Exhibit 23(d)(1)
XXXXX SERIES, INC.
INVESTMENT ADVISORY AGREEMENT
January 1, 2001
Xxxxx Selected Advisers, L.P.
0000 X. Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Dear Sirs:
We herewith confirm our agreement with you as follows:
1. Management. We desire to employ the capital of Xxxxx Series, Inc. (the
"Company") by investing and reinvesting the same in securities of the type
and in accordance with the limitations specified in the registration
statement under the Securities Act of 1933 and the Investment Company Act
of 1940, of which we enclose a copy, and in such manner and to such extent
as may from time to time be approved by our Board of Directors. We desire
to employ you to supervise and assist in the management of this business
for us. You shall for all purposes herein be deemed an independent
contractor, and shall, unless otherwise expressly provided for or
authorized, have no authority to act or represent us.
2. Officers, Directors, Employees. In this connection it is understood that
you will from time to time employ or associate with yourselves such person
or persons as you may believe to be particularly fitted to assist you in
the execution of this Agreement, it being understood that the compensation
of such person or persons shall be paid by you and that no obligation may
be incurred on our behalf in any such respect. This does not apply to such
individuals as we may in due course elect as officers of our corporation,
except that no officer, director, stockholder or employee of your firm
shall receive compensation from us for acting as director, officer or
employee of our corporation, and you agree to pay the compensation of all
such persons. We understand that, during the continuance of this agreement,
officers of your firm will, if elected, serve as directors of our
corporation and as its principal officers.
3. Authority, Reporting. You are to have complete and exclusive authority to
develop and handle for us any business of the type above mentioned which
you may consider advantageous for us, subject to the direction and control
of our officers and directors. You will furnish us with such statistical
information with respect to the securities which we may hold or contemplate
purchasing as we may request. We wish to be kept in touch with important
developments affecting our Company and shall expect you on your own
initiative to furnish us from time to time with such information as you may
believe appropriate for this purpose, whether concerning the individual
companies whose securities are included in our portfolio or the industries
in which they are engaged. We shall also expect you of your own motion to
advise us whenever in your opinion conditions are such as to make it
desirable that a specific security be eliminated from our portfolio.
4. Standard of Care. We shall expect of you your best judgment in rendering
these services to us, and we agree as an inducement to your undertaking the
same that you shall not be liable hereunder for any mistake of judgment or
in any other event whatsoever, except for lack of good faith, provided that
nothing herein shall be deemed to protect or purport to protect you against
any liability to us or to our security holders to which you would otherwise
be subject by reason of willful misfeasance, bad faith, or gross negligence
in the performance of your duties hereunder, or by reason of your reckless
disregard of your obligations and duties hereunder.
5. Expenses. Except as otherwise provided below in this paragraph, you will
attend to, or arrange for the performance, at your expense, of such
clerical and accounting work related to the investment and
reinvestment of our capital for us as we may specify. We shall, however,
bear all costs and expenses of or attendant upon: (i) preparation of our
federal, state and local tax returns; (ii) preparation of certain documents
we must file with the Securities and Exchange Commission; (iii)
determination of the status and payment of dividends; (iv) reconciling and
reviewing output of our custodian bank, determining the adequacy of various
accruals, approving our expenses authorizing our bank to receive and
disburse money and securities and verifications related thereto, and
interfacing with our auditors; (v) verification of our security ledger and
preparation and maintenance of other corporate books and records; (vi)
brokerage fees and commissions; (vii) stockholders' and Directors'
meetings; (viii) corporate reports and proxy materials, including their
preparation, printing and distribution; (ix) fees of disinterested
Directors; (x) taxes and interest expenses; (xi) reports to government
authorities including all expenses and costs relating to such reports and
to state securities law compliance; (xii) custodian and transfer agent
fees; (xiii) association membership dues; (xiv) premiums on all insurance
and bonds maintained for us or on our behalf; (xv) retention of the
transfer agent and registrar for our shares and the disbursing agent for
our stockholders, including costs and expenses attendant upon repurchase
and redemption of our shares; (xvi) our counsel; and (xvii) our independent
auditors. We may arrange for you to provide some or all of the services
relating to items (i) to (xvii) above, and any other services not directly
relating to investment and reinvestment of our capital, upon such terms and
conditions as we may agree and subject to the approval and review of our
Board of Directors.
6. Fees. In consideration of such services, we shall pay you a monthly fee as
of the last day of each month in each year based upon the average daily
value of net assets during a month for which the monthly fee is calculated,
as follows:
VALUE OF AVERAGE DAILY
NET ASSETS
OF THE FUND DURING
MONTHLY RATE THE MONTH
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ALL FUNDS EXCEPT XXXXX GOVERNMENT MONEY MARKET FUND & XXXXX GOVERNMENT BOND FUND
1/12 of 0.75% of...............................First $250,000,000
1/12 of 0.65% of...............................Next $250,000,000
1/12 of 0.55% of...............................Amount in excess of $500,000,000
XXXXX GOVERNMENT MONEY MARKET FUND
1/12 of 0.50% of...............................First $250,000,000
1/12 of 0.45% of...............................Next $250,000,000
1/12 of 0.40% of...............................Amount in excess of $500,000,000
XXXXX GOVERNMENT BOND FUND
1/12 of 0.50%..................................All assets
provided, however, that such fee for any period which shall not be a full
monthly period shall be prorated according to the proportion which such period
bears to the full month. For this purpose, the value of our net assets shall be
computed in the same manner as the value of such net assets are computed in
connection with the determination of the net asset value of our shares.
7. Portfolio Transactions.
(a) You are authorized to place purchase and sale orders for our portfolio
transactions with brokers and/or dealers which, in your best judgment
are able to achieve "best execution" of such orders.
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"Best execution" shall mean prompt and reliable execution at the most
favorable security price obtainable, taking into account research and
other services available and the reasonableness of commission charges.
Purchases and sales of securities not listed or traded on a securities
exchange shall ordinarily be executed with primary market makers,
acting as principal, except where, in your judgment, better prices and
execution may otherwise be obtained.
(b) You are authorized to allocate brokerage and principal business to
members of securities exchanges, brokers and dealers (such members,
brokers and dealers being hereinafter referred to as "brokers") who
have provided brokerage and research services, as such services are
defined in Section 28(e) of the Securities Exchange Act of 1934 (the
"1934 Act") for us and/or other accounts, if any, for which you
exercise investment discretion (as defined in Section 3(a)(35) of the
0000 Xxx) and to cause us to pay a commission for effecting a
securities transaction in excess of the amount another broker would
have charged for effecting that transaction if you determine in good
faith that such amount of commission is reasonable in relation to the
value of the brokerage and research services provided by such broker,
viewed in terms of either that particular transaction or your overall
responsibilities with respect to us and the other accounts, if any, as
to which you exercise investment discretion.
In reaching such determination, you will not be required to place or
attempt to place a specific dollar value on the research or execution
services of a broker or on the portion of any commission reflecting
either of said services. In demonstrating that such determinations
were made in good faith, you shall be prepared to show that all
commissions were allocated and paid in accordance with this agreement,
that commissions were not allocated or paid for products or services
which were readily and customarily available and offered to the public
on a commercial basis and that the commissions were within a
reasonable range shall be based on any available information as to the
level of commissions known to be charged by qualified brokers on
comparable transactions, but taking into account (i) the provisions of
this agreement relating to obtaining the most favorable securities
price, since it is recognized by our Board of Directors and
shareholders that it usually is more beneficial to us to obtain a
favorable price than to pay the lowest commission; and (ii) that
research from brokers is useful to you in performing your advisory
activities under this Agreement.
(c) Portfolio transactions may be allocated to any broker or dealer taking
into account the sale by such broker or dealer of our shares. Any such
allocation shall be made in accordance with the provisions of this
agreement relating to obtaining "best execution."
(d) In selecting brokers for our portfolio transactions, you shall make
use of a list of a number of brokers which you and we believe, based
on past and current experience, are qualified to execute our portfolio
transactions. The brokers on the list will ordinarily be used for our
portfolio transactions, but other brokers may be used in accordance
with the principles of this agreement. The brokers on the list may be
changed from time to time and will include members of the major and
regional securities exchanges and certain non-member brokers.
8. Non-Exclusive. You may act as investment adviser for any other person, firm
or corporation.
9 Term and Termination. This Agreement shall become effective for an initial
period of not more than two years from its effective date, and shall
continue in full force and effect continuously thereafter, if its
continuance is approved at least annually as required by the Investment
Company Act of 1940. The effective date of this Agreement shall be the
later of (i) January 1, 2001, or (ii) the date this Agreement has been
approved as required by the Investment Company Act of 1940. As of such
effective date, this Agreement shall supersede all prior investment
advisory agreements between the parties. This Agreement may be terminated
at any time, without the payment of any penalty, by our Board of Directors
or by vote of a majority of our outstanding voting securities (as defined
in the 1940 Act) on 60 days' written notice to you, or by you on 60 days'
written notice to us, and it shall be automatically terminated in the event
of its assignment (as defined in said Act).
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10. Series of Shares. As of the date of this Agreement, the Company has six
series of shares ("Funds"), namely Xxxxx Growth Opportunity Fund, Xxxxx
Financial Fund, Xxxxx Real Estate Fund, Xxxxx Convertible Securities Fund,
Xxxxx Government Bond Fund, and Xxxxx Government Money Market Fund. In the
event that the Company shall create any additional Funds, this Agreement
shall apply to and be effective as to each such Fund, provided that the
Agreement is approved as required by the Investment Company Act of 1940.
The effective date of the Agreement as to each such future Fund shall be
the date as it is so approved or any later date as shall be agreed to by
the parties.
If the foregoing is in accordance with your understanding, will you so kindly
indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
XXXXX SERIES, INC.
By:
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Xxxxxx Xxxx, Vice President
Accepted as of the day and year first above written.
XXXXX SELECTED ADVISERS, L.P.
By: XXXXX INVESTMENTS, LLC, General Partner
By:
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Xxxxxx Xxxx, Vice President
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