INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, entered into as of November 10, 2003, by and between the
GOVERNMENT STREET MID-CAP FUND of WILLIAMSBURG INVESTMENT TRUST, a Massachusetts
Business Trust (the "Trust"), and X. Xxxxxxx & Associates, Inc., an Alabama
corporation (the "Adviser"), registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act").
WHEREAS, the Trust is registered as a no-load, diversified, open-end
management investment company of the series type under the Investment Company
Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust desires to retain the Adviser to furnish investment
advisory and administrative services to The Government Street Mid-Cap Fund
series of the Trust, and the Adviser is willing to so furnish such services;
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Trust hereby appoints the Adviser to act as investment
adviser to The Government Street Mid-Cap Fund series of the Trust (the
"Fund") for the period and on the terms set forth in this Agreement. The
Adviser accepts such appointment and agrees to furnish the services herein
set forth, for the compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Trust has furnished the Investment Adviser with
copies properly certified or authenticated of each of the following:
(a) The Trust's Declaration of Trust, as filed with the State of
Massachusetts (such Declaration, as presently in effect and as it
shall from time to time be amended, is herein called the
"Declaration");
(b) The Trust's By-Laws (such By-Laws, as presently in effect and as they
shall from time to time be amended, are herein called the "By-Laws");
(c) Resolutions of the Trust's Board of Trustees authorizing Agreement;
(d) The Trust's Registration Statement on Form N-1A under the 1940 Act and
under the Securities Act of 1933 as amended (the "1933 Act"), relating
to shares of beneficial interest of the Trust (herein called the
"Shares") as filed with the Securities and Exchange Commission ("SEC")
and all amendments thereto;
(e) The Trust's Prospectus (such Prospectus, as presently in effect and
all amendments and supplements thereto are herein called the
"Prospectus").
The Trust will furnish the Adviser from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the
foregoing at the same time as such documents are required to be filed with
the SEC.
3. MANAGEMENT. Subject to the supervision of the Trust's Board of Trustees,
the Adviser will provide a continuous investment program for the Fund,
including investment
research and management with respect to all securities, investments, cash
and cash equivalents in the Fund. The Adviser will determine from time to
time what securities and other investments will be purchased, retained or
sold by the Fund. The Adviser will provide the services under this
Agreement in accordance with the Fund's investment objectives, policies and
restrictions as stated in its Prospectus. The Adviser further agrees that
it:
(a) Will conform its activities to all applicable Rules and Regulations of
the Securities and Exchange Commission and will, in addition, conduct
its activities under this Agreement in accordance with regulations of
any other Federal and State agencies which may now or in the future
have jurisdiction over its activities under this Agreement;
(b) Will place orders pursuant to its investment determinations for the
Fund either directly with the issuer or with any broker or dealer. In
placing orders with brokers or dealers, the Adviser will attempt to
obtain the best net price and the most favorable execution of its
orders. Consistent with this obligation, when the Adviser believes two
or more brokers or dealers are comparable in price and execution, the
Adviser may prefer: (i) brokers and dealers who provide the Fund with
research advice and other services, or who recommend or sell Fund
shares, and (ii) Brokers who are affiliated with the Trust or its
Adviser(s), PROVIDED, HOWEVER, that in no instance will portfolio
securities be purchased from or sold to the Adviser or any affiliated
person of the Adviser in principal transactions;
(c) Will provide certain executive personnel for the Trust as may be
mutually agreed upon from time to time with the Board of Trustees, the
salaries and expenses of such personnel to be borne by the Adviser
unless otherwise mutually agreed upon; and
(d) Will provide, at its own cost, all office space, facilities and
equipment necessary for the conduct of its advisory activities on
behalf of the Trust.
Notwithstanding the foregoing, the Adviser may obtain the services of an
investment counselor or sub-advisor of its choice subject to the approval
of the Board of Trustees. The cost of employing such counselor or
sub-advisor will be paid by the Adviser and not by the Trust.
4. SERVICES NOT EXCLUSIVE. The advisory services furnished by the Adviser
hereunder are not to be deemed exclusive, and the Adviser shall be free to
furnish similar services to others as long as its services under this
Agreement are not impaired thereby PROVIDED, HOWEVER, the without the
written consent of the Trustees, the Adviser will not serve as investment
adviser to any other investment company having a similar investment
objective to that of the Fund.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Adviser hereby agrees that all records which it maintains
for the benefit of the Trust are the property of the Trust and further
agrees to surrender promptly to the Trust any of such records upon the
Trust's request. The Adviser further agrees to preserve for the periods
prescribed by it pursuant to Rule 31a-2 under the 1940 Act the records
2
required to be maintained by Rule 31a-1 under the Act that are not
maintained by others on behalf of the Trust.
6. EXPENSES. During the term of this Agreement, the Adviser will pay all
expenses incurred by it in connection with its investment advisory services
pertaining to the Trust. In the event that there is no distribution plan
under Rule 12b-1 of the 1940 Act in effect for the Fund, the Adviser will
pay, out of the Adviser's resources generated from sources other than fees
received from the Trust, the entire cost of the promotion and sale of Fund
shares.
Notwithstanding the foregoing, the Trust shall pay the expenses and costs
of the following:
(a) Taxes, interest charges, and extraordinary expenses;
(b) Brokerage fees and commissions with regard to portfolio transactions
of the Fund;
(c) Fees and expenses of the custodian of the Fund's portfolio securities;
(d) Fees and expenses of the Fund's administrative agent, the Fund's
transfer and shareholder servicing agent and the Fund's accounting
agent or, if the Trust performs any such services without an agent,
the costs of the same;
(e) Auditing and legal expenses;
(f) Cost of maintenance of the Trust's existence as a legal entity;
(g) Compensation of trustees who are not interested persons of the Adviser
as that term is defined by law;
(h) Costs of Trust meetings;
(i) Federal and State registration or qualification fees and expenses;
(j) Costs of setting in type, printing and mailing Prospectuses, reports
and notices to existing shareholders;
(k) The investment advisory fee payable to the Adviser, as provided in
paragraph 7 herein; and
(l) Distribution expenses, but only in accordance with any Distribution
Plan as and if approved by the shareholders of the Fund.
It is understood that the Trust may desire to register the Fund's shares
for sale in certain states which impose expense limitations on mutual
funds. The Trust agrees that it will register the Fund's shares in such
states only with the prior written consent of the Adviser. It is further
understood that the Trustees desire to limit Fund expenses to 2% of average
daily net assets, if such state limitations are not so restrictive. The
Adviser agrees to reimburse the Trust an amount equal to any excess
expenses incurred over the lesser of either (i) the most stringent of such
states' limitations in which the Fund's shares are registered, or (ii) 2%
of average daily net assets. The Adviser shall in no event be required to
reimburse an amount greater than its fees received from the Trust pursuant
to paragraph 7, below.
7. COMPENSATION. For the services provided to the Fund and for the expenses
assumed by the Adviser pursuant to this Agreement, the Trust will pay the
Adviser and the Adviser will accept as full compensation an investment
advisory fee, computed at the end of each
3
month and payable within five (5) business days thereafter, at the annual
rate of 0.75% of the Fund's average daily net assets.
8.(a)LIMITATION OF LIABILITY. The Adviser shall not be liable for any error
of judgment, mistake of law or for any other loss whatsoever suffered by
the Trust in connection with the performance of this Agreement, except a
loss resulting from a breach of fiduciary duty with respect to the receipt
of the compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the Adviser in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
8.(b)INDEMNIFICATION OF ADVISER. Subject to the limitations set forth in this
Subsection 8(b), the Trust shall indemnify, defend and hold harmless (from
the assets of the Fund or Funds to which the conduct in question relates)
the Adviser against all loss, damage and liability, including but not
limited to amounts paid in satisfaction of judgments, in compromise or as
fines and penalties, and expenses, including reasonable accountants' and
counsel fees, incurred by the Adviser in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or legislative body, related
to or resulting from this Agreement or the performance of services
hereunder, except with respect to any matter as to which it has been
determined that the loss, damage or liability is a direct result of (i) a
breach of fiduciary duty with respect to the receipt of compensation for
services; or (ii) willful misfeasance, bad faith or gross negligence on the
part of the Adviser in the performance of its duties or from reckless
disregard by it of its duties under this Agreement (either and both of the
conduct described in clauses (i) and (ii) above being referred to
hereinafter as "DISABLING CONDUCT"). A determination that the Adviser is
entitled to indemnification may be made by (i) a final decision on the
merits by a court or other body before whom the proceeding was brought that
the Adviser was not liable by reason of Disabling Conduct, (ii) dismissal
of a court action or an administrative proceeding against the Adviser for
insufficiency of evidence of Disabling Conduct, or (iii) a reasonable
determination, based upon a review of the facts, that the Adviser was not
liable by reason of Disabling Conduct by, (a) vote of a majority of a
quorum of Trustees who are neither "interested persons" of the Trust as the
quoted phrase is defined in Section 2(a)(19) of the 1940 Act nor parties to
the action, suit or other proceeding on the same or similar grounds that is
then or has been pending or threatened (such quorum of such Trustees being
referred to hereinafter as the "INDEPENDENT TRUSTEES"), or (b) an
independent legal counsel in a written opinion. Expenses, including
accountants' and counsel fees so incurred by the Adviser (but excluding
amounts paid in satisfaction of judgments, in compromise or as fines or
penalties), may be paid from time to time in advance of the final
disposition of any such action, suit or proceeding; PROVIDED, that the
Adviser shall have undertaken to repay the amounts so paid if it is
ultimately determined that indemnification of such expenses is not
authorized under this Subsection 8(b) and if (i) the Adviser shall have
provided security for such undertaking, (ii) the Trust shall be insured
against losses arising by reason of any lawful advances, or (iii) a
majority of the Independent Trustees, or an independent legal counsel in a
written opinion, shall have determined, based on a review of readily
available facts (as opposed to a full trial-type
4
inquiry), that there is reason to believe that the Adviser ultimately will
be entitled to indemnification hereunder.
As to any matter disposed of by a compromise payment by the Adviser
referred to in this Subsection 8(b), pursuant to a consent decree or
otherwise, no such indemnification either for said payment or for any other
expenses shall be provided unless such indemnification shall be approved
(i) by a majority of the Independent Trustees or (ii) by an independent
legal counsel in a written opinion. Approval by the Independent Trustees
pursuant to clause (i) shall not prevent the recovery from the Adviser of
any amount paid to the Adviser in accordance with either of such clauses as
indemnification of the Adviser is subsequently adjudicated by a court of
competent jurisdiction not to have acted in good faith in the reasonable
belief that the Adviser's action was in or not opposed to the best
interests of the Trust or to have been liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in its conduct under the
Agreement.
The right of indemnification provided by this Subsection 8(b) shall not be
exclusive of or affect any of the rights to which the Adviser may be
entitled. Nothing contained in this Subsection 8(b) shall affect any rights
to indemnification to which Trustees, officers or other personnel to which
Trustees, officers or other personnel of the Trust, and other persons may
be entitled by contract or otherwise under law, nor the power of the Trust
to purchase and maintain liability insurance on behalf of any such person.
The Board of Trustees of the Trust shall take all such action as may be
necessary and appropriate to authorize the Trust hereunder to pay the
indemnification required by this Subsection 8(b) including, without
limitation, to the extent needed, to determine whether the Adviser is
entitled to indemnification hereunder and the reasonable amount of any
indemnity due it hereunder, or employ independent legal counsel for that
purpose.
8.(c)The provisions contained in Section 8 shall survive the expiration or
other termination of this Agreement, shall be deemed to include and protect
the Adviser and its directors, officers, employees and agents and shall
inure to the benefit of its/their respective successors, assigns and
personal representatives.
9. DURATION AND TERMINATION. This Agreement shall become effective on the date
of its execution and, unless sooner terminated as provided herein, shall
continue in effect until April 1, 2005. Thereafter, this Agreement shall be
renewable for successive periods of one year each, PROVIDED such
continuance is specifically approved annually:
(a) By the vote of a majority of those members of the Board of Trustees
who are not parties to this Agreement or interested persons of any
such party (as that term is defined in the 1940 Act), cast in person
at a meeting called for the purpose of voting on such approval; and
(b) By vote of either the Board or a majority (as that term is defined in
the 0000 Xxx) of the outstanding voting securities of the Fund.
5
Notwithstanding the foregoing, this Agreement may be terminated by the
Fund or by the Adviser at any time on sixty (60) days' written notice,
without the payment of any penalty, provided that termination by the
Fund must be authorized either by vote of the Board of the Board of
Trustees or by vote of a majority of the outstanding voting securities
of the Fund. This Agreement will automatically terminate in the event
of its assignment (as that term is defined in the 1940 Act).
10. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by a written instrument
signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No material amendment of this Agreement
shall be effective until approved by vote of the holders of a majority of
the Fund's outstanding voting securities (as defined in the 1940 Act).
11. MISCELLANEOUS. The captions of 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. If any provision
of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of the Agreement shall not be
affected thereby. This Agreement shall be binding and shall inure to the
benefit of the parties hereto and their respective successors.
12. APPLICABLE LAW. This Agreement shall be construed in accordance with, and
governed by, the laws of the State of North Carolina.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
ATTEST: WILLIAMSBURG INVESTMENT TRUST
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx, Xx.
------------------------ ------------------------------
Title: Secretary Title: Chairman
--------------------- ----------------------------
ATTEST: X. XXXXXXX & ASSOCIATES, INC.
By: By: /s/ Xxxxxxx Xxxxxxxx
------------------------ ------------------------------
Title: Title: Exec. V.P.
------------------------ ------------------------------
6
