MANAGEMENT AGREEMENT
Exhibit 28d(iii)
AGREEMENT made as of this 15th day of December 2011 by and between LORD XXXXXX EQUITY TRUST, a Delaware statutory trust (hereinafter called the “Trust”), on behalf of those series listed in one or more addenda to this Agreement (individually a “Series” and together the “Series”), and LORD, XXXXXX & CO. LLC, a Delaware limited liability company (hereinafter called the “Investment Manager”).
WHEREAS, the Trust, on behalf of each Series, desires to obtain the investment management services of the Investment Manager and the Investment Manager is willing to provide services of the nature desired upon the terms and conditions hereinafter provided;
NOW, THEREFORE, in consideration of the mutual covenants and of other good and valuable consideration, receipt of which is hereby acknowledged, it is agreed as follows:
1. The
Trust, on behalf of each Series, hereby employs the Investment Manager under
the terms and conditions of this Agreement, and the Investment Manager hereby
accepts such employment and agrees to perform supervisory functions of the
Trust with respect to the investment and reinvestment of its property and
assets (whether or not held in trust or in the custody of a bank or trust
company subject to the Trust’s direction or control) including, without
limitation, the supervision of the Series’ investment portfolios and the
recommendation of investment policies and procedures within the limitations set
forth in the Trust’s Registration Statement on file with the Securities and
Exchange Commission under the Securities Act of 1933 and the Investment Company
Act of 1940, as amended (the “Act”).
The
Investment Manager agrees to maintain an adequate organization of competent
persons to perform the supervisory functions mentioned herein.
All
recommendations with respect to the investment portfolios will be made to the
Trust’s trading department which, with the approval of authorized officers of
the Trust, will execute all trades in accordance with the Trust’s investment
procedures.
The
Investment Manager reserves the right, in its discretion, to purchase or
otherwise obtain statistical information and services from other sources,
including affiliated persons of the Investment Manager.
Notwithstanding
the provisions of this paragraph 1, the investment policies and procedures and
all other actions of the Trust are, and shall at all times be, subject to the
control and direction of its trustees.
2. Each
Series will pay the Investment Manager for its services under this Agreement
and for the expenses assumed, an annual management fee computed and payable
monthly at the annual rate of the value of the average daily net assets of such
Series as set forth in any Addenda to this Agreement between the Investment
Manager and the Trust on behalf of such Series. The value of the net assets of
the Series shall include all assets held in trust or in custody of any bank,
savings bank or trust company for the Series, subject to its control or
direction, and shall be determined as provided in the Declaration and Agreement
of Trust of the Trust. The fee shall be paid on the first day of each month for
the preceding month.
While
recognizing that principal transactions generally are not afforded the
protection of the safe harbor in Section 28(e) of the Securities Exchange Act
of 1934, the Investment Manager may receive research and other statistical
information from broker-dealers and from other sources and, in accordance with
said Section 28(e), a broker-dealer may be paid a commission for a transaction
involving portfolio securities of the Trust exceeding the amount another
broker-dealer would have charged for the same transaction if it is determined
by the Investment Manager in good faith that such amount of commission is
reasonable in relation to the value of the research services provided by the
executing broker-dealer, viewed in terms of either the particular transaction
or the overall responsibilities of the Investment Manager with respect to the
Trust and other accounts (investment companies and other investment clients)
with respect to which it exercises investment discretion. Such research
services may be used by the Investment
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Manager in
serving all its accounts, and not all of such research services need
necessarily be used by the Investment Manager in connection with its services
to the Trust.
It
is understood that any supplemental advisory or statistical services which may
be provided to the Trust or to the Investment Manager from time to time by
independent broker-dealers or persons other than the Investment Manager, for
whatever reason, shall not reduce the amount of the fees payable to the
Investment Manager hereunder. It is recognized that such supplementary advisory
or statistical services may be useful to the Investment Manager and the Trust,
but their value is indeterminable and is not to be considered a substitute for
the services provided by the Investment Manager hereunder.
3. It
is understood that the services of the Investment Manager are not deemed to be
exclusive, and nothing in this Agreement shall prevent the Investment Manager,
or any officer, director, member, partner or employee thereof, from providing
similar services to other investment companies and other clients (whether or
not their investment objectives and policies are similar to those of the Trust)
or to engage in other activities. When other clients of the Investment Manager
desire to purchase or sell the same portfolio security at the same time as the
Trust, it is understood that such purchases and sales will be made as nearly as
practicable on a pro rata basis in proportion to the amounts desired to be
purchased or sold by each client.
4. The
Trust, on behalf of each Series, will, at its own expense, furnish to the
Investment Manager periodic (but not less than semi-annually) statements of its
books of account, including balance sheets and earnings statements, and all
other information which may reasonably be required, from time to time, by the
Investment Manager, and will, at its own expense, at all times keep the
Investment Manager fully advised as to the cash, securities and other property
then comprising its assets, and furnish daily detailed price makeup sheets with
respect to its investment portfolio and its shares of beneficial interest
outstanding.
5. The
Investment Manager shall be under no obligation to pay any fees, costs,
expenses or other charges of the Trust, except for the compensation of its
officers, the compensation, if any, of its trustees who are affiliated with the
Investment Manager, the rental for its office space, and the ordinary and
necessary office and clerical expenses relating to research, statistical work
and supervision of each Series’ investment portfolio,
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to be
performed by the Investment Manager under paragraph 1 of this Agreement. Each
Series will pay its own fees, costs, expenses or charges relating to its assets
and operations, including without limitation: office and clerical expenses not
relating to research, statistical work and supervision of its investment
portfolio; fees and expenses of trustees not affiliated with the Investment
Manager; governmental fees; interest charges; taxes; association membership
dues; fees and charges for legal and auditing services; fees and expenses of
any custodians or trustees with respect to custody of its assets; fees, charges
and expenses of dividend disbursing agents, registrars and transfer agents
(including the cost of keeping all necessary shareholder records and accounts,
and of handling any problems relating thereto and the expense of furnishing to
all shareholders statements of their accounts after every transaction including
the expense of mailing); costs and expenses of repurchase and redemption of its
shares; costs and expenses of preparing, printing and mailing to shareholders
ownership certificates, proxy statements and materials, prospectuses, reports
and notices; costs of preparing reports to governmental agencies; brokerage
fees and commissions of every kind and expenses in connection with the
execution of portfolio security transactions (including the cost of any service
or agency designed to facilitate the purchase and sale of portfolio
securities); and all postage, insurance premiums, and any other fee, cost,
expense or charge of any kind incurred by and on behalf of the Trust and not
expressly assumed by the Investment Manager under this Agreement.
Notwithstanding
the above, to encourage sales of shares of beneficial interest in a Series of
the Trust, the Investment Manager may, but is not required to, waive its fee
hereunder attributable to such Series and directly pay or reimburse the Trust
for any portion of the operating expenses of such Series not expressly assumed
by the Investment Manager under this Agreement. The amount of any such expenses
so voluntarily paid or reimbursed by the Investment Manager shall be paid back
to the Investment Manager by the applicable Series without interest to the
extent provided as follows, unless the Investment Manager elects to waive such
pay back. No such pay back will be made prior to the first day of the calendar
quarter after the net assets of such Series first reach $50 million (the
“commencement date”). Thereafter, until the first day of the calendar quarter
after the net assets first reach $100 million (the “recalculation date”), if
the ratio of
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operating
expenses (determined before taking into account any fee waiver or payment or
reimbursement of expenses by the Investment Manager) to average net assets
(“expense ratio”) is less than the percentage set forth in an Addendum to this
Agreement between the Investment Manager and the Trust, such Trust shall repay
the Investment Manager an amount equal in dollars to the difference between the
expenses included in the determination of such expense ratio and the expenses
required to achieve such percentage set forth in the addendum to this
Agreement. The expense ratios will be determined on a full fiscal year basis
and, if the commencement date does not begin at the start of a fiscal year, the
determination will be based on the remaining portion of the fiscal year
annualized. Beginning with the recalculation date, the reimbursement of
expenses shall be measured by the difference between the expenses included in
the determination of such expense ratio and those at the expense ratio set
forth in an Addendum to this Agreement between the Investment Manager and the
Trust. Any such repayments shall be made promptly (but in any event within 60
days) after the end of the fiscal years of the Series with respect to which
they are payable, and no such repayment shall exceed the amount of the expenses
of the applicable Series paid or reimbursed by the Investment Manager and not
previously paid back. The amount of any expenses of a Series paid or reimbursed
that is subject to the repayment provisions of this paragraph and not repaid as
provided above prior to termination of this Agreement, or by the end of the
fifth full fiscal year after the commencement date that shares of the Series
are first publicly sold, whichever first occurs, shall not be repaid to the
Investment Manager.
Notwithstanding
any other provision of this Agreement, if expenses (including management fees
hereunder but excluding interest, taxes, brokerage fees, and where permitted,
extraordinary expenses) borne by the Trust in any fiscal year exceed expense
limitations applicable to the Trust imposed by state securities administrators,
as such limitations may be lowered or raised from time to time, the Investment
Manager will reimburse the applicable Series for any such excess. If the
Investment Manager pays for other expenses of the Trust or furnishes without
charge to the Trust services the cost of which is to be borne by the Trust
under this Agreement, the Investment Manager shall not be deemed to have waived
its rights under this Agreement to have the Trust pay for such expenses or
provide or pay for such services in the future. The Investment Manager may
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also advance
the payment of expenses, subject to reimbursement by the Trust in the ordinary
course of business.
6. The
Investment Manager agrees that it shall observe and be bound by all of the
provisions of the Declaration and Agreement of Trust (including any amendments
thereto) of the Trust which in any way limit or restrict or prohibit or
otherwise regulate any action by the Investment Manager.
7. Other
than to abide by the provisions hereof and render the services called for
hereunder in good faith, the Investment Manager assumes no responsibility under
this Agreement and, having so acted, the Investment Manager shall not be held
liable or accountable for any mistakes of law or fact, or for any error or
omission of its officers, directors, members, partners or employees, or for any
loss or damage arising or resulting therefrom suffered by the Trust or any of
its shareholders, creditors, trustees or officers; provided however, that
nothing herein shall be deemed to protect the Investment Manager against any
liability to the Trust or its shareholders by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties hereunder, or by
reason of the reckless disregard of its obligations and duties hereunder. The
Investment Manager shall not be responsible for any action of the Trustees of
the Trust in following or declining to follow any advice or recommendation of
the Investment Manager.
8. Neither
this Agreement nor any other transaction between the parties hereto pursuant to
this Agreement shall be invalidated or in any way affected by the fact that any
or all of the trustees, officers, shareholders, or other representatives of the
Trust are or may be interested in the Investment Manager, or any successor or
assignee thereof, or that any or all of the officers, members, partners, or
other representatives of the Investment Manager are or may be interested in the
Trust, except as otherwise may be provided in the Act. The Investment Manager
in acting hereunder shall be an independent contractor and not any agent of the
Trust.
9. This
Agreement shall become effective upon the date hereof. With respect to each
Series, this Agreement shall continue in force, unless terminated, for two
years from the date hereof, and is renewable annually thereafter by specific
approval of the trustees of the Trust or by vote of a majority of the
outstanding voting securities of that
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Series at the
time outstanding and entitled to vote; any such renewal with respect to a
Series shall be approved by the vote of a majority of the trustees who are not
parties to this Agreement or interested persons of the Investment Manager or of
the Trust, cast in person at a meeting called for the purpose of voting on such
renewal.
This
Agreement may be terminated with respect to one or more Series without penalty
at any time by the trustees of the Trust on 60 days’ written notice. This
Agreement shall automatically terminate in the event of its assignment. The
terms “interested persons,” “assignment” and “vote of a majority of the
outstanding voting securities” shall have the same meaning as those terms are
defined in the Act.
10. The
Investment Manager reserves the right to grant the use of the name “LORD
XXXXXX,” “LORD, XXXXXX & CO.,” “LORD, XXXXXX & CO. LLC,” or any
derivative thereof, or any other part of the name of the Trust or any Series,
to any other investment company, any series of an investment company or any
business enterprise. The Investment Manager reserves the right to withdraw from
the Trust the use of the name “LORD XXXXXX” and the use of its registered
service xxxx; at such time of withdrawal of the right to use the name “LORD
XXXXXX,” the Investment Manager agrees that the question of continuing this
Agreement with respect to a Series may be submitted to a vote of that Series’
shareholders. In the event of such withdrawal or the termination of this
Agreement, for any reason, the Trust will, on the written request of the
Investment Manager, take such action as may be necessary to change its name and
eliminate all reference to the words “LORD XXXXXX” in any form, and will no
longer use such registered service xxxx.
11. The
obligations of the Trust, including those imposed hereby, are not personally
binding upon, nor shall resort be had to the private property of, any of the
trustees, shareholders, officers, employees or agents of the Trust
individually, but are binding only upon the assets and property of the Trust.
Any and all personal liability, either at common law or in equity, or by
statute or constitution, of every such trustee, shareholder, officer, employee
or agent for any breach by the Trust of any agreement, representation or
warranty hereunder is hereby expressly waived as a condition of and in
consideration for the execution of this Agreement by the Trust.
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IN WITNESS WHEREOF, the Trust has caused this Agreement to be executed by its duly authorized officers and its seal to be affixed hereto, and the Investment Manager has caused this Agreement to be executed by one of its members all on the day and year first above written.
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LORD XXXXXX EQUITY TRUST |
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By: |
/s/ Xxxxxx X. Xxxxxxxx |
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Xxxxxx X. Xxxxxxxx |
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Vice President and Assistant Secretary |
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Attest: |
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/s/ Xxxxxxxx X. Xxxxxxx |
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Xxxxxxxx X. Xxxxxxx |
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Vice President and Assistant Secretary |
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LORD, XXXXXX & CO. LLC |
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By: |
/s/ Xxxxxxxx X. Xxxxxx |
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Xxxxxxxx X. Xxxxxx |
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Member and General Counsel |
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