XXXXX XXXXXX DISCIPLINED SMALL CAP FUND, INC.
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made as of the 23rd day of June 1997 between XXXXX XXXXXX
DISCIPLINED SMALL CAP FUND, INC., a Maryland Corporation, (the "Fund") and
Travelers Investment Management Company (the "Adviser").
W I T N E S S E T H:
WHEREAS, the Fund is a diversified open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Fund has been organized for the purpose of investing its
funds and desires to avail itself of the experience, sources of information,
advice, assistance and facilities available to the Adviser and to have the
Adviser perform for it various investment management services; and the Adviser
is willing to furnish such advice and services on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed as follows:
1. The Fund hereby appoints the Adviser to act as investment adviser to
the Fund on the terms set forth in this Agreement. The Adviser accepts such
appointment and agrees to render the services herein described, for the
compensation herein provided.
2. Subject to the supervision of the Board of Directors of the Fund
(the "Board"), the Adviser shall manage the investment of the Fund assets and
provide investment research advice and supervision of the Fund's portfolio in
accordance with the Fund's investment objective, policies and restrictions as
stated in the Fund's Registration Statement under the 1940 Act as it may be
amended from time to time (the Fund's "Registration Statement") and subject to
the following understandings:
(a) The Adviser shall provide supervision of the Fund's investments and
determine from time to time the investments or securities that will be
purchased, retained, sold or loaned by the Fund, and the portion of the
assets that will be invested in securities or otherwise.
In determining the securities to be purchased or sold by the Fund,
the Adviser shall place orders with respect to portfolio securities
either directly with the issuer or with or through such persons, brokers
(including Xxxxx Xxxxxx Inc.) or dealers in conformity with the policy
with respect to brokerage as set forth in the Fund's Registration
Statement or as the Board may direct from time to time. It is understood
that it may be desirable for the Fund that the Adviser have access to
supplemental investment and market research and security and economic
analysis provided by brokers who may execute brokerage transactions at a
higher cost to the Fund than may result when allocating brokerage to
other brokers on the basis of seeking the best price and best execution.
Therefore, the Adviser is authorized to place orders for the purchase and
sale of securities for the Fund with such brokers, subject to review by
the Fund's Board from time to time with respect to the extent and
continuation of this practice. It is understood that the services
provided by such brokers may be useful to the Adviser or its affiliates
in connection with their services to other clients.
(b) The Adviser shall use its best judgment in the performance of its
duties under this Agreement.
(c) The Adviser undertakes to perform its duties and obligations under
this Agreement in conformity with the Prospectus of the Fund, with the
requirements of the 1940 Act and all other applicable Federal and state
laws and regulations and with the instructions and directions of the
Board.
(d) The Adviser shall maintain such books and records with respect to
the Fund's portfolio transactions and such books and records required to
be maintained by the Adviser pursuant to the Rules of the Commission
under the 1940 Act and the Adviser shall render to the Fund's Board such
periodic and special reports as the Board may reasonably request. The
Adviser agrees that all records that it maintains for the Fund are the
property of the Fund and it will surrender promptly to the Fund any of
such records upon the Fund's request.
(e) The Adviser shall provide the Fund's Administrator on each business
day with information relating to all transactions concerning the Fund's
portfolio.
3. The Adviser will bear all of its expenses of its employees and
overhead in connection with its duties under this Agreement. It will also pay
all directors' fees and salaries of the Fund's directors and officers who are
affiliated persons (as such term is defined in the 0000 Xxx) of the Adviser.
Except for the expenses specifically assumed by the Adviser, the Fund
will pay all of its expenses, including, without limitation, fees of the
directors not affiliated with the Adviser or its affiliates and board meeting
expenses; fees of the Adviser and of Xxxxx Xxxxxx Mutual Funds Management Inc.
(or any successor) as the Administrator; interest charges; taxes; charges and
expenses of the Fund's legal counsel and independent accountants, and of the
transfer agent, registrar and dividend disbursing agent of the Fund; expenses
of issue, repurchase or redemption of Shares; expenses of printing and mailing
share certificates, shareholder reports, notices, proxy statements and reports
to governmental offices; brokerage and other expenses connected with the
execution, recording and settlement of portfolio security transactions; fees
and expenses of the Fund's custodians for all services to the Fund, including
safekeeping of funds and securities and maintaining required books and
accounts; expenses of calculating and publishing the net asset value of the
Fund's Shares; expenses of membership in associations; expenses of fidelity
bonding and other insurance premiums; expenses of shareholders' meetings;
filing fees and expenses related to the registration and qualification of the
Funds shares and the Fund under Federal or state securities laws and
maintaining such registrations and qualifications (including the printing of
the Funds registration statements and prospectuses); fees payable to the
National Association of Securities Dealers, Inc. in connection with this
offering; and its other business and operating expenses.
4. For the services provided and the expenses assumed pursuant to this
Agreement, the Fund will pay to the Adviser a monthly fee in arrears equal to
.65% per annum of the Fund's average daily net assets during the month.
5. 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.
6. The Adviser shall not be liable for any error of judgment or for any
loss suffered by the Fund in connection with the matters to which this
Agreement relates, except a loss resulting from a breach of fiduciary duty
with respect to the receipt of compensation for services (in which case any
award of damages shall be limited to the period and the amount set forth in
Section 36(b)(3) of the 0000 Xxx) or a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of
its duties or from reckless disregard by it of its obligations and duties
under this Agreement.
7. This Agreement shall continue in effect for a period of two years
from its effective date, and if not sooner terminated, will continue in effect
for successive periods of 12 months thereafter, provided that each continuance
is specifically approved at least annually in conformity with the requirements
of the 1940 Act. This Agreement may be terminated as a whole at any time by
the Fund, without the payment of any penalty, upon the vote of a majority of
the Fund's Board of Directors or the vote of a majority of the outstanding
voting securities (as defined in the 0000 Xxx) of the Fund, or by the Adviser,
on 60 days' written notice by either party to the other. This Agreement shall
terminate automatically in the event of its assignment (as such term is
defined in the 1940 Act and the rules thereunder).
8. Nothing in this Agreement shall limit or restrict the right of any
of the Adviser's directors, officers, or employees 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
business, whether of a similar or a dissimilar nature, nor limit or restrict
the Adviser's right to engage in any other business or to render services of
any kind to any other corporation, firm, individual or association. The
investment advisory services provided by the Adviser hereunder are not to be
deemed exclusive, and the Adviser shall be free to render similar services to
others.
9. Any notice or other communication required to be given pursuant to
this Agreement shall be deemed duly given if delivered or mailed by registered
mail, postage prepaid, (i) to the Adviser at Xxx Xxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000, Attention: Chief Executive Officer; or (ii) to the Fund at
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Secretary.
10. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
XXXXX XXXXXX DISCIPLINED SMALL CAP FUND, INC.
Attest:
By: By:
TRAVELERS INVESTMENT MANAGEMENT COMPANY
Attest:
By: By:
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