Exhibit 10.21
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this 1st day of July, 1990, by and between TMK/UNITED FUNDS, INC.
(hereinafter called "United", and XXXXXXX & XXXX, INC.
WITNESSETH:
In consideration of the mutual promises and agreements herein contained and
other good and valuable consideration, the receipt of which is hereby
acknowledged, it is hereby agreed by and between the parties hereto as follows:
I. IN GENERAL.
Xxxxxxx & Xxxx, Inc., agrees to act as investment adviser to United
with respect to the investment of its assets and in general to supervise the
investments of United, subject at all times to the direction and control of the
Board of Directors of United, all as more fully set forth herein.
II. DUTIES OF XXXXXXX & XXXX, INC., WITH RESPECT TO INVESTMENT OF ASSETS OF
UNITED.
X. Xxxxxxx & Xxxx Inc., shall regularly provide investment advice
to United and shall, subject to the succeeding provisions of this section,
continuously supervise the investment and reinvestment of cash, securities or
other property comprising the assets of the investment portfolios of United; and
in furtherance thereof, Xxxxxxx & Xxxx, Inc., shall:
1. obtain and evaluate pertinent information about
significant developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or one or more of
the portfolios of United, and whether concerning the individual companies whose
securities are included in United's portfolios or the industries in which they
engage, or with respect to securities which Xxxxxxx & Xxxx, Inc., considers
desirable for inclusion in United's portfolios;
2. furnish continuously an investment program for each
of the portfolios of United;
3. determine what securities shall be purchased or sold
by United;
4. take, on behalf of United, all actions which appear
to Xxxxxxx & Xxxx, Inc., necessary to carry into effect such investment programs
and supervisory functions as aforesaid, including the placing of purchase and
sale orders.
X. Xxxxxxx & Xxxx, Inc., shall make appropriate and regular
reports to the Board of Directors of United on the actions it takes pursuant to
Section II.A. above. Any investment programs furnished by Xxxxxxx & Xxxx, Inc.,
under this section, or any supervisory function taken hereunder by Xxxxxxx &
Xxxx, Inc., shall at all times conform to and be in accordance with any
requirements imposed by:
1. the provisions of the Investment Company Act of 1940
and any rules or regulations in force thereunder;
2. any other applicable provision of law;
3. the provisions of the Articles of Incorporation of
United as amended from time to time;
4. the provisions of the Bylaws of United as amended
from time to time;
5. the terms of the registration statements of United,
as amended from time to time, under the Securities Act of 1933 and the
Investment Company Act of 1940.
C. Any investment programs furnished by Xxxxxxx & Xxxx, Inc.,
under this section or any supervisory functions taken hereunder by Xxxxxxx &
Xxxx, Inc., shall at all times be subject to any directions of the Board of
Directors of United, its Executive Committee, or any committee or officer of
United acting pursuant to authority given by the Board of Directors.
III. ALLOCATION OF EXPENSES.
The expenses of United and the expenses of Xxxxxxx & Xxxx, Inc., in
performing its functions under this Agreement shall be divided into two classes,
to wit: (i) those expenses which will be paid in full by Xxxxxxx & Xxxx, Inc.,
as set forth in subparagraph "A" hereof, and (ii) those expenses which will be
paid in full by United, as set forth in subparagraph "B" hereof.
A. With respect to the duties of Xxxxxxx & Xxxx, Inc.,
under Section II above, it shall pay in full, except as to the brokerage and
research services acquired through the allocation of commissions as provided in
Section IV hereinafter, for (a) the salaries and employment benefits of all
employees of Xxxxxxx & Xxxx, Inc. who are engaged in providing these advisory
services; (b) adequate office space and suitable office equipment for such
employees; and (c) all telephone and communications costs relating to such
functions. In addition, Xxxxxxx & Xxxx, Inc., shall pay the fees and expenses of
all directors of United who are employees of Xxxxxxx & Xxxx, Inc., or an
affiliated corporation and the salaries and employment benefits of all officers
of United who are affiliated persons of Xxxxxxx & Xxxx, Inc.
B. United shall pay in full for all of its expenses
which are not listed above (other than those assumed by Xxxxxxx & Xxxx, Inc., or
its affiliates in its capacity as Accounting Services Agent for United),
including (a) the costs of preparing and printing prospectuses and reports to
shareholders of United including mailing costs; (b) the costs of printing all
proxy statements and all other costs and expenses of meetings of shareholders of
United; (c) interest, taxes, brokerage commission and premiums on fidelity and
other insurance; (d) audit fees and expenses of independent accountants and
legal fees and expenses of attorneys, but not of attorneys who are employees of
Xxxxxxx & Xxxx, Inc.; (e) fees and expenses of its directors; (f) custodian fees
and expenses; (g) fees payable by United under the Securities Act of 1933, the
Investment Company Act of 1940, and the securities or "Blue-Sky" laws of any
jurisdiction; (h) fees and assessments of the Investment Company Institute or
any
successor organization; (i) such nonrecurring or extraordinary expenses as may
arise, including litigation affecting United and any indemnification by United
of its officers, directors, employees and agents with respect thereto; (j) the
costs and expenses of maintaining shareholder records and processing
transactions for the issuance and redemption of its shares; and (k) the costs
and expenses provided for in any Accounting Services Agreement, including
amendments thereto, contemplated by subsection C of this section III.
X. Xxxxxxx & Xxxx, Inc., or an affiliate of Xxxxxxx &
Xxxx, Inc., may also act as accounting services agent of United if at the time
in question there is a separate agreement, "Accounting Services Agreement,"
covering such functions between United and Xxxxxxx & Xxxx, Inc., or such
affiliate. The corporation, whether Xxxxxxx & Xxxx, Inc., or its affiliate,
which is the party to such Agreement with United is referred to as the "Agent."
Any such Agreement shall provide in substance that it shall not go into effect,
or may be amended, or a new agreement covering the same topics between United
and the Agent may be entered into only if the terms of such Agreement, such
amendment or such new agreement have been approved by the Board of Directors of
United, including the vote of a majority of the directors who are not
"interested persons" as defined in the Investment Company Act of 1940, of either
party to the Agreement, such amendment or such new agreement (considering
Xxxxxxx & Xxxx, Inc., to be such a party even if at the time in question the
Agent is an affiliate of Xxxxxxx & Xxxx, Inc.), cast in person at a meeting
called for the purpose of voting on such approval. Such a vote is referrer to as
a "disinterested director" vote. Any such Agreement shall also provide in
substance for its continuance, unless terminated, for a specified period which
shall not exceed two years from the date of its execution and from year to year
thereafter only if such continuance is specifically approved at least annually
by a disinterested director vote, and that any disinterested director vote shall
include a determination that (i) the Agreement, amendment, new agreement or
continuance in question is in the best interests of United and its shareholders;
(ii) the services to be performed under the Agreement, the Agreement as amended,
new agreement or agreement to be continued are services required for the
operation of United; (iii) the Agent can provide services the nature and quality
of which are at least equal to those provided by others offering the same or
similar services; and (iv) the fees for such services are fair and reasonable in
light of the usual and customary charges made by others for services of the same
nature and quality. Any such Agreement may also provide in substance that any
disinterested director vote may be conditioned on the favorable vote of the
holders of a majority (as defined in or under the Investment Company Act of
1940) of the outstanding shares of each class of United. Any such Agreement
shall also provide in substance that it may be terminated by the Agent at any
time without penalty upon giving United one hundred twenty (120) days' written
notice (which notice may be waived by United) and may be terminated by United at
any time without penalty upon giving the Agent sixty (60) days' written notice
(which notice may be waived by the Agent), provided that such termination by
United shall be directed or approved by the vote of a majority of the Board of
Directors of United in office at the time or by the vote of the holders of a
majority (as defined in or under the Investment Company Act of 1940) of the
outstanding shares of each class of United.
IV. BROKERAGE.
(a) Xxxxxxx & Xxxx, Inc., may select brokers to effect the
portfolio transactions of United on the basis of its estimate of their ability
to obtain, for reasonable and competitive commissions, the best execution of
particular and related portfolio transactions. For this
purpose, "best execution" means prompt and reliable execution at the most
favorable price obtainable. Such brokers may be selected on the basis of all
relevant factors including the execution capabilities required by the
transaction or transactions, the importance of speed, efficiency, or
confidentiality, and the willingness of the broker to provide useful or
desirable investment research and/or special execution services. Xxxxxxx & Xxxx,
Inc., shall have no duty to seek advance competitive commission bids and may
select brokers based solely on its current knowledge of prevailing commission
rates.
(b) Subject to the foregoing, Xxxxxxx & Xxxx, Inc., shall have
discretion, in the interest of United, to direct the execution of its portfolio
transactions to brokers who provide brokerage and/or research services (as such
services are defined in Section 28(e) of the Securities Exchange Act of 1934)
for United and/or other accounts for which Xxxxxxx & Xxxx, Inc., and its
affiliates exercise "investment discretion" (as that term is defined in Section
3(a)(35) of the Securities Act of 1934); and in connection with such
transactions, to pay commission in excess of the amount another adequately
qualified broker would have charged if Xxxxxxx & Xxxx, Inc., determines, in good
faith, that such commission is reasonable in relation to the value of the
brokerage and/or research services provided by such broker, viewed in terms of
either that particular transaction or the overall responsibilities of Xxxxxxx &
Xxxx, Inc., and its investment advisory affiliates with respect to the accounts
for which they exercise investment discretion. In reaching such determination,
Xxxxxxx & Xxxx, Inc., will not be required to attempt to place a specified
dollar amount on the brokerage and/or research services provided by such broker;
provided that Xxxxxxx & Xxxx, Inc., shall be prepared to demonstrate that such
determinations were made in good faith, and that all commissions paid by United
over a representative period selected by its Board of Directors were reasonable
in relation to the benefits to United.
(c) Subject to the foregoing provisions of this Paragraph "IV,"
Xxxxxxx & Xxxx, Inc., may also consider sales of insurance policies funded by
United's shares and sales of shares of investment companies distributed by
Xxxxxxx & Xxxx, Inc., or its affiliates, and portfolio valuation or pricing
services as a factor in the selection of brokers to execute brokerage and
principal portfolio transactions.
V. COMPENSATION OF XXXXXXX & XXXX, INC.
As compensation in full for services rendered and for the facilities
and personnel furnished under sections I, II, and IV of this Agreement, United
will pay to Xxxxxxx & Xxxx, Inc., for each day the fees specified in Exhibit A
hereto.
The amounts payable to Xxxxxxx & Xxxx, Inc., shall be determined as of
the close of business each day; shall, except as set forth below, be based upon
the value of net assets computed in accordance with the Articles of
Incorporation of United; and shall be paid in arrears whenever requested by
Xxxxxxx & Xxxx, Inc.
Notwithstanding the foregoing, if the laws, regulations or policies of
any state in which shares of United are qualified for sale limit the operation
and management expenses of United, Xxxxxxx & Xxxx, Inc., will refund to United
the amount by which such expenses exceed the lowest of such state limitations.
VI. UNDERTAKINGS OF XXXXXXX & XXXX, INC.; LIABILITIES.
Xxxxxxx & Xxxx, Inc., shall give to United the benefit of its best
judgment, efforts and facilities in rendering advisory services hereunder.
Xxxxxxx & Xxxx, Inc., shall at all times be guided by and be subject to
United's investment policies, the provisions of its Articles of Incorporation
and Bylaws as each shall from time to time be amended, and to the decision and
determination of United's Board of Directors.
This Agreement shall be performed in accordance with the requirements
of the Investment Company Act of 1940, the Investment Advisors Act of 1940, the
Securities Act of 1933, and the Securities Exchange Act of 1934, to the extent
that the subject matter of this Agreement is within the purview of such Acts.
Insofar as applicable to Xxxxxxx & Xxxx, Inc., as an investment adviser and
affiliated person of United, Xxxxxxx & Xxxx, Inc., shall comply with the
provisions of the Investment Company Act of 1940, the Investment Advisers Act of
1940 and the respective rules and regulations of the Securities and Exchange
Commission thereunder.
In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties hereunder on the part of Xxxxxxx &
Xxxx, Inc., it shall not be subject to liability to United or to any stockholder
of United (direct of beneficial) for any act or omission in the course of or
connected with rendering services thereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.
VII. DURATION OF THIS AGREEMENT.
This Agreement shall become effective at the start of business on the
date hereof and shall continue in effect, unless terminated as hereinafter
provided, for a period of one year and from year-to-year thereafter only if such
continuance is specifically approved at least annually by the Board of
Directors, including the vote of a majority of the directors who are not parties
to this Agreement or "interested persons" (as defined in the Investment Company
Act of 1940) of any such party, cast in person at a meeting called for the
purpose of voting on such approval, or by the vote of the holders of a majority
(as so defined) of the outstanding voting securities of each class of United and
by the vote of a majority of the directors who are not parties to this Agreement
or "interested persons" (as so defined) of any such party, cast in person at a
meeting called for the purpose of voting on such approval.
VIII. TERMINATION.
This Agreement may be terminated by Xxxxxxx & Xxxx, Inc., at any time
without penalty upon giving United one hundred twenty (120) days' written notice
(which notice may be waived by United) and may be terminated by United at any
time without penalty upon giving Xxxxxxx & Xxxx, Inc. sixty (60) days' written
notice (which notice may be waived by Xxxxxxx & Xxxx, Inc.), provided that such
termination by United shall be directed or approved by the vote of a majority of
the Board of Directors of United in office at the time or by the vote of a
majority (as defined in the Investment Company Act of 1940) of the outstanding
voting securities of United. This Agreement shall automatically terminate in the
event of its
assignment, the term "assignment" for this purpose having the meaning defined in
Section 2(a)(4) of the Investment Company Act of 1940 and the rules and
regulations thereunder.
IN WITNESS WHEREROF, the parties hereto have caused the foregoing instrument to
be executed by their duly authorized officers and their corporate seal to be
hereunto affixed, all as of the day and year first above written.
(Seal) TMK/UNITED FUNDS, INC.
By: /s/Xxxxxx X. XxXxxxxxx
----------------------
Xxxxxx X. XxXxxxxxx
Vice President
ATTEST:
/s/Xxxxxx X. Xxxxxx
-------------------
Xxxxxx X. Xxxxxx
Secretary
(Seal) XXXXXXX & XXXX, INC.
By: /s/Xxxxxx X. Xxxxxxx
--------------------
Xxxxxx X. Xxxxxxx
Executive Vice President
ATTEST:
/s/Xxxxxx X. XxXxxxxxx
----------------------
Xxxxxx X. XxXxxxxxx
Secretary
EXHIBIT A TO INVESTMENT MANAGEMENT AGREEMENT
TARGET/UNITED FUNDS, INC.
FEE SCHEDULE
A cash fee computed each day on net asset value for each Portfolio at the annual
rates listed below*:
ASSET STRATEGY PORTFOLIO
Net Assets Fee
---------- ---
Up to $1 billion 0.70%
Over $1 billion and up to $2 billion 0.65%
Over $2 billion and up to $3 billion 0.60%
Over $3 billion 0.55%
BALANCED PORTFOLIO
Net Assets Fee
---------- ---
Up to $1 billion 0.70%
Over $1 billion and up to $2 billion 0.65%
Over $2 billion and up to $3 billion 0.60%
Over $3 billion 0.55%
BOND PORTFOLIO
Net Assets Fee
---------- ---
Up to $500 million 0.525%
Over $500 million and up to $1 billion 0.50%
Over $1 billion and up to $1.5 billion 0.45%
Over $1.5 billion 0.40%
CORE EQUITY PORTFOLIO
Net Assets Fee
---------- ---
Up to $1 billion 0.70%
Over $1 billion and up to $2 billion 0.65%
Over $2 billion and up to $3 billion 0.60%
Over $3 billion 0.55%
GROWTH PORTFOLIO
Net Assets Fee
---------- ---
Up to $1 billion 0.70%
Over $1 billion and up to $2 billion 0.65%
Over $2 billion and up to $3 billion 0.60%
Over $3 billion 0.55%
HIGH INCOME PORTFOLIO
Net Assets Fee
---------- ---
Up to $500 million 0.625%
Over $500 million and up to $1 billion 0.60%
Over $1 billion and up to $1.5 billion 0.55%
Over $1.5 billion 0.50%
INTERNATIONAL PORTFOLIO
Net Assets Fee
---------- ---
Up to $1 billion 0.85%
Over $1 billion and up to $2 billion 0.83%
Over $2 billion and up to $3 billion 0.80%
Over $3 billion 0.76%
LIMITED-TERM BOND PORTFOLIO
Net Assets Fee
---------- ---
Up to $500 million 0.50%
Over $500 million and up to $1 billion 0.45%
Over $1 billion and up to $1.5 billion 0.40%
Over $1.5 billion 0.35%
MONEY MARKET PORTFOLIO
A cash fee computed each day on net asset values for the Portfolio at the annual
rate of 0.40% of net assets.
SCIENCE & TECHNOLOGY PORTFOLIO
Net Assets Fee
---------- ---
Up to $1 billion 0.85%
Over $1 billion and up to $2 billion 0.83%
Over $2 billion and up to $3 billion 0.80%
Over $3 billion 0.76%
SMALL CAP PORTFOLIO
Net Assets Fee
---------- ---
Up to $1 billion 0.85%
Over $1 billion and up to $2 billion 0.83%
Over $2 billion and up to $3 billion 0.80%
Over $3 billion 0.76%
VALUE PORTFOLIO
Net Assets Fee
---------- ---
Up to $1 billion 0.70%
Over $1 billion and up to $2 billion 0.65%
Over $2 billion and up to $3 billion 0.60%
Over $3 billion 0.55%
*If a Portfolio's net assets are less than $25 million, Xxxxxxx & Xxxx
Investment Management Company has agreed to voluntarily waive the management
fee, subject to its right to change or modify this waiver.
As Amended and Effective February 14, 2001.
