INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this 26th day of February, 1998, by and between
NATIONAL INVESTORS CASH MANAGEMENT FUND, INC., a Maryland corporation, whose
address is 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Company") and
WATERHOUSE ASSET MANAGEMENT, INC., a Delaware corporation, whose address is 000
Xxxx Xxxxxx, Xxx Xxxx 00000 (the "Investment Manager").
W I T N E S S E T H:
WHEREAS, the Company is an open-end, diversified management
investment company, registered under the Investment Company Act of 1940, as
amended (the 1940 Act), with distinct series of shares each having its own
investment objectives, policies and restrictions, including the Company's
Xxxxxxx Cabot Money Market Portfolio, Xxxxxxx Cabot U.S. Government Portfolio
and Xxxxxxx Cabot Municipal Portfolio (each, a Portfolio), and including such
other Portfolios as may hereafter be offered by the Company, all as more fully
described in the Company's Registration Statement on Form N-1A under the 1940
Act and the Securities Act of 1933, as amended (the Registration Statement), as
filed with the Securities and Exchange Commission (the Commission) relating to
the Company and shares of the Company's capital stock, and all amendments
thereto;
WHEREAS, the Investment Manager is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Company and the Investment Manager desire to enter
into an agreement to provide for comprehensive management and investment
advisory services to each Portfolio upon the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is hereby agreed by and between the parties
hereto as follows:
1. Duties of Investment Manager. (a) The Company hereby employs the
Investment Manager to act as the investment adviser for each of the Portfolios
and to manage the investment and reinvestment of the assets of each Portfolio in
accordance with the investment objectives, policies and restrictions of each
such Portfolio as the same are set forth in the Registration Statement, and in
accordance with the requirements of the 1940 Act and all other applicable state
and federal laws, rules and regulations, subject to the supervision of the Board
of Directors of the Company for the period and upon the terms herein set forth.
The investment of funds shall also be subject to all applicable restrictions of
the Articles of Incorporation and By-laws of the Company as may from time to
time be in force. Without limiting the generality of the foregoing, the
Investment Manager shall:
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(i) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic, foreign or
otherwise, whether affecting the economy generally or a Portfolio specifically,
and whether concerning the individual issuers whose securities are included in a
Portfolio or the activities in which such issuers engage, or with respect to
securities which the Investment Manager considers desirable for inclusion in a
Portfolio;
(ii) determine which issuers and securities shall be represented
in a Portfolio and regularly report thereon to the Company's Board of Directors;
(iii) formulate and implement continuing programs for the
purchases and sales of securities of such issuers and lists of approved
investments for each Portfolio and regularly report thereon to the Company's
Board of Directors;
(iv) make decisions with respect to and take, on behalf of each
Portfolio, all actions which appear necessary to carry into effect such purchase
and sale programs and supervisory functions aforesaid, including the placing of
orders for the purchase and sale of securities for such Portfolio.
(b) The Investment Manager accepts such employment and agrees during such
period to render such services and to assume the obligations herein set forth
for the compensation herein provided. The Investment Manager shall give each
Portfolio the benefit of its best judgment, efforts and facilities in rendering
its services as an investment manager. The Investment Manager shall for all
purposes herein provided be deemed to be an independent contractor and, unless
otherwise expressly provided or authorized, shall have no authority to act for
or represent the Company in any way or otherwise be deemed an agent of the
Company. It is understood and agreed that the Investment Manager, by separate
agreements with the Company, may also serve the Company in other capacities. It
is further agreed that the Investment Manager and its officers and directors are
not prohibited from engaging in any other business activity or from rendering
services to any other person, or from serving as partners, officers or directors
of any other firm or corporation, including other investment companies, so long
as its or their services hereunder are not impaired thereby. It is further
agreed that personnel of the Investment Manager may invest in securities for
their own account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the Company, establishes procedures for
personal investing and restricts certain transactions.
(c) The Investment Manager shall keep any books and records relevant to the
provision of its investment advisory services to each Portfolio and shall
specifically maintain all books and records with respect to each Portfolio's
securities and portfolio transactions and shall render to the Company's Board of
Directors such periodic and special reports as the Board may reasonably request.
The Investment Manager agrees that all records which it maintains for the
Company are the property of the Company and it will surrender promptly to the
Company any such records upon the Company's request, provided however that the
Investment Manager may retain a copy of such records. The Investment Manager
further agrees to preserve for the periods prescribed
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by Rule 31a-2 under the 1940 Act any such records kept by the Investment
Manager in connection with investment advisory services provided pursuant
hereto.
(d) The Company has delivered to the Investment Manager copies of each of the
following documents and will deliver to it all future amendments and supplements
thereto, if any:
(i) The Registration Statement; and
(ii) The Prospectus(es) of the Company (such Prospectus(es) and the related
Statement(s) of Additional Information of the Company, as currently in effect
and as amended or supplemented from time to time, being herein collectively
called the Prospectus).
(e) The Company shall at all times keep the Investment Manager fully informed
with regard to the securities owned by each Portfolio, its funds available or to
become available for investment, and generally as to the condition of its
affairs. The Company shall furnish the Investment Manager with a copy of all
financial statements and each report prepared by certified public accountants
with respect to it, and with such other information with regard to its affairs
as the Investment Manager may from time to time reasonably request.
(f) Any investment program undertaken by the Investment Manager pursuant to
this Agreement, as well as any other activities undertaken by the Investment
Manager on behalf of any Portfolio pursuant thereto, shall at all times be
subject to any directives of the Board of Directors.
2. Expenses. The Investment Manager shall pay all of its expenses arising
from the performance of its obligations under Section 1 of this Agreement and
shall pay any salaries, fees and expenses of Company directors or officers who
are employees, officers or directors of the Investment Manager.
The Investment Manager shall not be required to pay any other expenses of
the Company or the Portfolios, including (a) the fees and expenses of directors
who are not interested persons of the Company, as defined by the 1940 Act, and
travel and related expenses of the directors for attendance at meetings; (b) the
fees and expenses of the custodian and transfer agent of the Company or any
pricing service, including but not limited to fees and expenses relating to
Company accounting, pricing of portfolio shares, and computation of net asset
value; (c) the fees and expenses of calculating yield and/or performance of the
Portfolios; (d) the charges and expenses of legal counsel and independent
accountants; (e) taxes and corporate fees payable to governmental agencies; (f)
the costs of share certificates and of membership dues of any trade association
of which the Company is a member; (g) reimbursement of each Portfolio's share of
the organization expenses of the Company; (h) the fees and expenses involved in
registering and maintaining registration of the Company and the Portfolios'
shares with the Commission, blue sky service providers, registering the Company
as a broker or dealer, including the preparation and printing of the
registration statements and prospectuses for such purposes; (I) allocable
communications
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expenses with respect to investor services, expenses of shareholders' and
Board of Directors' meetings and preparing, printing and mailing proxies,
prospectuses and reports to shareholders; (j) costs of acquiring and disposing
of portfolio securities, including but not limited to brokers' commissions,
dealers' xxxx-ups and any issue or transfer taxes chargeable in connection with
the Portfolios' transactions; (k) the cost of stock certificates representing
shares of the Portfolios, if any; (l) insurance expenses, including, but not
limited to, the cost of a fidelity bond, directors and officers insurance and
errors and omissions insurance; and (m) litigation and indemnification expenses,
expenses incurred in connection with mergers, and other extraordinary expenses
not incurred in the ordinary course of the Portfolios' business.
3. Compensation. For the services described in Section 1 hereof, the
Company, on behalf of each Portfolio, will pay to the Investment Manager
promptly after the end of each calendar month, an investment management fee
computed at the annual rate applicable to such Portfolio set forth on Schedule A
hereto. The fee as computed in accordance with Schedule A shall be based upon
the net assets of each Portfolio as to which this Agreement is then effective.
The value of the net assets for each Portfolio shall be calculated in accordance
with the provisions of the Company's Prospectus. For purposes of this Agreement,
on each day when net asset value is not calculated, the net assets of any
Portfolio shall be deemed to be the net assets of such Portfolio as of the close
of business on the last day on which net asset value was determined. Except as
hereinafter set forth, compensation under this Agreement shall be calculated and
accrued daily and the amounts of the daily accruals shall be paid monthly in
arrears (i.e., the applicable annual fee rate divided by 365 as applied to each
prior day's net assets in order to calculate the daily accrual). If this
Agreement becomes effective subsequent to the first day of a month or shall
terminate before the last day of a month, compensation for that part of the
month this Agreement is in effect shall be prorated in a manner consistent with
the calculation of the fees as set forth above.
4. Brokerage. In managing the assets of each Portfolio, the Investment
Manager shall purchase securities from or through and sell securities to or
through such persons, brokers or dealers as the Investment Manager shall deem
appropriate in conformity with applicable law and with the terms of the
Registration Statement, and as the Company's Board of Directors may direct from
time to time. Without limiting the generality of the foregoing, the Investment
Manager will implement the Company's policy of seeking the best execution of
orders, which includes best net prices, in effecting purchases and sales of
portfolio securities for the account of each Portfolio.
On occasions when the Investment Manager deems the purchase or sale of
securities to be in the best interest of one or more Portfolios as well as other
clients of the Investment Manager, the Investment Manager, to the extent
permitted by applicable laws and regulations, may, but shall be under no
obligation to, aggregate the securities to be so sold or purchased in order to
obtain the most favorable price or lower brokerage commissions and efficient
execution. In such event, allocation of the securities so purchased or sold, as
well as the expenses incurred in the transaction, will be made by the Investment
Manager in accordance with its policy for aggregation of orders, as in effect
from time to time, which has been approved by the Company's Board of Directors.
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5. Interested Persons. No director, officer or employee of the Company
shall receive from the Company any salary or other compensation as such
director, officer or employee while he or she is at the same time a director,
officer or employee of the Investment Manager or any affiliated person (as
defined in the 1940 Act) thereof. The Investment Manager shall authorize and
permit any of its directors, officers and employees who may be elected as
directors or officers of the Company to serve in the capacities in which they
are elected, subject to their individual consent and to any limitations imposed
by law. All services to be furnished by the Investment Manager under this
Agreement may be furnished through the medium of any such directors, officers or
employees of the Investment Manager.
6. Limitation of Liability. Subject to Section 36 of the 1940 Act, the
Investment Manager shall not be liable for any error of judgment or mistake of
law or for any loss suffered by any Portfolio in connection with the matters to
which this Agreement relates, except a loss resulting from willful misfeasance,
bad faith or gross negligence on the part of the Investment Manager in the
performance of its obligations and duties or by reason of its reckless disregard
of its obligations and duties under this Agreement.
7. Term of Agreement. This Agreement shall become effective upon its
execution by an authorized officer of the respective parties hereto. This
Agreement shall continue in effect with respect to each Portfolio for an initial
two-year term, and thereafter from year to year so long as such continuation is
specifically approved at least annually in conformity with the requirements of
the 1940 Act with regard to investment advisory contracts; provided, however,
that this Agreement may be terminated at any time without the payment of any
penalty, on behalf of any or all of the Portfolios, by the Company, by the Board
or, with respect to any Portfolio, by "vote of a majority of the outstanding
voting securities" (as defined in the 0000 Xxx) of that Portfolio, or by the
Investment Manager on not less than 60 days' written notice to the other party.
This Agreement shall terminate automatically in the event of its assignment (as
defined in the 1940 Act).
Termination of this Agreement shall not affect the right of the Investment
Manager to receive payments on any unpaid balance of the compensation described
in Section 3 hereof earned prior to such termination.
8. Amendments; Partial Invalidity. This Agreement may be amended by mutual
consent, but the consent of the Company must be obtained in conformity with the
requirements of the 1940 Act. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
shall not be thereby affected.
9. Notices. All notices or other communications hereunder to either party
shall be in writing and shall be deemed to be received on the earlier of the
date actually received or on the fourth day after postmark if such notice is
mailed first class postage prepaid. Notice shall be addressed: (a) if to the
Company, to: President, National Investors Cash Management Fund, Inc., 00 Xxxxx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxxxxx 00000; or (b) if to the Investment
Manager, to: President, Waterhouse Asset Management, Inc., 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or at such other address as either party may designate by
written notice to the other. Notice shall also be
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deemed sufficient if given by telex, telecopier, telegram or similar means
of same day delivery (with a confirming copy by mail as provided herein).
10. Separate Portfolios. This Agreement shall be construed to be made by
the Company as a separate agreement with respect to each Portfolio, and under no
circumstances shall the rights, obligations or remedies with respect to a
particular Portfolio be deemed to constitute a right, obligation or remedy
applicable to any other Portfolio.
11. Entire Agreement; Governing Law. This Agreement contains the entire
agreement between the parties hereto and supersedes all prior agreements,
understandings and arrangements with respect to the subject matter hereof. This
Agreement shall be construed in accordance with applicable federal law and 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 Company and the Investment Manager have caused this
Agreement to be executed as of the day and year first above written.
NATIONAL INVESTORS CASH
MANAGEMENT FUND, INC.
By: /s/ Xxxxxxx Xxxxxx
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WITNESS:
/s/ Xxxxx Xxxxxxx Wood
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WATERHOUSE ASSET MANAGEMENT, INC.
By: /s/ Xxxxx Xxxxxxx
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WITNESS:
/s/ Xxxxxxx X. Xxxxxxxx
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SCHEDULE A
Fees
For the services provided by the Investment Manager under the foregoing
agreement to each of the following Portfolios, the Investment Manager will
receive the following fees:
In the case of each of the Xxxxxxx Cabot Money Market Portfolio, the Xxxxxxx
Cabot U.S. Government Portfolio and the Xxxxxxx Cabot Municipal Portfolio an
annual investment management fee, payable monthly, on a graduated basis equal to
.35 of 1% of the first $1 billion of average daily net assets of each Portfolio,
.34 of 1% of the next $1 billion, and .33 of 1% of average daily net assets of
each Portfolio over $2 billion.
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