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Ex-99 .5
MANAGEMENT AGREEMENT
AGREEMENT made this loth day of August, 1987, by and between
XXXXXXX XXXXX STRATEGIC DIVIDEND FUND, a Massachusetts business
trust (hereinafter referred to as the "Fund"), and XXXXXXX XXXXX
ASSET MANAGEMENT, INC., a Delaware corporation (hereinafter
referred to as the "Manager").
W I T N E S S E T H:
WHEREAS, the Fund is engaged in business as a diversified
open-end investment company registered under the Investment
Company Act of 1940, as amended (hereinafter referred to as the
"Investment Company Act"); and
WHEREAS, the Manager is engaged principally in rendering
management and investment advisory services and is registered as
an investment adviser under the Investment Adviser's Act of 1940;
and
WHEREAS, the Fund's assets will be invested primarily in a
diversified portfolio of dividend-paying common stocks which
yield more than the Standard & Poor's 500 Composite Stock Price
Index; and
WHEREAS, the Fund desires to retain the Manager to provide
management and investment advisory services to the Fund in the
manner and on the terms hereinafter set forth; and
WHEREAS, the Manager is willing to provide management and
investment advisory services to the Fund on the terms and
conditions hereinafter set forth;
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NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained, the Fund and the Manager hereby
agree as follows:
ARTICLE I
Duties of the Manager
The Fund hereby employs the Manager to act as a manager and
investment adviser of the Fund and to furnish, or arrange for
affiliates to furnish, the management and investment advisory
services described below, subject to the polices of, review by
and overall control of the Board of Trustees of the Fund, for the
period and on the terms and conditions set forth in this
Agreement. The Manager hereby accepts such employment and agrees
during such period, at its own expense, to render, or arrange for
the rendering of, such services and to assume the obligations
herein set forth for the compensation provided for herein. The
Manager and its affiliates shall for all purposes herein be
deemed to be independent contractors and shall, unless other-wise
expressly provided or authorized, have no authority to act for or
represent the Fund in any way or otherwise be deemed agents of
the Fund.
(a) Management Services. The Manager shall perform (or
arrange for the performance by affiliates of) the management and
administrative services necessary for the operation of the Fund
including administering shareholder accounts and handling
shareholder relations. The Manager shall provide the Fund with
office space, facilities, equipment and necessary personnel and
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such other services as the Manager, subject to review by the
Trustees, shall from time to time determine to be necessary or
useful to perform its obligations under this Agreement. The
Manager shall also, on behalf of the Fund, conduct relations with
custodians, depositories, transfer agents, dividend disbursing
agents, other 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. The Manager
shall generally monitor the Fund's compliance with investment
policies and restrictions as set forth in the currently effective
prospectus and statement of additional information relating to
the shares of the Fund under the Securities Act of 1933, as
amended (the "Prospectus" and "Statement of Additional
Information", respectively). The Manager shall make reports to
the Trustees of its performance of obligations hereunder and
furnish advice and recommendations with respect to such other
aspects of the business and affairs of the Fund as it shall
determine to be desirable.
(b) Investment Advisory Services. The Manager shall
provide the Fund with such investment research, advice and
supervision as the latter may from time to time consider
necessary for the proper supervision of the assets of the Fund,
shall furnish continuously an investment program for the Fund and
shall determine from time to time which securities shall be
purchased, sold or exchanged and what portion of the assets of
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the Fund shall be held in the various securities in which the
Fund invests or cash, subject always to the restrictions of the
Declaration of Trust and By-Laws of the Fund, as amended from
time to time, the provisions of the Investment Company Act and
the statements relating to the Fund's investment objectives,
investment policies and investment restrictions as the same are
set forth in the Prospectus and Statement of Additional
Information. The Manager shall make decisions for the Fund as to
foreign currency matters and make determinations as to foreign
exchange contracts. The Manager shall make decisions for the
Fund 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 Trustees at
any time, however, make any definite determination as to
investment policy 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
portfolio securities for the Fund's account with brokers or
dealers selected by it, and to that end, the Manager is
authorized as the agent of the Fund to give instructions to the
Custodian of the Fund as to deliveries of securities and payments
of cash for the account of the Fund. In connection with the
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selection of such brokers or dealers and the placing of such
orders with respect to assets of the Fund, the Manager is
directed at all times to seek to obtain execution and prices
within the policy guidelines determined by the Trustees and set
forth in the Prospectus and Statement of Additional Information.
Subject to this requirement and the provisions of the Investment
Company Act, the Securities Exchange Act of 1934, as amended, and
other applicable provisions of law, the Manager may select
brokers or dealers with which it or the Fund is affiliated.
ARTICLE II
Allocation of Charges and Expenses
(a) The Manager. the Manager assumes and shall pay for
maintaining the staff and personnel necessary to perform its
obligations under this Agreement, and shall at its own expense,
provide the office space, facilities, equipment and necessary
personnel which it is obligated to provide under Article I
hereof, and shall pay all compensation of officers of the Fund
and all trustees of the Fund who are affiliated persons of the
Manager.
(b) The Fund. The Fund assumes and shall pay or cause to
be paid all other expenses of the Fund (except for the expenses
paid by the Distributor), including, without limitation: taxes,
expenses for legal and auditing services, costs of printing
proxies, stock certificates, shareholder reports, prospectuses
and statements of additional information, charges of the
Custodian, any Sub-Custodian and Transfer Agent, expenses of
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portfolio transactions expenses of redemption of shares,
Securities and Exchange Commission fees, expenses of registering
the shares under Federal, state and foreign laws, fees and actual
out-of-pocket expenses of trustees who are not affiliated persons
of the Manager, accounting and pricing costs (including the daily
calculation of the net asset value), insurance, interest,
brokerage costs, litigation and other extraordinary or non-
recurring expenses, and other expenses properly payable by the
Fund. It is also understood that the Fund will reimburse the
Manager for its costs in providing accounting services to the
Fund. The Distributor will pay certain of the expenses of the
Fund incurred in connection with the continuous offering of
beneficial shares of interest in the Fund.
ARTICLE III
Compensation of the Manager
(a) Management and Investrent Advisory Fee. For the
services rendered, the facilities furnished and expenses assume
by the Manager, the Fund shall pay to the Manager at the end of
each calendar month a fee based upon the average daily value of
the net assets of the Fund, as determined and computed in
accordance with the description of the determination of net asset
value contained in the Prospectus and Statement of Additional
Information, at the annual rate of 0.60 of 1.0% (0.60%) of the
average daily net assets of the Fund, commencing on the day
following effectiveness hereof. If this Agreement becomes
effective subsequent to the first day of a month or shall
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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 fee as set
forth above. Subject to the provisions of subsection (b) hereof,
payment of the Manager's compensation for the preceding month
shall be made as promptly as possible after completion of the
computations contemplated by subsection (b) hereof. During any
period when the determination of net asset value is suspended by
the Trustees, the net asset value of a share as of the last
business day prior to such suspension shall for this purpose be
deemed to be the net asset value at the close of each succeeding
business day until it is again determined.
(b) Expense Limitations. In the event the operating
expenses of the Fund, including amounts payable to the Manager
pursuant to subsection (a) hereof, for any fiscal year ending an
a date on which this Agreement is in effect exceed the expense
limitations applicable to the Fund imposed by applicable state
securities laws or regulations thereunder, as such limitations
may be raised or lowered from time to time, the Manager shall
reduce its management fee by the extent of such excess and, if
required pursuant to any such laws or regulations, will reimburse
the Fund in the amount of such excess; provided, however, to the
extent permitted by law, there shall be excluded from such
expenses the amount of any interest, taxes, brokerage fees and
commissions, distribution fees and extraordinary expenses
(including but not limited to legal claims and liabilities and
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litigation costs and any indemnification related thereto) paid or
payable by the Fund. Whenever the expenses of the Fund exceed a
pro rata portion of the applicable annual expense limitations,
the estimated amount of reimbursement under such limitations
shall be applicable as an offset against the monthly payment of
the fee due to the Manager. Should two or more such expenses
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 Manager's fee shall be applicable.
ARTICLE IV
Limitation of Liability of the Manager
The Manager 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 management of 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 Article
IV, the term "Manager" shall include any affiliates of the
Manager performing services for the Fund contemplated hereby and
directors, officers and employees of the Manager and such
affiliates.
ARTICLE V
Activities of the Manager
The services of the Manager to the Fund are not to be deemed
to be exclusive, the Manager and any person controlled by or
under common control with the Manager (for purposes of the
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Article V referred to as "affiliates") is free to render services
to others. it is understood that Trustees, officers, employees
and shareholders of the Fund are or may become interested in the
Manager and its affiliates, as directors, officers, employees,
partners, and shareholders or otherwise and that directors,
officers, employees, partners, and shareholders of the Manager
and its affiliates are or may become similarly interested in the
Fund, and that the Manager and directors, officers, employees,
partners, and shareholders of its affiliates may become
interested in the Fund as shareholder or otherwise.
ARTICLE VI
Duration and Termination of this Agreement
This Agreement shall become effective as of the date first
above written and shall remain in force until May 31, 1989 and
thereafter, but only so long as such continuance is specifically
approved at least annually by (i) the Trustees, or by the vote of
a majority of the outstanding voting securities of the Fund, and
(ii) a majority of those Trustees who are not parties to this
Agreement or interested persons of any such party cast in person
at a meeting called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the
payment of any penalty, by the Trustees or by vote of a majority
of the outstanding voting securities of the Fund, or by the
manager, on sixty days' written notice to the other party. This
Agreement shall automatically terminate in the event of its
assignment.
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ARTICLE VII
Amendments of this Agreement
This Agreement may be amended by the parties only if such
amendment is specifically approved by (i) the vote of a majority
of outstanding voting securities of the Fund, and (ii) a majority
of those Trustees who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting
called for the purpose of voting on such approval.
ARTICLE VIII
Definitions of Certain Terms
The terms "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 the Investment Company Act of 1940 and the
Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange
Commission under said Act.
ARTICLE IX
Governing Law
This Agreement shall be construed in accordance with laws of
the State of New York and the applicable provisions of the
investment Company Act. To the extent that the applicable laws
of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the Investment Company
Act, the latter shall control.
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ARTICLE X
Personal Liability
The Declaration of Trust establishing Xxxxxxx Xxxxx
Strategic Dividend Fund, dated May 14, 1987, a copy of which,
together with all amendments thereto (the "Declaration"), is on
file in the office of the Secretary of the Commonwealth of
Massachusetts, provides that the name "Xxxxxxx Xxxxx Strategic
Dividend Fund," refers to the Trustees under the Declaration
collectively as Trustees, but not as individuals or personally;
and no Trustee, shareholder, officer, employee or agent of
Xxxxxxx Xxxxx Strategic Dividend Fund, shall be held to any
personal liability, nor shall resort be had to their private
property for the satisfaction of any obligation or claim or
otherwise in connection with the affairs of said Xxxxxxx Xxxxx
Strategic Dividend Fund, but the "Trust Property" only shall be
liable.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.
XXXXXXX XXXXX STRATEGIC DIVIDEND FUND
/s/ XXXXXX XXXXXX
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By Xxxxxx Xxxxxx
XXXXXXX XXXXX ASSET MANAGEMENT, INC.
XXXXXX X. XXXXXXXX
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By Xxxxxx Xxxxxx
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