Exhibit (d)(7)
INVESTMENT MANAGEMENT AGREEMENT
Xxxxxxx Investors Trust
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
April 5, 2002
Deutsche Investment Management Americas Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Investment Management Agreement
Xxxxxxx S&P 500 Stock Fund
Ladies and Gentlemen:
Xxxxxxx Investors Trust (the "Trust") has been established as a Massachusetts
business Trust to engage in the business of an investment company. Pursuant
to the Trust's Declaration of Trust, as amended from time-to-time (the
"Declaration"), the Board of Trustees is authorized to issue the Trust's shares
of beneficial interest, par value $0.01 per share, (the "Shares") in separate
series, or funds. The Board of Trustees has authorized Xxxxxxx S&P 500 Stock
Fund (the "Fund"). Series may be abolished and dissolved, and additional
series established, from time to time by action of the Trustees.
The Trust, on behalf of the Fund, has selected you to act as the investment
manager of the Fund and to provide certain other services, as more fully set
forth below, and you have indicated that you are willing to act as such
investment manager and to perform such services under the terms and conditions
hereinafter set forth. Accordingly, the Trust on behalf of the Fund agrees
with you as follows:
1. Delivery of Documents. The Trust engages in the business of
investing and reinvesting the assets of the Fund in the manner and in
accordance with the investment objectives, policies and restrictions specified
in the currently effective Prospectus (the "Prospectus") and Statement of
Additional Information (the "SAI") relating to the Fund included in the
Trust's Registration Statement on Form N-1A, as amended from time to time (the
"Registration Statement"), filed by the Trust under the Investment Company Act
of 1940, as amended (the "1940 Act"), and the Securities Act of 1933, as
amended. Copies of the documents referred to in the preceding sentence have
been furnished to you by the Trust. The Trust has also furnished you with
copies properly certified or authenticated of each of the following additional
documents related to the Trust and the Fund:
(a) The Declaration, as amended to date.
(b) By-Laws of the Trust as in effect on the date hereof (the
"By-Laws").
(c) Resolutions of the Trustees of the Trust and the
shareholders of the Fund selecting you as investment manager
and approving the form of this Agreement.
(d) Establishment and Designation of Series of Shares of
Beneficial Interest dated March 22, 2000 relating to the
Fund.
The Trust will furnish you from time to time with copies, properly certified
or authenticated, of all amendments of or supplements, if any, to the
foregoing, including the Prospectus, the SAI and the Registration Statement.
2. Portfolio Management Services. As manager of the assets of the Fund,
you shall provide continuing investment management of the assets of the Fund
in accordance with the investment objectives, policies and restrictions set
forth in the Prospectus and SAI; the applicable provisions of the 1940 Act and
the Internal Revenue
Code of 1986, as amended (the "Code"), relating to regulated investment
companies and all rules and regulations thereunder; and all other applicable
federal and state laws and regulations of which you have knowledge; subject
always to policies and instructions adopted by the Trust's Board of Trustees. In
connection therewith, you shall use reasonable efforts to manage the Fund so
that it will qualify as a regulated investment company under Subchapter M of the
Code and regulations issued thereunder. The Fund shall have the benefit of the
investment analysis and research, the review of current economic conditions and
trends and the consideration of long-range investment policy generally available
to your investment advisory clients. In managing the Fund in accordance with the
requirements set forth in this section 2, you shall be entitled to receive and
act upon advice of counsel to the Trust. You shall also make available to the
Trust promptly upon request all of the Fund's investment records and ledgers as
are necessary to assist the Trust in complying with the requirements of the 1940
Act and other applicable laws. To the extent required by law, you shall furnish
to regulatory authorities having the requisite authority any information or
reports in connection with the services provided pursuant to this Agreement
which may be requested in order to ascertain whether the operations of the Trust
are being conducted in a manner consistent with applicable laws and regulations.
You shall determine the securities, instruments, investments, currencies,
repurchase agreements, futures, options and other contracts relating to
investments to be purchased, sold or entered into by the Fund and place orders
with broker-dealers, foreign currency dealers, futures commission merchants or
others pursuant to your determinations and all in accordance with Fund
policies as expressed in the Registration Statement. You shall determine what
portion of the Fund's portfolio shall be invested in securities and other
assets and what portion, if any, should be held uninvested.
You shall furnish to the Trust's Board of Trustees periodic reports on the
investment performance of the Fund and on the performance of your obligations
pursuant to this Agreement, and you shall supply such additional reports and
information as the Trust's officers or Board of Trustees shall reasonably
request.
3. Delegation of Portfolio Management Services. Subject to the prior
approval of a majority of the members of the Fund's Board of Trustees,
including a majority of the Trustees who are not "interested persons," as
defined in the 1940 Act, you may, through a sub-advisory agreement or other
arrangement, delegate to any other company that you control, are controlled
by, or are under common control with, or to specified employees of any such
companies, or to more than one such company, to the extent permitted by
applicable law, certain of your duties enumerated in section 2 hereof;
provided, that you shall continue to supervise the services provided by such
company or employees and any such delegation shall not relieve you of any of
your obligations hereunder.
Subject to the provisions of this Agreement, the duties of any sub-adviser or
delegate, the portion of portfolio assets of the Fund that the sub-adviser or
delegate shall manage and the fees to be paid to the sub-adviser or delegate
by you under and pursuant to any sub-advisory agreement or other arrangement
entered into in accordance with this Agreement may be adjusted from time to
time by you, subject to the prior approval of a majority of the members of the
Fund's Board of Trustees, including a majority of the Trustees who are not
"interested persons," as defined in the 1940 Act.
4. Administrative Services. In addition to the portfolio management
services specified above in section 2, you shall furnish at your expense for
the use of the Fund such office space and facilities in the United States as
the Fund may require for its reasonable needs, and you (or one or more of your
affiliates designated by you) shall render to the Trust administrative
services on behalf of the Fund necessary for operating as an open end
investment company and not provided by persons not parties to this Agreement
including, but not limited to, preparing reports to and meeting materials for
the Trust's Board of Trustees and reports and notices to Fund shareholders;
supervising, negotiating contractual arrangements with, to the extent
appropriate, and monitoring the performance of, accounting agents, custodians,
depositories, transfer agents and pricing agents, accountants, attorneys,
printers, underwriters, brokers and dealers, insurers and other persons in any
capacity deemed to be necessary or desirable to Fund operations; preparing and
making filings with the Securities and Exchange Commission (the "SEC") and
other regulatory and self-regulatory organizations, including, but not limited
to, preliminary and definitive proxy materials, post-effective amendments to
the Registration Statement, semi-annual reports on Form N-SAR and notices
pursuant to Rule 24f-2 under the 1940 Act; overseeing the tabulation of
proxies by the Fund's transfer agent; assisting in the preparation and filing
of the Fund's federal, state and local tax returns; preparing and filing the
Fund's federal excise tax return pursuant to Section 4982 of the Code;
providing assistance with investor and public
2
relations matters; monitoring the valuation of portfolio securities and the
calculation of net asset value; monitoring the registration of Shares of the
Fund under applicable federal and state securities laws; maintaining or causing
to be maintained for the Fund all books, records and reports and any other
information required under the 1940 Act, to the extent that such books, records
and reports and other information are not maintained by the Fund's custodian or
other agents of the Fund; assisting in establishing the accounting policies of
the Fund; assisting in the resolution of accounting issues that may arise with
respect to the Fund's operations and consulting with the Fund's independent
accountants, legal counsel and the Fund's other agents as necessary in
connection therewith; establishing and monitoring the Fund's operating expense
budgets; reviewing the Fund's bills; processing the payment of bills that have
been approved by an authorized person; assisting the Fund in determining the
amount of dividends and distributions available to be paid by the Fund to its
shareholders, preparing and arranging for the printing of dividend notices to
shareholders, and providing the transfer and dividend paying agent, the
custodian, and the accounting agent with such information as is required for
such parties to effect the payment of dividends and distributions; and otherwise
assisting the Trust as it may reasonably request in the conduct of the Fund's
business, subject to the direction and control of the Trust's Board of Trustees.
Nothing in this Agreement shall be deemed to shift to you or to diminish the
obligations of any agent of the Fund or any other person not a party to this
Agreement which is obligated to provide services to the Fund.
5. Allocation of Charges and Expenses. Except as otherwise specifically
provided in this section 4, you shall pay the compensation and expenses of all
Trustees, officers and executive employees of the Trust (including the Fund's
share of payroll taxes) who are affiliated persons of you, and you shall make
available, without expense to the Fund, the services of such of your
directors, officers and employees as may duly be elected officers of the
Trust, subject to their individual consent to serve and to any limitations
imposed by law. You shall provide at your expense the portfolio management
services described in section 2 hereof and the administrative services
described in section 3 hereof.
You shall not be required to pay any expenses of the Fund other than those
specifically allocated to you in this section 4. In particular, but without
limiting the generality of the foregoing, you shall not be responsible, except
to the extent of the reasonable compensation of such of the Fund's Trustees
and officers as are directors, officers or employees of you whose services may
be involved, for the following expenses of the Fund: organization expenses of
the Fund (including out of-pocket expenses, but not including your overhead or
employee costs); fees payable to you and to any other Fund advisors or
consultants; legal expenses; auditing and accounting expenses; maintenance of
books and records which are required to be maintained by the Fund's custodian
or other agents of the Trust; telephone, telex, facsimile, postage and other
communications expenses; taxes and governmental fees; fees, dues and expenses
incurred by the Fund in connection with membership in investment company trade
organizations; fees and expenses of the Fund's accounting agent for which the
Trust is responsible pursuant to the terms of the Fund Accounting Services
Agreement, custodians, subcustodians, transfer agents, dividend disbursing
agents and registrars; payment for portfolio pricing or valuation services to
pricing agents, accountants, bankers and other specialists, if any; expenses
of preparing share certificates and, except as provided below in this section
4, other expenses in connection with the issuance, offering, distribution,
sale, redemption or repurchase of securities issued by the Fund; expenses
relating to investor and public relations; expenses and fees of registering or
qualifying Shares of the Fund for sale; interest charges, bond premiums and
other insurance expense; freight, insurance and other charges in connection
with the shipment of the Fund's portfolio securities; the compensation and all
expenses (specifically including travel expenses relating to Trust business)
of Trustees, officers and employees of the Trust who are not affiliated
persons of you; brokerage commissions or other costs of acquiring or disposing
of any portfolio securities of the Fund; expenses of printing and distributing
reports, notices and dividends to shareholders; expenses of printing and
mailing Prospectuses and SAIs of the Fund and supplements thereto; costs of
stationery; any litigation expenses; indemnification of Trustees and officers
of the Trust; and costs of shareholders' and other meetings.
You shall not be required to pay expenses of any activity which is primarily
intended to result in sales of Shares of the Fund if and to the extent that
(i) such expenses are required to be borne by a principal underwriter which
acts as the distributor of the Fund's Shares pursuant to an underwriting
agreement which provides that the underwriter shall assume some or all of such
expenses, or (ii) the Trust on behalf of the Fund shall have adopted a plan in
conformity with Rule 12b-1 under the 1940 Act providing that the Fund (or some
other party) shall assume some or all of such expenses. You shall be required
to pay such of the foregoing sales expenses as are not required to be paid by
the
3
principal underwriter pursuant to the underwriting agreement or are not
permitted to be paid by the Fund (or some other party) pursuant to such a plan.
6. Management Fee. For all services to be rendered, payments to be made
and costs to be assumed by you as provided in sections 2, 3, 4 and 5 hereof,
the Trust on behalf of the Fund shall pay you in United States Dollars on the
last day of each month the unpaid balance of a fee equal to the excess of 1/12
of 0.33 of 1 percent of the average daily net assets as defined below of the
Fund for such month; provided that, for any calendar month during which the
average of such values exceeds $100,000,000 the fee payable for that month
based on the portion of the average of such values in excess of $100,000,000
shall be 1/12 of 0.29 of 1 percent of such portion; provided further that, for
any calendar month during which the average of such values exceeds
$200,000,000 the fee payable for that month based on the portion of the
average of such values in excess of $200,000,000 shall be 1/12 of 0.27 of 1
percent of such portion; over the lowest applicable expense fully described
below or over any compensation waived by you from time to time (as more fully
described below). You shall be entitled to receive during any month such
interim payments of your fee hereunder as you shall request, provided that no
such payment shall exceed 75 percent of the amount of your fee then accrued on
the books of the Fund and unpaid.
The "average daily net assets" of the Fund shall mean the average of the
values placed on the Fund's net assets as of 4:00 p.m. (New York time) on each
day on which the net asset value of the Fund is determined consistent with the
provisions of Rule 22c-1 under the 1940 Act or, if the Fund lawfully
determines the value of its net assets as of some other time on each business
day, as of such time. The value of the net assets of the Fund shall always be
determined pursuant to the applicable provisions of the Declaration and the
Registration Statement. If the determination of net asset value does not take
place for any particular day, then for the purposes of this section 5, the
value of the net assets of the Fund as last determined shall be deemed to be
the value of its net assets as of 4:00 p.m. (New York time), or as of such
other time as the value of the net assets of the Fund's portfolio may be
lawfully determined on that day. If the Fund determines the value of the net
assets of its portfolio more than once on any day, then the last such
determination thereof on that day shall be deemed to be the sole determination
thereof on that day for the purposes of this section 5.
You may waive all or a portion of your fees provided for hereunder and such
waiver shall be treated as a reduction in purchase price of your services.
You shall be contractually bound hereunder by the terms of any publicly
announced waiver of your fee, or any limitation of the Fund's expenses, as if
such waiver or limitation were fully set forth herein.
7. Avoidance of Inconsistent Position; Services Not Exclusive. In
connection with purchases or sales of portfolio securities and other
investments for the account of the Fund, neither you nor any of your
directors, officers or employees shall act as a principal or agent or receive
any commission. You or your agent shall arrange for the placing of all orders
for the purchase and sale of portfolio securities and other investments for
the Fund's account with brokers or dealers selected by you in accordance with
Fund policies as expressed in the Registration Statement. If any occasion
should arise in which you give any advice to clients of yours concerning the
Shares of the Fund, you shall act solely as investment counsel for such
clients and not in any way on behalf of the Fund.
Your services to the Fund pursuant to this Agreement are not to be deemed to
be exclusive and it is understood that you may render investment advice,
management and services to others. In acting under this Agreement, you shall
be an independent contractor and not an agent of the Trust. Whenever the Fund
and one or more other accounts or investment companies advised by you have
available funds for investment, investments suitable and appropriate for each
shall be allocated in accordance with procedures believed by you to be
equitable to each entity. Similarly, opportunities to sell securities shall
be allocated in a manner believed by you to be equitable. The Fund recognizes
that in some cases this procedure may adversely affect the size of the
position that may be acquired or disposed of for the Fund.
8. Limitation of Liability of Manager. As an inducement to your
undertaking to render services pursuant to this Agreement, the Trust agrees
that you shall not be liable under this Agreement for any error of judgment or
mistake of law or for any loss suffered by the Fund in connection with the
matters to which this Agreement relates, provided that nothing in this
Agreement shall be deemed to protect or purport to protect you against any
liability to the Trust, the Fund or its shareholders to which you would
otherwise be subject by reason of willful misfeasance,
4
bad faith or gross negligence in the performance of your duties, or by reason of
your reckless disregard of your obligations and duties hereunder.
9. Duration and Termination of This Agreement. This Agreement shall
remain in force until September 30, 2002, and continue in force from year to
year thereafter, but only so long as such continuance is specifically approved
at least annually (a) by the vote of a majority of the Trustees who are not
parties to this Agreement or interested persons of any party to this
Agreement, cast in person at a meeting called for the purpose of voting on
such approval, and (b) by the Trustees of the Trust, or by the vote of a
majority of the outstanding voting securities of the Fund. The aforesaid
requirement that continuance of this Agreement be "specifically approved at
least annually" shall be construed in a manner consistent with the 1940 Act
and the rules and regulations thereunder and any applicable SEC exemptive
order therefrom.
This Agreement may be terminated with respect to the Fund at any time, without
the payment of any penalty, by the vote of a majority of the outstanding
voting securities of the Fund or by the Trust's Board of Trustees on 60 days'
written notice to you, or by you on 60 days' written notice to the Trust.
This Agreement shall terminate automatically in the event of its assignment.
This Agreement may be terminated with respect to the Fund at any time without
the payment of any penalty by the Board of Trustees or by vote of a majority
of the outstanding voting securities of the Fund in the event that it shall
have been established by a court of competent jurisdiction that you or any of
your officers or directors has taken any action which results in a breach of
your covenants set forth herein.
10. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Agreement shall
be effective until approved in a manner consistent with the 1940 Act and rules
and regulations thereunder and any applicable SEC exemptive order therefrom.
11. Limitation of Liability for Claims. The Declaration, a copy of
which, together with all amendments thereto, is on file in the Office of the
Secretary of The Commonwealth of Massachusetts, provides that the name
"Xxxxxxx Investors Trust" refers to the Trustees under the Declaration
collectively as Trustees and not as individuals or personally, and that no
shareholder of the Fund, or Trustee, officer, employee or agent of the Trust,
shall be subject to claims against or obligations of the Trust or of the Fund
to any extent whatsoever, but that the Trust estate only shall be liable.
You are hereby expressly put on notice of the limitation of liability as set
forth in the Declaration and you agree that the obligations assumed by the
Trust on behalf of the Fund pursuant to this Agreement shall be limited in all
cases to the Fund and its assets, and you shall not seek satisfaction of any
such obligation from the shareholders or any shareholder of the Fund or any
other series of the Trust, or from any Trustee, officer, employee or agent of
the Trust. You understand that the rights and obligations of each Fund, or
series, under the Declaration are separate and distinct from those of any and
all other series.
12. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
In interpreting the provisions of this Agreement, the definitions contained in
Section 2(a) of the 1940 Act (particularly the definitions of "affiliated
person," "assignment" and "majority of the outstanding voting securities"), as
from time to time amended, shall be applied, subject, however, to such
exemptions as may be granted by the SEC by any rule, regulation or order.
5
This Agreement shall be construed in accordance with the laws of The
Commonwealth of Massachusetts, provided that nothing herein shall be construed
in a manner inconsistent with the 1940 Act, or in a manner which would cause
the Fund to fail to comply with the requirements of Subchapter M of the Code.
This Agreement shall supersede all prior investment advisory or management
agreements entered into between you and the Trust on behalf of the Fund.
If you are in agreement with the foregoing, please execute the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Trust, whereupon this letter shall become a binding
contract effective as of the date of this Agreement.
6
Yours very truly,
XXXXXXX INVESTORS TRUST,
on behalf of
Xxxxxxx S&P 500 Stock Fund
By: /s/Xxxxxxx X. Xxxxxx
---------------------------
Xxxxxxx X. Xxxxxx
Vice President
The foregoing Agreement is hereby accepted as of the date hereof.
DEUTSCHE INVESTMENT MANAGEMENT
AMERICAS INC.
By: /S/Xxxx X. Xxxxxx
------------------------------
Xxxx X. Xxxxxx
Managing Director
7
