SSBC INDEX SERIES INC.
FORM OF INVESTMENT MANAGEMENT AGREEMENT
February [ ], 2000
SSB Citi Fund Management LLC
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
This Investment Management Agreement (the "Agreement") is made on this [ ] day
of February, 2000, by and between SSBC Index Series Inc. , a corporation
organized under the laws of the State of Maryland (the "Corporation"), in
respect of its new series, Internet Index Shares (the "Fund"), and SSB Citi Fund
Management LLC (the "Manager") as follows:
1. Investment Description; Appointment
The Fund desires to employ its capital by investing and reinvesting in
investments of the kind and in accordance with the limitations specified in: (i)
the Corporation's Charter as amended from time to time (the "Charter of the
Corporation"); (ii) the Fund's Prospectus (the "Prospectus"); and (iii) the
Fund's Statement of Additional Information (the "Statement") filed with the
Securities and Exchange Commission (the "SEC") as part of the Fund's
Registration Statement on Form N-1A, as amended from time to time, and in such
manner and to such extent as may from time to time be approved by the Board of
Directors of the Corporation (the "Board"). Copies of the Fund's Prospectus and
the Statement and the Charter of the Corporation have been or will be submitted
to the Manager. The Corporation desires to employ and hereby appoints the
Manager to act as investment manager for the Fund. The Manager accepts the
appointment and agrees to furnish the services for the compensation set forth
below. The Manager is hereby authorized to retain third parties and is hereby
authorized to delegate some or all of its duties and obligations hereunder to
such persons, provided such persons shall remain under the general supervision
of the Manager.
2. Services as Investment Manager
Subject to the supervision and direction of the Board, the Manager will: (a)
manage the Fund's holdings in accordance with the Fund's investment objective
and policies as stated in the Charter and the Registration Statement; (b) assist
in supervising all aspects of the Fund's operations; (c) supply the Fund with
office facilities (which may be in SSB Citi's own offices), statistical and
research data, data processing services, clerical, accounting and bookkeeping
services, including, but not limited to, the calculation of (i) the net asset
value of shares of the Fund, and (ii) distribution fees, internal auditing and
legal services, internal executive and administrative services, and stationery
and office supplies; and (d) prepare reports to shareholders of the Fund, tax
returns and reports to and filings with the SEC and state blue sky authorities.
The Manager is hereby authorized to retain third parties and to delegate some or
all of its duties and obligations under this
paragraph 2 to such persons provided that such persons shall remain under the
general supervision of the Manager.
3. Compensation
In consideration of the services rendered pursuant to this Agreement, the
Corporation will pay the Manager, on the first business day of each calendar
quarter, a fee for the previous quarter at an annual rate of [0.__]% of the
Fund's average daily net assets. The fee for the period from the date the Fund
commences its investment operations to the end of the month during which the
Fund commences its investment operations shall be pro-rated according to the
proportion that such period bears to the full monthly period. Upon any
termination of this Agreement before the end of any month, the fee for such part
of that month shall be pro-rated according to the proportion that such period
bears to the full monthly period and shall be payable upon the date of
termination of this Agreement. For the purpose of determining fees payable to
the Manager, the value of the Fund's net assets shall be computed at the times
and in the manner specified in the Fund's Prospectus and/or the Statement, as
from time to time in effect.
4. Expenses
The Manager will bear all expenses in connection with the performance of its
services under this Agreement. The Fund will bear certain other expenses to be
incurred in its operation, including: investment advisory and administration
fees; charges of custodians and transfer and dividend disbursing agents; fees
for necessary professional services, such as the Fund's and Board members'
proportionate share of insurance premiums, professional associations, dues
and/or assessments; and brokerage services, including taxes, interest and
commissions; costs attributable to investor services, including without
limitation, telephone and personnel expenses; costs of preparing and printing
prospectuses and statements of additional information for regulatory purposes
and for distribution to existing shareholders; the costs of regulatory
compliance, such as SEC fees and state blue sky qualifications fees; outside
auditing and legal expenses and costs associated with maintaining the Fund's
legal existence; costs of shareholders' reports and meetings of the officers or
Board; fees of the members of the Board who are not officers, directors or
employees of Xxxxxxx Xxxxx Xxxxxx, Inc. or its affiliates or any person who is
an affiliate of any person to whom duties may be delegated hereunder and any
extraordinary expenses. In addition, the Fund will pay all service and
distribution fees pursuant to a Services and Distribution Plan adopted under
Rule 12b-1 of the Investment Company Act of 1940, as amended (the "1940 Act").
5. Brokerage
In selecting brokers or dealers to execute transactions on behalf of the Fund,
the Manager will seek the best overall terms available. In assessing the best
overall terms available for any transaction, the Manager will consider factors
it deems relevant, including, but not limited to, the breadth of the market in
the security, the price of the security, the financial condition and execution
capability of the broker or dealer and the reasonableness of the commission, if
any, for the specific transaction and on a continuing basis. In selecting
brokers or dealers to execute a particular transaction, and in evaluating the
best overall terms available, the Manager is authorized to consider the
brokerage and research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of
1934, as amended) provided to the Fund and/or other accounts over which the
Manager or its affiliates exercise investment discretion.
6. Information Provided to the Fund
The Manager will keep the Corporation informed of developments materially
affecting the Fund's portfolio, and will, on its own initiative, furnish the
Corporation from time to time with whatever information the Manager believes is
appropriate for this purpose.
7. Standard of Care
The Manager shall exercise its best judgment in rendering the services listed in
paragraph 2 above. The Manager shall not be liable 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 the Manager against any
liability to the Corporation or to the Fund's shareholders to which the Manager
would otherwise be subject by reason of willful malfeasance, bad faith or gross
negligence on its part in the performance of its duties or by reason of the
Manager's reckless disregard of its obligations and duties under this Agreement.
8. Services to Other Companies or Accounts
The Corporation understands that the Manager now acts, will continue to act and
may act in the future as: investment adviser to fiduciary and other managed
accounts, as well as to other investment companies; and the Corporation has no
objection to the Manager's so acting, provided that whenever the Fund and one or
more other investment companies advised by the Manager have available funds for
investment, investments suitable and appropriate for each will be allocated in
accordance with a formula believed to be equitable to each company. The
Corporation recognizes that in some cases this procedure may adversely affect
the size of the position obtainable for the Fund. In addition, the Corporation
understands that the persons employed by the Manager to assist in the
performance of the Manager's duties under this Agreement will not devote their
full time to such service and nothing contained in this Agreement shall be
deemed to limit or restrict the right of the Manager or any affiliate of the
Manager to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature.
9. Term of Agreement
This Agreement shall become effective as of the date the Fund commences its
investment operations and continue for an initial two-year term and shall
continue thereafter so long as such continuance is specifically approved at
least annually by (i) the Board or (ii) a vote of a "majority" (as defined in
the 0000 Xxx) of the Fund's outstanding voting securities, provided that in
either event the continuance is also approved by a majority of the Board members
who are not "interested persons" (as defined in the 0000 Xxx) of any party to
this Agreement, by vote cast in person or by proxy at a meeting called for the
purpose of voting on such approval. This Agreement is terminable, without
penalty, on 60 days' written notice, by the Board or by vote of holders of a
majority of the Fund's shares, or upon 90 days' written notice, by the Manager.
This Agreement will also terminate automatically in the event of its assignment
(as defined in the 1940 Act).
10. Representation by the Corporation
The Corporation represents that a copy of the Charter of Corporation is on file
with the State of Maryland Department of Assessments and Taxation.
If the foregoing is in accordance with your understanding, kindly indicate your
acceptance hereof by signing and returning the enclosed copy of this Agreement
to us.
Very truly yours,
SSBC Index Series Inc.,
on behalf of
Internet Index Shares
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By: Xxxxx X. XxXxxxxx
Title: Chairman of the Board
Accepted:
SSB Citi Fund Management LLC
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By: Xxxxx X. Xxxxxxx
Title: Senior Vice President
