EXHIBIT 99.5
MANAGEMENT AGREEMENT
AGREEMENT made this 3Oth day of December, 1988 by and between XXXXXXX
XXXXX U.S.A. GOVERNMENT RESERVES, a Massachusetts business trust (hereinafter
referred to as the "Fund"), and XXXXXXX XXXXX ASSET MANAGEMENT, INC., a
Delaware corporation (hereinafter referred to as the "Manager").
WITNESSETH:
WHEREAS, the Fund is engaged in business as a diversified open-end
investment company registered under the Investment Company Act of 1940, as
amended (hereinafter referred to as the "Investment Company Act"); and
WHEREAS, the Manager is willing to provide management and investment
advisory services to the Fund on the terms and conditions hereinafter set forth.
Now, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Fund and the Manager agree as follows:
ARTICLE I
DUTIES OF THE MANAGER
The Fund hereby employs the Manager to act as the manager and investment
adviser of the Fund and to furnish, or arrange for affiliates to furnish, the
management and investment advisory services described below, subject to the
supervision of the Trustees of the Fund, for the period and on the terms and
conditions set forth in this Agreement. The Manager hereby accepts such
employment and agrees during such period, at its own expense, to render, or
arrange for the rendering of, such services and to assume the obligations herein
set forth for the compensation provided for herein. The Manager and its
affiliates shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Fund in any way or otherwise be deemed an
agent of the Fund.
(a) Management Services. The Manager shall perform (or arrange for the
performance by affiliates of) the management and administrative services
necessary for the operation of the Fund including processing shareholder orders,
administering shareholder accounts and handling shareholder relations. The
Manager shall provide the Fund with office space, equipment and facilities and
such other services as the Manager, subject to review by the Trustees, shall
from time to time determine to be necessary or useful to perform its obligations
under this Agreement. The Manager shall also, on behalf of the Fund. conduct
relations with custodians, depositories, transfer agents, accountants,
attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers,
banks and such other persons in any such other capacity deemed to be necessary
or desirable. The Manager shall make reports to the Trustees of its performance
of obligations hereunder and furnish advice and recommendations with respect to
such other aspects of the business and affairs of the Fund as it shall determine
to be desirable.
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(b) Investment Advisory Services. The Manager shall provide the Fund with
such investment research, advice and supervision as the later may from time to
time consider necessary for the proper supervision of the assets of the Fund,
shall furnish continuously an investment program for the Fund and shall
determine from time to time which securities shall be purchased, sold or
exchanged and what portion of the assets of the Fund shall be held in the
various securities in which the Fund invests or cash, subject always to the
restrictions of the Declaration of Trust and By-Laws of the Fund, as amended
from time to time, the provisions of the Investment Company Act and the
statements relating to the Fund's investment objectives, investment policies and
investment restrictions as the same are set forth in the currently effective
prospectus relating to the shares of beneficial interest of the Fund under the
Securities Act of 1933, as amended (the "Prospectus"). The Manager shall also
make decisions for the Fund 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 Trustees at any time,
however, make any definite determination as to investment policy 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 portfolio securities for the Fund's account with brokers or
dealers selected by it, and to that end, the Manager is authorized as the agent
of the Fund to give instructions to the Custodian 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
with respect to assets of the Fund, the Manager is directed at all times to seek
to obtain execution and price within the policy guidelines determined by the
Trustees of Fund and set forth in the Prospectus. Subject to this
requirement and the provisions of the Investment Company Act, the Securities
Exchange Act of 1934, as amended. and other applicable provisions of law, the
Manager may select brokers or dealers with which it or the Fund is affiliated.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
(a) The Manager. The Manager assumes and shall pay for maintaining the
staff and personnel necessary to perform its obligations under this Agreement,
and shall at its own expense, provide the office space, equipment and facilities
which it is obligated to provide under Article I hereof, and shall pay all
compensation of officers of the Fund and all Trustees of the Fund who are
affiliated persons of the Manager.
(b) The Fund. The Fund assumes and shall pay or cause to be paid all other
expenses of the Fund (except for the expenses incurred by the Distributor),
including, without limitation redemption expenses, expenses of portfolio
transactions, expenses of registering shares under Federal and state securities
laws, pricing costs (including the daily calculation of net asset value),
expenses of printing shareholder reports and prospectuses, Securities and
Exchange Commission fees, interest, taxes, fees and actual out-of-pocket
expenses of Trustees who are not affiliated persons of the Manager, fees for
legal and auditing services, litigation expenses, costs of printing proxies and
other expenses related to shareholders meetings, and other expenses properly
payable by the Fund. It is also understood that the Fund will reimburse the
Manager for its costs in providing accounting services to the Fund. The
Distributor will pay certain of the expenses of the Fund incurred in connection
with the continuous offering of Fund shares.
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ARTICLE III
COMPENSATION OF THE MANAGER
(a) Management Fee. For the services rendered, the facilities furnished and
the expenses assumed by the Manager, the Fund shall pay to the Manager
compensation at the annual rate of 0.45 of one percent (0.45%), calculated as
hereinafter set forth, commencing on the day following effectiveness hereof.
Except as hereinafter set forth, compensation under this Agreement shall be
calculated and accrued daily and paid monthly by applying the annual rate to the
average daily net assets of the Fund determined as of each business day. If this
Agreement becomes effective subsequent to the first day of a month or shall
terminate before the last day of a month, compensation for that part of the
month this Agreement is in effect shall be prorated in a manner consistent with
the calculation of the fees as set forth above. Subject to the provisions of
subsection (b) hereof, payment of the Manager's compensation for the preceding
month shall be made as promptly as possible after completion of the computations
contemplated by subsection (b) hereof.
(b) Expense Limitations. In the event the operating expenses of the Fund,
including amounts payable to the Manager pursuant to subsection (a) hereof, for
any fiscal year ending on a date which this Agreement is in effect exceed the
expense limitations applicable to the Fund imposed by applicable state
securities laws or regulations thereunder, as such limitations may be raised or
lowered from time to time. the Manager shall reduce its management fee by the
extent of such excess and, if required pursuant to any such laws or regulations,
will reimburse the Fund in the amount of such excess, provided, however, to the
extent permitted by law, there shall be excluded from such expenses the amount
of any interest, taxes, brokerage commissions and extraordinary expenses
(including but not limited to legal claims and liabilities and litigation costs
and any indemnification related thereto) paid or payable by the Fund. Whenever
the expenses of the Fund exceed a pro rata portion of the applicable annual
expense limitations, the estimated amount of reimbursement under such
limitations shall be applicable as an offset against the monthly payment of the
fee due to the Manager. Should two or more such expense limitations be
applicable as at the end of the last business day of the month, that expense
limitation which results in the largest reduction in the Manager's fee shall be
applicable.
ARTICLE IV
LIMITATION OF LIABILITY OF THE MANAGER
The Manager 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
management of 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 Article IV, the term
"Manager" shall include any affiliates of the Manager performing services for
the Fund contemplated hereby and directors, officers and employees of the
Manager and such affiliates.
ARTICLE V
ACTIVITIES OF THE MANAGER
The services of the Manager to the Fund are not to be deemed to be
exclusive, the Manager being free to render services to others. It is understood
that Trustees, officers, employees and shareholders of
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the Fund are or may become interested in the Manager, as directors, officers,
employees and shareholders or otherwise and that directors, officers, employees
and shareholders of the Manager are or may become similarly interested in the
Fund, and that the Manager may become interested in the Fund as shareholder or
otherwise.
ARTICLE VI
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the date first above written
and shall remain in force until February 28, 1985 and thereafter, but only so
long as such continuance is specifically approved at least annually by (i) the
Trustees of the Fund, or by the vote of a majority of the outstanding voting
securities of the Fund, and (ii) a majority of those Trustees who are not
parties to this Agreement or interested persons of any such party cast in person
at a meeting called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Trustees of the Fund or by vote of a majority of the outstanding
voting securities of the Fund, or by the Manager, on sixty days written notice
to the other party. This Agreement shall automatically terminate in the event of
its assignment.
ARTICLE VII
AMENDMENTS OF THIS AGREEMENT
This Agreement may be amended by the parties only if such amendment is
specifically approved by (i) the vote of a majority of outstanding voting
securities of the Fund, and (ii) a majority of those Trustees who are not
parties to this Agreement or interested persons of any such party cast in person
at a meeting called for the purpose of voting on such approval.
ARTICLE VIII
DEFINITIONS OF CERTAIN TERMS
The terms "vote of a majority of the outstanding voting securities",
"assignment", "affiliated person" and "interested person", when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act.
ARTICLE IX
GOVERNING LAW
This Agreement shall be construed in accordance with laws of the State of
New York and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
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ARTICLE X
PERSONAL LIABILITY
The Declaration of Trust establishing Xxxxxxx Xxxxx U.S.A. Government
Reserves, dated July 29, 1982. a copy of which, together with all amendments
thereto (the "Declaration"), is on file in the office of the Secretary of the
Commonwealth of Massachusetts, provides that the name "Xxxxxxx Xxxxx U.S.A.
Government Reserves" refers to the Trustees under the Declaration collectively
as Trustees. but not as individuals or personally; and no Trustee, shareholder,
officer, employee or agent of Xxxxxxx Xxxxx U.S.A. Government Reserves shall be
held to any personal liability, nor shall resort be had to their private
property for the satisfaction of any obligation or claim of said Xxxxxxx Xxxxx
U.S.A. Government Reserves, but the Trust Property only shall be liable.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
XXXXXXX XXXXX U.S.A. GOVERNMENT RESERVES
By
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XXXXXXX XXXXX ASSET MANAGEMENT INC.
By
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