XXXXXX VARIABLE TRUST
(formerly Xxxxxx Capital Manager Trust)
MANAGEMENT CONTRACT
Management Contract dated as of October 2, 1987, as supplemented March
2, 1990, as further supplemented February 27, 1992, as further
supplemented July 9, 1993, as further supplemented April 5, 1994, as
further supplemented June 2, 1994, as further supplemented April 7,
1995, as further supplemented July 13, 1995, as further supplemented
July 11, 1996, as further supplemented December 20, 1996 as further
supplemented February 6, 1998, as further supplemented July 10, 1998, as
further supplemented March 4, 1999, as further supplemented July 1,
1999, as further supplemented November 8, 1999, as further supplemented
June 5, 2000, as further supplemented July 24, 2000 and as further
supplemented March 17, 2003 between Xxxxxx Variable Trust (formerly
Xxxxxx Capital Manager Trust), a Massachusetts business trust (the
"Fund"), and XXXXXX INVESTMENT MANAGEMENT, LLC, a Delaware limited
liability company (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) The Manager, at its expense, will furnish continuously an investment
program for the Fund, will determine what investments shall be
purchased, held, sold or exchanged by the Fund and what portion, if any,
of the assets of the Fund shall be held uninvested and shall, on behalf
of the Fund, make changes in the Fund's investments. Subject always to
the control of the Trustees of the Fund and except for the functions
carried out by the officers and personnel referred to in Section 1(d),
the Manager will also manage, supervise and conduct the other affairs
and business of the Fund and matters incidental thereto. In the
performance of its duties, the Manager will comply with the provisions
of the Agreement and Declaration of Trust and By-Laws of the Fund and
its stated investment objectives, policies and restrictions, and will
use its best efforts to safeguard and promote the welfare of the Fund
and to comply with other policies which the Trustees may from time to
time determine and shall exercise the same care and diligence expected
of the Trustees.
(b) The Manager, at its expense, except as such expense is paid by the
Fund as provided in Section 1(d), will furnish (1) all necessary
investment and management facilities, including salaries of personnel,
required for it to execute its duties faithfully; (2) suitable office
space for the Fund; and (3) administrative facilities, including
bookkeeping, clerical personnel and equipment necessary for the
efficient conduct of the affairs of the Fund, including determination of
the Fund's net asset value, but excluding shareholder accounting
services. Except as otherwise provided in Section 1(d), the Manager
will pay the compensation, if any, of the officers of the Fund.
(c) The Manager, at its expense, shall place all orders for the purchase
and sale of portfolio investments for the Fund's account with brokers or
dealers selected by the Manager. In the selection of such brokers or
dealers and the placing of such orders, the Manager shall use its best
efforts to obtain for the Fund the most favorable price and execution
available, except to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research services as described
below. In using its best efforts to obtain for the Fund the most
favorable price and execution available, the Manager, bearing in mind
the Fund's best interests at all times, shall consider all factors it
deems relevant, including by way of illustration, price, the size of the
transaction, the nature of the market for the security, the amount of
the commission, the timing of the transaction taking into account market
prices and trends, the reputation, experience and financial stability of
the broker or dealer involved and the quality of service rendered by the
broker or dealer in other transactions. Subject to such policies as the
Trustees of the Fund may determine, the Manager shall not be deemed to
have acted unlawfully or to have breached any duty created by this
Contract or otherwise solely by reason of its having caused the Fund to
pay a broker or dealer that provides brokerage and research services to
the Manager an amount of commission for effecting a portfolio investment
transaction 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 was reasonable
in relation to the value of the brokerage and research services provided
by such broker or dealer, viewed in terms of either that particular
transaction or the Manager's overall responsibilities with respect to
the Fund and to other clients of the Manager as to which the Manager
exercises investment discretion. The Manager agrees that in connection
with purchases or sales of portfolio investments for the Fund's account,
neither the Manager nor any officer, director, employee or agent of the
Manager shall act as a principal or receive any commission other than as
provided in Section 3.
(d) The Fund will pay or reimburse the Manager for (i) the compensation
of the Vice Chairman of the Fund and of persons assisting him in these
offices, as determined from time to time by the Trustees of the Fund,
(ii) the compensation in whole or in part of such other officers of the
Fund and persons assisting them as may be determined from time to time
by the Trustees of the Fund, and (iii) the cost of suitable office
space, utilities, support services and equipment of the Vice Chairman
and persons assisting him and, as determined from time to time by the
Trustees of the Fund, all or a part of such cost attributable to the
other officers and persons assisting them whose compensation is paid in
whole or in part by the Fund. The Fund will pay the fees, if any, of
the Trustees of the Fund.
(e) The Manager shall pay all expenses incurred in connection with the
organization of the Fund and the initial public offering and sale of its
shares of beneficial interest, provided that upon the issuance and sale
of such shares to the public pursuant to the offering, and only in such
event, the Fund shall become liable for, and to the extent requested
reimburse the Manager for, registration fees payable to the Securities
and Exchange Commission and for an additional amount not exceeding
$125,000 as its agreed share of such expenses.
(f) The Manager shall not be obligated to pay any expenses of or for the
Fund not expressly assumed by the Manager pursuant to this Section 1
other than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Fund may be a shareholder, director, officer or
employee of, or be otherwise interested in, the Manager, and in any
person controlled by or under common control with the Manager, and that
the Manager and any person controlled by or under common control with
the Manager may have an interest in the Fund. It is also understood
that the Manager and any person controlled by or under common control
with the Manager have and may have advisory, management, service or
other contracts with other organizations and persons, and may have other
interests and business.
3. COMPENSATION TO BE PAID BY THE FUND TO THE MANAGER.
The Fund will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses
borne by the Manager pursuant to paragraphs (a), (b), (c) and (e) of
Section 1, a fee, computed and paid quarterly (except for Xxxxxx VT
Capital Appreciation Fund, Xxxxxx VT Capital Opportunities Fund, Xxxxxx
VT Discovery Growth Fund, Xxxxxx VT Equity Income Fund and Xxxxxx VT Mid
Cap Value Fund, which shall be computed and paid monthly) at the
following annual rates applicable to the average net asset value of each
Series of the Fund (a "Series") of:
Xxxxxx VT International New Opportunities Fund:
(a) 1.00% of the first $500 million of average net assets;
(b) 0.90% of the next $500 million;
(c) 0.85% of the next $500 million;
(d) 0.80% of the next $5 billion;
(e) 0.775% of the next $5 billion;
(f) 0.755% of the next $5 billion;
(g) 0.74% of the next $5 billion; and
(h) 0.73% of any excess thereafter.
Xxxxxx VT Global Equity Fund, Xxxxxx VT International Equity Fund,
Xxxxxx VT International Growth and Income Fund, and Xxxxxx VT Small Cap
Value Fund:
(a) 0.80% of the first $500 million of average net assets;
(b) 0.70% of the next $500 million;
(c) 0.65% of the next $500 million;
(d) 0.60% of the next $5 billion;
(e) 0.575% of the next $5 billion;
(f) 0.555% of the next $5 billion;
(g) 0.54% of the next $5 billion; and
(h) 0.53% of any excess thereafter.
Xxxxxx VT Discovery Growth Fund:
(a) 0.70% of the first $500 million of average net assets;
(b) 0.60% of the next $500 million;
(c) 0.55% of the next $500 million;
(d) 0.50% of the next $5 billion;
(e) 0.475% of the next $5 billion;
(f) 0.455% of the next $5 billion;
(g) 0.44% of the next $5 billion;
(h) 0.43% of the next $5 billion;
(i) 0.42% of the next $5 billion;
(j) 0.41% of the next $5 billion;
(k) 0.40% of the next $5 billion;
(l) 0.39% of the next $5 billion;
(m) 0.38% of the next $8.5 billion; and
(n) 0.37% of any excess thereafter.
Xxxxxx VT Growth Opportunities Fund:
(a) 0.70% of the first $500 million of average net assets;
(b) 0.60% of the next $500 million;
(c) 0.55% of the next $500 million;
(d) 0.50% of the next $5 billion;
(e) 0.475% of the next $5 billion;
(f) 0.455% of the next $5 billion;
(g) 0.44% of the next $5 billion;
(h) 0.43% of the next $5 billion; and
(i) 0.42% of any excess thereafter.
Xxxxxx VT Diversified Income Fund, Xxxxxx VT Global Asset Allocation
Fund, Xxxxxx VT Health Sciences Fund, Xxxxxx VT High Yield Fund, Xxxxxx
VT Mid Cap Value Fund, Xxxxxx VT New Opportunities Fund, Xxxxxx VT New
Value Fund, Xxxxxx VT OTC Emerging Growth Fund, Xxxxxx VT Utilities
Growth and Income Fund and Xxxxxx VT Voyager Fund:
(a) 0.70% of the first $500 million of average net assets;
(b) 0.60% of the next $500 million;
(c) 0.55% of the next $500 million;
(d) 0.50% of the next $5 billion;
(e) 0.475% of the next $5 billion;
(f) 0.455% of the next $5 billion;
(g) 0.44% of the next $5 billion; and
(h) 0.43% of any excess thereafter.
Xxxxxx VT Capital Appreciation Fund
(a) 0.65% of the first $500 million of average net assets;
(b) 0.55% of the next $500 million;
(c) 0.50% of the next $500 million;
(d) 0.45% of the next $5 billion;
(e) 0.425% of the next $5 billion;
(f) 0.405% of the next $5 billion;
(g) 0.39% of the next $5 billion;
(h) 0.38% of the next $5 billion;
(i) 0.37% of the next $5 billion;
(j) 0.36% of the next $5 billion;
(k) 0.35% of the next $5 billion;
(l) 0.34% of the next $5 billion;
(m) 0.33% of the next $8.5 billion; and
(n) 0.32% of any excess thereafter.
Xxxxxx VT American Government Income Fund:
(a) 0.65% of the first $500 million of average net assets;
(b) 0.55% of the next $500 million;
(c) 0.50% of the next $500 million;
(d) 0.45% of the next $5 billion;
(e) 0.425% of the next $5 billion;
(f) 0.405% of the next $5 billion;
(g) 0.39% of the next $5 billion;
(h) 0.38% of the next $5 billion;
(i) 0.37% of the next $5 billion;
(j) 0.36% of the next $5 billion;
(k) 0.35% of the next $5 billion; and
(l) 0.34% of any excess thereafter.
Xxxxxx VT Capital Opportunities Fund, Xxxxxx VT Equity Income Fund,
Xxxxxx VT The Xxxxxx Xxxxxx Fund of Boston, Xxxxxx VT Growth and Income
Fund, Xxxxxx VT Income Fund, Xxxxxx VT Investors Fund, Xxxxxx VT
Research Fund and Xxxxxx VT Vista Fund:
(a) 0.65% of the first $500 million of average net assets;
(b) 0.55% of the next $500 million;
(c) 0.50% of the next $500 million;
(d) 0.45% of the next $5 billion;
(e) 0.425% of the next $5 billion;
(f) 0.405% of the next $5 billion;
(g) 0.39% of the next $5 billion; and
(h) 0.38% of any excess thereafter.
Xxxxxx VT Money Market Fund:
(a) 0.45% of the first $500 million of average net assets;
(b) 0.35% of the next $500 million;
(c) 0.30% of the next $500 million;
(d) 0.25% of the next $5 billion;
(e) 0.225% of the next $5 billion;
(f) 0.205% of the next $5 billion;
(g) 0.19% of the next $5 billion; and
(h) 0.18% of any excess thereafter.
Such fees computed with respect to the net asset value of each Series
shall be paid from the assets of such Series. Such average net asset
value of each Series of the Fund shall be determined by taking an
average of all of the determinations of such net asset value during such
quarter or month, as the case may be, at the close of business on each
business day during such quarter or month while this Contract is in
effect. Such fee shall be payable for each month within 30 days after
the end of such quarter or month, as the case may be.
The fees payable by the Fund to the Manager pursuant to this Section 3
with respect to any Series of the Fund shall be reduced by any
commissions, fees, brokerage or similar payments received by the Manager
or any affiliated person of the Manager in connection with the purchase
and sale of portfolio investments of such Series, less any direct
expenses approved by the Trustees incurred by the Manager or any
affiliated person of the Manager in connection with obtaining such
payments.
In the event that expenses of any Series of the Fund for any fiscal year
should exceed the expense limitation on investment company expenses
imposed by any statute or regulatory authority of any jurisdiction in
which shares of that Series are qualified for offer or sale, the
compensation due the Manager for such fiscal year shall be reduced by
the amount of such excess by a reduction or refund thereof. In the
event that the expenses of any Series of the Fund exceed any expense
limitation which the Manager may, by written notice to the Fund,
voluntarily declare to be effective subject to such terms and conditions
as the Manager may prescribe in such notice, the compensation due the
Manager shall be reduced, and, if necessary, the Manager shall assume
expenses of the Series to the extent required by the terms and
conditions of such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be
amended as to any Series of the Fund unless such amendment be approved
at a meeting by the affirmative vote of a majority of the outstanding
shares of the Series, and by the vote, cast in person at a meeting
called for the purpose of voting on such approval, of a majority of the
Trustees of the Fund who are not interested persons of the Fund or of
the Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect as to each Series continuously
thereafter (unless terminated automatically as set forth in Section 4)
until terminated as follows:
(a) Either party hereto may at any time terminate this Contract as to
any Series or as to the Fund by not more than sixty days' nor less than
thirty days' written notice delivered or mailed by registered mail,
postage prepaid, to the other party, or
(b) If (i) the Trustees of the Fund or the shareholders by the
affirmative vote of a majority of the outstanding shares of the Series,
and (ii) a majority of the Trustees of the Fund who are not interested
persons of the Fund or of the Manager, by vote cast in person at a
meeting called for the purpose of voting on such approval, do not
specifically approve at least annually the continuance of this Contract,
then this Contract shall automatically terminate as to such Series at
the close of business on the second anniversary of its execution with
respect to any Series, or the expiration of one year from the effective
date of the last such continuance, whichever is later; provided,
however, that if the continuance of this Contract is submitted to the
shareholders of a Series for their approval and such shareholders fail
to approve such continuance of this Contract as provided herein, the
Manager may continue to serve hereunder in a manner consistent with the
Investment Company Act of 1940 and the Rules and Regulations thereunder.
Action by the Fund under (a) above may be taken either (i) by vote of a
majority of its Trustees, or (ii) by the affirmative vote of a majority
of the outstanding shares of one or more Series affected.
Termination of this Contract pursuant to this Section 5 will be without
the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund or the Series, as the case may be, present (in
person or by proxy) and entitled to vote at such meeting, if the holders
of more than 50% of the outstanding shares of the Fund or the Series, as
the case may be, entitled to vote at such meeting are present in person
or by proxy, or (b) of the holders of more than 50% of the outstanding
shares of the Fund, or the Series, as the case may be, entitled to vote
at such meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their
respective meanings defined in the Investment Company Act of 1940 and
the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission
under said Act; the term "specifically approve at least annually" shall
be construed in a manner consistent with the Investment Company Act of
1940 and the Rules and Regulations thereunder; and the term "brokerage
and research services" shall have the meaning given in the Securities
Exchange Act of 1934 and the Rules and Regulations thereunder.
7. NON-LIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and
duties hereunder, the Manager shall not be subject to any liability to
the Fund or to any shareholder of the Fund, for any act or omission in
the course of, or connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Fund is on file
with the Secretary of State of The Commonwealth of Massachusetts, and
notice is hereby given that this instrument is executed on behalf of the
Trustees of the Fund as Trustees and not individually and that the
obligations of or arising out of this instrument are not binding upon
any of the Trustees or shareholders individually but are binding only
upon the assets and property of the Fund.
IN WITNESS WHEREOF, XXXXXX VARIABLE TRUST and XXXXXX INVESTMENT
MANAGEMENT, LLC have each caused this instrument to be signed in
duplicate in its behalf by its President or a Vice President thereunto
duly authorized, all as of the day and year first above written.
XXXXXX VARIABLE TRUST
By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Executive Vice President; Treasurer and
Principal Financial Officer
XXXXXX INVESTMENT MANAGEMENT, LLC
By: /s/ Xxxxxx X. Silver
Xxxxxx X. Silver
Senior Managing Director
