EXHIBIT 5.
FORM OF INVESTMENT MANAGEMENT AND ADMINISTRATION
AGREEMENT BY AND BETWEEN THE HOLLAND TRUST ON
BEHALF OF THE GROWTH FUND AND HOLLAND
CAPITAL MANAGEMENT
FORM OF
INVESTMENT MANAGEMENT AND ADMINISTRATION AGREEMENT
INVESTMENT MANAGEMENT AGREEMENT ("Agreement") made as of the ___ day of
___________, 1996, by and between THE HOLLAND TRUST, a Delaware business trust
(the "Trust"), on its own behalf and on behalf of each series thereof, and
HOLLAND CAPITAL MANAGEMENT, L.P., a Delaware limited partnership (the
"Investment Manager").
W I T N E S S E T H:
WHEREAS, the Trust intends to engage in business as an open-end management
investment company of the series type and register as such under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Investment Manager is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Trust desires to retain the Investment Manager to provide
investment management and administrative services to the Trust and each series
thereof identified in Schedule A hereto (each a "Fund"),() in the manner and on
the terms and conditions hereinafter set forth; and
NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the parties hereto, intending to be
legally bound, do hereby agree as follows:
1. DUTIES AND RESPONSIBILITIES OF THE INVESTMENT MANAGER.
1.1. INVESTMENT MANAGEMENT SERVICES. The Investment Manager shall, subject
to the supervision of the Board of Trustees of the Trust, act as investment
manager of each Fund and, as such, shall:
1.1.1. INVESTMENT OF ASSETS. Supervise and direct the investment
of each Fund's assets in accordance with applicable law, and the investment
objectives,
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(1) The Trust initially will offer shares of beneficial interest in a single
series, the Growth Fund, which initially will be the only Fund listed on
Schedule A hereto. The Trust may in the future offer shares in additional
series. The term "Funds" and "each Fund" as used herein shall refer to each
series of the Trust identified in Schedule A hereto, even when Schedule A
identifies only one Fund.
investment program, policies, and restrictions set forth in the Fund's
current prospectus ("Prospectus") and Statement of Additional Information
("SAI") contained in the Trust's Registration Statement under the 1940 Act
and the Securities Act of 1933, as amended ("1933 Act"), and subject to
such further limitations as the Board of Trustees of the Trust may from
time to time impose by written notice to the Investment Manager.
1.1.2. INVESTMENT PROGRAM. The Investment Manager shall operate a
continuing program for the management of each Fund's assets and resources.
In furtherance of these duties and responsibilities, the Investment
Manager is authorized, in its discretion and without prior consultation
with the Trust to: (i) buy, sell, exchange, convert, lend, and otherwise
trade in any stocks, bonds, and other securities or assets for each Fund;
and (ii) place orders and negotiate the commissions (if any) for the
execution of transactions in securities with or through such brokers,
dealers, underwriters, or issuers as the Investment Manager may select
for a Fund.
1.2. ADMINISTRATIVE SERVICES. The Investment Manager shall oversee the
administration of the Trust's and each Fund's business and affairs as set forth
herein and shall provide certain services required for effective administration
of the Trust and the Funds. In connection therewith, the Investment Manager
shall:
1.2.1. OFFICE AND OTHER FACILITIES. Furnish, without cost to the
Trust, or provide and pay the cost of, such office facilities, furnishings,
and office equipment as are necessary for the performance of the Investment
Manager's duties to the Trust under this Agreement.
1.2.2. PERSONNEL. Provide, without additional remuneration from or
other cost to the Trust, the services of individuals competent to perform
all of the Investment Manager's duties under this Agreement.
1.2.3. AGENTS. Assist the Trust in selecting, coordinating the
activities of, supervising and acting as liaison with, any other person or
agent engaged by the Trust, including the Trust's depository agent,
custodian, consultants, transfer agent, dividend disbursing agent,
independent accountants, and independent legal counsel. The Investment
Manager shall also monitor the functions of such persons and agents to
ensure that their activities adhere to the provisions of the Trust's
current Prospectus(es) and SAI(s), and to ensure compliance with
applicable laws, including without limitation compliance of the Trust
and the Trust's custodian(s) with Rule 17f-5 under the 1940 Act, if
appropriate.
1.2.4. TRUSTEES AND OFFICERS. Authorize and permit those partners
and employees of the Investment Manager who are natural persons and who may
be elected or appointed as trustees or officers of the Trust to serve in
such capacities, without remuneration from or additional cost to the Trust.
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1.2.5. BOOKS AND RECORDS. Maintain customary records, on behalf
of the Trust, in connection with the performance of the Investment
Manager's duties under this Agreement. The Investment Manager also shall
monitor and oversee the performance of the agents specified in
Subparagraph 1.2.3. above, to ensure that all financial, accounting,
corporate, and other records required to be maintained and preserved by the
Fund or on its behalf shall be maintained in accordance with applicable
laws and regulations.
1.2.6. COST OVERSIGHT. Monitor and review activities and
procedures of the Trust and its agents identified in Subparagraph 1.2.3.
above, in order to identify and seek to obtain possible service
improvements and cost reductions.
1.2.7. ACCOUNTING AND COMPLIANCE POLICIES AND PROCEDURES. Assist in
developing, reviewing, maintaining, and monitoring the effectiveness of,
accounting and compliance policies and procedures, including valuation
procedures of each Fund's portfolio, expense allocation procedures,
personal trading procedures and the Trust's Code of Ethics. The Investment
Manager also shall assist and coordinate participation by the Trust and its
agents in any audit by its outside auditors or any examination by federal
or state regulatory authorities or any self-regulatory organization. The
Investment Manager also shall oversee and coordinate the activities of the
Trust's accountants, outside counsel, and other experts in these audits or
examinations.
1.2.8. SYSTEMS. Assist in developing, implementing, and monitoring
the Trust's use of automated systems for the purchase, sale, redemption and
transfer of shares and for recording and tracking such transactions. The
Investment Manager also shall assist in developing, implementing, and
monitoring the Trust's use of automated communications systems with
brokers, dealers, custodians, and other service providers, including
without limitation trade clearance systems.
1.2.9. REPORTS TO THE TRUST. Furnish to or place at the disposal
of the Trust such information, reports, evaluations, analyses, and opinions
relating to its administrative functions as the Trust may, at any time
or from time to time, reasonably request or as the Investment Manager may
deem helpful to the Trust. The Investment Manager also shall assist in the
preparation of agendas and other materials for meetings of the Trust's
Board of Trustees and shall attend such meetings.
1.2.10. REPORTS AND FILINGS. Provide appropriate assistance in the
development and/or preparation of all reports and communications by the
Trust to shareholders of the Trust and all reports and filings necessary to
maintain the registrations and qualifications of the Trust's shares under
federal securities law.
1.2.11. SHAREHOLDER INQUIRIES. Respond to all inquiries from
shareholders of the Trust or otherwise answer communications from
shareholders if such inquiries or communications are directed to the
Investment Manager. If any such inquiry or communication would be more
properly answered by one of the agents listed in
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Subparagraph 1.2.3. above, the Investment Manager shall coordinate, as
needed, the provision of their response.
2. ALLOCATION OF EXPENSES.
2.1. EXPENSES PAID BY THE INVESTMENT MANAGER.
2.1.1. IN GENERAL. The Investment Manager shall bear all of its
own expenses in connection with the performance of its duties under this
Agreement.
2.1.2. SALARIES AND FEES OF PARTNERS. The Investment Manager
shall pay all salaries, expenses, and fees, if any, of the partners and
employees of the Investment Manager who are trustees, officers or employees
of the Trust.
2.1.3. WAIVER OR ASSUMPTION AND REIMBURSEMENT OF TRUST EXPENSES BY
THE INVESTMENT MANAGER. The waiver or assumption and reimbursement by the
Investment Manager of any expense of the Trust that the Investment Manager
is not required by this Agreement to waive, or assume or reimburse, shall
not obligate the Investment Manager to waive, assume, or reimburse the same
or any similar expense of the Trust on any subsequent occasion, unless so
required pursuant to a separate agreement between the Trust and the
Investment Manager.
2.2. EXPENSES PAID BY THE TRUST. The Trust shall bear all expenses of its
organization, operation, and business not specifically waived, assumed, or
agreed to be paid by the Investment Manager as provided in this Agreement or any
other agreement between the Trust and the Investment Manager, and as described
in the Trust's current Prospectus(es) and SAI(s).
3. FEES.
3.1. COMPENSATION RATE. The Trust on behalf of each Fund shall
pay the Investment Manager, as compensation for all services rendered,
facilities provided, and expenses waived or assumed and reimbursed by
the Investment Manager pursuant to this Agreement, annual fees as specified
on Schedule A hereto.
3.2. METHOD OF COMPUTATION. The fees shall accrue on each calendar
day and the sum of the daily fee accruals for each Fund shall be paid
monthly to the Investment Manager on the first business day of the next
calendar month. The daily fee accruals shall be computed by multiplying
the fraction of one over the number of calendar days in the year by the
applicable annual rates for the applicable Fund, described in
Subparagraph 3.1. above, and multiplying the product by the net assets
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of the Fund in accordance with the Trust's current Prospectus as of the
close of business on the last preceding business day on which the Fund was
open for business.
3.3. PRORATION OF FEE. If this Agreement becomes effective or
terminates before the end of any month, the fee for the period from the
effective date to the end of such month or from the beginning of such month
to the date of termination, as the case may be, shall be prorated according
to the proportion which such period bears to the full month in which such
effectiveness or termination occurs.
3.4. LIMITATION OF FEE. In the event the expenses of a Fund
(including the fees of the Investment Manager and amortization of
organization expenses but excluding interest, taxes, brokerage commissions,
extraordinary expenses and sales charges and distribution fees) for any
fiscal year exceed the limits set by applicable regulations of state
securities commissions, the Investment Manager shall reduce its fee by the
amount of such excess. Any such reductions are subject to readjustment
during the year. The payment of the investment management fee at the end
of any month shall be reduced or postponed or, if necessary, a refund shall
be made to the Fund so that at no time shall there be any accrued but
unpaid liability under this expense limitation.
4. BROKERAGE.
Subject to seeking best execution, and subject to any policies or
procedures as then approved by the Board of Trustees of the Trust, the
Investment Manager, in carrying out its duties under Subparagraph 1.1. above,
may cause a Fund to pay a broker-dealer that furnishes brokerage or research
services (as such services are defined under Section 28(e) of the Securities
Exchange Act of 1934, as amended (the "1934 Act")) a higher commission than that
which might be charged by another broker-dealer that does not furnish brokerage
or research services or that furnishes brokerage or research services deemed to
be of lesser value, if the Investment Manager determines in good faith that the
amount of such commission is reasonable in relation to the value of the
brokerage and research services provided by the broker-dealer viewed in terms of
either that particular transaction or the overall responsibilities of the
Investment Manager with respect to other accounts, if any, as to which it
exercises investment discretion (as such term is defined under Section 3(a)(35)
of the 1934 Act). To demonstrate that such determinations were in good faith,
and to show the overall reasonableness of commissions paid, the Investment
Manager shall be prepared to show that commissions paid: (i) were for purposes
contemplated by this Agreement; (ii) provide lawful and appropriate assistance
to the Investment Manager in the performance of its decision-making
responsibilities; and (iii) were within a reasonable range as compared to the
rates charged by qualified brokers to other institutional investors as such
rates may become known from available information. The Trust recognizes that,
on any particular transaction, a higher than usual commission may be paid due to
the difficulty of the transaction in question. The Investment Manager is also
authorized to consider sales of
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shares as a factor in the selection of brokers to execute brokerage and
principal transactions, subject to the requirements of "best execution."
5. INVESTMENT MANAGER'S USE OF THE SERVICES OF OTHERS.
The Investment Manager may at its own cost (except as contemplated by
Paragraph 4 above) employ, retain, or otherwise avail itself of the services or
facilities of other persons or organizations for the purpose of providing the
Investment Manager or the Trust with such (i) statistical and other factual
information, (ii) advice regarding economic factors and trends, (iii) advice as
to occasional transactions in specific securities, or (iv) other information,
advice, or assistance as the Investment Manager may deem necessary, appropriate,
or convenient for the discharge of its obligations hereunder or otherwise
helpful to the Investment Manager or the Trust, or in the discharge of the
Investment Manager's overall responsibilities with respect to any accounts, if
any, for which it serves as investment manager.
6. OWNERSHIP AND CONFIDENTIALITY OF RECORDS.
All records required to be maintained and preserved by the Trust, pursuant
to the provisions of rules or regulations of the Securities and Exchange
Commission under Section 31(a) of the 1940 Act and maintained and preserved by
the Investment Manager on behalf of the Trust are the property of the Trust and
shall be surrendered by the Investment Manager promptly on request by the Trust.
The Investment Manager shall not disclose or use any records or information
obtained pursuant to this Agreement in any manner whatsoever except as expressly
authorized by this Agreement and applicable law. The Investment Manager shall
keep confidential any information obtained in connection with their duties
hereunder and shall disclose such information only if the Trust has authorized
such disclosure or if such disclosure is expressly required by applicable law or
federal or state regulatory authorities.
7. REPORTS TO THE INVESTMENT MANAGER.
The Trust shall furnish or otherwise make available to the Investment
Manager such Prospectuses, Statements of Additional Information, financial
statements, proxy statements, reports, and other information relating to the
business and affairs of the Trust, as the Investment Manager may, at any time or
from time to time, reasonably require in order to discharge its obligations
under this Agreement.
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8. SERVICES TO OTHER CLIENTS.
Nothing herein contained shall limit the freedom of the Investment Manager
or any affiliated person of the Investment Manager to render investment
management and/or administrative services to other investment companies
(including but not limited to one or more series of the Trust), to act as
investment adviser or investment counselor to other persons, firms, or
corporations, or to engage in other business activities; however, so long as
this Agreement or any extension, renewal, or amendment hereof shall remain in
effect or until the Investment Manager shall otherwise consent, the Investment
Manager shall be the only investment manager to the Trust.
9. LIMITATION OF LIABILITY OF THE INVESTMENT MANAGER AND INDEMNIFICATION BY
THE TRUST.
9.1. LIMITATION OF LIABILITY.
9.1.1. Neither the Investment Manager nor any of its partners,
employees or agents performing services for the Trust, at the direction
or request of the Investment Manager in connection with the Investment
Manager's discharge of its obligations undertaken or reasonably assumed
with respect to this Agreement, shall be liable for any act or omission
in the course of or in connection with the Investment Manager's services
hereunder, including any error of judgment or mistake of law or for any
loss suffered by the Trust, in connection with the matters to which this
Agreement relates; PROVIDED, that nothing herein contained shall be
construed to protect the Investment Manager or any such person against any
liability to the Trust or its shareholders to which the Investment Manager
or such person would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance of its or their duties on
behalf of the Trust.
9.1.2. The Investment Manager may apply to the Board of Trustees of
the Trust at any time for instructions and may consult counsel for the
Trust or its own counsel and consult with accountants and other experts
with respect to any matter arising in connection with the Investment
Manager's duties, and the Investment Manager shall not be liable or
accountable for any action taken or omitted by it in good faith in
accordance with such instruction or with the opinion of such counsel,
accountants, or other experts.
9.2. INDEMNIFICATION BY THE TRUST.
9.2.1. As long as the Investment Manager acts in good faith and
with due diligence and without gross negligence, the Trust shall
indemnify the Investment Manager and hold it harmless from and against any
and all actions, suits, and claims, whether groundless or otherwise, and
from and against any and all losses, damages, costs, charges, reasonable
counsel fees and disbursements, payments, expenses, and
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liabilities (including reasonable investigation expenses) arising directly
or indirectly out of the services rendered to the Trust hereunder. The
indemnity and defense provisions set forth herein shall indefinitely
survive the termination of this Agreement.
9.2.2. The rights hereunder shall include the right to
reasonable advances of defense expenses in the event of any pending or
threatened litigation with respect to which indemnification hereunder may
ultimately be merited. In order that the indemnification provision
contained herein shall apply, however, it is understood that if in any case
the Trust may be asked to indemnify or hold the Investment Manager
harmless, the Board of Trustees of the Trust shall be fully and promptly
advised of all pertinent facts concerning the situation in question, and it
is further understood that the Investment Manager shall use all reasonable
care to identify and notify the Board of Trustees of the Trust promptly
concerning any situation which presents or appears likely to present the
probability of such a claim for indemnification against the Trust, but
failure to do so in good faith shall not affect the rights hereunder.
10. INDEMNIFICATION BY THE INVESTMENT MANAGER.
10.1. The Investment Manager shall indemnify the Trust and its officers
and trustees, and hold them harmless from and against any and all actions,
suits, and claims, whether groundless or otherwise, and from and against any
and all losses, damages, costs, charges, reasonable counsel fees and
disbursements, payments, expenses, and liabilities (including reasonable
investigation expenses) arising directly or indirectly out of any service
rendered to the Trust hereunder and arising or based upon the willful
misfeasance, bad faith, or gross negligence of the Investment Manager, its
partners, employees, and agents in the performance of its or their duties on
behalf of the Trust. The indemnity and defense provisions set forth herein
shall indefinitely survive the termination of this Agreement.
10.2. The rights hereunder shall include the right to reasonable
advances of defense expenses in the event of any pending or threatened
litigation with respect to which indemnification hereunder may ultimately be
merited. In order that the indemnification provision contained herein shall
apply, however, it is understood that if in any case the Investment Manager may
be asked to indemnify or hold the Trust and its officers and trustees harmless,
the Investment Manager shall be fully and promptly advised of all pertinent
facts concerning the situation in question, and it is further understood that
the Trust shall use all reasonable care to identify and notify the Investment
Manager promptly concerning any situation which presents or appears likely to
present the probability of such a claim for indemnification against the
Investment Manager, but failure to do so in good faith shall not affect the
rights hereunder.
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11. TERM OF AGREEMENT.
The term of this Agreement shall begin on the day and year first above
written, and unless sooner terminated as hereinafter provided, shall continue in
effect for a period of one year. Thereafter, this Agreement shall continue in
effect from year to year, subject to the termination provisions and all other
terms and conditions hereof; PROVIDED, that such continuance is specifically
approved at least annually by the Board of Trustees of the Trust or by vote of a
majority of the outstanding voting securities of the Funds in accordance with
the requirements of the 1940 Act; and PROVIDED FURTHER, that in either event
such continuance also is approved annually by the vote, cast in person at a
meeting called for the purpose of voting on such approval, of a majority of the
Board of Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party (hereinafter "non-interested Trustees").
Any approval of this Agreement by the holders of a majority of the outstanding
voting securities of a Fund shall be effective to continue this Agreement,
notwithstanding the fact that (i) a comparable agreement has not been approved
by the holders of a majority of the outstanding shares of any other series of
the Trust and (ii) this Agreement has not been approved by the vote of a
majority of the outstanding shares of the Trust, unless such approval shall be
required by any other applicable law or otherwise. The Investment Manager shall
furnish to the Trust, promptly upon its request, such information as may be
reasonably necessary to evaluate the terms of this Agreement or any extension,
renewal or amendment thereof.
12. AMENDMENT AND ASSIGNMENT OF AGREEMENT.
Any amendment to this Agreement shall be in writing and signed by the
parties hereto; PROVIDED, that no material amendment shall be effective unless
authorized by resolution of the Board of Trustees of the Trust or by a majority
of the outstanding voting securities of the Funds, or, in the case of an
amendment to this Agreement with respect to a particular Fund, by a resolution
of the Board of Trustees of the Trust and/or a vote of a majority of the
outstanding voting securities of such Fund, as required by applicable law. An
amendment to this Agreement with respect to a particular Fund shall include
without limitation adding a Fund to, or deleting a Fund from, Schedule A hereto,
and adding a fee schedule for a Fund on Schedule A, or modifying or deleting
such fee schedule.
13. TERMINATION OF AGREEMENT.
This Agreement may be terminated by either party hereto, without the
payment of any penalty, upon sixty (60) days' prior written notice to the other
party; PROVIDED, that in the case of termination by the Trust such action shall
have been authorized by (i) resolution of the Board of Trustees of the Trust,
including a majority of the non-interested Trustees, or (ii) a majority of the
outstanding voting securities of the Funds. In the case of termination by the
Trust with respect to a particular Fund, such action shall have been
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authorized by (i) resolution of the Board of Trustees of the Trust, including a
majority of the non-interested Trustees, or (ii) a majority of the outstanding
voting securities of such Fund. In the case of termination by the Investment
Manager, such termination shall not be effective until the Trust shall have
contracted with one or more persons to serve as successor investment manager
for the Trust and such person(s) shall have assumed such position.
14. MISCELLANEOUS.
14.1. NOTICES. Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed postpaid, (i) if to the Investment
Manager, to Holland Capital Management, L.P., Suite 3260, 00 Xxxx Xxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000, Attention: Xx. Xxxxx X. Xxxxxxx, and (ii) if to the
Trust, to The Holland Trust, Suite 3260, 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000, Attention: Xx. Xxxxx X. Xxxxxxx.
14.2. CAPTIONS. The captions contained in this Agreement are included
for convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
14.3. INTERPRETATION. Nothing herein contained shall be deemed to
require the Trust to take any action contrary to its Declaration of Trust or By-
Laws, or any applicable statutory or regulatory requirement to which it is
subject or by which it is bound, or to relieve or deprive the Board of Trustees
of the Trust of its responsibility for and control of the conduct of the affairs
of the Trust.
14.4. DEFINITIONS. Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise derived from a
term or provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretations thereof, if any, by the United
States courts or, in the absence of any controlling decision of any such court
by rules, regulations, or orders of the Securities and Exchange Commission
validly issued pursuant to the 1940 Act. In addition, where the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement is
relaxed by a rule, regulation, or order of the Securities and Exchange
Commission, whether of special or of general application, such provision shall
be deemed to incorporate the effect of such rule, regulation, or order.
14.5. SEVERABILITY. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule, or otherwise, the remainder
of this Agreement shall not be affected thereby.
14.6. GOVERNING LAW. Except insofar as the 1940 Act or other federal
laws and regulations may be controlling, this Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the State of
Illinois.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
ATTEST: THE HOLLAND TRUST
_________________________ By: _____________________________________________
Name: Xxxxx X. Xxxxxxx
Title: President and Chairman of the Board of
Trustees
ATTEST: HOLLAND CAPITAL MANAGEMENT, L.P.
_________________________ By: _____________________________________________
Name: Xxxxx X. Xxxxxxx
Title: Managing Partner and Chief Investment
Officer
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SCHEDULE A
SERIES OF THE HOLLAND TRUST AND SCHEDULE OF FEES
The Growth Fund
.85% of the average daily net assets up to $500 million
.75% of the average daily net assets up to the next $500 million
.65% of the average daily net assets in excess of $1 billion
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