EXHIBIT (5)(d)
XXXXX XXXXX MUTUAL FUNDS TRUST
INVESTMENT ADVISORY AGREEMENT
ON BEHALF OF
XXXXX XXXXX MUNICIPAL BOND FUND
AGREEMENT made on the 17th day of October, 1997, by and between Xxxxx
Xxxxx Mutual Funds Trust, a Massachusetts business trust (the "Trust") on behalf
of Xxxxx Xxxxx Municipal Bond Fund (the "Fund"), and Xxxxx Xxxxx Management, a
Massachusetts business trust (hereinafter sometimes called 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 Fund and to administer its affairs, subject to the supervision of
the Board of Trustees of the Trust, for the period and on the terms set forth in
this Agreement.
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 the Fund and to
furnish for the use of the Fund office space and all necessary office
facilities, equipment and personnel for servicing the investments of the Fund
and for administering its 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 of 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 the Fund. As investment adviser to the Trust, the Adviser shall
furnish continuously an investment program and is authorized, in its discretion
and without prior consultation with the Trust, to buy, sell, lend and otherwise
trade in any municipal bonds, notes, obligations, options and other securities
and investment instruments on behalf of the Fund, to write or sell options on
securities, futures contracts or indices on behalf of the Fund, to enter into
commodities contracts on behalf of the Fund, including contracts for the future
delivery of securities and futures contracts on securities or other indices, and
to execute any and all agreements and instruments and to do any and all things
incidental thereto in connection with the management of the Fund's investment
portfolio. In the performance of its duties hereunder, the Adviser will at all
times use its best efforts to safeguard and promote the welfare of the Fund and
to comply with the provisions of the Declaration of Trust of the Trust, as from
time to time amended, and with the Fund's investment objective, policies and
limitations. Should the Trustees of the Trust at any time, however, make any
specific determination as to investment policy for the Fund 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
Trust, all actions which it deems necessary or desirable to implement the
investment policies of the Trust and of the Fund.
The Adviser shall place all orders for the purchase or sale of
portfolio securities for the Fund's account with brokers or dealers or other
persons selected by the Adviser, and to that end the Adviser is authorized as
the agent of the Fund to give instructions to the custodian of the Fund as to
deliveries of securities and payments of cash for the account of the Fund. In
connection with the selection of such brokers or dealers or other persons and
the placing of such orders, the Adviser shall use its best efforts to seek to
execute security transactions at prices which are advantageous to the Fund 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 (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934) to the Adviser, and the Adviser is
expressly authorized to pay any broker or dealer who provides such brokerage and
research services 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
Fund, or any other series of 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 Adviser shall be
entitled to receive from the Fund, on a daily basis, compensation in an amount
equal to the aggregate of
(a) a daily asset based fee computed by applying the annual asset rate
applicable to that portion of the total daily net assets of the Fund
in each Category as indicated below, plus
(b) a daily income based fee computed by applying the daily income rate
applicable to that portion of the total daily gross income of the
Fund (which portion shall bear the same relationship to the total
gross income on such day as that portion of the total daily net
assets of the Fund in the same Category bears to the total net
assets on such day) in each Category as indicated below:
ANNUAL DAILY
CATEGORY DAILY NET ASSETS ASSET RATE INCOME RATE
-------- ---------------- ---------- -----------
1 up to $500 million........................ 0.300% 3.00%
2 $500 million but less than $1 billion..... 0.275% 2.75%
3 $1 billion but less than $1.5 billion..... 0.250% 2.50%
4 $1.5 billion but less than $2 billion..... 0.225% 2.25%
5 $2 billion but less than $3 billion....... 0.200% 2.00%
6 $3 billion and over....................... 0.175% 1.75%
Such daily compensation shall be paid monthly in arrears on the first business
day of the succeeding month. The Fund's daily net assets and gross income shall
be computed in accordance with the Declaration of Trust of the Trust, as from
time to time amended, and any applicable votes of the Trustees of the Trust. 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 Fund
will pay all its expenses other than those expressly stated to be payable by the
Adviser hereunder, which expenses payable by the Fund shall include, without
implied limitation, (i) expenses of maintaining the Fund 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 acquisition,
holding or disposition of securities and other investments, (iv) auditing,
accounting and legal expenses, (v) taxes and interest, (vi) governmental fees,
(vii) expenses of issue, sale, repurchase and redemption of shares, (viii)
expenses of registering and qualifying the Fund and its shares under federal and
state securities laws and of preparing and printing prospectuses for such
purposes and for distributing the same to shareholders and investors, (ix)
expenses of reports and notices to shareholders and of meetings of shareholders
and proxy solicitations therefor, (x) expenses of reports to governmental
officers and commissions, (xi) insurance expenses, (xii) association membership
dues, (xiii) fees, expenses and disbursements of custodians and subcustodians
for all services to the Fund (including without limitation safekeeping of funds
and securities, keeping of books and accounts and determination of net asset
values), (xiv) fees, expenses and disbursements of transfer agents, dividend
disbursing agents, shareholder servicing agents and registrars for all services
to the Fund, (xv) expenses for servicing shareholder accounts, (xvi) any direct
charges to shareholders approved by the Trustees of the Trust, (xvii)
compensation and expenses of Trustees of the Trust who are not members of the
Adviser's organization, (xviii) all payments to be made and expenses to be
assumed by the Fund pursuant to any one or more distribution plans adopted by
the Trust on behalf of the Fund pursuant to Rule 12b-1 under the Investment
Company Act of 1940, and (xix) such non-recurring items as may arise, including
expenses incurred in connection with litigation, proceedings and claims and the
obligation of the Trust to indemnify its Trustees with respect thereto.
4. Other Interests. It is understood that Trustees and officers of the
Trust and shareholders of the Fund are or may be or become interested in the
Adviser as trustees, officers, employees, shareholders or otherwise and that
trustees, officers, employees and shareholders of the Adviser are or may be or
become similarly interested in the Fund, and that the Adviser may be or become
interested in the Fund as shareholder or otherwise. It is also understood that
trustees, officers, employees and shareholders of the Adviser may be or become
interested (as directors, 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 "Xxxxx Xxxxx" or any
combination thereof as part of their name, 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.
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 Fund 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 investment, provided that the Adviser acted in good faith
and in a manner it reasonably believed to be in the best interest of the Fund.
6. Duration and Termination of this Agreement. This Agreement shall
become effective upon the date of its execution, and unless terminated as herein
provided, shall remain in full force and effect through and including February
28, 1999 and shall continue in full force and effect indefinitely thereafter,
but only so long as such continuance after February 28, 1999 is specifically
approved at least annually (i) by the Board of Trustees of the Trust or by vote
of a majority of the outstanding voting securities of the Fund, 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 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 Agreement, without the payment of any
penalty, by action of the Trustees of the Trust, or the trustees of the Adviser,
as the case may be and the Trust may, at any time upon such written notice to
the Adviser, terminate this Agreement by vote of a majority of the outstanding
voting securities of the Fund. This Agreement shall terminate automatically in
the event of its assignment.
7. Amendments of the Agreement. This Agreement may be amended by a
writing signed by both parties hereto, provided that no amendment to this
Contract shall be effective 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
the Fund.
8. Limitation of Liability. The Adviser expressly acknowledges the
provision in the Trust's Declaration of Trust limiting the personal liability of
the shareholders of the Trust and the Trustees of the Trust. The Adviser hereby
agrees that is shall have recourse only to the assets of the Fund for payment of
claims or obligations as between the Trust and the Principal Underwriter arising
out of this Agreement and shall not seek satisfaction from any shareholders or
from the Trustees. No other Fund of the Trust shall be responsible for
obligations of the Fund hereunder.
9. Certain Definitions. The terms "vote of a majority of the
outstanding voting securities," "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.
XXXXX XXXXX MUTUAL FUNDS TRUST XXXXX XXXXX MANAGEMENT
(on behalf of Xxxxx Xxxxx Municipal Bond Fund)
By: /s/ X. Xxxxxx Xxxxxxx By: /s/ Xxxx X. Xxxxxx
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President Vice President,
and not individually