Exhibit 5(a)(i)
INVESTMENT ADVISORY AGREEMENT
between
Xxxxxx Advisors Trust
and
Xxxxxx Asset Management, L.P.
for
XXXXXX U.S. SMALL-CAP ADVISOR
XXXXXX ADVISORS TRUST, a Massachusetts business trust registered under the
Investment Company Act of 1940 (the "1940 Act") as an open-end diversified
management investment company (the "Trust"), and XXXXXX ASSET MANAGEMENT, L.P.,
a Delaware limited partnership registered under the Investment Advisers Act of
1940 as an investment adviser ("WAM"), agree that:
1. Engagement of WAM. WAM shall manage the investment and reinvestment of
the assets of Xxxxxx U.S. Small Cap Advisor, a series of the Trust (the "Fund"),
subject to the supervision of the Board of Trustees of the Trust, for the period
and on the terms set forth in this agreement. WAM shall give due consideration
to the investment policies and restrictions and the other statements concerning
the Fund in the Trust's agreement and declaration of trust, bylaws, and
registration statement under the 1940 Act and the Securities Act of 1933 (the
"1933 Act"), and to the provisions of the Internal Revenue Code of 1986, as
amended, applicable to the Fund as a regulated investment company. WAM shall be
deemed for all purposes to be an independent contractor and not an agent of the
Trust or the Fund, and unless otherwise expressly provided or authorized, shall
have no authority to act or represent the Trust or the Fund in any way.
WAM is authorized to make the decisions to buy and sell securities,
options, futures contracts and any other investments in which the Fund may
invest pursuant to its investment objectives, policies and restrictions, to
place the Fund's portfolio transactions with broker-dealers, and to negotiate
the terms of such transactions, including brokerage commissions on brokerage
transactions, on behalf of the Fund. WAM is authorized to exercise discretion
with the Fund's policy concerning allocation of its portfolio brokerage,
consistent with the Trust's registration statement and under the supervision of
the Trust's Board of Trustees, and as permitted by law, including but not
limited to Section 28(e) of the Securities Exchange Act of 1934, and in so doing
shall not be required to make any reduction in its investment advisory fees.
2. Expenses to be Paid by WAM. WAM shall furnish to the Trust, at WAM's
expense, office space and all necessary office facilities, equipment and
personnel for managing that portion of the Trust's business relating to the
Fund. WAM shall also assume and pay all other expenses incurred by it in
connection with managing the assets of the Fund, including expenses in
connection with placement of securities orders, all expenses of printing and
distributing the Fund's prospectus and reports to prospective investors (except
to the extent such expenses are allocated to a party other than the Trust in
any participation or operating agreement to which the Trust is a party), and all
expenses in determination of daily price computations, portfolio accounting and
related bookkeeping. WAM may, at WAM's expense, contract with any other person
or persons to provide services in connection with daily price computations,
portfolio accounting and related bookkeeping under such terms as it deems
reasonable and it shall have the authority to direct the activities of such
other person or persons in the manner it deems appropriate.
3. Expenses to be Paid by the Trust. The Trust shall pay all charges of
depositories, custodians and other agencies for the safekeeping and servicing of
its cash, securities and other property and of its transfer agents and
registrars and its dividend disbursing and redemption agents, if any; all
charges of legal counsel and of independent auditors; all expenses of qualifying
and maintaining the registration of shares of the Fund under the federal and
applicable state securities laws of such United States jurisdictions as the
Trust may from time to time reasonably designate; all compensation of trustees
other than those affiliated with WAM and all expenses incurred in connection
with their services to the Trust; all costs of borrowing money; all expenses of
publication of notices and reports to the Fund's shareholders and to
governmental bodies or regulatory agencies; all expenses of proxy solicitations
of the Fund or of the Board of Trustees of the Trust; all expenses of
shareholder meetings; all expenses of typesetting of the Fund's prospectus and
of printing and mailing copies of the prospectus furnished to each then-existing
shareholder or beneficial owner (except as may be otherwise provided in any
participation or operating agreement to which the Trust is a party); all taxes
and fees payable to federal, state or other governmental agencies, domestic or
foreign, all stamp or other taxes; all expenses of printing and mailing
certificates for shares of the Fund; all expenses of bond and insurance coverage
required by law or deemed advisable by the Trust's Board of Trustees; all
expenses of maintaining the registration of the Trust under the 1940 Act and all
fees, dues and other expenses related to membership of the Trust in any trade
association or other investment company organization.
In addition to the payment of expenses, the Fund shall also pay all
brokers' commissions and other charges relative to the purchase and sale of
portfolio securities for the Fund. Any expenses borne by the Trust that are
attributable solely to the organization, operation or business of the Fund shall
be paid solely out of the Fund assets.
The Trust's organizational expenses which were advanced to the Trust by WAM
shall be amortized over a period of 60 months beginning with the month following
the commencement of the Trust's operations, and the Trust shall reimburse WAM
during the period such amortization by paying to WAM on the last business day of
each month an amount equal to the organizational expenses amortized during that
month.
Any expense borne by the Trust that is not solely attributable to the Fund,
nor solely to any other series of shares of the Trust, shall be apportioned in
such manner as WAM determines is fair and appropriate, or as otherwise specified
by the Board of Trustees of the Trust.
4. Compensation of WAM. For the services to be rendered and the charges and
expenses to be assumed and to be paid by WAM hereunder, the Fund shall pay to
WAM a fee accrued daily and paid monthly at the annual rate of 1.00% of the
average daily net asset value of the Fund up to $100 million, 0.95% of the
average daily net asset value of the Fund in excess of $100 million and up to
$250 million, and 0.90% of the average daily net asset value of the Fund in
excess of $250 million.
5. Limitation of Expenses of the Fund. The total expenses of the Fund,
exclusive of taxes, of interest and of extraordinary litigation expenses, but
including fees paid to WAM, shall not in any fiscal year of the Fund exceed the
most restrictive limits prescribed by any state in which the Fund's shares are
then qualified for sale, and WAM agrees to reimburse the Fund for any sums
expended for such expenses in excess of that amount. If the states in which the
Fund's shares are qualified for sale impose no limits on total expenses, then
WAM agrees to reimburse the Fund in the event the fee and expenses payable by
the Fund in any fiscal year exceed 2.0%. For purposes of calculating the
expenses subject to this limitation, (i) brokers' commissions and other charges
relating to the purchase and sale of portfolio securities and (ii) the excess
custodian costs attributable to investments in foreign securities compared to
the custodian costs which would have been incurred had the investments been in
domestic securities, shall not be regarded as expenses. Reimbursement, if any,
shall be made by reduction of the fees otherwise payable to WAM under this
agreement, no less frequently than quarterly.
6. Services of WAM Not Exclusive. The services of WAM to the Fund hereunder
are not to be deemed exclusive, and WAM shall be free to render similar services
to others so long as its services under this agreement are not impaired by such
other activities.
7. Services Other Than as Manager. WAM (or an affiliate of WAM) may act as
broker for the Fund in connection with the purchase or sale of securities by or
to the Fund if and to the extent permitted by procedures adopted from time to
time by the Board of Trustees of the Trust. Such brokerage services are not
within the scope of the duties of WAM under this agreement, and, within the
limits permitted by law and the Board of Trustees of the Trust, WAM (or an
affiliate of WAM) may receive brokerage commissions, fees or other remuneration
from the Fund for such services in addition to its fee for services as WAM.
Within the limits permitted by law, WAM may receive compensation from the Fund
for other services performed by it for the Fund which are not within the scope
of the duties of WAM under this agreement.
8. Limitation of Liability of WAM. WAM shall not be liable to the Trust or
its shareholders for any loss suffered by the Trust or its shareholders from or
as a consequence of any act or omission of WAM, or of any of the partners,
employees or agents of WAM, in connection with or pursuant to this agreement,
except by reason of willful misfeasance, bad faith or gross negligence on the
part of WAM in the performance of its duties or by reason of reckless disregard
by WAM of its obligations and duties under this agreement.
9. Use of WAM's Name. The Trust may use the name "Xxxxxx Advisors Trust" or
any other name using the name "Xxxxxx" only for so long as this agreement or any
extension, renewal or amendment hereof remains in effect, including any similar
agreement with any organization which shall have succeeded to the business of
WAM as investment adviser. At such time as this agreement or any extension,
renewal or amendment hereof, or such similar agreement, shall no longer be in
effect, the Trust will (by amendment of its Agreement and Declaration of Trust,
if necessary) cease to use any name using the name "Xxxxxx," any name similar
thereto or any other name indicating that it is advised by or otherwise
connected with WAM or with any organization which shall have succeeded to WAM's
business as investment adviser. WAM's consent to the use of the name "Xxxxxx" by
the Trust shall not prevent WAM's permitting any other enterprise, including
other investment companies, to use that name.
10. Duration and Renewal. This agreement shall be effective January 1,
1998, or if later, the date approved by both (a) the vote of a "majority of the
outstanding voting shares of the Fund" (which term as used throughout this
agreement shall be construed in accordance with the definition of "vote of a
majority of the outstanding voting securities of a company" in section 2(a)(42)
of the 1940 Act), and (b) the vote of a majority of trustees who are not parties
to this agreement or interested persons of any party to this agreement, cast in
person at a meeting called for the purpose of voting on approval of this
agreement. Unless terminated as provided in Section 11, this agreement shall
continue in effect until December 31, 1999, and thereafter from year to year
only so long as such continuance is specifically approved at least annually (a)
by a majority of those trustees who are not interested persons of the Trust or
of WAM, voting in person at a meeting called for the purpose of voting on such
approval, and (b) by either the Board of Trustees of the Trust or vote of the
holders of a majority of the outstanding shares of the Fund.
11. Termination. This agreement may be terminated at any time, without
payment of any penalty, by the Board of Trustees of the Trust, or by a vote of
the holders of a majority of the outstanding shares of the Fund, upon 60 days'
written notice to WAM. This agreement may be terminated by WAM at any time upon
60 days' written notice to the Trust. This agreement shall terminate
automatically in the event of its assignment (as defined in Section 2(a)(4) of
the 1940 Act).
12. Non-Liability of Trustees and Shareholders. Any obligation of the Trust
hereunder shall be binding only upon the assets of the Trust (or applicable
series thereof) and shall not be binding upon any trustee, officer, employee,
agent or shareholder of the Trust. Neither the authorization of any action by
the trustees or shareholders of the Trust nor the execution of this agreement on
behalf of the Trust shall impose any liability upon any trustee, officer or
shareholder of the Trust.
13. Amendment. This agreement may not be amended without the affirmative
vote (a) of a majority of those trustees who are not "interested persons" (as
defined in section 2(a)(19) of the 0000 Xxx) of the Trust or of WAM, voting in
person at a meeting
called for the purpose of voting on such approval, and (b) of the holders of a
majority of the outstanding shares of the Fund, where required by the 1940 Act
or other applicable law, or otherwise deemed appropriate by the Board of
Trustees of the Trust.
Dated: January 1, 1998
XXXXXX ADVISORS TRUST XXXXXX ASSET MANAGEMENT, L.P.,
by Xxxxxx Asset Management, Ltd., its
General Partner
By _________________________________ By ___________________________________
