Exhibit (K)(5)
FORM
OF
ADDITIONAL COMPENSATION AGREEMENT
January [ ], 2005
Xxxxx Xxxxx Management
000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated January [ ],
2005 (the "Underwriting Agreement"), by and among Xxxxx Xxxxx Enhanced Equity
Income Fund II a closed-end management investment company (the "Fund"), Xxxxx
Xxxxx Management ("Xxxxx Xxxxx" or the "Investment Adviser"), Rampart Investment
Management Company, Inc. and each of the respective Underwriters named therein,
with respect to the issue and sale of the Fund's common shares of beneficial
interest, par value $0.01 per share (the "Common Shares"), as described therein.
Reference is also made to (i) the Investment Advisory Agreement, dated [ ], 2005
(the "Investment Advisory Agreement") between Xxxxx Xxxxx and the Fund and (ii)
the registration statement on Form N-2 regarding the Common Shares of the Fund
(the "Registration Statement"). Capitalized terms used herein and not otherwise
defined shall have the meanings given to them in the Underwriting Agreement.
Xxxxx Xxxxx hereby confirms its agreement with each Qualifying
Underwriter (as defined in Section 1 hereof) with respect to the additional
compensation referred to in the "Underwriting" section of the Registration
Statement, payable by Xxxxx Xxxxx to each of the Qualifying Underwriters. Xxxxx
Xxxxx agrees to pay to each Qualifying Underwriter additional compensation
(collectively, the "Additional Compensation") as provided for in Section 3
hereof; provided, however, that such Additional Compensation shall not exceed an
amount equal to 0.15% per annum of the aggregate average daily gross assets of
the Fund (including assets attributable to any preferred shares of the Fund that
may be outstanding); and provided, further, that such payments shall not exceed
the "Maximum Additional Compensation Amount" (as defined in Section 4 hereof).
The Additional Compensation shall be payable as set forth in Section 3 hereof.
SECTION 1. Qualifying Underwriters. For the purposes of this
Additional Compensation Agreement, each Underwriter (other than UBS Securities
LLC), which sells Common Shares of the Fund with an aggregate purchase price to
the public of at least $50,000,000 shall be a "Class I Qualifying Underwriter"
and each Underwriter (other than UBS Securities LLC), which sells Common Shares
of the Fund with an aggregate purchase price to the public of at least
$100,000,000 shall be a "Class II Qualifying Underwriter;" provided, however,
that the amounts required to qualify as a Class I Qualifying Underwriter or a
Class II
Qualifying Underwriter may be reduced with respect to any Underwriter in the
sole discretion of Xxxxx Xxxxx. Class I Qualifying Underwriters and Class II
Qualifying Underwriters are referred to collectively herein as "Qualifying
Underwriters." A Qualifying Underwriter which qualifies as a Class II Qualifying
Underwriter shall not also be a Class I Qualifying Underwriter. Within 60 days
following the Closing Date, the Qualifying Underwriters shall prepare or cause
to be prepared and provide to Xxxxx Xxxxx a chart listing each of the Qualifying
Underwriters, which chart shall indicate the aggregate purchase price to the
public of the Common Shares sold by each Qualifying Underwriter and the Pro Rata
Percentage (as defined in Section 2 hereof) of each Qualifying Underwriter and
shall be appended as Schedule A to this Additional Compensation Agreement. Such
Schedule A shall be prepared in good faith by the Qualifying Underwriters and
subject to verification by Xxxxx Xxxxx.
SECTION 2. Pro Rata Percentage. Each Qualifying Underwriter shall be
assigned a "Pro Rata Percentage," the numerator of which shall equal the
aggregate purchase price to the public of the Common Shares sold by such
Underwriter as set forth on Schedule A hereto and the denominator of which shall
equal the aggregate purchase price to the public of all of the Common Shares
purchased by the Underwriters pursuant to the Underwriting Agreement.
SECTION 3. Payment of Additional Compensation.
(a) Xxxxx Xxxxx shall pay the Additional Compensation, quarterly in
arrears, to each Class I Qualifying Underwriter in an amount equal to the
product of such Qualifying Underwriter's Pro Rata Percentage multiplied by
0.0250% of the aggregate average daily gross assets of the Fund for such
quarter.
(b) Xxxxx Xxxxx shall pay the Additional Compensation, quarterly in
arrears, to each Class II Qualifying Underwriter in an amount equal to the
product of such Qualifying Underwriter's Pro Rata Percentage multiplied by
0.0375% of the aggregate average daily gross assets of the Fund for such
quarter.
(c) All fees payable hereunder shall be paid to each Qualifying
Underwriter by wire transfer of immediately available funds within 15 days
following the end of each calendar quarter to a bank account designated by such
Qualifying Underwriter. At the time of each payment of Additional Compensation
hereunder, Xxxxx Xxxxx shall deliver to each Qualifying Underwriter receiving an
installment of Additional Compensation a statement indicating the amount of the
of the aggregate average daily gross asset value of the Fund for such quarter
(including assets attributable to any preferred shares of the Fund that may be
outstanding) on which such payment was based.
(d) The initial payments of Additional Compensation hereunder shall be
paid with respect to the calendar quarter ending March 31, 2005. In the event
that this Additional Compensation Agreement terminates prior to the end of a
calendar quarter, the Additional Compensation required to be paid hereunder
shall be due and payable within 15 days following the termination hereof and
shall be pro-rated in respect of the period prior to such termination.
Notwithstanding the foregoing, if any payment hereunder would otherwise fall on
a day which is not a business day, it shall be due on the next day which is a
business day. All fees payable
hereunder shall be in addition to any fees paid by the Investment Adviser
pursuant to the Underwriting Agreement.
SECTION 4. Maximum Additional Compensation Amount. The "Maximum
Additional Compensation Amount" payable by the Investment Adviser hereunder
shall be [ ]% of the aggregate offering price of the Common Shares. [ ] will
receive additional compensation which will not exceed [ ]% of the aggregate
initial offering price of the Common Shares and [ ] will received additional
compensation which will not exceed [ ]% of the aggregate initial offering price
of the Common Shares.
SECTION 5. Term. This Additional Compensation Agreement shall
continue coterminously with and so long as the Investment Advisory Agreement,
dated [ ], 2005, remains in effect between the Fund and Xxxxx Xxxxx, or any
similar investment advisory agreement with a successor in interest or affiliate
of Xxxxx Xxxxx remains in effect, as, and to the extent, that such investment
advisory agreement is renewed periodically in accordance with the Investment
Company Act of 1940, as amended. This Additional Compensation Agreement shall
terminate on the earliest to occur of (a) with respect to any Qualifying
Underwriter, the payment by Xxxxx Xxxxx to such Qualifying Underwriter of the
Maximum Additional Compensation Amount, (b) with respect to the Fund, the
dissolution and winding up of the Fund and (c) with respect to the Fund, the
date on which the Investment Advisory Agreement or other investment advisory
agreement between the Fund and Xxxxx Xxxxx or any successor in interest to Xxxxx
Xxxxx, including but not limited to an affiliate of Xxxxx Xxxxx, shall
terminate.
SECTION 6. Not an Investment Adviser. Xxxxx Xxxxx acknowledges that
the Underwriters are not providing any advice hereunder as to the value of
securities or regarding the advisability of purchasing or selling any securities
for the Fund. No provision of this Additional Compensation Agreement shall be
considered as creating, nor shall any provision create, any obligation on the
part of any Underwriter, and the Underwriters are not hereby agreeing, to: (i)
furnish any advice or make any recommendations regarding the purchase or sale of
portfolio securities or (ii) render any opinions, valuations or recommendations
of any kind or to perform any such similar services.
SECTION 7. Not Exclusive. Nothing herein shall be construed as
prohibiting any Underwriter or its respective affiliates from acting as such for
any other clients (including other registered investment companies or other
investment advisers).
SECTION 8. No Liability. Xxxxx Xxxxx agrees that no Underwriter
shall have liability to Xxxxx Xxxxx or the Fund for any act or omission to act
by such Underwriter in the course of its performance under this Additional
Compensation Agreement, in the absence of gross negligence or willful misconduct
on the part of such Underwriter. Xxxxx Xxxxx agrees to indemnify and hold
harmless each Underwriter and its respective officers, directors, agents and
employees against any loss or expense arising out of or in connection with such
Underwriter's performance under this Additional Compensation Agreement. This
provision shall survive the termination, expiration or supersession of this
Additional Compensation Agreement.
SECTION 9. Assignment. This Additional Compensation Agreement may
not be assigned by any party without the prior written consent of each other
party.
SECTION 10. Amendment; Waiver. No provision of this Additional
Compensation Agreement may be amended or waived except by an instrument in
writing signed by the parties hereto.
SECTION 11. Governing Law. This Additional Compensation Agreement
shall be governed by, and construed in accordance with, the laws of the State of
New York.
SECTION 12. Counterparts. This Additional Compensation Agreement may
be executed in any number of counterparts, each of which shall be an original,
and all of which, when taken together, shall constitute one agreement. Delivery
of an executed signature page of this Additional Compensation Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
Xxxxx Xxxxx and the Qualifying Underwriters in accordance with its terms.
Very truly yours,
[ ]
By:
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Name:
Title:
[ ]
By:
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Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXX XXXXX MANAGEMENT
By:
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Name:
Title:
SCHEDULE A
AGGREGATE
PURCHASE PRICE TO PUBLIC PRO RATA
NAME OF QUALIFYING UNDERWRITER CLASS OF COMMON SHARES SOLD PERCENTAGE
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