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Exhibit 23(d)(1)
Amended Investment Advisory Agreement
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AMENDED AND RESTATED
INVESTMENT MANAGEMENT AGREEMENT
THIS AMENDED AND RESTATED INVESTMENT MANAGEMENT AGREEMENT (the
"Agreement") made as of the 30th day of August, 2002, amends and restates in its
entirety the Investment Management Agreement dated July 31, 1997, by and between
THE XXXXXXXXXX FUNDS, a Massachusetts business trust (hereinafter called the
"Trust"), on behalf of each series of the Trust listed in APPENDIX A hereto, as
may be amended from time to time (hereinafter referred to individually as a
"Fund" and collectively as the "Funds") and XXXXXXXXXX ASSET MANAGEMENT, LLC, a
limited liability company organized and existing under the laws of the State of
Delaware (hereinafter called the "Manager").
WITNESSETH:
WHEREAS, the Trust is an open-end management investment
company, registered as such under the Investment Company Act of 1940, as amended
(the "1940 Act"); and
WHEREAS, the Manager is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended, and is engaged in the
business of supplying investment advice, investment management and
administrative services, as an independent contractor; and
WHEREAS, the Trust desires to retain the Manager to render
advice and services to the Funds pursuant to the terms and provisions of this
Agreement, and the Manager is interested in furnishing said advice and services;
NOW, THEREFORE, in consideration of the covenants and the
mutual promises hereinafter set forth, the parties hereto, intending to be
legally bound hereby, mutually agree as follows:
1. APPOINTMENT OF MANAGER. The Trust hereby employs the Manager and the
Manager hereby accepts such employment, to render investment advice and
management services with respect to the assets of the Funds for the period and
on the terms set forth in this Agreement, subject to the supervision and
direction of the Trust's Board of Trustees.
2. DUTIES OF MANAGER.
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(a) GENERAL DUTIES. The Manager shall act as investment manager to the
Funds and shall supervise investments of the Funds on behalf of the Funds in
accordance with the investment objectives, programs and restrictions of the
Funds as provided in the Trust's governing documents, including, without
limitation, the Trust's Agreement and Declaration of Trust and By-Laws, or
otherwise and such other limitations as the Trustees may impose from time to
time in writing to the Manager. Without limiting the generality of the
foregoing, the Manager shall: (i) furnish the Funds with advice and
recommendations with respect to the investment of each Fund's assets and the
purchase and sale of portfolio securities for the Funds, including the taking of
such other steps as may be necessary to implement such advice and
recommendations; (ii) furnish the Funds with reports, statements and other data
on securities, economic conditions and other pertinent subjects which the
Trust's Board of Trustees may reasonably request; (iii) manage the investments
of the Funds, subject to the ultimate supervision and direction of the Trust's
Board of Trustees; (iv) provide persons satisfactory to the Trust's Board of
Trustees to act as officers and employees of the Trust and the Funds (such
officers and
employees, as well as certain trustees, may be trustees, directors, officers,
partners, or employees of the Manager or its affiliates) but not including
personnel to provide administrative service or distribution services to the
Fund; and (v) render to the Trust's Board of Trustees such periodic and special
reports with respect to each Fund's investment activities as the Board may
reasonably request.
(b) BROKERAGE. The Manager shall place orders for the purchase and sale
of securities either directly with the issuer or with a broker or dealer
selected by the Manager. In placing each Fund's securities trades, it is
recognized that the Manager will give primary consideration to securing the most
favorable price and efficient execution, so that each Fund's total cost or
proceeds in each transaction will be the most favorable under all the
circumstances. Within the framework of this policy, the Manager may consider the
financial responsibility, research and investment information, and other
services provided by brokers or dealers who may effect or be a party to any such
transaction or other transactions to which other clients of the Manager may be a
party.
It is also understood that it is desirable for the Funds that
the Manager have access to investment and market research and securities and
economic analyses provided by brokers and others. It is also understood that
brokers providing such services may execute brokerage transactions at a higher
cost to the Funds than might result from the allocation of brokerage to other
brokers on the basis of seeking the most favorable price and efficient
execution. Therefore, the purchase and sale of securities for the Funds may be
made with brokers who provide such research and analysis, subject to review by
the Trust's Board of Trustees from time to time with respect to the extent and
continuation of this practice to determine whether each Fund benefits, directly
or indirectly, from such practice. It is understood by both parties that the
Manager may select broker-dealers for the execution of the Funds' portfolio
transactions who provide research and analysis as the Manager may lawfully and
appropriately use in its investment management and advisory capacities, whether
or not such research and analysis may also be useful to the Manager in
connection with its services to other clients.
On occasions when the Manager deems the purchase or sale of a
security to be in the best interest of one or more of the Funds as well as of
other clients, the Manager, to the extent permitted by applicable laws and
regulations, may aggregate the securities to be so purchased or sold in order to
obtain the most favorable price or lower brokerage commissions and the most
efficient execution. In such event, allocation of the securities so purchased or
sold, as well as the expenses incurred in the transaction, will be made by the
Manager in the manner it considers to be the most equitable and consistent with
its fiduciary obligations to the Funds and to such other clients.
(c) ADMINISTRATIVE SERVICES. The Manager shall oversee the
administration of the Funds' business and affairs although the provision of
administrative services, to the extent not covered by subparagraphs (a) or (b)
above, is not the obligation of the Manager under this Agreement.
Notwithstanding any other provisions of this Agreement, the Manager shall be
entitled to reimbursement from the Funds for all or a portion of the reasonable
costs and expenses, including salary, associated with the provision by Manager
of personnel to render administrative services to the Funds.
3. BEST EFFORTS AND JUDGMENT. The Manager shall use its best judgment
and efforts in rendering the advice and services to the Funds as contemplated
by this Agreement.
4. INDEPENDENT CONTRACTOR. The Manager shall, for all purposes herein,
be deemed to be an independent contractor, and shall, unless otherwise expressly
provided and authorized to
do so, have no authority to act for or represent the Trust or the Funds in any
way, or in any way be deemed an agent for the Trust or for the Funds. It is
expressly understood and agreed that the services to be rendered by the Manager
to the Funds under the provisions of this Agreement are not to be deemed
exclusive, and the Manager shall be free to render similar or different services
to others so long as its ability to render the services provided for in this
Agreement shall not be impaired thereby.
5. MANAGER'S PERSONNEL. The Manager shall, at its own expense, maintain
such staff and employ or retain such personnel and consult with such other
persons as it shall from time to time determine to be necessary to the
performance of its obligations under this Agreement. Without limiting the
generality of the foregoing, the staff and personnel of the Manager shall be
deemed to include persons employed or retained by the Manager to furnish
statistical information, research, and other factual information, advice
regarding economic factors and trends, information with respect to technical and
scientific developments, and such other information, advice and assistance as
the Manager or the Trust's Board of Trustees may desire and reasonably request.
6. REPORTS BY FUNDS TO MANAGER. Each Fund will from time to time
furnish to the Manager detailed statements of its investments and assets, and
information as to its investment objective and needs, and will make available to
the Manager such financial reports, proxy statements, legal and other
information relating to each Fund's investments as may be in its possession or
available to it, together with such other information as the Manager may
reasonably request.
7. EXPENSES.
(a) With respect to the operation of each Fund, the Manager is
responsible for (i) the compensation of any of the Trust's trustees, officers,
and employees who are affiliates of the Manager (but not the compensation of
employees performing services in connection with expenses which are the Fund's
responsibility under Subparagraph 7(b) below), (ii) the expenses of printing and
distributing the Funds' prospectuses, statements of additional information, and
sales and advertising materials (but not the legal, auditing or accounting fees
attendant thereto) to prospective investors (but not to existing shareholders),
and (iii) providing office space and equipment reasonably necessary for the
operation of the Funds.
(b) Each Fund is responsible for and has assumed the obligation for
payment of all of its expenses, other than as stated in Subparagraph 7(a) above,
including but not limited to: fees and expenses incurred in connection with the
issuance, registration and transfer of its shares; brokerage and commission
expenses; all expenses of transfer, receipt, safekeeping, servicing and
accounting for the cash, securities and other property of the Trust for the
benefit of the Funds including all fees and expenses of its custodian,
shareholder services agent and accounting services agent; interest charges on
any borrowings; costs and expenses of pricing and calculating its daily net
asset value and of maintaining its books of account required under the 1940 Act;
taxes, if any; expenditures in connection with meetings of each Fund's
Shareholders and Board of Trustees that are properly payable by the Fund;
salaries and expenses of officers and fees and expenses of members of the
Trust's Board of Trustees or members of any advisory board or committee who are
not members of, affiliated with or interested persons of the Manager; insurance
premiums on property or personnel of each Fund which inure to its benefit,
including liability and fidelity bond insurance; the cost of preparing and
printing reports, proxy statements, prospectuses and statements of additional
information of the Fund or other communications for distribution to existing
shareholders; legal, auditing and accounting fees; trade association dues; fees
and expenses (including legal fees) of obtaining and maintaining any required
registration or
notification for its shares for sale under federal and applicable state and
foreign securities laws; all expenses of maintaining and servicing shareholder
accounts, including all charges for transfer, shareholder recordkeeping,
dividend disbursing, redemption, and other agents for the benefit of the Funds,
if any; and all other charges and costs of its operation plus any extraordinary
and non-recurring expenses, except as herein otherwise prescribed.
(c) To the extent the Manager incurs any costs by assuming expenses
which are an obligation of a Fund as set forth herein, such Fund shall promptly
reimburse the Manager for such costs and expenses, except to the extent the
Manager has otherwise agreed to bear such expenses. To the extent the services
for which a Fund is obligated to pay are performed by the Manager, the Manager
shall be entitled to recover from such Fund to the extent of the Manager's
actual costs for providing such services.
8. INVESTMENT ADVISORY AND MANAGEMENT FEE.
(a) Each Fund shall pay to the Manager, and the Manager agrees to
accept, as full compensation for all administrative and investment management
and advisory services furnished or provided to such Fund pursuant to this
Agreement, a management fee as set forth in the Fee Schedule attached hereto as
APPENDIX B, as may be amended in writing from time to time by the Trust and the
Manager.
(b) The management fee shall be accrued daily by each Fund and paid to
the Manager upon its request.
(c) The initial fee under this Agreement shall be payable on the first
business day of the first month following the effective date of this Agreement
and shall be prorated as set forth below. If this Agreement is terminated prior
to the end of any month, the fee to the Manager shall be prorated for the
portion of any month in which this Agreement is in effect which is not a
complete month according to the proportion which the number of calendar days in
the month during which the Agreement is in effect bears to the number of
calendar days in the month, and shall be payable within ten (10) days after the
date of termination.
(d) FEE REDUCTION. The Manager may, but is not required to, reduce all
or a portion of its fees and/or reimburse a Fund for other expenses in order to
decrease the operating expenses of a Fund. Any such reduction, reimbursement, or
payment (collectively "subsidies") shall be applicable only to such specific
subsidy and shall not constitute an agreement to continue such subsidy in the
future. Any such subsidy will be agreed to prior to accrual of the related
expense or fee and will be estimated daily and reconciled and paid on a monthly
basis. The Manager may also agree contractually to limit a Fund's operating
expenses. To the extent such an expense limitation has been agreed to by the
Manager and such limit has been disclosed to shareholders of a Fund in the
Prospectus, the Manager may not change the limitation without first disclosing
the change in an updated Prospectus.
The Manager may seek reimbursement of any subsidies made by the Manager
either voluntarily or pursuant to contract. The reimbursement of any subsidy
must be approved by the Trust's Board of Trustees and must be sought no later
than the end of the third fiscal year following the year to which the subsidy
relates. The Manager may not request or receive reimbursement for any subsidies
before payment of a Fund's operating expenses for the current year and cannot
cause a Fund to exceed any more restrictive limitation to which the Manager has
agreed in making such reimbursement.
(e) The Manager may agree not to require payment of any portion of the
compensation or reimbursement of expenses otherwise due to it pursuant to this
Agreement prior
to the time such compensation or reimbursement has accrued as a liability of the
Fund. Any such agreement shall be applicable only with respect to the specific
items covered thereby and shall not constitute an agreement not to require
payment of any future compensation or reimbursement due to the Manager
hereunder.
9. FUND SHARE ACTIVITIES OF MANAGER'S DIRECTORS, PARTNERS, OFFICERS AND
EMPLOYEES. The Manager agrees that neither it nor any of its directors,
partners, officers or employees shall take any short position in the shares of
the Funds. This prohibition shall not prevent the purchase of such shares by any
of the officers and partners or bona fide employees of the Manager or any trust,
pension, profit-sharing or other benefit plan for such persons or affiliates
thereof, at a price not less than the net asset value thereof at the time of
purchase, as allowed pursuant to rules promulgated under the 1940 Act.
10. CONFLICTS WITH TRUST'S GOVERNING DOCUMENTS AND APPLICABLE LAWS.
Nothing herein contained shall be deemed to require the Trust or the Funds to
take any action contrary to the Trust's Agreement and Declaration of Trust,
By-Laws, or any applicable statute or regulation, or to relieve or deprive the
Board of Trustees of the Trust of its responsibility for and control of the
conduct of the affairs of the Trust and Funds.
11. MANAGER'S LIABILITIES.
(a) In the absence of willful misfeasance, bad faith, gross negligence,
or reckless disregard of the obligations or duties hereunder on the part of the
Manager, the Manager shall not be subject to liability to the Trust or the Funds
or to any shareholder of the Funds for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security by the Funds.
(b) The Funds shall indemnify and hold harmless the Manager, its
general partner and the shareholders, directors, officers and employees of each
of them (any such person, an "Indemnified Party") against any loss, liability,
claim, damage or expense (including the reasonable cost of investigating and
defending any alleged loss, liability, claim, damage or expenses and reasonable
counsel fees incurred in connection therewith) arising out of the Indemnified
Party's performance or non-performance of any duties under this Agreement
provided, however, that nothing herein shall be deemed to protect any
Indemnified Party against any liability to which such Indemnified Party would
otherwise be subject by reason of willful misfeasance, bad faith or negligence
in the performance of duties hereunder or by reason of reckless disregard of
obligations and duties under this Agreement.
(c) No provision of this Agreement shall be construed to protect any
Trustee or officer of the Trust, or partner or officer of the Manager, from
liability in violation of Sections 17(h) and (i) of the 1940 Act.
12. NON-EXCLUSIVITY. The Trust's employment of the Manager is not an
exclusive arrangement, and the Trust may from time to time employ other
individuals or entities to furnish it with the services provided for herein. In
the event this Agreement is terminated with respect to any Fund, this Agreement
shall remain in full force and effect with respect to all other Funds listed on
Appendix A hereto, as the same may be amended.
13. TERM. This Agreement shall become effective on the date that is the
latest of (1) the execution of this Agreement, (2) the approval of this
Agreement by the Board of Trustees of the Trust and (3) the approval of this
Agreement by the shareholders of each Fund in a special meeting of shareholders
of the Fund. This Agreement shall remain in effect for a period of two (2)
years, unless sooner terminated as hereinafter provided. This Agreement shall
continue in
effect thereafter for additional periods not exceeding one (l) year so long as
such continuation is approved for each Fund at least annually by (i) the Board
of Trustees of the Trust or by the vote of a majority of the outstanding voting
securities of each Fund and (ii) the vote of a majority of the Trustees of the
Trust who are not parties to this Agreement nor interested persons thereof, cast
in person at a meeting called for the purpose of voting on such approval.
14. TERMINATION. This Agreement may be terminated by the Trust on
behalf of any one or more of the Funds at any time without payment of any
penalty, by the Board of Trustees of the Trust or by vote of a majority of the
outstanding voting securities of a Fund, upon sixty (60) days' written notice to
the Manager, and by the Manager upon sixty (60) days' written notice to a Fund.
15. TERMINATION BY ASSIGNMENT. This Agreement shall terminate
automatically in the event of any transfer or assignment thereof, as defined
in the 1940 Act.
16. TRANSFER, ASSIGNMENT. This Agreement may not be transferred,
assigned, sold or in any manner hypothecated or pledged without the affirmative
vote or written consent of the holders of a majority of the outstanding voting
securities of each Fund.
17. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute or rule, or shall be otherwise
rendered invalid, the remainder of this Agreement shall not be affected thereby.
18. DEFINITIONS. The terms "majority of the outstanding voting
securities" and "interested persons" shall have the meanings as set forth in the
1940 Act.
19. NOTICE OF DECLARATION OF TRUST. The Manager agrees that the Trust's
obligations under this Agreement shall be limited to the Funds and to their
assets, and that the Manager shall not seek satisfaction of any such obligation
from the shareholders of the Funds nor from any trustee, officer, employee or
agent of the Trust or the Funds.
20. CAPTIONS. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect.
21. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of California without giving effect to
the conflict of laws principles thereof; provided that nothing herein shall be
construed to preempt, or to be inconsistent with, any federal law, regulation or
rule, including the 1940 Act and the Investment Advisers Act of 1940 and any
rules and regulations promulgated thereunder.
22. NONPUBLIC PERSONAL INFORMATION. Notwithstanding any provision
herein to the contrary, the Manager agrees on behalf of itself and its
directors, officers, and employees (1) to treat confidentially and as
proprietary information of the Trust (a) all records and other information
relative to the series of the Trust and their prior, present, or potential
shareholders (and clients of said shareholders) and (b) any Nonpublic Personal
Information, as defined under Section 248.3(t) of Regulation S-P ("Regulation
S-P"), promulgated under the Xxxxx-Xxxxx-Xxxxxx Act (the "Privacy Act"), and (2)
not to use such records and information for any purpose other than the
performance of its responsibilities and duties hereunder, or as otherwise
permitted by the privacy policies adopted by the Trust, Regulation S-P or the
Privacy Act, except after prior notification to and approval in writing by the
Trust. Such written approval shall not be unreasonably withheld by the Trust and
may not be withheld where the Manager may be exposed
to civil or criminal contempt proceedings for failure to comply after being
requested to divulge such information by duly constituted authorities, or when
so requested by the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested by their duly authorized officers, all on the day and
year first above written.
THE XXXXXXXXXX FUNDS XXXXXXXXXX ASSET MANAGEMENT, LLC
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxx Name: Xxxx Xxxxxxx
Title: Assistant Secretary Title: Chief Administrative Officer
Date: August 30, 2002 Date: August 30, 0000
XXXXXXXX A
FUND SCHEDULE - THE XXXXXXXXXX FUNDS
(updated July 10, 2002)
FUND EFFECTIVE DATE
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- Xxxxxxxxxx Growth Fund July 31, 1997
- Xxxxxxxxxx Small Cap Fund July 31, 1997
- Xxxxxxxxxx Mid Cap Fund July 31, 1997
- Xxxxxxxxxx Global Tech, Telecom and Media Fund July 31, 1997
- Xxxxxxxxxx International Growth Fund July 31, 1997
- Xxxxxxxxxx Emerging Markets Fund July 31, 1997
- Xxxxxxxxxx Government Money Market Fund July 31, 1997
- Xxxxxxxxxx Global Opportunities Fund July 31, 1997
- Xxxxxxxxxx Global Focus Fund July 31, 1997
- Xxxxxxxxxx Short Duration Government Bond Fund July 31, 1997
- Xxxxxxxxxx U.S. Focus Fund December 31, 1999
- Xxxxxxxxxx Mid Cap Focus Fund October 31, 2000
THE XXXXXXXXXX FUNDS XXXXXXXXXX ASSET MANAGEMENT, LLC
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxx Xxxxxxx
----------------------- -----------------------------
Name: Xxxxxxx Xxxxxx Name: Xxxx Xxxxxxx
Title: Assistant Secretary Title: Chief Administrative Officer
Date: August 30, 2002 Date: August 30, 0000
XXXXXXXX X
FEE SCHEDULE - THE XXXXXXXXXX FUNDS
1. Xxxxxxxxxx Growth Fund 1.00% of the first $500 million of
net assets; plus 0.90% of the next
$500 million of net assets; plus
0.80% of net assets over $1
billion.
2. Xxxxxxxxxx Small Cap Fund 1.00% of first $250 million of net
assets; plus 0.80% of net assets
over $250 million.
3. Xxxxxxxxxx Mid Cap Fund 1.40% of the first $200 million of
net assets; plus 1.25% of net
assets over $200 million.
4. Xxxxxxxxxx Global 1.25% of the first $250 million of
Tech, Telecom and Media Fund net assets; plus 1.00% of net
assets over $250 million.
5. Xxxxxxxxxx International 1.10% of the first $500 million of
Growth Fund net assets; plus 1.00% of next $500
million of net assets; plus 0.90%
of net assets over $1 billion.
6. Xxxxxxxxxx Emerging 1.25% of the first $250 million of
Markets Fund net assets; plus 1.00% of net
assets over $250 million.
7. Xxxxxxxxxx Government 0.40% of the first $250 million of
Money Market Fund net assets; plus 0.30% of the next
$250 million of net assets; plus
0.20% of net assets over $500
million.
8. Xxxxxxxxxx Global 1.25% of the first $500 million of
Opportunities Fund net assets; plus 1.10% of the next
$500 million of net assets; plus
1.00% of net assets over $1
billion.
9. Xxxxxxxxxx Global Focus Fund 1.25% of the first $250 million of
net assets; plus 1.00% of the next
$250 million of net assets; plus
0.90% of net assets over $500
million.
10. Xxxxxxxxxx Short Duration 0.50% of the first $500 million of
Government Bond Fund net assets; plus 0.40% of net
assets over $500 million.
12. Xxxxxxxxxx U.S. Focus Fund 1.00% of the first $500 million of
net assets; plus 0.90% of the next
$500 million of net assets ; plus
0.80% of net assets over $1
billion.
13. Xxxxxxxxxx Mid Cap Focus Fund 1.00% of the first $500 million of
net assets; plus 0.90% of the next
$500 million of net assets; plus
0.80% of net assets over $1
billion.
THE XXXXXXXXXX FUNDS XXXXXXXXXX ASSET MANAGEMENT, LLC
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxx Xxxxxxx
----------------------- -----------------------------
Name: Xxxxxxx Xxxxxx Name: Xxxx Xxxxxxx
Title: Assistant Secretary Title: Chief Administrative Officer
Date: August 30, 2002 Date: August 30, 2002
