Exhibit d(1)
FORM OF
MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT, dated as of ___________, 2003, by and between Xxxxx
Xxxxxx Trust II, a Massachusetts business trust (the "Trust"), and Xxxxx Xxxxxx
Fund Management LLC, a Delaware limited liability corporation ("Xxxxx Xxxxxx
Management" or the "Manager").
W I T N E S S E T H:
WHEREAS, the Trust engages in business as an open-end management
investment company and is registered as such under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder and any exemptive orders thereunder, the "1940 Act"), and
WHEREAS, the Trust wishes to engage Xxxxx Xxxxxx Management to provide
certain management services for the series of the Trust designated in Schedule
A annexed hereto (the "Fund"), and Xxxxx Xxxxxx Management is willing to
provide such management services for the Fund on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Duties of Manager. (a) Xxxxx Xxxxxx Management shall act as the Manager
for the Fund and as such shall furnish continuously an investment program and
shall determine from time to time what securities shall be purchased, sold or
exchanged and what portion of the assets of the Fund shall be held uninvested,
subject always to the restrictions of the Trust's Declaration of Trust, dated
as of September 28, 2001, and By-Laws, as each may be amended and restated from
time to time (respectively, the "Declaration" and the "By-Laws"), the
provisions of the 1940 Act, and the then-current Registration Statement of the
Trust with respect to the Fund. The Manager shall also make recommendations 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 Board of Trustees of the Trust at any time, however, make
any definite determination as to investment policy applicable to the Fund 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similarly notified that such determination has been revoked.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 securities for the Fund's account
with the brokers or dealers selected by it, and to that end the Manager is
authorized as the agent of the Trust to give instructions to the custodian or
any subcustodian 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, brokers or dealers may be
selected who also provide brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934) to the Fund
and/or the other accounts over which the Manager or its affiliates exercise
investment discretion. The Manager is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the Fund which is 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 is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer. This determination may be viewed in
terms of either that particular transaction or the overall responsibilities
which the Manager and its affiliates have with respect to accounts over which
they exercise investment discretion. In making purchases or sales of securities
or other property for the account of the Fund, the Manager may deal with itself
or with the Trustees of the Trust or the Trust's underwriter or distributor or
with its or their respective affiliates, or affiliates of affiliates, to the
extent such actions are permitted by the 1940 Act. In providing the services
and assuming the obligations set forth herein, the Manager may employ, at its
own expense, or may request that the Trust employ at each Fund's expense, one
or more subadvisers; provided that in each case the Manager shall supervise the
activities of each subadviser. Any agreement between the Manager and a
subadviser shall be subject to the renewal, termination and amendment
provisions applicable to this Agreement. Any agreement between the Trust on
behalf of the Fund and a subadviser may be terminated by the Manager at any
time on not more than 60 days' nor less than 30 days' written notice to the
Trust and the subadviser. To the extent authorized by the Board of Trustees and
subject to applicable provisions of the 1940 Act, the investment program to be
provided hereunder may entail the investment of all or a portion of the assets
of the Fund in one or more investment companies.
(b) Subject to the direction and control of the Board of Trustees of the
Trust, Xxxxx Xxxxxx Management shall perform such administrative and management
services as may from time to time be reasonably requested by the Trust with
respect to the Fund, which shall include without limitation: (i) providing
office space, equipment and clerical personnel necessary for maintaining the
organization of the Trust and the Fund and for performing the administrative
and management functions herein set forth; (ii) supervising the overall
administration of the Fund, including negotiation of contracts and fees with
and the monitoring of performance and xxxxxxxx of the Fund's transfer agent,
shareholder servicing agents, custodian and other independent contractors or
agents; and (iii) arranging for maintenance of books and records of the Trust
with respect to the Fund. Notwithstanding the foregoing, Xxxxx Xxxxxx
Management shall not be deemed to have assumed any duties with respect to, and
shall not be responsible for, the distribution of shares of beneficial interest
in the Fund, nor shall the Manager be deemed to have assumed or have any
responsibility with respect to functions specifically assumed by any transfer
agent, fund accounting agent, custodian or shareholder servicing agent of the
Trust or the Fund. In providing administrative and management services as set
forth herein, the Manager may, at its own expense, employ one or more
subadministrators; provided that the Manager shall remain fully responsible for
the performance of all administrative and management duties set forth herein
and shall supervise the activities of each subadministrator.
2. Allocation of Charges and Expenses. Xxxxx Xxxxxx Management shall
furnish at its own expense all necessary services, facilities and personnel in
connection with its responsibilities under Section 1 above. Except as provided
in the foregoing sentence, it is understood that the Trust will pay from the
assets of the Fund all of its own expenses allocable to the Fund including,
without limitation, organization costs of the Fund; compensation of Trustees
who are not "affiliated persons" of Xxxxx Xxxxxx Management; governmental fees;
interest charges; brokerage fees and commissions; loan commitment fees; taxes;
membership dues in industry associations allocable to the Trust; fees and
expenses of independent auditors, legal counsel and any transfer agent,
distributor, shareholder servicing agent, service agent, registrar or dividend
disbursing agent of the Trust; expenses of issuing and redeeming shares of
beneficial interest and servicing shareholder accounts; expenses of preparing,
typesetting, printing and mailing prospectuses, statements of additional
information, shareholder reports, notices, proxy statements and reports to
governmental officers and commissions and to existing shareholders of the Fund;
expenses connected with the execution, recording and settlement of security
transactions; insurance premiums; fees and expenses of the custodian for all
services to the Fund, including safekeeping of funds and securities and
maintaining required books and accounts; expenses of calculating the net asset
value of the Fund (including but not limited to the fees of independent pricing
services); expenses of meetings of the Fund's Trustees and of the Fund's
shareholders; expenses relating to the registration and qualification of shares
of the Fund; and such non-recurring or extraordinary expenses as may arise,
including those relating to actions, suits or proceedings to which the Trust on
behalf of the Fund may be a party and the legal obligation which the Trust may
have to indemnify its Trustees and officers with respect thereto.
3. Compensation of Manager. For the services to be rendered and the
facilities to be provided by the Manager hereunder, the Trust shall pay to the
Manager from the assets of the Fund a management fee computed daily and paid
monthly at an annual rate equal to the lesser of (i) that percentage of the
Fund's average daily net assets for the Fund's then-current fiscal year set
forth opposite the Fund's name on Schedule A annexed hereto (the "Aggregate
Management Fee"), minus the Fund's Aggregate Subadviser Fee (as defined below),
if any, and (ii) the difference between that Fund's Aggregate Management Fee
for the Fund's then-current fiscal year and the aggregate management fees
allocated to the Fund for the Fund's then-current fiscal year from the
registered investment company portfolios in which it invests (for which the
Manager or an affiliate serves as investment adviser). To the extent that the
Fund's Aggregate Subadviser Fee exceeds the Fund's Aggregate Management Fee,
the Manager shall pay such amount to the applicable subadvisers on the Fund's
behalf. The Fund's Aggregate Subadviser Fee is the aggregate amount payable by
that Fund to subadvisers pursuant to agreements between the Trust on behalf of
the Fund and the subadvisers. If the Manager provides services hereunder for
less than the whole of any period specified in this Section 3, the compensation
to the Manager shall be accordingly adjusted and prorated.
4. Covenants of Manager. The Manager agrees that it will not deal with
itself, or with the Trustees of the Trust or the Trust's principal underwriter
or distributor, as principals in making purchases or sales of securities or
other property for the account of the Fund, except as permitted by the 1940
Act, and will comply with all other provisions of the Declaration and By-Laws
and the then-current Registration Statement applicable to the Fund relative to
the Manager and its directors and officers.
5. Limitation of Liability of Manager. Xxxxx Xxxxxx Management 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 execution of securities
transactions for 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 Section 5, the term
"Xxxxx Xxxxxx Management" shall include directors, officers and employees of
the Manager as well as the Manager itself.
6. Activities of Manager. The services of the Manager to the Fund are not
to be deemed to be exclusive, the Manager being free to render investment
advisory, administrative and/or other services to others. It is understood that
Trustees, officers, and shareholders of the Trust are or may be or may become
interested in the Manager, as directors, officers, employees, or otherwise and
that directors, officers and employees of the Manager are or may become
similarly interested in the Trust and that the Manager may be or may become
interested in the Trust as a shareholder or otherwise.
7. Duration, Termination and Amendments of this Agreement. This Agreement
shall become effective as of the day and year first above written, shall govern
the relations between the parties hereto thereafter and shall remain in force
for a period of two years from its effectiveness, on which date it will
terminate unless its continuance with respect to the Fund after that date is
"specifically approved at least annually" (a) by the vote of a majority of the
Trustees of the Trust who are not "interested persons" of the Trust or of Xxxxx
Xxxxxx Management at a meeting specifically called for the purpose of voting on
such approval, and (b) by the Board of Trustees of the Trust or by "vote of a
majority of the outstanding voting securities" of the Fund.
This Agreement may be terminated at any time with respect to the Fund
without the payment of any penalty by the Trustees or by the "vote of a
majority of the outstanding voting securities" of the Fund, or by the Manager,
in each case on not more than 60 days' nor less than 30 days' written notice to
the other party. This Agreement shall automatically terminate in the event of
its "assignment."
This Agreement may be amended with respect to the Fund only if such
amendment is approved by the "vote of a majority of the outstanding voting
securities" of the Fund (except for any such amendment as may be effected in
the absence of such approval without violating the 1940 Act).
The terms "specifically approved at least annually," "vote of a majority
of the outstanding voting securities," "assignment," "affiliated person," and
"interested persons," when used in this Agreement, shall have the respective
meanings specified in, and shall be construed in a manner consistent with, the
1940 Act, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
8. Licenses. The Trust hereby agrees, on behalf of the Fund, to reimburse
the Manager for any and all reasonable costs incurred by the Manager relating
to the acquisition and retention of licenses to be used in connection with the
management of that Fund.
9. Governing Law. This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of The Commonwealth
of Massachusetts.
10. Use of Name. The Trust hereby acknowledges that any and all rights in
or to the name "Xxxxx Xxxxxx" which exist on the date of this Agreement or
which may arise hereafter are, and under any and all circumstances shall
continue to be, the sole property of the Manager; that the Manager may assign
any or all of such rights to another party or parties without the consent of
the Trust; and that the Manager may permit other parties, including other
investment companies, to use the word "Xxxxx Xxxxxx" in their names. If the
Manager, or its assignee as the case may be, ceases to serve as the manager of
the Trust, the Trust hereby agrees to take promptly any and all actions which
are necessary or desirable to change its name and those of each of its series
or classes so as to delete the word "Xxxxx Xxxxxx."
Each party acknowledges and agrees that all obligations of the Trust under
this Agreement are binding only with respect to the Fund; that any liability of
the Trust under this Agreement, or in connection with the transactions
contemplated herein, shall be discharged only out of the assets of that Fund;
and that no other series of the Trust shall be liable with respect to this
Agreement or in connection with the transactions contemplated herein.
The undersigned officer of the Trust has executed this Agreement not
individually, but as an officer under the Declaration and the obligations of
this Agreement are not binding upon any of the Trustees, officers or
shareholders of the Trust individually.
[Signature page to follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
XXXXX XXXXXX TRUST II XXXXX XXXXXX
on behalf of the series listed FUND MANAGEMENT LLC
on Schedule A
By:___________________________ By:____________________________________
Title:________________________ Title:_________________________________
Schedule A
Aggregate Management Fee (expressed as a
percentage of
each Fund's aggregate net assets
for its then-current fiscal year)
Fund
Xxxxx Xxxxxx Short Duration Municipal 0.45%
Income Fund
