MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT, dated as of March 18, 1999 between XXXXXXXX
PORTFOLIOS, INC., a Maryland corporation (the "Corporation"), on behalf of
Xxxxxxxx Large-Cap Growth Portfolio (the "Portfolio"), and J. & X. XXXXXXXX &
CO. INCORPORATED, a Delaware corporation (the "Manager").
WHEREAS, the Corporation is an open-end diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Corporation desires to retain the Manager to render or contract to
obtain as hereinafter provided investment management services to the
Corporation, and to administer the business and other affairs of the Corporation
and the Manager is willing to render such services;
Now, therefore, in consideration of the mutual agreements herein made, the
parties hereto agree as follows:
1. Duties of the Manager. The Manager shall, subject to the control of the
Board of Directors of the Corporation, manage the affairs of the Portfolio as
hereinafter defined, including, but not limited to, continuously providing the
Corporation with investment management, including investment research, advice
and supervision, determining which securities shall be purchased or sold by the
Portfolio, making purchases and sales of securities on behalf of the Portfolio
and determining how voting and other rights with respect to securities of the
Portfolio shall be exercised, subject in each case to the control of the Board
of Directors of the Corporation and in accordance with the objectives, policies
and principles set forth in the Registration Statement and Prospectus(es) of the
Corporation and the requirements of the 1940 Act and other applicable law. In
connection with the performance of its duties hereunder, the Manager shall
provide such office space, such bookkeeping, accounting, internal legal,
clerical, secretarial and administrative services (exclusive of, and in addition
to, any such services provided by any others retained by the Corporation) and
such executive and other personnel as shall be necessary for the operations of
the Portfolio. The Corporation understands that the Manager also acts as the
manager of all of the investment companies in the Xxxxxxxx Group.
Subject to Section 36 of the 1940 Act, the Manager shall not be liable to
the Corporation for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission in the management of
the Portfolio and the performance of its duties under this Agreement except for
willful misfeasance, bad faith
or gross negligence in the performance of its duties or by reason of reckless
disregard of its obligations and duties under this Agreement.
2. Expenses. The Manager shall pay all of its expenses arising from the
performance of its obligations under Section 1, and shall pay any salaries, fees
and expenses of the directors of the Corporation who are employees of the
Manager or its affiliates. The Manager shall not be required to pay any other
expenses of the Corporation or the Portfolio, including, but not limited to,
direct charges relating to the purchase and sale of portfolio securities,
interest charges, fees and expenses of independent attorneys and auditors, taxes
and governmental fees, cost of stock certificates and any other expenses
(including clerical expenses) of issue, sale, repurchase or redemption of
shares, expenses of registering and qualifying shares for sale, expenses of
printing and distributing reports, notices and proxy materials to shareholders,
expenses of corporate data processing and related services, shareholder
recordkeeping and shareholder account services, expenses of printing and filing
reports and other documents filed with governmental agencies, expenses of
printing and distributing prospectuses, expenses of annual and special
shareholders' meetings, fees and disbursements of transfer agents and
custodians, expenses of disbursing dividends and distributions, fees and
expenses of directors of the Corporation who are not employees of the Manager or
its affiliates, membership dues in the Investment Company Institute, insurance
premiums and extraordinary expenses such as litigation expenses.
3. Compensation. (a) As compensation for the services performed and the
facilities and personnel provided by the Manager pursuant to Section 1, the
Portfolio will pay to the Manager promptly after the end of each month a fee,
calculated on each day during such month at the annual rate of .70% of the
Portfolio's average daily net assets on the first $1 billion of net assets, .65%
of the Portfolio's average daily net assets on the next $1 billion of net
assets, and .60% of the Portfolio's average daily net assets in excess of $2
billion.
(b) If the Manager shall serve hereunder for less then the whole of any
month, the fee hereunder shall be prorated.
4. Purchase and Sale of Securities. The Manager shall purchase securities
from or through and sell securities to or through such persons, brokers or
dealers (including the Manager or an affiliate of the Manager) as the Manager
shall deem appropriate in order to carry out the policy with respect to
allocation of portfolio transactions as set forth in the Registration Statement
and Prospectus(es) of the Corporation or as the Board of Directors of the
Corporation may direct from time to time. In providing the Portfolio with
investment management and supervision, it is recognized that the Manager will
seek the most favorable price and execution, and, consistent with such policy,
may give consideration to the research, statistical and other services furnished
by brokers or dealers to the Manager for its use, to the general
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attitude of brokers or dealers toward investment companies and their support of
them, and to such other considerations as the Board of Directors of the
Corporation may direct or authorize from time to time.
Notwithstanding the above, it is understood that it is desirable for the
Portfolio that the Manager have access to supplemental investment and market
research and security and economic analysis provided by brokers who execute
brokerage transactions at a higher cost to the Portfolio than may result when
allocating brokerage to other brokers on the basis of seeking the most favorable
price and execution. Therefore, the Manager is authorized to place orders for
the purchase and sale of securities for the Portfolio with such brokers, subject
to review by the Corporation's Board of Directors from time to time with respect
to the extent and continuation of this practice. It is understood that the
services provided by such brokers may be useful to the Manager in connection
with its services to other clients as well as the Portfolio.
The placing of purchase and sale orders may be carried out by the Manager
or any wholly-owned subsidiary of the Manager.
If, in connection with purchases and sales of securities for the Portfolio,
the Manager or any subsidiary of the Manager may, without material risk, arrange
to receive a soliciting dealer's fee or other underwriter's or dealer's discount
or commission, the Manager shall, unless otherwise directed by the Board of
Directors of the Corporation, obtain such fee, discount or commission and the
amount thereof shall be applied to reduce the compensation to be received by the
Manager pursuant to Section 3 hereof.
Nothing herein shall prohibit the Board of Directors of the Corporation
from approving the payment by the Portfolio of additional compensation to others
for consulting services, supplemental research and security and economic
analysis.
5. Term of Agreement. This Agreement shall continue in full force and
effect until December 31, 2000, and from year to year thereafter if such
continuance is approved in the manner required by the 1940 Act if the Manager
shall not have notified the Portfolio in writing at least 60 days prior to such
December 31 or prior to December 31 of any year thereafter that it does not
desire such continuance. This Agreement may be terminated at any time in respect
of the Portfolio, without payment of any penalty by the Portfolio or the
Corporation, on 60 days' written notice to the Manager by vote of the Board of
Directors of the Corporation or by vote of a majority of the outstanding voting
securities of the Portfolio (as defined by the 1940 Act). This Agreement will
automatically terminate in the event of its assignment (as defined by the 1940
Act).
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6. Right of Manager In Corporate Name. The Manager and the Corporation each
agree that the word "Xxxxxxxx" which comprises a component of the Corporation's
and Portfolio's name, is a property right of the Manager. The Portfolio agrees
and consents that (i) it will only use the word "Xxxxxxxx" as a component of its
corporate name and for no other purpose, (ii) it will not purport to grant to
any third party the right to use the word "Xxxxxxxx" for any purpose, (iii) the
Manager or any corporate affiliate of the Manager may use or grant to others the
right to use the word "Xxxxxxxx", or any combination or abbreviation thereof, as
all or a portion of a corporate or business name or for any commercial purpose,
including a grant of such right to any other investment company, and at the
request of the Manager, the Corporation and the Portfolio will take such action
as may be required to provide its consent to the use of the word "Xxxxxxxx", or
any combination or abbreviation thereof, by the Manager or any corporate
affiliate of the Manager, or by any person to whom the Manager or an affiliate
of the Manager shall have granted the right to such use; and (iv) upon the
termination of any management agreement into which the Manager and the
Corporation may enter, the Corporation and the Portfolio shall, upon request by
the Manager, promptly take such action, at its own expense, as may be necessary
to change its corporate name to one not containing the word "Xxxxxxxx" and
following such change, shall not use the word Xxxxxxxx, or any combination
thereof, as a part of its corporate name or for any other commercial purpose,
and shall use its best efforts to cause its officers, trustees and shareholders
to take any and all actions which the Manager may request to effect the
foregoing and to reconvey to the Manager any and all rights to such word.
7. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. Anything herein to the
contrary notwithstanding, this Agreement shall not be construed to require, or
to impose any duty upon either of the parties, to do anything in violation of
any applicable laws or regulations.
IN WITNESS WHEREOF, the Corporation on behalf of the Portfolio and the
Manager have caused this Agreement to be executed by their duly authorized
officers as of the date first above written.
XXXXXXXX PORTFOLIOS, INC.
By ________________________________
J. & X. XXXXXXXX & CO. INCORPORATED
By ________________________________
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