XXXXX XXXXXX ALLOCATION SERIES INC.
SELECT HIGH GROWTH PORTFOLIO
SELECT GROWTH PORTFOLIO
SELECT BALANCED PORTFOLIO
ASSET ALLOCATION AND ADMINISTRATION AGREEMENT
AGREEMENT, made this 1st day of July 2005 between Xxxxx Xxxxxx Allocation
Series Inc., a Maryland corporation (the "Fund"), with respect to the Select
High Growth Portfolio, Select Growth Portfolio and Select Balanced Portfolio
(each, individually, a "Portfolio" and collectively, the "Portfolios") and Xxxxx
Xxxxxx Fund Management LLC, a Delaware corporation ("SBFM").
W I T N E S S E T H:
WHEREAS, each Portfolio is a series of the Fund which will operate as an
open-end management investment company registered under the Investment Company
Act of 1940, as amended, and the rules thereunder (the "1940 Act"); and
WHEREAS, the Fund has been organized for the purpose of investing its
assets in open-end management investment companies or series thereof that are or
will be part of a group of investment companies that holds itself out to
investors as related companies for purposes of investment and investor services
(i) for which Citigroup Global Markets Inc. ("CGM") or any entity controlling,
controlled by, or under common control with CGM now or in the future acts as
principal underwriter or (ii) for which Citigroup Inc. ("Citigroup"), CGM, SBFM
or any entity controlling, controlled by, or under common control with
Citigroup, CGM, or SBFM now or in the future acts as investment adviser
(collectively, the "Underlying Xxxxx Xxxxxx Funds"), as well as repurchase
agreements and desires to avail itself of the experience, sources of
information, advice, assistance and facilities available to SBFM and to have
SBFM perform for it various asset allocation and administration services; and
SBFM is willing to furnish such advice and services on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed as follows:
1. The Fund on behalf of each Portfolio hereby appoints SBFM to act as
investment manager to the Portfolios on the terms set forth in this Agreement.
SBFM accepts such appointment and agrees to render the services herein
described, for the compensation herein provided. SBFM is hereby authorized to
retain affiliated third parties and is hereby authorized to delegate some or all
of its administration duties and obligations hereunder to such persons provided
that such persons shall remain under the general supervision of SBFM.
2. Subject to the supervision of the Board of Directors of the Fund (the
"Board"), SBFM shall manage the investment of each Portfolio's assets and
provide investment research advice and supervision of the Portfolio's
investments in accordance with the Portfolio's investment objective, policies
and restrictions as stated in the Fund's
Registration Statement under the 1940 Act as it may be amended from time to time
(the "Registration Statement"), and subject to the following understandings:
(a) SBFM shall provide supervision of the Portfolios' investments and
determine from time to time the investments or securities that will be
purchased, retained or sold by the Portfolio. SBFM shall determine the
percentage of the Portfolios' assets invested from time to time in each
Underlying Xxxxx Xxxxxx Fund selected by the Board pursuant to the
investment objective and policies of each Portfolio as set forth in the
prospectus forming part of the Registration Statement and in repurchase
agreements. SBFM shall allocate investments for the Portfolios among the
Underlying Xxxxx Xxxxxx Funds and repurchase agreements based on factors
it considers relevant, including its outlook for the economy, financial
markets and the relative performance of the Underlying Xxxxx Xxxxxx Funds.
The allocation among the Underlying Xxxxx Xxxxxx Funds shall be made
within investment ranges established by the Board, which will designate
minimum and maximum percentages for each of the Underlying Xxxxx Xxxxxx
Funds.
SBFM will also make recommendations to the Board concerning changes to (i)
the Underlying Xxxxx Xxxxxx Funds in which the Portfolios may invest, (ii)
the percentage range of assets that may be invested by the Portfolios in
any one Underlying Xxxxx Xxxxxx Fund and (iii) the percentage range of
assets of the Portfolios that may be invested in equity funds and fixed
income funds (including money market funds).
(b) SBFM shall use its best judgment in the performance of its duties
under this Agreement.
(c) SBFM undertakes to perform its duties and obligations under this
Agreement in conformity with the Registration Statement, with the
requirements of the 1940 Act and all other applicable Federal and state
laws and regulations and with the instructions and directions of the
Board.
(d) SBFM shall maintain such books and records with respect to each
Portfolio's investments transactions and such books and records required
to be maintained by SBFM pursuant to the Rules of the Securities and
Exchange Commission ("SEC") under the 1940 Act and SBFM shall render to
the Board such periodic and special reports as the Board may reasonably
request. SBFM agrees that all records that it maintains for each Portfolio
or the Fund are the property of the Fund and it will surrender promptly to
the Fund on behalf of the Portfolio any of such records upon the Fund's
request.
(e) SBFM will (i) maintain office facilities for the Fund, (ii) furnish
the Portfolios with statistical and research data, clerical help and
accounting, data processing, bookkeeping, internal auditing and legal
services and certain other services required by the Fund and the
Portfolios, (iii) prepare reports to each Portfolio's shareholders and
(iv) prepare tax returns, reports to and filings with the SEC and state
Blue Sky authorities.
3. SBFM will bear all of the expenses of its employees and overhead in
connection with its duties under this Agreement. SBFM will also bear all
expenses incurred in the operation of the Portfolios other than the management
fee payable under this Agreement, the fees payable pursuant to the plan adopted
pursuant to Rule 12b-1 under the 1940 Act and extraordinary expenses (such as
costs of litigation to which the Fund is a party and of indemnifying officers
and Directors of the Fund), which will be borne by the Portfolios. The expenses
to be borne by SBFM include taxes, interest, brokerage fees and commissions, if
any; fees of the Fund's directors, salaries of all officers and employees who
are employed by both it and the Fund, SEC fees and state Blue Sky qualification
fees; charges of custodians; transfer agent, registrar and dividend disbursing
agent's fees; certain insurance premiums; outside auditing and legal expenses;
costs of maintenance of corporate existence; investor services (including
allocated telephone and personnel expenses); and costs of preparation and
printing of the prospectus and statement of additional information relating to
each Portfolio; cost of printing and mailing stock certificates, shareholders'
reports, notices, proxy statements and reports to governmental offices; or
directors of the Fund; expenses of membership in investment company
associations; and expenses of fidelity bonding and other insurance premiums.
4. For the services provided and the expenses assumed pursuant to this
Agreement, the Fund will pay to SBFM out of the assets of each Portfolio a
monthly fee in arrears equal to 0.35% per annum of the Portfolio's average daily
net assets during the month.
5. SBFM shall authorize and permit any of its directors, officers and
employees who may be elected as directors or officers of the Fund to serve in
the capacities in which they are elected.
6. SBFM shall not be liable for any error of judgment or for any loss
suffered by the Fund in connection with the matters to which this Agreement
relates, except a loss resulting from a breach of fiduciary duty with respect to
the receipt of compensation for services (in which case any award of damages
shall be limited to the period and the amount set forth in Section 36(b)(3) of
the 0000 Xxx) or a loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement.
7. This Agreement shall commence on July 1, 2005 and shall continue in
effect for a period of two years from its effective date, and if not sooner
terminated, will continue in effect for successive periods of 12 months
thereafter, provided that each continuance is specifically approved at least
annually in conformity with the requirements of the 1940 Act. This Agreement may
be terminated as a whole at any time by the Fund on behalf of a Portfolio,
without the payment of any penalty, upon the vote of a majority of the Board or
the vote of a majority of the outstanding voting securities (as defined in the
0000 Xxx) of a Portfolio, or by SBFM, on 60 days' written notice by either party
to the other. This Agreement shall terminate automatically in the event of its
assignment (as defined in the 1940 Act).
8. Nothing in this Agreement shall limit or restrict the right of any of
SBFM's directors, officers, or employees who may also be a director, officer or
employee of the
Fund to engage in any other business or to devote his/her time and attention in
part to management or other aspects of any business, whether of a similar or a
dissimilar nature, nor limit or restrict the Manger's right to engage in any
other business or to render services of any kind to any other corporation, firm,
individual or association. The investment management services provided by SBFM
hereunder are not to be deemed exclusive, and SBFM shall be free to render
similar services to others.
9. Any notice or other communication required to be given pursuant to this
Agreement shall be deemed duly given if delivered or mailed by registered mail,
postage prepaid, (i) to SBFM at 000 Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Secretary; or (ii) to the Fund at 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Secretary.
10. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to the conflict of law
rules thereof.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
XXXXX XXXXXX ALLOCATION SERIES INC. XXXXX XXXXXX FUND
on behalf of the MANAGEMENT LLC
SELECT HIGH GROWTH PORTFOLIO
SELECT GROWTH PORTFOLIO
SELECT BALANCED PORTFOLIO
By: /s/ R. Xxx Xxxxxx By: /s/ R. Xxx Xxxxxx
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R. Xxx Xxxxxx R. Xxx Xxxxxx
Chairman of the Board President
Attest: /s/ Xxxxxx X. Xxxxxxx Attest: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxx
Secretary Secretary
