EXHIBIT 10.13
MANAGEMENT AGREEMENT
BETWEEN
NUVEEN INVESTMENT TRUST III
AND
NUVEEN INSTITUTIONAL ADVISORY CORP.
NUVEEN INVESTMENT TRUST III, a Massachusetts business trust registered
under the Investment Company Act of 1940 ("1940 Act") as an open-end diversified
management series investment company ("Trust"), hereby appoints NUVEEN
INSTITUTIONAL ADVISORY CORP., a Delaware corporation registered under the
Investment Advisers Act of 1940 as an investment adviser, of Chicago, Illinois
("Manager"), to furnish investment advisory and management services and certain
administrative services with respect to the portion of its assets represented by
the shares of beneficial interest issued in the series listed in Schedule A
hereto, as such schedule may be amended from time to time (each such series
hereinafter referred to as "Fund"). Trust and Manager hereby agree that:
1. Investment Management Services. Manager shall manage the
investment operations of Trust and each Fund, subject to the terms of
this Agreement and to the supervision and control of Trust's Board of
Trustees ("Trustees"). Manager agrees to perform, or arrange for the
performance of, the following services with respect to each Fund:
(a) to obtain and evaluate such information relating to
economies, industries, businesses, securities and commodities
markets, and individual securities, commodities and indices as it
may deem necessary or useful in discharging its responsibilities
hereunder;
(b) to formulate and maintain a continuous investment
program in a manner consistent with and subject to (i) Trust's
agreement and declaration of trust and by-laws; (ii) the Fund's
investment objectives, policies, and restrictions as set forth in
written documents furnished by the Trust to Manager; (iii) all
securities, commodities, and tax laws and regulations applicable
to the Fund and Trust; and (iv) any other written limits or
directions furnished by the Trustees to Manager;
(c) unless otherwise directed by the Trustees, to determine from time
to time securities, commodities, interests or other investments to be
purchased, sold, retained or lent by the Fund, and to implement those
decisions, including the selection of entities with or through which such
purchases, sales or loans are to be effected;
(d) to use reasonable efforts to manage the Fund so that it will
qualify as a regulated investment company under subchapter M of the
Internal Revenue Code of 1986, as amended;
(e) to make recommendations as to the manner in which voting rights,
rights to consent to Trust or Fund action, and any other rights pertaining
to Trust or the Fund shall be exercised;
(f) to make available to Trust promptly upon request all of the
Fund's records and ledgers and any reports or information reasonably
requested by the Trust; and
(g) to the extent required by law, to furnish to regulatory
authorities any information or reports relating to the services provided
pursuant to this Agreement.
Except as otherwise instructed from time to time by the Trustees, with
respect to execution of transactions for Trust on behalf of a Fund, Manager
shall place, or arrange for the placement of, all orders for purchases, sales,
or loans with issuers, brokers, dealers or other counterparts or agents selected
by Manager. In connection with the selection of all such parties for the
placement of all such orders, Manager shall attempt to obtain most favorable
execution and price, but may nevertheless in its sole discretion as a secondary
factor, purchase and sell portfolio securities from and to brokers and dealers
who provide Manager with statistical, research and other information, analysis,
advice, and similar services. In recognition of such services or brokerage
services provided by a broker or dealer, Manager is hereby authorized to pay
such broker or dealer a commission or spread in excess of that which might be
charged by another broker or dealer for the same transaction if the Manager
determines in good faith that the commission or spread is reasonable in relation
to the value of the services so provided.
Trust hereby authorizes any entity or person associated with Manager that
is a member of a national securities exchange to effect any transaction on the
exchange for the account of a Fund to the extent permitted by and in accordance
with Section 11(a) of the Securities Exchange Act or 1934 and Rule 11a2-2(T)
thereunder. Trust hereby consents
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to the retention by such entity or person of compensation for such transactions
in accordance with Rule 11a-2-2(T)(a)(iv).
Manager may, where it deems to be advisable, aggregate orders for its other
customers together with any securities of the same type to be sold or purchased
for Trust or one or more Funds in order to obtain best execution or lower
brokerage commissions. In such event, Manager shall allocate the shares so
purchased or sold, as well as the expenses incurred in the transaction, in a
manner it considers to be equitable and fair and consistent with its fiduciary
obligations to Trust, the Funds, and Manager's other customers.
Manager shall for all purposes be deemed to be an independent contractor
and not an agent of Trust and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent Trust in any way.
2. Administrative Services. Subject to the terms of this Agreement and to
the supervision and control of the Trustees, Manager shall provide to the Trust
facilities, equipment, statistical and research data, clerical, accounting and
bookkeeping services, internal auditing and legal services, and personnel to
carry out all management services required for operation of the business and
affairs of the Funds other than those services to be performed by the Trust's
Distributor pursuant to the Distribution Agreement, those services to be
performed by the Trust's Custodian pursuant to the Custody Agreement, those
services to be performed by the Trust's Transfer Agent pursuant to the Transfer
Agency Agreement, those services to be provided by the Trust's Custodian
pursuant to the Accounting Agreement and those services normally performed by
the Trust's counsel and auditors.
3. Use of Affiliated Companies and Subcontractors. In connection with the
services to be provided by Manager under this Agreement, Manager may, to the
extent it deems appropriate, and subject to compliance with the requirements of
applicable laws and regulations, make use of (i) its affiliated companies and
their directors, trustees, officers, and employees and (ii) subcontractors
selected by Manager, provided that Manager shall supervise and remain fully
responsible for the services of all such third parties in accordance with and to
the extent provided by this Agreement. All costs and expenses associated with
services provided by any such third parties shall be borne by Manager or such
parties.
4. Expenses Borne by Trust. Except to the extent expressly assumed by
Manager herein or under a separate agreement between Trust and Manager and
except to the extent required by law to be paid by Manager, Manager shall not be
obligated to pay
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any costs or expenses incidental to the organization, operations or business of
the Trust. Without limitation, such costs and expenses shall include but not be
limited to:
(a) all charges of depositories, custodians and other agencies
for the safekeeping and servicing of its cash, securities, and other
property;
(b) all charges for equipment or services used for obtaining
price quotations or for communication between Manager or Trust and the
custodian, transfer agent or any other agent selected by Trust;
(c) all charges for and accounting services provided to Trust by
Manager, or any other provider of such services;
(d) all charges for services of Trust's independent auditors and
for services to Trust by legal counsel;
(e) all compensation of Trustees, other than those affiliated
with Manager, all expenses incurred in connection with their services
to Trust, and all expenses of meetings of the Trustees or committees
thereof;
(f) all expenses incidental to holding meetings of holders of
units of interest in the Trust ("Shareholders"), including printing
and of supplying each record-date Shareholder with notice and proxy
solicitation material, and all other proxy solicitation expense;
(g) all expenses of printing of annual or more frequent
revisions of Trust prospectus(es) an of supplying each then-existing
Shareholder with a copy of a revised prospectus;
(h) all expenses related to preparing and transmitting
certificates representing Trust shares;
(i) all expenses of bond and insurance coverage required by law
or deemed advisable by the Board of Trustees;
(j) all brokers' commissions and other normal charges incident
to the purchase, sale, or lending of portfolio securities;
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(k) all taxes and governmental fees payable to Federal, state or
other governmental agencies, domestic or foreign, including all stamp
or other transfer taxes;
(l) all expenses of registering and maintaining the registration
of Trust under the 1940 Act and, to the extent no exemption is
available, expenses of registering Trust's shares under the 1933 Act,
of qualifying and maintaining qualification of Trust and of Trust's
shares for sale under securities laws of various states or other
jurisdictions and of registration and qualification of Trust under all
other laws applicable to Trust or its business activities;
(m) all interest on indebtedness, if any, incurred by Trust or a
Fund; and
(n) all fees, dues and other expenses incurred by Trust in
connection with membership of Trust in any trade association or other
investment company organization.
5. Allocation of Expenses Borne by Trust. Any expenses borne by
Trust that are attributable solely to the organization, operation or
business of a Fund shall be paid solely out of Fund assets. Any expense
borne by Trust which is not solely attributable to a Fund, nor solely to
any other series of shares of Trust, shall be apportioned in such manner as
Manager determines is fair and appropriate, or as otherwise specified by
the Board of Trustees.
6. Expenses Borne by Manager. Manager at its own expense shall
furnish all executive and other personnel, office space, and office
facilities required to render the investment management and administrative
services set forth in this Agreement.
In the event that Manager pays or assumes any expenses of Trust or a
Fund not required to be paid or assumed by Manager under this Agreement,
Manager shall not be obligated hereby to pay or assume the same or similar
expense in the future; provided that nothing contained herein shall be
deemed to relieve Manager of any obligation to Trust or a Fund under any
separate agreement or arrangement between the parties.
7. Management Fee. For the services rendered, facilities provided,
and charges assumed and paid by Manager hereunder, Trust shall pay to
Manager out of the assets of each Fund fees at the annual rate for such
Fund as set forth in Schedule B to this Agreement. For each Fund, the
management fee shall accrue on each calendar day, and shall be payable
monthly on the first business day of the next succeeding calendar month.
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The daily fee accrual shall be computed by multiplying the fraction of one
divided by the number of days in the calendar year by the applicable annual rate
of fee, and multiplying this product by the net assets of the Fund, determined
in the manner established by the Board of Trustees, as of the close of business
on the last preceding business day on which the Fund's net asset value was
determined.
8. Start Expense Limitation. If for any fiscal year of a Fund, its
aggregate operating expenses ("Aggregate Operating Expenses") exceed the
applicable percentage expense limit imposed under the securities law and
regulations of any state in which Shares of the Fund are qualified for sale (the
"State Expense Limit"), the Manager shall pay such Fund the amount of such
excess. For purposes of this State Expense Limit, Aggregate Operating Expenses
shall (a) include (i) any fees or expenses reimbursements payable to Manager
pursuant to this Agreement and (ii) to the extent the Fund invests all or a
portion of its assets in another investment company registered under the 1940
Act, the pro rata portion of that company's operating expenses allocated to the
Fund, and (iii) any compensation payable to Manager pursuant to any separate
agreement relating to the Fund's administration, but (b) exclude any interest,
taxes, brokerage commissions, and other normal charges incident to the
purchase, sale or loan of securities, commodity interests or other investments
held by the Fund, litigation and indemnification expense, and other
extraordinary expenses not incurred in the ordinary course of business. Except
as otherwise agreed to by the parties or unless otherwise required by the law
or regulation of any state, any reimbursement by Manager to a Fund under this
section shall not exceed the management fee payable to Manager by the Fund
under this Agreement.
Any payment to a Fund by Manager hereunder shall be made monthly, by
annualizing the Aggregate Operating Expenses for each month as of the last day
of the month. An adjustment for payments made during any fiscal year of the Fund
shall be made on or before the last day of the first month following such fiscal
year of the Fund if the Annual Operating Expenses for such fiscal year (i) do
not exceed the State Expense Limitation or (ii) for such fiscal year there is no
applicable State Expense Limit.
9. Retention of Sub-Adviser. Subject to obtaining the initial and periodic
approvals required under Section 15 of the 1940 Act, Manager may retain one or
more sub-advisers at Manager's own cost and expense for the purpose of
furnishing one or more of the services described in Section 1 hereof with
respect to Trust of one or more Funds. Retention of a sub-adviser shall in no
way reduce the responsibilities or obligations of Manager under this Agreement,
and Manager shall be responsible to Trust and its Funds for all acts or
omissions of any sub-adviser in connection with the performance or Manager's
duties hereunder.
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10. Non-Exclusivity. The services of Manager to Trust hereunder are not to
be deemed exclusive and Manager shall be free to render similar services to
others.
11. Standard of Care. The Manager shall not be liable for any loss
sustained by reason of the purchase, sale or retention of any security, whether
or not such purchase, sale or retention shall have been based upon the
investigation and research made by any other individual, firm or corporation, if
such recommendation shall have been selected with due care and in good faith,
except loss resulting from willful misfeasance, bad faith, or gross negligence
on the part of the Manager in the performance of its obligations and duties, or
by reason of its reckless disregard of its obligations and duties under this
Agreement.
12. Amendment. This Agreement may not be amended as to the Trust or any
Fund without the affirmative votes (a) of a majority of the Board of Trustees,
including a majority of those Trustees who are not "interested persons" of Trust
or of Manager, voting in person at a meeting called for the purpose of voting on
such approval, and (b) of a "majority of the outstanding shares" of Trust or,
with respect to any amendment affecting an individual Fund, a "majority of the
outstanding shares" of that Fund. The terms "interested persons" and "vote of a
majority of the outstanding shares" shall be construed in accordance with their
respective definitions in the 1940 Act and, with respect to the latter term, in
accordance with Rule 18f-2 under the 1940 Act.
13. Effective Date and Termination. This Agreement shall become effective
as to any Fund as of the effective date for that Fund specified in Schedule A
hereto. This Agreement may be terminated at any time, without payment of any
penalty, as to any Fund by the Board of Trustees of Trust, or by a vote of a
majority of the outstanding shares of that fund, upon at least sixty (60) days'
written notice to Manager. This Agreement may be terminated by Manager at any
time upon at least sixty (60) days' written notice to Trust. This Agreement
shall terminate automatically in the event of its "assignment" (as defined in
the 1940 Act). Unless terminated as hereinbefore provided, this Agreement shall
continue in effect with respect to any Fund for an initial period of two (2)
years from the effective date applicable to that Fund specified in Schedule A
and thereafter from year to year only so long as such continuance is
specifically approved with respect to that Fund at least annually (a) by a
majority of those Trustees who are not interested persons of Trust or of
Manager, voting in person at a meeting called for the purpose of voting on such
approval, and (b) by either the Board of Trustees of Trust or by a "vote of a
majority of the outstanding shares" of the Fund.
14. Ownership of Records; Interparty Reporting. All records required to be
maintained and preserved by Trust pursuant to the provisions of rules or
regulations of
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the Securities and Exchange Commission under Section 31(a) of the 1940 Act or
other applicable laws or regulations which are maintained and preserved by
Manager on behalf of Trust and any other records the parties mutually agree
shall be maintained by Manager on behalf of Trust are the property of Trust and
shall be surrendered by Manager promptly on request by Trust; provided that
Manager may at its own expense make and retain copies of any such records.
Trust shall furnish or otherwise make available to Manager such copies of
the financial statements, proxy statements, reports, and other information
relating to the business and affairs of each Shareholder in a Fund as Manager
may, at any time or from time to time, reasonably require in order to discharge
its obligations under this Agreement.
Manager shall prepare and furnish to Trust as to each Fund statistical
data and other information in such form and at such intervals as Trust may
reasonably request.
15. Non-Liability of Trustees and Shareholders. Any obligation of Trust
hereunder shall be binding only upon the assets of Trust (or the applicable Fund
thereof) and shall not be binding upon any Trustee, officer, employee, agent or
Shareholder of Trust. Neither the authorization of any action by the Trustee or
Shareholders of Trust nor the execution of this Agreement on behalf of Trust
shall impose any liability upon any Trustee or any Shareholder.
16. Use of Manager's Name. Trust may use the name "Nuveen Investment
Trust III" and the Fund names listed in Schedule A or any other name derived
from the name "Nuveen" only for so long as this Agreement or any extension,
renewal, or amendment hereof remains in effect, including any similar agreement
with any organization which shall have succeeded to the business of Manager as
investment adviser. At such time as this Agreement or any extension, renewal or
amendment hereof, or such other similar agreement shall no longer be in effect,
Trust will cease to use any name derived from the name "Nuveen" or otherwise
connected with Manager, or with any organization which shall have succeeded to
Manager's business as investment adviser.
17. References and Headings. In this Agreement and in any such amendment,
references to this Agreement and all expressions such as "herein," "hereof,"
and "hereunder" shall be deemed to refer to this Agreement as amended or
affected by any such amendments. Headings are placed herein for convenience of
reference only and shall not be taken as a part hereof or control or affect the
meaning, construction, or effect of this Agreement. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original.
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Dated: August 26, 1998
NUVEEN INVESTMENT TRUST III
ATTEST BY
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NUVEEN INSTITUTIONAL ADVISORY CORP.
ATTEST BY
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NUVEEN INVESTMENT TRUST III
MANAGEMENT AGREEMENT
SCHEDULE A
The Funds of the Trust currently subject to this Agreement and the
effective date of each are as follows:
FUND EFFECTIVE DATE INITIAL TERM
Nuveen Income Fund November 27, 1998 Until August 1, 2000
NUVEEN INVESTMENT TRUST III
MANAGEMENT AGREEMENT
SCHEDULE B
Compensation pursuant to Section 7 of this Agreement shall be calculated
with respect to each Fund in accordance with the following schedule applicable
to the average daily net assets of the Fund:
NUVEEN INCOME FUND
AVERAGE DAILY NET ASSET VALUE FUND MANAGEMENT FEE
For the first $125 million .6000 of 1%
For the next $125 million .5875 of 1%
For the next $250 million .5750 of 1%
For the next $500 million .5625 of 1%
For the next $1 billion .5500 of 1%
For assets over $2 billion .5250 of 1%
