INVESTMENT ADVISORY AND SERVICE CONTRACT between THE JENSEN PORTFOLIO, INC. and JENSEN INVESTMENT MANAGEMENT, INC.
between
THE
XXXXXX PORTFOLIO, INC.
and
XXXXXX
INVESTMENT MANAGEMENT, INC.
This
Agreement is entered into, effective February 28, 2007, by and between THE
XXXXXX PORTFOLIO, INC., an Oregon corporation (the “Fund”), and XXXXXX
INVESTMENT MANAGEMENT, INC., an Oregon corporation (the “Adviser”).
In
consideration of the mutual covenants contained in this Agreement, it is hereby
agreed as follows:
1. The
Fund
hereby employs the Adviser to act as its investment adviser and, as such,
to manage the investment and reinvestment of the assets of the Fund
in accordance with the Fund’s investment objectives, policies and limitations,
and to administer the Fund’s affairs to the extent requested by the Fund,
subject to the supervision of the Board of Directors of the Fund, for the period
and upon the terms set forth in this Agreement. Investment of funds
shall be subject to all applicable restrictions of the Articles of Incorporation
and Bylaws of the Fund as may, from time to time, be in force and all applicable
provisions of the Investment Company Act of 1940, or any successor statute,
as
amended from time to time (the “1940 Act”).
The
Adviser agrees to: (a) furnish the investment advisory services
specified above; (b) furnish, for the use of the Fund, office space and all
necessary office facilities, equipment and personnel for servicing the
investments of the Fund; and (c) permit any of its officers and employees
to serve, without compensation except as otherwise set forth herein, as
directors or officers of the Fund if elected to such positions. The
Adviser shall pay the salaries and fees, if any, of all officers of the Fund
and
of all directors of the Fund who are “interested persons” (as defined in the
0000 Xxx) of the Fund or of the Adviser and of all personnel of the Fund or
Adviser performing services relating to research, statistical and investment
activities.
The
Adviser shall, on behalf of the Fund, maintain the Fund’s records and books of
account (other than those maintained by the Fund’s transfer agent, registrar,
custodian and shareholder servicing agent). All books and records so
maintained shall be the property of the Fund and, upon request, the Adviser
shall surrender to the Fund any of such books and records
requested.
The
investment policies and all other actions of the Fund are, and shall at all
times be, subject to the control and direction of the Board of Directors of
the
Fund. In acting under this Agreement, the Adviser shall be an
independent contractor and shall not be an agent of the Fund.
With
respect to services performed in connection with the purchase and sale of
portfolio securities on behalf of the Fund, the Adviser may place transaction
orders for the Fund’s account with brokers or dealers selected by the
Adviser. In connection with the selection of such brokers or dealers
and the placing of such orders, the Adviser shall not be deemed to have acted
unlawfully or to have breached any duty, created by this Agreement or otherwise,
solely by reason of its having caused the Fund to pay a broker or dealer an
amount of commission for effecting a securities transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if the Adviser has determined in good faith that the net price
to the Fund of such transaction was reasonable in relation to the net price
for
comparable transactions engaged in by similarly situated investors.
1
2. For
the
services and facilities to be furnished, the Fund shall pay to the Adviser
monthly compensation equal to an annual rate of 0.50 percent of the Fund’s
average daily net assets. The daily net asset value of the Fund shall
be computed in the manner and at the times set forth in the Fund’s Articles of
Incorporation. On any day that the Fund’s net asset value is not
calculated, the net asset value for such day shall be deemed to be the net
asset
value as of the close of business on the last day on which such calculation
was
made for the purposes of the foregoing computations. Except as
hereinafter set forth, compensation under this Agreement shall be calculated
and
accrued daily, and the amounts of the daily accruals shall be paid
monthly. Such calculations shall be made by applying 1/365th of the
annual rate to the Fund’s net asset value each day determined as of the close of
business on that day.
For
the
month and year in which this Agreement becomes effective or terminates, there
shall be an appropriate proration on the basis of the number of days that the
Agreement is in effect during the month and year, respectively.
The
services of the Adviser under this Agreement are not to be deemed exclusive,
and
the Adviser shall be free to render similar services or other services to
others, including other investment companies, so long as its services under
this
Agreement are not impaired by the delivery of such services.
3. The
Fund
shall pay all of its expenses other than those expressly stated to be payable
by
the Adviser. The expenses payable by the Fund shall include, without
limitation: (a) interest and taxes; (b) brokerage fees and
commissions and other costs in connection with the purchase or sale of portfolio
securities; (c) fees and expenses of its directors other than those who are
“interested persons” (as defined in the 0000 Xxx) of the Fund or the Adviser;
(d) legal and audit expenses; (e) transfer agent expenses and expenses
for servicing shareholder accounts; (f) expenses of computing the net asset
value of the shares of the Fund and the amount of its dividends;
(g) custodian fees and expenses; (h) administrative fees and expenses;
(i) fees and expenses related to the registration and qualification of the
Fund and its shares for distribution under state and federal securities laws;
(j) expenses of printing and mailing reports, notices and proxy materials
to shareholders of the Fund; (k) the cost of issuing share certificates, if
certificates are issued; (l) expenses for reports, membership dues and
other dues in the Investment Company Institute or any similar trade
organization; (m) expenses of preparing and typesetting prospectuses;
(n) expenses of printing and mailing prospectuses sent to existing
shareholders; (o) such nonrecurring expenses as may arise, including
expenses incurred in actions, suits or proceedings to which the Fund is a party
and the legal obligation that the Fund may have to indemnify its officers and
directors in respect thereto; (p) the organizational costs of the Fund and
other Fund expenses that are capitalized; (q) insurance premiums;
(r) expenses of maintaining the Fund’s corporate existence, providing
investor services and corporate reports, and holding corporate meetings; and
(s) such other expenses as the directors of the Fund may, from time to
time, determine to be properly payable by the Fund.
The
Adviser may, but has no obligation to, pay any or all of the expenses of the
Fund that are payable by the Fund. In such event, the Fund shall
promptly reimburse the Adviser for all such expenses so paid by the
Adviser.
4. In
the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser, the
Adviser shall not be subject to liability to the Fund or to any shareholder
of
the Fund for any act or omission in the course of, or connected with, rendering
services under this Agreement or for any losses that may be sustained by the
Fund or its shareholders in the purchase, holding or sale of any
security.
5. Subject
to all applicable statutes and regulations, it is understood that directors,
officers or agents of the Fund are or may be interested in the Adviser as
officers, directors, agents, shareholders or otherwise and that the officers,
directors, shareholders and agents of the Adviser may be interested in the
Fund
as officers, directors, agents, shareholders or otherwise.
6. The
Adviser shall have the right to grant the use of a name similar to the Fund’s
name to another investment company or business enterprise without the approval
of the Fund’s shareholders and shall have the right to withdraw from the Fund
the use of the Fund’s name. However, the Adviser may not withdraw
from the Fund the use of the Fund’s name without submitting to the Fund’s
shareholders the question of whether the shareholders wish the Fund to continue
this Agreement.
2
7. This
Agreement became effective on February 28, 2007 and shall continue in full
force
and effect until August 1, 2008 unless sooner terminated as hereinafter
provided. The Agreement shall continue in force from year to year
thereafter, but only as long as such continuance is specifically approved at
least annually in the manner required by the 1940 Act.
This
Agreement shall automatically terminate in the event of its assignment, and
may
be terminated at any time without payment of any penalty by the Fund or by
the
Adviser on 60 days’ written notice to the other party. The Fund may
effect termination by action of its Board of Directors or by vote of a majority
of the outstanding shares of the common stock of the Fund (as defined in the
1940 Act), accompanied by the appropriate notice. In the event of the
death or disability of any of the principal officers of the Adviser, or if,
for
any other reason, there is a material change in the management or ownership
of
the Adviser, the Board of Directors of the Fund shall be required to meet as
soon as practicable after such event to consider whether another investment
adviser should be selected for the Fund. If the Fund’s Board
determines, at such meeting, that this Agreement should be terminated, this
Agreement may be terminated without the payment of any penalty and without
any
required prior notice; provided, however, that any change in the
ownership of the Adviser that constitutes an assignment (within the meaning
of
the 0000 Xxx) shall require the automatic termination of this
Agreement.
This
Agreement may be terminated at any time by the Board of Directors of the Fund
or
by vote of a majority of the outstanding shares of common stock of the Fund,
and
such termination shall be without the payment of any penalty and without any
required prior notice, if it shall have been established by a court of competent
jurisdiction that the Adviser or any officer or director of the Adviser has
taken any action that results in a breach of the covenants of the Adviser set
forth in this Agreement. In addition, the Adviser agrees to inform
the Board of Directors of the Fund if the Adviser learns that it or any of
its
officers or directors has taken any action that results in a breach of the
Adviser’s covenants set forth in this Agreement. The Board of
Directors of the Fund shall meet as soon as practicable after it receives such
notification to consider whether another investment adviser should be selected
for the Fund. If the Fund’s Board determines, at such meeting, that
this Agreement should be terminated, this Agreement may be terminated without
the payment of any penalty and without any required prior notice.
Termination
of this Agreement shall not affect the right of the Adviser to receive payments
on any unpaid balance of the compensation described in Section 2 earned prior
to
such termination.
8. 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 thereby
be
affected.
9. Any
notice under this Agreement shall be in writing, addressed and delivered or
mailed, postage prepaid, to the other party at such address as such other party
may designate for the receipt of such notice.
10. If
any
action or suit is instituted to enforce or interpret this Agreement, the
prevailing party shall be entitled to recover from the other party, in addition
to all other rights and remedies, the prevailing party’s reasonable attorney
fees at trial and on appeal.
IN
WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement to be
executed as of the date first written above.
THE
XXXXXX PORTFOLIO, INC.
By /s/ Xxxxxx
XxXxxx
President
|
XXXXXX
INVESTMENT MANAGEMENT, INC.
By /s/ Xxxxxx
Xxxxxx
Chairman
|
3