XXXXXX FUNDS TRUST
FORM OF
MANAGEMENT CONTRACT
Management Contract dated as of June 7, 1996, as revised October 3, 1996,
December 6, 1996, November 6, 1997, December 8, 1997, January 8, 1998,
March 5, 1998, and May 8, 2000, between XXXXXX FUNDS 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 each series of the Fund, will determine what investments shall
be purchased, held, sold or exchanged by each series of the Fund and what
portion, if any, of the assets of each series of the Fund shall be held
uninvested and shall, on behalf of each series of the Fund, make changes in
such series' 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 xxxxxxx.Xx 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 the stated investment objectives, policies and
restrictions of each series of the Fund, 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 net asset value of each series of the
Fund, 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 the compensation in
whole or in part of such officers of the Fund and persons assisting them as
may be determined from time to time by the Trustees of the Fund. The Fund
will also pay or reimburse the Manager for all or part of the cost of
suitable office space, utilities, support services and equipment
attributable to such officers and persons, as may be determined in each
case by the Trustees of 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 for each series
of the Fund (except for Xxxxxx International Fund 2000 which shall be
computed and paid monthly):
Xxxxxx International Growth and Income Fund and Xxxxxx High Yield Total
Return Fund
(a) 0.80% of the first $500 million of the average net asset value of each
series;
(b) 0.70% of the next $500 million of such average net asset value;
(c) 0.65% of the next $500 million of such average net asset value;
(d) 0.60% of the next $5 billion of such average net asset value;
(e) 0.575% of the next $5 billion of such average net asset value;
(f) 0.555% of the next $5 billion of such average net asset value;
(g) 0.54% of the next $5 billion of such average net asset value; and
(h) 0.53% of any excess thereafter.
Xxxxxx Equity Fund 00, Xxxxxx Xxxx Xxxxxxx Xxxx XX, Xxxxxx Latin America Fund
and Xxxxxx International Fund 2000
(a) 1.00% of the first $500 million of the average net asset value of each
series;
(b) 0.90% of the next $500 million of such average net asset value;
(c) 0.85% of the next $500 million of such average net asset value;
(d) 0.80% of the next $5 billion of such average net asset value;
(e) 0.775% of the next $5 billion of such average net asset value;
(f) 0.755% of the next $5 billion of such average net asset value;
(g) 0.74% of the next $5 billion of such average net asset value; and
(h) 0.73% of any excess thereafter.
Xxxxxx High Yield Trust II, Xxxxxx Investment Fund 00, Xxxxxx Xxxxxx Xxxx,
Xxxxxx Value Fund, and Putnam U.S. Core Fund
(a) 0.70% of the first $500 million of the average net asset value of each
series;
(b) 0.60% of the next $500 million of such average net asset value;
(c) 0.55% of the next $500 million of such average net asset value;
(d) 0.50% of the next $5 billion of such average net asset value;
(e) 0.475% of the next $5 billion of such average net asset value;
(f) 0.455% of the next $5 billion of such average net asset value;
(g) 0.44% of the next $5 billion of such average net asset value; and
(h) 0.43% of any excess thereafter.
Such average net asset value shall be determined by taking an average of
all of the determinations of such net asset value during such quarter or
month as the case may be, at the close of business on each business day
during such quarter or month while this Contract is in effect. Such fee
shall be payable for each fiscal quarter or month within 30 days after the
close of such quarter or month and shall commence accruing as of the date
of the initial issuance of shares of the Fund to the public.
The fees payable by the Fund to the Manager pursuant to this Section 3
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 the Fund,
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 the Fund or 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 the Fund or such series are qualified for offer or sale,
the compensation due the Manager for such fiscal year shall be reduced by
the amount of excess by a reduction or refund thereof. In the event that
the expenses of the Fund or 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 Fund or such 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 quarter or 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
such 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 a particular 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 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 such 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 with respect to such series, then
this Contract shall automatically terminate with respect to such series at
the close of business on the second anniversary of its execution with
respect to such series, or upon the expiration of one year from the
effective date of the last such continuance, whichever is later.
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 the relevant series.
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" of a series means the affirmative vote, at a duly
called and held meeting of shareholders of such series, (a) of the holders
of 67% or more of the shares of such series 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 such series 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 such series 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 (the "1940 Act"), 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 1940 Act, 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, OFFICERS, 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, officers or shareholders individually but are binding only
upon the assets and property of the relevant series of the Fund.
IN WITNESS WHEREOF, XXXXXX FUNDS 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 FUNDS TRUST
By: ------------------------------
Xxxxxxx X. Xxxxxx
Executive Vice President
XXXXXX INVESTMENT MANAGEMENT, INC.
By: ------------------------------
Xxxxxx X. Silver
Senior Managing Director
