XXXX XXXXXXX CONSUMER INDUSTRIES FUND
(a series of Xxxx Xxxxxxx World Fund)
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
March 1, 2001
Xxxx Xxxxxxx Advisers, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Investment Management Contract
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Ladies and Gentlemen:
Xxxx Xxxxxxx World Fund (the "Trust"), of which Xxxx Xxxxxxx Consumer Industries
Fund (the "Fund") is a series, has been organized as a business trust under
the laws of The Commonwealth of Massachusetts to engage in the business of
an investment company. The Trust's shares of beneficial interest, no par
value, may be divided into series, each series representing the entire
undivided interest in a separate portfolio of assets. This Agreement
relates solely to the Fund. The Board of Trustees of the Trust (the
"Trustees") has selected Xxxx Xxxxxxx Advisers, Inc. (the "Adviser") to
provide overall investment advice and management for the Fund, and to
provide certain other services, as more fully set forth below, and the
Adviser is willing to provide such advice, management and services under
the terms and conditions hereinafter set forth. Accordingly, the Adviser
and the Trust, on behalf of the Fund, agree as follows: 1. DELIVERY OF
DOCUMENTS. The Trust has furnished the Adviser with copies, properly
certified or otherwise authenticated, of each of the following: (a) Amended
and Restated Declaration of Trust dated June 8, 1999, as amended from time
to time (the "Declaration of Trust"); (b) By-Laws of the Trust as in effect
on the date hereof; (c) Resolutions of the Trustees selecting the Adviser
as investment adviser for the Fund and approving the form of this
Agreement; (d) The Trust's Code of Ethics. The Trust will furnish to the
Adviser from time to time copies, properly certified or otherwise
authenticated, of all amendments of or supplements to the foregoing, if
any. 2. INVESTMENT AND MANAGEMENT SERVICES. The Adviser will use its best
efforts to provide to the Fund continuing and suitable investment programs
with respect to investments, consistent with the investment objectives,
policies and restrictions of the Fund. In the performance of the Adviser's
duties hereunder, subject always (x) to the provisions contained in the
documents delivered to the Adviser pursuant to Section 1, as each of the
same may from time to time be amended or supplemented, and (y) to the
limitations set forth in the Fund's then- current Prospectus and Statement
of Additional Information included in the registration statement of the
Trust as in effect from time to time under the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended (the "1940
Act"), the Adviser will, at its own expense: (a) furnish the Fund with
advice and recommendations, consistent with the investment objectives,
policies and restrictions of the Fund, with respect to the purchase,
holding and disposition of portfolio securities, alone or in consultation
with any subadviser or subadvisers appointed pursuant to this Agreement and
subject to the provisions of any sub-investment management contract
respecting the responsibilities of such subadviser or subadvisers; (b)
advise the Fund in connection with policy decisions to be made by the
Trustees or any committee thereof with respect to the Fund's investments
and, as requested, furnish the Fund with research, economic and statistical
data in connection with the Fund's investments and investment policies; (c)
provide administration of the day-to-day investment operations of the Fund;
(d) submit such reports relating to the valuation of the Fund's securities
as the Trustees may reasonably request; (e) assist the Fund in any
negotiations relating to the Fund's investments with issuers, investment
banking firms, securities brokers or dealers and other institutions or
investors; (f) consistent with the provisions of Section 7 of this
Agreement, place orders for the purchase, sale or exchange of portfolio
securities with brokers or dealers selected by the Adviser, PROVIDED that
in connection with the placing of such orders and the selection of such
brokers or dealers the Adviser shall seek to obtain execution and pricing
within the policy guidelines determined by the Trustees and set forth in
the Prospectus and Statement of Additional Information of the Fund as in
effect from time to time; (g) provide office space and office equipment and
supplies, the use of accounting equipment when required, and necessary
executive, clerical and secretarial personnel for the administration of the
affairs of the Fund; (h) from time to time or at any time requested by the
Trustees, make reports to the Fund of the Adviser's performance of the
foregoing services and furnish advice and recommendations with respect to
other aspects of the business and affairs of the Fund; (i) maintain all
books and records with respect to the Fund's securities transactions
required by the 1940 Act, including subparagraphs (b)(5), (6), (9) and (10)
and paragraph (f) of Rule 31a-1 thereunder (other than those records being
maintained by the Fund's custodian or transfer agent) and preserve such
records for the periods prescribed therefor by Rule 31a-2 of the 1940 Act
(the Adviser agrees that such records are the property of the Fund and will
be surrendered to the Fund promptly upon request therefor); (j) obtain and
evaluate such information relating to economies, industries, businesses,
securities markets and securities as the Adviser may deem necessary or
useful in the discharge of the Adviser's duties hereunder; (k) oversee, and
use the Adviser's best efforts to assure the performance of the activities
and services of the custodian, transfer agent or other similar agents
retained by the Fund; (l) give instructions to the Fund's custodian as to
deliveries of securities to and from such custodian and transfer of payment
of cash for the account of the Fund; and (m) appoint and employ one or more
sub-advisors satisfactory to the Fund under sub- investment management
agreements. 3. EXPENSES PAID BY THE ADVISER. The Adviser will pay: (a) the
compensation and expenses of all officers and employees of the Trust; (b)
the expenses of office rent, telephone and other utilities, office
furniture, equipment, supplies and other expenses of the Fund; and (c) any
other expenses incurred by the Adviser in connection with the performance
of its duties hereunder. 4. EXPENSES OF THE FUND NOT PAID BY THE ADVISER.
The Adviser will not be required to pay any expenses which this Agreement
does not expressly make payable by it. In particular, and without limiting
the generality of the foregoing but subject to the provisions of Section 3,
the Adviser will not be required to pay under this Agreement: (a) any and
all expenses, taxes and governmental fees incurred by the Trust or the Fund
prior to the effective date of this Agreement; (b) without limiting the
generality of the foregoing clause (a), the expenses of organizing the
Trust and the Fund (including without limitation, legal, accounting and
auditing fees and expenses incurred in connection with the matters referred
to in this clause (b), of initially registering shares of the Trust under
the Securities Act of 1933, as amended, and of qualifying the shares for
sale under state securities laws for the initial offering and sale of
shares; (c) the compensation and expenses of Trustees who are not
interested persons (as used in this Agreement, such term shall have the
meaning specified in the 0000 Xxx) of the Adviser and of independent
advisers, independent contractors, consultants, managers and other
unaffiliated agents employed by the Fund other than through the Adviser;
(d) legal, accounting, financial management, tax and auditing fees and
expenses of the Fund (including an allocable portion of the cost of its
employees rendering such services to the Fund); (e) the fees and
disbursements of custodians and depositories of the Fund's assets, transfer
agents, disbursing agents, plan agents and registrars; (f) taxes and
governmental fees assessed against the Fund's assets and payable by the
Fund; (g) the cost of preparing and mailing dividends, distributions,
reports, notices and proxy materials to shareholders of the Fund; (h)
brokers' commissions and underwriting fees; (i) the expense of periodic
calculations of the net asset value of the shares of the Fund; and (j)
insurance premiums on fidelity, errors and omissions and other coverages.
5. COMPENSATION OF THE ADVISER. For all services to be rendered, facilities
furnished and expenses paid or assumed by the Adviser as herein provided,
the Adviser shall be entitled to a fee, paid monthly in arrears, at an
annual rate equal to (i) 0.85% of the average daily net asset value of the
Fund up to $500,000,000 of average daily net assets, (ii) 0.80% of the next
$500,000,000 of the average daily net asset value of the Fund, and (iii)
0.75% of the average daily net asset value of the Fund in excess of
$1,000,000,000. The "average daily net assets" of the Fund shall be
determined on the basis set forth in the Fund's Prospectus or otherwise
consistent with the 1940 Act and the regulations promulgated thereunder.
The Adviser will receive a pro rata portion of such monthly fee for any
periods in which the Adviser serves as investment adviser to the Fund for
less than a full month. On any day that the net asset value calculation is
suspended as specified in the Fund's Prospectus, the net asset value for
purposes of calculating the advisory fee shall be calculated as of the date
last determined. In addition, the Adviser may agree not to impose all or a
portion of its fee (in advance of the time its fee would otherwise accrue)
and/or undertake to make any other payments or arrangements necessary to
limit the Fund's expenses to any level the Adviser may specify. Any fee
reduction or undertaking shall constitute a binding modification of this
Agreement while it is in effect but may be discontinued or modified
prospectively by the Adviser at any time. 6. OTHER ACTIVITIES OF THE
ADVISER AND ITS AFFILIATES. Nothing herein contained shall prevent the
Adviser or any affiliate or associate of the Adviser from engaging in any
other business or from acting as investment adviser or investment manager
for any other person or entity, whether or not having investment policies
or portfolios similar to the Fund's; and it is specifically understood that
officers, directors and employees of the Adviser and those of its parent
company, Xxxx Xxxxxxx Life Insurance Company, or other affiliates may
continue to engage in providing portfolio management services and advice to
other investment companies, whether or not registered, to other investment
advisory clients of the Adviser or of its affiliates and to said affiliates
themselves. The Adviser shall have no obligation to acquire with respect to
the Fund a position in any investment which the Adviser, its officers,
affiliates or employees may acquire for its or their own accounts or for
the account of another client, if, in the sole discretion of the Adviser,
it is not feasible or desirable to acquire a position in such investment on
behalf of the Fund. Nothing herein contained shall prevent the Adviser from
purchasing or recommending the purchase of a particular security for one or
more funds or clients while other funds or clients may be selling the same
security. 7. AVOIDANCE OF INCONSISTENT POSITION. In connection with
purchases or sales of portfolio securities for the account of the Fund,
neither the Adviser nor any of its investment management subsidiaries, nor
any of the Adviser's or such investment management subsidiaries' directors,
officers or employees will act as principal or agent or receive any
commission, except as may be permitted by the 1940 Act and rules and
regulations promulgated thereunder. If any occasions shall arise in which
the Adviser advises persons concerning the shares of the Fund, the Adviser
will act solely on its own behalf and not in any way on behalf of the Fund.
Nothing herein contained shall limit or restrict the Adviser or any of its
officers, affiliates or employees from buying, selling or trading in any
securities for its or their own account or accounts. 8. NO PARTNERSHIP OR
JOINT VENTURE. Neither the Trust, the Fund nor the Adviser are partners of
or joint venturers with each other and nothing herein shall be construed so
as to make them such partners or joint venturers or impose any liability as
such on any of them. 9. NAME OF THE TRUST AND THE FUND. The Trust and the
Fund may use the name "Xxxx Xxxxxxx" or any name or names derived from or
similar to the names "Xxxx Xxxxxxx Advisers, Inc.", "Xxxx Xxxxxxx Life
Insurance Company", or "Xxxx Xxxxxxx Financial Services, Inc." only for so
long as this Agreement remains in effect. At such time as this Agreement
shall no longer be in effect, the Trust and the Fund will (to the extent
that they lawfully can) cease to use such a name or any other name
indicating that the Fund is advised by or otherwise connected with the
Adviser. The Fund acknowledges that it has adopted the name Xxxx Xxxxxxx
Consumer Industries Fund through permission of Xxxx Xxxxxxx Life Insurance
Company, a Massachusetts insurance company, and agrees that Xxxx Xxxxxxx
Life Insurance Company reserves to itself and any successor to its business
the right to grant the nonexclusive right to use the name "Xxxx Xxxxxxx" or
any similar name or names to any other corporation or entity, including but
not limited to any investment company of which Xxxx Xxxxxxx Life Insurance
Company or any subsidiary or affiliate thereof shall be the investment
adviser. 10. LIMITATION OF LIABILITY OF THE ADVISER. The Adviser shall not
be liable for any error of judgment or mistake of law or for any loss
suffered by the Trust in connection with the matters to which this
Agreement relates, except 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. Any person, even though also employed by the Adviser,
who may be or become an employee of and paid by the Trust shall be deemed,
when acting within the scope of his employment by the Fund, to be acting in
such employment solely for the Trust and not as the Adviser's employee or
agent. 11. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall
remain in force until June 30, 2002, and from year to year thereafter, but
only so long as such continuance is specifically approved at least annually
by (a) a majority of the Trustees who are not interested persons of the
Adviser or (other than as Board members) of the Fund, cast in person at a
meeting called for the purpose of voting on such approval, and (b) either
(i) the Trustees or (ii) a majority of the outstanding voting securities of
the Fund. This Agreement may, on 60 days' written notice, be terminated at
any time without the payment of any penalty by the vote of a majority of
the outstanding voting securities of the Fund, by the Trustees or by the
Adviser. Termination of this Agreement shall not be deemed to terminate or
otherwise invalidate any provisions of any contract between the Adviser and
any other series of the Trust. This Agreement shall automatically terminate
in the event of its assignment. In interpreting the provisions of this
Section 11, the definitions contained in Section 2(a) of the 1940 Act
(particularly the definitions of "assignment," "interested person" and
"voting security") shall be applied. 12. 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 amendment, transfer, assignment, sale, hypothecation or
pledge of this Agreement shall be effective until approved by (a) the
Trustees, including a majority of the Trustees who are not interested
persons of the Adviser or (other than as Trustees) of the Fund, cast in
person at a meeting called for the purpose of voting on such approval, and
(b) a majority of the outstanding voting securities of the Fund, as defined
in the 1940 Act. 13. GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of The Commonwealth of Massachusetts.
14. SEVERABILITY. The provisions of this Agreement are independent of and
separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any
other or others of them may be deemed invalid or unenforceable in whole or
in part. 15. MISCELLANEOUS. 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. This
Agreement may be executed simultaneously in two or more counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. The name Xxxx Xxxxxxx Consumer
Industries Fund is a series designation of the Trustees under the Trust's
Declaration of Trust. The Declaration of Trust has been filed with the
Secretary of State of The Commonwealth of Massachusetts. The obligations of
the Fund are not personally binding upon, nor shall resort be had to the
private property of, any of the Trustees, shareholders, officers, employees
or agents of the Trust, but only upon the Fund and its property. The Fund
shall not be liable for the obligations of any other series of the Trust
and no other series shall be liable for the Fund's obligations hereunder.
Yours very truly,
XXXX XXXXXXX WORLD FUND
on behalf of Xxxx Xxxxxxx Consumer Industries Fund
By: ___________________________
Xxxxxxx X. Xxxx
President
The foregoing contract
is hereby agreed to as
of the date hereof.
XXXX XXXXXXX ADVISERS, INC.
By: ___________________________
Xxxxx X. Xxxxxx
Vice President and Secretary
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