INVESTMENT ADVISORY CONTRACT
CONTRACT made this 30th day of April 1997, between The Xxxxxx Blue Chip
Master Portfolio Trust, a New York trust (the "Trust"), and XXXXXX INVESTORS'
SERVICE, INC., a Connecticut corporation (the "Adviser"):
1. Duties of the Adviser. The Trust hereby employs the Adviser to act
as investment adviser for and to manage the investment and reinvestment of the
assets of the Trust and, except as otherwise provided in an administration
agreement, to administer its affairs, subject to the supervision of the Trustees
of the Trust, for the period and on the terms set forth in this Contract. The
Adviser will perform these duties with respect to any and all series of shares
("Portfolios") which may be established by the Trustees pursuant to the Trust's
Declaration of Trust. Portfolios may be terminated and additional Portfolios
established from time to time by action of the Trustees of the Trust.
The Adviser hereby accepts such employment, and undertakes to afford to
the Trust the advice and assistance of the Adviser's organization in the choice
of investments and in the purchase and sale of securities for each Portfolio and
to furnish for the use of the Trust office space and all necessary office
facilities, equipment and personnel for servicing the investments of the
Portfolios and for administering the Trust's affairs and to pay the salaries and
fees of all officers and Trustees of the Trust who are members of the Adviser's
organization and all personnel of the Adviser performing services relating to
research and investment activities. The Adviser shall for all purposes herein be
deemed to be an independent contractor and shall, except as otherwise expressly
provided or authorized, have no authority to act for or represent the Trust in
any way or otherwise be deemed an agent of the Trust.
The Adviser shall provide the Trust with such investment management and
supervision as the Trust may from time to time consider necessary for the proper
supervision of its Portfolios. As investment adviser to the Portfolios, the
Adviser shall furnish continuously an investment program and shall determine
from time to time what securities shall be purchased, sold or exchanged and what
portion of each Portfolio's assets shall be held uninvested, subject always to
the applicable restrictions of the Declaration of Trust, By-Laws and
registration statement of the Trust under the Investment Company Act of 1940,
all as from time to time amended. The Adviser is authorized, in its discretion
and without prior consultation with the Trust, but subject to each Portfolio's
investment objective, policies and restrictions, to buy, sell, lend and
otherwise trade in any stocks, bonds, options and other securities and
investment instruments on behalf of the Portfolios, to purchase, write or sell
options on securities, futures contracts or indices on behalf of the Portfolios,
to enter into commodities contracts on behalf of the Portfolios, including
contracts for the future delivery of securities or currency and futures
contracts on securities or other indices, and to execute
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any and all agreements and instruments and to do any and all things incidental
thereto in connection with the management of the Portfolios. Should the Trustees
of the Trust at any time, however, make any specific determination as to
investment policy for the Portfolios and notify the Adviser thereof in writing,
the Adviser shall be bound by such determination for the period, if any,
specified in such notice or until similarly notified that such determination has
been revoked. The Adviser shall take, on behalf of the Portfolios, all actions
which it deems necessary or desirable to implement the investment policies of
the Trust and of each Portfolio.
The Adviser shall place all orders for the purchase or sale of
portfolio securities for the account of a Portfolio with brokers or dealers
selected by the Adviser, and to that end the Adviser is authorized as the agent
of the Portfolio to give instructions to the custodian of the Portfolio as to
deliveries of securities and payments of cash for the account of a Portfolio or
the Trust. In connection with the selection of such brokers or dealers and the
placing of such orders, the Adviser shall use its best efforts to seek to
execute portfolio security transactions at prices which are advantageous to the
Portfolios and (when a disclosed commission is being charged) at reasonably
competitive commission rates. In selecting brokers or dealers qualified to
execute a particular transaction, brokers or dealers may be selected who also
provide brokerage and research services and products (as those terms are defined
in Section 28(e) of the Securities Exchange Act of 1934) to the Adviser. The
Adviser is expressly authorized to cause the Portfolios to pay any broker or
dealer who provides such brokerage and research service and products a
commission for executing a security transaction which is in excess of the amount
of commission another broker or dealer would have charged for effecting that
transaction if the Adviser determines 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 or dealer, viewed in terms of either that
particular transaction or the overall responsibilities which the Adviser and its
affiliates have with respect to accounts over which they exercise investment
discretion. Subject to the requirement set forth in the second sentence of this
paragraph, the Adviser is authorized to consider, as a factor in the selection
of any broker or dealer with whom purchase or sale orders may be placed, the
fact that such broker or dealer has sold or is selling shares of the Portfolio
or the Trust or of other investment companies sponsored by the Adviser.
2. Compensation of the Adviser. For the services, payments and
facilities to be furnished hereunder by the Adviser, the Trust on behalf of each
Portfolio shall pay to the Adviser on the last day of each month a fee equal
(annually) to the percentage or percentages specified in Annex A of the average
daily net assets of such Portfolio throughout the month, computed in accordance
with the Trust's Declaration of Trust, registration statement and any applicable
votes of the Trustees of the Trust.
In case of the initiation or termination of the Contract during any
month with respect to any Portfolio, each Portfolio's fee for that month shall
be reduced proportionately on the basis of the number of calendar days during
which the Contract
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is in effect and the fee shall be computed upon the average net assets for the
business days the Contract is so in effect for that month.
The Adviser may, from time to time, waive all or a part of the above
compensation.
3. Allocation of Charges and Expenses. It is understood that the Trust
will pay all of its expenses other than those expressly stated to be payable by
the Adviser hereunder, which expenses payable by the Trust shall include,
without limitation (i) expenses of maintaining the Trust and continuing its
existence, (ii) registration of the Trust under the Investment Company Act of
1940, (iii) commissions, fees and other expenses connected with the purchase or
sale of securities, (iv) auditing, accounting and legal expenses, (v) taxes and
interest, (vi) governmental fees, (vii) expenses of issue, repurchase and
redemption of interests, (viii) expenses of printing offering documents for
distributing to investors (ix) expenses of reports and notices to
interestholders and of meetings of interestholders and proxy solicitations
therefor, (x) expenses of reports to governmental officers and commissions, (xi)
insurance expenses, (xii) fees, expenses and disbursements of custodians and
subcustodians for all services to the Trust (including without limitation
safekeeping of funds and securities, keeping of books and accounts and
determination of net asset value), (xiii) fees, expenses and disbursements of
transfer agents and registrars for all services to the Trust, (xiv) expenses for
servicing interestholder accounts, (xv) any direct charges to interestholders
approved by the Trustees of the Trust, (xvi) compensation of and any expenses of
Trustees of the Trust who are not officers or employees of the Adviser or the
administrator; (xvii) the administration fee payable to the Trust's
administrator, and (xix) such nonrecurring items as may arise, including
expenses incurred in connection with litigation, proceedings and claims and the
obligation of the Trust to indemnify its Trustees and officers with respect
thereto.
4. Other Interests. It is understood that Trustees, officers and
interestholders of the Trust are or may be or become interested in the Adviser
as directors, officers, employees, stockholders or otherwise and that directors,
officers, employees and stockholders of the Adviser are or may be or become
similarly interested in the Trust, and that the Adviser may be or become
interested in the Trust as an interestholder or otherwise. It is also understood
that directors, officers, employees and stockholders of the Adviser are or may
be or become interested (as directors, trustees, officers, employees,
stockholders or otherwise) in other companies or entities (including, without
limitation, other investment companies) which the Adviser may organize, sponsor
or acquire, or with which it may merge or consolidate, and which may include the
words "Xxxxxx" or "Xxxxxx Investors" or any combination thereof as part of their
names, and that the Adviser or its subsidiaries or affiliates may enter into
advisory or management agreements or other contracts or relationships with such
other companies or entities.
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5. Limitation of Liability of the Adviser. The services of the Adviser
to the Trust are not to be deemed to be exclusive, the Adviser being free to
render services to others and engage in other business activities. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser, the
Adviser shall not be subject to liability to the Trust or to any shareholder of
the Trust for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses which may be sustained in the purchase,
holding or sale of any security.
6. Sub-Investment Advisers. The Adviser may employ one or more sub-
investment advisers from time to time to perform such of the acts and services
of the Adviser, including the selection of brokers or dealers to execute the
Trust's portfolio security transactions, and upon such terms and conditions as
may be agreed upon between the Adviser and such sub-investment adviser provided,
however, that any such subadvisory agreement shall be subject to such approval
by the Trustees and shareholders of the Trust as shall be required under the
Investment Company Act of 1940.
7. Duration and Termination of this Contract. This Contract shall
become effective upon the date of its execution, and, unless terminated as
herein provided, shall remain in full force and effect as to each Portfolio up
to and including February 28, 1999 and shall continue in full force and effect
as to each Portfolio indefinitely thereafter, but only so long as such
continuance after February 28, 1999 is specifically approved at least annually
(i) by the vote of a majority of the Trustees of the Trust or by vote of a
majority of the outstanding voting securities of that Portfolio and (ii) by the
vote of a majority of those Trustees of the Trust who are not interested persons
of the Adviser or the Trust, in each case cast in person at a meeting called for
the purpose of voting on such approval.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Contract as to any Portfolio, without the
payment of any penalty, by action of its Board of Directors or Trustees, as the
case may be, and the Trust may, at any time upon such written notice to the
Adviser, terminate this Contract as to any Portfolio by vote of a majority of
the outstanding voting securities of that Portfolio. This Contract shall
terminate automatically in the event of its assignment.
8. Amendments of the Contract. This Contract may be amended as to any
Portfolio by a writing signed by both parties hereto, provided that no material
amendment to this Contract shall be effective as to that Portfolio until
approved (i) by the vote of a majority of those Trustees of the Trust who are
not interested persons of the Adviser or the Trust cast in person at a meeting
called for the purpose of voting on such approval and (ii) by vote of a majority
of the outstanding voting securities of that Portfolio.
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9. Limitation of Liability. The Adviser expressly acknowledges the
provision in the Declaration of Trust of the Trust limiting the personal
liability of interestholders of the Trust, and the Adviser hereby agrees that it
shall have recourse only to the Trust for payment of claims or obligations as
between the Trust and Adviser arising out of this Contract and shall not seek
satisfaction from the interestholders or any interestholder of the Trust. No
Portfolio shall be liable for the obligations of any other Portfolio hereunder.
10. Certain Definitions. The terms "assignment" and "interested
persons" when used herein shall have the respective meanings specified in the
Investment Company Act of 1940 as now in effect or as hereafter amended subject,
however, to such exemptions as may be granted by the Securities and Exchange
Commission by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities of that Portfolio" shall mean the vote of the
lesser of (a) 67 per centum or more of the shares of the particular Portfolio
present or represented by proxy at a meeting of interestholders of the Portfolio
if the holders of more than 50 per centum of the outstanding shares of the
particular Portfolio are present or represented by proxy at the meeting, or (b)
more than 50 per centum of the outstanding interests of the particular
Portfolio, or such other vote as may be required from time to time by the
Investment Company Act of 1940.
11. Use of the Name "Xxxxxx". The Adviser hereby consents to the use by
the Trust of the name "Xxxxxx" as part of the Trust's name and the name of each
Portfolio should the Trust desire to adopt such name in the future; provided,
however, that such consent shall be conditioned upon the employment of the
Adviser or one of its affiliates as the investment adviser of the Trust. The
name "Xxxxxx" or any variation thereof may be used from time to time in other
connections and for other purposes by the Adviser and its affiliates and other
investment companies that have obtained consent to use the name "Xxxxxx." The
Adviser shall have the right to require the Trust to cease using the name
"Xxxxxx" as part of the Trust's name and the name of each Portfolio if the Trust
ceases, for any reasons, to employ the Adviser or one of its affiliates as the
Trust's investment adviser. Future names adopted by the Trust for itself and its
Portfolios, insofar as such names include identifying words requiring the
consent of the Adviser, shall be the property of the Adviser and shall be
subject to the same terms and conditions.
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In witness whereof, the undersigned have executed this Contract as of
the date first set forth above.
THE XXXXXX BLUE CHIP MASTER XXXXXX INVESTORS'
PORTFOLIO TRUST SERVICE, INC.
By: /s/Xxxxx X. Xxxxxxx By: /s/ A.M. Xxxxx III
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Name: Xxxxx X. Xxxxxxx Name: A.M. Xxxxx III
Title: President Title: Senior Vice President
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ANNEX A
ANNUAL ADVISORY FEE RATES
ANNUAL % ADVISORY FEE RATES
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$100 $500
Under Mil. to $250 Mil. Mil. to
$100 $250 to $500 $1 Over $1
Mil. Mil. Mil. Billion Billion
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Selected Blue Chip Equities Portfolio 0.55% 0.69% 0.67% 0.63% 0.58%
Junior Blue Chip Equities Portfolio 0.55% 0.69% 0.67% 0.63% 0.58%
International Blue Chip Equities Portfolio 0.75% 0.79% 0.77% 0.73% 0.68%
U.S. Treasury Portfolio 0.40% 0.46% 0.42% 0.38% 0.33%
U.S. Treasury Near Term Portfolio 0.40% 0.46% 0.42% 0.38% 0.33%
Current Income Portfolio 0.40% 0.46% 0.42% 0.38% 0.33%
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