AARP Managed Investment Portfolios Trust
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
February 1, 1997
Xxxxxxx, Xxxxxxx & Xxxxx, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Investment Management Agreement
Ladies and Gentlemen:
AARP Managed Investment Portfolios Trust (the "Trust") has been
established as a Massachusetts business trust to engage in the business of an
investment company. The Trust's Declaration of Trust provides that the Trust's
Trustees may, from time to time, determine that the shares of beneficial
interests of the Trust ("Shares") shall be issued in separate series of the
Trust ("Series"). There are currently two Series. Series may be abolished and
dissolved, and additional series established, from time to time by action of the
Trustees. The Trust has selected you to act as the sole investment manager, for
each of the two Series of the Trust and for each Series that may subsequently be
authorized by the Trustees (unless otherwise provided at the time and subject to
such conditions and amendments to this Agreement as shall mutually be agreed
upon), and to provide certain other services, as more fully set forth below, and
you have indicated that you are willing to act as such investment manager and to
perform such services under the terms and conditions hereinafter set forth.
Accordingly, the Trust agrees with you as follows:
1. Delivery of Documents. The Trust engages in the business of investing
and reinvesting the assets of the Trust in the manner and in accordance with the
investment objectives, policies and restrictions specified in the currently
effective Prospectus ("Prospectus") and Statement of Additional Information
("SAI") included in the Trust's Registration Statement on Form N-1A, as amended
from time to time (the "Registration Statement") filed by the Trust under the
Investment Company Act of 1940, as amended (the "1940 Act"), and the Securities
Act of 1933, as amended. Copies of the documents referred to in the preceding
sentence have been furnished to you by the Trust. The Trust has also furnished
you with copies properly certified or authenticated of each of the following
additional documents related to the Trust:
(a) Declaration of Trust dated October 21, 1996, as amended to
date (the "Declaration").
(b) By-Laws of the Trust as in effect on the date hereof (the
"By-Laws").
(c) Resolutions of the Trustees and the initial shareholder
selecting you as investment manager and approving the form of this Agreement.
The Trust will furnish you from time to time with copies, properly
certified or authenticated, of all amendments of or supplements, if any, to the
foregoing, including the Prospectus, the SAI and the Registration Statement.
2. Portfolio Management Services. As manager of the assets of the Trust,
you shall provide to each Series of the Trust continuing investment management
of its assets in accordance with the investment objectives, policies and
restrictions set forth in the Prospectus and SAI; the applicable provisions of
the 1940 Act and the Internal Revenue Code of 1986, as amended (the "Code"),
relating to regulated investment companies and all rules and regulations
thereunder; and all other applicable federal and state laws and regulations of
which you have knowledge; subject always to policies and instructions adopted by
the Trust's Board of Trustees. In connection therewith, you shall use reasonable
efforts to manage the Series so that each Series will qualify as a regulated
investment company under Subchapter M of the Code and regulations issued
thereunder. Each Series shall have the benefit of the investment analysis and
research, the review of current economic conditions and trends and the
consideration of long-range investment policy generally available to your
investment advisory clients. In managing the Series in accordance with the
requirements set forth in this section 2, you shall be entitled to receive and
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act upon the advice of counsel to the Trust or counsel to you. You shall also
make available to the Trust promptly upon request all of the Series' investment
records and ledgers as are necessary to assist the Trust to comply with the
requirements of the 1940 Act and other applicable laws. To the extent required
by law, you shall furnish to regulatory authorities having the requisite
authority any information or reports in connection with the services provided
pursuant to this Agreement which may be requested in order to ascertain whether
the operations of the Trust are being conducted in a manner consistent with
applicable laws and regulations.
You shall determine the securities, instruments, investments,
currencies, repurchase agreements, futures, options and other contracts relating
to investments to be purchased, sold or entered into by each Series and place
orders with broker-dealers, foreign currency dealers, futures commission
merchants or others pursuant to your determinations and all in accordance with
each Series' policies as expressed in the Registration Statement. You shall
determine what portion of each Series' portfolio shall be invested in securities
and other assets and what portion, if any, should be held uninvested.
You shall furnish to the Trust's Board of Trustees periodic reports on
the investment performance of each Series and on the performance of your
obligations pursuant to this Agreement, and you shall supply such additional
reports and information as the Trust's officers or Board of Trustees shall
reasonably request.
3. Administrative Services. In addition to the portfolio management
services specified above in section 2, you shall furnish at your expense for the
use of each Series such office space and facilities as each Series may require
for its reasonable needs, and you (or one or more of your affiliates designated
by you) shall render to the Trust administrative services on behalf of each
Series necessary for operating as an investment company and not provided by
persons not parties to this Agreement including, but not limited to, preparing
reports to and meeting materials for the Trust's Board of Trustees and reports
and notices to Series shareholders; supervising, negotiating contractual
arrangements with, to the extent appropriate, and monitoring the performance of,
accounting agents, custodians, depositories, transfer agents and pricing agents,
accountants, attorneys, printers, underwriters, brokers and dealers, insurers
and other persons in any capacity deemed to be necessary or desirable to Trust
or Series operations; preparing and making filings with the Securities and
Exchange Commission (the "SEC") and other regulatory and self-regulatory
organizations, including, but not limited to, preliminary and definitive proxy
materials, post-effective amendments to the Registration Statement, semi-annual
reports on Form N-SAR and notices pursuant to Rule 24f-2 under the 1940 Act;
overseeing the tabulation of proxies by each Series' transfer agent; assisting
in the preparation and filing of each Series' federal, state and local tax
returns; preparing and filing each Series' federal excise tax return pursuant to
Section 4982 of the Code; providing assistance with investor and public
relations matters; monitoring the valuation of portfolio securities, the
calculation of net asset value; monitoring the registration, qualification, or
other requirements regarding the offering of Shares of each Series under
applicable federal and state securities laws; maintaining or causing to be
maintained for each Series all books, records and reports and any other
information required under the 1940 Act, to the extent that such books, records
and reports and other information are not maintained by each Series' custodian
or other agents of each Series; assisting in establishing the accounting
policies of each Series; assisting in the resolution of accounting issues that
may arise with respect to each Series' operations and consulting with each
Series' independent accountants, legal counsel and each Series' other agents as
necessary in connection therewith; establishing and monitoring each Series'
operating expense budgets; reviewing each Series' bills; processing the payment
of bills that have been approved by an authorized person; assisting each Series
in determining the amount of dividends and distributions available to be paid by
each Series to its shareholders, preparing and arranging for the printing of
dividend notices to shareholders, and providing the transfer and dividend paying
agent and the custodian with such information as is required for such parties to
effect the payment of dividends and distributions; and otherwise assisting the
Trust as it may reasonably request in the conduct of each Series' business,
subject to the direction and control of the Trust's Board of Trustees. Nothing
in this Agreement shall be deemed to shift to you or to diminish the obligations
of any agent of the Series or any other person not a party to this Agreement
which is obligated to provide services to each Series.
4. Allocation of Charges and Expenses. Except as otherwise specifically
provided in this section 4, you shall pay the compensation and expenses of all
Trustees, officers and executive employees of the Trust (including each Series'
share of payroll taxes) who are affiliated persons of you, and you shall make
available or cause to be made available, without expense to the Trust, the
services of such of your directors, officers and employees as may duly be
elected officers of the Trust, subject to their individual consent to serve and
to any limitations imposed by law. You shall provide, or cause to be provided,
at your expense the portfolio management services described in section 2 hereof
and the administrative services described in section 3 hereof.
You shall not be required to pay any expenses of the Trust or a Series
other than those specifically allocated to you in this section 4 and under the
terms of the Special Servicing Agreement dated February 1, 1997 ("Special
Servicing Agreement") among you, the Trust, AARP Financial Services Company,
Xxxxxxx Fund Accounting Corporation, Xxxxxxx Service Corporation, Xxxxxxx Trust
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Company, Xxxxxxx Investor Services, Inc. and the various funds in which the
Portfolios may invest (the "Underlying Funds"). In particular, but without
limiting the generality of the foregoing, you shall not be responsible, except
to the extent of the reasonable compensation of such of the Trust's Trustees and
officers as are directors, officers or employees of you or of your partners
whose services may be involved, for the following expenses of the Trust or its
Series: organization expenses of the Series (including out-of-pocket expenses,
but not including your overhead or employee costs); fees payable to you and to
any other Series advisers or consultants; legal expenses; auditing and
accounting expenses; maintenance of books and records which are required to be
maintained by each Series' custodian or other agents of the Trust; telephone,
telex, facsimile, postage and other communications expenses; taxes and
governmental fees; fees, dues and expenses incurred by each Series in connection
with membership in investment company trade organizations; fees and expenses of
each Series' custodians, subcustodians, transfer agents, dividend disbursing
agents and registrars; payment for portfolio pricing or valuation services to
pricing agents, accountants, bankers and other specialists, if any; expenses of
preparing share certificates and, except as provided below in this section 4,
other expenses in connection with the issuance, offering, distribution, sale,
redemption or repurchase of securities issued by the Series; expenses relating
to investor and public relations; expenses and fees of registering, qualifying
or complying with requirements to permit the offering of Shares of each Series
for sale; interest charges, bond premiums and other insurance expense; freight,
insurance and other charges in connection with the shipment of the Series'
portfolio securities; the compensation and all expenses (specifically including
travel expenses relating to Trust business) of Trustees, officers and employees
of the Trust who are not affiliated persons of you; brokerage commissions or
other costs of acquiring or disposing of any portfolio securities of the Series;
expenses of printing and distributing reports, notices and dividends to
shareholders; expenses of printing and mailing Prospectuses and SAIs of the
Series and supplements thereto; costs of stationery; any litigation expenses;
indemnification of Trustees and officers of the Trust; costs of shareholders'
and other meetings; and travel expenses (or an appropriate portion thereof) of
Trustees and officers of the Trust who are directors, officers or employees of
you to the extent that such expenses relate to attendance at meetings of the
Board of Trustees of the Trust or any committees thereof or advisors thereto
held outside of Boston, Massachusetts or New York, New York.
Except as provided in the Special Servicing Agreement, you shall not be
required to pay expenses of any activity which is primarily intended to result
in sales of Shares of each Series if and to the extent that (i) such expenses
are required to be borne by a principal underwriter which acts as the
distributor of each Series' Shares pursuant to an underwriting agreement which
provides that the underwriter shall assume some or all of such expenses, or (ii)
the Trust on behalf of the Series shall have adopted a plan in conformity with
Rule 12b-1 under the 1940 Act providing that the Series (or some other party)
shall assume some or all of such expenses, or (iii) such expenses are required
to be borne by Xxxxxxx pursuant to section 4 of the Investment Company Services
Agreement, dated as of October 9, 1984, among American Association of Retired
Persons, AARP/Xxxxxxx Financial Management Company, and us. You shall be
required to pay such of the foregoing sales expenses as are not required to be
paid by the principal underwriter pursuant to the underwriting agreement or are
not permitted to be paid by the Series (or some other party) pursuant to such a
plan.
5. Management Fee and Payment of Certain Expenses. As you expect to
receive additional compensation under the investment management agreements
currently between you and the Underlying Funds due to growth in the assets of
the Underlying Funds resulting from investments in the Underlying Funds by the
Portfolios, you shall not be paid a fee for services described in sections 3 & 4
hereof.
6. Avoidance of Inconsistent Position; Services Not Exclusive. In
connection with purchases or sales of portfolio securities and other investments
for the account of a Series, neither you nor any of your partners, directors,
officers or employees will act as a principal or agent or receive any
commission. You or your agent shall arrange for the placing of all orders for
the purchase and sale of portfolio securities and other investments for a
Series' account with brokers or dealers selected by you in accordance with Trust
or Series policies as expressed in the Registration Statement. If any occasion
should arise in which you give any advice to clients of yours concerning the
Shares of a Series, you will act solely as investment counsel for such clients
and not in any way on behalf of a Series.
Your services to the Trust and each Series 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. In acting under this
Agreement, you shall be an independent contractor and not an agent of the Trust
or a Series.
7. Limitation of Liability of Manager. As an inducement to your
undertaking to render services pursuant to this Agreement, the Trust agrees that
you shall not be liable for any error of judgment or mistake of law or for any
loss suffered by the Trust or its Series in connection with the matters to which
this Agreement relates, provided that nothing in this Agreement shall be deemed
to protect or purport to protect you against any liability to the Trust, each
Series or its shareholders to which you would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of your
duties or by reason of your reckless disregard of your obligations and duties
hereunder. Any person, even though also employed by you, who may be or become an
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employee of and paid by the Trust or a Series shall be deemed, when acting
within the scope of his or her employment by the Trust or Series, to be acting
in such employment solely for the Trust or Series and not as your employee or
agent.
8. Duration and Termination of this Agreement. This Agreement shall
remain in force until August 31, 1998, and with respect to each Series, from
year to year thereafter, but only so long as such continuance is specifically
approved at least annually (i) by the vote of a majority of the Trustees who are
not parties to this Agreement or interested persons of any party to this
Agreement, cast in person at a meeting called for the purpose of voting on such
approval and (ii) by the Trustees of the Trust, or, with respect to each Series,
by vote of a majority of the outstanding voting securities of such Series of the
Trust. The aforesaid requirement that continuance of this Agreement be
"specifically approved at least annually" shall be construed in a manner
consistent with the 1940 Act and the rules and regulations thereunder.
This Agreement may, on 60 days' written notice, be terminated at any
time without the payment of any penalty, by the Trustees, by vote of a majority
of the outstanding voting securities of each Series (or of a Series, with
respect only to that Series), or by you. This Agreement shall automatically
terminate in the event of its assignment, provided that an assignment to a
corporate successor to all or substantially all of your business or to a
wholly-owned subsidiary of such corporate successor which does not result in a
change of actual control or management of your business shall not be deemed to
be an assignment for the purposes of this Agreement.
9. Amendment of this Agreement. No provisions of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Agreement shall be
effective with respect to any Series until approved by the vote of a majority of
the outstanding securities of that Series and by the Trustees, including a
majority of the Trustees who are not parties to this Agreement or interested
persons of any party to this Agreement, cast in person at a meeting called for
the purpose of voting on such approval.
10. Limitation of Liability for Claims. The Declaration, a copy of
which, together with all amendments thereto, is on file in the Office of the
Secretary of The Commonwealth of Massachusetts, provides that the name "AARP
Managed Investment Portfolios Trust" refers to the Trustees under the
Declaration collectively as Trustees and not as individuals or personally, and
that no shareholder of any Series of the Trust, or Trustee, officer, employee or
agent of the Trust, shall be subject to claims against or obligations of the
Trust or of any Series of the Trust to any extent whatsoever, but that the Trust
estate only shall be liable.
You are hereby expressly put on notice of the limitation of liability as
set forth in the Declaration and you agree that the obligations assumed by the
Trust on behalf of any Series of the Trust pursuant to this Agreement shall be
limited in all cases to the Series and its assets, and you shall not seek
satisfaction of any such obligation from the shareholders or any shareholder of
any Series of the Trust, or from any Trustee, officer, employee or agent of the
Trust. You understand that the rights and obligations of a Series, under the
Declaration are separate and distinct from those of any and all other Series.
11. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their constriction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
In interpreting the provisions of this Agreement, the definition
contained in Section 2(a) of the 1940 Act (particularly the definitions of
"interested person," "assignment" and "majority of the outstanding voting
securities"), as from time to time amended, shall be applied, subject, however,
to such exemptions as may be granted by the SEC by any rule, regulation or
order.
This Agreement shall be construed in accordance with and governed by the
laws of New York.
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.
Yours very truly,
AARP MANAGED INVESTMENT PORTFOLIOS
TRUST
By: ________________________________
President
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The foregoing Agreement is hereby accepted as of the date hereof.
XXXXXXX, XXXXXXX & XXXXX, INC.
By: ________________________________
Managing Director
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