EXHIBIT (d)
KIRR, XXXXXXX PARTNERS FUNDS, INC.
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is entered into as of the 26th day of July, 2002,
between Kirr, Xxxxxxx Partners Funds, Inc., a Maryland corporation (the
"Corporation") and Kirr, Xxxxxxx & Company, LLC, an Indiana limited liability
company (the "Adviser").
W I T N E S S E T H
WHEREAS, the Corporation is an open-end investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"). The
Corporation is authorized to create separate series, each with its own separate
investment portfolio (the "Funds"), and the beneficial interest in each such
series will be represented by a separate series of shares (the "Shares").
WHEREAS, the Adviser is a registered investment adviser, engaged in the
business of rendering investment advisory services.
WHEREAS, in managing the Corporation's assets, as well as in the
conduct of certain of its affairs, the Corporation seeks the benefit of the
Adviser's services and its assistance in performing certain managerial
functions. The Adviser desires to furnish such services and to perform the
functions assigned to it under this Agreement for the consideration provided for
herein.
NOW THEREFORE, the parties mutually agree as follows:
1. APPOINTMENT OF THE ADVISER . The Corporation hereby appoints
the Adviser as investment adviser for each of the Funds of the Corporation on
whose behalf the Corporation executes an Exhibit to this Agreement, and the
Adviser, by execution of each such Exhibit, accepts the appointments. Subject to
the direction of the Board of Directors (the "Directors") of the Corporation,
the Adviser shall manage the investment and reinvestment of the assets of each
Fund in accordance with the Fund's investment objective and policies and
limitations, for the period and upon the terms herein set forth. The investment
of funds shall also be subject to all applicable restrictions of the Articles of
Incorporation and By-Laws of the Corporation as may from time to time be in
force.
2. EXPENSES PAID BY THE ADVISER. In addition to the expenses
which the Adviser may incur in the performance of its responsibilities under
this Agreement, and the expenses which it may expressly undertake to incur and
pay, the Adviser shall incur and pay all reasonable compensation, fees and
related expenses of the Corporation's officers and its Directors, except for
such Directors who are not interested persons (as that term is defined in
Section 2(a)(l9) of the 0000 Xxx) of the Adviser, and all expenses related to
the rental and maintenance of the principal offices of the Corporation.
3. INVESTMENT ADVISORY FUNCTIONS. In its capacity as investment
adviser, the Adviser shall have the following responsibilities:
(a) To furnish continuous advice and recommendations to
the Funds, as to the acquisition, holding or disposition of any or all of the
securities or other assets which the Funds may own or contemplate acquiring from
time to time;
(b) To cause its officers to attend meetings and furnish
oral or written reports as the Corporation may reasonably require, in order to
keep the Directors and appropriate officers of the Corporation fully informed as
to the condition of the investments of the Funds, the investment recommendations
of the Adviser, and the investment considerations which have given rise to those
recommendations; and
(c) To supervise the purchase and sale of securities or
other assets as directed by the appropriate officers of the Corporation.
The services of the Adviser are not to be deemed exclusive and the Adviser shall
be free to render similar services to others as long as its services for others
does not in any way hinder, preclude or prevent the Adviser from performing its
duties and obligations under this Agreement. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties hereunder on the part of the Adviser, the Adviser shall not be subject to
liability to the Corporation, the Funds, or to any shareholder for any act or
omission in the course of, or in connection with, rendering services hereunder
or for any losses that may be sustained in the purchase, holding or sale of any
security.
4. OBLIGATIONS OF THE CORPORATION. The Corporation shall have the
following obligations under this Agreement:
(a) To keep the Adviser continuously and fully informed
as to the composition of the Funds' investments and the nature of all of their
respective assets and liabilities;
(b) To furnish the Adviser with a copy of any financial
statement or report prepared for it by certified or independent public
accountants, and with copies of any financial statements or reports made to the
Funds' shareholders or to any governmental body or securities exchange;
(c) To furnish the Adviser with any further materials or
information which the Adviser may reasonably request to enable it to perform its
functions under this Agreement; and
(d) To compensate the Adviser for its services in
accordance with the provisions of paragraph 5 hereof.
5. COMPENSATION. The Corporation will pay the Adviser a fee for
its services with respect to each Fund (the "'Advisory Fee") at the annual rate
set forth on the Exhibit(s) hereto. The Advisory Fee shall be accrued each
calendar day during the term of this Agreement and the sum of the daily fee
accruals shall be paid monthly as soon as practicable following the last day of
each month. The daily fee accruals will be computed by multiplying 1/365 by the
annual rate and multiplying the product by the net asset value of the Fund as
determined in accordance with the Corporation's registration statement as of the
close of business on the previous day on which the Fund was open for business,
or in such other manner as the parties agree. The Adviser may
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from time to time and for such periods as it deems appropriate or for such time
and to the extent agreed on Exhibit A for a Fund reduce its compensation and/or
assume expenses for one or more of the Funds (including initial organization
costs); provided, however, that with respect to any agreement set forth on
Exhibit A the Adviser shall be entitled to recoup such amounts for a period of
up to three (3) years from the date such amount was reduced or assumed.
6. EXPENSES PAID BY CORPORATION.
(a) Except as provided in this paragraph, nothing in this
Agreement shall be construed to impose upon the Adviser the obligation to incur,
pay, or reimburse the Corporation for any expenses not specifically assumed by
the Adviser under paragraph 2 above. Each Fund shall pay or cause to be paid all
of its expenses and the Fund's allocable share of the Corporation's expenses,
including, but not limited to, investment adviser fees; any compensation, fees,
or reimbursements which the Corporation pays to its Directors who are not
interested persons (as that phrase is defined in Section 2(a)(l9) of the 0000
Xxx) of the Adviser; fees and expenses of the custodian, transfer agent,
registrar or dividend disbursing agent; current legal, accounting and printing
expenses; administrative, clerical, recordkeeping and bookkeeping expenses;
brokerage commissions and all other expenses in connection with the execution of
Fund transactions; interest; all federal, state and local taxes (including
stamp, excise, income and franchise taxes); expenses of shareholders' meetings
and of preparing, printing and distributing proxy statements, notices and
reports to shareholders; expenses of preparing and filing reports and tax
returns with federal and state regulatory authorities; and all expenses incurred
in complying with all federal and state laws and the laws of any foreign country
applicable to the issue, offer, or sale of Shares of the Funds, including but
not limited to, all costs involved in the registration or qualification of
Shares of the Funds for sale in any jurisdiction and all costs involved in
preparing, printing and distributing prospectuses and statements of additional
information to existing shareholders of the Funds.
(b) If expenses borne by a Fund in any fiscal year
(including the Adviser's fee, but excluding taxes, interest, brokerage
commissions, Rule 12b-1 expenses and similar fees) exceed those set forth in any
statutory or regulatory formula applicable to a Fund, the Adviser will reimburse
the Fund for any excess.
7. BROKERAGE COMMISSIONS. For purposes of this Agreement,
brokerage commissions paid by a Fund upon the purchase or sale of securities
shall be considered a cost of the securities of the Fund and shall be paid by
the respective Fund. The Adviser is authorized and directed to place Fund
transactions only with brokers and dealers who render satisfactory service in
the execution of orders at the most favorable prices and at reasonable
commission rates; provided, however, that the Adviser may pay a broker or dealer
an amount of commission for effecting a securities transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction, if the Adviser 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 overall responsibilities of the Adviser. In
placing Fund business with such broker or dealers, the Adviser shall seek the
best execution of each transaction, and all such brokerage placement shall be
made in compliance with Section 28(e) of the Securities Exchange Act of 1934, as
amended, and other applicable state and federal laws. Notwithstanding the
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foregoing, the Corporation shall retain the right to direct the placement of all
Fund transactions, and the Directors may establish policies or guidelines to be
followed by the Adviser in placing Fund transactions for the Funds pursuant to
the foregoing provisions.
8. PROPRIETARY RIGHTS. The Adviser has proprietary rights in each
Fund's name and the Corporation's name. The Corporation acknowledges and agrees
that the Adviser may withdraw the use of such names from the Funds or the
Corporation should it cease to act as the investment adviser to any Fund.
9. TERMINATION. This Agreement may be terminated at any time,
without penalty, by the Directors of the Corporation or by the shareholders of a
Fund acting by the vote of at least a majority of its outstanding voting
securities (as that phrase is defined in Section 2(a)(42) of the 1940 Act),
provided in either case that 60 days' written notice of termination be given to
the Adviser at its principal place of business. This Agreement may also be
terminated by the Adviser at any time by giving 60 days' written notice of
termination to the Corporation, addressed to its principal place of business.
10. ASSIGNMENT. This Agreement shall terminate automatically in
the event of any assignment (within the meaning of Section 2(a)(4) of the 0000
Xxx) of this Agreement.
11. TERM. This Agreement shall begin for each Fund as of the date
of execution of the applicable Exhibit and shall continue in effect with respect
to each Fund (and any subsequent Funds added pursuant to an Exhibit during the
initial term of this Agreement) for two years from the date of the applicable
Exhibit (or such shorter period indicated therein) and thereafter for successive
periods of one year, subject to the provisions for termination and all of the
other terms and conditions hereof if such continuation shall be specifically
approved at least annually (i) by the vote of a majority of the Directors of the
Corporation, including a majority of the Directors who are not parties to this
Agreement or "interested persons" of any such party (as defined in the 1940
Act), cast in person at a meeting called for that purpose or (ii) by the vote of
a majority of the outstanding voting securities (as that phrase is defined in
Section 2(a)(42) of the 0000 Xxx) of each Fund.
12. AMENDMENTS. This Agreement may be amended by the mutual
consent of the parties, provided that the terms of each such amendment shall be
approved by the Directors or by the affirmative vote of a majority of the
outstanding voting securities (as that phrase is defined in Section 2(a)(42) of
the 0000 Xxx) of each Fund.
13. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Indiana,
provided, however that nothing herein shall be construed in a manner that is
inconsistent with the 1940 Act, the Investment Advisers Act of 1940, as amended,
or the rules and regulations promulgated with respect to such respective Acts.
This Agreement will become binding on the parties hereto upon their
execution of the Exhibit(s) to this Agreement.
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EXHIBIT A
to the
Investment Advisory Agreement
KIRR, XXXXXXX PARTNERS VALUE FUND
For all services rendered by the Adviser hereunder, the Corporation
shall pay the Adviser, on behalf of the above-named Fund, and the Adviser agrees
to accept as full compensation for all services rendered hereunder, an annual
investment advisory fee equal to 1.00% of the average daily net assets of the
Fund.
The Adviser hereby agrees that until February 28, 2003, the Adviser
will waive its fees and/or reimburse the Fund's operating expenses to the extent
necessary to ensure that the Fund's total operating expenses (on an annual
basis) do not exceed 1.50% of its average daily net assets, subject to possible
later recoupment as provided in Section 5.
The annual investment advisory fee shall be accrued daily at the rate
of 1/365th of 1.00% applied to the daily net assets of the Fund. The advisory
fee so accrued shall be paid by the Corporation to the Adviser monthly.
The initial term of this Agreement shall be until December 31, 2002 and
shall be subject to the annual approval requirements set forth in Section 11.
Executed as of this 26th day of July, 2002.
THE ADVISER:
KIRR, XXXXXXX & COMPANY, LLC
By: /Xxxxxx Xxx/
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Xxxxxx Xxx, Chief Operating Officer
THE CORPORATION:
KIRR, XXXXXXX PARTNERS FUNDS, INC.
By: /Xxxx X. Xxxxxx/
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Xxxx X. Xxxxxx, President
