XXXXXX VARIABLE TRUST
(formerly Xxxxxx Capital Manager Trust)
MANAGEMENT CONTRACT
Management Contract dated as of October 2, 1987, as supplemented March
2, 1990, as further supplemented February 27, 1992, as further
supplemented July 9, 1993, as further supplemented April 5, 1994, as
further supplemented June 2, 1994, as further supplemented April 7,
1995, as further supplemented July 13, 1995, as further supplemented
July 11, 1996, as further supplemented December 20, 1996 as further
supplemented February 6, 1998, as further supplemented July 10, 1998 and
as further supplemented March 4, 1999 between Xxxxxx Variable Trust
(formerly Xxxxxx Capital Manager Trust), a Massachusetts business trust
(the "Fund"), and XXXXXX INVESTMENT MANAGEMENT, INC., a Massachusetts
corporation (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) The Manager, at its expense, will furnish continuously an
investment program for the Fund, will determine what investments shall
be purchased, held, sold or exchanged by the Fund and what portion, if
any, of the assets of the Fund shall be held uninvested and shall, on
behalf of the Fund, make changes in the Fund's investments. Subject
always to the control of the Trustees of the Fund and except for the
functions carried out by the officers and personnel referred to in
Section 1(d), the Manager will also manage, supervise and conduct the
other affairs and business of the Fund and matters incidental thereto.
In the performance of its duties, the Manager will comply with the
provisions of the Agreement and Declaration of Trust and By-Laws of the
Fund and its stated investment objectives, policies and restrictions,
and will use its best efforts to safeguard and promote the welfare of
the Fund and to comply with other policies which the Trustees may from
time to time determine and shall exercise the same care and diligence
expected of the Trustees.
(b) The Manager, at its expense, except as such expense is paid by
the Fund as provided in Section 1(d), will furnish (1) all necessary
investment and management facilities, including salaries of personnel,
required for it to execute its duties faithfully; (2) suitable office
space for the Fund; and (3) administrative facilities, including
bookkeeping, clerical personnel and equipment necessary for the
efficient conduct of the affairs of the Fund, including determination of
the Fund's net asset value, but excluding shareholder accounting
services. Except as otherwise provided in Section 1(d), the Manager
will pay the compensation, if any, of the officers of the Fund.
(c) The Manager, at its expense, shall place all orders for the
purchase and sale of portfolio investments for the Fund's account with
brokers or dealers selected by the Manager. In the selection of such
brokers or dealers and the placing of such orders, the Manager shall use
its best efforts to obtain for the Fund the most favorable price and
execution available, except to the extent it may be permitted to pay
higher brokerage commissions for brokerage and research services as
described below. In using its best efforts to obtain for the Fund the
most favorable price and execution available, the Manager, bearing in
mind the Fund's best interests at all times, shall consider all factors
it deems relevant, including by way of illustration, price, the size of
the transaction, the nature of the market for the security, the amount
of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial
stability of the broker or dealer involved and the quality of service
rendered by the broker or dealer in other transactions. Subject to such
policies as the Trustees of the Fund may determine, the Manager shall
not be deemed to have acted unlawfully or to have breached any duty
created by this Contract or otherwise solely by reason of its having
caused the Fund to pay a broker or dealer that provides brokerage and
research services to the Manager an amount of commission for effecting a
portfolio investment transaction 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 was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of
either that particular transaction or the Manager's overall
responsibilities with respect to the Fund and to other clients of the
Manager as to which the Manager exercises investment discretion. The
Manager agrees that in connection with purchases or sales of portfolio
investments for the Fund's account, neither the Manager nor any officer,
director, employee or agent of the Manager shall act as a principal or
receive any commission other than as provided in Section 3.
(d) The Fund will pay or reimburse the Manager for (i) the
compensation of the Vice Chairman of the Fund and of persons assisting
him in these offices, as determined from time to time by the Trustees of
the Fund, (ii) the compensation in whole or in part of such other
officers of the Fund and persons assisting them as may be determined
from time to time by the Trustees of the Fund, and (iii) the cost of
suitable office space, utilities, support services and equipment of the
Vice Chairman and persons assisting him and, as determined from time to
time by the Trustees of the Fund, all or a part of such cost
attributable to the other officers and persons assisting them whose
compensation is paid in whole or in part by the Fund. The Fund will pay
the fees, if any, of the Trustees of the Fund.
(e) The Manager shall pay all expenses incurred in connection with
the organization of the Fund and the initial public offering and sale of
its shares of beneficial interest, provided that upon the issuance and
sale of such shares to the public pursuant to the offering, and only in
such event, the Fund shall become liable for, and to the extent
requested reimburse the Manager for, registration fees payable to the
Securities and Exchange Commission and for an additional amount not
exceeding $125,000 as its agreed share of such expenses.
(f) The Manager shall not be obligated to pay any expenses of or for
the Fund not expressly assumed by the Manager pursuant to this Section 1
other than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Fund may be a shareholder, director, officer or
employee of, or be otherwise interested in, the Manager, and in any
person controlled by or under common control with the Manager, and that
the Manager and any person controlled by or under common control with
the Manager may have an interest in the Fund. It is also understood
that the Manager and any person controlled by or under common control
with the Manager have and may have advisory, management, service or
other contracts with other organizations and persons, and may have other
interests and business.
3. COMPENSATION TO BE PAID BY THE FUND TO THE MANAGER.
The Fund will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses
borne by the Manager pursuant to paragraphs (a), (b), (c) and (e) of
Section 1, a fee, computed and paid quarterly at the following annual
rates applicable to the average net asset value of each Series of the
Fund (a "Series") of:
Xxxxxx VT International New Opportunities Fund:
(a) 1.20% of the first $500 million of average net assets;
(b) 1.10% of the next $500 million;
(c) 1.05% of the next $500 million;
(d) 1.00% of the next $5 billion;
(e) 0.975% of the next $5 billion;
(f) 0.955% of the next $5 billion;
(g) 0.94% of the next $5 billion; and
(h) 0.93% of any excess thereafter.
Xxxxxx VT Asia Pacific Growth Fund, Xxxxxx VT International Growth Fund,
Xxxxxx VT International Growth and Income Fund and Xxxxxx VT Small Cap
Value Fund:
(a) 0.80% of the first $500 million of average net assets;
(b) 0.70% of the next $500 million;
(c) 0.65% of the next $500 million;
(d) 0.60% of the next $5 billion;
(e) 0.575% of the next $5 billion;
(f) 0.555% of the next $5 billion;
(g) 0.54% of the next $5 billion; and
(h) 0.53% of any excess thereafter.
Xxxxxx VT Diversified Income Fund, Xxxxxx VT Global Asset Allocation
Fund, Xxxxxx VT Health Sciences Fund, Xxxxxx VT High Yield Fund, Xxxxxx
VT New Opportunities Fund, Xxxxxx VT New Value Fund, Xxxxxx VT Utilities
Growth and Income Fund, Xxxxxx VT Voyager Fund and Xxxxxx VT OTC
Emerging Growth Fund:
(a) 0.70% of the first $500 million of average net assets;
(b) 0.60% of the next $500 million;
(c) 0.55% of the next $500 million;
(d) 0.50% of the next $5 billion;
(e) 0.475% of the next $5 billion;
(f) 0.455% of the next $5 billion;
(g) 0.44% of the next $5 billion; and
(h) 0.43% of any excess thereafter.
Xxxxxx VT Growth and Income Fund, Xxxxxx VT Income Fund Fund, Xxxxxx VT
Vista Fund, Xxxxxx VT Investors Fund, Xxxxxx VT The Xxxxxx Xxxxxx Fund
of Boston and Xxxxxx VT Research Fund:
(a) 0.65% of the first $500 million of average net assets;
(b) 0.55% of the next $500 million;
(c) 0.50% of the next $500 million;
(d) 0.45% of the next $5 billion;
(e) 0.425% of the next $5 billion;
(f) 0.405% of the next $5 billion;
(g) 0.39% of the next $5 billion; and
(h) 0.38% of any excess thereafter.
Xxxxxx VT Money Market Fund:
(a) 0.45% of the first $500 million of average net assets;
(b) 0.35% of the next $500 million;
(c) 0.30% of the next $500 million;
(d) 0.25% of the next $5 billion;
(e) 0.225% of the next $5 billion;
(f) 0.205% of the next $5 billion;
(g) 0.19% of the next $5 billion; and
(h) 0.18% of any excess thereafter.
Xxxxxx VT Global Growth Fund: 0.60% of average net assets.
Such fees computed with respect to the net asset value of each Series
shall be paid from the assets of such Series. Such average net asset
value of each Series of the Fund shall be determined by taking an
average of all of the determinations of such net asset value during such
quarter at the close of business on each business day during such
quarter while this Contract is in effect. Such fee shall be payable for
each month within 30 days after the end of such quarter.
The fees payable by the Fund to the Manager pursuant to this Section 3
with respect to any Series of the Fund shall be reduced by any
commissions, fees, brokerage or similar payments received by the Manager
or any affiliated person of the Manager in connection with the purchase
and sale of portfolio investments of such Series, less any direct
expenses approved by the Trustees incurred by the Manager or any
affiliated person of the Manager in connection with obtaining such
payments.
In the event that expenses of any Series of the Fund for any fiscal year
should exceed the expense limitation on investment company expenses
imposed by any statute or regulatory authority of any jurisdiction in
which shares of that Series are qualified for offer or sale, the
compensation due the Manager for such fiscal year shall be reduced by
the amount of such excess by a reduction or refund thereof. In the
event that the expenses of any Series of the Fund exceed any expense
limitation which the Manager may, by written notice to the Fund,
voluntarily declare to be effective subject to such terms and conditions
as the Manager may prescribe in such notice, the compensation due the
Manager shall be reduced, and, if necessary, the Manager shall assume
expenses of the Series to the extent required by the terms and
conditions of such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be
amended as to any Series of the Fund unless such amendment be approved
at a meeting by the affirmative vote of a majority of the outstanding
shares of the Series, and by the vote, cast in person at a meeting
called for the purpose of voting on such approval, of a majority of the
Trustees of the Fund who are not interested persons of the Fund or of
the Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect as to each Series continuously
thereafter (unless terminated automatically as set forth in Section 4)
until terminated as follows:
(a) Either party hereto may at any time terminate this Contract as to
any Series or as to the Fund by not more than sixty days' nor less than
thirty days' written notice delivered or mailed by registered mail,
postage prepaid, to the other party, or
(b) If (i) the Trustees of the Fund or the shareholders by the
affirmative vote of a majority of the outstanding shares of the Series,
and (ii) a majority of the Trustees of the Fund who are not interested
persons of the Fund or of the Manager, by vote cast in person at a
meeting called for the purpose of voting on such approval, do not
specifically approve at least annually the continuance of this Contract,
then this Contract shall automatically terminate as to such Series at
the close of business on:
January 31, 1989 in the case of Xxxxxx VT Global Growth Fund, and
the second anniversary of its execution with respect to any other
Series,
or the expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the
continuance of this Contract is submitted to the shareholders of a
Series for their approval and such shareholders fail to approve such
continuance of this Contract as provided herein, the Manager may
continue to serve hereunder in a manner consistent with the Investment
Company Act of 1940 and the Rules and Regulations thereunder.
Action by the Fund under (a) above may be taken either (i) by vote of a
majority of its Trustees, or (ii) by the affirmative vote of a majority
of the outstanding shares of one or more Series affected.
Termination of this Contract pursuant to this Section 5 will be without
the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund or the Series, as the case may be, present (in
person or by proxy) and entitled to vote at such meeting, if the holders
of more than 50% of the outstanding shares of the Fund or the Series, as
the case may be, entitled to vote at such meeting are present in person
or by proxy, or (b) of the holders of more than 50% of the outstanding
shares of the Fund, or the Series, as the case may be, entitled to vote
at such meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their
respective meanings defined 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; the term "specifically approve at least annually" shall
be construed in a manner consistent with the Investment Company Act of
1940 and the Rules and Regulations thereunder; and the term "brokerage
and research services" shall have the meaning given in the Securities
Exchange Act of 1934 and the Rules and Regulations thereunder.
7. NON-LIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and
duties hereunder, the Manager shall not be subject to any liability to
the Fund or to any shareholder of the Fund, for any act or omission in
the course of, or connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Fund is on file
with the Secretary of State of The Commonwealth of Massachusetts, and
notice is hereby given that this instrument is executed on behalf of the
Trustees of the Fund as Trustees and not individually and that the
obligations of or arising out of this instrument are not binding upon
any of the Trustees or shareholders individually but are binding only
upon the assets and property of the Fund.
IN WITNESS WHEREOF, XXXXXX VARIABLE TRUST and XXXXXX INVESTMENT
MANAGEMENT, INC. have each caused this instrument to be signed in
duplicate in its behalf by its President or a Vice President thereunto
duly authorized, all as of the day and year first above written.
XXXXXX VARIABLE TRUST
/s/ Xxxxxxx X. Xxxxxx
By:
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Xxxxxxx X. Xxxxxx
Executive Vice President
XXXXXX INVESTMENT MANAGEMENT, INC.
/s/ Xxxxxx X. Silver
By:
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Xxxxxx X. Silver
Senior Managing Director
