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Ex-99 .5(a)
MANAGEMENT AGREEMENT
AGREEMENT made this 19th day of June, 1989, by and between
XXXXXXX XXXXX DEVELOPING CAPITAL MARKETS FUND, INC., a Maryland
corporation (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 non-
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 Advisers Act of 1940;
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 condi-
tions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained, the Fund and the Manager hereby
agree as follows:
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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 policies of, review by
and overall control of the Board of Directors 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 deem-
ed to be independent contractors and shall, unless otherwise
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 Manager) 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 such other services as the Manager,
subject to review by the Directors, shall from time to time
determine to be necessary or useful to perform its obligations
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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 monitor generally 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 Directors 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 pro-
vide (or arrange for affiliates to 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 the Fund shall be held in the
various securities in which the Fund invests, options, futures,
options on futures or cash, subject always to the restrictions of
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the Articles of Incorporation 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, foreign currency options, foreign currency
futures and related options on foreign currency futures. 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 Directors at any time, however,
make any definite determination as to investment policy and noti-
fy 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 selection of such brokers or dealers and
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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
Directors and set forth in the Prospectus and Statement of Addi-
tional Information. Subject to this requirement and the provi-
sions 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 here-
of, and shall pay all compensation of officers of the Fund and
all Directors 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 custo-
xxxx, any sub-custodian and transfer agent, expenses of portfolio
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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 Directors 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
shares of common stock in the Fund.
ARTICLE III
Compensation of the Manager
(a) Management and Investment Advisory Fee. For the ser-
vices rendered, the facilities furnished and expenses assumed 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 con-
tained in the Prospectus and Statement of Additional Information,
at the annual rate of 1.00% 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 terminate before the last day of a month,
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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 Directors, 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 on
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 perfor-
xxxxx 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 direc-
tors, 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 this
Article V referred to as "affiliates") is free to render services
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to others. It is understood that Directors, 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, 1991 and
thereafter, but only so long as such continuance is specifically
approved at least annually by (i) the Directors, or by the vote
of a majority of the outstanding voting securities of the Fund,
and (ii) a majority of those Directors 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 Directors or by vote of a majority
of the outstanding voting securities of the Fund, or by the Mana-
ger, 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 Directors 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
person", 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, con-
flict with the applicable provisions of the Investment Company
Act, the latter shall control.
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IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.
XXXXXXX XXXXX DEVELOPING CAPITAL MARKETS
FUND, INC.
By/s/ Xxxxxx X. Xxxxxxx
XXXXXXX XXXXX ASSET MANAGEMENT, INC.
By /s/ Xxxx X. Xxxxxxx
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