Exhibit 1
XXXXXX FUNDS TRUST
FORM OF
MANAGEMENT CONTRACT
Management Contract dated as of June 7, 1996, as revised
October 3, 1996, December 6, 1996, November 6, 1997, December 8,
1997, January 8, 1998 and February ___, 1998, between XXXXXX
FUNDS TRUST, a Massachusetts business trust (the "Fund"), and
XXXXXX INVESTMENT MANAGEMENT, INC., a Massachusetts corporation
(the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein
contained, it is agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) The Manager, at its expense, will furnish
continuously an investment program for each series of the Fund,
will determine what investments shall be purchased, held, sold or
exchanged by each series of the Fund and what portion, if any, of
the assets of each series of the Fund shall be held uninvested
and shall, on behalf of each series of the Fund, make changes in
such series' investments. Subject always to the control of the
Trustees of the Fund and except for the functions carried out by
the officers and personnel referred to in Section 1(d), the
Manager will also manage, supervise and conduct the other affairs
and business of the Fund and matters incidental thereto. In the
performance of its duties, the Manager will comply with the
provisions of the Agreement and Declaration of Trust and By-Laws
of the Fund and the stated investment objectives, policies and
restrictions of each series of the Fund, and will use its best
efforts to safeguard and promote the welfare of the Fund and to
comply with other policies which the Trustees may from time to
time determine and shall exercise the same care and diligence
expected of the Trustees.
(b) The Manager, at its expense, except as such expense
is paid by the Fund as provided in Section 1(d), will furnish (1)
all necessary investment and management facilities, including
salaries of personnel, required for it to execute its duties
faithfully; (2) suitable office space for the Fund; and (3)
administrative facilities, including bookkeeping, clerical
personnel and equipment necessary for the efficient conduct of
the affairs of the Fund, including determination of the net asset
value of each series of the Fund, but excluding shareholder
accounting services. Except as otherwise provided in Section
1(d), the Manager will pay the compensation, if any, of the
officers of the Fund.
(c) The Manager, at its expense, shall place all orders
for the purchase and sale of portfolio investments for the Fund's
account with brokers or dealers selected by the Manager. In the
selection of such brokers or dealers and the placing of such
orders, the Manager shall use its best efforts to obtain for the
Fund the most favorable price and execution available, except to
the extent it may be permitted to pay higher brokerage
commissions for brokerage and research services as described
below. In using its best efforts to obtain for the Fund the most
favorable price and execution available, the Manager, bearing in
mind the Fund's best interests at all times, shall consider all
factors it deems relevant, including by way of illustration,
price, the size of the transaction, the nature of the market for
the security, the amount of the commission, the timing of the
transaction taking into account market prices and trends, the
reputation, experience and financial stability of the broker or
dealer involved and the quality of service rendered by the broker
or dealer in other transactions. Subject to such policies as the
Trustees of the Fund may determine, the Manager shall not be
deemed to have acted unlawfully or to have breached any duty
created by this Contract or otherwise solely by reason of its
having caused the Fund to pay a broker or dealer that provides
brokerage and research services to the Manager an amount of
commission for effecting a portfolio investment transaction in
excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Manager
determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of
either that particular transaction or the Manager's overall
responsibilities with respect to the Fund and to other clients of
the Manager as to which the Manager exercises investment
discretion. The Manager agrees that in connectio with purchases
or sales of portfolio investments for the Fund's account, neither
the Manager nor any officer, director, employee or agent of the
Manager shall act as a principal or receive any commission other
than as provided in Section 3.
(d) The Fund will pay or reimburse the Manager for the
compensation in whole or in part of such officers of the Fund and
persons assisting them as may be determined from time to time by
the Trustees of the Fund. The Fund will also pay or reimburse
the Manager for all or part of the cost of suitable office space,
utilities, support services and equipment attributable to such
officers and persons, as may be determined in each case by the
Trustees of the Fund. The Fund will pay the fees, if any, of the
Trustees of the Fund.
(e) The Manager shall pay all expenses incurred in
connection with the organization of the Fund and the initial
public offering and sale of its shares of beneficial interest,
provided that upon the issuance and sale of such shares to the
public pursuant to the offering, and only in such event, the Fund
shall become liable for, and to the extent requested reimburse
the Manager for, registration fees payable to the Securities and
Exchange Commission and for an additional amount not exceeding
$125,000 as its agreed share of such expenses.
(f) The Manager shall not be obligated to pay any
expenses of or for the Fund not expressly assumed by the Manager
pursuant to this Section 1 other than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees,
officers and employees of the Fund may be a shareholder,
director, officer or employee of, or be otherwise interested in,
the Manager, and in any person controlled by or under common
control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have
an interest in the Fund. It is also understood that the Manager
and any person controlled by or under common control with the
Manager have and may have advisory, management, service or other
contracts with other organizations and persons, and may have
other interests and business.
3. COMPENSATION TO BE PAID BY THE FUND TO THE MANAGER.
The Fund will pay to the Manager as compensation for the
Manager's services rendered, for the facilities furnished and for
the expenses borne by the Manager pursuant to paragraphs (a),
(b), (c) and (e) of Section 1, a fee, computed and paid quarterly
at the following annual rates for each series of the Fund:
Xxxxxx International Growth and Income Fund and Xxxxxx
High Yield Total Return Fund
(a) 0.80% of the first $500 million of the average net
asset value of each series;
(b) 0.70% of the next $500 million of such average net
asset value;
(c) 0.65% of the next $500 million of such average net
asset value;
(d) 0.60% of the next $5 billion of such average net
asset value;
(e) 0.575% of the next $5 billion of such average net
asset value;
(f) 0.555% of the next $5 billion of such average net
asset value;
(g) 0.54% of the next $5 billion of such average net
asset value; and
(h) 0.53% of any excess thereafter.
Xxxxxx Equity Fund 98
(a) 1.00% of the first $500 million of the average net
asset value of each series;
(b) 0.90% of the next $500 million of such average net
asset value;
(c) 0.85% of the next $500 million of such average net
asset value;
(d) 0.80% of the next $5 billion of such average net
asset value;
(e) 0.775% of the next $5 billion of such average net
asset value;
(f) 0.755% of the next $5 billion of such average net
asset value;
(g) 0.74% of the next $5 billion of such average net
asset value; and
(h) 0.73% of any excess thereafter.
Xxxxxx Asia Pacific Fund II and Putnam Latin America
Fund
(a) 1.20% of the first $500 million of the average net
asset value of each series;
(b) 1.10% of the next $500 million of such average net
asset value;
(c) 1.05% of the next $500 million of such average net
asset value;
(d) 1.00% of the next $5 billion of such average net
asset value;
(e) 0.975% of the next $5 billion of such average net
asset value;
(f) 0.955% of the next $5 billion of such average net
asset value;
(g) 0.94% of the next $5 billion of such average net
asset value; and
(h) 0.93% of any excess thereafter.
Xxxxxx High Yield Trust II, Xxxxxx Investment Fund 00,
Xxxxxx Xxxxxx Xxxx, Xxxxxx Value Fund, and Putnam U.S. C
Core Fund
(a) 0.70% of the first $500 million of the average net
asset value of each series;
(b) 0.60% of the next $500 million of such average net
asset value;
(c) 0.55% of the next $500 million of such average net
asset value;
(d) 0.50% of the next $5 billion of such average net
asset value;
(e) 0.475% of the next $5 billion of such average net
asset value;
(f) 0.455% of the next $5 billion of such average net
asset value;
(g) 0.44% of the next $5 billion of such average net
asset value; and
(h) 0.43% of any excess thereafter.
Such average net asset value shall be determined by taking an
average of all of the determinations of such net asset value
during such quarter at the close of business on each business day
during such quarter while this Contract is in effect. Such fee
shall be payable for each fiscal quarter within 30 days after the
close of such quarter and shall commence accruing as of the date
of the initial issuance of shares of the Fund to the public.
The fees payable by the Fund to the Manager pursuant to
this Section 3 shall be reduced by any commissions, fees,
brokerage or similar payments received by the Manager or any
affiliated person of the Manager in connection with the purchase
and sale of portfolio investments of the Fund, less any direct
expenses approved by the Trustees incurred by the Manager or any
affiliated person of the Manager in connection with obtaining
such payments.
In the event that expenses of the Fund or any series of
the Fund for any fiscal year should exceed the expense limitation
on investment company expenses imposed by any statute or
regulatory authority of any jurisdiction in which shares of the
Fund or such series are qualified for offer or sale, the
compensation due the Manager for such fiscal year shall be
reduced by the amount of excess by a reduction or refund thereof.
In the event that the expenses of the Fund or any series of the
Fund exceed any expense limitation which the Manager may, by
written notice to the Fund, voluntarily declare to be effective
subject to such terms and conditions as the Manager may prescribe
in such notice, the compensation due the Manager shall be
reduced, and, if necessary, the Manager shall assume expenses of
the Fund or such series to the extent required by the terms and
conditions of such expense limitation.
If the Manager shall serve for less than the whole of a
quarter, the foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS
CONTRACT.
This Contract shall automatically terminate, without the
payment of any penalty, in the event of its assignment; and
this Contract shall not be amended as to any series of the Fund
unless such amendment be approved at a meeting by the
affirmative vote of a majority of the outstanding shares of
such series, and by the vote, cast in person at a meeting
called for the purpose of voting on such approval, of a
majority of the Trustees of the Fund who are not interested
persons of the Fund or of the Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution,
and shall remain in full force and effect as to a particular
series continuously thereafter (unless terminated automatically
as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this
Contract as to any series by not more than sixty days' nor less
than thirty days' written notice delivered or mailed by
registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Fund or the shareholders
by the affirmative vote of a majority of the outstanding shares
of such series, and (ii) a majority of the Trustees of the Fund
who are not interested persons of the Fund or of the Manager, by
vote cast in person at a meeting called for the purpose of voting
on such approval, do not specifically approve at least annually
the continuance of this Contract with respect to such series,
then this Contract shall automatically terminate with respect to
such series at the close of business on the second anniversary of
its execution with respect to such series, or upon the expiration
of one year from the effective date of the last such continuance,
whichever is later.
Action by the Fund under (a) above may be taken either
(i) by vote of a majority of its Trustees, or (ii) by the
affirmative vote of a majority of the outstanding shares of the
relevant series.
Termination of this Contract pursuant to this Section 5
will be without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote
of a majority of the outstanding shares" of a series means the
affirmative vote, at a duly called and held meeting of
shareholders of such series, (a) of the holders of 67% or more of
the shares of such series present (in person or by proxy) and
entitled to vote at such meeting, if the holders of more than 50%
of the outstanding shares of such series entitled to vote at such
meeting are present in person or by proxy, or (b) of the holders
of more than 50% of the outstanding shares of such series
entitled to vote at such meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated
person", "control", "interested person" and "assignment" shall
have their respective meanings defined in the Investment Company
Act of 1940 and the Rules and Regulations thereunder (the "1940
Act"), subject, however, to such exemptions as may be granted by
the Securities and Exchange Commission under said Act; the term
"specifically approve at least annually" shall be construed in a
manner consistent with the 1940 Act, and the Rules and
Regulations thereunder; and the term "brokerage and research
services" shall have the meaning given in the Securities Exchange
Act of 1934 and the Rules and Regulations thereunder.
7. NON-LIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or
gross negligence on the part of the Manager, or reckless
disregard of its obligations and duties hereunder, the Manager
shall not be subject to any liability to the Fund or to any
shareholder of the Fund, for any act or omission in the course
of, or connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES, OFFICERS, AND
SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the
Fund is on file with the Secretary of State of The Commonwealth o
of Massachusetts, and notice is hereby given that this instrument
is executed on behalf of the Trustees of the Fund as Trustees and
not individually and that the obligations of or arising out of
this instrument are not binding upon any of the Trustees,
officers or shareholders individually but are binding only upon
the assets and property of the relevant series of the Fund.
IN WITNESS WHEREOF, XXXXXX FUNDS TRUST and XXXXXX
INVESTMENT MANAGEMENT, INC. have each caused this instrument to
be signed in duplicate in its behalf by its President or a Vice
President thereunto duly authorized, all as of the day and year
first above written.
XXXXXX FUNDS TRUST
By:
--------------------------------
Xxxxxxx X. Xxxxxx
Executive Vice President
XXXXXX INVESTMENT MANAGEMENT, INC.
By:
--------------------------------
Xxxxxx X. Silver
Senior Managing Director
s:\boiler\pre-eff\pftmc.vpp
