EXHIBIT 4(a)
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the 31st day of May, 1997, and amended as of March
2, 1998 and May 1, 1998, by and between Xxxx Xxxxxx Select Dimensions
Investment Series, an unincorporated business trust organized under the laws
of the Commonwealth of Massachusetts (hereinafter called the "Fund"), and
Xxxx Xxxxxx InterCapital Inc., a Delaware corporation (hereinafter called the
"Investment Manager"):
WHEREAS, The Fund is engaged in business as an open-end management
investment company and is registered as such under the Investment Company Act
of 1940, as amended (the "Act"); and
WHEREAS, The Investment Manager is registered as an investment adviser
under the Investment Advisers Act of 1940, and engages in the business of
acting as investment adviser; and
WHEREAS, The Fund is authorized to issue shares of beneficial interest
in separate portfolios (the "Portfolios") with each Portfolio representing
interests in a separate portfolio of securities and other assets; and
WHEREAS, The Fund currently offers shares in thirteen Portfolios, such
Portfolios together with all other Portfolios subsequently established by the
Fund with respect to which the Fund desires to retain the Investment Manager
to render management and investment advisory services in the manner and on
the terms and conditions hereinafter set forth being collectively referred to
as the "Portfolios;" and
WHEREAS, The Investment Manager desires to be retained to perform
services on said terms and conditions:
Now, Therefore, this Agreement
W I T N E S S E T H:
that in consideration of the premises and the mutual covenants hereinafter
contained, the Fund and the Investment Manager agree as follows:
1. The Fund hereby retains the Investment Manager to act as investment
manager of the Portfolios and, subject to the supervision of the Trustees, to
supervise the investment activities of the Portfolios as hereinafter set
forth. Without limiting the generality of the foregoing, the Investment
Manager: shall obtain and evaluate such information and advice relating to
the economy, securities and commodities markets and securities and
commodities as it deems necessary or useful to discharge its duties
hereunder; with respect to the Portfolios other than such Portfolios in
respect of which a Sub-Advisory Agreement is in effect in accordance with
paragraph 2 hereof, shall continuously manage the assets of the Portfolios in
a manner consistent with the investment objectives and policies of the
Portfolios and shall determine the securities and commodities to be
purchased, sold or otherwise disposed of by the Portfolios and the timing of
such purchases, sales and dispositions; with respect to the Portfolios in
respect of which a Sub-Advisory Agreement is in effect in accordance with
paragraph 2 hereof, shall supervise the management of the assets of the
Portfolio in a manner consistent with the investment objectives and policies
of the Portfolio and subject to such other limitations and directions as the
Trustees of the Fund may from time to time prescribe; and shall take such
further action, including the placing of purchase and sale orders on behalf
of the Portfolios other than the Portfolios in respect of which a
Sub-Advisory Agreement is in effect in accordance with paragraph 2 hereof, as
the Investment Manager shall deem necessary or appropriate. The Investment
Manager shall also furnish to or place at the disposal of the Fund such of
the information, evaluations, analyses and opinions formulated or obtained by
the Investment Manager in the discharge of its duties as the Fund may, from
time to time, reasonably request.
In the event the Fund establishes another Portfolio other than the
current Portfolios with respect to which it desires to retain the Investment
Manager to render investment advisory services hereunder, it shall notify the
Investment Manager in writing. If the Investment Manager is willing to render
such services, it shall notify the Fund in writing, whereupon such other
Portfolio shall become a Portfolio hereunder.
2. The Investment Manager may, at its own expense, from time to time
and in its discretion, enter into a Sub-Advisory Agreement or Sub-Advisory
Agreements in respect of any of the Portfolios with a Sub-Adviser or
Sub-Advisers to make determinations as to the securities and commodities to
be purchased, sold or otherwise disposed of by the Portfolio and the timing
of such purchases, sales and dispositions and to take such further action,
including the placing of purchase and sale orders on behalf of the Portfolio,
as the Sub-Adviser, in consultation with the Investment Manager, shall deem
necessary or appropriate; provided that the Investment Manager shall be
responsible for monitoring compliance by such Sub-Adviser with the investment
policies and restrictions of the Portfolio and with such other limitations or
directions as the Trustees of the Fund may from time to time prescribe. Upon
the termination of any such Sub-Advisory Agreement, the Investment Manager
may assume all of the duties that were the responsibility of the Sub-Adviser
under the Sub-Advisory Agreement.
3. The Investment Manager shall, at its own expense, maintain such
staff and employ or retain such personnel and consult with such other persons
as it shall from time to time determine to be necessary or useful to the
performance of its obligations under this Agreement. Without limiting the
generality of the foregoing, the staff and personnel of the Investment
Manager shall be deemed to include persons employed or otherwise retained by
the Investment Manager to furnish statistical and other factual data, advice
regarding economic factors and trends, information with respect to technical
and scientific developments, and such other information, advice and
assistance as the Investment Manager may desire. The Investment Manager
shall, as agent for the Fund, maintain the Fund's records and books of
account (other than those maintained by the Fund's transfer agent, registrar,
custodian and other agencies). All such books and records so maintained shall
be the property of the Fund and, upon request therefor, the Investment
Manager shall surrender to the Fund such of the books and records so
requested.
4. The Fund will, from time to time, furnish or otherwise make
available to the Investment Manager such financial reports, proxy statements
and other information relating to the business and affairs of the Fund as the
Investment Manager may reasonably require in order to discharge its duties
and obligations hereunder.
5. The Investment Manager shall bear the cost of rendering the
investment management and supervisory services to be performed by it under
this Agreement, and shall, at its own expense, pay the compensation of the
officers and employees, if any, of the Fund who are also directors, officers
or employees of the Investment Manager, and provide such office space,
facilities and equipment and such clerical help and bookkeeping services as
the Fund shall reasonably require in the conduct of its business. The
Investment Manager shall also bear the cost of telephone service, heat,
light, power and other utilities provided to the Fund.
6. The Fund assumes and shall pay or cause to be paid all other
expenses of the Fund, including without limitation: the charges and expenses
of any registrar, any custodian or depository appointed by the Fund for the
safekeeping of its cash, portfolio securities or commodities and other
property, and any stock transfer or dividend agent or agents appointed by the
Fund; brokers' commissions chargeable to the Fund in connection with
portfolio transactions to which the Fund is a party; all taxes, including
securities or commodities issuance and transfer taxes, and fees payable by
the Fund to federal, state or other governmental agencies; the cost and
expense of engraving or printing certificates representing shares of the
Fund; all costs and expenses in connection with the registration and
maintenance of registration of the Fund and its shares with the Securities
and Exchange Commission and various states and other jurisdictions (including
filing fees and legal fees and disbursements of counsel); the cost and
expense of printing (including typesetting) and distributing prospectuses and
statements of additional information of the Fund and supplements thereto to
the Fund's shareholders; all expenses of shareholders' and Trustees' meetings
and of preparing, printing and mailing proxy statements and reports to
shareholders; fees and travel expenses of Trustees or members of any advisory
board or committee who are not employees of the Investment Manager or any
corporate affiliate of the Investment Manager; all expenses incident to the
payment of any dividend, distribution, withdrawal or redemption, whether in
shares or in cash; charges and expenses of any outside
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service used for pricing of the Fund's shares; charges and expenses of legal
counsel, including counsel to the Trustees of the Fund who are not interested
persons (as defined in the Act) of the Fund or the Investment Manager, and of
independent accountants, in connection with any matter relating to the Fund;
membership dues of industry associations; interest payable on Fund
borrowings; postage; insurance premiums on property or personnel (including
officers and Trustees) of the Fund which inure to its benefit; extraordinary
expenses (including but not limited to legal claims and liabilities and
litigation costs and any indemnification related thereto); and all other
charges and costs of the Fund's operation unless otherwise explicitly
provided herein.
7. For the services to be rendered, the facilities furnished, and the
expenses assumed by the Investment Manager, the various Portfolios of the
Fund shall pay to the Investment Manager monthly compensation determined by
applying the following annual rates to the daily net assets of the respective
Portfolios determined as of the close of each business day: (a) the Money
Market Portfolio -- 0.50%; (b) the North American Government Securities
Portfolio -- 0.65%; (c) the Diversified Income Portfolio -- 0.40%; (d) the
Balanced Growth Portfolio -- 0.60%; (e) the Utilities Portfolio -- 0.65%; (f)
the Dividend Growth Portfolio -- 0.625% of daily net assets up to $500
million and 0.50% of daily net assets over $500 million; (g) the Value-Added
Market Portfolio -- 0.50%; (h) the Growth Portfolio -- 0.80%; (i) the American
Value Portfolio -- 0.625%; (j) the Mid-Cap Growth Portfolio -- 0.75%; (k) the
Global Equity Portfolio -- 1.0%; (l) the Developing Growth Portfolio --
0.50%; and (m) the Emerging Markets Portfolio -- 1.25%. Except as hereinafter
set forth, compensation under this Agreement shall be calculated and accrued
daily and the amounts of the daily accruals shall be paid monthly. Such
calculations shall be made by applying 1/365ths of the annual rates to the
net assets of the respective Portfolios each day determined as of the close
of business on that day or the last previous business day. If this Agreement
becomes effective subsequent to the first day of a month or shall terminate
before the last day of a month, compensation for that part of the month this
Agreement is in effect shall be prorated in a manner consistent with the
calculation of the fees as set forth above.
Subject to the provisions of paragraph 8 hereof, payment of the
Investment Manager's compensation for the preceding month shall be made as
promptly as possible after completion of the computations contemplated by
paragraph 8 hereof.
8. In the event that the operating expenses of any of the Money Market
Portfolio, the North American Government Securities Portfolio, the
Diversified Income Portfolio, the Balanced Growth Portfolio, the Utilities
Portfolio, the Dividend Growth Portfolio, the Value-Added Market Portfolio,
the Growth Portfolio, the American Value Portfolio, the Global Equity
Portfolio, the Developing Growth Portfolio or the Emerging Markets Portfolio,
including amounts payable to the Investment Manager pursuant to paragraph 7
hereof, for any year ending on a date on which this Agreement is in effect
exceed 2.5% of the average daily net assets of such Portfolio up to $30
million, 2.0% of the next $70 million and 1.5% of the average daily net
assets of such Portfolio in excess of $100 million (the "expense limitation"
of these Portfolios), the Investment Manager shall reduce its management fee
in respect of such Portfolio to the extent of such excess and will reimburse
such Portfolio for annual operating expenses in excess of the expense
limitation, up to the amount of the management fee for that Portfolio which
otherwise would be payable for that year; provided, however, there shall be
excluded from such expenses the amount of any interest, taxes, brokerage
commissions and extraordinary expenses (including but not limited to legal
claims and liabilities and litigation costs and any indemnification related
thereto) paid or payable by such Portfolio. Such reduction, if any, shall be
computed and accrued daily, shall be settled on a monthly basis, and shall be
based upon the expense limitation applicable to such Portfolio as at the end
of the last business day of the month.
9. The Investment Manager will use its best efforts in the supervision
and management of the investment activities of the Fund, but in the absence
of willful misfeasance, bad faith, gross negligence or reckless disregard of
its obligations hereunder, the Investment Manager shall not be liable to the
Fund or any of its investors for any error of judgment or mistake of law or
for any act or omission by the Investment Manager or for any losses sustained
by the Fund or its investors.
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10. Nothing contained in this Agreement shall prevent the Investment
Manager or any affiliated person of the Investment Manager from acting as
investment adviser or manager for any other person, firm or corporation and
shall not in any way bind or restrict the Investment Manager or any such
affiliated person from buying, selling or trading any securities or
commodities for their own accounts or for the account of others for whom they
may be acting. Nothing in this Agreement shall limit or restrict the right of
any Trustee, officer or employee of the Investment Manager to engage in any
other business or to devote his or her time and attention in part to the
management or other aspects of any other business whether of a similar or
dissimilar nature.
11. This Agreement shall remain in effect until April 30, 1999 and from
year to year thereafter with respect to each Portfolio provided such
continuance with respect to a Portfolio is approved at least annually by the
vote of holders of a majority (as defined in the Act) of the outstanding
voting securities of such Portfolio or by the Trustees of the Fund; provided
that in either event such continuance is also approved annually by the vote
of a majority of the Trustees of the Fund who are not parties to this
Agreement or "interested parties" (as defined in the Act) of any such party,
which vote must be cast in person at a meeting called for the purpose of
voting on such approval; provided, however, that (a) the Fund may, at any
time and without the payment of any penalty, terminate this Agreement upon
thirty days' written notice to the Investment Manager, either by majority
vote of the Trustees of the Fund or, with respect to a Portfolio, by the vote
of a majority of the outstanding voting securities of such Portfolio; (b)
this Agreement shall immediately terminate in the event of its assignment (to
the extent required by the Act and the rules thereunder) unless such
automatic terminations shall be prevented by an exemptive order of the
Securities and Exchange Commission; and (c) the Investment Manager may
terminate this Agreement without payment of penalty on thirty days' written
notice to the Fund. Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed post-paid, to the other party at
the principal office of such party.
Any approval of this Agreement by the holders of a majority of the
outstanding voting securities of any Portfolio shall be effective to continue
this Agreement with respect to such Portfolio notwithstanding (a) that this
Agreement has not been approved by the holders of a majority of the
outstanding voting securities of any other Portfolio or (b) that this
Agreement has not been approved by the vote of a majority of the outstanding
voting securities of the Fund, unless such approval shall be required by any
other applicable law or otherwise.
12. This Agreement may be amended by the parties without the vote or
consent of the shareholders of the Fund to supply any omission, to cure,
correct or supplement any ambiguous, defective or inconsistent provision
hereof, or if they deem it necessary to conform this Agreement to the
requirements of applicable federal laws or regulations, but neither the Fund
nor the Investment Manager shall be liable for failing to do so.
13. This Agreement shall be construed in accordance with the laws of
the State of New York and the applicable provisions of the Act. To the extent
the applicable law of the State of New York, or any of the provisions herein,
conflicts with the applicable provisions of the Act, the latter shall control.
14. The Investment Manager and the Fund each agree that the name "Xxxx
Xxxxxx," which comprises a component of the Fund's name, is a property right
of Xxxx Xxxxxx Xxxxxxxx Inc. The Fund agrees and consents that (i) it will
only use the name "Xxxx Xxxxxx" as a component of its name and for no other
purpose, (ii) it will not purport to grant to any third party the right to
use the name "Xxxx Xxxxxx" for any purpose, (iii) the Investment Manager or
its parent, Xxxxxx Xxxxxxx Xxxx Xxxxxx & Co., or any corporate affiliate of
the Investment Manager's parent, may use or grant to others the right to use
the name "Xxxx Xxxxxx," or any combination or abbreviation thereof, as all or
a portion of a corporate or business name or for any commercial purpose,
including a grant of such right to any other investment company, (iv) at the
request of the Investment Manager or its parent, the Fund will take such
action as may be required to provide its consent to the use of the name "Xxxx
Xxxxxx," or any combination or abbreviation thereof, by the Investment
Manager or its parent or any corporate affiliate of the Investment Manager's
parent, or by any
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person to whom the Investment Manager or its parent or any corporate
affiliate of the Investment Manager's parent shall have granted the right to
such use, and (v) upon the termination of any investment advisory agreement
into which the Investment Manager and the Fund may enter, or upon termination
of affiliation of the Investment Manager with its parent, the Fund shall,
upon request by the Investment Manager or its parent, cease to use the name
"Xxxx Xxxxxx" as a component of its name, and shall not use the name, or any
combination or abbreviation thereof, as a part of its name or for any other
commercial purpose, and shall cause its officers, Trustees and shareholders
to take any and all actions which the Investment Manager or its parent may
request to effect the foregoing and to reconvey to the Investment Manager or
its parent any and all rights to such name.
15. The Declaration of Trust establishing Xxxx Xxxxxx Select Dimensions
Investment Series, dated June 2, 1994, a copy of which, together with all
amendments thereto (the "Declaration"), is on file in the office of the
Secretary of the Commonwealth of Massachusetts, provides that the name Xxxx
Xxxxxx Select Dimensions Investment Series refers to the Trustees under the
Declaration collectively as Trustees, but not as individuals or personally;
and no Trustee, shareholder, officer, employee or agent of Xxxx Xxxxxx Select
Dimensions Investment Series shall be held to any personal liability, nor
shall resort be had to their private property for the satisfaction of any
obligation or claim or otherwise, in connection with the affairs of said Xxxx
Xxxxxx Select Dimensions Investment Series, but the Trust Estate only shall
be liable.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement, as amended, on May 1, 1998 in New York, New York.
XXXX XXXXXX SELECT DIMENSIONS
INVESTMENT SERIES
By:
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Attest:
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XXXX XXXXXX INTERCAPITAL INC.
By:
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Attest:
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