THE XXXXXX MANAGED BOND TRUST
INVESTMENT ADVISORY CONTRACT
CONTRACT made this 21st day of December, 1987, between THE XXXXXX
MANAGED BOND TRUST, a Massachusetts business trust (the "Trust") and The
Winthrop Corporation, a Connecticut corporation doing business as XXXXXX
INVESTORS' SERVICE (the "Adviser"):
1. Duties of the Adviser. The Trust hereby employs the Adviser to act
as investment adviser for and to manage the investment and reinvestment of the
assets of the Trust and to administer its affairs, subject to the supervision of
the Trustees of the Trust, for the period and on the terms set forth in this
Contract. The Adviser will perform these duties with respect to any and all
series of shares ("Funds") which may be established by the Trustees pursuant to
the Trust's Declaration of Trust. Funds may be terminated and additional Funds
established from time to time by action of the Trustees of the Trust.
The Adviser hereby accepts such employment, and undertakes to afford to
the Trust the advice and assistance of the Adviser's organization in the choice
of investments and in the purchase and sale of securities for each Fund and to
furnish for the use of the Trust office space and all necessary office
facilities, equipment and personnel for servicing the investments of the Funds
and for administering the Trust's affairs and to pay the salaries and fees of
all officers and Trustees of the Trust who are members of the Adviser's
organization and all personnel of the Adviser performing services relating to
research and investment activities. The Adviser shall for all purposes herein be
deemed to be an independent contractor and shall, except as otherwise expressly
provided or authorized, have no authority to act for or represent the Trust in
any way or otherwise be deemed an agent of the Trust.
The Adviser shall provide the Trust with such investment management and
supervision as the Trust may from time to time consider necessary for the proper
supervision of its Funds. As investment adviser to the Funds, the Adviser shall
furnish continuously an investment program and shall determine from time to time
what securities shall be purchased, sold or exchanged and what portion of each
Fund's assets shall be held uninvested, subject always to the applicable
restrictions of the Declaration of Trust, By-Laws and registration statement of
the Trust under the Investment Company Act of 1940, all as from time to time
amended. The Adviser is authorized, in its discretion and without prior
consultation with the Trust, to buy, sell, lend and otherwise trade in any
stocks, bonds, options and other securities and investment instruments on behalf
of the Funds, to purchase, write or sell options on securities, futures
contracts indices on behalf of the Funds, to enter into commodities contracts on
behalf of the Funds, including contracts for the future delivery of securities
or currency and futures contracts on securities or other indices, and to execute
any and all agreements and instruments and to do any and all things incidental
thereto in connection with the management of the Funds. Should the Trustees of
the Trust at any time, however, make any specific determination as to investment
policy for any or all of the Funds and notify the Adviser thereof in writing,
the Adviser shall be bound by such determination for the period, if any,
specified in such notice or until similarly notified that such determination has
been revoked. The Adviser shall take, on behalf of the Funds, all actions which
it deems necessary or desirable to implement the investment policies of the
Trust and of each Fund.
The Adviser shall place all orders for the purchase or sale of
portfolio securities for the account of a Fund with brokers or dealers selected
by the Adviser, and to that end the Adviser is authorized as the agent of the
Fund to give instructions to the custodian of the Fund as to deliveries of
securities and payments of cash for the account of a Fund or the Trust. In
connection with the selection of such brokers or dealers and the placing of such
orders, the Adviser shall use its best efforts to seek to execute portfolio
security transactions at prices which are advantageous to the Funds and (when a
disclosed commission is being charged) at reasonably competitive commission
rates. In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage and
research services and products (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934) to the Adviser and the Adviser is expressly
authorized to cause the Funds to pay any broker or
dealer who provides such brokerage and research service and products a
commission for executing a security transaction which is in excess of the amount
of commission another broker or dealer would have charged for effecting that
transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services and products provided by such broker or dealer, viewed in terms of
either that particular transaction or the overall responsibilities which the
Adviser and its affiliates have with respect to accounts over which they
exercise investment discretion. Subject to the requirement set forth in the
second sentence of this paragraph, the Adviser is authorized to consider, as a
factor in the selection of any broker or dealer with whom purchase or sale
orders may be placed, the fact that such broker or dealer has sold or is selling
shares of a Fund or the Trust or of other investment companies sponsored by the
Adviser.
2. Compensation of the Adviser. For the services, payments and
facilities to be furnished hereunder by the Adviser, the Trust shall pay to the
Adviser on the last day of each month a fee equal to a percentage of the average
daily net assets of each Fund of the Trust throughout the month, computed in
accordance with the Trust's Declaration of Trust and any applicable votes of the
Trustees of the Trust, as shown in the following table.
Monthly Advisory Fee Rates
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Under $100 Million $250 Million $500 Million
$100 to to to Over
Million $250 Million $500 Million $1 Billion $1 Billion
Xxxxxx Government
Obligations Fund
(WGOF) 0.033333% 0.038333% 0.035% 0.031666% 0.0278%
Xxxxxx Near Term
Bond Fund (WNTB) 0.033333% 0.038333% 0.035% 0.031666% 0.0278%
Xxxxxx Total Return
Bond Fund (WTRB) 0.033333% 0.038333% 0.035% 0.031666% 0.0278%
Xxxxxx Tax Free
Bond Fund
(WTFB) 0.033333% 0.038333% 0.035% 0.031666% 0.0278%
Xxxxxx Tax Free
Income Fund
(WTFI) 0.033333% 0.038333% 0.035% 0.031666% 0.0278%
Xxxxxx Current
Income Fund
(WCIF) 0.033333% 0.038333% 0.035% 0.031666% 0.0278%
In case of initiation or termination of the Contract during any month
with respect to any Fund, the Fund's fee for that month shall be reduced
proportionately on the basis of the number of calendar days during which the
Contract is in effect and the fee shall be computed upon the average net assets
for the business days the Contract is so in effect for that month.
The Adviser may, from time to time, waive all or a part of the above
compensation.
3. Allocation of Charges and Expenses. It is understood that the Trust
will pay all its expenses other than those expressly stated to be payable by the
Adviser hereunder, which expenses payable by the Trust shall include, without
implied limitation (i) expenses of maintaining the Trust and continuing its
existence, (ii) registration of the Trust under the Investment Company Act of
1940, (iii) commissions, fees and other expenses connected with the purchase or
sale of securities, (iv) auditing, accounting and legal expenses, (v) taxes and
interest, (vi) governmental fees, (vii) expenses of issue, sale, repurchase and
redemption of shares, (viii) expenses of registering and qualifying the Trust
and its shares under federal and state securities laws and of preparing and
printing prospectuses for such purposes and for distributing the same to
shareholders and investors, and fees and expenses of registering and maintaining
registration of the Trust and of the Trust's principal underwriter, if any, as
broker-dealer or
agent under state securities laws, (ix) expenses of reports and notices to
shareholders and of meetings of shareholders and proxy solicitations therefor,
(x) expenses of reports to governmental officers and commissions, (xi) insurance
expenses, (xii) association membership dues, (xiii) fees, expenses and
disbursements of custodians and subcustodians for all services to the Trust
(including without limitation safekeeping of funds and securities, keeping of
books and accounts and determination of net asset value), (xiv) fees, expenses
and disbursements of transfer agents, dividend disbursing agents, shareholder
servicing agents and registrars for all services to the Trust, (xv) expenses for
servicing shareholder accounts, (xvi) any direct charges to shareholders
approved by the Trustees of the Trust, (xvii) compensation of and any expenses
of Trustees of the Trust, (xviii) all payments to be made and expenses to be
assumed by the Trust pursuant to any one or more distribution plans adopted by
the Trust pursuant to Rule 12b-1 under the Investment Company Act of 1940, (xix)
the administration fee payable to the Trust's administrator, and (xx) such
nonrecurring items as may arise, including expenses incurred in connection with
litigation, proceedings and claims and the obligation of the Trust to indemnify
its Trustees and officers with respect thereto.
4. Other Interests. It is understood that Trustees, officers and
shareholders of the Trust are or may be or become interested in the Adviser as
directors, officers, employees, stockholders or otherwise and that directors,
officers employees and stockholders of the Adviser are or may be or become
similarly interested in the Trust, and that the Adviser may be or become
interested in the Trust as a shareholder or otherwise. It is also understood
that directors, officers, employees and stockholders of the Adviser are or may
be or become interested (as directors, trustees, officers, employees,
stockholders or otherwise) in other companies or entities (including, without
limitation, other investment companies) which the Adviser may organize, sponsor
or acquire, or with which it may merge or consolidate, and which may include the
words "Xxxxxx" or "Xxxxxx Investors" or any combination thereof as part of their
names, and that the Adviser or its subsidiaries or affiliates may enter into
advisory or management agreements or other contracts or relationships with such
other companies or entities.
5. Limitation of Liability of the Adviser. The services of the Adviser
to the Trust are not to be deemed to be exclusive, the Adviser being free to
render services to others and engage in other business activities. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser, the
Adviser shall not be subject to liability to the Trust or to any shareholder of
the Trust for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses which may be sustained in the purchase,
holding or sale of any security.
6. Sub-Investment Advisers. The Adviser may employ one or more
sub-investment advisers from time to time to perform such of the acts and
services of the Adviser, including the selection of brokers or dealers to
execute the Trust's portfolio security transactions, and upon such terms and
conditions as may be agreed upon between the Adviser and such sub-investment
adviser and approved by the Trustees of the Trust.
7. Duration and Termination of this Contract. This Contract shall
become effective upon the date of its execution, and, unless terminated as
herein provided, shall remain in full force and effect as to each Fund to and
including February 28, 1989 and shall continue in full force and effect
indefinitely thereafter, but only so long as such continuance after February 28,
1989 is specifically approved at least annually (i) by the Trustees of the Trust
or by vote of a majority of the outstanding voting securities of that Fund and
(ii) by the vote of a majority of those Trustees of the Trust who are not
interested persons of the Adviser or the Trust cast in person at a meeting
called for the purpose of voting on such approval.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Contract as to any Fund, without the payment
of any penalty, by action of its Board of Directors or Trustees, as the case may
be, and the Trust may, at any time upon such written notice to the Adviser,
terminate this Contract as to any Fund by vote of a majority of the outstanding
voting securities of that Fund. This Contract shall terminate automatically in
the event of its assignment.
8. Amendments of the Contract. This Contract may be amended as to any
Fund by a writing signed by both parties hereto, provided that no amendment to
this Contract shall be effective as to that Fund until approved (i) by the vote
of a majority of those Trustees of the Trust who are not interested persons of
the Adviser or the Trust cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of the outstanding
voting securities of that Fund.
9. Limitation of Liability. The Adviser expressly acknowledges the
provision in the Declaration of Trust of the Trust (Article XIV, Section 2)
limiting the personal liability of shareholders of the Trust, and the Adviser
hereby agrees that it shall have recourse only to the Trust for payment of
claims or obligations as between the Trust and Adviser arising out of this
Contract and shall not seek satisfaction from the shareholders or any
shareholder of the Trust.
10. Certain Definitions. The terms "assignment" and "interested
persons" when used herein shall have the respective meanings specified in the
Investment Company Act of 1940 as now in effect or as hereafter amended subject,
however, to such exemptions as may be granted by the Securities and Exchange
Commission by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities of that Fund" shall mean the vote of the lesser of
(a) 67 per centum or more of the shares of the particular Fund present or
represented by proxy at the meeting if the holders of more than 50 per centum of
the outstanding shares of the particular Fund are present or represented by
proxy at the meeting, or (b) more than 50 per centum of the outstanding shares
of the particular Fund.
11. Use of the Name "Xxxxxx." The Adviser hereby consents to the use by
the Trust of the name "Xxxxxx" as part of the Trust's name and the name of each
Fund; provided, however, that such consent shall be conditioned upon the
employment of the Adviser or one of its affiliates as the investment adviser of
the Trust. The name "Xxxxxx" or any variation thereof may be used from time to
time in other connections and for other purposes by the Adviser and its
affiliates and other investment companies that have obtained consent to use the
name "Xxxxxx." The Adviser shall have the right to require the Trust to cease
using the name "Xxxxxx" as part of the Trust's name and the name of each Fund if
the Trust ceases, for any reason, to employ the Adviser or one of its affiliates
as the Trust's investment adviser. Future names adopted by the Trust for itself
and its Funds, insofar as such names include identifying words requiring the
consent of the Adviser, shall be the property of the Adviser and shall be
subject to the same terms and conditions.
THE XXXXXX MANAGED BOND TRUST THE WINTHROP CORPORATION
D/B/A/ XXXXXX INVESTORS' SERVICE
By/s/ Xxxxx X. Xxxxxxx By/s/ Xxxx Xxxxxxxx Xxxxxx
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President President
