PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT made this _____day of July, 1995 between XXXXXXXX ASSOCIATES CAPITAL
CORP., a New York corporation ("Portfolio Manager") and THE XXXXXX XXXXXXXXX
TRUST, a Delaware business trust ("Trust").
WHEREAS, the Trust is registered as an open-end, diversified, management
series investment company under the Investment Company Act of 1940, as amended
("Investment Company Act") which currently offers five series of beneficial
interests ("shares") representing interests in separate investment portfolios,
and may offer additional portfolios in the future (each referred to
hereinafter as a "Portfolio" and collectively, as the "Portfolios"); and
WHEREAS, the Trust desires to retain the Portfolio Manager to provide a
continuous program of investment management for The Growth Equity Portfolio of
the Trust ("Portfolio") and Portfolio Manager is willing, in accordance with
the terms and conditions hereof, to provide such services to the Trust;
NOW THEREFORE, in consideration of the promises and covenants set forth herein
and intending to be legally bound hereby, it is agreed between the parties as
follows:
1. Appointment of Portfolio Manager.
The Trust hereby retains Portfolio Manager to provide the investment services
set forth herein and Portfolio Manager agrees to accept such appointment. In
carrying out its responsibilities under this Agreement, the Portfolio Manager
shall at all times act in accordance with the investment objectives, policies
and restrictions applicable to the Portfolio as set forth in the then current
Registration Statement of the Trust, applicable provisions of the Investment
Company Act and the rules and regulations promulgated under that Act and other
applicable federal securities laws.
2. Duties of Portfolio Manager.
(a) Portfolio Manager shall provide a continuous program of investment
management for that portion of the assets of the Portfolio ("Account") that
may, from time to time be allocated to it by the Trust's Board of Trustees, in
writing, by an authorized officer of the Trust. It is understood that the
Account may consist of all, a portion of or none of the assets of the
Portfolio, and that the Board of Trustees has the right to allocate and
reallocate such assets to the Account at any time, and from time to time, upon
such notice to Portfolio Manager as may, in the view of the Trust, be
necessary to ensure orderly management of the Account or the Portfolio.
(b) Subject to the general supervision of the Trust's Board of Trustees,
Portfolio Manager shall have sole investment discretion with respect to the
Account, including investment research, selection of the securities to be
purchased and sold and the portion of the Account, if any, that shall be held
uninvested, and the selection of brokers and dealers through which securities
transactions in the Account shall be executed. Specifically, and without
limiting the generality of the foregoing, Portfolio Manager agrees that it
will:
(i) promptly advise the Portfolio's designated custodian bank and
administrator or accounting agent of each purchase and sale, as the case
may be, made on behalf of the Account, specifying the name and quantity of
the security purchased or sold, the unit and aggregate purchase or sale
price, commission paid, the market on which the transaction was effected,
the trade date, the settlement date, the identity of the effecting broker
or dealer and/or such other information, and in such manner, as may from
time to time be reasonably requested by the Trust;
(ii) maintain all applicable books and records with respect to the
securities transactions of the Account. Specifically, Portfolio Manager
agrees to maintain with respect to the Account those records required to
be maintained under Rule 31a-1(b)(1), (b)(5) and (b)(6) under the
Investment Company Act with respect to transactions in the Account
including, without limitation, records which reflect securities purchased
or sold in the Account, showing for each such transaction, the name and
quantity of securities, the unit and aggregate purchase or sale price,
commission paid, the market on which the transaction was effected, the
trade date, the settlement date, and the identity of the effecting broker
or dealer. Portfolio Manager will preserve such records in the manner and
for the periods prescribed by Rule 31a-2 under the Investment Company
Act. Portfolio Manager acknowledges and agrees that all records it
maintains for the Trust are the property of the Trust and Portfolio
Manager will surrender promptly to the Trust any such records upon the
Trust's request. The Trust agrees, however, that Portfolio Manager may
retain copies of those records that are required to be maintained by
Portfolio Manager under federal or state regulations to which it may be
subject or are reasonably necessary for purposes of conducting its
business;
(iii) provide, in a timely manner, such information as may be
reasonably requested by the Trust or its designated agents in connection
with, among other things, the daily computation of the Portfolio's net
asset value and net income, preparation of proxy statements or amendments
to the Trust's registration statement and monitoring investments made in
the Account to ensure compliance with the various limitations on
investments applicable to the Portfolio and to ensure that the Portfolio
will continue to qualify for the special tax treatment accorded to
regulated investment companies under Subchapter M of the Internal Revenue
Code of 1986, as amended; and
(iv) render regular reports to the Trust concerning the performance of
Portfolio Manager of its responsibilities under this Agreement. In
particular, Portfolio Manager agrees that it will, upon reasonable notice
and at the reasonable request of the Board of Trustees, attend meetings of
the Board or its validly constituted committees and make its officers and
employees available to meet with the officers and employees of the Trust
at least quarterly to review the investments and investment program of the
Account.
3. Portfolio Transaction and Brokerage. In placing orders for portfolio
securities with brokers and dealers, Portfolio Manager shall use its best
efforts to execute securities transactions on behalf of the Account in such a
manner that the total cost or proceeds in each transaction is the most
favorable under the circumstances. Portfolio Manager may, however, in its
discretion, direct orders to brokers that provide to Portfolio Manager
research, analysis, advice and similar services, and Portfolio Manager may
cause the Account to pay to those brokers a higher commission than may be
charged by other brokers for similar transactions, provided that Portfolio
Manager determines in good faith that such commission is reasonable in terms
either of the particular transaction or of the overall responsibility of the
Portfolio Manager to the Account and any other accounts with respect to which
Portfolio Manager exercises investment discretion, and provided further that
the extent and continuation of any such practice is subject to review by the
Trust's Board of Trustees. Portfolio Manager shall not execute any portfolio
transactions for the Trust with a broker or dealer which is an "affiliated
person" of the Trust or Portfolio Manager, including any other investment
advisory organization that may, from time to time act as a portfolio manager
for the Portfolio or any of the Trust's other Portfolios, without prior
written approval of the Trust. The Trust shall provide a list of such
affiliated brokers and dealers to Portfolio Manager and will promptly advise
Portfolio Manager of any changes in such list.
4. Expenses and Compensation.
Portfolio Manager shall pay all of its expenses incurred in the performance of
its duties under this Agreement and shall not be required to pay any expenses
of the Trust. For its services under this Agreement, Portfolio Manager shall
be entitled to receive a fee at the annual rate of .30% of the average daily
net assets of the Account, which fee shall be payable monthly.
5. Limitation of Liability and Indemnification.
(a) Portfolio Manager shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Trust in connection with the matters to
which this Agreement relates including, without limitation, losses that may be
sustained in connection with the purchase, holding, redemption or sale of any
security or other investment by the Trust except a loss resulting directly
from willful misfeasance, bad faith or gross negligence on the part of
Portfolio Manager in the performance of its duties or from reckless disregard
by it of its duties under this Agreement.
(b) Notwithstanding the foregoing, Portfolio Manager expressly agrees that the
Trust may rely upon written information provided by Portfolio Manager to the
Trust (including, without limitation, information contained in Portfolio
Manager's then current Form ADV) in accordance with Section 9 of the Agreement
or otherwise in preparing the Trust's registration statement and amendments
thereto and certain periodic reports relating to the Trust and its Portfolios
that are required to be furnished to shareholders of the Trust and/or filed
with the Securities and Exchange Commission ("SEC Filings"). Portfolio
Manager agrees to indemnify and hold harmless the Trust and each of its
Trustees, officers and employees from any claims, liabilities and expenses,
including reasonable attorneys' fees, incurred as a result of any untrue
statement or alleged untrue statement of a material fact made by Portfolio
Manager in any such written information
and upon which the Trust relies in preparing any SEC Filing, or any omission
or alleged omission to state in such written information a material fact
necessary to make such statements not misleading ("material omission").
Portfolio Manager will not, however, be required to so indemnify any person
under this Section 5 to the extent that Portfolio Manager relied upon an
untrue statement or material omission made by an officer or Trustee of the
Trust or where such untrue statement or material omission was made in reliance
upon information furnished to the Portfolio Manager in writing by such officer
or Trustee, or by the Trust's custodian bank, administrator or accounting
agent.
6. Permissible Interest.
Subject to and in accordance with the Trust's Declaration of Trust and Bylaws
and corresponding governing documents of Portfolio Manager, directors,
officers, agents and shareholders of the Trust may have an interest in the
Portfolio Manager as officers, directors, agents and/or shareholders or
otherwise. Portfolio Manager may have similar interests in the Trust. The
effect of any such interrelationships shall be governed by said governing
documents and the provisions of the Investment Company Act.
7. Duration, Termination and Amendments.
This Agreement shall become effective as of the date first written above and
shall continue in effect for two years. Thereafter, this Agreement shall
continue in effect from year to year for so long as its continuance is
specifically approved, at least annually, by (i) a majority of the Board of
Trustees or the vote of the holders of a majority of the Portfolio's
outstanding voting securities; and (ii) the affirmative vote, cast in person
at a meeting called for the purpose of voting on such continuance, of a
majority of those members of the Board of Trustees ("IndependentTrustees") who
are not "interested persons" of the Trust or any investment adviser to the
Trust.
This Agreement may be terminated by the Trust or by Portfolio Manager at any
time and without penalty upon sixty days written notice to the other party,
which notice may be waived by the party entitled to it. This Agreement may
not be amended except by an instrument in writing and signed by the party to
be bound thereby provided that if the Investment Company Act requires that
such amendment be approved by the vote of the Board, the Independent
Directors, and/or the holders of the Trust's or the Portfolio's outstanding
shareholders, such approval must be obtained before any such amendment may
become effective. This Agreement shall terminate upon its assignment.
For purposes of this Agreement, the terms "majority of the outstanding voting
securities, "assignment" and "interested person" shall have the meanings set
forth in the Investment Company Act.
8. Confidentiality; Use of Name.
(a) Portfolio Manager acknowledges and agrees that during the course of its
responsibilities hereunder, it may have access to certain information that is
proprietary to the Trust or to one or more of the Trust's agents or service
providers. Portfolio Manager agrees that Portfolio Manager, its officers and
its employees shall treat all such proprietary information as confidential and
will not use or disclose information contained in, or derived from such
material for any purpose other than in connection with the carrying out of
Portfolio Manager's responsibilities hereunder, provided, however, that this
shall not apply in the case of (i) information that is publicly available;
(ii) information that Portfolio Manager obtains from other sources without
knowing of any obligation of confidentiality that such sources have to the
Trust, and (iii) disclosures required by law or requested by any regulatory
authority that may have jurisdiction over Portfolio Manager, in which case
Portfolio Manager shall request such confidential treatment of such
information as may be reasonably available. In addition, Portfolio Manager
shall use its best efforts to ensure that any agent or affiliate of Portfolio
Manager who may gain access to such proprietary materials shall be made aware
of the proprietary nature of such materials and shall likewise treat such
materials as confidential.
(b) It is acknowledged and agreed that the names "Xxxxxx Xxxxxxxxx," "Xxxxxx
Xxxxxxxxx Chief Investment Officers" (which is a registered trademark
ofHirtle, Xxxxxxxxx & Co., Inc. ("HCCI")), and derivatives of either, as well
as any logo that is now or shall later become associated with either name
("Marks") are valuable property of HCCI and that the use of the Marks, or any
one of them, by the Trust or its agents is subject to the license granted to
the Trust by HCCI. Portfolio Manager agrees that it will not use any Xxxx
without the prior written consent of the Trust or HCCI.
(c) Portfolio Manager consents to use of its name, performance data,
biographical data and other pertinent data by the Trust for use in marketing
and sales literature, provided that any such marketing and sales literature
(other than the Trust's prospectus included in its then current registration
statement) shall not be used by the Trust without the prior written consent of
Portfolio Manager. The Trust agrees to treat Portfolio Manager's advice and
information rendered to the Portfolio confidential and for use only by the
Trust, subject to the exception stated in clauses Section 8(a)(i), (ii) and
(iii), above. The provisions of this Section 8 shall survive termination of
this Agreement.
9. Representations, Warranties and Agreements of Portfolio Manager. Portfolio
Manager represents and warrants that:
(a) It is registered as an investment adviser under the Investment Advisers
Act of 1940 ("Investment Advisers Act"), it will maintain such registration in
full force and effect and will promptly report to the Trust the commencement
of any formal proceeding that would be reasonably likely to render the
Portfolio Manager ineligible to serve as an investment adviser to a registered
investment company under Section 9 of the Investment Company Act.
(b) It has adopted a written code of ethics complying with the requirements of
Rule 17j-1 under the Investment Company Act and has provided the Trust with a
copy of the code of ethics. During the period that this Agreement is in
effect, an officer or director of Portfolio Manager shall certify to the
Trust, on a quarterly basis, that (i) Portfolio Manager has complied with the
requirements of Rule 17j-1 during the prior year and (ii) that there has been
no violation of such code of ethics or, if such a violation has occurred, that
appropriate action was taken in response to such violation. Upon the written
request of the Trust, Portfolio Manager shall permit the Trust, or it
designated agents, to examine the reports required to be made by Portfolio
Manager under rule 17j-1(c)(1) under the Investment Company Act. In addition,
Portfolio Manager acknowledges that the Trust may, in response to regulations
or recommendations issued by the Securities and Exchange Commission or other
regulatory agencies, from time to time, request additional information
regarding the personal securities trading of its directors, partners, officers
and employees and the policies of Portfolio Manager with regard to such
trading. Portfolio Manager agrees that it make every reasonable effort to
respond to the Trust's requests in this area.
(c) Upon request of the Trust, Portfolio Manager shall promptly supply the
Trust with any information concerning Portfolio Manager and its stockholders,
employees and affiliates that the Trust may reasonably require in connection
with the preparation of its registration statements, proxy materials, reports
and other documents required, under applicable state or Federal laws, to be
filed with state or Federal agencies or to be provided to shareholders of the
Trust.
10. Status of Portfolio Manager.
The Trust and Portfolio Manager acknowledge and agree that the relationship
between Portfolio Manager and the Trust is that of an independent contractor
and under no circumstances shall any employee of Portfolio Manager be deemed
an employee of the Trust or any other organization that the Trust may, from
time to time, engage to provide services to the Trust, its Portfolios or its
shareholders. The parties also acknowledge and agree that nothing in this
Agreement shall be construed to restrict the right of Portfolio Manager or its
affiliates to perform investment management or other services to any person or
entity, including without limitation, other investment companies and persons
who may retain Portfolio Manager to provide investment management services and
the performance of such services shall not be deemed to violate or give rise
to any duty or obligations to the Trust. It is understood that Portfolio
Manager shall not have any obligation to purchase for or sell for the
Portfolio any security that Portfolio Manager or its affiliates or employees
may purchase or sell for its or their own account or for the account of any
other client.
11. Counterparts and Notice.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original. Any notice required to be given under this
Agreement shall be deemed given when received, in writing addressed and
delivered, by certified mail, by hand or via overnight delivery service as
follows:
If to the Trust:
Xx. Xxxxxx X. Xxxxxxxxx, President
The Xxxxxx Xxxxxxxxx Trust
000 Xxxx Xxxxxxxxxx Xxxx
Xxxxx, XX 00000-0000
If to Portfolio Manager:
Xx. Xxxxxx X. Xxxxxx
Senior Vice President
Xxxxxxxx Associates Capital Corp.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
12. Miscellaneous. 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 any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by the law of the state of Delaware provided that nothing herein
shall be construed as inconsistent with the Investment Company Act or the
Investment Advisers Act.
Portfolio Manager is hereby expressly put on notice of the limitations of
shareholder and Trustee liability set forth in the Declaration of Trust of the
Trust and agrees that obligations assumed by the Trust pursuant to this
Agreement shall be limited in all cases to the assets of The Growth Equity
Portfolio Manager further agrees that it will not seek satisfaction of any
such obligations from the shareholders or any individual shareholder of the
Trust, or from the Trustees of the Trust or any individual Trustee of the
Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized as of the day and year
first written above.
Xxxxxxxx Associates Capital Corp.
By: /s/
The Xxxxxx Xxxxxxxxx Trust
By: /s/
