Exhibit 99.(d)(3)
EXHIBIT (d)(3).
Management and Investment Advisory Agreement
for the Xxxxx Partners Value Fund
MANAGEMENT AND
INVESTMENT ADVISORY AGREEMENT
This Agreement dated April 1, 2004 is between THE XXXXX FUNDS, a Delaware
statutory trust (hereinafter called "Trust") and XXXXXXX X. XXXXX & COMPANY, a
Nebraska corporation (hereinafter called "Adviser");
In consideration of the mutual covenants herein contained, the parties
hereto agree as follows:
1. APPOINTMENT OF INVESTMENT ADVISER
The Trust hereby appoints the Adviser to manage the investment and
reinvestment of assets of the Xxxxx PartnersValue Fund (the "Fund") and to
administer its affairs, subject to the supervision of the Board of Trustees of
the Trust for the period and on the terms set forth herein. The Adviser hereby
accepts such appointment and agrees during such period, at its own expense, to
render the services and to assume the obligations herein set forth, for the
compensation herein provided. The Adviser shall not be liable to the Trust for
any act or omission by the Adviser or for any losses sustained by the Trust or
its shareholders except in the case of willful misfeasance, bad faith, gross
negligence or reckless disregard of duty. The federal and state securities laws
and other laws may impose liability under certain circumstances on persons who
act in good faith, and therefore, nothing in this Agreement will waive or limit
any rights the client may have under such laws.
2. DUTIES AND EXPENSES OF ADVISER AND TRUST
(a) The Trust shall, at all times, inform Adviser as to the securities held
by it, the funds available or to become available for investment by it, and
otherwise as to the condition of its affairs.
(b) Adviser shall furnish to the Trust, at the regular executive offices of
the Trust, advice and recommendations with respect to the purchase and sale of
securities and investments and the making of commitments and shall place at the
disposal of the Trust such statistical, research, analytical and
technical services, information and reports as may reasonably be required; shall
furnish the Trust with office facilities in the offices of the Adviser,
including space, furniture and equipment and supplies; and with administrative,
clerical and bookkeeping personnel; and in general shall superintend the affairs
of the Trust, subject to the supervision of the Board of Trustees of the Trust.
The Adviser shall also pay or reimburse the Trust for the compensation, if any,
of the officers of the Trust.
The officers of the Trust or the Adviser shall use their best efforts to
obtain the most favorable execution available from brokers or dealers in
purchasing and selling securities. In so doing, such officers may consider such
factors which they may deem relevant to the Trust's best interest, such as
price, the size of the transaction, the nature of the market for the security,
the amount of commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial stability of
the broker-dealer involved and the quality of service rendered by the
broker-dealer in other transactions. Subject to the foregoing considerations, at
the Trust's expense, such officers may place orders for the purchase or sale of
portfolio securities with brokers or dealers who have provided research,
statistical or other financial information and services to the Trust or the
Adviser. Such officers shall have discretionary authority to utilize
broker-dealers who have provided brokerage and research information of the type
or nature referred to in Section 28(e) of the Securities Exchange Act of 1934 to
the Trust or the Adviser even though it may result in the payment by the Trust
of an amount of commission for effecting a securities transaction in excess of
the amount of commission another broker-dealer would have charged for effecting
that transaction, providing, however, that the Trust officers have determined in
good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by the broker-dealer
effecting the transactions, viewed in terms of either
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that particular transaction or their responsibilities with respect to the
accounts for which said officers exercise investment discretion.
(c) Except as otherwise expressly provided herein, the Trust shall pay the
following items:
(1) the charges and expenses of any custodian or depository appointed
by the Trust for the safekeeping of its cash, securities and other
property;
(2) the charges and expenses of auditors for the Trust;
(3) the charges and expenses of any transfer agents and registrars
appointed by the Trust;
(4) broker's commissions and issue and transfer taxes chargeable to
the Trust in connection with securities transactions to which the Trust or
the Fund is a party;
(5) all taxes and corporate fees payable by the Trust to federal,
state or other governmental agencies;
(6) the cost of stock certificates representing shares of the Trust;
(7) compensation of the trustees of the Trust (other than trustees who
are officers of the Adviser), and all expenses of Trust shareholders' and
trustees' meetings and of preparing, printing and mailing reports to
shareholders of the Trust;
(8) charges and expenses of legal counsel for the Trust in connection
with legal matters relating to the Trust, including without limitation,
legal services rendered in connection with the Trust's corporate existence,
corporate and financial structure, relations with its stockholders and the
issuance of securities; and
(9) all other bookkeeping, administrative and operational costs,
charges and expenses of the Trust, without limitation.
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3. FEES OF ADVISER
For the services and facilities to be furnished by the Adviser hereunder,
the Trust shall pay Adviser an annual fee, paid monthly, equal to the following
percentage based on the average daily net assets of the Fund:
EQUAL TO OR
GREATER THAN LESS THAN RATE
------------ --------- ----
$ 0 $ 2,500,000,000 1.00%
2,500,000,000 5,000,000,000 0.90%
5,000,000,000 0.80%
The compensation for the period from the effective date hereof to the next
succeeding last day of the month shall be prorated according to the proportion
which such period bears to the full month ending on such date, and provided
further that, upon any termination of this Agreement before the end of any
month, such compensation for the period from the end of the last month ending
prior to such termination to the date of termination, shall be prorated
according to the proportion which such period bears to a full month, and shall
be payable upon the date of termination. For the purpose of the Adviser's
compensation, the value of the Fund's net assets shall be computed in the manner
specified in its Declaration of Trust or By-Laws in connection with the
determination of the net asset value of its shares.
4. INDEPENDENT CONTRACTOR
Adviser shall, for all purposes herein, be an independent contractor and
shall have no authority to act for or represent the Trust in its investment
commitments unless otherwise provided. No agreement, bid, offer, commitment,
contract or other engagement entered into by Adviser whether on behalf of
Adviser or whether purported to have been entered into on behalf of the Trust
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shall be binding upon the Trust, and all acts authorized to be done by Adviser
under this Agreement shall be done by it as an independent contractor and not as
agent.
5. NON-EXCLUSIVE SERVICES OF ADVISER
Except to the extent necessary for performance of Adviser's obligations
hereunder, nothing shall restrict the right of Adviser or any of its directors,
officers, or employees who may be directors, officers or employees of the Trust
to engage in any other business or to devote time and attention to the
management or other aspects of any other business whether of a similar or
dissimilar nature or to render services of any kind to any other corporation,
firm, individual or association. The services of the Adviser to the Trust
hereunder are not to be deemed exclusive, and the Adviser shall be free to
render similar services to others so long as its services hereunder be not
impaired thereby.
6. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective on the effective date of the first
public offering of the Fund's shares, and shall continue in effect if approved
annually in accordance with the provisions of the Investment Company Act of 1940
(the "1940 Act") and the regulations promulgated under the 1940 Act.
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 a majority of
the outstanding voting securities of the Fund, in either case upon not less than
sixty (60) days' written notice to Adviser, and it may be terminated by Adviser
upon sixty (60) days' written notice to the Trust.
7. ASSIGNMENT OF AGREEMENT PROHIBITED
This Agreement will automatically be terminated in the event of its
assignment. It may not be transferred, assigned, sold, or in any manner
hypothecated or pledged; nor may any new agreement become effective without the
affirmative vote of a majority of those trustees of the Trust
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who are not parties to such Agreement or interested persons of any such party,
and ratified by a vote of the majority of the outstanding voting securities of
the Fund, provided that this limitation shall not prevent any minor amendments
to the Agreement which may be required by federal or state regulatory bodies.
8. INTERESTED PERSONS
It is understood that trustees, officers, agents and stockholders of the
Fund are or may be interested in the Adviser (or any successor thereof) as
trustees, officers, agents, stockholders or otherwise; that trustees, officers,
agents, and stockholders of the Adviser are or may be interested in the Fund as
trustees, officers, agents, stockholders or otherwise; and that the Adviser (or
any such successor) is or may be interested in the Trust as stockholder or
otherwise.
9. DEFINITIONS
For the purpose of the Agreement, the terms "vote of a majority of the
outstanding voting securities," "assignment," "affiliated person" and
"interested person" shall have the respective meanings specified in the
Investment Company Act of 1940 as now or hereafter in effect.
10. PROPRIETARY INTEREST OF ADVISER
The parties hereto acknowledge and agree that the name "Xxxxx" is
proprietary to and the sole and exclusive property of the Adviser. Adviser
hereby licenses the use of the name "Xxxxx" to the Fund for a term concurrent
with the term of this Agreement. From and after a date which is one hundred
eighty (180) days after the termination of this Agreement, Trust shall not do
business under any name containing the word "Xxxxx" without the prior written
consent of Adviser.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their proper officers and their corporate seals to be hereunto
affixed, all as of the day and year first above written.
THE XXXXX FUNDS
By /s/ Xxxxxxx X. Xxxxx
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President
Attest /s/ Xxxx X. Xxxxxxxx
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Secretary
XXXXXXX X. XXXXX & COMPANY
By /s/ Xxxxxxx X. Xxxxx
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President
Attest /s/ Xxxx X. Xxxxxxxx
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Assistant Secretary
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