Exhibit (d)
FORM OF INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this ___ day of ________, 1999, by and between
TD WATERHOUSE TRUST, a Delaware business trust, whose address is 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Trust") and TD WATERHOUSE ASSET
MANAGEMENT, INC., a Delaware corporation, whose address is 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 (the "Investment Manager").
W I T N E S S E T H:
WHEREAS, the Trust is an open-end, management investment
company, registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), with one distinct series of shares, XX Xxxxxxxxxx Xxx 30 Fund (the
"Fund"), as more fully described in the Trust'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 Trust and shares of the Trust's beneficial
interest, 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 Trust and the Investment Manager desire to enter
into an agreement to provide for comprehensive management and investment
advisory services to the Fund 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 Trust hereby employs
the Investment Manager to act as the investment adviser for the Fund and to
manage the investment and reinvestment of the assets of the Fund in accordance
with the investment objectives, policies and restrictions of the Fund 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 Trustees of
the Trust for the period and upon the terms herein set forth. The investment of
funds shall also be subject to all applicable restrictions of the Agreement and
Declaration of Trust and By-Laws of the Trust as may from time to time be in
force. Without limiting the generality of the foregoing, the Investment Manager
shall:
(i) formulate and implement a continuing program for the
purchases and sales of securities for the Fund and regularly report thereon to
the Trust's Board of Trustees; and
(ii) make decisions with respect to and take, on behalf of the
Fund, all actions which appear necessary to carry into effect such purchase and
sale program and supervisory functions aforesaid, including the placing of
orders for the purchase and sale of securities for the Fund.
(b) Subject to the supervision and direction of the Board of
Trustees of the Trust, the Investment Manager also shall perform or arrange for
the performance of the following administrative and clerical services with
respect to the Fund: (i) maintain and preserve the books and records, including
financial and corporate records, of the Trust as required by law or otherwise
for the proper operation of the Trust; (ii) prepare and, subject to approval by
the Trust, file registration statements, notices, reports and other documents
required by U.S. Federal, state and other applicable laws and regulations (other
than state "blue sky" laws), including proxy materials and periodic reports to
Trust shareholders, oversee the preparation and filing of registration
statements, notices, reports and other documents required by state "blue sky"
laws, and oversee the monitoring of sales of shares of the Trust for compliance
with state securities laws; (iii) calculate and publish, or arrange for the
calculation and publication of, the net asset value of the Fund's shares; (iv)
calculate, or arrange for the calculation of, dividends and distributions and
performance data, and prepare other financial information regarding the Fund;
(v) oversee and assist in the coordination of, and, as the Board may reasonably
request or deem appropriate, make reports and recommendations to the Board on,
the performance of administrative and professional services rendered to the
Trust by others, including the custodian, registrar, transfer agent and dividend
disbursing agent, shareholder servicing agents, accountants, attorneys,
underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and
such other persons in any such other capacity deemed to be necessary or
desirable; (vi) furnish secretarial services to the Trust, including, without
limitation, preparation of materials necessary in connection with meetings of
the Trust's Board of Trustees, including minutes, notices of meetings, agendas
and other Board materials; (vii) provide the Trust with the services of an
adequate number of persons competent to perform the administrative and clerical
functions described herein; (viii) provide the Trust with administrative office
and data processing facilities; (ix) arrange for payment of the Trust's
expenses; (x) provide routine accounting services to the Trust, and consult with
the Trust's officers, independent accountants, legal counsel, custodian,
accounting agent and transfer and dividend disbursing agent in establishing the
accounting policies of the Trust; (xi) prepare such financial information and
reports as may be required by any banks from which the Trust borrows funds;
(xii) develop and implement procedures to monitor the Trust's compliance with
regulatory requirements and with the Fund's investment policies and restrictions
as set forth in the Fund's currently effective Prospectus and Statement of
Additional Information filed under the Securities Act of 1933, as amended; and
(xiii) provide such assistance to the custodian, other Trust service providers
and the Trust's counsel and auditors as generally may be required to carry on
properly the business and operations of the Trust. Notwithstanding anything to
the contrary herein contained, the Trust, and not the Investment Manager, shall
be responsible for and bear the cost of any third party pricing services or any
third party blue sky services.
(c) 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 the Fund 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 Trust in any way or otherwise be deemed an agent of the
Trust. It is understood and agreed that the
Investment Manager, by separate agreements with the Trust, may
also serve the Trust 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 Trust, establishes procedures for personal
investing and restricts certain transactions.
(d) The Investment Manager shall keep any books and records
relevant to the provision of its investment advisory services to the Fund and
shall specifically maintain all books and records with respect to the Fund's
securities and portfolio transactions and shall render to the Trust's Board of
Trustees such periodic and special reports as the Board may reasonably request.
The Investment Manager agrees that all records which it maintains for the Trust
are the property of the Trust and it will surrender promptly to the Trust any
such records upon the Trust'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 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.
(e) The Trust 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 of the Fund (such Prospectus and the
related Statement of Additional Information of the
Fund, as currently in effect and as amended or
supplemented from time to time, being herein
collectively called the "Prospectus").
(f) The Trust shall at all times keep the Investment Manager
fully informed with regard to the securities owned by the Fund, its funds
available or to become available for investment, and generally as to the
condition of its affairs. The Trust 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.
(g) The Investment Manager may enter into agreements with one
or more other persons, including affiliates of the Investment Manager, to
perform any or all the Investment Manager's duties hereunder, provided that (i)
any such agreement shall have been approved by the Board of Trustees of the
Trust; (ii) the Investment Manager shall be as fully responsible to the Trust
for the acts and omissions of any such service providers as it would be for its
own acts or omissions hereunder; and (iii) the cost of performance of such
duties by others are to be borne and paid by the Investment Manager.
(h) 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 the Fund pursuant thereto, shall at all
times be subject to any directives of the Board of Trustees.
2. Expenses. The Investment Manager shall pay all of its
expenses arising from the performance of its obligations under Section 1 of this
Agreement, including the payment of any persons engaged pursuant to Section
l(g), and shall pay any salaries, fees and expenses of Trust 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 Trust or the Fund, including (a) the fees and expenses of
directors who are not "interested persons" of the Trust, 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
Trust or any pricing service, including but not limited to fees and expenses
relating to Trust accounting, pricing of portfolio shares, and computation of
net asset value; (c) the fees and expenses of calculating yield and/or
performance of the Fund; (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 Trust is a member; (g) reimbursement of the
organization expenses of the Fund; (h) the fees and expenses involved in
registering and maintaining registration of the Trust and the Fund's shares with
the Commission, blue sky service providers, registering the Trust as a broker or
dealer and qualifying the shares of the Fund (or applying for applicable
exemptions, as the case may be) under state securities laws, including the
preparation and printing of the registration statements and prospectuses for
such purposes; (i) allocable communications expenses with respect to investor
services, expenses of shareholders' and Board of Trustees' 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 Fund's transactions;
(k) the cost of stock certificates representing shares of the Fund, 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 Fund's business.
3. Compensation. (a) For the services described in Section 1
hereof, the Trust, on behalf of the Fund, 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 the Fund set forth on Schedule A
hereto. The fee as computed in accordance with Schedule A shall be based upon
the net assets of the Fund as to which this Agreement is then effective. The
value of the net assets for the Fund shall be calculated in accordance with the
provisions of the Fund's Prospectus. For purposes of this Agreement, on each day
when net asset value is not calculated, the net assets of the Fund shall be
deemed to be the net assets of the Fund 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.
(b) In the event the operating expenses of the Fund including
all management fees, for any fiscal year ending on a date on which this
Agreement is in effect exceed the expense limitation applicable to the Fund
imposed by the securities laws or regulations thereunder of any state or
jurisdiction in which the Fund's shares are qualified for sale, as such
limitations may be raised or lowered from time to time, the Investment Manager
shall reduce its management fee to the extent of such excess and, if required,
pursuant to any such laws or regulations, will reimburse the Fund for any annual
operating expenses (after reductions of all management fees) in excess of any
expense limitation that may be applicable; provided, however, there shall be
excluded from such expenses the amount of any interest, taxes, brokerage
commission and extraordinary expenses (including but not limited to legal claims
and liabilities and litigation costs and any indemnification related thereto)
paid or payable by the Trust and attributable to the Fund. Such reduction, if
any, shall be computed and accrued daily, shall be settled on a monthly basis
and shall be based upon the expense limitation applicable to the Fund as at the
end of the last business day of the month. Should two or more such expense
limitations be applicable as at the end of the last business day of the month,
that expense limitation which results in the largest reduction in the Investment
Manager's fee shall be applicable.
4. Brokerage. In managing the assets of the Fund, 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 Trust's Board of Trustees may direct from
time to time. Without limiting the generality of the foregoing, the Investment
Manager will implement the Trust'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 the Fund (consistent with this
obligation, when the execution and price offered by two or more persons, brokers
or dealers are comparable, the Investment Manager, in its discretion, purchase
and sell portfolio securities to and from persons, brokers and dealers who
provide the Investment Manager with research advice and other services).
On occasions when the Investment Manager deems the purchase or
sale of securities to be in the best interest of the Fund and one or more of the
other investment portfolios of the Trust, 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.
5. Interested Persons. No Trustee, officer or employee of the
Trust shall receive from the Trust any salary or other compensation as such
Trustee, 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
Trustees or officers of the
Trust 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 the Fund 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. Non-Exclusive Use of the Name "TD Waterhouse". The Trust
acknowledges that it adopted its name and the name of the Fund through the
permission of the Investment Manager. The Investment Manager hereby consents to
the non-exclusive use by the Trust of the marks "TD Waterhouse", "TD Waterhouse
Family of Funds, Inc.", "TD Waterhouse Trust" and the TD Waterhouse logo only so
long as the Investment Manager (or its affiliate or successor) serves as the
investment manager to one or more portfolios of the Trust. The Trust covenants
and agrees to protect, exonerate, defend, indemnify and hold harmless the
Investment Manager, its officers, agents and employees from and against any and
all costs, losses, claims, damages or liabilities, joint or several, including
all legal expenses which may arise or have arisen out of the Trust's use or
misuse of the name "TD Waterhouse", "TD Waterhouse Trust" or the TD Waterhouse
logo or out of any breach of or failure to comply with this paragraph.
Neither the Trust nor the Fund shall distribute or circulate
any prospectus, proxy statement, sales literature, promotional material or other
printed matter required to be filed with the Securities and Exchange Commission
under Section 24(b) of the 1940 Act which contains any reference to the
Investment Manager or using the name "TD Waterhouse", "TD Waterhouse Family of
Funds, Inc.", "TD Waterhouse Trust" or the TD Waterhouse logo without the
approval of the Investment Manager and shall submit all such materials requiring
approval of the Investment Manager in draft form, allowing sufficient time for
review by the Investment Manager and its counsel prior to any deadline for
printing. If the Investment Manager or any successor to its business shall cease
to furnish services to the Trust under this Agreement or similar contractual
arrangement, the Trust:
(a) as promptly as practicable, will take all necessary action
to cause its Articles of Incorporation to be amended to accomplish a change of
name; and
(b) within 90 days after the termination of this Agreement or
such similar contractual arrangement, shall cease to use in any other manner,
including but not limited to use in any prospectus, sales literature or
promotional material, the name "TD Waterhouse", "TD Waterhouse Family of Funds,
Inc.", "TD Waterhouse Trust" and the TD Waterhouse logo or any name, xxxx or
logotype derived from or similar to such marks or indicating that the Trust or
the Fund is managed by or otherwise associated with the Investment Manager.
8. 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 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 by
the Trust, by the Board or by "vote of a majority of the outstanding voting
securities" (as defined in the 0000 Xxx) of the Fund, 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.
9. Amendments; Partial Invalidity. This Agreement may be
amended by mutual consent, but the consent of the Trust 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.
10. 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 Trust, to: President, TD Waterhouse Trust, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000; or (b) if to the Investment Manager, to: President, TD
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 deemed sufficient if given by telex, telecopier,
telegram or similar means of same day delivery (with a confirming copy by mail
as provided herein).
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 Trust and the Investment Manager have
caused this Agreement to be executed as of the day and year first above written.
TD WATERHOUSE TRUST
By:
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WITNESS:
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TD WATERHOUSE ASSET
MANAGEMENT, INC.
By:
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WITNESS:
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SCHEDULE A
FEES
For the services provided by the Investment Manager under the foregoing
agreement to the Fund, the Investment Manager will receive the following fee:
An annual fee, payable monthly, of .20 of 1% of average daily net assets of the
Fund.
