THE MASTERS' SELECT EQUITY FUND
MASTERS' SELECT INVESTMENT TRUST
INVESTMENT MANAGEMENT AGREEMENT
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THIS INVESTMENT MANAGEMENT AGREEMENT is made as of the ___ day
of ___________, 199__, by and between XXXXXX/XXXXXXX FUND ADVISORS, LLC
(hereinafter called the "Advisor") and XXXXX SELECTED ADVISERS LP and its
affiliates (hereinafter called "Manager").
WITNESSETH:
WHEREAS, the Advisor has been retained as the investment
adviser to The Masters' Select Equity Fund (the "Fund"), a series of Masters'
Select Investment Trust (the "Trust"), an open-end management investment
company, registered as such under the Investment Company Act of 1940, as amended
(the "Investment Company Act"); and
WHEREAS, the Advisor has been authorized by the Trust to
retain one of more investment advisers (each an "investment manager") to serve
as portfolio managers for a specified portion of the Fund's assets (the
"Allocated Portion"); and
WHEREAS, 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 management services as an independent contractor; and
WHEREAS, the Fund and the Advisor desire to retain Manager as
an investment manager to render portfolio advice and services to the Fund
pursuant to the terms and provisions of this Agreement, and Manager desires to
furnish said advice and services; and
WHEREAS, the Trust and the Fund are third party beneficiaries
of such arrangements;
NOW, THEREFORE, in consideration of the covenants and the
mutual promises hereinafter set forth, the parties to this Agreement, which
shall include the Trust and the Fund for purposes of the indemnification
provisions of Section 10 hereto, intending to be legally bound hereby, mutually
agree as follows:
1. Appointment of Manager.
(a) The Advisor hereby employs Manager, and Manager
hereby accepts such employment, to render investment advice and related services
with respect to an Allocated Portion of the assets of the Fund for the period
and on the terms set
forth in this Agreement, subject to the supervision and direction of the Advisor
and the Trust's Board of Trustees.
(b) Manager's employment shall be solely with respect
to an Allocated Portion of the Fund's assets, such Allocated Portion to be
specified by the Advisor and subject to periodic increases or decreases at the
Advisor's discretion.
2. Duties of Manager.
(a) General Duties. Manager shall act as one of
several investment managers to the Fund and shall invest Manager's Allocated
Portion of the assets of the Fund in accordance with the investment objectives,
policies, and restrictions of the Fund as set forth in the Fund's and Trust's
governing documents, including, without limitation, the Trust's Agreement and
Declaration of Trust and By-Laws; the Fund's prospectus, statement of additional
information, and undertakings; and such other limitations, policies, and
procedures as the Advisor or the Trustees of the Trust may impose from time to
time in writing to Manager. In providing such services, Manager shall at all
times adhere to the provisions and restrictions contained in the federal
securities laws, applicable state securities laws, the Internal Revenue Code,
and other applicable law.
Without limiting the generality of the foregoing, Manager
shall: (i) furnish the Fund with advice and recommendations with respect to the
investment of the Manager's Allocated Portion of the Fund's assets, (ii) effect
the purchase and sale of portfolio securities for Manager's Allocated Portion;
(iii) manage and oversee the investments of the Manager's Allocated Portion,
subject to the ultimate supervision and direction of the Trust's Board of
Trustees; (iv) vote proxies, file required Section 13 ownership reports with
respect to Manager's Allocated Portion, and take other actions with respect to
the securities in Manager's Allocated Portion; (v) maintain the books and
records required by the Investment Company Act, the Investment Advisers Act of
1940, or other applicable law to be maintained with respect to the securities in
Manager's Allocated Portion; (vi) furnish reports, statements and other data on
securities, economic conditions and other matters related to the investment of
the Fund's assets which the Advisor, Trustees or the officers of the Trust may
reasonably request; and (vi) render to the Trust's Board of Trustees such
periodic and special reports with respect to Manager's Allocated Portion as the
Board may reasonably request.
(b) Brokerage. With respect to Manager's Allocated
Portion, Manager shall be responsible for broker-dealer selection and for
negotiation of brokerage commission rates, provided that Manager shall not
direct orders to an affiliated person of the Manager or any other investment
manager without general prior authorization to use such affiliated broker or
dealer by the Trust's Board of Trustees. Manager's primary
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consideration in effecting a securities transaction will be execution at the
most favorable price. In selecting a broker-dealer to execute each particular
transaction, Manager may take the following into consideration: the best net
price available; the reliability, integrity and financial condition of the
broker-dealer; the size of and difficulty in executing the order; and the value
of the expected contribution of the broker-dealer to the investment performance
of the Fund on a continuing basis. The price to the Fund in any transaction may
be less favorable than that available from another broker-dealer if the
difference is reasonably justified by other aspects of the portfolio execution
services offered. In accordance with Section 11(a) of the 1934 Act and Rule
11a2-2(T) thereunder, and subject to any other applicable laws and regulations
including Section 17(e) of the Act and Rule 17e-1 thereunder, Manager may engage
its affiliates, the Advisor and its affiliates or any other investment manager
to the Trust and its respective affiliates, as broker-dealers or futures
commissions merchants to effect Fund transactions in securities and other
investments for the Fund.
Subject to such policies as the Advisor and the Board of
Trustees of the Trust may determine, Manager shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or otherwise
solely by reason of its having caused the Fund to pay a broker or dealer that
provides (directly or indirectly) brokerage or research services to Manager an
amount of commission for effecting a portfolio transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction, if Manager determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or Manager's or Advisor's overall responsibilities with
respect to the Fund. Manager is further authorized to allocate the orders placed
by it on behalf of the Fund to such brokers or dealers who also provide research
or statistical material, or other services, to the Trust, the Advisor, or any
affiliate of either. Such allocation shall be in such amounts and proportions as
Manager shall determine, and Manager shall report on such allocations regularly
to the Advisor and the Trust, indicating the broker-dealers to whom such
allocations have been made and the basis therefor. Manager is also authorized to
consider sales of shares of the Fund as a factor in the selection of brokers or
dealers to execute portfolio transactions, subject to the requirements of best
execution, i.e., that such brokers or dealers are able to execute the order
promptly and at the best obtainable securities price.
On occasions when Manager deems the purchase or sale of a
security to be in the best interest of the Fund as well as other clients of
Manager, 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
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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 Manager in the
manner it considers to be the most equitable and consistent with its fiduciary
obligations to the Fund and to such other clients.
3. Representations of Manager.
(a) Manager shall maintain all licenses and
registrations necessary to perform its duties hereunder in good order.
(b) Manager shall conduct its operations at all times
in conformance with the Investment Advisers Act of 1940, the Investment Company
Act, and any other applicable state and/or self-regulatory organization
regulations.
(c) Manager shall maintain errors and omissions
insurance in a reasonable amount throughout the term of this Agreement.
4. Independent Contractor. 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, the Fund, or the Advisor in any way, or in any way be
deemed an agent for the Trust, the Fund, or the Advisor. It is expressly
understood and agreed that the services to be rendered by Manager to the Fund
under the provisions of this Agreement are not to be deemed exclusive, and
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. 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 Manager shall be deemed
to include persons employed or retained by 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 Manager, the
Advisor or the Trust's Board of Trustees may desire and reasonably request.
6. Expenses.
(a) Manager shall be responsible for (i) providing
the personnel, office space and equipment reasonably necessary to fulfill its
obligations under this Agreement, and (ii) the costs of any special meetings of
the Fund's shareholders or the Trust's Board of Trustees convened for the
primary benefit of Manager, or its fair share of the costs of any special
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meetings convened for the benefit of Manager as well as for other purposes.
(b) To the extent Manager incurs any costs by
assuming expenses which are an obligation of the Advisor or the Fund, the
Advisor or the Fund shall promptly reimburse the Manager for such costs and
expenses. To the extent Manager performs services for which the Fund or the
Advisor is obligated to pay, Manager shall be entitled to reimbursement in such
amount as shall be negotiated between Manager and the Advisor.
7. Investment Management Fee.
(a) The Advisor shall pay to Manager, and Manager
agrees to accept, as full compensation for all investment management and
advisory services furnished or provided to the Fund pursuant to this Agreement,
an annual management fee based on Manager's Allocated Portion, as such Allocated
Portion may be adjusted from time to time. Such fee shall be equal to [ ]% of
the average daily net assets of the Fund attributable to the Manager's Allocated
Portion, computed on the value of such net assets as of the close of business
each day.
(b) The management fee shall be paid by the Advisor
to Manager monthly in arrears on the first business day of each month.
(c) The initial fee under this Agreement shall be
payable on the tenth 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 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) The fee payable to Manager under this Agreement
will be reduced to the extent of any amount owed by Manager to the Advisor or
the Fund.
(e) Manager voluntarily may reduce any portion of the
compensation or reimbursement of expenses due to it pursuant to this Agreement
and may agree to make payments to limit the expenses which are the
responsibility of the Advisor or the Fund under this Agreement. Any such
reduction or payment shall be applicable only to such specific reduction or
payment and shall not constitute an agreement to reduce any future compensation
or reimbursement due to Manager hereunder or to continue future payments. Any
such reduction 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.
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8. Conflicts with Trust's Governing Documents and Applicable
Laws. Nothing herein contained shall be deemed to require the Trust or the Fund
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 the Fund. In this connection, Manager
acknowledges that the Advisor and the Trust's Board of Trustees retain ultimate
plenary authority over the Fund, including the Allocated Portion, and may take
any and all actions necessary and reasonable to protect the interests of
shareholders, with notice to and in coordination with Manager.
9. Reports and Access. Manager agrees to supply such
information to the Advisor and to permit such compliance inspections by the
Advisor or the Fund as shall be reasonably necessary to permit the administrator
to satisfy its obligations and respond to the reasonable requests of the
Trustees.
10. Standard of Care, Liability and Indemnification.
(a) Manager shall exercise reasonable care and
prudence in fulfilling its obligations under this Agreement.
(b) Manager shall have responsibility for the
accuracy and completeness (and liability for the lack thereof) of the statements
furnished by Manager for use by the Advisor in the Fund's offering materials
(including the prospectus, the statement of additional information, advertising
and sales materials) that pertain to Manager and the investment of Manager's
Allocated Portion of the Fund. Manager shall have no responsibility or liability
with respect to other disclosures.
(c) In the absence of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the obligations or duties hereunder
on the part of Manager, Manager shall not be subject to liability to the
Advisor, the Trust or the Fund or to any shareholder of the Fund 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 Fund.
(d) Each party to this Agreement, including the
Trust, shall indemnify and hold harmless the other party and the shareholders,
directors, officers and employees of the other party (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
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hereunder or by reason of reckless disregard of obligations and duties under
this Agreement.
(e) No provision of this Agreement shall be construed
to protect any Trustee or officer of the Trust, or officer of the Advisor, from
liability in violation of Sections 17(h) and (i) of the Investment Company Act.
11. Non-Exclusivity; Trading for Manager's Own Account. The
Advisor's employment of Manager is not an exclusive arrangement. The Advisor
anticipates that it will employ other individuals or entities to furnish it with
the services provided for herein. Likewise, Manager may act as investment
adviser for any other person, and shall not in any way be limited or restricted
from buying, selling or trading any securities for its or their own accounts or
the accounts of others for whom it or they may be acting, provided, however,
that Manager expressly represents that it will undertake no activities which
will adversely affect the performance of its obligations to the Fund under this
Agreement; and provided further that Manager will adhere to a code of ethics
governing employee trading and trading for proprietary accounts that conforms to
the requirements of the Investment Company Act and the Investment Advisers Act
of 1940, which has been provided to the Board of Trustees of the Trust.
12. Term.
(a) This Agreement shall become effective at the time
the Fund commences operations pursuant to an effective amendment to the Trust's
Registration Statement under the Securities Act of 1933 and 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
the 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 the 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, and (iii) the Advisor. The terms
"majority of the outstanding voting securities" and "interested persons" shall
have the meanings as set forth in the Investment Company Act.
(b) The Fund and its distributor may use the name
"Xxxxx Selected Advisers LP" or a derivation of such name including the words
"Xxxxx" and/or "Xxxxx Selected Advisers" only for Fund purposes and only so long
as this Agreement or any extension, renewal or amendment hereof remains in
effect. Within sixty (60) days from such time as this Agreement shall no longer
be in effect, the Fund shall cease to use such a name or any other name
connected with Manager.
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13. Termination; No Assignment.
(a) This Agreement may be terminated by the Advisor
or the Trust on behalf of the Fund 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
Manager, and by Manager upon sixty (60) days' written notice to the Advisor. In
the event of a termination, Manager shall cooperate in the orderly transfer of
the Fund's affairs and, at the request of the Board of Trustees, transfer any
and all books and records of the Fund maintained by Manager on behalf of the
Fund which are not otherwise available to the Fund.
(b) This Agreement shall terminate automatically in
the event of any transfer or assignment thereof, as defined in the Investment
Company Act.
14. 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.
15. 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.
16. 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 Investment Company Act and the Investment
Advisors Act of 1940 and any rules and regulations promulgated thereunder.
17. Notice. Any notice that is required to be given by the
parties to each other under the terms of this Agreement shall be in writing,
delivered, or mailed postpaid to the other party, or transmitted by facsimile
with acknowledgment of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to Manager:
Xxxxx Selected Advisers LP
000 Xxxx Xxxxx Xxxxxx
Xxxxx Xx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Xx.
Telephone: (000)000-0000
Facsimile: (000)000-0000
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(b) If to the Advisor:
Xxxxxx/Xxxxxxx Fund Advisors, LLC
0 Xxxxxx Xxx, Xxxxx 000-X
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000)000-0000
Facsimile: (000)000-0000
(c) If to the Trust:
Masters' Select Investment Trust
0 Xxxxxx Xxx, Xxxxx 000-X
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000)000-0000
Facsimile: (000)000-0000
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers, all on the day
and year first above written.
XXXXXX/XXXXXXX FUND XXXXX SELECTED ADVISERS LP
ADVISORS, LLC
By:______________________________ By:_________________________________
_________________________________ ____________________________________
_________________________________ ____________________________________
As a Third Party Beneficiary,
MASTERS' SELECT INVESTMENT TRUST
on behalf of
THE MASTERS' SELECT EQUITY FUND
By:______________________________
_________________________________
_________________________________
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