EXHIBIT (d)(3)
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT ("Agreement"), made
this 25th day of June, 2001, by and between XXXXXX XXXXXX SELECT FUND, INC. (the
"Fund"), a Maryland corporation, having its principal place of business at Xxxxx
Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000, and XXXXXX ASSET MANAGEMENT, INC. (the
"Adviser"), a Tennessee corporation with the same address.
WHEREAS, the Fund is registered under the Investment Company Act of
1940, as amended ("1940 Act") as an open-end management investment company, and
offers for sale a distinct series of shares of common stock, which has been
designated Xxxxxx Xxxxxx Select Capital Growth Fund ("Portfolio"); and
WHEREAS, the Fund wishes to retain the Adviser to provide investment
advisory, management, and administrative services to the Portfolio; and
WHEREAS, the Adviser is willing to furnish such services on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. The Fund hereby appoints the Adviser as investment adviser and
administrator of the Portfolio for the period and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. The Portfolio shall at all times keep the Adviser fully informed
with regard to the securities owned by it, its funds available, or to become
available, for investment, and generally as to the condition of its affairs. It
shall furnish the Adviser with such other documents and information with regard
to its affairs as the Adviser may from time to time reasonably request.
3. (a) Subject to the direction and control of the Fund's Board of
Directors, the Adviser shall regularly provide the Portfolio with investment
research, advice, management and supervision and shall furnish a continuous
investment program for the its portfolio of securities consistent with the
Portfolio's investment objective, policies, and limitations as stated in the
Portfolio's current Prospectus and Statement of Additional Information. The
Adviser shall determine from time to time what securities will be purchased,
retained or sold by the Portfolio, and shall implement those decisions, all
subject to the provisions of the Fund's Articles of Incorporation and By-laws,
the 1940 Act, the applicable rules and regulations of the Securities and
Exchange Commission, and other applicable federal and state laws, as well as the
investment objective, policies, and limitations of the Portfolio. The Adviser
will place orders pursuant to its investment determinations for the Portfolio
either directly with the issuer or with any broker or dealer. In placing orders
with brokers and dealers the Adviser will attempt to obtain the best net
results; however, the Adviser may, in its discretion, purchase and sell
portfolio securities from and to brokers and dealers who provide the Portfolio
with research, analysis, advice and similar services, and the Adviser may pay to
those brokers, in return for research and analysis, a higher commission than may
be charged by other brokers. In no instance will portfolio securities be
purchased from or sold to the Adviser, or any affiliated person thereof except
in accordance with the rules and regulations promulgated by the Securities and
Exchange Commission pursuant to the 0000 Xxx. The Adviser shall also provide
advice and recommendations with respect to other aspects of the business and
affairs of the Portfolio, and shall perform such other functions of management
and supervision as may be directed by the Board of Directors of the Fund.
(b) The Fund authorizes any entity or person associated with
the Adviser which is a member of a national securities exchange to effect any
transaction on the exchange for the account of the Portfolio which is permitted
by Section 11(a) of the Securities Exchange Act of 1934 and Rule 11a2-2(T)
thereunder, and the Fund hereby consents to the retention of compensation by
such entity or person for such transaction in accordance with Rule
11a2-2(T)(a)(2)(iv).
4. (a) The Adviser, at its expense, shall supply the Board of Directors
and officers of the Fund with all statistical information and reports reasonably
required by them and reasonably available to the Adviser and shall furnish the
Portfolio with office facilities, including space, furniture and equipment and
all personnel reasonably necessary for the operation of the Portfolio. The
Adviser shall oversee the maintenance of all books and records with respect to
the Portfolio's securities transactions and the Portfolio's books of account in
accordance with all applicable federal and state laws and regulations. In
compliance with the requirements of Rule 31a-3 under the 1940 Act, the Adviser
hereby agrees that any records that it maintains for 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. The Adviser further agrees to arrange for
the preservation of the records required to be maintained by Rule 31a-1 under
the 1940 Act for the periods prescribed by Rule 31a-2 under the 1940 Act. The
Adviser shall authorize and permit any of its directors, officers and employees,
who may be elected as directors or officers of the Fund, to serve in the
capacities in which they are elected.
(b) Other than as herein specifically indicated, the Adviser
shall not be responsible for the Portfolio's expenses. Specifically, the Adviser
will not be responsible, except to the extent of the reasonable compensation of
employees of the Fund whose services may be used by the Adviser hereunder, for
any of the following expenses of the Portfolio, which expenses shall be borne by
the Portfolio: legal and audit expenses, organizational expenses; interest;
taxes; governmental fees; fees, voluntary assessments and other expenses
incurred in connection with membership in investment company organizations; the
cost (including brokerage commissions or charges, if any) of securities
purchased or sold by the Portfolio and any losses incurred in connection
therewith; fees of custodians, transfer agents, registrars or other agents;
distribution fee; expenses of preparing share certificates; expenses relating to
the redemption or repurchase of the Portfolio's shares; expenses of registering
and qualifying Portfolio shares for sale under applicable federal and state law
and maintaining such registrations and qualifications; expenses of preparing,
setting in print, printing and distributing prospectuses, proxy statements,
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reports, notices and dividends to Portfolio shareholders; cost of stationery;
costs of stockholders and other meetings of the Fund; compensation and expenses
of the independent directors of the Fund; and the Fund's pro rata portion of
premiums of any fidelity bond and other insurance covering the Fund and its
officers and directors.
5. No director, officer or employee of the Fund shall receive from the
Fund any salary or other compensation as such director, officer or employee
while he is at the same time a director, officer or employee of the Adviser or
any affiliated company of the Adviser. This paragraph shall not apply to
directors, executive committee members, consultants and other persons who are
not regular members of the Adviser's or any affiliated company's staff.
6. As compensation for the services performed and the facilities
furnished and expenses assumed by the Adviser, including the services of any
consultants retained by the Adviser, the Portfolio shall pay the Adviser, as
promptly as possible after the last day of each month, a fee, calculated daily,
of 1.0% annually of the average daily net assets of the Portfolio for the first
$100 million of average daily net assets and 0.75% annually of the average daily
net assets exceeding $100 million. The first payment of the fee shall be made as
promptly as possible at the end of the month next succeeding the effective date
of this Agreement, and shall constitute a full payment of the fee due the
Adviser for all services prior to that date. In the event that the Adviser's
right to such fee commences on a date other than the last day of the month, the
fee for such month shall be based on the average daily assets of the Portfolio
in that period from the date of commencement to the last day of the month. If
this Agreement is terminated as of any date not the last day of a month, such
fee shall be paid as promptly as possible after such date of termination, shall
be based on the average daily net assets of the Portfolio in that period from
the beginning of such month to such date of termination, and shall be that
proportion of such average daily net assets as the number of business days in
such period bears to the number of business days in such month. The average
daily net assets of the Portfolio shall in all cases be based only on business
days and be computed as of the time of the regular close of business of the New
York Stock Exchange, or such other time as may be determined by the Board of
Directors of the Fund. Each such payment shall be accompanied by a report of the
Portfolio prepared either by the Fund or by a reputable firm of independent
accountants that shall show the amount properly payable to the Adviser under
this Agreement and the detailed computation thereof.
7. The Adviser assumes no responsibility under this Agreement other
than to render the services called for hereunder in good faith, and shall not be
responsible for any action of the Board of Directors of the Fund in following or
declining to follow any advice or recommendations of the Adviser; provided that
nothing in this Agreement shall protect the Adviser against any liability to the
Portfolio, the Fund or its stockholders to which it would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties hereunder.
8. Nothing in this Agreement shall limit or restrict the right of any
director, officer, or employee of the Adviser who may also be a director,
officer, or employee of the Fund, to engage in any other business or to devote
his time and attention in part to the management or other aspects of any other
business, whether of a similar nature or a dissimilar nature, nor to limit or
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restrict the right of the Adviser to engage in any other business or to render
services of any kind, including investment advisory and management services, to
any other corporation, firm, individual or association.
9. As used in this Agreement, the terms "securities" and "net assets"
shall have the meanings ascribed to them in the Articles of Incorporation of the
Fund; and the terms "assignment", "interested person", and "majority of the
outstanding voting securities" shall have the meanings given to them by Section
2(a) of the 1940 Act, subject to such exemptions as may be granted by the
Securities and Exchange Commission by any rule, regulation or order.
10. This Agreement shall terminate automatically in the event of its
assignment by the Adviser and shall not be assignable by the Fund without the
consent of the Adviser. This Agreement may also be terminated at any time,
without the payment of any penalty, by the Fund or by the Adviser on sixty (60)
days' written notice addressed to the other at its principal place of business.
11. In the event this Agreement is terminated by either party or upon
written notice from the Adviser at any time, the Fund hereby agrees that it will
eliminate from its corporate name any reference to the name of "Xxxxxx Xxxxxx."
The Fund shall have the non-exclusive use of the name "Xxxxxx Xxxxxx" in whole
or in part so long as this Agreement is effective or until such notice is given.
12. This Agreement shall continue in effect for one year and from year
to year thereafter only so long as specifically approved annually by vote of a
majority of the directors of the Fund who are not parties to this Agreement or
interested persons of such parties, cast in person at a meeting called for that
purpose, and either by vote of the holders of a majority of the outstanding
voting securities of the Portfolio or by majority vote of the Fund's Board of
Directors.
13. 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 material amendment of this Agreement shall be effective until
approved by vote of the holders of a majority of the Portfolio's outstanding
voting securities.
14. If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
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IT WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized.
Attest: XXXXXX XXXXXX SELECT
FUND, INC.
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
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Attest: XXXXXX ASSET MANAGEMENT, INC.
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
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