Exhibit 5(a) under Form N-1A
Exhibit 10 under Item 601/Reg. X-X
XXXXXXXXX FUNDS
MANAGEMENT CONTRACT
This Contract is made this 12th day of July, 1995 between Virtus Capital
Management,
Inc., a Maryland corporation having its principal place of business in Richmond,
Virginia (the "Manager"), and Xxxxxxxxx Funds, a Massachusetts business trust
having its principal place of business in Pittsburgh, Pennsylvania (the
"Trust").
WHEREAS the Trust is an open-end management investment company as that term
is defined in the Investment Company Act of 1940, as amended, and is
registered as such with the Securities and Exchange Commission; and
WHEREAS Manager is engaged in the business of rendering investment advisory
and management services.
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. The Trust hereby appoints Manager as Manager for each of the
portfolios ("Funds") of the Trust which executes an exhibit to this Contract,
and Manager accepts the appointments. Subject to the direction of the Trustees
of the Trust, Manager shall provide or procure on behalf of each of the Funds
all management and administrative services. In carrying out its obligations
under this paragraph, the Manager shall: (i) provide or arrange for investment
research and supervision of the investments of the Funds; (ii) select and
evaluate the performance of each Fund's Portfolio Sub-Adviser; (iii) select and
evaluate the performance of the Administrator; and (iv) conduct or arrange for a
continuous program of appropriate sale or other disposition and reinvestment of
each Fund's assets.
2. Manager, in its supervision of the investments of each of the Funds will
be guided by each of the Fund's investment objective and policies and the
provisions and restrictions contained in the Declaration of Trust and By-Laws of
the Trust and as set forth in the Registration Statements and exhibits and may
be on file with the Securities and Exchange Commission.
3. Each Fund shall pay or cause to be paid all of its own expenses and its
allocable share of Trust expenses, including, without limitatlon, the expenses
of organizing the Trust and continuing its existence; fees and expenses of
trustees and officers of the Trust; fees for investment advisory services and
administrative personnel and services; expenses incurred in the distribution of
its shares ("Shares"), including expenses of administrative support services;
fees and expenses of preparing and printing its Registration Statements under
the Securities Act of 1933 and the Investment Company Act of 1940, as amended,
and any amendments thereto; expenses of registering and qualifying the Trust,
the Funds, and Shares of the Funds under federal and state laws and regulations;
expenses of preparing, printing, and distributing prospectuses (and any
amendments thereto) to shareholders; interest expense, taxes, fees, and
commissions of every kind; expenses of issue (including cost of Share
certificates), purchase, repurchase, and redemption of Shares, including
expenses attributable to a program of periodic issue; charges and expenses of
custodians, transfer agents, dividend disbursing agents, shareholder servicing
agents, and registrars; printing and mailing costs, auditing, accounting, and
legal expenses; reports to shareholders and governmental officers and
commissions; expenses of meetings of Trustees and shareholders and proxy
solicitations therefor; insurance expenses; association membership dues and such
nonrecurring items as may arise, including all losses and liabilities incurred
in administering the Trust and the Funds. Each Fund will also pay its allocable
share of such extraordinary expenses as may arise including expenses incurred in
connection with litigation, proceedings, and claims and the legal obligations of
the Trust to indemnify its officers and Trustees and agents with respect
thereto.
4. Each of the Funds shall pay to Manager, for all services rendered to each
Fund by Manager hereunder, the fees set forth in the exhibits attached hereto.
5. If, for any fiscal year, the total of all ordinary business expenses of
the Fund, including all investment advisory fees but excluding distribution
fees, taxes, interest and extraordinary expenses and certain other excludable
expenses, would exceed the most restrictive expense limits imposed by any
statute or regulatory authority of any jurisdiction in which shares of the Fund
are offered for sale, the Manager shall reduce its investment advisory fee in
order to reduce such excess expenses, but will not be required to reimburse the
Fund for any ordinary business expenses which exceed the amount of its
investment advisory fee for such fiscal year. The amount of any such reduction
is to be borne by the Manager and shall be deducted from the monthly investment
advisory fee otherwise payable to the Manager during such fiscal year. For the
purposes of this paragraph, the term "fiscal year" shall exclude the portion of
the current fiscal year which shall have elapsed prior to the date hereof and
shall include the portion of the then current fiscal year which shall have
elapsed at the date of termination of this Agreement.
6. The net asset value of each Fund's Shares as used herein will he
calculated to the nearest 1/10th of one cent.
7. The Manager may from time to time and for such periods as it deems
appropriate reduce its compensation (and, if appropriate, assume expenses of one
or more of the Funds) to the extent that any Fund's expenses exceed such lower
expense limitation as the Manager may, by notice to the Funds, voluntarily
declare to be effective.
8. This Contract shall begin for each Fund as of the date of execution of
the applicable exhibit and shall continue in effect with respect to each Fund
presently set forth on an exhibit (and any subsequent Funds added pursuant to an
exhibit during the initial term of this Contract) for two years from the date of
this Contract set forth above and thereafter for successive periods of one year,
subject to the provisions for termination and all of the other terms and
conditions hereof if: (a) such continuation shall be specifically approved at
least annually by the vote of a majority of the Trustees of the Trust, including
a majority of the Trustees who are not parties to this Contract or interested
persons of any such party cast in person at a meeting called for that purpose;
and (b) Manager shall not have notified a Fund in writing at least sixty (60)
days prior to the anniversary date of this Contract in any year thereafter that
it does not desire such continuation with respect to that Fund. If a Fund is
added after the first approval by the Trustees as described above, this Contract
will be effective as to that Fund upon execution of the applicable exhibit and
will continue in effect until the next annual approval of this Contract by the
Trustees and thereafter for successive periods of one year, subject to approval
as described above.
9. Notwithstanding any provision in this Contract, it may be terminated at
any time with respect to any Fund, without the payment of any penalty, by the
Trustees of the Trust or by a vote of the shareholders of that Fund on sixty
(60) days' written notice to Manager.
10. This Contract may not be assigned by Manager and shall automatically
terminate in the event of any assignment. Manager may employ or contract with
such other person, persons, corporation, or corporations at its own cost and
expense as it shall determine in order to assist it in carrying out this
Contract.
11. In the absence of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the obligations or duties under this Contract on the part
of Manager, Manager shall not be liable to the Trust or to any of the Funds or
to any shareholder for any act or omission in the course of or connected in any
way with rendering services or for any losses that may be sustained in the
purchase, holding, or sale of any security.
12. This Contract may be amended at any time by agreement of the parties
provided that the amendment shall be approved both by the vote of a majority of
the Trustees of the Trust, including a majority of the Trustees who are not
parties to this Contract or interested persons of any such party to this
Contract (other than as Trustees of the Trust) cast in person at a meeting
called for that purpose, and, where required by Section 15(a)(2) of the Act, on
behalf of a Fund by a majority of the outstanding voting securities of such Fund
as defined in Section 2(a)(42) of the Act.
13. The Manager acknowledges that all sales literature for investment
companies (such as the Trust) are subject to strict regulatory oversight. The
Manager agrees to submit any proposed sales literature for the Trust (or any
Fund) or for itself or its affiliates which mentions the Trust (or any Fund) to
the Trust's distributor for review and filing with the appropriate regulatory
authorities prior to the public release of any such sales literature, provided,
however, that nothing herein shall be construed so as to create any obligation
or duty on the part of the Manager to produce sales literature for the Trust (or
any Fund). The Trust agrees to cause its distributor to promptly review all such
sales literature to ensure compliance with relevant requirements, to promptly
advise Manager of any deficiencies contained in such sales literature, to
promptly file complying sales literature with the relevant authorities, and to
cause such sales literature to be distributed to prospective investors in the
Trust.
14. A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of The Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of the Trust as
Trustees and not individually and that the obligations of this instrument are
not binding upon any of the Trustees, or any of the officers, employees, agents
or shareholders of the Trust individually but are binding only upon the assets
and property of the Trust. Notice is also hereby given that the obligations
pursuant to this instrument of a particular Fund and of the Trust with respect
to that particular Fund shall be limited solely to the assets of that particular
Fund.
15. This Contract shall be construed in accordance with and governed by the
laws of the Commonwealth of Pennsylvania.
16. This Contract will become binding on the parties hereto upon their
execution of the attached exhibits to this Contract.
2
EXHIBIT A
to the
Management Contract
Xxxxxxxxx Global Growth Fund
Xxxxxxxxx 100% Treasury Money Market Fund
Xxxxxxxxx Short-Term Global Income Fund
Xxxxxxxxx American Equity Fund
Xxxxxxxxx Flexible Income Fund
Xxxxxxxxx Short-Term Bond Fund
Xxxxxxxxx Flexible Tax-Free Bond Fund
Xxxxxxxxx Worldwide Emerging Markets Fund
For all services rendered by Manager hereunder, the above-named Funds of
the Trust shall pay to Manager and Manager agrees to accept as full compensation
for all services rendered hereunder, an annual management fee equal to the
following percentage ("the applicable percentage") of the average daily net
assets of each Fund.
Name of Fund Percentage of Net Assets
Xxxxxxxxx Global Growth Fund 1% of the first $150 million of average
daily net assets, .875% of the Fund's
average daily net assets in excess of
$150 million but not exceeding $300
million and .75% of the Fund's average
daily net assets in excess of $300
million.
Xxxxxxxxx 100% Treasury
Money Market Fund .5% of the first $500 million of the Fund's
average daily net assets, .475% of the Fund's
average daily net assets in excess of $500
million but not exceeding $1 billion, plus
.45% of the Fund's average daily net assets
in excess of $1 billion.
Xxxxxxxxx Short-Term Global Income Fund .75%
Xxxxxxxxx American Equity Fund 1.10%
Xxxxxxxxx Flexible Income Fund .75%
Xxxxxxxxx Short-Term Bond Fund .75%
Xxxxxxxxx Flexible Tax-Free Bond Fund .75%
Xxxxxxxxx Worldwide Emerging Markets Fund 1.25%
The portion of the fee based upon the average daily net assets of the Fund
shall be accrued daily at the rate of 1/365th of the applicable percentage
applied to the daily net assets of the Fund.
The advisory fee so accrued shall be paid to Manager daily.
Witness the execution hereof this 12th day of July, 1995.
Attest: Virtus Capital Management, Inc.
By:
--------------------------- ---------------------------
Secretary Executive Vice President
Attest: Xxxxxxxxx Funds
/s/ C. Xxxxx Xxxxxxxx By:/s/ Xxxxxx X. Xxxxx
Assistant Secretary Executive Vice President
EXHIBIT B
to the
Investment Advisory Contract
XXXXXXXXX GROWTH & INCOME FUND
XXXXXXXXX CAPITAL GROWTH FUND
The Trust shall pay to VCM, on behalf of the Funds, monthly compensation at
the annual rate of 1.10% of each Fund's average daily net assets, .40% of which,
which would otherwise be received by VCM and paid to The Chase Manhattan Bank,
N.A. ("Chase") for portfolio advisory services, shall be paid to Chase directly
by the Capital Growth Portfolio and the Growth & Income Portfolio, respectively,
under separate investment advisory agreements between Chase and the Capital
Growth Portfolio and Chase and the Growth & Income Portfolio.
The portion of the fee based upon the average daily net assets of the Funds
shall be accrued daily at the rate of 1/365th of the applicable percentage
applied to the daily net assets of each Fund.
Witness the due execution hereof this day of , 1995.
Attest: Virtus Capital Management, Inc.
By:
Secretary Senior Vice President
Attest: Xxxxxxxxx Funds
By:
