FORM OF
INVESTMENT MANAGEMENT AGREEMENT
April [ ], 1997
Xxxxx Xxxxxx Mutual Funds Management Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
This Investment Management Agreement (the "Agreement") is made on this [
] day of April, 1997, by and between Xxxxx Xxxxxx Investment Trust , a
business trust organized under the laws of the Commonwealth of Massachusetts
(the "Trust"), in respect of its sub-trust, Xxxxx Xxxxxx Large Capitalization
Growth Fund (the "Fund"), and Xxxxx Xxxxxx Mutual Funds Management Inc.
("SBMFM") as follows:
1. Investment Description; Appointment
The Fund desires to employ its capital by investing and reinvesting in
investments of the kind and in accordance with the limitations specified
in: (i) the Trust's Master Trust Agreement, as amended from time to time
(the "Master Trust Agreement"); (ii) the Fund's Prospectus (the
"Prospectus"); and (iii) the Fund's Statement of Additional Information
(the "Statement") filed with the Securities and Exchange Commission (the
"SEC") as part of the Fund's Registration Statement on Form N-1A, as
amended from time to time, and in such manner and to such extent as may
from time to time be approved by the Board of Trustees of the Trust (the
"Board"). Copies of the Fund's Prospectus and the Statement and the
Trust's Master Trust Agreement have been or will be submitted to SBMFM.
The Trust desires to employ and hereby appoints SBMFM to act as
investment manager for the Fund. SBMFM accepts the appointment and
agrees to furnish the services for the compensation set forth below.
SBMFM is hereby authorized to retain third parties and is hereby
authorized to delegate some or all of its duties and obligations
hereunder to such persons, provided such persons shall remain under the
general supervision of SBMFM.
2. Services as Investment Manager
Subject to the supervision and direction of the Board, SBMFM will: (a)
assist in supervising all aspects of the Fund's operations; (b) supply
the Fund with office facilities (which may be in SBMFM's own offices),
statistical and research data, data processing services, clerical,
accounting and bookkeeping services, including, but not limited to, the
calculation of (i) the net asset value of shares of the Fund, (ii)
applicable contingent deferred sales charges and similar fees and
charges and (iii) distribution fees, internal auditing and legal
services, internal executive and administrative services, and stationery
and office supplies; and (c) prepare reports to shareholders of the
Fund, tax returns and reports to and filings with the SEC and state blue
sky authorities.
3. Compensation
In consideration of the services rendered pursuant to this Agreement,
the Trust will pay SBMFM, on the first business day of each month, a fee
for the previous month at an annual rate of 0.75% of the Fund's average
daily net assets. The fee for the period from the date the Fund
commences its investment operations to the end of the month during which
the Fund commences its investment operations shall be pro-rated
according to the proportion that such period bears to the full monthly
period. Upon any termination of this Agreement before the end of any
month, the fee for such part of that month shall be pro-rated according
to the proportion that such period bears to the full monthly period and
shall be payable upon the date of termination of this Agreement. For
the purpose of determining fees payable to SBMFM, the value of the
Fund's net assets shall be computed at the times and in the manner
specified in the Fund's Prospectus and/or the Statement, as from time to
time in effect.
4. Expenses
SBMFM will bear all expenses in connection with the performance of its
services under this Agreement. The Fund will bear certain other
expenses to be incurred in its operation, including: investment advisory
and administration fees; charges of custodians and transfer and dividend
disbursing agents; fees for necessary professional services, such as the
Fund's and Board members' proportionate share of insurance premiums,
professional associations, dues and/or assessments; and brokerage
services, including taxes, interest and commissions; costs attributable
to investor services, including without limitation, telephone and
personnel expenses; costs of preparing and printing prospectuses and
statements of additional information for regulatory purposes and for
distribution to existing shareholders; the costs of regulatory
compliance, such as SEC fees and state blue sky qualifications fees;
outside auditing and legal expenses and costs associated with
maintaining the Fund's legal existence; costs of shareholders' reports
and meetings of the officers or Board; fees of the members of the Board
who are not officers, directors or employees of Xxxxx Xxxxxx, Inc. or
its affiliates or any person who is an affiliate of any person to whom
duties may be delegated hereunder and any extraordinary expenses. In
addition, the Fund will pay all service and distribution fees pursuant
to a Services and Distribution Plan adopted under Rule 12b-1 of the
Investment Company Act of 1940, as amended (the "1940 Act").
5. Reimbursement to the Fund
If in any fiscal year the aggregate expenses of the Fund (including fees
pursuant to this Agreement, but excluding distribution fees, interest,
taxes, brokerage and, if permitted by state securities commissions,
extraordinary expenses) exceed the expense limitations of any state
having jurisdiction over the Fund, SBMFM will reimburse the Fund for
that excess expense to the extent required by state law in the same
proportion as its respective fees bear to the combined fees for
investment advice and administration. The expense reimbursement
obligation of SBMFM will be limited to the amount of its fees hereunder.
Such expense reimbursement, if any, will be estimated, reconciled and
paid on a monthly basis.
6. Brokerage
In selecting brokers or dealers to execute transactions on behalf of the
Fund, SBMFM will seek the best overall terms available. In assessing
the best overall terms available for any transaction, SBMFM will
consider factors it deems relevant, including, but not limited to, the
breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker or dealer and
the reasonableness of the commission, if any, for the specific
transaction and on a continuing basis. In selecting brokers or dealers
to execute a particular transaction, and in evaluating the best overall
terms available, SBMFM is authorized to consider the brokerage and
research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934, as amended) provided to the Fund and/or
other accounts over which SBMFM or its affiliates exercise investment
discretion.
7. Information Provided to the Fund
SBMFM will keep the Trust informed of developments materially affecting
the Fund's portfolio, and will, on its own initiative, furnish the Trust
from time to time with whatever information SBMFM believes is
appropriate for this purpose.
8. Standard of Care
SBMFM shall exercise its best judgment in rendering the services listed
in paragraph 2 above. SBMFM shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, provided
that nothing in this Agreement shall be deemed to protect or purport to
protect SBMFM against any liability to the Trust or to the Fund's
shareholders to which SBMFM would otherwise be subject by reason of
willful malfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of SBMFM 's reckless disregard of
its obligations and duties under this Agreement.
9. Services to Other Companies or Accounts
The Trust understands that SBMFM now acts, will continue to act and may
act in the future as: investment adviser to fiduciary and other managed
accounts, as well as to other investment companies; and the Trust has no
objection to SBMFM's so acting, provided that whenever the Fund and one
or more other investment companies advised by SBMFM have available funds
for investment, investments suitable and appropriate for each will be
allocated in accordance with a formula believed to be equitable to each
company. The Trust recognizes that in some cases this procedure may
adversely affect the size of the position obtainable for the Fund. In
addition, the Trust understands that the persons employed by SBMFM to
assist in the performance of SBMFM's duties under this Agreement will
not devote their full time to such service and nothing contained in this
Agreement shall be deemed to limit or restrict the right of SBMFM or any
affiliate of SBMFM to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature.
l0. Term of Agreement
This Agreement shall become effective as of the date the Fund commences
its investment operations and continue for an initial two-year term and
shall continue thereafter so long as such continuance is specifically
approved at least annually by (i) the Board or (ii) a vote of a
"majority" (as defined in the 0000 Xxx) of the Fund's outstanding voting
securities, provided that in either event the continuance is also
approved by a majority of the Board members who are not "interested
persons" (as defined in the 0000 Xxx) of any party to this Agreement, by
vote cast in person or by proxy at a meeting called for the purpose of
voting on such approval. This Agreement is terminable, without penalty,
on 60 days' written notice, by the Board or by vote of holders of a
majority of the Fund's shares, or upon 90 days' written notice, by
SBMFM. This Agreement will also terminate automatically in the event of
its assignment (as defined in the 1940 Act).
11. Representation by the Trust
The Trust represents that a copy of the Master Trust Agreement is on
file with the Secretary of the Commonwealth of Massachusetts and with
the City of Boston.
12. Indemnification
The Trust agrees to indemnify SBMFM and its officers, directors,
employees, affiliates, controlling persons, agents (including persons to
whom responsibilities are delegated hereunder) against any loss, claim,
expense or cost of any kind (including reasonable attorney's fees)
resulting or arising in connection with this Agreement, or from the
performance or failure to perform any act hereunder, provided that no
such indemnification shall be available if the indemnitee violated the
standard of care in paragraph 9 above. This indemnification shall be
limited by the 1940 Act and relevant state law. Each indemnitee shall be
entitled to advance of its expenses in accordance with the requirements
of the 1940 Act and the rules, regulations and interpretations thereof
as in effect from time to time.
13. Limitation of Liability
The Trust and SBMFM agree that the obligations of the Trust under this
Agreement shall not be binding upon any of the Board members,
shareholders, nominees, officers, employees or agents, whether past,
present or future, of the Trust individually, but are binding only upon
the assets and property of the Fund, as provided in the Master Trust
Agreement. The execution and delivery of this Agreement have been duly
authorized by the Trust and SBMFM, and signed by an authorized officer
of each, acting as such. Neither the authorization by the Board members
of the Trust, nor the Trust execution and delivery by the officer of the
Trust shall be deemed to have been made by any of them individually or
to impose any liability on any of them personally, but shall bind only
the assets and property of the Fund as provided in the Master Trust
Agreement.
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance hereof by signing and returning the enclosed copy of
this Agreement to us.
Very truly yours,
Xxxxx Xxxxxx Investment Trust,
on behalf of
Xxxxx Xxxxxx Large Capitalization
Growth Fund
By:
Title:
Accepted:
Xxxxx Xxxxxx Mutual Funds Management Inc.
By:
Name:
Title:
g:\boards\wed\1997\misc\newfunds.doc
