Exhibit 5
EUCLID MUTUAL FUNDS
MANAGEMENT AGREEMENT
April 16, 1998
EUCLID ADVISORS LLC
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Gentlemen:
Euclid Mutual Funds, a Delaware business trust (the "Trust"), is an
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently offers shares of one series,
Euclid Market Neutral Fund, with four classes of shares, designated as Class A,
Class B, Class C and Class I shares. In the future the Trust may issue other
series and other classes of shares.
Each series of the Trust invests and reinvests its assets in a portfolio
of securities and investments. The Trust hereby engages you to act as its
investment manager for each series of the Trust authorized now or in the future
subject to the terms and conditions of this Agreement.
SECTION 1. Investment Management Services.
You shall use your staff and other facilities to conduct and maintain a
continuous review of each series' portfolio of securities and investments, and
shall advise and assist each series of the Trust with respect to the selection,
acquisition, holding and disposal of securities and investments. In so doing,
you shall be guided by the investment objectives and policies of each series
delineated and limited in documents filed with the SEC, by policies adopted by
the Board of Trustees of the Trust (the "Board") and by the provisions of the
1940 Act and the rules thereunder, so that at all times the Trust shall be in
compliance with its policies and the provisions of the 1940 Act. The Trust
agrees to supply you with copies of all such documents and to notify you of any
changes in its investment objectives, policies and restrictions.
In rendering services to the Trust pursuant to this Agreement, you may
employ, retain or otherwise avail yourself of the services or facilities of
other persons or organizations for the purpose of providing you or the Trust
with such statistical and other factual information, such advice regarding
economic factors and trends, such advice as to occasional transactions in
specific securities, or such other information, advice or assistance as you may
deem necessary, appropriate or convenient for the discharge of your obligations
under this Agreement or otherwise helpful to the Trust or in the discharge of
your overall responsibilities with respect to the other accounts for which you
or your affiliates serve as investment manager.
You and any person performing executive, administrative or trading
functions for the Trust, whose services were made available to the Trust by you,
are specifically authorized to allocate brokerage and principal business to
firms that provide such services or facilities or to cause the Trust to pay a
member of a securities exchange or any other securities broker or dealer an
amount of commission for effecting a securities transaction in excess of the
amount of commission another member of an exchange or broker or dealer would
have charged for effecting that transaction if you or such person determine in
good faith that such amount of commission is reasonable in relation to the value
of the brokerage and research services (as such services are defined in Section
28(e) of the Securities Exchange Act of 1934, as amended (the "1934 Act"))
provided by such member, broker or dealer, viewed in terms of either that
particular transaction or your or such person's over-all responsibilities with
respect to the accounts as to which you or such person exercise investment
discretion.
SECTION 2. Resumes and Reports, etc.
You shall maintain a record of all the investments and securities which
comprise the portfolios of each series of the Trust and shall furnish to the
Board, at its regularly scheduled meetings and at such other times as the Board
may reasonably request, a resume of the portfolios and report on all matters
pertaining to your services as investment manager. In addition, you shall
furnish the Trust with such statistical information reasonably available to you
as the Board shall reasonably request.
SECTION 3. Additional Services to be Furnished.
You shall maintain the books and financial records of the Trust and shall
perform such other services as are reasonably incidental to the foregoing duties
including supervising the Trust Custodian's recordkeeping. You shall assist in
the computation of the net asset value of the shares of each class of each
series of the Trust (in accordance with the Trust's Prospectus and the
instructions of the Board) and shall furnish to the Trust and its distributor
any statements with respect to the net assets of each series of the Trust and
the net asset value per share of each class of each series of the Trust at such
times, and in such forms, as the Trust may prescribe. You shall also furnish the
Trust with office space reasonably suited to its operations and with
bookkeeping, internal accounting and administrative services, and shall permit
such of your directors, officers and employees as may be elected as Trustees or
officers of the Trust to serve in the capacities to which they are elected. All
services to be furnished by you under this Agreement may be furnished through
directors, officers or employees of you or your affiliates.
In acting under this Agreement, you shall be an independent contractor and
shall not be an agent of the Trust. The investment policies, the administration
of its business and affairs and all other acts of the Trust are and shall at all
times be subject to the approval and direction of the Board.
SECTION 4. Multiple Capacities.
Nothing in this Agreement shall be deemed to prohibit you or your
affiliates from acting, and being separately compensated for acting, in one or
more capacities on behalf of the Trust including, but not limited to, the
capacities of broker or distributor. The Trust understands that you and your
affiliates may act as investment manager or in other capacities on behalf of
other investment companies and customers. While information and recommendations
you supply to the Trust shall in your judgment be appropriate under the
circumstances and in light of the investment objectives and policies of the
Trust, they may be different from the information and recommendations you supply
to other investment companies and customers. You shall give the Trust equitable
treatment under the circumstances in supplying information, recommendations and
any other services requested of you but you shall not be required to give
preferential treatment to the Trust as compared with the treatment given to any
other investment company or customer. Whenever you shall act in multiple
capacities on behalf of the Trust, you shall maintain the appropriate separate
accounts and records for each such capacity. All information and advice supplied
by you to the Trust under this Agreement shall be for its own use exclusively.
SECTION 5. Payment of Expenses.
You shall assume and pay all of your own costs and expenses under this
Agreement. The Trust shall assume and pay, or reimburse you for, all expenses
incurred in the operation of the Trust (to the extent not specifically allocated
to you hereunder) and, in particular but without limitation, the Trust shall
bear the cost of and pay all interest, taxes, fees and commissions of every
kind, expenses of issue, repurchase or redemption of shares, expenses of
registering or qualifying shares for sale, insurance, association
membership dues, all charges of custodians (including fees as custodian, escrow
agent, for keeping books and performing portfolio valuations) , transfer agents,
registrars, dividend disbursing agents, independent auditors and legal counsel,
expenses of preparing, printing and distributing prospectuses and all proxy
materials, reports and notices to shareholders, expenses of distribution of
shares in accordance with a plan adopted pursuant to Rule 12b-1 under the 1940
Act, out-of-pocket expenses of trustees and fees of trustees who are not
"interested persons", and all other costs incident to the Trust's existence.
SECTION 6. Compensation for Services.
Each series of the Trust will pay to you monthly, a management fee
determined daily at the rate set forth below times its net assets.
Euclid Market Neutral Fund 1/365 (1/366 for Leap Years) of 1.50%
Notwithstanding the foregoing, nothing shall preclude you or your
affiliates from executing brokerage transactions for the Trust, charging the
Trust brokerage commissions therefor and deriving profit therefrom, provided
such payments to you by the Trust are reviewed in connection with each annual
continuation of this Agreement required by the 1940 Act and Section 9 below.
SECTION 7. Liability of the Investment Manager, etc.
You shall be liable for your own acts and omissions caused by your willful
misfeasance, bad faith or gross negligence in the performance of your duties or
by your reckless disregard of your obligations under this Agreement, and nothing
in this Agreement shall protect you against any such liability to the Trust or
its security holders. You shall not be liable for the acts and omissions of any
agent employed by you, nor for those of any bank, trust company, broker or other
person with whom, or into whose hands, any monies, shares of the Trust or
securities and investments may be deposited or come, pursuant to the provisions
of this Agreement. You shall not be liable for any defect in title of any
property acquired, nor for any loss unless it shall occur through your own
willful default. Subject to the first sentence of this section, you shall not be
liable for any action taken or omitted on advice, obtained in good faith, of
counsel, provided such counsel is satisfactory to the Trust.
SECTION 8. Termination of Agreement, Assignment, etc.
This Agreement may be terminated at any time, without the payment of any
penalty, upon sixty (60) days' written notice by the terminating party to the
other party, by you or by the Trust, acting pursuant to a resolution adopted by
its Board or by a vote of shareholders in accordance with the requirements of
the 1940 Act. This Agreement shall automatically terminate in the event of its
assignment. Termination shall not affect rights of the parties which have
accrued prior thereto.
SECTION 9. Duration of Agreement.
Unless sooner terminated, this Agreement shall continue in effect for two
years, and thereafter until terminated, provided that the continuation of this
Agreement and the terms thereof are specifically approved annually in accordance
with the requirements of the 1940 Act by a majority of the Trustees, including a
majority of the Trustees who are not "interested persons" of you or of the
Trust, cast in person at a meeting called for the purpose of voting on such
approval.
SECTION 10. Definitions.
The terms "assignment" and "interested person" when used in this Agreement
shall have the meanings given such terms in the 1940 Act and the rules and
regulations thereunder.
SECTION 11. Obligation of the Trust.
The Trust's Agreement and Declaration of Trust is on file with the
Secretary of the State of Delaware and notice is hereby given that this
Agreement is made and executed on behalf of the Trust, and not by the Trustees
or officers of the Trust individually, and the obligations of or arising out of
this Agreement are not binding upon the Trustees, officers or shareholders of
the Trust individually but are binding only upon the assets and property of one
or more classes or series of the Trust.
SECTION 12. Concerning Applicable Provisions of Law, etc.
This Agreement shall be subject to all applicable provisions of law,
including, without limitation, the applicable provisions of the 1940 Act, and to
the extent that any provisions in this Agreement conflict with any such
applicable provisions of law, the latter shall control.
SECTION 13. Counterparts.
This Agreement may be executed by any one or more of the parties in any
number of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same instrument.
SECTION 14. Effective Date.
This Agreement is effective upon such date on or after its initial
approval in accordance with the 1940 Act as may be agreed upon by the parties.
Very truly yours,
EUCLID MUTUAL FUNDS
By:______________________________
Name:
Attest:__________________________
Accepted and agreed to this Title:
_______ day of ____________, 1998
EUCLID ADVISORS LLC
By:_____________________________
Name:
Title:
Attest:________________________________
