MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT, dated as of March 20, 1997, between XXXXXXXX VALUE
FUND SERIES, INC., a Maryland corporation (the "Corporation"), on behalf of
Xxxxxxxx Large-Cap Value Fund and Xxxxxxxx Small-Cap Value Fund (collectively,
together with any future series, the "Series") and J. & X. XXXXXXXX & CO.
INCORPORATED, a Delaware corporation (the "Manager").
In consideration of the mutual agreements herein made, the parties hereto
agree as follows:
1. Duties of the Manager. The Manager shall manage the affairs of the
Corporation including, but not limited to, continuously providing the
Corporation with investment management services, including investment research,
advice and supervision, determining which securities shall be purchased or sold
by the Series, making purchases and sales of securities on behalf of the Series
and determining how voting and other rights with respect to securities of the
Corporation shall be exercised, subject in each case to the control of the Board
of Directors of the Corporation and in accordance with the objectives, policies
and principles set forth in the Registration Statement and Prospectus of the
Series and the requirements of the Investment Company Act of 1940 (the "1940
Act") and other applicable law. The Manager will enter into an agreement dated
the date hereof (the "Subadvisory Agreement") with Xxxxxxxx Xxxxxxxxx Co. (the
"Subadviser") pursuant to which the Subadviser may provide the Series with the
type of investment management services described above with respect to a portion
of the Series' assets. The Manager will continue to have responsibility for
investment management services provided under the Subadvisory Agreement. In the
event the Subadviser ceases to provide such investment management services to
the Series, they shall be provided by the Manager or by such other form as may
be selected by the Corporation and approved in accordance with applicable
requirements. In performing such duties, the Manager shall provide such office
space, such bookkeeping, accounting, internal legal, clerical, secretarial and
administrative services (exclusive of, and in addition to, any such services
provided by any others retained by the Series) and such executive and other
personnel as shall be necessary for the operations of the Series. The
Corporation understands that the Manager also acts as the manager of all of the
investment companies in the Xxxxxxxx Group.
Subject to Section 36 of the Act, the Manager shall not be liable to the
Series 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 management of the Series and
the performance of its duties under this Agreement 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 under this
Agreement.
2. Expenses. The Manager shall pay all of its expenses arising from the
performance of its obligations under Section 1, including the fee of the
Subadviser, and shall pay any salaries, fees and expenses of the directors of
the Corporation who are employees of the Manager or its affiliates. The Manager
shall not be required to pay any other expenses of the Series, including, but
not limited to, direct charges relating to the purchase and sale of portfolio
securities, interest charges, fees and expenses of independent attorneys and
auditors, taxes and governmental fees, cost of stock certificates and any other
expenses (including clerical
expenses) of issue, sale, repurchase or redemption of shares, expenses of
registering and qualifying shares for sale, expenses of printing and
distributing reports, notices and proxy materials to shareholders, expense of
corporate data processing and related services, shareholder recordkeeping and
shareholder account services, expenses of printing and filing reports and other
documents filed with governmental agencies, expenses of printing and
distributing prospectuses, expenses of annual and special shareholders'
meetings, fees and disbursements of transfer agents and custodians, expenses of
disbursing dividends and distributions, fees and expenses of directors of the
Corporation who are not employees of the Manager or its affiliates, membership
dues in the Investment Company Institute, insurance premiums and extraordinary
expenses such as litigation expenses.
3. Compensation. (a) As compensation for the services performed and the
facilities and personnel provided by the Manager pursuant to Section 1, each
Series will pay to the Manager promptly after the end of each month a fee,
calculated on each day during such month as indicated on the attached fee
schedule.
(b) If the Manager shall serve hereunder for less than the whole of any
month, the fee hereunder shall be prorated.
4. Purchase and Sale of Securities. The Manager or, pursuant to the
Subadvisory Agreement, the Subadviser, shall purchase securities from or through
and sell securities to or through such persons, brokers or dealers (including
the Manager or an affiliate of the Manager) as the Manager and or Subadviser
shall deem appropriate in order to carry out the policy with respect to
portfolio transactions as set forth in the Registration Statement and
Prospectus(es) of the Series or as the Board of Directors of the Corporation may
direct from time to time. In providing the Series with investment management and
supervision, it is recognized that the Manager or the Subadviser will seek the
most favorable price and execution, and, consistent with such policy, may give
consideration to the research, statistical and other services furnished by
brokers or dealers to the Manager or the Subadvisor for its use, to the general
attitude of brokers or dealers toward investment companies and their support of
them, and to such other considerations as the Board of Directors of the
Corporation may direct or authorize from time to time.
Notwithstanding the above, it is understood that it is desirable for the
Series that the Manager or the Subadvisor have access to supplemental investment
and market research and security and economic analysis provided by brokers who
execute brokerage transactions at a higher cost to the Corporation than may
result when allocating brokerage to other brokers on the basis of seeking the
most favorable price and execution. Therefore, the Manager and the Subadvisor
are authorized to place orders for the purchase and sale of securities for the
Series with such brokers, subject to review by the Corporation's Board of
Directors from time to time with respect to the extent and continuation of this
practice. It is understood that the services provided by such brokers may be
useful to the Manager and the Subadvisor in connection with its services to
other clients as well as the Series.
The placing of purchase and sale orders may be carried out by the Manager
or the Subadvisor or any wholly-owned subsidiary of the Manager.
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If, in connection with purchases and sales of securities for the Series,
the Manager or any subsidiary of the Manager may, without material risk, arrange
to receive a soliciting dealer's fee or other underwriter's or dealer's discount
or commission, the Manager shall, unless otherwise directed by the Board of
Directors of the Corporation, obtain such fee, discount or commission and the
amount thereof shall be applied to reduce the compensation to be received by the
Manager pursuant to Section 3 hereof.
Nothing herein shall prohibit the Board of Directors of the Corporation
from approving the payment by the Series of additional compensation to others
for consulting services, supplemental research and security and economic
analysis.
5. Term of Agreement. This Agreement shall continue in full force and
effect until December 31, 1998, and from year to year thereafter if such
continuance is approved in the manner required by the 1940 Act if the Manager
shall not have notified the Series in writing at least 60 days prior to such
December 31 or prior to December 31 of any year thereafter that it does not
desire such continuance. This Agreement may be terminated at any time in respect
of any Series, without payment of penalty by the Series, on 60 days' written
notice to the Manager, by vote of the Board of Directors of the Corporation or
by vote of a majority of the outstanding voting securities of such Series (as
defined by the 1940 Act). The failure of the Board of Directors of the
Corporation or holders of securities of any Series to approve the continuance of
this Agreement with respect to such Series, shall be without prejudice to the
effectiveness of this Agreement with respect to any other Series. This Agreement
shall automatically terminate in the event of its assignment (as defined by the
1940 Act).
6. Right of Manager In Corporate Name. The Manager and the Series each
agree that the word "Xxxxxxxx", which comprises a component of each Series'
name, is a property right of the Manager. Each Series agrees and consents that
(i) it will only use the word "Xxxxxxxx" as a component of its corporate name
and for no other purpose, (ii) it will not purport to grant to any third party
the right to use the word "Xxxxxxxx" for any purpose, (iii) the Manager or any
corporate affiliate of the Manager may use or grant to others the right to use
the word "Xxxxxxxx", or any combination or abbreviation thereof, as all or a
portion of a corporate or business name or for any commercial purpose, including
a grant of such right to any other investment company, and at the request of the
Manager, each Series will take such action as may be required to provide its
consent to the use of the word "Xxxxxxxx", or any combination or abbreviation
thereof, by the Manager or any corporate affiliate of the Manager, or by any
person to whom the Manager or an affiliate of the Manager shall have granted the
right to such use; and (iv) upon the termination of any management agreement
into which the Manager and a Series may enter, such Series shall, upon request
by the Manager, promptly take such action, at its own expense, as may be
necessary to change its corporate name to one not containing the word "Xxxxxxxx"
and following such change, shall not use the word "Xxxxxxxx", or any combination
thereof, as a part of its corporate name or for any other commercial purpose,
and shall use its best efforts to cause its officers, directors and stockholders
to take any and all actions which the Manager may request to effect the
foregoing and to reconvey to the Manager any and all rights to such word.
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7. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. Anything herein to the
contrary notwithstanding, this Agreement shall not be construed to require, or
to impose any duty upon either of the parties, to do anything in violation of
any applicable laws or regulations.
IN WITNESS WHEREOF, the Corporation, on behalf of the Series, and the
Manager have caused this Agreement to be executed by their duly authorized
officers as of the date first above written.
XXXXXXXX VALUE FUND SERIES, INC.
By /s/ Xxxxxxx X. Xxxxxx
-----------------------------
Xxxxxxx X. Xxxxxx
J. & X. XXXXXXXX & CO. INCORPORATED
By /s/ Xxxxx X. Xxxx
-----------------------------
Xxxxx X. Xxxx
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FEE SCHEDULE
Series Annual Rate
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Xxxxxxxx Large-Cap Value Fund .80% of the Series' average
daily net assets.
Xxxxxxxx Small-Cap Value Fund 1.00% of the Series' average
daily net assets.
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