Exhibit 5(a)
FORM OF MANAGEMENT AGREEMENT
VARIABLE ANNUITY PORTFOLIOS
[Name of Series]
MANAGEMENT AGREEMENT, dated as of __________ __, 1996, by and between
Variable Annuity Portfolios, a Massachusetts trust (the "Trust"), and Citibank,
N.A., a national banking association ("Citibank" or the "Manager").
W I T N E S S E T H:
WHEREAS, the Trust engages in business as an open-end management
investment company and is registered as such under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act"), and
WHEREAS, the Trust wishes to engage Citibank to provide certain investment
advisory and administrative services for the series of the Trust designated as
[Name of Series] (the "Fund"), and Citibank is willing to provide such
investment advisory and administrative services for the Fund on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Duties of Citibank. (a) Citibank shall act as the Manager for the Fund
and as such shall furnish continuously an investment program and shall
determine from time to time what securities shall be purchased, sold or
exchanged and what portion of the assets of the Fund shall be held uninvested,
subject always to the restrictions of the Trust's Declaration of Trust, dated
October 18, 1996, and By-laws, as each may be amended and restated from time to
time (respectively, the "Declaration" and the "By-Laws"), the provisions of the
1940 Act, and the then-current Registration Statement of the Trust with respect
to the Fund. The Manager shall also make recommendations as to the manner in
which voting rights, rights to consent to corporate action and any other rights
pertaining to the Fund's portfolio securities shall be exercised. Should the
Board of Trustees of the Trust at any time, however, make any definite
determination as to investment policy applicable to the Fund and notify the
Manager thereof in writing, the Manager shall be bound by such determination
for the period, if any, specified
in such notice or until similarly notified that such determination has
been revoked. The Manager shall take, on behalf of the Fund, all actions which
it deems necessary to implement the investment policies determined as provided
above, and in particular to place all orders for the purchase or sale of
securities for the Fund's account with the brokers or dealers selected by it,
and to that end the Manager is authorized as the agent of the Trust to give
instructions to the custodian or any subcustodian of the Fund as to deliveries
of securities and payments of cash for the account of the Fund. In connection
with the selection of such brokers or dealers and the placing of such orders,
brokers or dealers may be selected who also provide brokerage and research
services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) to the Fund and/or the other accounts over which the
Manager or its affiliates exercise investment discretion. The Manager is
authorized to pay a broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction for the Fund which
is 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 is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer. This
determination may be viewed in terms of either that particular transaction or
the overall responsibilities which the Manager and its affiliates have with
respect to accounts over which they exercise investment discretion. The
Trustees of the Trust shall periodically review the commissions paid by the
Fund to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits to the Fund. In making purchases or
sales of securities or other property for the account of the Fund, the Manager
may deal with itself or with the Trustees of the Trust or the Trust's
underwriter or distributor, to the extent such actions are permitted by the
1940 Act. In providing the services and assuming the obligations set forth
herein, the Manager may, at its own expense, employ one or more subadvisers;
provided that the Manager shall supervise the activities of each subadviser.
Any agreement between the Manager and a subadviser shall be subject to the
renewal, termination and amendment provisions applicable to this Agreement.
(b) Subject to the direction and control of the Board of Trustees of the
Trust, Citibank shall perform such administrative and management services as
may from time to time be reasonably requested by the Trust, which shall include
without limitation: (a) providing office space, equipment and clerical
personnel necessary for maintaining the organization of the Trust and for
performing the administrative and management functions herein set forth; (b)
supervising the overall administration of the Trust, including negotiation of
contracts and fees
with and the monitoring of performance and xxxxxxxx of the Trust's
transfer agent, custodian and other independent contractors or agents; (c)
preparing and, if applicable, filing all documents required for compliance by
the Trust with applicable laws and regulations, including registration
statements, prospectuses and statements of additional information, semi-annual
and annual reports to shareholders, proxy statements and tax returns; (d)
preparation of agendas and supporting documents for and minutes of meetings of
Trustees, committees of Trustees and shareholders; and (e) arranging for
maintenance of books and records of the Trust. Notwithstanding the foregoing,
Citibank shall not be deemed to have assumed any duties with respect to, and
shall not be responsible for, the distribution of shares of beneficial interest
in the Fund, nor shall Citibank be deemed to have assumed or have any
responsibility with respect to functions specifically assumed by any transfer
agent, fund accounting agent or custodian of the Trust or the Fund. In
providing administrative and management services as set forth herein, Citibank
may, at its own expense, employ one or more subadministrators; provided that
Citibank shall remain fully responsible for the performance of all
administrative and management duties set forth herein and shall supervise the
activities of each subadministrator.
2. Allocation of Charges and Expenses. Citibank shall furnish at its own
expense all necessary services, facilities and personnel in connection with its
responsibilities under Section 1 above. Except as provided in the foregoing
sentence, it is understood that the Trust will pay from the assets of the Fund
all of its own expenses allocable to the Fund including, without limitation,
organization costs of the Fund; compensation of Trustees who are not
"interested persons" of the Trust; governmental fees; interest charges; loan
commitment fees; taxes; membership dues in industry associations allocable to
the Trust; fees and expenses of independent auditors, legal counsel and any
transfer agent, distributor, registrar or dividend disbursing agent of the
Trust; expenses of issuing and redeeming shares of beneficial interest and
servicing shareholder accounts; expenses of preparing, typesetting, printing
and mailing prospectuses, statements of additional information, shareholder
reports, notices, proxy statements and reports to governmental officers and
commissions and to existing shareholders of the Fund; expenses connected with
the execution, recording and settlement of security transactions; insurance
premiums; fees and expenses of the custodian for all services to the Fund,
including safekeeping of funds and securities and maintaining required books
and accounts; expenses of calculating the net asset value of the Fund
(including but not limited to the fees of
independent pricing services); expenses of meetings of the Fund's shareholders;
expenses relating to the issuance, registration and qualification of shares of
the Fund; and such non-recurring or extraordinary expenses as may arise,
including those relating to actions, suits or proceedings to which the Trust on
behalf of the Fund may be a party and the legal obligation which the Trust may
have to indemnify its Trustees and officers with respect thereto.
3. Compensation of Citibank. For the services to be rendered and the
facilities to be provided by Citibank hereunder, the Trust shall pay to
Citibank from the assets of the Fund a management fee computed daily and paid
monthly at an annual rate equal to 0.75% of the Fund's average daily net assets
for the Fund's then-current fiscal year. If Citibank provides services
hereunder for less than the whole of any period specified in this Section 3,
the compensation to Citibank shall be accordingly adjusted and prorated.
4. Covenants of Citibank. Citibank agrees that it will not deal with
itself, or with the Trustees of the Trust or the Trust's principal underwriter
or distributor, as principals in making purchases or sales of securities or
other property for the account of the Fund, except as permitted by the 1940
Act, will not take a long or short position in shares of the Fund except as
permitted by the Declaration, and will comply with all other provisions of the
Declaration, the Trust's By-Laws, as in effect from time to time and the
then-current Registration Statement applicable to the Fund relative to Citibank
and its directors and officers.
5. Limitation of Liability of Citibank. Citibank shall not be liable for
any error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in the execution of securities
transactions for the Fund, except for willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of reckless disregard
of its obligations and duties hereunder. As used in this Section 5, the term
"Citibank" shall include directors, officers and employees of Citibank as well
as Citibank itself.
6. Activities of Citibank. The services of Citibank to the Fund are not to
be deemed to be exclusive, Citibank being free to render investment advisory,
administrative and/or other services to others. It is understood that Trustees,
officers, and shareholders of the Trust are or may be or may become interested
in Citibank, as directors, officers, employees, or otherwise and that
directors, officers and employees of Citibank are or may become similarly
interested in the Trust and that Citibank may be or may become interested in
the Trust as a shareholder or otherwise.
7. Duration, Termination and Amendments of this Agreement. This Agreement
shall become effective as of the day and year first above written, shall govern
the relations between the parties hereto thereafter and shall remain in force
until __________ __, 1998, on which date it will terminate unless its
continuance after __________ __, 1998 is "specifically approved at least
annually" (a) by the vote of a majority of the Trustees of the Trust who are
not "interested persons" of the Trust or of Citibank at a meeting specifically
called for the purpose of voting on such approval, and (b) by the Board of
Trustees of the Trust or by "vote of a majority of the outstanding voting
securities" of the Fund.
This Agreement may be terminated at any time without the payment of any
penalty by the Trustees or by the "vote of a majority of the outstanding voting
securities" of the Fund, or by Citibank, in each case on not more than 60 days'
nor less than 30 days' written notice to the other party. This Agreement shall
automatically terminate in the event of its "assignment."
This Agreement may be amended only if such amendment is approved by the
"vote of a majority of the outstanding voting securities" of the Fund (except
for any such amendment as may be effected in the absence of such approval
without violating the 1940 Act).
The terms "specifically approved at least annually," "vote of a majority
of the outstanding voting securities," "assignment," "affiliated person," and
"interested persons," when used in this Agreement, shall have the respective
meanings specified in, and shall be construed in a manner consistent with, the
1940 Act, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
Each party acknowledges and agrees that all obligations of the Trust under
this Agreement are binding only with respect to the Fund; that any liability of
the Trust under this Agreement, or in connection with the transactions
contemplated herein, shall be discharged only out of the assets of the Fund;
and that no other series of the Trust shall be liable with respect to this
Agreement or in connection with the transactions contemplated herein.
The undersigned officer of the Trust has executed this Agreement not
individually, but as an officer under the Declaration and the obligations of
this Agreement are not binding upon any of the Trustees, officers or
shareholders of the Trust individually.
8. Governing Law. This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of The Commonwealth
of Massachusetts.
9. Use of Name. (a) The Trust hereby acknowledges that any and all rights
in or to the names "CitiSelect" and "CitiSelect Folios" which exist on the date
of this Agreement or which may arise hereafter are, and under any and all
circumstances shall continue to be, the sole property of Citibank; that
Citibank may assign any or all of such rights to another party or parties
without the consent of the Trust; and that Citibank may permit other parties,
including other investment companies, to use the word "CitiSelect" or the words
"CitiSelect Folios" in their names. If Citibank, or its assignee as the case
may be, ceases to serve as the adviser to the Trust, the Trust hereby agrees to
take promptly any and all actions which are necessary or desirable to change
its name so as to delete the word "CitiSelect" or the words "CitiSelect
Folios."
(b) The Trust hereby acknowledges that any and all rights in or to the
names "Landmark" and "Landmark Funds" which exist on the date of this Agreement
or which may arise hereafter are, and under any and all circumstances shall
continue to be, the sole property of The Landmark Funds Broker-Dealer Services,
Inc. ("LFBDS"); that LFBDS may assign any or all of such rights to another
party or parties without the consent of the Trust; and that LFBDS may permit
other parties, including other investment companies, to use the word "Landmark"
or the words "Landmark Funds" in their names. If LFBDS, or its assignee as the
case may be, ceases to serve as the distributor of shares of the Trust, the
Trust hereby agrees to take promptly any and all actions which are necessary or
desirable to change its name so as to delete the word "Landmark" or the words
"Landmark Funds."
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
VARIABLE ANNUITY CITIBANK, N.A.
PORTFOLIOS
By:________________________ By:________________________
Title:_____________________ Title:_____________________
The Landmark Funds Broker-Dealer Services, Inc. joins is this Agreement for
purposes of Section 9(b) only.
THE LANDMARK FUNDS
BROKER-DEALER SERVICES, INC.
By:__________________________
Title:_______________________
