EXHIBIT 99.(d-1)
THE XXXXX AMERICAN FUND
INVESTMENT ADVISORY AGREEMENT
January 17, 2007
Xxxx Xxxxx Management, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The Xxxxx American Fund (the "Fund"), an unincorporated business
trust organized under the laws of the Commonwealth of Massachusetts, on behalf
of the portfolios named on Schedule I hereto, as such Schedule may be revised
from time to time (each, a "Portfolio"), hereby confirms its agreement with Xxxx
Xxxxx Management, Inc. ("Xxxxx Management") as follows:
1. INVESTMENT DESCRIPTION; APPOINTMENT
The Fund desires to employ the capital of each Portfolio by
investing and reinvesting in investments of the kind and in accordance with the
limitations specified in its Agreement and Declaration of Trust and in its
Prospectus and Statement of Additional Information, as from time to time in
effect, and in such manner and to such extent as may from time to time be
approved by the Board of Trustees of the Fund. Copies of the Fund's Prospectus,
Statement of Additional Information and Agreement and Declaration of Trust, as
each may from time to time be amended, have been or will be submitted to Xxxxx
Management. The Fund desires to employ and hereby appoints Xxxxx Management to
act as the investment manager for each Portfolio. Xxxxx Management accepts the
appointment and agrees to furnish the services for the compensation set forth
below.
2. SERVICES AS INVESTMENT MANAGER
Subject to the supervision and direction of the Board of Trustees of
the Fund, Xxxxx Management will (a) act in strict conformity with the Fund's
Agreement and Declaration of Trust, the Investment Company Act of 1940 (the
"1940 Act"), and the Investment Advisers Act of 1940, as the same may from time
to time be amended; (b) manage each Portfolio in accordance with such
Portfolio's investment objective and policies as stated in the Fund's Prospectus
and Statement of Additional Information as from time to time in effect; (c) make
general investment decisions for each Portfolio involving decisions concerning
(i) the specific types of securities to be held by such Portfolio and the
proportion of such Portfolio's assets that should be allocated to such
investments during particular market cycles and (ii) the specific issuers whose
securities will be purchased or sold by such Portfolio; and (d) supply
statistical and research data; and general assistance in all aspects of the
Fund's operations with respect to each Portfolio. In providing those services,
Xxxxx Management will supervise each Portfolio's investments generally and
conduct a continual program of evaluation of such Portfolio's assets.
In connection with the performance of its duties under this
Agreement, it is understood that Xxxxx Management may from time to time employ
or associate with itself such person or persons as Xxxxx Management may believe
to be particularly fitted to assist it in the performance of this Agreement, it
being understood that the compensation of such person or persons shall be paid
by Xxxxx Management and that no obligation may be incurred on the Fund's behalf
in any such respect.
3. BROKERAGE
In executing transactions for each Portfolio and selecting brokers
or dealers, Xxxxx Management will use its best efforts to seek the best overall
terms available. In assessing the best overall terms available for any Portfolio
transaction, Xxxxx Management will consider all factors it deems relevant
including, but not limited to, the breadth of the market in the security, the
price of the security, the financial condition and execution capability of the
broker or dealer and the reasonableness of any commission for the specific
transaction and on a continuing basis. In selecting brokers or dealers to
execute a particular transaction and in evaluating the best overall terms
available, Xxxxx Management may consider the brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of 1934,
as amended (the "1934 Act")) provided to each Portfolio and/or other accounts
over which Xxxxx Management or an affiliate exercises investment discretion.
Pursuant to the provisions of Section 11(a) of the 1934 Act, the Fund authorizes
Xxxxx Management to select a broker which is affiliated with Xxxxx Management.
In such case, the Fund consents that the broker may retain any compensation in
connection with effecting transactions. The Fund may revoke such consent at any
time upon written notice given to Xxxxx Management.
4. INFORMATION PROVIDED TO THE FUND
Xxxxx Management will keep the Fund informed of developments
materially affecting each Portfolio, and will, on its own initiative, furnish
the Fund from time to time with whatever information Xxxxx Management believes
is appropriate for this purpose.
In compliance with the requirements of Rule 31a-3 under the 0000
Xxx, Xxxxx Management hereby agrees that all records that it maintains for the
Fund in respect of each Portfolio are the property of the Fund and further
agrees to surrender promptly to the Fund any of such records upon the Fund's
request.
5. STANDARD OF CARE
Xxxxx Management shall exercise its best judgment in rendering the
services listed in paragraph 2 above. Xxxxx Management shall not be liable for
any error of judgment or mistake of law or for any loss suffered by any
Portfolio in connection with the matters to which this Agreement relates,
provided that nothing herein shall be deemed to protect or purport to protect
Xxxxx Management against any liability to such Portfolio or to its shareholders
to which Xxxxx Management would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or by reason of Xxxxx Management's reckless disregard of its obligations
and duties under this Agreement.
6. COMPENSATION
In consideration of the services rendered pursuant to this
Agreement, each Portfolio will pay Xxxxx Management on the first business day of
each month a fee for the previous month at the annual rate set forth opposite
such Portfolio's name on Schedule I hereto. The fee for the period from the
effective date of this Agreement to the end of the month in which such date
occurs shall be prorated according to the proportion that such period bears to
the full monthly period. Upon any termination of this Agreement before the end
of a month, the fee for such part of that month shall be prorated according to
the proportion that such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement. For the purpose of
determining fees payable to Xxxxx Management, the value of each Portfolio's net
assets shall be computed at the times and in the manner specified in the Fund's
Prospectus and Statement of Additional Information as from time to time in
effect.
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7. EXPENSES
Xxxxx Management will bear all expenses in connection with the
performance of its services under this Agreement. The Fund or the relevant
Portfolio will bear certain other expenses to be incurred in its operation,
including: taxes, interest, brokerage fees and commissions, if any; fees of
Trustees of the Fund who are not officers, directors or employees of Xxxxx
Management or any of its affiliates; SEC fees and state Blue Sky qualification
fees; charges of custodians and transfer and dividend disbursing agents; charges
of any independent pricing service retained to assist in valuing the assets of
such Portfolio; the Fund's proportionate share of insurance premiums; outside
auditing and legal expenses; costs of maintenance of the Fund's existence; costs
attributable to shareholder services, including, without limitation, telephone
and personnel expenses; costs of preparing and printing prospectuses and
statements of additional information for regulatory purposes and for
distribution to existing shareholders; costs of shareholders' reports and
meetings of the shareholders of the Fund and of the officers or Board of
Trustees of the Fund; and any extraordinary expenses. Fund-wide expenses not
specifically identifiable to a Portfolio will be allocated among all Portfolios
in such manner as Xxxxx Manager shall, in its reasonable judgment, determine to
be fair and equitable to all Portfolios.
8. REIMBURSEMENT TO A PORTFOLIO]
With respect to any Portfolio specifically identified on Schedule I
hereto as being subject to a reimbursement agreement, if in any fiscal year the
aggregate operating expenses of such Portfolio (including fees pursuant to this
Agreement, but excluding interest, taxes, fees for brokerage expenses and
extraordinary expenses) exceed the percentage specified on Schedule I, Xxxxx
Management will reimburse such Portfolio for such excess expense. Such expense
reimbursement, if any, will be estimated, reconciled and paid on a monthly
basis.
9. SERVICES TO OTHER COMPANIES OR ACCOUNTS
The Fund understands that Xxxxx Management now acts, will continue
to act and may act in the future as investment adviser to fiduciary and other
managed accounts and as investment manager to one or more other investment
companies, and the Fund has no objection to Xxxxx Management so acting, provided
that whenever a Portfolio and one or more other accounts or investment companies
advised by Xxxxx Management have available funds for investment, investments
suitable and appropriate for each will be allocated in accordance with a formula
believed to be equitable to each entity. The Fund recognizes that in some cases
this procedure may adversely affect the size of the position obtainable for a
Portfolio. In addition, the Fund understands that the persons employed by Xxxxx
Management to assist in the performance of Xxxxx Management's duties under this
Agreement will not devote their full time to such service and nothing contained
herein shall be deemed to limit or restrict the right of Xxxxx Management or any
affiliate of Xxxxx Management to engage in and devote time and attention to
other businesses or to render services of whatever kind or nature.
10. TERM OF AGREEMENT
This Agreement shall become effective as of the date first set forth
above and, as to each Portfolio, shall continue until the date set forth
opposite such Portfolio's name on Schedule I hereto (the "Reapproval Date), and
thereafter shall continue automatically for successive annual periods, provided
such continuance is specifically approved at least annually by (i) the Board of
Trustees of the Fund or (ii) a vote of a "majority" (as defined in the 0000 Xxx)
of such Portfolio's outstanding voting securities, provided that in either event
the continuance is also approved by a majority of the Board of Trustees who are
not "interested persons" (as defined in the 0000 Xxx) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of voting
on such approval. As to each Portfolio, this
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Agreement is terminable, without penalty by the Portfolio, on 60 days' written
notice, by the Board of Trustees of the Fund or by vote of a majority of the
Portfolio's outstanding voting securities, or upon 60 days' written notice, by
Xxxxx Management. This Agreement will also terminate automatically in the event
of its assignment (as defined in the 1940 Act and the rules thereunder).
11. REPRESENTATION BY THE FUND
The Fund represents that a copy of its Agreement and Declaration of
Trust, dated April 6, 1988, together with all amendments thereto, is on file in
the office of the Secretary of the Commonwealth of Massachusetts.
12. LIMITATION OF LIABILITY
This Agreement has been executed on behalf of the Fund in respect of
each Portfolio by the undersigned officer of the Fund in his capacity as an
officer of the Fund. The obligations of this Agreement shall be binding on the
assets and property of the relevant Portfolio only and shall not be binding on
any other Portfolio or any Trustee, officer or shareholder of the Fund
individually.
13. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws (except the conflict of law rules) of the State of New York.
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If the foregoing is in accordance with your understanding, kindly
indicate your acceptance of this Agreement by signing and returning the enclosed
copy of this Agreement.
Very truly yours,
THE XXXXX AMERICAN FUND
By: /s/ Xxx Xxxxxx
--------------------
Authorized Officer
Accepted and Agreed:
XXXX XXXXX MANAGEMENT, INC.
By: /s/ Xxx Xxxxxx
---------------------
Authorized Officer
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SCHEDULE 1
Annual Fee
as a
Percentage of Average Reapproval
Name of Portfolio Daily Net Assets Date
----------------- ---------------- ----
Xxxxx American Small Capitalization Portfolio(1) .81% September 30, 0000
Xxxxx American MidCap Growth Portfolio(2) .76% September 30, 0000
Xxxxx American Growth Portfolio(3) .71% September 30, 0000
Xxxxx American Income and Growth Portfolio(4) .585% September 30, 0000
Xxxxx American Leveraged AllCap Portfolio(5) .81% September 30, 0000
Xxxxx American Balanced Portfolio(6) .71% September 30, 2008
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(1) Subject to reimbursement agreement relating to expenses in excess of 1.50%.
(2) Subject to reimbursement agreement relating to expenses in excess of 1.50%.
(3) Subject to reimbursement agreement relating to expenses in excess of 1.50%.
(4) Subject to reimbursement agreement relating to expenses in excess of 1.25%.
(5) Subject to reimbursement agreement relating to expenses in excess of 1.50%.
(6) Subject to reimbursement agreement relating to expenses in excess of 1.25%.
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