XXXXX XXXXXX SECTOR SERIES INC.
FORM OF INVESTMENT MANAGEMENT AGREEMENT
February 14, 2000
SSB Citi Fund Management LLC
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
This Investment Management Agreement (the "Agreement")
is made on this 14th day of February, 2000, by and
between Xxxxx Xxxxxx Sector Series Inc., a corporation
organized under the laws of the State of Maryland
(the "Corporation"), in respect of its new series,
Xxxxx Xxxxxx Financial Services Fund (the "Fund"), and
SSB Citi Fund Management LLC (the "Manager") 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
Corporation's Charter as amended from time to time
(the "Charter of the Corporation"); (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 Directors of the Corporation
(the "Board"). Copies of the Fund's Prospectus and the
Statement and the Charter of the Corporation have been
or will be submitted to the Manager. The Corporation
desires to employ and hereby appoints the Manager to
act as investment manager for the Fund. The Manager
accepts the appointment and agrees to furnish the
services for the compensation set forth below. The
Manager 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 the Manager.
2. Services as Investment Manager
Subject to the supervision and direction of the Board,
the Manager will: (a) manage the Fund's holdings in
accordance with the Fund's investment objective and
policies as stated in the Charter and the Registration
Statement; (b) assist in supervising all aspects of
the Fund's operations; (c) supply the Fund with office
facilities (which may be in SSB Citi'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 (d)
prepare reports to shareholders of the Fund, tax
returns and reports to and filings with the SEC and
state blue sky authorities. The Manager is hereby
authorized to retain third parties and to delegate
some or all of its duties and obligations under this
paragraph 2 to such persons provided that such persons
shall remain under the general supervision of the
Manager.
3. Compensation
In consideration of the services rendered pursuant to
this Agreement, the Corporation will pay the Manager,
on the first business day of each month, a fee for the
previous month at an annual rate of 0.80% 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 the
Manager, 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
The Manager 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 Xxxxxxx Xxxxx Barney, 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. Brokerage
In selecting brokers or dealers to execute
transactions on behalf of the Fund, the Manager will
seek the best overall terms available. In assessing
the best overall terms available for any transaction,
the Manager 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, the
Manager 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 the Manager or its affiliates exercise
investment discretion.
6. Information Provided to the Fund
The Manager will keep the Corporation informed of
developments materially affecting the Fund's
portfolio, and will, on its own initiative, furnish
the Corporation from time to time with whatever
information the Manager believes is appropriate for
this purpose.
7. Standard of Care
The Manager shall exercise its best judgment in
rendering the services listed in paragraph 2 above.
The Manager 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 the Manager against any liability to the
Corporation or to the Fund's shareholders to which the
Manager 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 the Manager's reckless disregard of its obligations
and duties under this Agreement.
8. Services to Other Companies or Accounts
The Corporation understands that the Manager 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 Corporation has no objection to the Manager's
so acting, provided that whenever the Fund and one or
more other investment companies advised by the Manager
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 Corporation recognizes that in some
cases this procedure may adversely affect the size of
the position obtainable for the Fund. In addition,
the Corporation understands that the persons employed
by the Manager to assist in the performance of the
Manager'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 the Manager or any affiliate of the
Manager to engage in and devote time and attention to
other businesses or to render services of whatever
kind or nature.
9. 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 the Manager. This
Agreement will also terminate automatically in the
event of its assignment (as defined in the 1940 Act).
10. Representation by the Corporation
The Corporation represents that a copy of the Charter
of Corporation is on file with the State of Maryland
Department of Assessments and Taxation.
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 Sector
Series Inc.,
on behalf of
Xxxxx
Xxxxxx Financial
Services Fund
By:
Xxxxx X. XxXxxxxx
Title:
Chairman of the Board
Accepted:
SSB Citi Fund Management LLC
By: Xxxxx X. Xxxxxxx
Title: Senior Vice President
SECT\INVESTMENT MANAGEMENT AGREEMENT FSF
