AMENDED MANAGEMENT AND INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this -------day of -----------, 1994, by and between KPM
FUNDS, INC., a Nebraska corporation (hereinafter called "Fund") and KPM
INVESTMENT MANAGEMENT, INC., 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
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The Fund hereby appoints the Adviser to manage the investment and
reinvestment of assets of the KPM Equity Portfolio, KPM Fixed Income Portfolio
and any other Portfolio of the Fund which may be hereafter designated as a
separate series, subject to the supervision of the Board of Directors of the
Fund 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 Fund for
any act or omission by the Adviser or for any losses sustained by the Fund or
its shareholders except in the case of willful misfeasance, bad faith, gross
negligence or reckless disregard of duty.
2. Duties and Expenses of Adviser and Fund
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(a) The Fund 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 Fund, at the regular executive offices of
the Fund, 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 Fund such statistical, research,
analytical and technical services, information and reports as may reasonably be
required. The Adviser shall also pay or reimburse the Fund for the compensation,
if any, of the officers of the Fund that are also officers or employees of the
Adviser.
The officers of the Fund 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 Fund'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 Fund'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 Fund 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 Fund or the Adviser
even though it may result in the payment by the Fund 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 Fund 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 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 Fund shall pay the
following items:
(1) the charges and expenses of any custodian or depository appointed by
the Fund for the safekeeping of its cash, securities and other
property;
(2) the charges and expenses of auditors for the Fund:
(3) the charges and expenses of any transfer agents and registrars
appointed by the Fund:
(4) broker's commissions and issue and transfer taxes chargeable to the
Fund in connection with securities transactions to which the Fund is
a party:
(5) all taxes and corporate fees payable by the Fund to federal,
state or other governmental agencies:
(6) compensation of the disinterested directors of the Fund, as such, and
all expenses of Fund shareholders' and directors' meetings and of
preparing, printing and mailing reports to shareholders of the Fund:
(7) charges and expenses of legal counsel for the Fund in connection
with legal matters relating to the Fund, including without limitation,
legal services rendered in connection with the Fund's corporate
existence, corporate and financial structure, relations with its
stockholders, and the issuance of securities: and
(8) all other bookkeeping, administrative and operational costs, charges
and expenses of the Fund, without limitation.
3. Fees of Adviser
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For the services to be furnished by the Adviser hereunder, the Fund shall,
commencing with the effective date of the first public offering of shares of the
Portfolios, pay Adviser an annual fee as set forth on Appendix A equal to a
percentage of the average net asset value of the
Portfolios as ascertained on each business day and paid monthly to the extent
that additional series of the Fund are added in the future, the Fund will pay
the fee as approved by the Board of Directors of the Fund which such fee shall
be described on an Appendix A to this Agreement.
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 Articles of Incorporation 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 Fund 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 Fund
shall be binding upon the Fund, 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
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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 Fund
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
Fund 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 unless sooner terminated as herein
provided until the last day of the second fiscal year ending after the Effective
Date, and thereafter shall continue in effect only if approved at least
annually: (a) by the Board of Directors of the Fund: or (b) by the vote of a
majority of the outstanding shares of the Fund (as defined in the Investment
Company Act of 1940) and, in addition, (c) by the vote of a majority of the
directors of the Fund who are not parties hereto nor interested persons of any
party, as required by the Investment Company Act of 1940, provided that the
first such approval by directors under (a) or (c) shall take place within thirty
days prior to or after the last day of the second fiscal year after the
Effective Date, and each subsequent annual approval shall take place within
thirty days prior to or after the last day of the fiscal year in each year
thereafter, and if approval made by the vote of shareholders, such approval
shall be made at a meeting held at any time in any calendar year, and each such
approval whether under (a) and (c) or under (b) and (c) shall be effective to
continue such contract for a period ending on the corresponding day of approval
of the next succeeding year.
This Agreement may be terminated at any time, without payment of any
penalty, by the Board of Directors of the Fund, 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 Fund.
7. Assignment of Agreement Prohibited
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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 directors of the Fund 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
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It is understood that directors, officers, agents and stockholders of
the Fund are or may be interested in the Adviser (or any successor thereof) as
directors, officers, agents, stockholders or otherwise; that directors,
officers, agents, and stockholders of the Adviser are or may be interested in
the Fund as directors, officers, agents, stockholders or otherwise: and that the
Adviser (or any such successor) is or may be interested in the Fund 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
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The parties hereto acknowledge and agree that the letters "KPM" are
proprietary to and the sole and exclusive property of the Adviser. Adviser
hereby licenses the use of the letters
"KPM" 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, Fund shall not do business under any name containing the letters
"KPM" without the prior written consent of Adviser.
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.
KPM FUNDS, INC.
By --------------------------------
President
Attest --------------------------
Secretary
KPM INVESTMENT MANAGEMENT, INC.
By ------------------------------
President
Attest--------------------------
Secretary
APPENDIX A
FEES
KPM Equity Portfolio .75%
KPM Fixed Income Portfolio .60%
The Adviser further agrees until further notice to voluntarily
reimburse the Portfolios monthly, to the extent of the advisory fee paid, in an
amount necessary to limit the Portfolios total expenses, other than
extraordinary expenses, to an amount not exceeding an annual rate of 1.50% for
the KPM Equity Portfolio and 1.25% for the KPM Fixed Income Portfolio.
