exhibit d(5)
MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT, dated as of March 17, 2003, by and between Xxxxx
Xxxxxx Trust II, a Massachusetts business trust (the "Trust"), and Xxxxx Xxxxxx
Fund Management LLC, a Delaware limited liability corporation ("Xxxxx Xxxxxx
Management" or the "Manager").
W I T N E S S E T H:
WHEREAS, the Trust 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 and any exemptive orders thereunder, the "1940 Act"), and
WHEREAS, the Trust wishes to engage Xxxxx Xxxxxx Management to provide
certain management services for the series of the Trust designated in Schedule
A annexed hereto (the "Fund"), and Xxxxx Xxxxxx Management is willing to
provide such management services for the Fund on the terms and conditions set
forth herein.
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 Manager. (a) Xxxxx Xxxxxx Management shall act as the
Manager for the Fund 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 Fund shall
be held uninvested, subject always to the restrictions of the Trust's
Declaration of Trust, dated as of September 28, 2001, and By-Laws, as each may
be amended and restated 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 Trust with respect to the Fund. The Manager 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 Fund's
portfolio securities shall be exercised. Should the Board of Trustees of the
Trust at any time, however, make any definite determination as to investment
policy applicable to the Fund and notify the Manager thereof in writing, the
Manager 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in such notice or until similarly notified that such determination has been
revoked.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 Manager shall take, on behalf of the Fund, 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 Fund's account with the brokers or dealers selected by it,
and to that end the Manager is authorized as the agent of the Trust to give
instructions to the custodian or any subcustodian of the Fund as to deliveries
of securities and payments of cash for the account of the Fund. 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 Fund and/or the other accounts over which the
Manager or its affiliates exercise investment discretion. The Manager is
authorized to pay a broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction for the Fund which
is 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 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 Manager and its affiliates 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 Fund,
the Manager may deal with itself or with the Trustees of the Trust or the
Trust's underwriter or distributor or with its or their respective affiliates,
or affiliates of affiliates, to the extent such actions are permitted by the
1940 Act. In providing the services and assuming the obligations set forth
herein, the Manager may employ, at its own expense, or may request that the
Trust employ at each Fund's expense, one or more subadvisers; provided that in
each case the Manager shall supervise the activities of each subadviser. Any
agreement between the Manager and a subadviser shall be subject to the renewal,
termination and amendment provisions applicable to this Agreement. Any
agreement between the Trust on behalf of the Fund and a subadviser may be
terminated by the Manager at any time on not more than 60 days' nor less than
30 days' written notice to the Trust and the subadviser. To the extent
authorized by the Board of Trustees and subject to applicable provisions of the
1940 Act, the investment program to be provided hereunder may entail the
investment of all or a portion of the assets of the Fund in one or more
investment companies.
(b) Subject to the direction and control of the Board of Trustees of
the Trust, Xxxxx Xxxxxx Management shall perform such administrative and
management services as may from time to time be reasonably requested by the
Trust with respect to the Fund, which shall include without limitation: (i)
providing office space, equipment and clerical personnel necessary for
maintaining the organization of the Trust and the Fund and for performing the
administrative and management functions herein set forth; (ii) supervising the
overall administration of the Fund, including negotiation of contracts and fees
with and the monitoring of performance and xxxxxxxx of the Fund's transfer
agent, shareholder servicing agents, custodian and other independent
contractors or agents; and (iii) arranging for maintenance of books and records
of the Trust with respect to the Fund. Notwithstanding the foregoing, Xxxxx
Xxxxxx Management shall not be deemed to have assumed any duties with respect
to, and shall not be responsible for, the distribution of shares of beneficial
interest in the Fund, nor shall the Manager be deemed to have assumed or have
any responsibility with respect to functions specifically assumed by any
transfer agent, fund accounting agent, custodian or shareholder servicing agent
of the Trust or the Fund. In providing administrative and management services
as set forth herein, the Manager may, at its own expense, employ one or more
subadministrators; provided that the Manager 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. Xxxxx Xxxxxx Management 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 Trust will pay from the
assets of the Fund all of its own expenses allocable to the Fund including,
without limitation, organization costs of the Fund; compensation of Trustees
who are not "affiliated persons" of Xxxxx Xxxxxx Management; governmental fees;
interest charges; brokerage fees and commissions; loan commitment fees; taxes;
membership dues in industry associations allocable to the Trust; fees and
expenses of independent auditors, legal counsel and any transfer agent,
distributor, shareholder servicing agent, service agent, registrar or dividend
disbursing agent of the Trust; expenses of issuing and redeeming shares of
beneficial interest and servicing shareholder accounts; expenses of preparing,
typesetting, printing and mailing prospectuses, statements of additional
information, shareholder reports, notices, proxy statements and reports to
governmental officers and commissions and to existing shareholders of the Fund;
expenses connected with the execution, recording and settlement of security
transactions; insurance premiums; fees and expenses of the custodian for all
services to the Fund, including safekeeping of funds and securities and
maintaining required books and accounts; expenses of calculating the net asset
value of the Fund (including but not limited to the fees of independent pricing
services); expenses of meetings of the Fund's Trustees and of the Fund's
shareholders; expenses relating to the registration and qualification of shares
of the Fund; and such non-recurring or extraordinary expenses as may arise,
including those relating to actions, suits or proceedings to which the Trust on
behalf of the Fund may be a party and the legal obligation which the Trust may
have to indemnify its Trustees and officers with respect thereto.
3. Compensation of Manager. For the services to be rendered and the
facilities to be provided by the Manager hereunder, the Trust shall pay to the
Manager from the assets of the Fund a management fee computed daily and paid
monthly at an annual rate equal to the lesser of (i) that percentage of the
Fund's average daily net assets for the Fund's then-current fiscal year set
forth opposite the Fund's name on Schedule A annexed hereto (the "Aggregate
Management Fee"), minus the Fund's Aggregate Subadviser Fee (as defined below),
if any, and (ii) the difference between that Fund's Aggregate Management Fee
for the Fund's then-current fiscal year and the aggregate management fees
allocated to the Fund for the Fund's then-current fiscal year from the
registered investment company portfolios in which it invests (for which the
Manager or an affiliate serves as investment adviser). To the extent that the
Fund's Aggregate Subadviser Fee exceeds the Fund's Aggregate Management Fee,
the Manager shall pay such amount to the applicable subadvisers on the Fund's
behalf. The Fund's Aggregate Subadviser Fee is the aggregate amount payable by
that Fund to subadvisers pursuant to agreements between the Trust on behalf of
the Fund and the subadvisers. If the Manager provides services hereunder for
less than the whole of any period specified in this Section 3, the compensation
to the Manager shall be accordingly adjusted and prorated.
4. Covenants of Manager. The Manager agrees that it will not deal with
itself, or with the Trustees of the Trust or the Trust's principal underwriter
or distributor, as principals in making purchases or sales of securities or
other property for the account of the Fund, except as permitted by the 1940
Act, and will comply with all other provisions of the Declaration and By-Laws
and the then-current Registration Statement applicable to the Fund relative to
the Manager and its directors and officers.
5. Limitation of Liability of Manager. Xxxxx Xxxxxx Management 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 Fund, 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 "Xxxxx Xxxxxx Management" shall include directors, officers and
employees of the Manager as well as the Manager itself.
6. Activities of Manager. The services of the Manager to the Fund are
not to be deemed to be exclusive, the Manager being free to render investment
advisory, administrative and/or other services to others. It is understood that
Trustees, officers, and shareholders of the Trust are or may be or may become
interested in the Manager, as directors, officers, employees, or otherwise and
that directors, officers and employees of the Manager are or may become
similarly interested in the Trust and that the Manager may be or may become
interested in the Trust as a shareholder 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 for a period of two years from its effectiveness, on which date
it will terminate unless its continuance with respect to the Fund after that
date is "specifically approved at least annually" (a) by the vote of a majority
of the Trustees of the Trust who are not "interested persons" of the Trust or
of Xxxxx Xxxxxx Management at a meeting specifically called for the purpose of
voting on such approval, and (b) by the Board of Trustees of the Trust or by
"vote of a majority of the outstanding voting securities" of the Fund.
This Agreement may be terminated at any time with respect to the Fund
without the payment of any penalty by the Trustees or by the "vote of a
majority of the outstanding voting securities" of the Fund, or by the Manager,
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 with respect to the Fund only if such
amendment is approved by the "vote of a majority of the outstanding voting
securities" of the Fund (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 said Act.
8. Licenses. The Trust hereby agrees, on behalf of the Fund, to
reimburse the Manager for any and all reasonable costs incurred by the Manager
relating to the acquisition and retention of licenses to be used in connection
with the management of that Fund.
9. Governing Law. This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of The Commonwealth
of Massachusetts.
10. Use of Name. The Trust hereby acknowledges that any and all rights
in or to the name "Xxxxx Xxxxxx" which exist on the date of this Agreement or
which may arise hereafter are, and under any and all circumstances shall
continue to be, the sole property of the Manager; that the Manager may assign
any or all of such rights to another party or parties without the consent of
the Trust; and that the Manager may permit other parties, including other
investment companies, to use the word "Xxxxx Xxxxxx" in their names. If the
Manager, or its assignee as the case may be, ceases to serve as the manager of
the Trust, the Trust hereby agrees to take promptly any and all actions which
are necessary or desirable to change its name and those of each of its series
or classes so as to delete the word "Xxxxx Xxxxxx."
Each party acknowledges and agrees that all obligations of the Trust
under this Agreement are binding only with respect to the Fund; that any
liability of the Trust under this Agreement, or in connection with the
transactions contemplated herein, shall be discharged only out of the assets of
that Fund; and that no other series of the Trust shall be liable with respect
to this Agreement or in connection with the transactions contemplated herein.
The undersigned officer of the Trust 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
shareholders of the Trust individually.
[Signature page to follow]
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.
XXXXX XXXXXX TRUST II XXXXX XXXXXX
on behalf of the series listed FUND MANAGEMENT LLC
on Schedule A
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxxxx X. Xxxxx
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Title: Senior Vice-President Title: Secretary
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Schedule A
Aggregate Management
Fee (expressed as a
percentage of
each Fund's aggregate
net assets for its
Fund then-current fiscal year)
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Xxxxx Xxxxxx Short Duration Municipal Income Fund 0.45%
