MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT, dated as of October 22, 1997, by and between
Domini Social Index Portfolio, a New York trust (the "Portfolio"), and Domini
Social Investments LLC ("DSI" or the "Adviser").
WITNESSETH:
WHEREAS, the Portfolio engages in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act"), and
WHEREAS, the Portfolio wishes to engage DSI to provide certain
investment advisory and administrative services for the Portfolio, and DSI is
willing to provide such investment advisory and administrative services for the
Portfolio on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. DUTIES OF DSI. (A) DSI shall act as the Adviser for the Portfolio and
as such shall furnish continuously an investment program and shall determine
from time to time what securities shall be purchased, sold or exchanged and what
portion of the assets of the Portfolio shall be held uninvested, subject always
to the restrictions of the Portfolio's Declaration of Trust, dated June 7, 1989,
and By-laws, as each may be amended from time to time (respectively, the
"Declaration" and the "By-Laws"), the provisions of the 1940 Act, and the
then-current registration statement of the Portfolio. The Adviser shall also
make recommendations as to the manner in which voting rights, rights to consent
to corporate action and any other rights pertaining to the Portfolio's portfolio
securities shall be exercised. Should the Board of Trustees of the Portfolio at
any time, however, make any definite determination as to investment policy
applicable to the Portfolio and notify the Adviser thereof in writing, the
Adviser shall be bound by such determination for the period, if any, specified
in such notice or until similarly notified that such determination has been
revoked. The Adviser shall take, on behalf of the Portfolio, all actions which
it deems necessary to implement the investment policies determined as provided
above and, in particular, to place all orders for the purchase or sale of
securities for the Portfolio's account with the brokers or dealers selected by
it, and to that end the Adviser is authorized as the agent of the Portfolio to
give instructions to the custodian or any subcustodian of the Portfolio as to
deliveries of securities and payments of cash for the account of the Portfolio.
In connection with the selection of such brokers or dealers and the placing of
such orders, 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 Portfolio and/or the other accounts over which the
Adviser, any subadviser, submanager or respective "affiliated person" thereof
exercises investment discretion. The Adviser is
authorized to pay a broker or dealer who provides such brokerage and
research services a commission for executing a portfolio transaction for the
Portfolio which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if the Adviser
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 Adviser and any
"affiliated person" of the Adviser have with respect to accounts over which they
exercise investment discretion. In making purchases or sales of securities or
other property for the account of the Portfolio, the Adviser may deal with
itself or with the Trustees of the Portfolio or the Portfolio's underwriter or
distributor to the extent such actions are permitted by the 1940 Act. In
providing the services and assuming the obligations set forth herein, the
Adviser may subject to the requirements of the 1940 Act or any exemptive order
granted thereunder employ at its own expense, or may request that the Portfolio
employ at the Portfolio's expense, one or more subadvisers or submanagers;
provided that in each case the Adviser shall supervise the activities of each
subadviser. Any agreement between the Adviser and a subadviser shall be subject
to the renewal, termination and amendment provisions applicable to this
Agreement. Any agreement by the Portfolio and a subadviser may be terminated by
the Adviser at any time on not more than 60 days' nor less than 30 days' written
notice to the Portfolio and the subadviser.
(B) Subject to the direction and control of the Board of Trustees of the
Portfolio, DSI shall perform such administrative and management services as may
from time to time be reasonably requested by the Portfolio, which shall include
without limitation: (1) maintaining office facilities (which may be in the
office of DSI or an "affiliated person" of DSI) and furnishing clerical services
necessary for maintaining the organization of the Portfolio and for performing
the administrative and management functions herein set forth; (2) arranging, if
desired by the Portfolio, for directors, officers or employees of the Adviser to
serve as Trustees, officers or agents of the Portfolio if duly elected or
appointed to such positions and subject to their individual consent and to any
limitations imposed by the law; (3) supervising the overall administration of
the Portfolio, including negotiation of contracts and fees with and the
monitoring of performance and xxxxxxxx of the Portfolio's transfer agent,
custodian and other independent contractors or agents; (4) overseeing (with
advice of the Portfolio's counsel), the preparation of and, if applicable,
filing all documents required for compliance by the Portfolio with applicable
laws and regulations, including registration statements, semi-annual and annual
reports to investors, proxy statements and tax returns; (5) preparation of
agendas and supporting documents for and minutes of meetings of Trustees,
committees of Trustees and investors; (6) arranging for maintenance of books and
records of the Portfolio; (7) maintaining telephone coverage to respond to
investor inquiries regarding matters to which this Agreement pertains to which
transfer agents are unable to respond; (8) providing reports and assistance
regarding the Portfolio's compliance with securities and tax laws and investment
objective and restrictions; (9) arranging for dissemination of yield and other
performance information to newspapers and tracking services; (10) arranging for
and preparing annual renewals for fidelity bond and errors and omissions
insurance coverage; (11) developing a budget for the Portfolio, establishing the
rate of expense accruals and arranging for the payment of all fixed and
management expenses; and (12) answering questions from the general public, the
media and investors in the Portfolio regarding (a) the securities holdings of
the Portfolio; (b) any limits in which the Portfolio invests; (c) the social
investment philosophy of the Portfolio; and (d) the proxy voting philosophy and
shareholder activism philosophy of the Portfolio. Notwithstanding the foregoing,
DSI shall not be deemed to have assumed any duties with respect to, and shall
not be responsible for, the distribution of beneficial interests in the
Portfolio, nor shall DSI be deemed to have assumed or have any responsibility
with respect to functions specifically assumed by any transfer agent, fund
accounting agent or custodian of the Portfolio. In providing administrative and
management services as set forth herein, DSI may, at its own expense, employ one
or more subadministrators; provided that DSI shall remain fully responsible for
the performance of all administrative and management duties set forth herein and
shall supervise the activities of each subadministrator.
2. ALLOCATION OF CHARGES AND EXPENSES. DSI shall furnish at its own
expense all necessary services, facilities and personnel in connection with its
responsibilities under Section 1 above. Except as provided in the foregoing
sentence, it is understood that the Portfolio will pay all of its own expenses
including, without limitation, organization costs of the Portfolio; compensation
of Trustees who are not "interested persons" of the Portfolio; governmental
fees, including but not limited to Securities and Exchange Commission fees and
state "blue sky" fees, if any; interest; loan commitment fees; taxes; brokerage
fees and commissions; membership dues in industry and professional associations;
fees and expenses of auditors and accountants, legal counsel and any transfer
agent, distributor, shareholder servicing agent, recordkeeper, registrar or
dividend disbursing agent of the Portfolio; expenses relating to the issuance
and redemption of beneficial interests in the Portfolio and servicing investor
accounts; expenses of preparing, typesetting, printing and mailing: registration
statements for regulatory purposes and for distribution to current investors,
investor reports, notices, proxy statements and reports to governmental officers
and commissions and to investors in the Portfolio; expenses connected with the
execution, recording and settlement of security transactions; insurance
premiums; fees and expenses of the custodian for all services to the Portfolio,
including safekeeping of funds and securities and maintaining required books and
accounts; expenses of calculating the net asset value of the Portfolio
(including but not limited to the fees of independent pricing services);
expenses connected with maintaining the Portfolio's existence as a New York
trust; expenses of meetings of the Portfolio's investors; and such non-recurring
or extraordinary expenses as may arise, including those relating to actions,
suits or proceedings to which the Portfolio may be party and the legal
obligation which the Portfolio may have to indemnify its Trustees and officers
with respect thereto.
3. COMPENSATION OF DSI. For the services to be rendered and facilities
provided by DSI hereunder, the Portfolio will pay DSI a management fee accrued
daily and payable monthly at an annual rate equal to 0.20% of the Portfolio's
average daily net assets for the Portfolio's then current fiscal year; provided,
however, for a period of one year from the date of this Agreement, the fee
payable to the Adviser shall be the lesser of (i) 0.20% of the Portfolio's
average daily net assets for the Portfolio's then-current fiscal year and (ii)
the percentage obtained by deducting from 0.20%, the Portfolio's annual
operating expenses (excluding amounts payable under this Agreement and brokerage
fees and commissions,
interest, taxes and any other extraordinary expenses) expressed as a
percentage of the Portfolio's average daily net assets. The Adviser shall pay
any applicable fees to the subadviser(s) on the Portfolio's behalf. If DSI
provides services hereunder for less than the whole of any period specified in
this Section 3, the compensation to DSI shall be accordingly adjusted and
prorated.
4. COVENANTS OF DSI. DSI agrees that it will not deal with itself, or
with the Trustees of the Portfolio or the Portfolio's principal underwriter or
distributor, if any, as principals in making purchases or sales of securities or
other property, except as permitted by the 1940 Act, will not take a long or
short position in beneficial interests of the Portfolio, except as permitted by
the Declaration, and will comply with all other provisions of the Declaration
and By-Laws and the then-current registration statement of the Portfolio
relative to DSI and its directors and officers.
5. LIMITATION OF LIABILITY OF DSI. DSI 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 the
Portfolio, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of its obligations
and duties hereunder. As used in this Section 5, the term "DSI" shall include
directors, officers and employees of DSI as well as DSI itself.
6. ACTIVITIES OF DSI. The services of DSI to the Portfolio are not to be
deemed to be exclusive, DSI being free to render investment advisory,
administrative and/or other services to others. It is understood that Trustees,
officers and investors of the Portfolio are or may be or may become interested
in DSI as directors, officers, employees or otherwise and that directors,
officers and employees of DSI are or may become similarly interested in the
Portfolio and that DSI may be or may become interested in the Portfolio as an
investor or otherwise.
7. DURATION, TERMINATION AND AMENDMENTS OF THIS AGREEMENT. This
Agreement shall become effective as of the day and year first above written,
shall govern the relations between the parties hereto thereafter and shall
remain in force until October 22, 1999, on which date it will terminate unless
its continuance after October 22, 1999 is "specifically approved at least
annually" (a) by the vote of a majority of the Trustees of the Portfolio who are
not "interested persons" of the Portfolio or of DSI at a meeting specifically
called for the purpose of voting on such approval and (b) by the Board of
Trustees of the Portfolio or by "vote of a majority of the outstanding voting
securities" of the Portfolio.
This Agreement may be terminated at any time without the payment of any
penalty by the Trustees or by the "vote of a majority of the outstanding voting
securities" of the Portfolio, or by DSI, in each case on not more than 60 days'
nor less than 30 days' written notice to the other party. This Agreement shall
automatically terminate in the event of its "assignment."
This Agreement may be amended only if such amendment is approved by the
"vote of a majority of the outstanding voting securities" of the Portfolio
(except for any such
amendment as may be effected in the absence of such approval without
violating the 1940 Act).
The terms "specifically approved at least annually," "vote of a majority
of the outstanding voting securities," "assignment," "affiliated person" and
"interested persons," when used in this Agreement, shall have the respective
meanings specified in, and shall be construed in a manner consistent with, the
1940 Act, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under the Act.
Each party acknowledges and agrees that all obligations of the Portfolio
under this Agreement are binding only with respect to the Portfolio; that any
liability of the Portfolio under this Agreement, or in connection with the
transactions contemplated herein, shall be discharged only out of the assets of
the Portfolio.
The undersigned officer of the Portfolio has executed this Agreement not
individually, but as an officer under the Declaration and the obligations of
this Agreement are not binding upon any of the Trustees, officers or holders of
beneficial interests in the Portfolio individually.
8. GOVERNING LAW. This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
DOMINI SOCIAL INDEX PORTFOLIO DOMINI SOCIAL INVESTMENTS LLC
By: /s/ Xxx X. Xxxxxx By: /s/ Xxx X. Xxxxxx
Title: President and Trustee Title: Manager
DSI303B
