INTERIM PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT made this 28th day of April 2000 between Capital Guardian Trust
Company ("Portfolio Manager"), a California corporation and THE XXXXXX XXXXXXXXX
TRUST, a Delaware business trust ("Trust").
WHEREAS, the Trust is registered as an open-end, diversified, management series
investment company under the Investment Company Act of 1940, as amended
("Investment Company Act") which currently offers seven series of beneficial
interests ("shares") representing interests in separate investment portfolios,
and may offer additional portfolios in the future; and
WHEREAS, the Trust desires to retain the Portfolio Manager to provide a
continuous program of investment management for The International Equity
Portfolio of the Trust ("Portfolio") and Portfolio Manager is willing, in
accordance with the terms and conditions hereof, to provide such services to the
Trust;
NOW THEREFORE, in consideration of the promises and covenants set forth herein
and intending to be legally bound hereby, it is agreed between the parties as
follows:
1. APPOINTMENT OF PORTFOLIO MANAGER.
--------------------------------
The Trust hereby retains Portfolio Manager to provide the investment services
set forth herein and Portfolio Manager agrees to accept such appointment. In
carrying out its responsibilities under this Agreement, the Portfolio Manager
shall at all times act in accordance with the investment objectives, policies
and restrictions applicable to the Portfolio as set forth in the then current
Registration Statement of the Trust, applicable provisions of the Investment
Company Act and the rules and regulations promulgated under that Act and other
applicable federal securities laws.
2. DUTIES OF PORTFOLIO MANAGER.
---------------------------
(a) Portfolio Manager shall provide a continuous program of investment
management for that portion of the assets of the Portfolio ("Account") that
may, from time to time be allocated to it by the Trust's Board of Trustees,
in writing, by an authorized officer of the Trust. It is understood that
the Account may consist of all, a portion of or none of the assets of the
Portfolio, and that the Board of Trustees has the right to allocate and
reallocate such assets to the Account at any time, and from time to time,
upon such notice to the Portfolio Manager as may be reasonably necessary,
in the view of the Trust, to ensure orderly management of the Account or
the Portfolio.
(b) Subject to the general supervision of the Trust's Board of Trustees,
Portfolio Manager shall have sole investment discretion with respect to the
Account, including investment research, selection of the securities to be
purchased and sold and the portion of the Account, if any, that shall be
held uninvested, and the selection of brokers and dealers through which
securities transactions in the Account shall be executed. Specifically, and
without limiting the generality of the foregoing, Portfolio Manager agrees
that it will:
(i) promptly advise the Portfolio's designated custodian bank and
administrator or accounting agent of each purchase and sale, as the case may be,
made on behalf of the Account, specifying the name and quantity of the security
purchased or sold, the unit and aggregate purchase or sale price, commission
paid, the market on which the transaction was effected, the trade date, the
settlement date, the identity of the effecting broker or dealer and/or such
other information, and in such manner, as may from time to time be reasonably
requested by the Trust;
(ii) maintain all applicable books and records with respect to the
securities transactions of the Account. Specifically, Portfolio Manager agrees
to maintain with respect to the Account those records required to be maintained
under Rule 31a-1(b)(1), (b)(5) and (b)(6) under the Investment Company Act with
respect to transactions in the Account including, without limitation, records
which reflect securities purchased or sold in the Account, showing for each such
transaction, the name and quantity of securities, the unit and aggregate
purchase or sale price, commission paid, the market on which the transaction was
effected, the trade date, the settlement date, and the identity of the effecting
broker or dealer. Portfolio Manager will preserve such records in the manner and
for the periods prescribed by Rule 31a-2 under the Investment Company Act.
Portfolio
================================================================================
Interium Contract
The International Equity Portfolio
Page 1
Manager acknowledges and agrees that all records it maintains for the Trust are
the property of the Trust and Portfolio Manager will surrender promptly to the
Trust any such records upon the Trust's request. The Trust agrees, however, that
Portfolio Manager may retain copies of those records that are required to be
maintained by Portfolio Manager under federal or state regulations to which it
may be subject or are reasonably necessary for purposes of conducting its
business;
(iii) provide, in a timely manner, such information as may be reasonably
requested by the Trust or its designated agents to assist the Trust or its
designated agent in connection with, among other things, the daily computation
of the Portfolio's net asset value and net income, preparation of proxy
statements or amendments to the Trust's registration statement and monitoring
investments made in the Account to ensure compliance with the various
limitations on investments applicable to the Portfolio and to ensure that the
Portfolio will continue to qualify for the special tax treatment accorded to
regulated investment companies under Subchapter M of the Internal Revenue Code
of 1986, as amended; and
(iv) render regular reports to the Trust concerning the performance of
Portfolio Manager of its responsibilities under this Agreement. In particular,
Portfolio Manager agrees that it will, at the reasonable request of the Board of
Trustees, attend meetings of the Board or its validly constituted committees and
will, in addition, make its officers and employees available to meet with the
officers and employees of the Trust at least quarterly and at other times upon
reasonable notice, to review the investments and investment program of the
Account.
3. PORTFOLIO TRANSACTION AND BROKERAGE.
------------------------------------
In placing orders for portfolio securities with brokers and dealers, Portfolio
Manager shall use its best efforts to execute securities transactions on behalf
of the Account in such a manner that the total cost or proceeds in each
transaction is the most favorable under the circumstances. Portfolio Manager
may, however, in its discretion, direct orders to brokers that provide to
Portfolio Manager research, analysis, advice and similar services, and Portfolio
Manager may cause the Account to pay to those brokers a higher commission than
may be charged by other brokers for similar transactions, provided that
Portfolio Manager determines in good faith that such commission is reasonable in
terms either of the particular transaction or of the overall responsibility of
the Portfolio Manager to the Account and any other accounts with respect to
which Portfolio Manager exercises investment discretion, and provided further
that the extent and continuation of any such practice is subject to review by
the Trust's Board of Trustees. Portfolio Manager shall not execute any portfolio
transactions for the Trust with a broker or dealer which is an "affiliated
person" of the Trust or Portfolio Manager, including any other investment
advisory organization that may, from time to time act as a portfolio manager for
the Portfolio or any of the Trust's other Portfolios, without prior written
approval of the Trust. The Trust shall provide a list of such affiliated brokers
and dealers to Portfolio Manager and will promptly advise Portfolio Manager of
any changes in such list.
4. EXPENSES AND COMPENSATION.
-------------------------
Portfolio Manager shall pay all of its expenses incurred in the performance of
its duties under this Agreement and shall not be required to pay any other
expenses of the Trust. For its services under this Agreement, Portfolio Manager
shall be entitled to receive a fee at the annual rate of .40% of the average net
assets of the Account's average net assets of $200 million or less; .35% of
average net assets of assets over $200 million up to $300 million; and .30% on
assets over $300 million, which fee shall be payable quarterly.
5. LIMITATION OF LIABILITY AND INDEMNIFICATION.
-------------------------------------------
(a) Portfolio Manager shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Trust in connection with the matters
to which this Agreement relates including, without limitation, losses that
may be sustained in connection with the purchase, holding, redemption or
sale of any security or other investment by the Trust except a loss
resulting from willful misfeasance, bad faith or gross negligence on the
part of Portfolio Manager in the performance of its duties or from reckless
disregard by it of its duties under this Agreement.
(b) Notwithstanding the foregoing, Portfolio Manager expressly agrees that the
Trust may rely upon written information provided, in writing, by Portfolio
Manager to the Trust (including, without limitation, information contained
in Portfolio Manager's then current Form ADV) in accordance with Section 9
of the Agreement or otherwise, in preparing the Trust's registration
statement and amendments thereto and certain periodic reports relating to
the Trust and its Portfolios that are
================================================================================
Interium Contract
The International Equity Portfolio
Page 2
required to be furnished to shareholders of the Trust and/or filed with the
Securities and Exchange Commission ("SEC Filings"). Portfolio Manager
agrees to indemnify and hold harmless the Trust and each of its Trustees,
officers and employees from any claims, liabilities and expenses, including
reasonable attorneys' fees, incurred as a result of any untrue statement or
alleged untrue statement of a material fact made by Portfolio Manager in
any such written information and upon which the Trust relies in preparing
any SEC Filing, or any omission or alleged omission to state in such
written information a material fact necessary to make such statements not
misleading ("material omission"). Portfolio Manager will not, however, be
required to so indemnify any person under this Section 5 to the extent that
Portfolio Manager relied upon an untrue statement or material omission made
by an officer or Trustee of the Trust or where such untrue statement or
material omission was made in reliance upon information furnished to the
Portfolio Manager in writing by such officer or Trustee, or by the Trust's
Custodian, Administrator or Accounting Agent.
6. PERMISSIBLE INTEREST.
--------------------
Subject to and in accordance with the Trust's Declaration of Trust and Bylaws
and corresponding governing documents of Portfolio Manager, Trustees , officers,
agents and shareholders of the Trust may have an interest in the Portfolio
Manager as officers, directors, agents and/or shareholders or otherwise.
Portfolio Manager may have similar interests in the Trust. The effect of any
such interrelationships shall be governed by said governing documents and the
provisions of the Investment Company Act.
7. DURATION, TERMINATION AND AMENDMENTS.
------------------------------------
This Agreement shall become effective as of the date on which that certain
agreement between Xxxxxxx Partners, Inc. and the Trust is terminated ("Effective
Date"). It shall continue in effect thereafter until the earlier of the date on
which a subsequent agreement with CapGuardian is approved by the shareholders of
the Portfolio in accordance with Section 15(a) of the 1940 Act or the 150th day
following the Effective Date.
This Agreement may be terminated by the Trust or by Portfolio Manager at any
time and without penalty upon sixty days written notice to the other party,
which notice may be waived by the party entitled to it. This Agreement may not
be amended except by an instrument in writing and signed by the party to be
bound thereby provided that if the Investment Company Act requires that such
amendment be approved by the vote of the Board, the Independent Trustees and/or
the holders of the Trust's or the Portfolio's outstanding shareholders, such
approval must be obtained before any such amendment may become effective. This
Agreement shall terminate upon its assignment.
For purposes of this Agreement, the terms "majority of the outstanding voting
securities, "assignment" and "interested person" shall have the meanings set
forth in the Investment Company Act.
8. CONFIDENTIALITY; USE OF NAME.
----------------------------
(a) Portfolio Manager acknowledges and agrees that during the course of its
responsibilities hereunder, it may have access to certain information that
is proprietary to the Trust or to one or more of the Trust's agents or
service providers. Portfolio Manager agrees that Portfolio Manager, its
officers and its employees shall treat all such proprietary information as
confidential and will not use or disclose information contained in, or
derived from such material for any purpose other than in connection with
the carrying out of Portfolio Manager's responsibilities hereunder. In
addition, Portfolio Manager shall use its best efforts to ensure that any
agent or affiliate of Portfolio Manager who may gain access to such
proprietary materials shall be made aware of the proprietary nature of such
materials and shall likewise treat such materials as confidential.
(b) It is acknowledged and agreed that the names "Xxxxxx Xxxxxxxxx," "Xxxxxx
Xxxxxxxxx Chief Investment Officers" (which is a registered trademark of
Xxxxxx, Xxxxxxxxx & Co., Inc. ("HCCI")), and derivatives of either, as well
as any logo that is now or shall later become associated with either name
("Marks") are valuable property of HCCI and that the use of the Marks, or
any one of them, by the Trust or its agents is subject to the license
granted to the Trust HCCI. Portfolio Manager agrees that it will not use
any Xxxx without the prior written consent of the Trust. Portfolio Manager
consents to use of its name, performance data, biographical data and other
pertinent data by the Trust for use in marketing and sales literature,
provided that any such marketing and sales literature shall not be used by
the Trust without the prior written consent of Portfolio Manager, which
consent shall not be unreasonably withheld.
================================================================================
Interium Contract
The International Equity Portfolio
Page 3
(c) It is acknowledged and agreed tha the name "Capital Guardian Trust
Company," the names of the Portfolio Manager's affiliates within The
Capital Croup Companies, Inc., and any derivative or logo or trade or
service xxxx (including but not limited to the Ameritan Funds Group of
mutual funds), are the valuable property of the the Portfolio Manager. The
Trust shall have the right to use such names(s), derivatives, logos, trade
or service marks only with the prior written approval of the Portfolio
Manager, which approval shall not be unreasonably withheld or delayed so
long as this Agreement is in effect. Upon termination of this Agreement,
the Trust shall forthwith cease to use such name(s), derivatives, logos,
trade or service marks. The Trust agrees that it will review with the
Portfolio Manager any advertisement, sales literature, or notice prior to
its use that makes reference to the Portfolio Manager so that the Portfolio
Manager may review the context in which it is referred to, it being agreed
that the Portfolio Manatger shall have no responsibility to enaure the
adequacy of the form or contect of such materials for the purposes of the
1940 Act or other applicable laws and regulations. If the Trust makes any
unauthorized use of the Portfolio Manager's name(s) derivatives, logos,
trade or service marks, the parties acknowledge that the Portfolio Manage4
shall suffer irreparable harm for which monetary damages are inadequate and
thus, the Portfolio Manager shall be entitled to injunctive relief.
(d) The provisions of this Section 8 shall survive termination of this
Agreement.
9. REPRESENTATION, WARRANTIES AND AGREEMENTS OF PORTFOLIO MANAGER.
--------------------------------------------------------------
Portfolio Manager represents and warrants that:
(a) It is a "bank" as defined under the Investment Advisers Act of 1940
("Investment Advisers Act"), and thereby exempt from registration under the
Investment Advisers Act and that it will promptly report to the Trust the
commencement of any formal proceeding that could render the Portfolio
Manager ineligible to serve as an investment adviser to a registered
investment company under Section 9 of the Investment Company Act or any
actions that Portfolio Manager has determined to take in connection with
changes in its status as an entity that is exempt from registration under
the Investment Advisers Act.
(b) It will take such actions as may be neccessary, and shall provide such
information that is reasonably requested by the Trust in connection with
the Trust's obligations under Rule 17j-1 under the 1940 Act. In particular,
Portfolio Manager represents that it is subject to a written code of ethics
("Portfolio Manager's Code") complying with the requirements of Rule 17j-1
under the 1940 Act. Portfolio Manager further represents that it is subject
to a written code of ethics ("Portfolio Manager's Code") complying with the
requirements of such rule and will provide the Trust with a copy of such
code of ethics. During the period that this Agreement is in effect, an
officer or director of Portfolio Manager shall certify to the Trust, at
least quarterly, that Portfolio Manager has complied with the requirements
of the Portfolio Manager's Code during the prior year; and that either (i)
that no violation of such code has occurred or (ii) if such a violation
occurred, that appropriate action was taken in response to such violation.
Upon the written request of the Trust, Portfolio Manager shall permit the
Trust, or it designated agents, to examine the reports required to be made
by Portfolio Manager under rule 17j-1(c)(1) under the Investment Company
Act. In addition, Portfolio Manager acknowledges that the Trust may, in
response to regulations or recommendations issued by the Securities and
Exchange Commission or other regulatory agencies, from time to time,
request additional information regarding the personal securities trading of
its directors, partners, officers and employees and the policies of
Portfolio Manager with regard to such trading. Portfolio Manager agrees
that it make every effort to respond to the Trust's reasonable requests in
this area.
(c) Upon request of the Trust, Portfolio Manager shall promptly supply the
Trust with any information concerning Portfolio Manager and its
stockholders, employees and affiliates that the Trust may reasonably
require in connection with the preparation of its registration statements,
proxy materials, reports and other documents required, under applicable
state or Federal laws, to be filed with state or Federal agencies or to be
provided to shareholders of the Trust.
10. STATUS OF PORTFOLIO MANAGER.
---------------------------
The Trust and Portfolio Manager acknowledge and agree that the relationship
between Portfolio Manager and the Trust is that of an independent contractor and
under no circumstances shall any employee of Portfolio Manager be deemed an
employee of the Trust or any other organization that the Trust may, from time to
time, engage to provide services to the Trust, its Portfolios or its
shareholders. The parties also acknowledge and agree that nothing in this
Agreement shall be construed to restrict the
================================================================================
Interium Contract
The International Equity Portfolio
Page 4
right of Portfolio Manager or its affiliates to perform investment management or
other services to any person or entity, including without limitation, other
investment companies and persons who may retain Portfolio Manager to provide
investment management services and the performance of such services shall not be
deemed to violate or give rise to any duty or obligations to the Trust.
11. COUNTERPARTS AND NOTICE.
-----------------------
This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original. Any notice required to be given under this
Agreement shall be deemed given when received, in writing addressed and
delivered, by certified mail, by hand or via overnight delivery service as
follows:
If to the Trust:
Xx. Xxxxxx X. Xxxxxxxxx, President
The Xxxxxx Xxxxxxxxx Trust
000 Xxxx Xxxxx Xxxxxxxxx Xxxxxx
Xxxx Xxxxxxxxxxxx, XX 00000-0000
If to Portfolio Manager:
Capital Guardian Trust Company
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Treasurer
12. MISCELLANEOUS.
--------------
The captions in this Agreement are included for convenience of reference only
and in no way define or delimit any of the provisions hereof or otherwise affect
their construction or effect. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and shall be governed by the law of the state of Delaware provided
that nothing herein shall be construed as inconsistent with the Investment
Company Act or the Investment Advisers Act.
Portfolio Manager is hereby expressly put on notice of the limitations of
shareholder and Trustee liability set forth in the Declaration of Trust of the
Trust and agrees that obligations assumed by the Trust pursuant to this
Agreement shall be limited in all cases to the assets of The International
Equity Portfolio. Portfolio Manager further agrees that it will not seek
satisfaction of any such obligations from the shareholders or any individual
shareholder of the Trust, or from the Trustees of the Trust or any individual
Trustee of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their officers thereunto duly authorized as of the day and year first written
above.
/s/ Capital Guardian Trust Company
/s/ The Xxxxxx Xxxxxxxxx Trust
================================================================================
Interium Contract
The International Equity Portfolio
Page 5
