Exhibit (d)
INVESTMENT MANAGEMENT AGREEMENT
XXXXXX CAPITAL APPRECIATION FUND
A SERIES OF THE XXXXXXXXXX FUNDS
February 23, 1993
Xxxxxx Capital Advisors, Inc.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The Xxxxxxxxxx Funds (the "Trust"), a business trust created pursuant
to a declaration of trust ("Declaration of Trust") under the laws of the
Commonwealth of Massachusetts, herewith enters into the following agreement with
Xxxxxx Capital Advisors, Inc. ("Xxxxxx"), a wholly-owned subsidiary of
Xxxxxxxxxx-Xxxxx Holdings, Inc. ("FVH") on behalf of Xxxxxx Capital Appreciation
Fund (the "Fund"), a series of shares of the Trust, as follows:
1. Investment Description; Appointments
------------------------------------
The Trust desires the Fund to employ its capital by investing and
reinvesting in investments of the kind and in accordance with the limitations
specified in the Declaration of Trust of the Trust and in the Fund's Prospectus
and Statement of Additional Information as from time to time in effect, and in
such manner and to such extent as may from time to time be approved by the Board
of Trustees of the Trust. Copies of the Fund's Prospectus and Statement of
Additional Information and of the Declaration of Trust of the Trust, as amended,
have been or will be submitted to Xxxxxx. The Trust desires to employ and
hereby appoints Xxxxxx to act as investment manager to its the Fund. Xxxxxx
accepts the appointment and agrees to furnish the services set forth below for
the compensation set forth below.
2. Services as Investment Manager
------------------------------
Subject to the supervision and direction of the Board of Trustees of
the Trust, Xxxxxx will (a) act in strict conformity with the Trust's Declaration
of Trust and by-laws, the Investment Company Act of 1940 (the "Act") and the
Investment Advisers Act of 1940, as the same may from time to time be amended;
(b) manage the Fund in accordance with the Fund's investment objective and
policies as stated in the Fund's Prospectus and its Statement of Additional
Information as from time to time in effect; (c) make general investment
decisions for
the Fund including decisions concerning (i) the specific types of
securities to be held by the Fund and the proportion of the Fund's assets to be
allocated to such investments during particular market cycles and (ii) the
specific issuers whose securities will be purchased or sold by the Fund; (d)
supply office facilities for the above services; and (e) with respect to the
Fund's investments, supply statistical and research data; data processing
services; clerical, accounting and bookkeeping services; and stationery and
office supplies. In providing those services, Xxxxxx will supervise the Fund's
investments generally and conduct a continual program of evaluation of the
Fund's assets.
It is agreed that Xxxxxx, in connection with the performance of its
duties under this Agreement, will from time to time employ or associate with
itself such person or persons as Xxxxxx may believe to be particularly fitted to
assist it in the performance of this Agreement with the compensation of such
person or persons to be paid by Xxxxxx and that the Trust will incur no
obligation for such compensation. Xxxxxx, a corporation formed under the laws
of the state of New York, will notify the Trust of any change in its ownership
or in its senior management with responsibilities for investment management
within a reasonable time after such change.
3. Information Provided to the Trust; Books and Records
--------------------------------------------- -------
(a) Xxxxxx will keep the Trust informed of developments materially
affecting the Fund, and will, on its own initiative, furnish the Trust from time
to time with whatever information Xxxxxx believes is appropriate for this
purpose.
(b) In compliance with the requirements of Rule 31a-3 under the
Investment Company Act of 1940, Xxxxxx hereby agrees that all records which it
maintains for the Trust and the Fund are the property of the Trust and further
agrees to surrender promptly to the Trust any of such records upon the Trust's
request.
4. Standard of Care
----------------
Xxxxxx shall exercise its best judgment in rendering the services
listed in paragraph 2 above. Xxxxxx shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust or the Fund in
connection with the matters to which this Agreement relates, provided that
nothing herein shall be deemed to protect or purport to protect Xxxxxx against
any liability to the Trust or the Fund or to its shareholders to which Xxxxxx
would otherwise be subject by reason
2
of willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of Xxxxxx'x reckless disregard of its
obligations and duties under this Agreement.
Any person who, even though also an officer, employee, or agent of
Xxxxxx, may be or become a trustee, officer, employee or agent of the Trust
shall be deemed, when rendering services to the Trust or acting on any business
of the Trust, to be rendering such services to or acting solely for the Trust
and not as a director, officer, employee, or agent of, or one under the control
or direction of, Xxxxxx even though paid by Xxxxxx.
5. Compensation
------------
In consideration of the services rendered pursuant to this Agreement,
the Trust will pay Xxxxxx on the first business day of each quarter a fee for
the previous quarter, calculated daily, at the annual rate of 1.00% of the
Fund's average daily net assets on the first $25,000,000.00 of average daily net
assets, and 0.75% of the Fund's average daily net assets in excess of
$25,000,000.00. Upon any termination of this Agreement before the end of a
quarter, the fee for such part of that quarter shall be prorated according to
the proportion that such period bears to the full quarterly period and shall be
payable upon the date of termination of this Agreement. For the purpose of
determining fees payable to Xxxxxx, the value of the Fund's net assets shall be
computed at the times and in the manner specified in the Fund's Prospectus or
Statement of Additional Information as from time to time in effect.
6. Expenses
--------
Xxxxxx will bear all expenses in connection with the performance of
its services under this Agreement. The Fund will bear certain other expenses to
be incurred in its operation, including, but not limited to: taxes, interest,
brokerage fees and commissions, if any; fees of trustees of the Trust who are
not officers or employees of Xxxxxx, Xxxxxxxxxx & Co. Inc. or FVH; Securities
and Exchange Commission fees and state Blue Sky qualification fees; management,
advisory and administration fees; distribution expenses; charges of custodians
and transfer and dividend disbursing agents; certain insurance premiums; outside
auditing and legal expenses; costs of maintenance of trust existence; costs of
share certificates, if any are issued; costs attributable to investor services,
including, without limitation, telephone and personnel expenses; costs of
preparing and printing prospectuses and statements of additional information for
regulatory purposes and for distribution to existing shareholders; costs of
shareholders' reports and meetings of the
3
shareholders, officers or Board of Trustees of the Trust; dues payable in
connection with membership in any industry association; and any extraordinary
expenses.
7. Reimbursement to the Fund
-------------------------
If in any fiscal year the aggregate expenses of the Fund (including
fees pursuant to this Agreement, but excluding interest, taxes, brokerage
expenses, an applicable portion of distribution expenses and, with the prior
written consent of the appropriate state securities commissions, extraordinary
expenses) exceed the applicable expense limitation of any state having
jurisdiction over the Fund, Xxxxxx will reimburse the excess expense. Xxxxxx'x
expense reimbursement obligation will be limited to the amount of its fees
received pursuant to this Agreement; however, Xxxxxx shall reimburse the Fund
for such excess expenses regardless of the amount of fees paid to it during such
fiscal year to the extent that the securities regulations of any state in which
Fund shares are registered and qualified for sale so require. This expense
reimbursement, if any, will be estimated, reconciled and paid on a quarterly
basis. From time to time Xxxxxx, in its sole discretion and as it deems
appropriate, may assume certain expenses of the Fund and/or other of the Trust's
funds while retaining the ability to be reimbursed by the Fund or such other
fund of the Trust for such amounts prior to the end of the fiscal year. Xxxxxx
will not be reimbursed for such amounts if such action would violate the
provisions of any applicable state securities laws relating to the limitation of
the applicable Fund's expenses.
8. Services to Other Companies or Accounts
---------------------------------------
The Trust understands that Xxxxxx now acts and will continue to act as
investment adviser to fiduciary and other managed accounts and now acts and will
continue to act as investment manager, investment adviser, sub-investment
adviser and/or administrator to one or more other investment companies, and the
Trust has no objection to Xxxxxx'x so acting, provided that whenever and one or
more other accounts or investment companies advised by Xxxxxx have available
funds for investment, investments suitable and appropriate for each will be
allocated in a manner believed to be equitable to each entity. The Trust
recognizes that in some cases this procedure may adversely affect the size of
the position obtainable for the Fund. In addition, the Trust understands that
the persons employed by Xxxxxx to assist in the performance of Xxxxxx'x duties
hereunder will not devote their full time to such service and nothing contained
herein shall be deemed to limit or restrict the right of Xxxxxx or any affiliate
of Xxxxxx to engage in and devote time and
4
attention to other businesses or to render services of whatever kind or nature.
9. Use of Name
-----------
The Trust hereby acknowledges that Xxxxxx and FVH, its parent each has
a proprietary right and interest in the name "Xxxxxx" and agrees that the name
"Xxxxxx" will be used by it only so long as this agreement or any extension,
renewal or amendment of this agreement remains in effect. In the event that
Xxxxxx ceases to be the investment adviser to the Fund and that the successor
adviser is not affiliated with FVH, the Trust agrees that, to the extent that it
is legally able to do so, the Fund will cease to use the name "Xxxxxx" and will
not use the name "Xxxxxx" or any other name indicating that it is advised by or
otherwise connected with Xxxxxx or FVH. The Trust further acknowledges and
agrees that Xxxxxx and FVH may grant the nonexclusive right to use the names
"Xxxxxx" or any similar names to any other corporation or entity, including but
not limited to any investment company of which Xxxxxx or any affiliate of FVH,
or any successor to the business of Xxxxxx or such affiliate, shall be the
investment adviser or the distributor.
10. Term of Agreement
-----------------
This Agreement shall continue until February 23, 1994 and thereafter
shall continue automatically for successive annual periods ending on March 5th
of each year, provided such continuance is specifically approved at least
annually by (a) the Board of Trustees who are not "interested persons" (as
defined in the Act) of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such approval. This Agreement is
terminable, without penalty, on 60 days' written notice, by the Board of
Trustees of the Trust or by vote of holders of a majority of the Portfolio's
shares, or, upon 90 days' written notice, by Xxxxxx. This Agreement will also
terminate automatically in the event of its assignment (as defined in the Act
and the Rules thereunder).
11. Amendment of this Agreement
---------------------------
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, and no material amendment of this Agreement shall be effective until
approved by vote of the holders of a majority of the outstanding voting
securities of the Fund.
5
12. Miscellaneous
-------------
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be invalidated or rendered
unforceable thereby. This Agreement shall inure to the benefit of the parties
hereto and their respective successors and shall be governed by New York law.
This Investment Management Agreement is made by the Trustees, and
executed on their behalf by the undersigned officer, not individually, but as
Trustees under the Trust's Declaration of Trust, and the obligations of the
Trust or any of its series of shares are not binding upon any of the Trustees or
Shareholders individually, but bind only the Trust property or the Trust
property of the applicable series of its shares of beneficial interest.
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance hereof by signing and returning the enclosed copy
hereof.
Very truly yours,
THE XXXXXXXXXX FUNDS
By:/s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxx, Secretary
Accepted and Agreed:
XXXXXX CAPITAL ADVISERS, INC.
By:/s/ Xxxxxx Xxxxx
-------------------------
Xxxxxx Xxxxx
6
