BAIRD FUNDS, INC.
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is entered into as of the 29th day of September, 2000,
between Baird Funds, Inc., a Wisconsin corporation (the "Corporation"), and
Xxxxxx X. Xxxxx & Co. Incorporated, a Wisconsin corporation (the "Advisor").
W I T N E S S E T H
WHEREAS, the Corporation is an open-end investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"). The
Corporation is authorized to create separate series, each with its own separate
investment portfolio (the "Funds"), and the beneficial interest in each such
series will be represented by a separate series of shares (the "Shares").
WHEREAS, the Advisor is a registered investment advisor, engaged in the
business of rendering investment advisory services.
WHEREAS, in managing the Corporation's assets, as well as in the
conduct of certain of its affairs, the Corporation seeks the benefit of the
Advisor's services and its assistance in performing certain managerial
functions. The Advisor desires to furnish such services and to perform the
functions assigned to it under this Agreement for the consideration provided for
herein.
NOW THEREFORE, the parties mutually agree as follows:
1. APPOINTMENT OF THE ADVISOR. The Corporation hereby appoints the Advisor as
investment advisor for each of the Funds of the Corporation on whose behalf the
Corporation executes an Exhibit to this Agreement, and the Advisor, by execution
of each such Exhibit, accepts the appointments. Subject to the direction of the
Board of Directors (the "Directors") of the Corporation, the Advisor shall
manage the investment and reinvestment of the assets of each Fund in accordance
with the Fund's investment objective and policies and limitations, for the
period and upon the terms herein set forth. The investment of funds shall also
be subject to all applicable restrictions of the Articles of Incorporation and
By-Laws of the Corporation as may from time to time be in force.
2. EXPENSES PAID BY THE ADVISOR. In addition to the expenses which the Advisor
may incur in the performance of its responsibilities under this Agreement, and
the expenses which it may expressly undertake to incur and pay, the Advisor
shall incur and pay all reasonable compensation, fees and related expenses of
the Corporation's officers and its Directors, except for such Directors who are
not interested persons (as that term is defined in Section 2(a)(19) of the 0000
Xxx) of the Advisor, and all expenses related to the rental and maintenance of
the principal offices of the Corporation.
3. INVESTMENT ADVISORY FUNCTIONS. In its capacity as investment advisor, the
Advisor shall have the following responsibilities:
(a) To furnish continuous advice and recommendations to the Funds, as to the
acquisition, holding or disposition of any or all of the securities or other
assets which the Funds may own or contemplate acquiring from time to time;
(b) To cause its officers to attend meetings and furnish oral or written
reports, as the Corporation may reasonably require, in order to keep the
Directors and appropriate officers of the Corporation fully informed as to the
condition of the investments of the Funds, the investment recommendations of the
Advisor, and the investment considerations which have given rise to those
recommendations; and
(c) To supervise the purchase and sale of securities or other assets as directed
by the appropriate officers of the Corporation.
The services of the Advisor are not to be deemed exclusive and the Advisor shall
be free to render similar services to others as long as its services for others
does not in any way hinder, preclude or prevent the Advisor from performing its
duties and obligations under this Agreement. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties hereunder on the part of the Advisor, the Advisor shall not be subject to
liability to the Corporation, the Funds, or to any shareholder for any act or
omission in the course of, or in connection with, rendering services hereunder
or for any losses that may be sustained in the purchase, holding or sale of any
security.
4. OBLIGATIONS OF THE CORPORATION. The Corporation shall have the following
obligations under this Agreement:
(a) To keep the Advisor continuously and fully informed as to the composition of
the Funds' investments and the nature of all of their respective assets and
liabilities;
(b) To furnish the Advisor with a copy of any financial statement or report
prepared for it by certified or independent public accountants, and with copies
of any financial statements or reports made to the Funds' shareholders or to any
governmental body or securities exchange;
(c) To furnish the Advisor with any further materials or information which the
Advisor may reasonably request to enable it to perform its functions under this
Agreement; and
(d) To compensate the Advisor for its services in accordance with the provisions
of paragraph 5 hereof.
5. COMPENSATION. The Corporation will pay the Advisor a fee for its services
with respect to each Fund (the "Advisory Fee") at the annual rate set forth on
the Exhibits hereto. The Advisory Fee shall be accrued each calendar day during
the term of this Agreement and the sum of the daily fee accruals shall be paid
monthly as soon as practicable following the last day of each month. The daily
fee accruals will be computed by multiplying 1/365 by the annual rate and
multiplying the product by the net asset value of the Fund as determined in
accordance with the Corporation's registration statement as of the close of
business on the previous day on which the Fund was open for business, or in such
other manner as the parties agree. The Advisor may from time to time and for
such periods as it deems appropriate or for such time and to the extent agreed
on the Exhibits hereto for a Fund reduce its compensation and/or assume expenses
for one or more of the Funds (including initial organization costs); PROVIDED,
HOWEVER, that with respect to any expense limitation set forth on the Exhibits
hereto the Advisor shall be entitled to recoup such amounts for a period of up
to three (3) years from the date such amount was reduced or assumed, provided
that, the expense ratios in those future years are less than the limits
specified on the Exhibits and less than the limits in effect in those future
years.
6. EXPENSES PAID BY CORPORATION.
(a) Except as provided in this paragraph, nothing in this Agreement shall be
construed to impose upon the Advisor the obligation to incur, pay or reimburse
the Corporation for any expenses not specifically assumed by the Advisor under
paragraph 2 above. Each Fund shall pay or cause to be paid all of its expenses
and the Fund's allocable share of the Corporation's expenses, including, but not
limited to, investment advisor fees; any compensation, fees, or reimbursements
which the Corporation pays to its Directors who are not interested persons (as
that phrase is defined in Section 2(a)(19) of the 0000 Xxx) of the Advisor; fees
and expenses of the custodian, transfer agent, registrar or dividend disbursing
agent; current legal, accounting and printing expenses; administrative,
clerical, recordkeeping and bookkeeping expenses; brokerage commissions and all
other expenses in connection with the execution of Fund transactions; interest;
all federal, state and local taxes (including stamp, excise, income and
franchise taxes); expenses of shareholders' meetings and of preparing, printing
and distributing proxy statements, notices and reports to shareholders; expenses
of preparing and filing reports and tax returns with federal and state
regulatory authorities; and all expenses incurred in complying with all federal
and state laws and the laws of any foreign country applicable to the issue,
offer or sale of Shares of the Funds, including but not limited to, all costs
involved in the registration or qualification of Shares of the Funds for sale in
any jurisdiction and all costs involved in preparing, printing and distributing
prospectuses and statements of additional information to existing shareholders
of the Funds.
(b) If expenses borne by a Fund in any fiscal year (including the Advisor's fee,
but excluding taxes, interest, brokerage commissions, Rule 12b-1 expenses and
similar fees) exceed those set forth in any statutory or regulatory formula
applicable to a Fund, the Advisor will reimburse the Fund for any excess.
7. BROKERAGE COMMISSIONS. For purposes of this Agreement, brokerage commissions
paid by a Fund upon the purchase or sale of securities shall be considered a
cost of the securities of the Fund and shall be paid by the respective Fund. The
Advisor is authorized and directed to place Fund transactions only with brokers
and dealers who render satisfactory service in the execution of orders at the
most favorable prices and at reasonable commission rates; provided, however,
that the Advisor may 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
Advisor determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided by such
broker or dealer viewed in terms of either that particular transaction or the
overall responsibilities of the Advisor. In placing Fund business with such
broker or dealers, the Advisor shall seek the best execution of each
transaction, and all such brokerage placement shall be made in compliance with
Section 28(e) of the Securities Exchange Act of 1934, as amended, and other
applicable state and federal laws. Notwithstanding the foregoing, the
Corporation shall retain the right to direct the placement of all Fund
transactions, and the Directors may establish policies or guidelines to be
followed by the Advisor in placing Fund transactions for the Funds pursuant to
the foregoing provisions.
8. PROPRIETARY RIGHTS. The Advisor has proprietary rights in each Fund's name
and the Corporation's name. The Corporation acknowledges and agrees that the
Advisor may withdraw the use of such names from the Funds or the Corporation
should it cease to act as the investment advisor to any Fund.
9. TERMINATION. This Agreement may be terminated at any time, without penalty,
by the Directors of the Corporation or by the shareholders of a Fund acting by
the vote of at least a majority of its outstanding voting securities (as that
phrase is defined in Section 2(a)(42) of the 1940 Act), provided in either case
that 60 days' written notice of termination be given to the Advisor at its
principal place of business. This Agreement may also be terminated by the
Advisor at any time by giving 60 days' written notice of termination to the
Corporation, addressed to its principal place of business.
10. ASSIGNMENT. This Agreement shall terminate automatically in the event of
any assignment (within the meaning of Section 2(a)(4) of the 0000 Xxx) of this
Agreement.
11. TERM. This Agreement shall begin for each Fund as of the date of execution
of the applicable Exhibit and shall continue in effect with respect to each Fund
(and any subsequent Funds added pursuant to an Exhibit during the initial term
of this Agreement) for two years from the date of this Agreement and thereafter
for successive periods of one year, subject to the provisions for termination
and all of the other terms and conditions hereof if such continuation shall be
specifically approved at least annually (i) by the vote of a majority of the
Directors of the Corporation, including a majority of the Directors who are not
parties to this Agreement or "interested persons" of any such party (as defined
in the 1940 Act), cast in person at a meeting called for that purpose or (ii) by
the vote of a majority of the outstanding voting securities (as that phrase is
defined in Section 2(a)(42) of the 0000 Xxx) of each Fund. If a Fund is added
after the first approval by the Directors as described above, this Agreement
will be effective as to that Fund upon execution of the applicable Exhibit and
will continue in effect until the next annual approval of this Agreement by the
Directors and thereafter for successive periods of one year, subject to approval
as described above.
12. AMENDMENTS. This Agreement may be amended by the mutual consent of the
parties, provided that the terms of each such amendment shall be approved by the
Directors or by the affirmative vote of a majority of the outstanding voting
securities (as that phrase is defined in Section 2(a)(42) of the 0000 Xxx) of
each Fund.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Wisconsin, provided, however
that nothing herein shall be construed in a manner that is inconsistent with the
1940 Act, the Investment Advisers Act of 1940, as amended, or the rules and
regulations promulgated with respect to such respective Acts.
This Agreement will become binding on the parties hereto upon their
execution of the Exhibits to this Agreement.
EXHIBIT A
to the
Investment Advisory Agreement
XXXXX SHORT-TERM BOND FUND
For all services rendered by the Advisor hereunder, the Corporation
shall pay the Advisor, on behalf of the above-named Fund, and the Advisor agrees
to accept as full compensation for all services rendered hereunder, an annual
investment advisory fee equal to 0.25% of the average daily net assets of the
Fund.
The annual investment advisory fee shall be accrued daily at the rate
of 1/365th of 0.25% applied to the daily net assets of the Fund. The advisory
fee so accrued shall be paid by the Corporation to the Advisor monthly.
Executed as of this 29th day of September, 2000.
THE ADVISOR:
XXXXXX X. XXXXX & CO. INCORPORATED
By: /s/ Xxxx X. Xxxxxxxx
THE CORPORATION:
BAIRD FUNDS, INC.
By: /s/ Xxxxx X. Xxxxx
EXHIBIT B
to the
Investment Advisory Agreement
XXXXX INTERMEDIATE BOND FUND
For all services rendered by the Advisor hereunder, the Corporation
shall pay the Advisor, on behalf of the above-named Fund, and the Advisor agrees
to accept as full compensation for all services rendered hereunder, an annual
investment advisory fee equal to 0.25% of the average daily net assets of the
Fund.
The annual investment advisory fee shall be accrued daily at the rate
of 1/365th of 0.25% applied to the daily net assets of the Fund. The advisory
fee so accrued shall be paid by the Corporation to the Advisor monthly.
Executed as of this 29th day of September, 2000.
THE ADVISOR:
XXXXXX X. XXXXX & CO. INCORPORATED
By: /s/ Xxxx X. Xxxxxxxx
THE CORPORATION:
BAIRD FUNDS, INC.
By: /s/ Xxxxx X. Xxxxx
EXHIBIT C
to the
Investment Advisory Agreement
XXXXX CORE BOND FUND
For all services rendered by the Advisor hereunder, the Corporation
shall pay the Advisor, on behalf of the above-named Fund, and the Advisor agrees
to accept as full compensation for all services rendered hereunder, an annual
investment advisory fee equal to 0.25% of the average daily net assets of the
Fund.
The annual investment advisory fee shall be accrued daily at the rate
of 1/365th of 0.25% applied to the daily net assets of the Fund. The advisory
fee so accrued shall be paid by the Corporation to the Advisor monthly.
Executed as of this 29th day of September, 2000.
THE ADVISOR:
XXXXXX X. XXXXX & CO. INCORPORATED
By: /s/ Xxxx X. Xxxxxxxx
THE CORPORATION:
BAIRD FUNDS, INC.
By: /s/ Xxxxx X. Xxxxx
EXHIBIT D
to the
Investment Advisory Agreement
XXXXX INTERMEDIATE MUNICIPAL BOND FUND
For all services rendered by the Advisor hereunder, the Corporation
shall pay the Advisor, on behalf of the above-named Fund, and the Advisor agrees
to accept as full compensation for all services rendered hereunder, an annual
investment advisory fee equal to 0.25% of the average daily net assets of the
Fund.
The annual investment advisory fee shall be accrued daily at the rate
of 1/365th of 0.25% applied to the daily net assets of the Fund. The advisory
fee so accrued shall be paid by the Corporation to the Advisor monthly.
Executed as of this 29th day of September, 2000.
THE ADVISOR:
XXXXXX X. XXXXX & CO. INCORPORATED
By: /s/ Xxxx X. Xxxxxxxx
THE CORPORATION:
BAIRD FUNDS, INC.
By: /s/ Xxxxx X. Xxxxx
EXHIBIT E
to the
Investment Advisory Agreement
BAIRD HORIZON GROWTH FUND
For all services rendered by the Advisor hereunder, the Corporation
shall pay the Advisor, on behalf of the above-named Fund, and the Advisor agrees
to accept as full compensation for all services rendered hereunder, an annual
investment advisory fee equal to 0.65% of the average daily net assets of the
Fund.
The Advisor hereby agrees that until December 31, 2001, the Advisor
will waive its fees and/or reimburse the Fund's operating expenses to the extent
necessary to ensure that the total operating expenses, excluding taxes, interest
and brokerage commissions (on an annual basis), do not exceed 1.65% of the
Investor Class's average daily net assets and 1.40% of the Institutional Class's
average daily net assets, subject to possible later recoupment as provided in
Section 5.
The annual investment advisory fee shall be accrued daily at the rate
of 1/365th of 0.65% applied to the daily net assets of the Fund. The advisory
fee so accrued shall be paid by the Corporation to the Advisor monthly.
Executed as of this 29th day of September, 2000.
THE ADVISOR:
XXXXXX X. XXXXX & CO. INCORPORATED
By: /s/ Xxxx X. Xxxxxxxx
THE CORPORATION:
BAIRD FUNDS, INC.
By: /s/ Xxxxx X. Xxxxx
EXHIBIT F
to the
Investment Advisory Agreement
XXXXX AGGREGATE BOND FUND
For all services rendered by the Advisor hereunder, the Corporation
shall pay the Advisor, on behalf of the above-named Fund, and the Advisor agrees
to accept as full compensation for all services rendered hereunder, an annual
investment advisory fee equal to 0.25% of the average daily net assets of the
Fund.
The annual investment advisory fee shall be accrued daily at the rate
of 1/365th of 0.65% applied to the daily net assets of the Fund. The advisory
fee so accrued shall be paid by the Corporation to the Advisor monthly.
Executed as of this 29th day of September, 2000.
THE ADVISOR:
XXXXXX X. XXXXX & CO. INCORPORATED
By: /s/ Xxxx X. Xxxxxxxx
THE CORPORATION:
BAIRD FUNDS, INC.
By: /s/ Xxxxx X. Xxxxx
