EXHIBIT 23(d)(1)
MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT, dated as of September 15, 2005, between XXXXXXXX
TARGETHORIZON ETF PORTFOLIOS, INC., a Maryland corporation (the "Corporation"),
on behalf of Xxxxxxxx TargETFund 2025, Xxxxxxxx TargETFund 2015 and Xxxxxxxx
TargETFund Core (collectively, together with any future funds, the "Funds") and
J. & X. XXXXXXXX & CO. INCORPORATED, a Delaware corporation (the "Manager").
In consideration of the mutual agreements herein made, the parties
hereto agree as follows:
1. DUTIES OF THE MANAGER. The Manager shall manage the affairs of the
Corporation and the Funds including, but not limited to, continuously providing
the Corporation with investment management services, including investment
research, advice and supervision, determining which securities shall be
purchased or sold by the Funds (including determining in which exchange-traded
funds ("ETFs") or other securities the assets of the Corporation will be
invested and determining the percentage of the Funds' assets that will be
invested in each such ETF and other security) making purchases and sales of
securities on behalf of the Funds and determining how voting and other rights
with respect to securities of the Funds shall be exercised, subject in each case
to the control of the Board of Directors of the Corporation and in accordance
with the objectives, policies and principles set forth in the Registration
Statement of the Corporation and Prospectus of the Funds and the requirements of
the Investment Company Act of 1940 (the "1940 Act") and other applicable law. In
performing such duties, the Manager shall provide such office space, such
bookkeeping, accounting, internal legal, clerical, secretarial and
administrative services (exclusive of, and in addition to, any such services
provided by any others retained by the Corporation) and such executive and other
personnel as shall be necessary for the operations of the Corporation or the
Funds. The Corporation understands that the Manager also acts as the manager of
all of the investment companies in the Xxxxxxxx Group.
Subject to Section 36 of the 1940 Act, the Manager shall not be liable
to the Corporation or Funds 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
management of the Funds and the performance of its duties under this Agreement
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
under this Agreement.
2. EXPENSES. (a) The Manager shall pay all of its expenses arising from
the performance of its obligations under Section 1, and shall pay any salaries,
fees and expenses of the directors of the Corporation who are employees of the
Manager or its affiliates. Except as otherwise provided in Section paragraph (b)
of this Section 2, the Manager shall not be required to pay any other expenses
of the Corporation or the Funds ("Fund Expenses"), including, but not limited
to, direct charges relating to the purchase and sale of portfolio securities,
interest charges, credit commitment fees, fees and expenses of independent
attorneys and auditors, taxes and governmental fees, cost of stock certificates
and any other
expenses (including clerical expenses) of issue, sale, repurchase or redemption
of shares, expenses of registering and qualifying shares for sale, expenses of
printing and distributing reports, notices and proxy materials to shareholders,
expense of corporate data processing and related services, shareholder
recordkeeping and shareholder account services, expenses of printing and filing
reports and other documents filed with governmental agencies, expenses of
printing and distributing prospectuses, expenses of annual and special
shareholders' meetings, fees and disbursements of transfer agents and
custodians, expenses of disbursing dividends and distributions, fees and
expenses of directors of the Corporation who are not employees of the Manager or
its affiliates, membership dues in the Investment Company Institute, insurance
premiums and extraordinary expenses, as determined by the Board of Directors and
the Manager, such as litigation expenses and other expenses that relate to
events and transactions that are distinguished by their unusual nature and by
the infrequency of their occurrence ("Extraordinary Expenses").
(b) Notwithstanding anything to the contrary in paragraph (a) of this
Section 2, the Manager agrees that, during the term of this Agreement until
January 31, 2008, with respect to each Fund, if Fund Expenses (excluding any
Extraordinary Expenses and, for the avoidance of doubt, excluding any
compensation paid by the Funds to the Manager pursuant to Section 3, any amounts
paid by the Funds pursuant to a written plan adopted under Rule 12b-1 under the
1940 Act and interest on borrowings) exceeds 0.34% of such Fund's average daily
net assets (the "Excess Fund Expenses") in any fiscal year, the Manager shall
reimburse the Fund for Fund Expenses and/or waive all or any portion of its
compensation paid pursuant to Section 3 in an aggregate amount equal to the
Excess Fund Expenses.
3. COMPENSATION. (a) As compensation for the services performed and the
facilities and personnel provided by the Manager pursuant to Section 1, each
Fund will pay to the Manager promptly after the end of each month a fee,
calculated on each day during such month as indicated on the attached fee
schedule.
(b) If the Manager shall serve hereunder for less than the whole of any
month, the fee hereunder shall be prorated.
4. PURCHASE AND SALE OF SECURITIES. The Manager shall purchase
securities from or through and sell securities to or through such persons,
brokers or dealers (including the Manager or an affiliate of the Manager) as the
Manager shall deem appropriate in order to carry out the policy with respect to
portfolio transactions as set forth in the Registration Statement of the
Corporation and Prospectus(es) of the Funds or as the Board of Directors of the
Corporation may direct from time to time. In providing the Funds with investment
management and supervision, it is recognized that the Manager will seek the most
favorable price and execution, and, consistent with such policy, may give
consideration to the research, statistical and other services furnished by
brokers or dealers to the Manager for its use, to the general attitude of
brokers or dealers toward investment companies and their support of them, and to
such other considerations as the Board of Directors of the Corporation may
direct or authorize from time to time.
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Notwithstanding the above, it is understood that it is desirable for the
Funds that the Manager have access to supplemental investment and market
research and security and economic analysis provided by brokers who execute
brokerage transactions at a higher cost to the Funds than may result when
allocating brokerage to other brokers on the basis of seeking the most favorable
price and execution. Therefore, the Manager is authorized to place orders for
the purchase and sale of securities for the Funds with such brokers, subject to
review by the Corporation's Board of Directors from time to time with respect to
the extent and continuation of this practice. It is understood that the services
provided by such brokers may be useful to the Manager in connection with its
services to other clients as well as the Funds.
The placing of purchase and sale orders may be carried out by the
Manager or any wholly-owned subsidiary of the Manager.
If, in connection with purchases and sales of securities for the Funds,
the Manager or any subsidiary of the Manager may, without material risk, arrange
to receive a soliciting dealer's fee or other underwriter's or dealer's discount
or commission, the Manager shall, unless otherwise directed by the Board of
Directors of the Corporation, obtain such fee, discount or commission and the
amount thereof shall be applied to reduce the compensation to be received by the
Manager pursuant to Section 3 hereof.
Nothing herein shall prohibit the Board of Directors of the Corporation
from approving the payment by the Funds of additional compensation to others for
consulting services, supplemental research and security and economic analysis.
5. TERM OF AGREEMENT. This Agreement shall continue in full force and
effect until December 31, 2006, and from year to year thereafter if such
continuance is approved in the manner required by the 1940 Act if the Manager
shall not have notified the Funds in writing at least 60 days prior to such
December 31 or prior to December 31 of any year thereafter that it does not
desire such continuance. This Agreement may be terminated at any time in respect
of any Fund, without payment of penalty by the Fund, on 60 days' written notice
to the Manager, by vote of the Board of Directors of the Corporation or by vote
of a majority of the outstanding voting securities of such Fund (as defined by
the 1940 Act). The failure of the Board of Directors of the Corporation or
holders of securities of any Funds to approve the continuance of this Agreement
with respect to such Fund, shall be without prejudice to the effectiveness of
this Agreement with respect to any other Fund. This Agreement shall
automatically terminate in the event of its assignment (as defined by the 1940
Act).
6. RIGHT OF MANAGER IN CORPORATE NAME. The Manager and the Corporation
each agree that the word "Xxxxxxxx", which comprises a component of each Fund's
name, is a property right of the Manager. The Corporation (on behalf of each
Fund) agrees and consents that (i) it will only use the word "Xxxxxxxx" as a
component of its corporate name and for no other purpose, (ii) it will not
purport to grant to any third party the right to use the word "Xxxxxxxx" for any
purpose, (iii) the Manager or any corporate affiliate of the Manager may use or
grant to others the right to use the word "Xxxxxxxx", or any
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combination or abbreviation thereof, as all or a portion of a corporate or
business name or for any commercial purpose, including a grant of such right to
any other investment company, and at the request of the Manager, the Corporation
and each Fund will take such action as may be required to provide its consent to
the use of the word "Xxxxxxxx", or any combination or abbreviation thereof, by
the Manager or any corporate affiliate of the Manager, or by any person to whom
the Manager or an affiliate of the Manager shall have granted the right to such
use; and (iv) upon the termination of any management agreement into which the
Manager and the Corporation may enter, the applicable Fund shall, upon request
by the Manager, promptly take such action, at its own expense, as may be
necessary to change its corporate name to one not containing the word "Xxxxxxxx"
and following such change, shall not use the word "Xxxxxxxx", or any combination
thereof, as a part of its corporate name or for any other commercial purpose,
and shall use its best efforts to cause its officers, directors and stockholders
to take any and all actions which the Manager may request to effect the
foregoing and to reconvey to the Manager any and all rights to such word.
7. MISCELLANEOUS. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. Anything herein to the
contrary notwithstanding, this Agreement shall not be construed to require, or
to impose any duty upon either of the parties, to do anything in violation of
any applicable laws or regulations.
IN WITNESS WHEREOF, the Corporation, on behalf of the Funds, and the
Manager have caused this Agreement to be executed by their duly authorized
officers as of the date first above written.
XXXXXXXX TARGETHORIZON ETF PORTFOLIOS,
INC.
By: /s/ Xxxxxxxx X. Xxxxx
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Name: Xxxxxxxx X. Xxxxx
Title: Vice President
J. & X. XXXXXXXX & CO. INCORPORATED
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: President
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FEE SCHEDULE
Average Daily Annual Rate (as a % of
Fund Net Assets Average Daily Net Assets)
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Xxxxxxxx TargETFund 2025 First $500 million 0.50%
Next $500 million 0.45%
Over $1 billion 0.40%
Xxxxxxxx TargETFund 2015 First $500 million 0.50%
Next $500 million 0.45%
Over $1 billion 0.40%
Xxxxxxxx TargETFund Core First $500 million 0.50%
Next $500 million 0.45%
Over $1 billion 0.40%
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