EXHIBIT B
ADVISORY AGREEMENT
ADVISORY AGREEMENT, dated _______________, 1999, between FFTW
Funds, Inc., a Maryland corporation (the "Fund") and Xxxxxxx Xxxxxxx Trees &
Xxxxx, Inc., a New York corporation (the "Adviser"),
In consideration of the mutual agreements herein made, the
parties hereto agree as follows:
1. Attorney-in-Fact. The Fund appoints the Adviser as its attorney-in-fact to
invest and reinvest the assets of the U.S. Short-Term Portfolio (the
"Portfolio"), as fully as the Fund itself could do. The Adviser hereby accepts
this appointment.
2. Duties of the Adviser. (a) The Adviser shall be responsible for
managing the investment portfolio of the Portfolio,
including, without limitation, providing investment research, advice and
supervision, determining which portfolio securities shall be purchased
or sold by the Portfolio, purchasing and selling securities on behalf of
the Portfolio and determining how voting and other rights with respect
to portfolio securities of the Portfolio shall be exercised, subject in
each case to the control of the Board of Directors of the Fund (the
"Board") and in accordance with the objectives, policies and principles
of the Portfolio set forth in the Registration Statement, as amended, of
the Fund, the requirements of the Investment Company Act of 1940, as
amended, (the "Act") and other applicable law. In performing such
duties, the Adviser shall provide such office space, and such executive
and other personnel as shall be necessary for the operations of the
Portfolio. In managing the Portfolio in accordance with the
requirements set forth in this paragraph 2, the Adviser shall be
entitled to act upon advice of counsel to the Fund or counsel to the
Adviser.
(b) Subject to Section 36 of the Act, the Adviser shall not be
liable to the Fund 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 the management of
the Portfolio and the performance of its duties under this Agreement except for
losses arising out of the Adviser's bad faith, willful misfeasance or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement. It is agreed that
the Adviser shall have no responsibility or liability for the accuracy or
completeness of the Fund's Registration Statement under the Act and the
Securities Act of 1933 except for information supplied by the Adviser for
inclusion therein about the Adviser. The Fund agrees to indemnify the Adviser
for any claims, losses, costs, damages, or expenses (including fees and
disbursements of counsel, but excluding the ordinary expenses of the Adviser
arising from the performance of its duties and obligations under this Agreement)
whatsoever arising out of the performance of this Agreement except for those
claims, losses, costs, damages and expenses resulting from the Adviser's bad
faith, willful misfeasance or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and duties under this
Agreement.
(c) The Adviser and its officers may act and continue to act
as investment advisers and managers for others (including, without limitation,
other investment companies), and nothing in this Agreement will in any way be
deemed to restrict the right of the Adviser to perform investment management or
other services for any other person or entity, and the performance of such
services for others will not be deemed to violate or give rise to any duty or
obligation to the Fund.
(d) Except as provided in Paragraph 5, nothing in this
Agreement will limit or restrict the Adviser or any of its officers, affiliates
or employees from buying, selling or trading in any securities for its or their
own account or accounts. The Fund acknowledges that the Adviser and its
officers, affiliates or employees, and its other clients may at any time have,
acquire, increase, decrease or dispose of positions in investments which are at
the same time being acquired or disposed of for the account of the Portfolio.
The Adviser will have no obligation to acquire for the Portfolio a position in
any investment which the Adviser, its officers, affiliates or employees may
acquire for its or their own accounts or for the account of another client, if
in the sole discretion of the Adviser, it is not feasible or desirable to
acquire a position in such investment for the account of the Portfolio.
3. Expenses. The Adviser shall pay all of its expenses arising from the
performance of its obligations under this Agreement
and shall pay any salaries, fees and expenses of the Directors and
officers of the Fund who are employees of the Adviser or its
affiliates. Except as provided below, the Adviser shall not be required
to pay any other expenses of the Fund, including, without limitation,
organization expenses of the Fund (including out-of-pocket expenses, but
not including the Adviser's overhead or employee costs); brokerage
commissions; maintenance of books and records which are required to be
maintained by the Fund's custodian or other agents of the Fund;
telephone, telex, facsimile, postage and other communications expenses;
expenses relating to investor and public relations; freight, insurance
and other charges in connection with the shipment of the Fund's
portfolio securities; indemnification of Directors and officers of the
Fund; travel expenses (or an appropriate portion thereof) of Directors
and officers of the Fund who are directors, officers or employees of the
Adviser to the extent that such expenses relate to attendance at
meetings of the Board of Directors of the Fund or any committee thereof
or advisors thereto held outside of New York, New York; interest, fees
and expenses of independent attorneys, auditors, custodians, accounting
agents, transfer agents, dividend disbursing agents and registrars;
payment for portfolio pricing or valuation service to pricing agents,
accountants, bankers and other specialists, if any; taxes and government
fees; cost of stock certificates and any other expenses (including
clerical expenses) of issue, sale, repurchase or redemption of shares;
expenses of registering and qualifying shares of the Fund under Federal
and state laws and regulations; expenses of printing and distributing
reports, notices, dividends and proxy materials to existing
stockholders; expenses of printing and filing reports and other
documents filed with governmental agencies, expenses of printing and
distributing prospectuses; expenses of annual and special stockholders'
meetings; costs of stationery, fees and expenses (specifically including
travel expenses relating to Fund business) of Directors of the Fund who
are not employees of the Adviser or its affiliates; membership dues in
the Investment Company Institute; insurance premiums and extraordinary
expenses such as litigation expenses.
4. Compensation. (a) As compensation for the services performed
and the facilities and personnel provided by the Adviser
pursuant to this Agreement, the Fund will pay to the Adviser promptly at
the end of each calendar month, a fee, calculated on each day during
such month, at an annual rate of 0.30% of the Portfolio's average daily
net assets. The Adviser shall be entitled to receive during any month
such interim payments of its fee hereunder as the Adviser shall request,
provided that no such payment shall exceed 50% of the amount of such fee
then accrued on the books of the Portfolio and unpaid.
(b) If the Adviser shall serve hereunder for less than the
whole of any month, the fee payable hereunder shall be prorated.
(c) For purposes of this Section 4, the "average daily net
assets" of the Portfolio shall mean the average of the values placed on the
Portfolio's net assets on each day pursuant to the applicable provisions of the
Fund's Registration Statement, as amended.
5. Purchase and Sale of Securities. The Adviser or an agent of the
Adviser shall purchase securities from or through and sell
securities to or through such persons, brokers or dealers as the Adviser
shall deem appropriate in order to carry out the policy with respect to
the allocation of portfolio transactions as set forth in the
Registration Statement of the Fund, as amended, or as the Board may
direct from time to time. The Adviser will use its reasonable best
efforts to execute all purchases and sales with dealers and banks on a
best net price basis.
Neither the Adviser nor any of its officers, affiliates, or
employees will act as principal or receive any compensation from the Portfolio
in connection with the purchase or sale of investments for the Portfolio other
than the fee referred to in Paragraph 4 hereof.
6. Term of Agreement. This Agreement shall continue in full force and
effect until two years from the date hereof, and will
continue in effect from year to year thereafter if such continuance is
approved in the manner required by the Act, provided that this Agreement
is not otherwise terminated. The Adviser may terminate this Agreement
at any time, without payment of penalty, upon 60 days' written notice to
the Fund. The Fund may terminate this Agreement with respect to the
Portfolio at any time, without payment of penalty, on 60 days' written
notice to the Adviser by vote of either the Board or a majority of the
outstanding stockholders of the Portfolio. This Agreement will
automatically terminate in the event of its assignment (as defined by
the Act).
7. Right of Adviser In Corporate Name. The Adviser and the Fund each
agree that the phrase "FFTW", which comprises a component
of the Fund's corporate name, is a property right of the Adviser. The
Fund agrees and consents that: (i) it will only use the phrase "FFTW" as
a component of its corporate name and for no other purpose; (ii) it will
not purport to grant to any third party the right to use the phrase
"FFTW" for any purpose; (iii) the Adviser or any corporate affiliate of
the Adviser may use or grant to others the right to use the phrase
"FFTW" or any combination or abbreviation thereof, as all or a portion
of a corporate or business name or for any commercial purpose, including
a grant of such right to any other investment company, and at the
request of the Adviser, the Fund will take such action as may be
required to provide its consent to such use or grant; and (iv) upon the
termination of any investment advisory agreement into which the Adviser
and the Fund may enter, the Fund shall, upon request by the Adviser,
promptly take such action, at its own expense, as may be necessary to
change its corporate name to one not containing the phrase "FFTW" and
following such a change, shall not use the phrase "FFTW" or any
combination thereof, as part of its corporate name or for any other
commercial purpose, and shall use its best efforts to cause its
officers, directors and stockholders to take any and all actions which
the Adviser may request to effect the foregoing and recovery to the
Adviser any and all rights to such phrase.
8. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. Anything herein to the
contrary notwithstanding, this Agreement shall not be construed to require or to
impose any duty upon either of the parties to do anything in violation of any
applicable laws or regulations.
IN WITNESS WHEREOF, the Fund and the Adviser have caused this
Agreement to be executed by their duly authorized officers as of the date first
written above.
ATTEST FFTW FUNDS, INC.
By: By:
Xxxx Xxxxxxxxxxx Xxxxxxx X. Xxxxxxxxx
Secretary
ATTEST XXXXXXX XXXXXXX TREES & XXXXX, INC.
By: By:
Xxxxxxx Xxxxxxx Xxxxxxx X. Xxxxxx
CFO
