XXXX XXXXXXX 500 INDEX FUND
(a series of Xxxx Xxxxxxx Series Trust)
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
August 18, 1999
Xxxx Xxxxxxx Advisers, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Investment Management Contract
----------------------------------------
Ladies and Gentlemen:
Xxxx Xxxxxxx Series Trust (the "Trust"), of which Xxxx
Xxxxxxx 500 Index Fund (the "Fund") is a series, has been
organized as a business trust under the laws of The Commonwealth
of Massachusetts to engage in the business of an investment
company. The Trust's shares of beneficial interest, no par
value, may be divided into series, each series representing the
entire undivided interest in a separate portfolio of assets.
This Agreement relates solely to the Fund.
The Board of Trustees of the Trust (the "Trustees") has
selected Xxxx Xxxxxxx Advisers, Inc. (the "Adviser") to provide
overall investment advice and management for the Fund, and to
provide certain other services, as more fully set forth below,
and the Adviser is willing to provide such advice, management and
services under the terms and conditions hereinafter set forth.
Accordingly, the Adviser and the Trust, on behalf of the
Fund, agree as follows:
1. DELIVERY OF DOCUMENTS. The Trust has furnished the
Adviser with copies, properly certified or otherwise
authenticated, of each of the following:
(a) Declaration of Trust dated September 10, 1996, as
amended from time to time (the "Declaration of Trust");
(b) By-Laws of the Trust as in effect on the date hereof;
(c) Resolutions of the Trustees selecting the Adviser as
investment adviser for the Fund and approving the form
of this Agreement;
(d) The Trust's Code of Ethics.
The Trust will furnish to the Adviser from time to time
copies, properly certified or otherwise authenticated, of all
amendments of or supplements to the foregoing, if any.
2. INVESTMENT AND MANAGEMENT SERVICES. The Adviser will use
its best efforts to provide to the Fund continuing and suitable
investment programs with respect to investments, consistent with
the investment objectives, policies and restrictions of the Fund.
In the performance of the Adviser's duties hereunder, subject
always (x) to the provisions contained in the documents delivered
to the Adviser pursuant to Section 1, as each of the same may
from time to time be amended or supplemented, and (y) to the
limitations set forth in the Fund's then-current Prospectus and
Statement of Additional Information included in the registration
statement of the Trust as in effect from time to time under the
Securities Act of 1933, as amended, and the Investment Company
Act of 1940, as amended (the "1940 Act"), the Adviser will, at
its own expense:
(a) furnish the Fund with advice and recommendations,
consistent with the investment objectives, policies and
restrictions of the Fund, with respect to the purchase,
holding and disposition of portfolio securities, alone
or in consultation with any subadviser or subadvisers
appointed pursuant to this Agreement and subject to the
provisions of any sub-investment management contract
respecting the responsibilities of such subadviser or
subadvisers;
(b) advise the Fund in connection with policy decisions to
be made by the Trustees or any committee thereof with
respect to the Fund's investments and, as requested,
furnish the Fund with research, economic and statistical
data in connection with the Fund's investments and
investment policies;
(c) provide administration of the day-to-day investment
operations of the Fund;
(d) submit such reports relating to the valuation of the
Fund's securities as the Trustees may reasonably
request;
(e) assist the Fund in any negotiations relating to the
Fund's investments with issuers, investment banking
firms, securities brokers or dealers and other
institutions or investors;
(f) consistent with the provisions of Section 7 of this
Agreement, place orders for the purchase, sale or
exchange of portfolio securities with brokers or dealers
selected by the Adviser, PROVIDED that in connection
with the placing of such orders and the selection of
such brokers or dealers the Adviser shall seek to obtain
execution and pricing within the policy guidelines
determined by the Trustees and set forth in the
Prospectus and Statement of Additional Information of
the Fund as in effect from time to time;
(g) provide office space and office equipment and supplies,
the use of accounting equipment when required, and
necessary executive, clerical and secretarial personnel
for the administration of the affairs of the Fund;
(h) from time to time or at any time requested by the
Trustees, make reports to the Fund of the Adviser's
performance of the foregoing services and furnish advice
and recommendations with respect to other aspects of the
business and affairs of the Fund;
(i) maintain all books and records with respect to the
Fund's securities transactions required by the 1940 Act,
including subparagraphs (b)(5), (6), (9) and (10) and
paragraph (f) of Rule 31a-1 thereunder (other than those
records being maintained by the Fund's custodian or
transfer agent) and preserve such records for the
periods prescribed therefor by Rule 31a-2 of the 1940
Act (the Adviser agrees that such records are the
property of the Fund and will be surrendered to the Fund
promptly upon request therefor);
(j) obtain and evaluate such information relating to
economies, industries, businesses, securities markets
and securities as the Adviser may deem necessary or
useful in the discharge of the Adviser's duties
hereunder;
(k) oversee, and use the Adviser's best efforts to assure
the performance of the activities and services of the
custodian, transfer agent or other similar agents
retained by the Fund;
(l) give instructions to the Fund's custodian as to
deliveries of securities to and from such custodian and
transfer of payment of cash for the account of the Fund;
and
(m) appoint and employ one or more sub-advisors satisfactory
to the Fund under sub-investment management agreements.
3. EXPENSES PAID BY THE ADVISER. The Adviser will pay:
(a) the compensation and expenses of all officers and
employees of the Trust;
(b) the expenses of office rent, telephone and other
utilities, office furniture, equipment, supplies and
other expenses of the Fund; and
(c) any other expenses incurred by the Adviser in connection
with the performance of its duties hereunder.
4. EXPENSES OF THE FUND NOT PAID BY THE ADVISER. The
Adviser will not be required to pay any expenses which this
Agreement does not expressly make payable by it. In particular,
and without limiting the generality of the foregoing but subject
to the provisions of Section 3, the Adviser will not be required
to pay under this Agreement:
(a) any and all expenses, taxes and governmental fees
incurred by the Trust or the Fund prior to the effective
date of this Agreement;
(b) without limiting the generality of the foregoing clause
(a), the expenses of organizing the Trust and the Fund
(including without limitation, legal, accounting and
auditing fees and expenses incurred in connection with
the matters referred to in this clause (b), of initially
registering shares of the Trust under the Securities Act
of 1933, as amended, and of qualifying the shares for
sale under state securities laws for the initial
offering and sale of shares;
(c) the compensation and expenses of Trustees who are not
interested persons (as used in this Agreement, such term
shall have the meaning specified in the 0000 Xxx) of the
Adviser and of independent advisers, independent
contractors, consultants, managers and other
unaffiliated agents employed by the Fund other than
through the Adviser;
(d) legal, accounting, financial management, tax and
auditing fees and expenses of the Fund (including an
allocable portion of the cost of its employees rendering
such services to the Fund);
(e) the fees and disbursements of custodians and
depositories of the Fund's assets, transfer agents,
disbursing agents, plan agents and registrars;
(f) taxes and governmental fees assessed against the Fund's
assets and payable by the Fund;
(g) the cost of preparing and mailing dividends,
distributions, reports, notices and proxy materials to
shareholders of the Fund;
(h) brokers' commissions and underwriting fees;
(i) the expense of periodic calculations of the net asset
value of the shares of the Fund; and
(j) insurance premiums on fidelity, errors and omissions and
other coverages.
5. COMPENSATION OF THE ADVISER. For all services to be
rendered, facilities furnished and expenses paid or assumed by
the Adviser as herein provided, the Adviser shall be entitled to
a fee, paid monthly in arrears, at an annual rate equal to 0.35%
of the average daily net asset value of the Fund.
The "average daily net assets" of the Fund shall be
determined on the basis set forth in the Fund's Prospectus or
otherwise consistent with the 1940 Act and the regulations
promulgated thereunder. The Adviser will receive a pro rata
portion of such monthly fee for any periods in which the Adviser
serves as investment adviser to the Fund for less than a full
month. On any
day that the net asset value calculation is suspended as
specified in the Fund's Prospectus, the net asset value for
purposes of calculating the advisory fee shall be calculated as
of the date last determined.
In the event that normal operating expenses of the Fund,
exclusive of certain expenses prescribed by state law, are in
excess of any limitation imposed by the law of a state where the
Fund has registered its shares of beneficial interest, the fee
payable to the Adviser will be reduced to the extent required by
law, and the Adviser will make any additional arrangements that
the Adviser is required by law to make.
In addition, the Adviser may agree not to impose all or a
portion of its fee (in advance of the time its fee would
otherwise accrue) and/or undertake to make any other payments or
arrangements necessary to limit the Fund's expenses to any level
the Adviser may specify. Any fee reduction or undertaking shall
constitute a binding modification of this Agreement while it is
in effect but may be discontinued or modified prospectively by
the Adviser at any time.
6. OTHER ACTIVITIES OF THE ADVISER AND ITS AFFILIATES.
Nothing herein contained shall prevent the Adviser or any
affiliate or associate of the Adviser from engaging in any other
business or from acting as investment adviser or investment
manager for any other person or entity, whether or not having
investment policies or portfolios similar to the Fund's; and it
is specifically understood that officers, directors and employees
of the Adviser and those of its parent company, Xxxx Xxxxxxx
Mutual Life Insurance Company, or other affiliates may continue
to engage in providing portfolio management services and advice
to other investment companies, whether or not registered, to
other investment advisory clients of the Adviser or of its
affiliates and to said affiliates themselves.
The Adviser shall have no obligation to acquire with respect
to the Fund 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 on behalf of the Fund.
Nothing herein contained shall prevent the Adviser from
purchasing or recommending the purchase of a particular security
for one or more funds or clients while other funds or clients may
be selling the same security.
7. AVOIDANCE OF INCONSISTENT POSITION. In connection with
purchases or sales of portfolio securities for the account of the
Fund, neither the Adviser nor any of its investment management
subsidiaries, nor any of the Adviser's or such investment
management subsidiaries' directors, officers or employees will
act as principal or agent or receive any commission, except as
may be permitted by the 1940 Act and rules and regulations
promulgated thereunder. If any occasions shall arise in which
the Adviser advises persons concerning the shares of the Fund,
the Adviser will act solely on its own behalf and not in any way
on behalf of the Fund. Nothing herein contained shall 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.
8. NO PARTNERSHIP OR JOINT VENTURE. Neither the Trust, the
Fund nor the Adviser are partners of or joint venturers with each
other and nothing herein shall be construed so as to make them
such partners or joint venturers or impose any liability as such
on any of them.
9. NAME OF THE TRUST AND THE FUND. The Trust and the Fund
may use the name "Xxxx Xxxxxxx" or any name or names derived from
or similar to the names "Xxxx Xxxxxxx Advisers, Inc." or "Xxxx
Xxxxxxx Mutual Life Insurance Company" only for so long as this
Agreement remains in effect. At such time as this Agreement
shall no longer be in effect, the Trust and the Fund will (to the
extent that they lawfully can) cease to use such a name or any
other name indicating that the Fund is advised by or otherwise
connected with the Adviser. The Fund acknowledges that it has
adopted the name Xxxx Xxxxxxx 500 Index Fund through permission
of Xxxx Xxxxxxx Mutual Life Insurance Company, a Massachusetts
insurance company, and agrees that Xxxx Xxxxxxx Mutual Life
Insurance Company reserves to itself and any successor to its
business the right to grant the nonexclusive right to use the
name "Xxxx Xxxxxxx" or any similar name or names to any other
corporation or entity, including but not limited to any
investment company of which Xxxx Xxxxxxx Mutual Life Insurance
Company or any subsidiary or affiliate thereof shall be the
investment adviser.
10. LIMITATION OF LIABILITY OF THE ADVISER. The Adviser
shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Trust in connection with the
matters to which this Agreement relates, except a loss resulting
from willful misfeasance, bad faith or gross negligence on the
part of the Adviser in the performance of its duties or from
reckless disregard by it of its obligations and duties under this
Agreement. Any person, even though also employed by the Adviser,
who may be or become an employee of and paid by the Trust shall
be deemed, when acting within the scope of his employment by the
Fund, to be acting in such employment solely for the Trust and
not as the Adviser's employee or agent.
11. DURATION AND TERMINATION OF THIS AGREEMENT. This
Agreement shall remain in force until June 30, 2000, and from
year to year thereafter, but only so long as such continuance is
specifically approved at least annually by (a) a majority of the
Trustees who are not interested persons of the Adviser or (other
than as Board members) of the Fund, cast in person at a meeting
called for the purpose of voting on such approval, and (b) either
(i) the Trustees or (ii) a majority of the outstanding voting
securities of the Fund. This Agreement may, on 60 days' written
notice, be terminated at any time without the payment of any
penalty by the vote of a majority of the outstanding voting
securities of the Fund, by the Trustees or by the Adviser.
Termination of this Agreement shall not be deemed to terminate or
otherwise invalidate any provisions of any contract between the
Adviser and any other series of the Trust. This Agreement shall
automatically terminate in the event of its assignment. In
interpreting the provisions of this Section 11, the definitions
contained in Section 2(a) of the 1940 Act (particularly the
definitions of "assignment," "interested person" and "voting
security") shall be applied.
12. AMENDMENT OF THIS AGREEMENT. No provision of this
Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment, transfer, assignment,
sale, hypothecation or pledge of this Agreement shall be
effective until approved by (a) the Trustees, including a
majority of the Trustees who are not interested persons of the
Adviser or (other than as Trustees) of the Fund, cast in person
at a meeting called for the purpose of voting on such approval,
and (b) a majority of the outstanding voting securities of the
Fund, as defined in the 1940 Act.
13. GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of The Commonwealth of
Massachusetts.
14. SEVERABILITY. The provisions of this Agreement are
independent of and separable from each other, and no provision
shall be affected or rendered invalid or unenforceable by virtue
of the fact that for any reason any other or others of them may
be deemed invalid or unenforceable in whole or in part.
15. MISCELLANEOUS. The captions in this Agreement are
included for convenience of reference only and in no way define
or limit any of the provisions hereof or otherwise affect their
construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute
one and the same instrument. The name Xxxx Xxxxxxx 500 Index
Fund is a series designation of the Trustees under the Trust's
Declaration of Trust. The Declaration of Trust has been filed
with the Secretary of State of The Commonwealth of Massachusetts.
The obligations of the Fund are not personally binding upon, nor
shall resort be had to the private property of, any of the
Trustees, shareholders, officers, employees or agents of the
Trust, but only upon the Fund and its property. The Fund shall
not be liable for the obligations of any other series of the
Trust and no other series shall be liable for the Fund's
obligations hereunder.
Yours very truly,
XXXX XXXXXXX SERIES TRUST
on behalf of Xxxx Xxxxxxx 500 Index Fund
By: ___________________________
Xxxx X. Xxxxxxx
President
The foregoing contract
is hereby agreed to as
of the date hereof.
XXXX XXXXXXX ADVISERS, INC.
By: ___________________________
Xxxx X. Xxxxx
Vice President and Secretary
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