XXXXXX INCOME FUND
MANAGEMENT CONTRACT
This Management Contract is dated as of February 27, 2014 between
XXXXXX INCOME FUND, a Massachusetts business trust (the Fund ), and
XXXXXX INVESTMENT MANAGEMENT, LLC, a Delaware limited liability
company (the Manager ).
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 or, in the case of a Fund that has
divided its shares into two or more series under Section 18(f)(2) of
the Investment Company Act of 1940, as amended (the 1940 Act ), each
series of the Fund identified from time to time on Schedule A to this
Contract (each reference in this Contract to a Fund or to the Fund
is also deemed to be a reference to any existing series of the Fund,
as appropriate in the particular context), will determine what
investments will be purchased, held, sold or exchanged by the Fund and
what portion, if any, of the assets of the Fund will be held
uninvested and will, on behalf of the Fund, make changes in such
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 the stated investment
objectives, policies and restrictions of the Fund, 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 will 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 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, will 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 will
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, will 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 will 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 will 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.
(f) Subject to the prior approval of a majority of the
Trustees, including a majority of the Trustees who are not interested
persons and, to the extent required by the 1940 Act and the rules and
regulations under the 1940 Act, subject to any applicable guidance or
interpretation of the Securities and Exchange Commission or its staff,
by the shareholders of the Fund, the Manager may, from time to time,
delegate to a sub adviser or sub administrator any of the Manager s
duties under this Contract, including the management of all or a
portion of the assets being managed. In all instances, however, the
Manager must oversee the provision of delegated services, the Manager
must bear the separate costs of employing any sub adviser or sub
administrator, and no delegation will relieve the Manager of any of
its obligations under this Contract.
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 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), and (c) of
Section 1, a fee, based on the Fund s Average Net Assets, computed and
paid monthly at the annual rates set forth on Schedule B attached to
this Contract, as from time to time amended. The Fund s Average Net
Assets means the average of all of the determinations of the Fund s
net asset value at the close of business on each business day during
each month while this Contract is in effect. The fee is payable for
each month within 15 days after the close of the month.
The fees payable by the Fund to the Manager pursuant to this
Section 3 will 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 for any fiscal year exceed
the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of
the Fund are qualified for offer or sale, the compensation due the
Manager for such fiscal year will be reduced by the amount of excess
by a reduction or refund thereof. In the event that the expenses 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 will be reduced, and if
necessary, the Manager will assume expenses of the Fund, to the extent
required by the terms and conditions of such expense limitation.
If the Manager serves for less than the whole of a month, the
foregoing compensation will be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract will automatically terminate, without the payment
of any penalty, in the event of its assignment, provided that no
delegation of responsibilities by the Manager pursuant to Section 1(f)
will be deemed to constitute an assignment. No provision of this
Contract may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought.
No amendment of this Contract is effective until approved in a manner
consistent with the 1940 Act, the rules and regulations under the 1940
Act and any applicable guidance or interpretation of the Securities
and Exchange Commission or its staff.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract is effective upon its execution and will remain in
full force and effect as to a Fund continuously thereafter (unless
terminated automatically as set forth in Section 4 or terminated in
accordance with the following paragraph) through June 30, 2014, and
will continue in effect from year to year thereafter so long as its
continuance is approved at least annually by (i) the Trustees, or the
shareholders by the affirmative vote of a majority of the outstanding
shares of the respective Fund, and (ii) a majority of the Trustees 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.
Either party hereto may at any time terminate this Contract as to
a Fund by not less than 60 days written notice delivered or mailed by
registered mail, postage prepaid, to the other party. Action with
respect to a Fund may be taken either (i) by vote of a majority of the
Trustees or (ii) by the affirmative vote of a majority of the
outstanding shares of the respective Fund.
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 Fund means the affirmative
vote, at a duly called and held meeting of shareholders of the
respective Fund, (a) of the holders of 67% or more of the shares of
the Fund present (in person or by proxy) and entitled to vote at the
meeting, if the holders of more than 50% of the outstanding shares of
the Fund entitled to vote at the meeting are present in person or by
proxy or (b) of the holders of more than 50% of the outstanding shares
of the Fund entitled to vote at the meeting, whichever is less.
For the purposes of this Contract, the terms affiliated person,
control, interested person and assignment have their respective
meanings defined in the 1940 Act, subject, however, to the rules and
regulations under the 1940 Act and any applicable guidance or
interpretation of the Securities and Exchange Commission or its staff;
the term approve at least annually will be construed in a manner
consistent with the 1940 Act and the rules and regulations under the
1940 Act and any applicable guidance or interpretation of the
Securities and Exchange Commission or its staff; and the term
brokerage and research services has the meaning given in the
Securities Exchange Act of 1934 and the rules and regulations under
the Securities Exchange Act of 1934 and under any applicable guidance
or interpretation of the Securities and Exchange Commission or its
staff.
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 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
respective Fund.
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IN WITNESS WHEREOF, XXXXXX INCOME FUND and XXXXXX INVESTMENT
MANAGEMENT, LLC have each caused this instrument to be signed on its
behalf by its President or a Vice President thereunto duly authorized,
all as of the day and year first above written.
XXXXXX INCOME FUND
By: /s/ Xxxxxxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxxxx
Executive Vice President, Principal
Executive
Officer, and Compliance Liaison
XXXXXX INVESTMENT MANAGEMENT, LLC
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Director of Trustee Relations and
Authorized
Person
Schedule A
Not applicable.
Schedule B
0.550% of the first $5 billion of Total Open End Mutual Fund Average
Net Assets;
0.500% of the next $5 billion of Total Open End Mutual Fund Average
Net Assets;
0.450% of the next $10 billion of Total Open End Mutual Fund Average
Net Assets;
0.400% of the next $10 billion of Total Open End Mutual Fund Average
Net Assets;
0.350% of the next $50 billion of Total Open End Mutual Fund Average
Net Assets;
0.330% of the next $50 billion of Total Open End Mutual Fund Average
Net Assets;
0.320% of the next $100 billion of Total Open End Mutual Fund Average
Net Assets;
0.315% of any excess thereafter.
Total Open End Mutual Fund Average Net Assets means the average of
all of the determinations of the aggregate net assets of all open end
funds sponsored by Xxxxxx Management (excluding the net assets of such
funds investing in, or invested in by, other such funds, such as
Xxxxxx RetirementReady Funds and Xxxxxx Money Market Liquidity Fund,
to the extent necessary to avoid double counting of such net assets)
at the close of business on each business day during each month while
the Management Contract is in effect.
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39381838_4
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A-1
39381838_4
B-1
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