INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
XXXX XXXXX INVESTORS TRUST, INC.
AGREEMENT made this 1st day of August, 2000 by and between Xxxx Xxxxx
Funds Management, Inc. ("Adviser"), a Maryland corporation, and Xxxx Xxxxx
Investors Trust, Inc. ("Corporation"), a Maryland corporation, on behalf of its
series, Xxxx Xxxxx American Leading Companies Trust ("Fund");
WHEREAS, the Adviser is an investment adviser registered under the
Investment Advisers Act of 1940, as amended, and the Fund is a series of the
Corporation, an open-end, diversified management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Corporation wishes to retain the Adviser to provide the
Fund with certain investment advisory, management, and administration services;
and
WHEREAS, the Adviser is willing to furnish such services on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. Appointment. The Corporation hereby appoints the Adviser as manager
and investment adviser for the Fund for the period and on the terms set forth in
this Agreement. The Adviser accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein provided.
2. Delivery of Documents. The Fund has furnished the Adviser with
copies properly certified or authenticated of each of the following:
(a) The Corporation's Articles of Incorporation, as filed
with the State Department of Assessments and Taxation
of the State of Maryland and all amendments thereto;
(b) The Corporation's By-Laws and all amendments thereto;
(c) The Corporation's currently effective Registration
Statement on Form N-1A under the Securities Act of
1933, as amended, and the 1940 Act, as filed with the
Securities and Exchange Commission, including all
exhibits thereto, relating to shares of common stock
of the Fund, and all amendments thereto;
(d) The Fund's most recent prospectus(es); and
(e) The Fund's most recent statement(s) of additional
information.
The Fund will furnish the Adviser from time to time with copies of all
amendments of or supplements to the foregoing.
3. Investment Advisory Services. (a) Subject to the supervision of the
Corporation's Board of Directors, the Adviser shall regularly provide the Fund
with investment research, advice, management and supervision and shall furnish a
continuous investment program for the Fund's portfolio of securities consistent
with the Fund's investment objective, policies and limitations as stated in the
Fund's current Prospectus and Statement of Additional Information. The Adviser
shall determine from time to time what securities will be purchased, retained or
sold by the Fund, and shall implement those decisions, all subject to the
provisions of the Corporation's Articles of Incorporation and By-Laws, the 1940
Act, the applicable rules and regulations of the Securities and Exchange
Commission ("SEC") and other applicable federal and state law, as well as the
investment objective, policies, and limitations of the Fund. The Adviser will
place orders pursuant to its investment determinations for the Fund either
directly with the issuer or with any broker or dealer. In placing orders with
brokers and dealers, the Adviser will attempt to obtain the best net price and
the most favorable execution of its orders; however, the Adviser may, in its
discretion, purchase and sell portfolio securities from and to brokers and
dealers who provide the Fund with research, analysis, advice and similar
services, and the Adviser may pay to these brokers, in return for research and
analysis, a higher commission than may be charged by other brokers. The Adviser
is authorized to combine orders on behalf of the Fund with orders on behalf of
other clients of the Adviser, consistent with guidelines adopted by the Board of
Directors of the Corporation. In no instance will portfolio securities be
purchased from or sold to the Adviser or any affiliated person thereof except in
accordance with the rules, regulations or orders promulgated by the SEC pursuant
to the 1940 Act. The Adviser shall also perform such other functions of
management and supervision as may be requested by the Fund and agreed to by the
Adviser.
(b) The Fund has authorized any entity or person associated with the
Adviser which is a member of a national securities exchange to effect any
transaction on the exchange for the account of the Fund which is permitted by
Section 11(a) of the Securities Exchange Act of 1934 or Rule 11a2-2(T)
thereunder, and the Fund hereby consents to the retention by such person
associated with the Adviser of compensation for such transactions, including
compensation, in accordance with Rule 11a2-2(T)(a)(2)(iv).
(c) The Adviser, at its expense, shall supply the Board of Directors
and officers of the Fund with all statistical information and reports reasonably
required by them and reasonably available to the Adviser and shall furnish the
Fund with office facilities, including space, furniture and equipment and all
personnel reasonably necessary for the operation of the Fund. The Adviser shall
oversee the maintenance of all books and records with respect to the Fund's
securities transactions and the Fund's books of accounts in accordance with all
applicable federal and state laws and regulations. The Adviser shall authorize
and permit any of its directors, officers and employees, who may be elected as
directors or officers of the Fund, to serve in the capacities in which they are
elected.
(d) The Adviser may enter into contracts with an investment sub-adviser
or a sub-administrator in which the Adviser delegates to such investment
sub-adviser or sub-administrator any or all of its duties specified in Paragraph
2
3 above, provided that such contracts impose on the investment sub-adviser or
sub-administrator bound thereby all duties and conditions to which the Adviser
is subject hereunder, and further provided that such contracts meet all
requirements of the 1940 Act and the rules thereunder.
4. Expenses. (a) Other than as herein specifically indicated, the
Adviser shall not be responsible for the expenses of the Fund. Specifically, the
Adviser will not be responsible, except to the extent of the reasonable
compensation of employees of the Fund whose services may be used by the Adviser
hereunder, for any of the following expenses of the Fund, which expenses shall
be borne by the Fund: advisory fees; distribution fees; interest, taxes,
governmental fees; fees, voluntary assessments and other expenses incurred in
connection with membership in investment company organizations; the cost
(including brokerage commissions or charges, if any) of securities purchased or
sold by the Fund and any losses in connection therewith; fees of custodians,
transfer agents, registrars or other agents; legal expenses; expense of
preparing share certificates; expenses relating to the redemption or repurchase
of the Fund's shares; expenses of registering and qualifying the Fund's shares
for sale under applicable federal and state law; expenses of preparing, setting
in print, printing and distributing prospectuses, reports, notices and dividends
to the Fund's shareholders; costs of stationery; costs of stockholders and other
meetings of the Fund; directors' fees; audit fees; travel expenses of officers,
directors and employees of the Fund, if any; and the Fund's pro rata portion of
premiums on any fidelity bond and other insurance covering the Fund and its
officers and directors.
(b) No director, officer or employee of the Fund shall receive from the
Fund any salary or other compensation as such director, officer or employee
while he or she is at the same time a director, officer or employee of the
Adviser or any affiliated company of the Adviser. This paragraph shall not apply
to directors, executive committee members, consultants and other persons who are
not regular members of the Adviser's or any affiliated company's staff.
5. Services Not Exclusive. The Adviser's services hereunder are not
deemed to be exclusive, and the Adviser shall be free to render similar services
to others. It is understood that persons employed by the Adviser to assist in
the performance of its duties hereunder might not devote their full time to such
service. Nothing herein contained shall be deemed to limit or restrict the right
of the Adviser or any affiliate of the Adviser to engage in and devote time and
attention to other business or to render services of whatever kind or nature.
6. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Adviser hereby agrees that all books and records which
it maintains for the Fund are property of the Fund and further agrees to
surrender promptly to the Fund or its agents any of such records upon the Fund's
request. The Adviser further agrees to preserve for the period prescribed by
Rule 31a-2 under the 1940 Act, any such records required to be maintained by
Rule 31a-1 under the 1940 Act.
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7. Compensation. (a) For the services which the Adviser will render to
the Fund under this Agreement, the Fund will pay the Adviser a fee, computed
daily and paid monthly, at the annual rate of the Fund's average daily net
assets that is set forth in Appendix A to this Agreement. If this Agreement is
terminated as of any date not the last day of a calendar month, a final fee
shall be paid promptly after the date of termination, shall be based on the
average daily net assets of the Fund in that period from the beginning of such
month to such date of termination, and shall be prorated by the ratio that the
number of business days in such period bears to the number of business days in
such month. The average daily net assets of the Fund shall in all cases be based
only on business days and be computed as of the time of the regular close of
business of the New York Stock Exchange, or such other time as may be determined
by the Board of Directors of the Fund. Each such payment shall be accompanied by
a report of the Fund prepared either by the Fund or by a reputable firm of
independent accountants which shall show the amount properly payable to the
Adviser under this Agreement and the detailed computation thereof.
(b) The Adviser agrees that for services rendered to the Fund, or
indemnity due in connection with service to the Fund, it shall look only to
assets of the Fund for satisfaction and that it shall have no claim against the
assets of any other series of the Corporation.
8. Limitation of Liability. The Adviser assumes no responsibility under
this Agreement other than to render the services called for hereunder, in good
faith, and shall not be responsible for any action of the Board of Directors of
the Fund in following or declining to follow any advice or recommendations of
the Adviser; provided, however, that nothing in this Agreement shall protect the
Adviser against any liability to the Fund or its shareholders for a loss
resulting from willful misfeasance, bad faith or gross negligence in the
performance of its duties or from reckless disregard by it of its obligations or
duties under this Agreement.
9. Definitions. As used in this Agreement, the terms "securities" and
"net assets" shall have the meanings ascribed to them in the Articles of
Incorporation of the Fund; and the terms "assignment," "interested person," and
"majority of the outstanding voting securities" shall have the meanings given to
them by Section 2(a) of the 1940 Act, subject to such exemptions as may be
granted by the SEC by any rule, regulation or order.
10. Duration and Termination. This Agreement will become effective
August 1, 2000. If not earlier terminated, this Agreement shall continue in
effect for successive annual periods, provided that such continuance is
specifically approved at least annually (i) by the Fund's Board of Directors or
(ii) by a vote of a majority of the outstanding voting securities of the Fund,
provided that in either event the continuance is also approved by a majority of
the Fund's Directors who are not interested persons of the Fund or of any party
to this Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. This Agreement is terminable without penalty, by vote
of the Fund's Board of Directors, by vote of a majority of the outstanding
voting securities of the Fund, or by the Adviser, on not less than 60 days'
notice to the Fund and/or the other party(ies) and will be terminated
immediately upon the mutual written consent of the Adviser and the Fund. This
Agreement will automatically and immediately terminate in the event of its
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assignment by the Adviser and shall not be assignable by the Fund without the
consent of the Adviser.
11. Use of "Xxxx Xxxxx" Name. In the event this Agreement is terminated
by either party or upon written notice from the Adviser at any time, the Fund
hereby agrees that it will eliminate from its name any reference to the name of
"Xxxx Xxxxx." The Fund shall have the non-exclusive use of the name "Xxxx Xxxxx"
in whole or in part so long as this Agreement is effective or until such notice
is given.
12. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
13. Amendments. 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 material amendment of this Agreement shall be
effective until approved by vote of the holders of a majority of the Fund's
outstanding voting securities.
14. Miscellaneous. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the subject matter hereof. The captions in this
Agreement are included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their constitution or
effect. Should any part of this Agreement be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby. This Agreement shall be binding on and shall inure to the
benefit of the parties hereto and their respective successors.
IN WITNESS WHEREOF, the parties hereto caused this Agreement to be
executed by their officers thereunto duly authorized.
Attest: XXXX XXXXX FUNDS MANAGEMENT, INC.
By: /s/ Xxxx Xxxxx By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------ ------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Senior Vice President
Attest: XXXX XXXXX INVESTORS TRUST, INC.
(on behalf of Xxxx Xxxxx American Leading
Companies Trust)
By: /s/ Xxxx Xxxxx By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------ ------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
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APPENDIX A
Xxxx Xxxxx American Leading Companies 0.75% of average daily net assets up
Trust to $1 billion;
0.65% of average daily net assets
over $1 billion
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