Exhibit 5(a)
MANAGEMENT AGREEMENT
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This Management Agreement is made as of this ___________, 199_ between
XXXXXX XXXX MUTUAL FUNDS, a Delaware business trust (herein called the
"Company"), and XXXXXX XXXX INVESTORS, INC., a Delaware corporation (herein
called the "Manager").
WHEREAS, the Company is registered as an open-end management investment
company under the Investment Company Act of 1940 (the "1940 Act"); and
WHEREAS, the Company wishes to retain the Manager under this Agreement to
render investment advisory and management services to the portfolios of the
Company known as Small Cap Growth Fund, International Equity Fund and Socially
Responsible Fund (the "Initial Fund(s)", together with any other Company
portfolios which may be established later and served by the Manager hereunder,
being herein referred to collectively as the "Funds" and individually as a
"Fund"); and
WHEREAS, the Company desires to retain the Manager to provide management
and administrative services for the Funds, and the Manager is willing to render
such services;
NOW THEREFORE, in consideration of the premises and mutual covenants set
forth herein, the parties hereto agree as follows:
1. Appointment of Manager
(A) The Company hereby appoints the Manager as manager of each Fund on
the terms and for the period set forth in this Agreement and the Manager hereby
accepts such appointment and agrees to perform the services and duties set forth
herein on the terms herein provided. The Manager may, in its discretion, provide
such services through its own employees or the employees of one or more
affiliated companies that are qualified to provide such services to the Trust
under applicable law and are under common control with the Manager provided (i)
that all persons, when providing services hereunder, are functioning as part of
an organized group of persons, and (ii) that such organized group of persons is
managed at all times by authorized officers of the Manager.
(B) In the event that the Company establishes one or more portfolios
other than the Initial Fund(s) with respect to which it desires to retain the
Manager to render investment advisory and management services hereunder, it
shall notify the Manager in writing. If the Manager is willing to render such
services, it shall notify the Company in writing whereupon such portfolio or
portfolios shall become a Fund or Funds hereunder.
2. Administrative Services and Duties. Subject to the supervision and
control of the Company's Board of Trustees, the Manager shall provide to the
Company facilities, equipment, statistical and research data, clerical,
accounting and bookkeeping services, internal auditing and legal services, and
personnel to carry out all management services required for operation of the
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business and affairs of the Funds other than those services to be performed by a
distributor of the Funds' shares pursuant to a Distribution Agreement, those
services to be performed by the Funds' custodian pursuant to the Company's
Custody Agreement, those services to be performed by the Funds' transfer agent
pursuant to the Company's Transfer Agency Agreement, those accounting services
to be provided pursuant to an accounting agreement or custody agreement and
those services normally performed by the Company's counsel and auditors.
(A) The Manager's oversight responsibilities shall include:
(1) Overseeing the performance of the Custodian under the Custody
Agreement with respect to the Funds; and
(2) Overseeing the performance of the Transfer Agent under the
Transfer Agency Agreement with respect to the Funds.
(B) The Manager shall participate in the periodic updating of the Funds'
prospectuses and statements of additional information and shall accumulate
information for and, subject to approval by the Company's Treasurer and legal
counsel, coordinate the preparation, filing, printing and dissemination of
reports to the Funds' shareholders and the Securities and Exchange Commission
(the "Commission"), including but not limited to annual reports and semi-annual
reports on Form N-SAR, notices pursuant to Rule 24f-2 and proxy materials
pertaining to the Funds.
(C) The Manager shall calculate dividends and capital gain distributions to
be paid by each Fund in conformity with subchapter M of the Internal Revenue
Code of 1986, as amended.
(D) The Manager shall pay all costs and expenses of maintaining the offices
of the Company, wherever located, and shall arrange for payment by the Company
of all expenses payable by the Company.
(E) The Manager shall maintain such other books and records with respect to
the Funds as may be required by law or may be required for the proper operation
of the business and affairs of the Funds, other than those required to be
maintained under the Fund Accounting Agreement and by the Manager under Section
3 of this Agreement. Without limiting the foregoing, the Manager shall be
responsible for the proper maintenance of the records to be maintained by it,
throughout the term of this Agreement.
(F) The Manager shall prepare the Funds' federal, state and local income
tax returns.
(G) The Manager shall prepare and, subject to approval of the Company's
Treasurer, disseminate to the Company's trustees each Fund's quarterly financial
statements and schedules of investments, and shall prepare such other reports
relating to the business and affairs
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of the Funds (not otherwise appropriately prepared by the Company's counsel,
auditors or other Company service providers) as the officers and trustees of the
Company may from time to time reasonably request in connection with performance
of their duties.
(H) The Manager shall assist the Custodian, Transfer Agent, counsel
and auditors as required to carry out the business and operations of the Funds.
3. Investment Services and Duties. Subject to the supervision of the
Company's Board of Trustees, the Manager shall provide a continuous investment
program for the Funds, including investment, research and management with
respect to all securities and investments and cash equivalents in the Funds.
The Manager shall determine from time to time what securities and other
investments will be purchased, retained or sold by the Company with respect to
each Fund. The Manager shall provide the services under this Section 3 in
accordance with the Funds' investment objectives, policies and restrictions as
stated in the Funds' then current registration statement and resolutions of the
Company's Board of Trustees.
(A) The Manager shall place all orders for the purchase and sale of
portfolio securities for the account of each Fund with brokers or dealers
selected by the Manager. In executing portfolio transactions and selecting
brokers or dealers, the Manager will use its best efforts to seek on behalf of
each Fund the best overall terms available. In assessing the best overall terms
available for any transaction the Manager shall consider all facts it deems
relevant, including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. In evaluating the best overall terms
available, and in selecting the broker or dealer to execute a particular
transaction, the Manager may also consider the brokerage and research services
(as those terms are defined in Section 28(e) of the Securities Exchange Act of
1934) provided to the Fund and/or other accounts over which the Manager or any
affiliate of the Manager exercise investment discretion. The Manager is
authorized to pay to a broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction for any Fund which
is in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if, but only if, the Manager determines
in good faith that such commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer, viewed in
terms of that particular transaction or in terms of the overall responsibilities
of the Manager to that Fund and to the Company. In no instance may portfolio
securities be purchased from or sold to the Manager, any sub-adviser, or an
affiliated person of any of them acting as principal or as broker, except as
permitted by law. In executing portfolio transactions for the Funds the Manager
may, to the extent permitted by applicable laws and regulations, but shall not
be obligated to, aggregate the securities to be sold or purchased with those of
other investment portfolios and its other clients where such aggregation is not
inconsistent with the policies set forth in the Company's registration
statement. In such event, the Manager shall allocate the securities so
purchased or sold, and the expenses incurred in the transaction, in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to the Funds and such other clients.
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(B) In performing the investment advisory services hereunder, the
Manager is authorized to purchase, sell or otherwise deal with securities or
other instruments for which (i) the Manager, (ii) any affiliate of the Manager,
(iii) an entity in which the Manager has a direct or indirect interest, and (iv)
another member of a syndicate or other intermediary (where an entity referred to
in (i), (ii) or (iii) above was a member of the syndicate), has acted, now acts
or in the future will act as an underwriter, syndicate member, market-maker,
dealer, broker or in any other similar capacity, whether the purchase, sale or
other dealing occurs during the life of the syndicate or after the close of the
syndicate, provided such purchase, sale or dealing is permitted under the 1940
Act and the rules thereunder. Insofar as permitted by law, any rules of or
under applicable law prohibiting or restricting in any way an agent or fiduciary
from dealing with itself or from dealing with respect to any matter in which it
may or does have a personal interest shall not apply to the Manager, to the
extent its actions are authorized under this paragraph.
(C) The Manager shall maintain books and records with respect to the
securities transactions of the Fund, and furnish the Company's Board of Trustees
such periodic special reports as the Board may request.
(D) The Manager shall review, monitor and report to the Board of
Trustees regarding the performance and investment procedures of any sub-adviser
appointed by the Board of Trustees, and shall assist and consult with any sub-
adviser in connection with the Fund's continuous investment program.
4. Compliance with Governing Instruments and Laws. In performing its
duties as Manager for the Funds, the Manager shall act in conformity with the
Company's Declaration of Trust, Bylaws, prospectuses and statements of
additional information, and the instructions and directions of the Board of
Trustees of the Company. In addition, the Manager shall conform to and comply
with the requirements of the 1940 Act, the Rules and Regulations of the
Commission, the requirements of subchapter M and Section 817(h) of the Internal
Revenue Code of 1986, as amended, and all other applicable federal or state laws
and regulations.
5. Services Not Exclusive. The Manager shall for all purposes herein be
deemed to be an independent contractor and shall, unless otherwise expressly
provided herein or authorized by the Board of Trustees from time to time, have
no authority to act for or represent the Company in any way or otherwise be
deemed its agent. The services furnished by the Manager hereunder are not
deemed exclusive, and the Manager shall be free to furnish similar services to
others so long as its services under this Agreement are not impaired thereby.
6. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Manager hereby agrees that all records which it
maintains for the Company are the property of the Company and further agrees to
surrender promptly to the Company any such records upon the Company's request.
The Manager further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act.
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7. Subcontractors. It is understood that the Manager may from time to
time employ or associate with itself such person or persons as the Manager may
believe to be particularly fitted to assist in the performance of this
Agreement; provided, however, that the compensation of such person or persons
shall be paid by the Manager and that the Manager shall be as fully responsible
to the Company for the acts and omissions of any subcontractor as it is for its
own acts and omissions. Without limiting the generality of the foregoing, it is
understood that the Manager and the Company intend to enter into an agreement
with the Fund Accountant under which said institution will provide certain
accounting, bookkeeping, pricing and dividend and distribution calculation
services with respect to the Funds at the expense of the Funds.
8. Expenses Assumed as Manager. Except as otherwise stated in this
Agreement, the Manager shall pay all expenses incurred by it in performing its
services and duties hereunder as Manager (other than the cost of securities
purchased for the Company). The Company shall bear other expenses incurred in
the operation of the Funds, including without limitation taxes, interest,
brokerage fees and commissions, if any, fees of trustees who are not officers,
directors, partners, employees or holders of 5 percent or more of the
outstanding voting securities of the Manager or any of its affiliates,
Commission fees and state blue sky registration and qualification fees, charges
of custodians, transfer and dividend disbursing agents' fees, certain insurance
premiums, outside auditing and legal expenses, costs of maintaining the trust
existence, costs of preparing and printing prospectuses or any supplements or
amendments thereto necessary for the continued effective registration of the
Shares under federal or state securities laws, costs of printing and
distributing any prospectus, supplement or amendment thereto for existing
shareholders of the Funds described therein, costs of shareholders' reports and
meetings, and any extraordinary expenses. It is understood that certain
advertising, marketing, shareholder servicing, administration and/or
distribution expenses to be incurred in connection with the Shares may be paid
by the Company as provided in any plan which may in the sole discretion of the
Company be adopted in accordance with Rule 12b-1 under the 1940 Act, and that
such expenses shall be paid apart from any fees paid under this Agreement.
9. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, the Company shall pay the Manager a fee, computed
daily and payable monthly, at the annual rate as set forth in the attached fee
schedule based on the average net assets of each Fund. Such fee as is
attributable to each Fund shall be a separate (and not joint or joint and
several) obligation of each such Fund. Notwithstanding anything to the contrary
herein, if in any fiscal year the aggregate expenses of any Fund (as defined
under the securities regulations of any state having jurisdiction over such
Fund) exceed the expense limitations of any such state, the Company may deduct
from the fees to be paid pursuant to this Agreement, or the Manager shall bear
such excess, to the extent required by state law. Such deduction or payment, if
any, will be estimated and accrued daily and paid on a monthly basis. The
Company shall reduce the advisory fee to be paid to the Manager by the amount of
any advisory fees paid to other investment companies relating to the Funds'
investment in such investment companies' securities.
10. Confidentiality. The Manager shall treat confidentially and as
proprietary information of the Company all records and other information
relative to the Company and prior
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or present shareholders or those persons or entities who respond to the
Distributor's inquiries concerning investment in the Company, and shall not use
such records and information for any purpose other than performance of its
responsibilities and duties hereunder or under any other agreement with the
Company except after prior notification to and approval in writing by the
Company, which approval shall not be unreasonably withheld and may not be
withheld where the Manager may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by the Company. Nothing
contained herein, however, shall prohibit the Manager from advertising to or
soliciting the public generally with respect to other products or services,
including, but not limited to, any advertising or marketing via radio,
television, newspapers, magazines or direct mail solicitation, regardless of
whether such advertisement or solicitation may coincidentally include prior or
present Company shareholders or those persons or entities who have responded to
inquiries with respect to the Funds.
11. Limitations of Liability. Subject to the provisions of Section 7
hereof concerning the Manager's responsibility for the acts and omissions of
persons employed or associated with the Manager, the Manager shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Company or by any 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 or a loss resulting from willful
misfeasance, bad faith or negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement. Any person, even though also an officer, director, employee or agent
of the Manager, who may be or become an officer, director, employee or agent of
the Company, shall be deemed when rendering services to the Company or to any
Fund, or acting on any business of the Company or of any Fund (other than
services or business in connection with the Manager's duties as Manager
hereunder or under any other agreement with the Company) to be rendering such
services to or acting solely for the Company or Fund and not as an officer,
director, employee or agent or one under the control or direction of the Manager
even though paid by the Manager.
The Manager acknowledges and agrees that the Declaration of Trust of
the Company provides that the Trustees of the Company and the officers of the
Company executing this Agreement on behalf of the Company shall not be
personally bound hereby or liable hereunder, nor shall resort be had to their
private property or the private property of the shareholders of the Company for
the satisfaction of any claim or obligation under this Agreement.
12. Duration or Termination. This Agreement shall become effective as of
the date first written above and, unless sooner terminated as provided herein,
shall continue until October 31, 1998. Thereafter, this Agreement will be
extended with respect to a particular Fund for successive one-year periods
ending on October 31st of each year provided each such extension is specifically
approved at least annually (a) by vote of a majority of those members of the
Company's Board of Trustees who are not interested persons of any party to this
Agreement, cast in person at a meeting called for the purpose of voting on such
approval, and (b) by the
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Company's Board of Trustees or by vote of a majority of the outstanding voting
securities of such Fund. This Agreement may be terminated by the Company at any
time with respect to any Fund, without the payment of any penalty, by vote of a
majority of the entire Board of Trustees of the Company or by a vote of a
majority of the outstanding voting securities of such Fund on 60 days' written
notice to the Manager, or by the Manager at any time, without payment of
penalty, on 60 days' written notice to the Company. This Agreement will
immediately terminate in the event of its assignment. As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested persons" and "assignment" shall have the same meanings as such terms
have in the 1940 Act.
13 . Names. The name "Xxxxxx Xxxx Mutual Funds" refers to the trust
created and the trustees, as trustees but not individually or personally, acting
from time to time under a Declaration of Trust dated November 7, 1996, as
amended, which is hereby referred to and a copy of which is on file at the
principal office of the Company. The trustees, officers, employees and agents
of the Company shall not personally be bound by or liable under any written
obligation, contract, instrument, certificate or other interest or undertaking
of the Company made by the trustees or by any officer, employee or agent of the
Company, in his or her capacity as such, nor shall resort be had to their
private property for the satisfaction of any obligation or claim thereunder.
All persons dealing with any series or class of shares of the Company may
enforce claims against the Company only against the assets belonging to such
series or class.
14. Notices. Notices of any kind to be given to the Company hereunder by
the Manager shall be in writing and shall be duly given if mailed or delivered
to the Company at the following:
With a copy to:
Xxxxx X. X'Xxxxx, Esq.
Vedder, Price, Xxxxxxx & Kammholz
000 Xxxxx XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
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or at such other address or to such individual as shall be so specified by the
Company to the Manager. Notices of any kind to be given to the Manager
hereunder by the Company shall be in writing and shall be duly given if mailed
or delivered to the Manager at:
or at such other address or to such individual as shall be so specified by the
Manager to the Company.
15. 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. Subject to the provisions of Section 12 hereof, 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 Delaware law
(without regard to principles of conflicts of law); provided, however, that
nothing herein shall be construed in a manner inconsistent with the 1940 Act or
any rule or regulation of the Commission thereunder.
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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.
XXXXXX XXXX MUTUAL FUNDS
By: _________________________________________
(name)_______________________________________
(title)______________________________________
Attest: _____________________________
(name)_______________________
(title)______________________
XXXXXX XXXX INVESTORS, INC.
By: ________________________________________
(name)______________________________________
(title)_____________________________________
Attest: ____________________________
(name)______________________
(title)_____________________
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FEE SCHEDULE
SMALL CAP GROWTH FUND 1.4% OF NET ASSETS
INTERNATIONAL EQUITY FUND 1.1% OF NET ASSETS
SOCIALLY RESPONSIBLE FUND .95% OF NET ASSETS
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