Exhibit 5
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT ("Agreement"), made this 14th
day of August, 1986, by and between XXXXXX XXXXXX SOUTHERN CAPITAL FUND, INC.
(the "Fund"), a Maryland corporation, having its principal place of business at
Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000, and XXXXXX XXXXXX INVESTMENT
MANAGEMENT COMPANY, INC. (the "Adviser"), a Tennessee corporation with the same
address.
WHEREAS, the Fund, an open-end, diversified investment company registered under
the Investment Company Act of 1940 (the "1940 Act"), wishes to retain the
Adviser to provide investment advisory, management, and administrative services
to the Fund; 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 convenants herein
contained, it is agreed as follows:
1. The Fund hereby appoints the Adviser as investment adviser and administrator
of the Fund for the period and on the terms set forth in this Agreement. The
Adviser accepts such appointment and agrees to render the services herein set
forth, for the compensation herein provided.
2. The Fund shall at all times keep the Adviser fully informed with regard to
the securities owned by it, its funds available, or to become available, for
investment, and generally as to the condition of its affairs. It shall furnish
the Adviser with such other documents and information with regard to its affairs
as the Adviser may from time to time reasonably request.
3. (a) Subject to the direction and control of the Fund'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 purchase
implement those decisions, all subject to the provisions of the Fund's Articles
of Incorporation and By-laws, the 1940 Act, the applicable rules and regulations
of the Securities and Exchange Commission, and other applicable federal and
state laws, 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 dea
best net results; 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 those brokers, in return for research and
analysis, a higher commission than may be charged by other brokers. 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 and
regulations promulgated by the Securities and Exchange Commission pursuant to
the 0000 Xxx. The Adviser shall also provide advice and recommendations with
respect to other aspects of the business and affairs of the Fund, and shall
perform such other functions of management and supervis
ctors of the Fund.
(b) The Fund authorizes 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 and Rule 11a2-2(T) thereunder, and the Fund
hereby consents to the retention of compensation by such entity or person for
such transaction in accordance with Rule 11a2-2(T)(a)(2)(iv).
4. (a) 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
ll applicable federal and state laws and regulations. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, the Adviser hereby agrees that
any records which it maintains for the Fund are the property of the Fund and
further agrees to surrender promptly to the Fund any of such records upon the
Fund's request. The Adviser further agrees to arrange for the preservation of
the records required to be maintained by Rule 31a-1 under the 1940 Act for the
periods prescribed by Rule 31a-2 under the
thorize 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.
(b) Other than as herein specifically indicated, the Adviser shall not be
responsible for the Fund's expenses. 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:
legal and audit expenses, organizational expenses; interest; taxes; governmental
fees; fees, voluntary assessments and other exp
th 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 incurred in connection therewith; fees of custodians, transfer
agents, registrars or other agents; distribution fee; expenses of preparing
share certificates; expenses relating to the redemption or repurchase of the
Fund's shares; expenses of registering and qualifying Fund shares for sale under
applicable federal and state law and mainta
alifications; expenses of preparing, setting in print, printing and distributing
prospectuses, proxy statements, reports, notices and dividends to Fund
shareholders; cost of stationery; costs of stockholders and other meetings of
the Fund; compensation and expenses of the independent directors of the Fund;
and the Fund's pro rata portion of premiums of any fidelity bond and other
insurance covering the Fund and its officers and directors.
5. 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 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.
6. As compensation for the services performed and the facilities furnished and
expenses assumed by the Adviser, including the services of any consultants
retained by the Adviser, the Fund shall pay the Adviser, as promptly as possible
after the last day of each month, a fee, calculated daily, of 1.0% annually of
the average daily net assets of the Fund for the first $100 million of average
daily net assets and 0.75% annually of the average daily net assets exceeding
$100 million. The first payment of the f
possible at the end of the month next succeeding the effective date of this
Agreement, and shall constitute a full payment of the fee due the Adviser for
all services prior to that date. In the event that the Adviser's right to such
fee commences on a date other than the last day of the month, the fee for such
month shall be based on the average daily assets of the Fund in that period from
the date of commencement to the last day of the month. If this Agreement is
terminated as of any date not the last d
e paid as promptly as possible after such 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 that proportion of such
average daily net assets as 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 busine
ge, 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.
7. 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 that
nothing in this Agreement shall protect the Adviser against any liability to
the Fund or its stockholders to which it would otherwise be subject by reason of
willful misfeasance, bad faith or gross negl
ance of its duties or by reason of its reckless disregard of its obligations and
duties hereunder.
8. Nothing in this Agreement shall limit or restrict the right of any director,
officer, or employee of the Adviser who may also be a director, officer, or
employee of the Fund, to engage in any other business or to devote his time and
attention in part to the management or other aspects of any other business,
whether of a similar nature or a dissimilar nature, nor to limit or restrict the
right of the Adviser to engage in any other business or to render services of
any kind, including investment advisory a
, to any other corporation, firm, individual or association.
9. 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 Securities and
Exchange Commission by any rule, regulation or order.
10. This Agreement shall terminate automatically in the event of its assignment
by the Adviser and shall not be assignable by the Fund without the consent of
the Adviser. This Agreement may also be terminated at any time, without the
payment of any penalty, by the Fund or by the Adviser on sixty (60) days'
written notice addressed to the other at its principal place of business.
11. 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 corporate name any reference to the name of "Xxxxxx Xxxxxx".
The Fund shall have the non-exclusive use of the name "Xxxxxx Xxxxxx" in whole
or in part so long as this Agreement is effective or until such notice is given.
12. This Agreement shall continue in effect for one year and from year to year
thereafter only so long as specifically approved annually by vote of a majority
of the directors of the Fund who are not parties to this Agreement or interested
persons of such parties, cast in person at a meeting called for that purpose,
and either by vote of the holders of a majority of the outstanding voting
securities of the Fund or by majority vote of the Fund's Board of Directors.
13. 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. If any provision of this Agreement shall 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 upon and shall inure to
the benefit of the parties hereto and their respective successors.
IT WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their officers thereunto duly authorized.
Attest: XXXXXX XXXXXX SOUTHERN CAPITAL
FUND, INC.
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxx, Xx.
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Attest: XXXXXX XXXXXX INVESTMENT
MANAGEMENT COMPANY, INC.
By: /s/ Xxxx Xxxxxxxxxx By: /s/ Xxxxxxx X. XxXxxx
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