular
transaction or the Manager's overall responsibilities with
respect to the Portfolio and to other clients of the
Manager as to which the Manager exercises investment
discretion. The Trust hereby agrees with the Manager that
any entity or person associated with the Manager which is a
member of a national securities exchange is authorized to
effect any transaction on such exchange for the account of
the Portfolio which is permitted by Section 11(a) of the
Securities Exchange Act of 1934 and Rule 11a-2-2(T)
thereunder, and the Trust hereby consents to the retention
of compensation for such transactions in accordance with
Rule 11a2-2(T)(2)(iv).
6. Manager's Use of the Services of Others. The Manager
may (at its cost except as contemplated by Paragraph 5
of this Agreement) employ, retain or otherwise avail
itself of the services or facilities of other persons
or organizations for the purpose of providing the
Manager or the Portfolio with such statistical and
other factual information, such advice regarding
economic factors and trends, such advice as to
occasional transactions in specific securities or such
other information, advise or assistance as the Manager
may deem necessary, appropriate or convenient for the
discharge of its obligations hereunder or otherwise
helpful to the Portfolio or in the discharge of the
Manager's overall responsibility with respect to other
accounts which it serves as investment adviser or
manager.
7. Ownership of Records. All records required to be
maintained and preserved by the Portfolio pursuant to
the rules or regulations of the Securities and Exchange
Commission under Section 31(a) of the Act and
maintained and preserved by the manager on behalf of
the Portfolio are the property of the Portfolio and
will be surrendered by the Manager promptly on request
by the Portfolio. The Manager may retain, for itself,
copies of all such records.
8. Reports to Manager. The Portfolio shall furnish or
otherwise make available to the Manager such
prospectuses, financial statements, proxy statements,
reports, and other information relating to the business
and affairs of the Portfolio as the Manager may, at any
time or from time to time, reasonably require in order
to discharge its obligations under this Agreement.
9. Other Agreements, Etc. It is understood that any of
the shareholders, Trustees, officers and employees of
the Trust may be a shareholder, director, officer or
employee of, or be otherwise interested in, the
Manager, and in any person controlled by or under
common control with the Manager, and that the Manager
and any person controlled by or under common control
with the Manager may have an interest in the Trust. It
is also understood that the Manager and persons
controlled by or under common control with the Manager
have and may have advisory, management service,
distribution or other contracts with other
organizations and persons, and may have other interests
and businesses.
10. Limitation of Liability of Manager. Neither the
Manager nor any of its officers, directors,
stockholders (or partners of stockholders), agents or
employees, nor any person performing executive,
administrative, trading, or other functions for the
Portfolio (at the direction or request of the manager)
or the Manager in connection with the Manager's
discharge of its obligation undertaken or reasonably
assumed with respect to this Agreement, shall be liable
for any error of judgment or mistake of law or for any
loss suffered by the Portfolio in connection with the
matters to which this Agreement relates, except for
loss resulting from willful misfeasance, bad faith, or
gross negligence in the performance of its or his
duties on behalf of the Portfolio or from reckless
disregard by the Manager or any such person of the
duties of the Manager under this Agreement.
11. Limitation of Liability of Portfolio. The term "Xxxxx
Xxxxxxx Trust" means and refers to the trustees from
time to time serving under the Declaration of Trust of
the Trust dated December 18, 1991, as the same may
subsequently thereto have been, or subsequently hereto
be, amended (the "Declaration of Trust"). It is
expressly agreed that the obligations of the Portfolio
hereunder shall not be binding upon any of the
trustees, shareholders, nominees, officers, agents or
employees of the Portfolio personally, but shall bind
only the trust property of the Portfolio, as provided
in the Declaration of Trust of the Portfolio. The
execution and delivery of this Agreement have been
authorized by the trustees and shareholders of the
Portfolio and this Agreement has been signed by an
authorized officer of the Portfolio, acting as such,
and neither such authorization by such trustees and
shareholders nor such execution and delivery by such
officer shall be deemed to have been made by any of
them but shall bind only the trust property of the
Portfolio as provided in its Declaration of Trust.
12. Use of Name. The Manager owns the name "Xxxxx
Xxxxxxx," which may be used by the Trust only with the
consent of the Manager. The Manager consents to the
use by the Trust of the name "Xxxxx Xxxxxxx Funds" or
any other name embodying the name "Xxxxx Xxxxxxx," but
only on the condition and so long as (i) this Agreement
shall remain in full force, (ii) the Trust shall fully
perform, fulfill and comply with all provisions of this
Agreement expressed herein to be performed, fulfilled
or complied with by it, and (iii) Xxxxx Xxxxxxx
Associates, Inc. is the Manager of the Trust. No such
name shall be used by the Trust at any time or in any
place or for any purposes or under any conditions
except as in this section provided. The foregoing
authorization by the Manager to the Trust to use the
name "Xxxxx Xxxxxxx" as a part of a business or name is
not exclusive of the right of the Manager itself to
use, or to authorize others to use, the same; the Trust
acknowledges and agrees that as between the Manager and
the Trust, the Manager has the exclusive right so to
use, or authorize others to use, said name, and the
Trust agrees to take such action as may reasonably be
requested by the Manager to give full effect to the
provisions of this section (including, without
limitation, consenting to such use of said name).
Without limiting the generality of the foregoing, the
Trust agrees that, upon (i) any termination of this
Agreement by either party, (ii) the violation of any of
its provisions by the Trust or (iii) termination of
this Investment Advisory Agreement between Xxxxx
Xxxxxxx Associates, Inc. and the Trust, the Trust will,
at the request of the Manager made within six months
after such termination or violation, use its best
efforts to change the name of the Trust so as to
eliminate all reference, if any, to the name "Xxxxx
Xxxxxxx" and will not thereafter transact any business
in a name containing the name "Xxxxx Xxxxxxx" in any
form or combination whatsoever, or designate itself as
the same entity as or successor to an entity of such
name, or otherwise use the name "Xxxxx Xxxxxxx" or any
other reference to the Manager. Such covenants on the
part of the Trust shall be binding upon it, its
Trustees, officers, stockholders, creditors and all
other persons claiming under or through it.
13. Term of Agreement. The term of this Agreement shall
begin on the date first above written, and unless
sooner terminated as hereinafter provided, this
Agreement shall remain in effect until July 31, 2000.
Thereafter, this Agreement shall continue in effect
from year to year, subject to the termination
provisions and all other terms and conditions hereof,
so long as such continuation shall be specifically
approved at least annually (a) by either the Board of
Trustees of the Portfolio, or by vote of a majority of
the outstanding voting securities of the Portfolio, and
(b) in either event by the vote, cast in person at a
meeting called for the purpose of voting on such
approval, of a majority of the Trustees of the
Portfolio who are not interested persons of the Trust
or the Manager; provided, however, that if the
continuance of this Agreement is submitted to the
shareholders of the Portfolio for their approval and
such shareholders fail to approve such continuance of
this Contract as provided herein, the Manager may
continue to serve hereunder in a manner consistent with
the Investment Company Act of 1940 and the rules and
regulations thereunder. The Manager shall furnish to
the Portfolio, promptly upon its request, such
information as may reasonably be necessary to evaluate
the terms of this Agreement or any extension, renewal
or amendment hereof.
14. Amendment and Assignment of Agreement. This Agreement
may not be amended in any material respect or assigned
without the affirmative vote of a majority of the
outstanding voting securities of the Portfolio, and
this Agreement shall automatically and immediately
terminate in the event of its assignment.
15. Termination of Agreement. This Agreement may be
terminated by either party hereto, without the payment
of any penalty, upon 60 days' prior notice in writing
to the other party; provided, that in the case of
termination by the Portfolio, such action shall have
been authorized by resolution of a majority of the
Trustees of the Portfolio who are not parties to this
Agreement or interested persons of any such party, or
by vote of a majority of the outstanding voting
securities of the Portfolio.
16. Miscellaneous.
A. Captions. The captions in this Agreement are
included for convenience of reference only and in
no way define or delineate any of the provisions
hereof or otherwise affect their construction or
effect.
B. Interpretation. Nothing herein contained shall be
deemed to require the Portfolio to take any action
contrary to its Declaration of Trust or By-Laws,
or any applicable statutory or regulatory
requirement to which it is subject or by which it
is bound, or to relieve or deprive the Board of
Trustees of the Portfolio of its responsibility
for and control of the conduct of the affairs of
the Portfolio. This Agreement shall be construed
and enforced in accordance with and governed by
the laws of The Commonwealth of Massachusetts.
C. Definitions. For the purposes of this Agreement,
the "affirmative vote of a majority of the
outstanding shares" of the Portfolio means the
affirmative vote, at a duly called and held
meeting of shareholders, (a) of the holders of 67%
or more of the shares of the Portfolio present (in
person or by proxy) and entitled to vote as such
meeting, if the holders of more than 50% of the
outstanding shares of the Portfolio entitled to
vote at such meeting are present in person or by
proxy, or (b) of the holders of more than 50% of
the outstanding shares of the Portfolio entitled
to vote at such meeting, whichever is less.
For the purposes of this Agreement, the terms
"affiliated person," "interested person" and
"assignment" shall have their respective meanings
defined in the Investment Company Act of 1940 and
the rules and regulations thereunder, subject,
however, to such exemptions as may be granted by
the Securities and Exchange Commission under said
Act; the term "specifically approve at least
annually" shall be construed in a manner
consistent with the Investment Company Act of 1940
and the rules and regulations thereunder; and the
term "brokerage and research services" shall have
the meaning given in the Securities Exchange Act
of 1934 and the rules and regulations thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their respective officers
thereunto duly authorized and their respective corporate
seals to be hereunto affixed, as of the date and year first
above written.
XXXXX XXXXXXX TRUST
(on behalf Xxxxx Xxxxxxx
Europe Fund)
Attest: By:
XXXXX XXXXXXX ASSOCIATES, INC.
Attest: By:
