INVESTMENT ADVISORY AGREEMENT
XXXXXX FUNDS
AGREEMENT made this 28th day of February, 2002, by and between Xxxxxx
Funds, a Massachusetts business trust (the "Trust"), and Xxxxxx Investment
Management LLC (the "Adviser").
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended; and
WHEREAS, the Trust has retained Xxxxxx Investment Partners, Inc.
(the "Administrator") to provide administration of the Trust's operations,
subject to the control of the Board of Trustees;
WHEREAS, the Trust desires to retain the Adviser to render investment
management services with respect to such portfolios as the Trust and the Adviser
may agree upon (each a "Fund" and together, the "Funds") and as are set forth in
the attached schedule, and the Adviser is willing to render such services:
NOW, THEREFORE, in consideration of mutual covenants herein contained,
the parties hereto agree as follows:
1. Duties of Adviser. The Trust employs the Adviser to manage the
investment and reinvestment of the assets of the Funds, and to
continuously review, supervise and (where appropriate)
administer the investment program of each Fund, to determine
in its discretion (where appropriate) the securities to be
purchased or sold, to provide the Administrator and the Trust
with records concerning the Adviser's activities which the
Trust is required to maintain, and to render regular reports
to the Administrator and to the Trust's officers and Trustees
concerning the Adviser's discharge of the foregoing
responsibilities. The retention of a sub-adviser by the
Adviser shall not relieve the Adviser of its responsibilities
under this Agreement.
The Adviser shall discharge the foregoing responsibilities
subject to the control of the Board of Trustees of the Trust
and in compliance with such policies as the Trustees may from
time to time establish, and in compliance with the objectives,
policies, and limitations for each such Fund set forth in the
Fund's prospectus and statement of additional information as
amended from time to time, and applicable laws and
regulations.
The Adviser accepts such employment and agrees, at its own
expense, to render the services and to provide the office
space, furnishings and equipment and the personnel (including
any sub-advisers) required by it to perform the services on
the terms and for the compensation provided herein. The
Adviser will not, however, pay for the cost of securities,
commodities, and other investments (including brokerage
commissions and other transaction charges, if any) purchased
or sold for the Trust.
2. Fund Transactions. The Adviser is authorized to select the
brokers or dealers that will execute the purchases and sales
of portfolio securities for the Funds and is directed to use
its best efforts to obtain the best net results as described
from time to time in the Funds' Prospectuses and Statement of
Additional Information. The Adviser will promptly communicate
to the Administrator and to the officers and the Trustees of
the Trust such information relating to portfolio transactions
as they may reasonably request.
It is understood that the Adviser will not be deemed to have
acted unlawfully, or to have breached a fiduciary duty to the
Trust or be in breach of any obligation owing to the Trust
under this Agreement, or otherwise, by reason of its having
directed a securities transaction on behalf of the Trust to a
broker-dealer in compliance with the provisions of Section
28(e) of the Securities Exchange Act of 1934 or as described
from time to time by the Funds' Prospectuses and Statement of
Additional Information.
3. Compensation of the Adviser. For the services to be rendered
by the Adviser as provided in Sections 1 and 2 of this
Agreement, the Trust shall pay to the Adviser compensation at
the rate specified in the Schedule(s) which are attached
hereto and made a part of this Agreement. Such compensation
shall be paid to the Adviser at the end of each month, and
calculated by applying a daily rate, based on the annual
percentage rates as specified in the attached Schedule(s), to
the assets. The fee shall be based on the average daily net
assets for the month involved (less any assets of such Funds
held in non-interest bearing special deposits with a Federal
Reserve Bank). The Adviser may, in its discretion and from
time to time, waive a portion of its fee.
All rights of compensation under this Agreement for services
performed as of the termination date shall survive the
termination of this Agreement.
4. Other Expenses. The Adviser shall pay all expenses of printing
and mailing reports, prospectuses, statements of additional
information, and sales literature relating to the solicitation
of prospective clients. The Trust shall pay all expenses
relating to mailing to existing shareholders prospectuses,
statements of additional information, proxy solicitation
material and shareholder reports.
5. Excess Expenses. If the expenses for any Fund for any fiscal
year (including fees and other amounts payable to the Adviser,
but excluding interest, taxes, brokerage costs, litigation,
and other extraordinary costs) as calculated every business
day would exceed the expense limitations imposed on investment
companies by any applicable statute or regulatory authority of
any jurisdiction in which shares of a Fund are qualified for
offer and sale, the Adviser shall bear such excess cost.
However, the Adviser will not bear expenses of any Fund which
would result in the Fund's inability to qualify as a regulated
investment company under provisions of the Internal Revenue
Code. Payment of expenses by the Adviser pursuant to this
Section 5 shall be settled on a monthly basis (subject to
fiscal year end reconciliation) by a reduction in the fee
payable to the Adviser for such month pursuant to Section 3(a)
or 3(b) and, if such reduction shall be insufficient to offset
such expenses, by reimbursing the Trust.
6. Reports. The Trust and the Adviser agree to furnish to each
other, if applicable, current prospectuses, proxy statements,
reports to shareholders, certified copies of their financial
statements, and such other information with regard to their
affairs as each may reasonably request.
7. Status of Adviser. The services of the Adviser to the Trust
are not to be deemed exclusive, and the Adviser shall be free
to render similar services to others so long as its services
to the Trust are not impaired thereby. The Adviser shall be
deemed to be an independent contractor and shall, unless
otherwise expressly provided or authorized, have no authority
to act for or represent the Trust in any way or otherwise be
deemed an agent of the Trust.
8. Certain Records. Any records required to be maintained and
preserved pursuant to the provisions of Rule 31a-1 and Rule
31a-2 promulgated under the Investment Company Act of 1940
which are prepared or maintained by the Adviser on behalf of
the Trust are the property of the Trust and will be
surrendered promptly to the Trust on request.
9. Limitation of Liability of Adviser. The duties of the
Adviser shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be
asserted against the Adviser hereunder. The Adviser shall
not be liable for any error of judgment or mistake of law or
for any loss arising out of any investment or for any
act or omission in carrying out its duties hereunder, except
a loss resulting from willful misfeasance, bad faith or
gross negligence in the performance of its duties, or by
reason of reckless disregard of its obligations and duties
hereunder, except as may otherwise be provided under
provisions of applicable state law or Federal securities law
which cannot be waived or modified hereby. (As used
in this Paragraph 9, the term "Adviser" shall include
directors, officers, employees and other corporate agents of
the Adviser as well as that corporation itself).
10. Permissible Interests. Trustees, agents, and shareholders of
the Trust are or may be interested in the Adviser (or any
successor thereof) as directors, partners, officers, or
shareholders, or otherwise; directors, partners, officers,
agents, and shareholders of the Adviser are or may be
interested in the Trust as Trustees, shareholders or
otherwise; and the Adviser (or any successor) is or may be
interested in the Trust as a shareholder or otherwise. In
addition, brokerage transactions for the Trust may be effected
through affiliates of the Adviser if approved by the Board of
Trustees, subject to the rules and regulations of the
Securities and Exchange Commission.
11. License of Adviser's Name. The Adviser hereby agrees to
grant a license to the Trust for use of its name in the
names of the Funds for the term of this Agreement and
such license shall terminate upon termination of this
Agreement.
12. Duration and Termination. This Agreement, unless sooner
terminated as provided herein, shall remain in effect until
two years from date of execution, and thereafter, for
periods of one year so long as such continuance thereafter is
specifically approved at least annually (a) by the vote of
a majority of those Trustees of the Trust who are not
parties to this Agreement or interested persons of any
such party, cast in person at a meeting called for the
purpose of voting on such approval, and (b) by the Trustees
of the Trust or by vote of a majority of the outstanding
voting securities of each Fund; provided, however, that
if the shareholders of any Fund fail to approve the
Agreement as provided herein, the Adviser may continue to
serve hereunder in the manner and to the extent permitted
by the Investment Company Act of 1940 and rules and
regulations thereunder. The foregoing requirement that
continuance of this Agreement be "specifically approved at
least annually" shall be construed in a manner consistent
with the Investment Company Act of 1940 and the rules and
regulations thereunder.
This Agreement may be terminated as to any Fund at any time,
without the payment of any penalty by vote of a majority of
the Trustees of the Trust or by vote of a majority of the
outstanding voting securities of the Fund on not less than 30
days nor more than 60 days written notice to the Adviser, or
by the Adviser at any time without the payment of any penalty,
on 90 days written notice to the Trust. This Agreement will
automatically and immediately terminate in the event of its
assignment. Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed postpaid, to the
other party at any office of such party.
As used in this Section 11, the terms "assignment",
"interested persons", and a "vote of a majority of the
outstanding voting securities" shall have the respective
meanings set forth in the Investment Company Act of 1940 and
the rules and regulations thereunder; subject to such
exemptions as may be granted by the Securities and Exchange
Commission under said Act.
13. Notice. Any notice required or permitted to be given by either
party to the other shall be deemed sufficient if sent by
registered or certified mail, postage prepaid, addressed by
the party giving notice to the other party at the last address
furnished by the other party to the party giving notice: if to
the Trust, at Xxx Xxxxxxx Xxxxxx Xxxxx, Xxxx, XX 00000, and if
to the Adviser at 0000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxx, XX
00000.
14. Severability. 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.
15. Governing Law. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Massachusetts
and the applicable provisions of the 1940 Act. To the
extent that the applicable laws of the Commonwealth of
Massachusetts, or any of the provisions herein, conflict
with the applicable provisions of the 1940 Act, the latter
shall control.
A copy of the Declaration of Trust of the Trust is on file with the Secretary of
the Commonwealth of Massachusetts, and notice is hereby given that this
instrument is executed on behalf of the Trustees of the Trust as Trustees, and
are not binding upon any of the Trustees, officers, or shareholders of the Trust
individually but binding only upon the assets and property of the Trust.
Further, the obligations of the Trust with respect to any one Fund shall not be
binding upon any other Fund.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the day and year first written above.
XXXXXX FUNDS
By:
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Attest:
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XXXXXX INVESTMENT MANAGEMENT LLC
By:
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Attest:
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Schedule A dated February 28, 2002
to the
Investment Advisory Agreement
dated February 28, 2002
between
Xxxxxx Funds
and
Xxxxxx Investment Management LLC.
Pursuant to Article 3, the Trust shall pay the Adviser compensation at an annual
rate as follows:
Fund Fee (in basis points)
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Xxxxxx Small Cap Equity Fund 0.95%
Xxxxxx Small Cap Value Opportunities Fund 0.95%
