PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT made this 18th day of September, 1997, between Xxxxxxx Xxxxx Asset
Management, a separate operating division of Xxxxxxx, Sachs & Co., a New York
limited partnership, 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 five series of beneficial
interests ("shares") representing interests in separate investment portfolios,
and may offer additional portfolios in the future (each referred to
hereinafter as a "Portfolio" and collectively, as the "Portfolios"); and
WHEREAS, the Trust desires to retain the Portfolio Manager to provide a
continuous program of investment management for The Growth 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 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 (including, subject to
Section 3 of this Agreement, Xxxxxxx Sachs & Co.,) through which securities
transactions in the Account shall be executed. The Trust agrees that the
Portfolio Manager shall manage the Account in accordance with the objectives,
policies, and limitations set forth in the Trust's current prospectus and
statement of additional information. 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 Manager acknowledges and agrees that all such 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;
(iii) provide, in a timely manner, such information as may be reasonably
requested by the Trust or its designated agents 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 by
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
EDGARPlus(TM) FORM-TYPE: PROXY FILING-DATE: December 13, 1997
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. (i) 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 at the
most favorable execution and net price available. 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 may 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, subject to the
provisions of the Investment Company Act and the Trust's approved procedures.
The Trust shall provide a list of such affiliated brokers and dealers to
Portfolio Manager and will immediately advise Portfolio Manager of any changes
in such list.
(ii) The Portfolio Manager may, on occasions when it deems the purchase or
sale of a security to be in the best interests of the Trust as well as its
other clients, aggregate, to the extent permitted by applicable laws and
rules, the securities to be sold or purchased in order to obtain the most
favorable execution and net price. In such event, allocation of the securities
so purchased or sold, as well as the expenses incurred in the transaction,
will be made by the Portfolio Manager in the manner it considers to be the
most equitable and consistent with its obligations to the Trust and to such
other clients. The Portfolio Manager is not, however, required to aggregate
securities orders.
4. EXPENSES AND COMPENSATION. For its services under this Agreement,
Portfolio Manager shall be entitled to receive a fee in accordance with the
Schedule A of this Agreement.
5. LIMITATION OF LIABILITY AND INDEMNIFICATION. (a) Neither the Portfolio
Manager nor any person that is an "affiliated person" of the Portfolio Manager
or any of its affiliated companies (collectively, "Associated
Persons") shall 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 or
such Associated Persons 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 by Portfolio Manager to
the Trust (including, without limitation, information contained in Portfolio
Manager's then current Form ADV) concerning the Portfolio Manager and its
Associated Persons 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
required to be furnished to shareholders of the Trust and/or filed with the
Securities and Exchange Commission ("SEC Filing"), provided that a copy of any
such filing is provided to Portfolio Manager at least 10 days prior to the
date on which it will become effective, in the case of a registration
statement or, in the case of proxy statements and/or shareholders report, at
least 10 days prior to the date on which such document is first distributed
shareholders for the purpose of obtaining Portfolio Manager's consent pursuant
to Section (v). 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: (i)
as a result of any untrue statement, or alleged untrue statement, of a
material fact made by Portfolio Manager in such written information; and/or
(ii) as a result of the omission, or the alleged omission, in such written
information of any material fact necessary in order to make the statements
made, in the light of the circumstances under which they are made, not
misleading ("Material Omission"), provided that the Trust has relied upon such
statement or Material Omission in preparing any SEC Filing. Portfolio Manager
shall not be required to 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 bank, administrator or accounting agent.
(c) The Trust agrees to indemnify and hold harmless the Portfolio Manager
and its Associated Persons from any claims, liabilities and expenses,
including reasonable attorneys' fees, incurred as a result of any untrue
statement of a material fact which relates to information in any SEC filing,
or any omission to state in such written information a material fact necessary
to make such statements not misleading ("material omission"), contained in any
information in such SEC filings not supplied by the Portfolio Manager pursuant
to Section 5(b) hereof.
(d) The Portfolio Manager shall not be liable for (i) any acts of any other
portfolio manager to the Portfolio or the Trust with respect to the portion of
the assets of the Account not managed by the Portfolio Manager; and (ii) acts
of the Portfolio Manager which result from acts of the Trust, including, but
not limited to, a failure of the Trust to provide accurate and current
information with respect to any records maintained by Trust or any other
portfolio manager to the Portfolio. The Trust agrees that the Portfolio
Manager shall manage the Account as if it was a separate operating series and
shall comply with (a) the objectives, policies, and limitations for the
Account set forth in the Trust's current prospectus and statement of
additional information, and (b) applicable laws and regulations (including,
but not limited to, the investment objectives, policies and restrictions
applicable to the Account and qualification of the Account as a regulated
investment company under the Internal Revenue Code of 1986, as amended) with
respect to the portion of the assets of the Account not allocated to the
Portfolio Manager. In no event shall the Portfolio Manager or its Associated
Persons have any liability arising from the conduct of the Trust and any other
portfolio manager with respect to the portion of the Portfolio's assets not
allocated to the Portfolio Manager.
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 Westfield
Capital Management Company and the Trust is terminated ("Effective Date") and
shall continue in effect thereafter, unless sooner terminated, for two years
provided that this Agreement is approved by the shareholders of the Portfolio
on or before the 120th day after such Effective Date. Thereafter, this
Agreement shall continue in effect, unless sooner terminated, from year to
year for so long as its continuance is specifically approved, at least
annually, by (i) a majority of the Board of Trustees or the vote of the
holders of a majority of the Portfolio's outstanding voting securities; and
(ii) the affirmative vote, cast in person at a meeting called for the purpose
of voting on such continuance, of a majority of those members of the Board of
Trustees ("Independent Trustees ") who are not "interested persons" of the
Trust or any investment adviser to the Trust.
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 automatically upon its assignment.
For purposes of this Agreement, the terms "majority of the outstanding
voting securities," "assignment, " "affiliated person" and "interested person"
shall have the meanings set forth in the Investment Company Act.
8. CONFIDENTIALITY; USE OF NAME. (i) 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, and which information has not
been developed by Portfolio Manager. 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 or as
required by law. 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.
(ii) 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 derivative 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 by HCCI. Portfolio Manager agrees that it will not use any Xxxx
(other than to indicate that it is acting as Portfolio Manager to Account)
without the prior written consent of the Trust.
(iii) The Trust will not publish or distribute any information regarding the
provision of investment advisory services by the Portfolio Manager pursuant to
this Agreement. Notwithstanding the foregoing, the Trust may, without the
prior written consent of the Portfolio Manager, distribute information
regarding the provision of investment advisory services by the Portfolio
Manager (a) to the Trust's Board of Trustees, committees of the Board and
officers of the Trust; (b) to the Trust's administrator, fund accounting
agent, custodian banks, counsel and auditors; (c) to HCCI; and (d) to persons
to whom, and in documents in which, disclosure of such information is required
by law.
(iv) All information and advice by the Portfolio Manager for the Account
will be treated as confidential by the Trust and will not be disclosed without
the Portfolio Manager's prior written consent to third parties except
(a) to the Trust's Board of Trustees, committees of the Board and officers of
the Trust; (b) to the Trust's administrator, fund accounting agent, custodian
banks, counsel and auditors; (c) to HCCI; and (d) to persons to whom, and in
documents in which, disclosure of such information is required by law.
(v) The Trust will not publish or use in advertising, publicity or otherwise
the name of the Portfolio Manager or any of its affiliates, or any trade name,
trademark, trade device, service xxxx, symbol or any abbreviation, contraction
or simulation thereof of the Portfolio Manager or its affiliates, without the
prior written consent of the Portfolio Manager, provided, however, that this
limitation does not include the inclusion in the Trust's registration
statement of information provided to the Trust in writing by Portfolio
Manager.
(vi) 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 registered as an investment adviser under the Investment
Advisers Act of 1940 ("Investment Advisers Act"), it will maintain such
registration in full force and effect and 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.
(b) It understands that, as a result of its services hereunder, certain
of its employees and officers may be deemed "access persons" with respect
to the Portfolio within the meaning of Rule 17j-1 under the Investment
Company Act and that each such access person is subject to the provisions
of the code of ethics ("Trust's Code") adopted by the Trust in compliance
with such rule. Portfolio Manager further represents that it is subject to
a written code of ethics ("Portfolio Manager's Code") complying with the
requirements of Rule 204-2(a)(12) under the Investment Advisers Act 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, on a quarterly basis, that
Portfolio Manager has complied with the requirements of the Portfolio
Manager's Code as it relates to the Account during the prior year; and that
either (i) that no violation of such code as it relates to the Account
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 as it relates to the Account.
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
reasonable efforts 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
Associated Persons 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 services of the Portfolio Manager to
the Trust are not to be deemed exclusive, and the Portfolio Manager is free to
render similar services to others so long as its services to the Trust are not
impaired thereby. The Portfolio Manager will be deemed to be an independent
contractor and will, unless otherwise expressly provided or authorized, have
no authority to act for or represent the Trust in any way or otherwise be
deemed an agent of the Trust.
Without limiting the foregoing, the Trust understands that the Portfolio
Manager now acts, will continue to act, or may act in the future, as
investment adviser or investment sub-adviser to fiduciary and other managed
accounts, including other investment companies and that the Trust has no
objection to the Portfolio Manager so acting, provided that the Portfolio
Manager duly performs all obligations under this Agreement.
The Trust also understands that the Portfolio Manager
may give advice and take action with respect to any of its other clients or
for its own account which may differ from the timing or nature of action taken
by the Portfolio Manager with respect to the Trust. Nothing in this Agreement
imposes upon the Portfolio Manager any obligation to purchase or sell or to
recommend for purchase or sale, with respect to the Account, any security
which the Portfolio Manager or its Associated Persons may purchase or sell for
its or their own account(s) or for the account of any other client.
11. DELIVERY OF INFORMATION AND REPORTS. The Trust agrees to furnish to the
Portfolio Manager current prospectuses, statements of additional information,
proxy statements, reports of shareholders, certified copies of financial
statements, charter documents and such other information with regard to the
affairs of the Trust and Account as the Portfolio Manager may reasonably
request. The Portfolio Manager agrees to render to the Trust such periodic and
special reports regarding its activities under this Agreement as the Trust may
reasonably request. The Trust represents that it has received Parts I and II
of the Portfolio Manager's Form ADV.
12. 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 Xxxxxxxxxx Xxxx
Xxxxx, XX 00000-0000
If to Portfolio Manager:
Xxxxxxx Sachs Asset Management
One New York Plaza
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
13. 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 Growth 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.
Xxxxxxx, Sachs & Co., on behalf of
Xxxxxxx Xxxxx Asset Management
By: /s/
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The Xxxxxx Xxxxxxxxx Trust
By: /s/
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A
