Exhibit 5(a)(1) Investment Management Agreement - California Municipal Portfolio
XXXXXXX X. XXXXXXXXX FUND, INC.
XXXXXXXXX CALIFORNIA MUNICIPAL PORTFOLIO
INVESTMENT MANAGEMENT AGREEMENT
INVESTMENT MANAGEMENT AGREEMENT, dated as of May 1, 1990, between XXXXXXX X.
XXXXXXXXX FUND, INC., a Maryland Corporation, (the "Fund"), on behalf of the
Xxxxxxxxx California Municipal Portfolio (the "Portfolio") and XXXXXXX X.
XXXXXXXXX & CO., INC., a New York Corporation (the "Adviser" or "Xxxxxxxxx").
In consideration of the mutual agreements herein made, the parties hereto
agree as follows:
1. Duties of the Adviser. The Adviser shall manage the investment operations
of the Portfolio and the Fund including, but not limited to, continuously
providing the Portfolio with investment management, including investment
research, advice and supervision, determining which securities or other
investments including, but not limited to, debt and equity securities,
futures, options and options on futures, shall be purchased or sold by the
Portfolio, making purchases and sales of securities and such other investments
on behalf of the Portfolio and determining how voting and other rights with
respect to securities and other investments owned by the Fund on behalf of the
Portfolio shall be exercised, subject in each case to oversight by the Board
of Directors of the Fund (the "Board") and in accordance with the investment
objectives and policies of the Fund and of the Portfolio set forth in the
Registration Statement and the current Prospectus and Statement of Additional
Information relating to the Fund and the Portfolio, as amended from time to
time, the requirements of the Investment Company Act of 1940, as amended (the
"Act") and other applicable law. The Fund understands that the Adviser may
also act as the investment manager to other Portfolios of the Fund and to
other persons or entities, including other investment companies.
2. Limitation of Liability. Subject to Section 36 of the Act, the Adviser, and
the directors, officers and employees of the Adviser, shall not be liable to
the Fund or the Portfolio for any error of judgment or mistake of law or for
any loss arising out of any investment or the performance or non-performance
of duties under this Agreement, except for willful misfeasance, bad faith or
gross negligence in the performance of, or by reason of reckless disregard of,
obligations and duties under this Agreement.
3. Indemnification.
(a) The Fund, on behalf of the Portfolio, shall indemnify and hold harmless
the Adviser, and the directors, officers, and employees of the Adviser,
against any loss, liability, claim, damage or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damage or expenses and reasonable counsel fees incurred in connection
therewith) arising out of the performance or non-performance of any duties
under this Agreement, provided, however, that nothing herein shall be deemed
to protect the Adviser or any director, officer or employee thereof against
any liability to the Fund or its stockholders, to which the Adviser or any
director, officer or employee thereof would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of
duties or by reason of reckless disregard of obligations and duties under this
Agreement.
4. Expenses. The Adviser shall pay all of its expenses arising from the
performance of its obligations under Section 1 of this Agreement and shall pay
any salaries, fees and expenses of the Directors who are employees of the
Adviser. In addition, during the first two years of operation of the
Portfolio, the Adviser will pay any Portfolio operating expenses (excluding
interest, taxes, brokerage commissions and extraordinary expenses) which,
together with fees payable to Xxxxxxxxx pursuant to the Shareholder Servicing
and Administrative Agreement entered into by the Fund on behalf of the
Portfolio and Adviser, exceed the rate of .79% per annum of the Portfolio's
average daily net assets. For the purposes of this Agreement, the term "the
first two years of operation" means the 24-month period commencing with the
first day of the first month after shares of the Portfolio are first issued to
the public. Except as provided above, the Adviser shall not be required to pay
any other expenses of the Fund or the Portfolio, including
(a) the fees payable to Xxxxxxxxx under this Agreement and the Shareholder
Servicing and Administrative Agreement; (b) the fees and expenses of Directors
who are not affiliated with Xxxxxxxxx; (c) the fees and expenses of the
Custodian and Transfer Agent including but not limited to fees and expenses
relating to Fund accounting, pricing of Portfolio shares, and computation of net
asset value; (d) the fees and expenses of calculating yield and/or performance
of the Portfolio; (e) the charges and expenses of legal counsel and independent
accountants; (f) all taxes and corporate fees payable to governmental agencies;
(g) the fees of any trade association of which the Fund is a member; (h)
reimbursement of the organization expenses of the Portfolio or the Fund; (i) the
fees and expenses involved in registering and maintaining registration of the
Fund and the Portfolio's shares with the Securities and Exchange Commission,
registering the Fund as a broker or dealer and qualifying the shares of the
Portfolio under state securities laws, including the preparation and printing of
the registration statements and prospectuses for such purposes, allocable
communications expenses with respect to investor services, all expenses of
shareholders' and Board of Directors' meetings and preparing, printing and
mailing proxies, prospectuses and reports to shareholders; (j) brokers'
commissions, dealers' xxxx-ups and any issue or transfer taxes chargeable in
connection with the Portfolio's transactions; (k) the cost of stock certificates
representing shares of the Portfolio; (1) insurance expenses, including, but not
limited to, the cost of a fidelity bond, directors and officers insurance and
errors and omissions insurance; and (m) litigation and indemnification expenses,
expenses incurred in connection with mergers, and other extraordinary expenses
not incurred in the ordinary course of the Portfolio's business.
5. Compensation. As compensation for the services performed and the facilities
and personnel provided by the Adviser pursuant to Section 1 of this Agreement,
the Fund, on behalf of the Portfolio, will pay to the Adviser, promptly after
the end of each month, a fee assessed at an annual rate of .50 of 1% of the
average daily net assets of the Portfolio during the month, provided that,
during the first two years of operation of the Portfolio, the Fund will not
pay any portion of the fee that, together with the other operating expenses of
the Portfolio (excluding interest, taxes, brokerage commission and
extraordinary expenses but including fees payable to Xxxxxxxxx under the
Shareholder Servicing and Administrative Agreement described in section 4
above), exceeds the rate of .79% per annum of the Portfolio's average daily
net assets. If the Adviser shall serve hereunder for less than the whole of
any month, the fee hereunder shall be prorated.
6. Purchase and Sale of Securities. The Adviser shall purchase securities from
or through and sell securities to or through such persons, brokers, or dealers
as the Adviser shall deem appropriate in order to carry out the policy with
respect to portfolio transactions as set forth in the Registration Statement
of the Fund and the current Prospectus or Statement of Additional Information
of the Portfolio, as amended from time to time, or as the Directors may direct
from time to time. Nothing herein shall prohibit the Directors from approving
the payment by the Fund on behalf of the Portfolio of additional compensation
to others for consulting services, supplemental research and security and
economic analysis.
7. Term of Agreement. This Agreement shall continue in effect for a period of
more than two years from the date hereof only so long as such continuance is
specifically approved at least annually in conformity with the requirements of
the Act with regard to investment advisory contracts; provided, however, that
this Agreement may be terminated at any time without the payment of any
penalty, on behalf of the Portfolio, by the Fund, by the Board or by vote of a
majority of the outstanding voting securities (as defined in the Act) of the
Portfolio, or by the Adviser on not more than 60 days' nor less than 30 days'
written notice to the other party. This Agreement shall terminate
automatically in the event of its assignment (as defined in the Act).
8. Miscellaneous. The Fund hereby agrees that if at any time the Adviser shall
cease to act as investment adviser to the Portfolio or to the Fund, or if at
any time during the continuation of this Agreement the Adviser shall change
its name to delete the reference to Xxxxxxx X. Xxxxxxxxx, the Fund shall take
all steps necessary under law to change its corporate name to delete the
reference to Xxxxxxx X. Xxxxxxxxx or to delete the reference to Xxxxxxxxx from
the name of the Portfolio, and shall thereafter refrain from using such name
with reference to the Portfolio and, if applicable, the Fund.
This Agreement contains the entire agreement between the parties hereto and
supersedes all prior
agreements, understandings and arrangements with respect to the subject matter
hereof. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. Anything herein to the contrary notwithstanding,
this Agreement shall not be construed to require, or to impose any duty upon,
either of the parties to do anything in violation of any applicable laws or
regulations.
IN WITNESS WHEREOF, the Fund, on behalf of the Portfolio, and the Adviser have
caused this Agreement to be executed by their duly authorized officers as of
the date first above written.
XXXXXXX X. XXXXXXXXX & CO., INC.
By: Xxxxx X. Xxxxxxx, President
XXXXXXX X. XXXXXXXXX FUND, INC.
By: Xxxxxx X. Xxxxxx, Senior Vice President
