Exhibit 5(d)
INVESTMENT MANAGEMENT AGREEMENT
THE XXXXX FUND
Xxxxx Small Capitalization Portfolio
October 24, 0000
Xxxx Xxxxx Management
00 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The Xxxxx Fund (the "Fund"), an unincorporated business trust organized
under the laws of the Commonwealth of Massachusetts, hereby confirms its
agreement with Xxxx Xxxxx Management, Inc. ("Xxxxx") as follows:
1. INVESTMENT DESCRIPTION; APPOINTMENT
The Fund desires to employ the capital of the Xxxxx Small Capitalization
Portfolio (the "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. The Fund desires to employ and hereby
appoints Xxxxx to act as the investment manager for the Portfolio. Xxxxx 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 will (a) act in strict conformity with the Fund's Agreement and
Declaration of Trust, the Investment Company Act of 1940 (the "Act") and the
Investment Advisers Act of 1940, as the same may from time to time be amended;
(b) manage the Portfolio in accordance with the 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 the Portfolio involving decisions concerning (i) the specific
types of securities to be held by the Portfolio and the proportion of the
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 the Portfolio; and (d) supply office facilities (which may
be in Xxxxx'x own offices); statistical and research data; data processing
services; clerical, accounting and bookkeeping services; internal auditing
services; internal executive and administrative services; stationery and office
supplies; preparation of reports to shareholders of the Portfolio; preparation
of tax returns, reports to and filings with the Securities and Exchange
Commission (the "SEC") and state Blue Sky authorities; calculation of the net
asset value of shares of the Portfolio; maintenance of the Portfolio's financial
accounts and records; and general assistance in all aspects of the Fund's
operations with respect to the Portfolio. In providing those services, Xxxxx
will supervise the Portfolio's investments generally and conduct a continual
program of evaluation of the Portfolio's assets.
In connection with the performance of its duties under this Agreement, it
is understood that Xxxxx may from time to time employ or associate with itself
such person or persons as Xxxxx 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 and that no
obligation may be incurred on the Fund's behalf in any such respect.
3. BROKERAGE
In executing transactions for the Portfolio and selecting brokers or
dealers, Xxxxx will use its best efforts to seek the best overall terms
available. In assessing the best overall terms available for any Portfolio
transaction, Xxxxx will consider all factors it deems relevant including, but
not limited to, 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 may
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) provided to the Portfolio
and/or other accounts over which Xxxxx or an affiliate exercises investment
discretion.
4. INFORMATION PROVIDED TO THE FUND
Xxxxx will keep the Fund informed of developments materially affecting the
Portfolio, and will, on its own initiative, furnish the Fund from time to time
with whatever information Xxxxx believes is appropriate for this purpose. In
compliance with the requirements of Rule 31a-3 under the Act, Xxxxx hereby
agrees that all records that it maintains for the Fund in respect of the
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 shall exercise its best judgment in rendering the services listed in
paragraph 2 above. Xxxxx shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the 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 against any liability to the
Portfolio or to its shareholders to which Xxxxx 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'x reckless disregard of its
obligations and duties under this Agreement.
6. COMPENSATION
In consideration of the services rendered pursuant to this Agreement, the
Portfolio will pay Xxxxx on the first business day of each month a fee for the
previous month at the annual rate of .85 of 1.00% of the Portfolio's average
daily net assets. The fee for the period from the date the Fund's registration
statement is declared effective by the SEC to the end of the month during which
its registration statement is declared effective 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 its Agreement. For the purpose of determining fees payable to
Xxxxx, the value of the 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.
7. EXPENSES
Xxxxx will bear all expenses in connection with the performance of its
services under this Agreement. The 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 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 the 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 the Portfolio or any other portfolio
of the Fund will be allocated to all portfolios pro rata on the basis of their
relative net assets.
8. REIMBURSEMENT TO THE PORTFOLIO
If in any fiscal year the aggregate expenses of the Portfolio (including
fees pursuant to this Agreement, but excluding interest, taxes, brokerage
expenses and distribution expenses and, if permitted by state securities
commissions, extraordinary expenses) exceed the expense limitation imposed by
any state having jurisdiction over the Portfolio, Xxxxx will reimburse the
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 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 (including other portfolios of the Fund), and the Fund has no
objection to Xxxxx so acting, provided that whenever the Portfolio and one or
more other accounts or investment companies advised by Xxxxx 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 the Portfolio. In addition, the Fund
understands that the persons employed by Xxxxx to assist in the performance of
Xxxxx'x duties hereunder will not devote their full time to such service and
nothing contained herein shall be deemed to limit or restrict the right of Xxxxx
or any affiliate of Xxxxx 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 continue until October 24, 1988 and thereafter shall
continue automatically for successive annual periods ending on October 24th of
each year, 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 Act) of the 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 Act) of any
party to this Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval. This Agreement is terminable, without
penalty, on 60 days written notice, by the Board of Trustees of the Fund or by
vote of holders of a majority of the Portfolio's outstanding voting securities,
or upon 60 days' written notice, by Xxxxx. This Agreement will also terminate
automatically in the event of its assignment (as defined in the Act and the
ruled thereunder).
11. REPRESENTATION BY THE FUND
The Fund represents that a copy of its Agreement and Declaration of Trust,
dated March 20, 1986, 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 the
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 Portfolio only and shall not be binding on any other
portfolio of the Fund 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.
If the foregoing is in accordance with your understanding, kindly indicate
your acceptance hereof by signing and returning the enclosed copy hereof.
Very truly yours,
The Xxxxx Fund
By: /s/Xxxxxx X. Xxxxxx
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Authorized Officer
Accepted and Agreed:
Xxxx Xxxxx Management, Inc.
By: /s/Xxxxxx X. Xxxxxx
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Authorized Officer
