Exhibit d
MANAGEMENT AGREEMENT
CASH RESERVES PORTFOLIO
MANAGEMENT AGREEMENT, dated as of January 1, 2002, by and between Cash
Reserves Portfolio, a New York trust (the "Trust"), and Citi Fund Management
Inc., a Delaware corporation ("Citi 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 Citi Management to provide certain
management services, and Citi Management is willing to provide such management
services for the Trust 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) Citi Management shall act as the Manager for the
Trust 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 Trust shall be held uninvested,
subject always to the restrictions of the Trust's Amended and Restated
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. 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 Trust'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 Trust 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notice or until similarly notified that such determination has been revoked.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 Trust, 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 Trust'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 Trust as to deliveries of securities
and payments of cash for the account of the Trust. 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 Trust 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 Trust 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 Trust, 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
the Trust'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 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 Trust in one or more investment companies.
(b) Subject to the direction and control of the Board of Trustees of the
Trust, Citi Management shall perform such administrative and management
services as may from time to time be reasonably requested by the Trust, which
shall include without limitation: (i) providing office space, equipment and
clerical personnel necessary for maintaining the organization of the Trust and
for performing the administrative and management functions herein set forth;
(ii) supervising the overall administration of the Trust, including negotiation
of contracts and fees with and the monitoring of performance and xxxxxxxx of
the Trust's transfer agent, investor servicing agents, custodian and other
independent contractors or agents; and (iii) arranging for maintenance of books
and records of the Trust. Notwithstanding the foregoing, Citi 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
Trust, 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 investor servicing agent of the
Trust. 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. Citi 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 Trust all of its own expenses including, without limitation, organization
costs of the Trust; compensation of Trustees who are not "affiliated persons"
of Citi 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, placement agent, investor servicing
agent, service agent, registrar or dividend disbursing agent of the Trust;
expenses of issuing and redeeming shares of beneficial interest and servicing
investor accounts; expenses of preparing, typesetting, printing and mailing
prospectuses, statements of additional information, investor reports, notices,
proxy statements and reports to governmental officers and commissions and to
existing investors of the Trust; expenses connected with the execution,
recording and settlement of security transactions; insurance premiums; fees and
expenses of the custodian for all services to the Trust, including safekeeping
of funds and securities and maintaining required books and accounts; expenses
of calculating the net asset value of the Trust (including but not limited to
the fees of independent pricing services); expenses of meetings of the Trust's
investors; expenses relating to the registration and qualification of interests
in the Trust; and such non-recurring or extraordinary expenses as may arise,
including those relating to actions, suits or proceedings to which the Trust
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 Trust a management fee computed daily and paid
monthly at an annual rate equal to the percentage of the Trust's average daily
net assets for the Trust's then-current fiscal year set forth opposite the
Trust's name on Schedule A annexed hereto (the "Aggregate Management Fee"),
minus the Trust's Aggregate Subadviser Fee (as defined below), if any. To the
extent that the Trust's Aggregate Subadviser Fee exceeds the Trust's Aggregate
Management Fee, the Manager shall pay such amount to the applicable subadvisers
on the Trust's behalf. A Trust's Aggregate Subadviser Fee is the aggregate
amount payable by the Trust to subadvisers pursuant to agreements between the
Trust 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 placement agent, as principals in making purchases or sales of securities or
other property for the account of the Trust, 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 Trust relative to
the Manager and its directors and officers.
5. Limitation of Liability of Manager. Citi 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 Trust, 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
"Citi 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 Trust 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 investors 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 an investor 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 Trust 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 Citi
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 Trust.
This Agreement may be terminated at any time with respect to the Trust
without the payment of any penalty by the Trustees or by the "vote of a
majority of the outstanding voting securities" of the Trust, 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 only if such amendment is approved by the
"vote of a majority of the outstanding voting securities" of the Trust (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 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 the
Trust.
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.
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 investors
of the Trust individually.
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.
CASH RESERVES PORTFOLIO CITI FUND MANAGEMENT INC.
By: /s/ Xxxxx X. XxXxxxxx By: /s/ Xxxxx X. XxXxxxxx
-------------------------------- ------------------------------
Title: President Title: Director
------------------------------ ---------------------------
SCHEDULE A
Trust Aggregate Management Fee (expressed as
a percentage of the Trust's aggregate
net assets for its then-current fiscal
year)
Cash Reserves Portfolio 0.15%
