MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT ("Agreement") is made this 1st day of December,
2005, by and between Xxxxx Xxxxxx Investment Funds Inc., a Maryland
Corporation (the "Corporation") and Xxxxx Xxxxxx Fund Management LLC, a
Delaware limited liability company (the "Manager").
WHEREAS, the Corporation is registered as a management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Manager is engaged primarily in rendering investment
advisory, management and administrative services and is registered as an
investment adviser under the Investment Advisers Act of 1940, as amended;
WHEREAS, the Corporation wishes to retain the Manager to provide investment
advisory, management, and administrative services to the Corporation with
respect to the series of the Corporation designated in Schedule A annexed
hereto (the "Fund"); and
WHEREAS, the Manager is willing to furnish such services on the terms and
conditions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed as follows:
1. The Corporation hereby appoints the Manager to act as investment
adviser and administrator of the Fund for the period and on the terms set
forth in this Agreement. The Manager accepts such appointment and agrees
to render the services herein set forth, for the compensation herein
provided.
2. The Fund shall at all times keep the Manager fully informed with
regard to the securities owned by it, its funds available, or to become
available, for investment, and generally as to the condition of its affairs.
It shall furnish the Manager with such other documents and information
with regard to its affairs as the Manager may from time to time reasonably
request.
3. (a) Subject to the supervision of the Corporation's
Board of Directors (the "Board"), the Manager shall regularly provide the
Fund with investment research, advice, management and supervision and
shall furnish a continuous investment program for the Fund's portfolio
of securities and other investments consistent with the Fund's investment
objectives, policies and restrictions, as stated in the Fund's current
Prospectus and Statement of Additional Information. The Manager shall
determine from time to time what securities and other investments will
be purchased, retained, sold or exchanged by the Fund and what portion
of the assets of the Fund's portfolio will be held in the various
securities and other investments in which the Fund invests, and shall
implement those decisions, all subject to the provisions of the
Corporation's Articles of Incorporation and By-Laws (collectively, the
"Governing Documents"), the 1940 Act, and the applicable rules and
regulations promulgated thereunder by the Securities and Exchange
Commission (the "SEC") and interpretive guidance issued thereunder by
the SEC staff and any other applicable federal and state law, as well as
the investment objectives, policies and restrictions of the Fund referred
to above, and any other specific policies adopted by the Board and
disclosed to the Manager. The Manager is authorized as the agent of the
Corporation to give instructions to the custodian of the Fund as to
deliveries of securities and other investments and payments of cash for
the account of the Fund. Subject to applicable provisions of the 1940 Act
and direction from the Board, the investment program to be provided
hereunder may entail the investment of all or substantially all of the
assets of a Fund in one or more investment companies. The Manager will
place orders pursuant to its investment determinations for the Fund either
directly with the issuer or with any broker or dealer, foreign currency
dealer, futures commission merchant or others selected by it. In
connection with the selection of such brokers or dealers and the placing
of such orders, subject to applicable law, 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 Funds 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 a 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 Board may adopt policies and
procedures that modify and restrict the Manager's authority regarding
the execution of the Fund's portfolio transactions provided herein. The
Manager shall also provide advice and recommendations with respect to
other aspects of the business and affairs of the Fund, shall exercise
voting rights, rights to consent to corporate action and any other rights
pertaining to a Fund's portfolio securities subject to such direction as
the Board may provide, and shall perform such other functions of investment
management and supervision as may be directed by the Board.
(b) Subject to the direction and control of the Board, the
Manager shall perform such administrative and management services as may
from time to time be reasonably requested by the Fund as necessary for the
operation of the Fund, such as (i) supervising the overall administration
of the Fund, including negotiation of contracts and fees with and the
monitoring of performance and xxxxxxxx of the Fund's transfer agent,
shareholder servicing agents, custodian and other independent contractors
or agents, (ii) providing certain compliance, fund accounting, regulatory
reporting, and tax reporting services, (iii) preparing or participating
in the preparation of Board materials, registration statements, proxy
statements and reports and other communications to shareholders, (iv)
maintaining the Fund's existence, and (v) during such times as shares are
publicly offered, maintaining the registration and qualification of the
Fund's shares under federal and state laws. Notwithstanding the foregoing,
the Manager shall not be deemed to have assumed any duties with respect to,
and shall not be responsible for, the distribution of the shares of any
Fund, nor shall the Manager be deemed to have assumed or have any
responsibility with respect to functions specifically assumed by any
transfer agent, fund accounting agent, custodian, shareholder servicing
agent or other agent, in each case employed by the Fund to perform such
functions.
(c) The Fund hereby authorizes any entity or person associated
with the Manager which is a member of a national securities exchange to
effect any transaction on the exchange for the account of the Fund which
is permitted by Section 11(a) of the Securities Exchange Act of 1934, as
amended, and Rule 11a2-2(T) thereunder, and the Fund hereby consents to
the retention of compensation for such transactions in accordance with
Rule 11a2-2(T)(a)(2)(iv). Notwithstanding the foregoing, the Manager
agrees that it will not deal with itself, or with members of the Board
or any principal underwriter of the Fund, as principals or agents in
making purchases or sales of securities or other property for the
account of the Fund, nor will it purchase any securities from an
underwriting or selling group in which the Manager or its affiliates is
participating, or arrange for purchases and sales of securities between
a Fund and another account advised by the Manager or its affiliates,
except in each case as permitted by the 1940 Act and in accordance with
such policies and procedures as may be adopted by a Fund from time to
time, and will comply with all other provisions of the Governing
Documents and the Fund's then-current Prospectus and Statement of
Additional Information relative to the Manager and its directors and
officers.
4. Subject to the Board's approval, the Manager or the Fund may enter
into contracts with one or more investment subadvisers or subadministrators,
including without limitation, affiliates of the Manager, in which the
Manager delegates to such investment subadvisers or subadministrators any
or all its duties specified hereunder, on such terms as the Manager will
determine to be necessary, desirable or appropriate, provided that in each
case the Manager shall supervise the activities of each such subadviser or
subadministrator and further provided that such contracts impose on any
investment subadviser or subadministrator bound thereby all the conditions
to which the Manager is subject hereunder and that such contracts are
entered into in accordance with and meet all applicable requirements of
the 1940 Act.
5. (a) The Manager, at its expense, shall supply the Board and
officers of the Corporation with all information and reports reasonably
required by them and reasonably available to the Manager and shall furnish
the Fund with office facilities, including space, furniture and equipment
and all personnel reasonably necessary for the operation of the Fund. The
Manager shall oversee the maintenance of all books and records with
respect to the Fund's securities transactions and the keeping of the Fund's
books of account in accordance with all applicable federal and state laws
and regulations. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Manager hereby agrees that any records that it maintains
for the Fund are the property of the Fund, and further agrees to surrender
promptly to the Fund any of such records upon the Fund's request. The
Manager further agrees to arrange for the preservation of the records
required to be maintained by Rule 31a-1 under the 1940 Act for the periods
prescribed by Rule 31a-2 under the 1940 Act. The Manager shall authorize
and permit any of its directors, officers and employees, who may be elected
as Board members or officers of the Fund, to serve in the capacities in
which they are elected.
(b) The Manager shall bear all expenses, and shall furnish all
necessary services, facilities and personnel, in connection with its
responsibilities under this Agreement. Other than as herein specifically
indicated, the Manager shall not be responsible for the Fund's expenses,
including, without limitation, advisory fees; distribution fees; interest;
taxes; governmental fees; voluntary assessments and other expenses incurred
in connection with membership in investment company organizations;
organization costs of the Fund; the cost (including brokerage commissions,
transaction fees or charges, if any) in connection with the purchase or
sale of the Fund's securities and other investments and any losses in
connection therewith; fees and expenses of custodians, transfer agents,
registrars, independent pricing vendors or other agents; legal expenses;
loan commitment fees; expenses relating to share certificates; expenses
relating to the issuing and redemption or repurchase of the Fund's shares
and servicing shareholder accounts; expenses of registering and qualifying
the Fund's shares for sale under applicable federal and state law; expenses
of preparing, setting in print, printing and distributing prospectuses
and statements of additional information and any supplements thereto,
reports, proxy statements, notices and dividends to the Fund's
shareholders; costs of stationery; website costs; costs of meetings of
the Board or any committee thereof, meetings of shareholders and other
meetings of the Fund; Board fees; audit fees; travel expenses of officers,
members of the Board and employees of the Fund, if any; and the Fund's
pro rata portion of premiums on any fidelity bond and other insurance
covering the Fund and its officers, Board members and employees;
litigation expenses and any non-recurring or extraordinary expenses as
may arise, including, without limitation, those relating to actions,
suits or proceedings to which the Fund is a party and the legal
obligation which the Fund may have to indemnify the Fund's Board members
and officers with respect thereto.
6. No member of the Board, officer or employee of the Corporation
or Fund shall receive from the Corporation or Fund any salary or other
compensation as such member of the Board, officer or employee while he
is at the same time a director, officer, or employee of the Manager
or any affiliated company of the Manager, except as the Board may
decide. This paragraph shall not apply to Board members, executive
committee members, consultants and other persons who are not regular
members of the Manager's or any affiliated company's staff.
7. As compensation for the services performed and the facilities
furnished and expenses assumed by the Manager, including the services
of any consultants retained by the Manager, the Fund shall pay the
Manager, as promptly as possible after the last day of each month, a
fee, computed daily at an annual rate set forth opposite the Fund's
name on Schedule A annexed hereto, provided however, that if the Fund
invests all or substantially all of its assets in another registered
investment company for which the Manager or an affiliate of the
Manager serves as investment adviser or investment manager, the
annual fee computed as set forth on such Schedule A shall be reduced
by the aggregate management fees allocated to that Fund for the Fund's
then-current fiscal year from such other registered investment company.
The first payment of the fee shall be made as promptly as possible at
the end of the month succeeding the effective date of this Agreement,
and shall constitute a full payment of the fee due the Manager for all
services prior to that date. If this Agreement is terminated as of
any date not the last day of a month, such fee shall be paid as
promptly as possible after such date of termination, shall be based
on the average daily net assets of the Fund in that period from the
beginning of such month to such date of termination, and shall be
that proportion of such average daily net assets as the number of
business days in such period bears to the number of business days
in such month. The average daily net assets of the Fund shall in
all cases be based only on business days and be computed as of the
time of the regular close of business of the New York Stock Exchange,
or such other time as may be determined by the Board.
8. The Manager assumes no responsibility under this Agreement
other than to render the services called for hereunder, in good faith,
and 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 a Fund,
provided that nothing in this Agreement shall protect the Manager
against any liability to the Fund to which the Manager would otherwise
be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties hereunder. As used
in this Section 8, the term "Manager" shall include any affiliates of
the Manager performing services for the Corporation or the Fund
contemplated hereby and the partners, shareholders, directors, officers
and employees of the Manager and such affiliates.
9. Nothing in this Agreement shall limit or restrict the right
of any director, officer, or employee of the Manager who may also be
a Board member, officer, or employee of the Corporation or the Fund,
to engage in any other business or to devote his time and attention
in part to the management or other aspects of any other business,
whether of a similar nature or a dissimilar nature, nor to limit or
restrict the right of the Manager to engage in any other business or
to render services of any kind, including investment advisory and
management services, to any other fund, firm, individual or association.
If the purchase or sale of securities consistent with the investment
policies of a Fund or one or more other accounts of the Manager is
considered at or about the same time, transactions in such securities
will be allocated among the accounts in a manner deemed equitable
by the Manager. Such transactions may be combined, in accordance
with applicable laws and regulations, and consistent with the
Manager's policies and procedures as presented to the Board from
time to time.
10. For the purposes of this Agreement, the Fund's "net assets"
shall be determined as provided in the Fund's then-current Prospectus
and Statement of Additional Information and the terms "assignment,
" "interested person," and "majority of the outstanding voting
securities" shall have the meanings given to them by Section 2(a) of
the 1940 Act, subject to such exemptions as may be granted by the SEC
by any rule, regulation or order.
11. This Agreement will become effective with respect to the Fund
on the date set forth opposite the Fund's name on Schedule A annexed
hereto, provided that it shall have been approved by the Corporation's
Board and by the shareholders of the Fund in accordance with the
requirements of the 1940 Act and, unless sooner terminated as
provided herein, will continue in effect for two years from the above
written date. Thereafter, if not terminated, this Agreement shall
continue in effect with respect to the Fund, so long as such
continuance is specifically approved at least annually (i) by the
Board or (ii) by a vote of a majority of the outstanding voting
securities of the Fund, provided that in either event the continuance
is also approved by a majority of the Board members who are not
interested persons of any party to this Agreement, by vote cast
in person at a meeting called for the purpose of voting on such
approval.
12. This Agreement is terminable with respect to the Fund without
penalty by the Board or by vote of a majority of the outstanding
voting securities of the Fund, in each case on not more than 60 days'
nor less than 30 days' written notice to the Manager, or by the
Manager upon not less than 90 days' written notice to the Fund, and
will be terminated upon the mutual written consent of the Manager
and the Corporation. This Agreement shall terminate automatically
in the event of its assignment by the Manager and shall not be
assignable by the Corporation without the consent of the Manager.
13. The Manager agrees that for services rendered to the Fund,
or for any claim by it in connection with services rendered to the
Fund, it shall look only to assets of the Fund for satisfaction and
that it shall have no claim against the assets of any other
portfolios of the Corporation.
14. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no material amendment of the
Agreement shall be effective until approved, if so required by the
1940 Act, by vote of the holders of a majority of the Fund's
outstanding voting securities.
15. This Agreement embodies the entire agreement and understanding
between the parties hereto, and supersedes all prior agreements and
understandings relating to the subject matter hereof. Should any
part of this Agreement be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding on and
shall inure to the benefit of the parties hereto and their respective
successors.
16. This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of
New York.
[signature page to follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers thereunto duly authorized.
XXXXX XXXXXX INVESTMENT FUNDS INC.
By:_________________________
Name: R. Xxx Xxxxxx
Title: Chairman
XXXXX XXXXXX FUND MANAGEMENT LLC
By:__________________________
Name: Xxxxxx Xxxxxxx
Title: Director
Schedule A
Xxxxx Xxxxxx Government Securities Fund
Fee:
The following percentage of the Fund's average daily net assets:
First $2 billion 0.55; Next $2 billion 0.50; Next $2 billion 0.45;
Next $2 billion 0.40; Over $8 billion 0.35
