EXHIBIT A
FORM OF MANAGEMENT AGREEMENT
FOR XXXXXXX NON-INSTITUTIONAL FUNDS
[This form of management agreement is representative of each of the
three proposed management agreements. You should note that there are
two versions of paragraph 8 regarding amendment of the agreement, both
of which are provided below. Other differences are immaterial and not
presented in this form.]
TO: XXXXXXX INVESTMENT COUNSEL, INC.
0000 Xxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
Dear Sirs:
Xxxxxxx Mutual Funds Trust (hereinafter referred to as 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,
two of which are the [insert name] Fund and the [insert name] Fund (the
?Funds?).
You have been selected to act as the sole investment adviser to the
Funds and to provide certain other services to the Funds, 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 upon the date of
the execution of this Agreement.
1. ADVISORY SERVICES
You will regularly provide the Funds with such investment advice as you in
your discretion deem advisable and will furnish a continuous investment
program for each of the Funds consistent with the respective series'
investment objectives and policies. You will determine the securities to be
purchased for the Funds, the portfolio securities to be held or sold by each
Fund and the portion of each Funds' assets to be held uninvested, subject
always to the series' investment objectives, 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 may from time to time
establish. You will advise and assist the officers of the Trust in taking
such steps as are necessary or appropriate to carry out the decisions of
the Board and the appropriate committees of the Board regarding the
conduct of the business of the Funds.
2. ALLOCATION OF CHARGES AND EXPENSES
You will pay all operating expenses of the Funds, including the
compensation and expenses of any trustees, officers and employees of
the Trust and of any other persons rendering any services to the Funds;
clerical and shareholder service staff salaries; office space and other
office expenses; fees and expenses incurred by the Funds in connection
with membership in investment company organizations; legal, auditing
and accounting expenses; non-organizational expenses of registering
shares under federal and state securities laws; 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 Funds; expenses, including
clerical expenses, of issue, sale, redemption or repurchase of shares of
the Funds; 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 the Funds' current and
prospective 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 Funds' shares; and all other
operating expenses not specifically assumed by the Funds.
The Funds will pay all brokerage fees and commissions, taxes, interest,
and their share of such extraordinary or non recurring expenses as may
arise, including litigation to which the Trust may be a party and
indemnification of the Trust's trustees and officers with respect thereto.
You may obtain reimbursement from the Funds, at such time or times as
you may determine in your sole discretion, for any of the expenses
advanced by you, which the Funds are 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 day of each month, each Fund
will pay you a fee at the annual rate of 1.00% of the average value of its
daily net assets.
The average value of the daily net assets of the Funds shall be
determined pursuant to the applicable provisions of the Declaration of
Trust of the Trust or a resolution of the Board, if required. If, pursuant to
such provisions, the determination of net asset value of a 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 a 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 series 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 Funds, 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 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 series 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 (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) to the Trust 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 portfolio transaction for
the Funds 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 Trust and to accounts over which you exercise investment
discretion. The Trust and you understand and acknowledge that, although
the information may be useful to the Funds and you, it is not possible to
place a dollar value on such information. The Board shall periodically
review the commissions paid by the Funds to determine if the
commissions paid over representative periods of time were reasonable in
relation to the benefits to the Funds.
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
Trust as a factor in the selection of brokers and dealers to execute Trust
portfolio transactions.
Subject to the provisions of the Investment Company Act of 1940, as
amended, and other applicable law, you or any of your affiliates may
retain compensation in connection with effecting the Funds' 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 Funds, you will act solely as investment
counsel for such client and not in any way on behalf of the Funds. Your
services to the Funds 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 Investment
Company Act of 1940 or the rules thereunder, neither you nor your
shareholders, officers, directors, employees, 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 an officer, director, trustee,
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 or (ii) a vote of a majority (as defined in the Investment Company
Act of 1940) of the outstanding voting securities of a Fund, provided that
in either event continuance is also approved by a majority of the trustees
who are not "interested persons" as defined in the Investment Company
Act of 1940 of you or the Trust, by a vote cast in person at a meeting
called for the purpose of voting such approval.
If the shareholders of a Fund fail to approve the Agreement in the manner
set forth above, upon request of the Board, you will continue to serve or
act in such capacity for the Fund for the period of time pending required
approval of the Agreement, of a new agreement with you or a different
adviser or other definitive action; provided that the compensation to be
paid by the Fund to you for your services to and payments on behalf of the
series will be equal to the lesser of your actual costs incurred in furnishing
such services and payments or the amount you would have received
under this Agreement for furnishing such services and payments.
This Agreement may, on sixty days written notice, be terminated with
respect to a Fund at any time without the payment of any penalty, by the
Board, by a vote of a majority of the outstanding voting securities of a
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 "Xxxxxxx"
belong to you and that the Funds are being granted a limited license to
use such words in the name of the Funds. In the event you cease to be
the adviser to the Funds, the Funds' right to the use of the name
"Xxxxxxx" shall automatically cease on the thirtieth 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 thirty (30) days'
written notice by you to the Funds. Nothing contained herein shall impair
or diminish in any respect, your right to use the name "Xxxxxxx" 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 Funds for
the right to use this name.
8. AMENDMENT OF THIS AGREEMENT [for the Xxxxxxx Growth Fund
and the Xxxxxxx Fixed Income Fund]
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 vote of the holders of a majority of the outstanding
voting securities of the series to which the amendment relates and by the
Board, 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.
8. AMENDMENT OF THIS AGREEMENT [for the Xxxxxxx Opportunity
Fund, the Xxxxxxx Municipal Income Fund and the Xxxxxxx Realty Fund]
No provision of this Agreement may be changed, waived, discharged or
terminated orally, and no amendment of this Agreement shall be effective
until approved (i) by the Board, 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 (ii) if and
only if required by the Investment Company Act of 1940, by vote of the
holders of a majority of the outstanding voting securities of the Fund to
which the amendment relates.
9. LIMITATION OF LIABILITY TO TRUST PROPERTY
The term "Xxxxxxx Mutual Funds Trust" means and refers to the Trustees
from time to time serving under the Trust's 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 the trustees, shareholders,
nominees, officers, agents or employees of the Trust, personally, but bind
only the trust property of the Trust, as provided in the Declaration of Trust
of the Trust. The execution and delivery of this Agreement have been
authorized by the trustees and shareholders of the Funds 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 as provided in its Declaration of Trust. A copy
of the Agreement and Declaration of Trust of the Trust is on file with the
Secretary of the 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 Ohio.
(b) 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 Investment Company Act of 1940, as amended (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 rules, regulations or
orders of the Securities and Exchange Commission issued pursuant to
said Act. In addition, where the effect of a requirement of the Act,
reflected in any provision of this Agreement is revised by rule, regulation
or order of the Securities and Exchange Commission, such provision shall
be deemed to incorporate the effect of such rule, regulation or order.
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 and your
address for this purpose shall be 0000 Xxxx Xxxx Xxxx, Xxxxxxxxxx, Xxxx
00000.
13. COUNTERPARTS
This Agreement may be 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,
ATTEST:
XXXXXXX MUTUAL FUNDS TRUST
By
XXXXXXX X. XXXXXXX, President
Dated: , 2001
ACCEPTANCE
The foregoing Agreement is hereby accepted.
ATTEST:
XXXXXXX INVESTMENT COUNSEL, INC.
By
Title:
Dated: , 2001
