MANAGEMENT AGREEMENT
AS IN EFFECT DECEMBER 14, 1988
AGREEMENT made this 15th day of March, 1971 by and between LORD XXXXXX
BOND-DEBENTURE FUND, INC., a Maryland corporation (hereinafter called the
"Corporation"), and LORD, XXXXXX & CO., a New York partnership (hereinafter
called the "Investment Manager"), as amended on April 9, 1987.
WHEREAS, the Corporation desires to obtain the investment management
services of the Investment Manager and the Investment Manager is willing to
provide services of the nature desired upon the terms and conditions hereinafter
provided.
NOW, THEREFORE, in consideration of the mutual covenants and of other
good and valuable consideration, receipt of which is hereby acknowledged, it is
agreed as follows:
1. The Corporation hereby employs the Investment Manager under the terms
and conditions of this Agreement, and the Investment Manager hereby accepts such
employment and agrees to perform supervisory functions of the Corporation with
respect to the investment and reinvestment of its property and assets (whether
or not held in trust or in the custody of a bank or trust company subject to the
Corporation's direction or control) including without limitation, the
supervision of its investment portfolio and the recommendation of investment
policies and procedures within the limitations set forth in the Corporation's
Registration Statement on file with the Securities and Exchange Commission under
the Securities Act of 1933 and the Investment Company Act of 1940.
The Investment Manager agrees to maintain an adequate organization of
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competent persons to perform the supervisory functions mentioned herein.
All recommendations with respect to the investment portfolios will be
made to the Corporation's trading department which, with the approval of
authorized officers of the Corporation, will execute all trades in accordance
with the Corporation's investment procedures.
The Investment Manager reserves the right, in its discretion, to purchase
or otherwise obtain statistical information and services from other sources,
including affiliated persons of the Investment Manager.
Notwithstanding the provisions of this paragraph 1, the investment
policies and procedures and all other action of the Corporation are, and shall
at all times be, subject to the control and direction of its Board of Directors.
2. The Corporation agrees to pay the Investment Manager for its services
under this Agreement and for the expenses assumed, a management fee computed and
payable monthly at the annual rate of fifty one-hundredths (.50) of one percent
(1%) of the value of the Corporation's average daily net assets that do not
exceed $500,000,000, and forty-five one hundredths (.45) of one percent (1%) of
the value of such assets in excess of $500,000,000. The value of the net assets
of the Corporation shall include all assets held in trust or in custody of any
bank, savings bank or trust company for the Corporation, subject to its control
or direction, and shall be determined as provided in the Certificate of
Incorporation of the Corporation. The fee shall be paid on the first day of each
month for the preceding month.
3. It is understood that the services of the Investment Manager are not
deemed to be exclusive, and nothing in this Agreement shall prevent the
Investment Manager, or any officer, director, partner or employee thereof, from
providing similar services to other
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investment companies and other clients (whether or not their investment
objectives and policies are similar to those of the Corporation) or to engage in
other activities. When other clients of the Investment Manager desire to
purchase or sell the same portfolio security at the same time as the
Corporation, it is understood that such purchases and sales will be made as
nearly as practicable on a pro rata basis in proportion to the amounts desired
to be purchased or sold by each client.
4. The Corporation will, at its own expense, furnish to the Investment
Manager periodic (but not less than semi-annually) audited statements of its
books of account, including balance sheets and earnings statements, certified by
certified public accountants satisfactory to the Investment Manager and all
other information which may personally be required, from time to time, by the
Investment Manager, and will, at its own expense, at all times keep the
Investment Manager fully advised as to the cash, securities and other property
then comprising its assets, and furnish daily detailed price makeup sheets with
respect to its investment portfolio and its shares of capital stock.
5. The Investment Manager shall be under no obligation to pay any fees,
costs, expenses or other charges of the Corporation, except the compensation of
its officers, the compensation, if any, of its directors who are affiliated with
the Investment Manager, rental for its office space, and except for its ordinary
and necessary office and clerical expenses relating to research, statistical
work and the supervision of the Corporation's investment portfolio, to be
performed by the Investment Manager under paragraph 1 of this Agreement. The
Corporation will pay all other fees, costs, expenses or charges relating to its
assets and operations, including without limitation, fees and expenses of its
directors not affiliated with the Investment Manager, governmental fees,
interest charges, taxes, association membership
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dues, fees and charges for legal and auditing services; fees and expenses of any
custodians or trustees with respect to custody of its assets; fees, charges and
expenses of dividend disbursing agents, registrars and transfer agents
(including the cost of keeping all necessary shareholder records and accounts,
and of handling any problems relating thereto and the expense of furnishing to
all shareholders statements of their accounts after every transaction including
the expense of mailing); costs and expense of repurchase and redemption of its
shares; costs and expenses of preparing, printing and mailing to shareholders
stock certificates and reports, notices and proxy statements to shareholders and
cost of preparing reports to governmental agencies; brokerage fees and
commissions of every kind and expenses in connection with the execution of
portfolio security transactions (including the cost of any service or agency
designed to facilitate the purchase and sale of portfolio securities); all
postage; insurance premiums; and any other fee, cost, expense or charge of any
kind not expressly assumed by the Investment Manager under this Agreement.
Notwithstanding any other provision of this Agreement, if expenses
(including the management fee hereunder but excluding interest, taxes, brokerage
fees and, where permitted, extraordinary expenses) borne by the Corporation in
any fiscal year exceed expense limitations applicable to the Corporation imposed
by state securities administrators, as such limitations may be lowered or raised
from time to time, the Investment Manager will reimburse the Corporation for any
such excess.
If the Investment Manager pays for other expenses of the Corporation or
furnishes the Corporation with services the cost of which is to be borne by the
Corporation under this Agreement, the Investment Manager shall not be deemed to
have waived its rights under this Agreement to have the Corporation pay for such
expenses or provide or pay for
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such services in the future.
6. The Investment Manager agrees that it shall observe and be bound by
all of the terms of the Certificate of Incorporation (including any amendments
thereto) of the Corporation which shall in any way limit or restrict or prohibit
or otherwise regulate any action by the Investment Manager.
7. The Investment Manager assumes no responsibility under this Agreement
other than to render the services called for hereunder in good faith, and the
Investment Manager shall not be held liable or accountable for any mistakes of
law or fact, or for any error or omission of its officers, directors, partners
or employees, or for any loss or damage arising or resulting therefrom suffered
by the Corporation or any of its stockholders, creditors, directors or officers;
provided, however, that nothing herein shall be deemed to protect the Investment
Manager against any liability to the Corporation or to its stockholders by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties hereunder, or by reason of the reckless disregard of its
obligations and duties hereunder. The Investment Manager shall not be
responsible for any action of the Board of Directors of the Corporation in
following or declining to follow any advice or recommendation of the Investment
Manager.
8. Neither this Agreement nor any other transaction between the parties
hereto pursuant to this Agreement shall be invalidated or in any way affected by
the fact that any or all of the directors, officers, stockholders, or other
representatives of the Corporation are or may be interested in the Investment
Manager, or any successor or assignee thereof, or that any or all of the
directors, officers, partners, or other representatives of the Investment
Manager are or may be interested in the Corporation, except as otherwise may be
provided in
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the Investment Company Act of 1940. The Investment Manager in acting hereunder
shall be an independent contractor and not any agent of the Corporation.
9. This Agreement shall become effective upon the effective date of the
Registration Statement of the Corporation filed with the Securities and Exchange
Commission in November 1970, and shall continue in force for two years from the
date hereof, and is renewable annually thereafter by specific approval of the
Board of Directors of the Corporation including the vote of a majority of the
directors who are not parties to this Agreement or interested persons of the
Investment Manager or of the Corporation, cast in person at a meeting called for
the purpose of voting on such approval, or by vote of a majority of the
outstanding voting securities of the Corporation. This Agreement may be
terminated without penalty at any time by the Corporation upon 60 days' written
notice. This Agreement shall automatically terminate in the event of its
assignment. The terms "interested persons", "assignment" and "vote of a majority
of the outstanding voting securities" shall have the same meaning as those terms
are defined in the Investment Company Act of 1940.
10. The Investment Manager reserves the right to grant the use of the
name "LORD XXXXXX" or "LORD, XXXXXX & CO.", or any derivative thereof, to any
other investment company or business enterprise. The Investment Manager reserves
the right to withdraw from the Corporation the use of the name "LORD XXXXXX" and
the use of its registered service xxxx; at such time of withdrawal of the right
to use the name "LORD XXXXXX", the Investment Manager agrees that the question
of continuing this Agreement may be submitted to a vote of the Corporation's
shareholders. In the event of such withdrawal or the termination of this
Agreement, for any reason, the Corporation will, on the written request of the
Investment Manager, take such action as may be necessary to change its
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name and eliminate all reference to the words "LORD XXXXXX" in any form, and
will no longer use such registered service xxxx.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed by its duly authorized officers and its corporate seal to be affixed
hereto, and the Investment Manager has caused this Agreement to be executed by
one of its partners, all on the day and year first above written.
LORD XXXXXX BOND-DEBENTURE FUND, INC.
By: /s/ Xxxx X. Xxxxxxxx
--------------------------
President
(Corporate Seal)
ATTEST:
/s/ Xxxxxx X. Xxxxx
-------------------------
Assistant Secretary
LORD, XXXXXX & CO.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Partner
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