EXHIBIT D
MANAGEMENT AGREEMENT
TO: Private Asset Management, Inc.
00000 Xx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Dear Sirs:
Private Asset Management Funds (the "Trust") herewith confirms our
agreement with you.
The Trust has been organized to engage in the business of an investment
company. The Trust currently offers several series of shares to investors, one
called the Private Asset Management Fund (the "Fund").
You have been selected to act as the sole investment adviser of the Fund
and to provide certain other services, as more fully set forth below, and you
are willing to act as such investment adviser and to perform such services under
the terms and conditions hereinafter set forth. Accordingly, the Trust agrees
with you as follows effective upon the date of the execution of this Agreement.
1. ADVISORY SERVICES
You will regularly provide the Fund with such investment advice as you in
your discretion deem advisable and will furnish a continuous investment program
for the Fund consistent with the Fund's investment objective and policies. You
will determine the securities to be purchased for the Fund, the portfolio
securities to be held or sold by the Fund and the portion of the Fund's assets
to be held uninvested, subject always to the Fund's investment objective,
policies and restrictions, as each of the same shall be from time to time in
effect, and subject further to such policies and instructions as the Board of
Trustees may from time to time establish.
2. ALLOCATION OF CHARGES AND EXPENSES
You will pay all operating expenses of the Fund, including the compensation
and expenses of any employees of the Fund and of any other persons rendering any
services to the Fund; clerical and shareholder service staff salaries; office
space and other office expenses; fees and expenses incurred by the Fund in
connection with membership in investment company organizations; legal, auditing
and accounting expenses; expenses of registering shares under federal and state
securities laws, including expenses incurred by the Fund in connection with the
organization and initial registration of shares of the Fund; insurance expenses;
fees and expenses of the custodian, transfer agent, dividend disbursing agent,
shareholder service agent, plan agent, administrator, accounting and pricing
services agent and underwriter of the Fund; expenses, including clerical
expenses, of issue, sale, redemption or repurchase of shares of the Fund; the
cost of preparing and distributing reports and notices to shareholders, the cost
of printing or preparing prospectuses and statements of additional information
for delivery to shareholders; the cost of printing or preparing stock
certificates or any other documents, statements or reports to shareholders;
expenses of shareholders' meetings and proxy solicitations; advertising,
promotion and other expenses incurred directly or indirectly in connection with
the sale or distribution of the Fund's shares, excluding expenses which the Fund
is authorized to pay pursuant to Rule 12b-1 under Investment Company Act of
1940, as amended (the "Act"); and all other operating expenses not specifically
assumed by the Fund.
The Fund will pay all brokerage fees and commissions, taxes, borrowing
costs (such as (a) interest and (b) dividend expenses on securities sold short),
fees and expenses of the non-interested person Trustees and such extraordinary
or non-recurring expenses as may arise, including litigation to which the Fund
may be a party and indemnification of the Trust's Trustees and officers with
respect thereto. The Fund will also pay expenses that it is authorized to pay
pursuant to Rule 12b-1 under the Act.
You may obtain reimbursement from the Fund, at such time or times as you
may determine in your sole discretion, for any of the expenses advanced by you,
which the Fund is obligated to pay, and such reimbursement shall not be
considered to be part of your compensation pursuant to this Agreement.
3. COMPENSATION OF THE ADVISER
For all of the services to be rendered and payments to be made as provided
in this Agreement, as of the last business day of each month, the Fund will pay
you a fee at the annual rate of 1.50% of the average value of its daily net
assets.
The average value of the daily net assets of the Fund shall be determined
pursuant to the applicable provisions of the Agreement and Declaration of Trust
or a resolution of the Board of Trustees, if required. If, pursuant to such
provisions, the determination of net asset value of the Fund is suspended for
any particular business day, then for the purposes of this paragraph, the value
of the net assets of the Fund as last determined shall be deemed to be the value
of the net assets as of the close of the business day, or as of such other time
as the value of the Fund's net assets may lawfully be determined, on that day.
If the determination of the net asset value of the Fund has been suspended for a
period including such month, your compensation payable at the end of such month
shall be computed on the basis of the value of the net assets of the Fund as
last determined (whether during or prior to such month).
4. EXECUTION OF PURCHASE AND SALE ORDERS
In connection with purchases or sales of portfolio securities for the
account of the Fund, it is understood that you will arrange for the placing of
all orders for the purchase and sale of portfolio securities for the account
with brokers or dealers selected by you, subject to review of this selection by
the Board of Trustees from time to time. You will be responsible for the
negotiation and the allocation of principal business and portfolio brokerage. In
the selection of such brokers or dealers and the placing of such orders, you are
directed at all times to seek for the Fund the best qualitative execution,
taking into account such factors as price (including the applicable brokerage
commission or dealer spread), the execution capability, financial responsibility
and responsiveness of the broker or dealer and the brokerage and research
services provided by the broker or dealer.
You should generally seek favorable prices and commission rates that are
reasonable in relation to the benefits received. In seeking best qualitative
execution, you are authorized to select brokers or dealers who also provide
brokerage and research services to the Fund and/or the other accounts over which
you exercise investment discretion. You are authorized to pay a broker or dealer
who provides such brokerage and research services a commission for executing a
Fund portfolio transaction which is in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction if
you determine in good faith that the amount of the commission is reasonable in
relation to the value of the brokerage and research services provided by the
executing broker or dealer. The determination may be viewed in terms of either a
particular transaction or your overall responsibilities with respect to the Fund
and to accounts over which you exercise investment discretion. The Fund and you
understand and acknowledge that, although the information may be useful to the
Fund and you, it is not possible to place a dollar value on such information.
The Board of Trustees shall periodically review the commissions paid by the Fund
to determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Fund.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc., and subject to seeking best qualitative execution as
described above, you may give consideration to sales of shares of the Fund as a
factor in the selection of brokers and dealers to execute Fund portfolio
transactions.
Subject to the provisions of the Act, and other applicable law, you, any of
your affiliates or any affiliates of your affiliates may retain compensation in
connection with effecting the Fund's portfolio transactions, including
transactions effected through others. If any occasion should arise in which you
give any advice to clients of yours concerning the shares of the Fund, you will
act solely as investment counsel for such client and not in any way on behalf of
the Fund. Your services to the Fund pursuant to this Agreement are not to be
deemed to be exclusive and it is understood that you may render investment
advice, management and other services to others, including other registered
investment companies.
5. LIMITATION OF LIABILITY OF ADVISER
You may rely on information reasonably believed by you to be accurate and
reliable. Except as may otherwise be required by the Act or the rules
thereunder, neither you nor your directors, officers, employees, shareholders,
agents, control persons or affiliates of any thereof shall be subject to any
liability for, or any damages, expenses or losses incurred by the Trust in
connection with, any error of judgment, mistake of law, any act or omission
connected with or arising out of any services rendered under, or payments made
pursuant to, this Agreement or any other matter to which this Agreement relates,
except by reason of willful misfeasance, bad faith or gross negligence on the
part of any such persons in the performance of your duties under this Agreement,
or by reason of reckless disregard by any of such persons of your obligations
and duties under this Agreement.
Any person, even though also a director, officer, employee, shareholder or
agent of you, who may be or become a trustee, officer, employee or agent of the
Trust, shall be deemed, when rendering services to the Trust or acting on any
business of the Trust (other than services or business in connection with your
duties hereunder), to be rendering such services to or acting solely for the
Trust and not as a director, officer, employee, shareholder or agent of you, or
one under your control or direction, even though paid by you.
6. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall take effect on the date of its execution, and shall
remain in force for a period of two (2) years from the date of its execution,
and from year to year thereafter, subject to annual approval by: (i) the Board
of Trustees; or (ii) a vote of a majority of the outstanding voting securities
of the Fund, provided that in either event continuance is also approved by a
majority of the Trustees who are not interested persons of you or the Trust, by
a vote cast in person at a meeting called for the purpose of voting such
approval.
This Agreement may, on sixty (60) days written notice, be terminated with
respect to the Fund, at any time without the payment of any penalty, by the
Board of Trustees, by a vote of a majority of the outstanding voting securities
of the Fund, or by you. This Agreement shall automatically terminate in the
event of its assignment.
7. USE OF NAME
The Trust and you acknowledge that all rights to the name "Private Asset
Management" or any variation thereof belong to you, and that the Trust is being
granted a limited license to use such words in its Fund name or in any class
name. In the event you cease to be the adviser to the Fund, the Trust's right to
the use of the name "Private Asset Management" shall automatically cease on the
ninetieth day following the termination of this Agreement. The right to the name
may also be withdrawn by you during the term of this Agreement upon ninety (90)
days' written notice by you to the Trust. Nothing contained herein shall impair
or diminish in any respect, your right to use the name "Private Asset
Management" in the name of, or in connection with, any other business
enterprises with which you are or may become associated. There is no charge to
the Trust for the right to use this name.
8. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived, discharged or
terminated orally, and no amendment of this Agreement shall be effective until
approved by the Board of Trustees, including a majority of the Trustees who are
not interested persons of you or of the Trust, cast in person at a meeting
called for the purpose of voting on such approval, and (if required under
interpretations of the Act by the Securities and Exchange Commission or its
staff) by vote of the holders of a majority of the outstanding voting securities
of the series to which the amendment relates.
9. LIMITATION OF LIABILITY TO TRUST PROPERTY
The term "Private Asset Management Funds" means and refers to the Trustees
from time to time serving under the Trust's Agreement and Declaration of Trust
as the same may subsequently thereto have been, or subsequently hereto be,
amended. It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of Trustees, officers, employees, agents or
nominees of the Trust, or any shareholders of any series of the Trust,
personally, but bind only the trust property of the Trust (and only the property
of the Fund), as provided in the Agreement and Declaration of Trust. The
execution and delivery of this Agreement have been authorized by the Trustees
and shareholders of the Fund and signed by officers of the Trust, acting as
such, and neither such authorization by such Trustees and shareholders nor such
execution and delivery by such officers shall be deemed to have been made by any
of them individually or to impose any liability on any of them personally, but
shall bind only the trust property of the Trust (and only the property of the
Fund) as provided in its Agreement and Declaration of Trust. A copy of the
Agreement and Declaration of Trust is on file with the Secretary of State of
Ohio.
10. SEVERABILITY
In the event any provision of this Agreement is determined to be void or
unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
11. QUESTIONS OF INTERPRETATION
(a) This Agreement shall be governed by the laws of the State of
California.
(b) For the purpose of this Agreement, the terms "majority of the
outstanding voting securities," "control" and "interested person" shall have
their respective meanings as defined in the Act and rules and regulations
thereunder, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under the Act; and the term "brokerage and
research services" shall have the meaning given in the Securities Exchange Act
of 1934.
(c) Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the Act shall be resolved by reference to such term or provision of the Act
and to interpretation thereof, if any, by the United States courts or in the
absence of any controlling decision of any such court, by the Securities and
Exchange Commission or its staff. In addition, where the effect of a requirement
of the Act, reflected in any provision of this Agreement, is revised by rule,
regulation, order or interpretation of the Securities and Exchange Commission or
its staff, such provision shall be deemed to incorporate the effect of such
rule, regulation, order or interpretation.
12. NOTICES
Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to the other party at such address as such
other party may designate for the receipt of such notice. Until further notice
to the other party, it is agreed that the address of the Trust is 00000 Xx
Xxxxxx Xxxx, Xxxxx 000, Xxx Xxxxx, XX 00000, and your address for this purpose
shall be 00000 Xx Xxxxxx Xxxx, Xxxxx 000, Xxx Xxxxx, XX 00000
13. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
14. BINDING EFFECT
Each of the undersigned expressly warrants and represents that he has the
full power and authority to sign this Agreement on behalf of the party
indicated, and that his signature will operate to bind the party indicated to
the foregoing terms.
15. CAPTIONS
The captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect.
If you are in agreement with the foregoing, please sign the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Trust, whereupon this letter shall become a binding contract
upon the date thereof.
Yours very truly,
Private Asset Management Funds
Dated: 4/24/02 By: /s/ Xxxxxxx X. Xxxxx
Print Name: Xxxxxxx X. Xxxxx
Title: President
ACCEPTANCE
The foregoing Agreement is hereby accepted.
Private Asset Management, Inc.
Dated: 4/24/02 By: /s/ Xxxxxxx X. Xxxxxx
Print Name: Xxxxxxx X. Xxxxxx
Title: VP / General Counsel
