XXXXX XXXXXX INVESTMENT TRUST
FORM OF INVESTMENT MANAGEMENT AGREEMENT
February 10, 2003
Xxxxx Xxxxxx Funds Management LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
This Investment Management Agreement (the "Agreement") is made on this 10th
day of February, 2003, by and between Xxxxx Xxxxxx Investment Trust, a business
trust organized under the laws of the Commonwealth of Massachusetts (the
"Trust"), in respect of its sub-trust, Xxxxx Xxxxxx Classic Values Fund (the
"Fund"), and Xxxxx Xxxxxx Funds Management LLC ("SBFM") as follows:
1. Investment Description; Appointment
The Fund desires to employ its capital by investing and reinvesting in
investments of the kind and in accordance with the limitations specified in: (i)
the Trust's Master Trust Agreement, as amended from time to time (the "Master
Trust Agreement"); (ii) the Fund's Prospectus (the "Prospectus"); and (iii) the
Fund's Statement of Additional Information (the "Statement") filed with the
Securities and Exchange Commission (the "SEC") as part of the Fund's
Registration Statement on Form N-1A, as amended from time to time, and in such
manner and to such extent as may from time to time be approved by the Board of
Trustees of the Trust (the "Board"). Copies of the Fund's Prospectus and the
Statement and the Trust's Master Trust Agreement have been or will be submitted
to SBFM. The Trust desires to employ and hereby appoints SBFM to act as
investment manager for the Fund. SBFM accepts the appointment and agrees to
furnish the services for the compensation set forth below. SBFM is hereby
authorized to retain third parties and is hereby authorized to delegate some or
all of its duties and obligations hereunder to such persons, provided such
persons shall remain under the general supervision of SBFM.
2. Services as Investment Manager
Subject to the supervision and direction of the Board, SBFM will: (a)
assist in supervising all aspects of the Fund's operations; (b) supply the Fund
with office facilities (which may be in SBFM's own offices), statistical and
research data, data processing services, clerical, accounting and bookkeeping
services, including, but not limited to, the calculation of (i) the net asset
value of shares of the Fund, (ii) applicable contingent deferred sales charges
and similar fees and charges and (iii) distribution fees, internal auditing and
legal services, internal executive and administrative services, and stationery
and office supplies; and (c) prepare reports to shareholders of the Fund, tax
returns and reports to and filings with the SEC and state blue sky authorities.
3. Compensation
In consideration of the services rendered pursuant to this Agreement, the
Trust will pay SBFM, on the first business day of each month, a fee for the
previous month at an annual rate of 1.00% of the Fund's average daily net
assets. The fee for the period from the date the Fund commences its investment
operations to the end of the month during which the Fund commences its
investment operations shall be pro-rated according to the proportion that such
period bears to the full monthly period. Upon any termination of this Agreement
before the end of any month, the fee for such part of that month shall be
pro-rated according to the proportion that such period bears to the full monthly
period and shall be payable upon the date of termination of this Agreement. For
the purpose of determining fees payable to SBFM, the value of the Fund's net
assets shall be computed at the times and in the manner specified in the Fund's
Prospectus and/or the Statement, as from time to time in effect.
4. Expenses
SBFM 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: investment advisory and administration
fees; charges of custodians and transfer and dividend disbursing agents; fees
for necessary professional services, such as the Fund's and Board members'
proportionate share of insurance premiums, professional associations, dues
and/or assessments; and brokerage services, including taxes, interest and
commissions; 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; the costs of regulatory
compliance, such as SEC fees and state blue sky qualifications fees; outside
auditing and legal expenses and costs associated with maintaining the Fund's
legal existence; costs of shareholders' reports and meetings of the officers or
Board; fees of the members of the Board who are not officers, directors or
employees of Xxxxxxx Xxxxx Barney, Inc. or its affiliates or any person who is
an affiliate of any person to whom duties may be delegated hereunder and any
extraordinary expenses. In addition, the Fund will pay all service and
distribution fees pursuant to a Services and Distribution Plan adopted under
Rule 12b-1 of the Investment Company Act of 1940, as amended (the "1940 Act").
5. Reimbursement to the Fund
If in any fiscal year the aggregate expenses of the Fund (including fees
pursuant to this Agreement, but excluding distribution fees, interest, taxes,
brokerage and, if permitted by state securities commissions, extraordinary
expenses) exceed the expense limitations of any state having jurisdiction over
the Fund, SBFM will reimburse the Fund for that excess expense to the extent
required by state law in the same proportion as its respective fees bear to the
combined fees for investment advice and administration. The expense
reimbursement obligation of SBFM will be limited to the amount of its fees
hereunder. Such expense reimbursement, if any, will be estimated, reconciled and
paid on a monthly basis.
6. Brokerage
In selecting brokers or dealers to execute transactions on behalf of the
Fund, SBFM will seek the best overall terms available. In assessing the best
overall terms available for any transaction, SBFM will consider factors it deems
relevant, including, but not limited to, the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer and the reasonableness of the commission, if
any, for the specific transaction and on a continuing basis. In selecting
brokers or dealers to execute a particular transaction, and in evaluating the
best overall terms available, SBFM is authorized to consider the brokerage and
research services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934, as amended) provided to the Fund and/or other accounts
over which SBFM or its affiliates exercise investment discretion.
7. Information Provided to the Fund
SBFM will keep the Trust informed of developments materially affecting the
Fund's portfolio, and will, on its own initiative, furnish the Trust from time
to time with whatever information SBFM believes is appropriate for this purpose.
8. Standard of Care
SBFM shall exercise its best judgment in rendering the services listed in
paragraph 2 above. SBFM shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Fund in connection with the matters to
which this Agreement relates, provided that nothing in this Agreement shall be
deemed to protect or purport to protect SBFM against any liability to the Trust
or to the Fund's shareholders to which SBFM would otherwise be subject by reason
of willful malfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of SBFM's reckless disregard of its
obligations and duties under this Agreement.
9. Services to Other Companies or Accounts
The Trust understands that SBFM now acts, will continue to act and may act
in the future as: investment adviser to fiduciary and other managed accounts, as
well as to other investment companies; and the Trust has no objection to SBFM's
so acting, provided that whenever the Fund and one or more other investment
companies advised by SBFM have available funds for investment, investments
suitable and appropriate for each will be allocated in accordance with a formula
believed to be equitable to each company. 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
SBFM to assist in the performance of SBFM's duties under this Agreement will not
devote their full time to such service and nothing contained in this Agreement
shall be deemed to limit or restrict the right of SBFM or any affiliate of SBFM
to engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.
l0. Term of Agreement
This Agreement shall become effective as of the date the Fund commences its
investment operations and continue for an initial two-year term and shall
continue thereafter so long as such continuance is specifically approved at
least annually by (i) the Board or (ii) a vote of a "majority" (as defined in
the 0000 Xxx) of the Fund's outstanding voting securities, provided that in
either event the continuance is also approved by a majority of the Board members
who are not "interested persons" (as defined in the 0000 Xxx) of any party to
this Agreement, by vote cast in person or by proxy 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 or by vote of holders of a
majority of the Fund's shares, or upon 90 days' written notice, by SBFM. This
Agreement will also terminate automatically in the event of its assignment (as
defined in the 1940 Act).
11. Representation by the Trust
The Trust represents that a copy of the Master Trust Agreement is on file
with the Secretary of the Commonwealth of Massachusetts and with the City of
Boston.
12. Indemnification
The Trust agrees to indemnify SBFM and its officers, directors, employees,
affiliates, controlling persons, agents (including persons to whom
responsibilities are delegated hereunder) against any loss, claim, expense or
cost of any kind (including reasonable attorney's fees) resulting or arising in
connection with this Agreement, or from the performance or failure to perform
any act hereunder, provided that no such indemnification shall be available if
the indemnitee violated the standard of care in paragraph 9 above. This
indemnification shall be limited by the 1940 Act and relevant state law. Each
indemnitee shall be entitled to advance of its expenses in accordance with the
requirements of the 1940 Act and the rules, regulations and interpretations
thereof as in effect from time to time.
13. Limitation of Liability
The Trust and SBFM agree that the obligations of the Trust under this
Agreement shall not be binding upon any of the Board members, shareholders,
nominees, officers, employees or agents, whether past, present or future, of the
Trust individually, but are binding only upon the assets and property of the
Fund, as provided in the Master Trust Agreement. The execution and delivery of
this Agreement have been duly authorized by the Trust and SBFM, and signed by an
authorized officer of each, acting as such. Neither the authorization by the
Board members of the Trust, nor the Trust execution and delivery by the officer
of the Trust shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but shall bind only the assets
and property of the Fund as provided in the Master Trust Agreement.
If the foregoing is in accordance with your understanding, kindly indicate
your acceptance hereof by signing and returning the enclosed copy of this
Agreement to us.
Very truly yours,
Xxxxx Xxxxxx Investment Trust,
Xxxxx Xxxxxx Classic Values Fund
By:
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Title:
Accepted:
Xxxxx Xxxxxx Fund Management LLC
By:
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Title:
