EXHIBIT B
Form of Proposed Investment Management Agreement
Dodge & Xxx [Stock, Balanced or Income] Fund
Xxx Xxxxxxx Xxxxxx
00XX Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
____________, 199__
Dodge & Xxx Incorporated
One Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
INVESTMENT MANAGEMENT AGREEMENT
DODGE & XXX [STOCK, BALANCED OR INCOME] FUND
Ladies and Gentlemen:
The Dodge & Xxx Funds (the "Trust") has been established as a Delaware
business Trust to engage in the business of an investment company. Pursuant to
the Trust's Trust Instrument, as amended from time-to-time (the "Trust
Instrument"), the Board of Trustees has divided the Trust's shares of beneficial
interest, par value $.01 per share, (the "Shares") into separate series, or
funds, including Dodge & Xxx [Stock, Balanced or Income] Fund (the "Fund").
Series may be abolished and dissolved, and additional series established, from
time to time by action of the Trustees. The Trust, on behalf of the Fund, has
selected you to act as the sole investment manager of the Fund and to provide
certain other services, as more fully set forth below, and you have indicated
that you are willing to act as such investment manager and to perform such
services under the terms and conditions hereinafter set forth. Accordingly, the
Trust on behalf of the Fund agrees with you as follows:
1. Delivery of Documents. The Trust engages in the business of
investing and reinvesting the assets of the Fund in the manner and in
accordance with the investment objectives, policies and restrictions
specified in the currently effective Prospectus (the "Prospectus") and
Statement of Additional Information (the "SAI") relating to the Fund
included in the Trust's Registration Statement on Form N-1A, as
amended from time to time, (the "Registration Statement") filed by the
Trust under the Investment Company Act of 1940, as amended, (the "1940
Act") and the Securities Act of 1933, as amended. Copies of the
documents referred to in the preceding sentence have been furnished to
you by the Trust. The Trust has also furnished you with copies
properly certified or authenticated of each of the following
additional documents related to the Trust and the Fund:
(a) The Trust Instrument dated __________, 199__ , as amended to date;
(b) By-Laws of the Trust as in effect on the date hereof (the
"By-Laws"); and
(c) Resolutions of the Trustees of the Trust and the shareholders of
the Fund selecting you as investment manager and approving the form of
this Agreement.
The Trust will furnish you from time to time with copies, properly
certified or authenticated, of all amendments of or supplements, if any, to the
foregoing, including the Prospectus, the SAI and the Registration Statement.
2. Portfolio Management Services. As manager of the assets of the
Fund, you shall provide continuing investment management of the assets
of the Fund in accordance with the investment objectives, policies and
restrictions set forth in the Prospectus and SAI; the applicable
provisions of the 1940 Act and the Internal Revenue Code of 1986, as
amended, (the "Code") relating to regulated investment companies and
all rules and regulations thereunder; and all other applicable federal
and state laws and regulations of which you have knowledge; subject
always to policies and instructions adopted by the Trust's Board of
Trustees. In connection therewith, you shall use reasonable efforts to
manage the Fund so that it will qualify as a regulated investment
company under Subchapter M of the Code and regulations issued
thereunder. The Fund shall have the benefit of the investment analysis
and research, the review of current economic conditions and trends and
the consideration of long-range investment policy generally available
to your investment advisory clients. In managing the Fund in
accordance with the requirements set forth in this section 2, you
shall be entitled to receive and act upon advice of counsel to the
Trust or counsel to you. You shall also make available to the Trust
promptly upon request all of the Fund's investment records and ledgers
as are necessary to assist the Trust in complying with the
requirements of the 1940 Act and other applicable laws. To the extent
required by law, you shall furnish to regulatory authorities having
the requisite authority any information or reports in connection with
the services provided pursuant to this Agreement which may be
requested in order to ascertain whether the operations of the Trust
are being conducted in a manner consistent with applicable laws and
regulations.
You shall determine the securities, instruments, investments,
currencies, repurchase agreements and other contracts relating to investments to
be purchased, sold or entered into by the Fund and place orders with
broker-dealers, foreign currency dealers or others pursuant to your
determinations and all in accordance with Fund policies as expressed in the
Registration Statement. You shall determine what portion of the Fund's portfolio
shall be invested in securities and other assets and what portion, if any,
should be held uninvested.
You shall furnish to the Trust's Board of Trustees periodic reports on
the investment performance of the Fund and on the performance of your
obligations pursuant to this Agreement, and you shall supply such additional
reports and information as the Trust's officers or Board of Trustees shall
reasonably request.
3. Administrative Services. In addition to the portfolio management
services specified above in section 2, you shall furnish at your
expense for the use of the Fund such office space and facilities in
the United States as the Fund may require for its reasonable needs,
and you (or one or more of your affiliates designated by you) shall
render to the Trust administrative services on behalf of the Fund
necessary for operating as an open-end investment company and not
provided by persons not parties to this Agreement including, but not
limited to: preparing reports to and meeting materials for the Trust's
Board of Trustees and overseeing reports and notices to Fund
shareholders; supervising, negotiating contractual arrangements with,
to the extent appropriate, and monitoring the performance of,
accounting agents, custodians, depositories, transfer agents and
pricing agents, accountants, attorneys, printers, underwriters,
brokers and dealers, insurers and other persons in any capacity deemed
to be necessary or desirable to Fund operations; preparing and making
filings with the Securities and Exchange Commission (the "SEC") and
other regulatory and self-regulatory organizations, including, but not
limited to, preliminary and definitive proxy materials, post-effective
amendments to the Registration Statement, semi-annual reports on Form
N-SAR and notices pursuant to Rule 24f-2 under the 1940 Act; filing of
the Fund's federal, state and local tax returns; providing assistance
with investor and public relations matters; monitoring the valuation
of portfolio securities and the calculation of net asset value;
monitoring the registration of Shares of the Fund under applicable
federal and state securities laws; maintaining or causing to be
maintained for the Fund all books, records and reports and any other
information required under the 1940 Act, to the extent that such
books, records and reports and other information are not maintained by
the Fund's custodian or other agents of the Fund; and otherwise
assisting the Trust as it may reasonably request in the conduct of the
Fund's business, subject to the direction and control of the Trust's
Board of Trustees. Nothing in this Agreement shall be deemed to shift
to you or to diminish the obligations of any agent of the Fund or any
other person not a party to this Agreement which is employed to
provide services to the Fund.
4. Allocation of Charges and Expenses. Except as otherwise
specifically provided in this section 4, you shall pay the
compensation and expenses of all Trustees and officers who are
affiliated persons of you, and you shall make available, without
expense to the Fund, the services of such of your directors, officers
and employees as may duly be elected officers of the Trust, subject to
their individual consent to serve and to any limitations imposed by
law. You shall provide at your expense the portfolio management
services described in section 2 hereof and the administrative services
described in section 3 hereof. You shall not be required to pay any
expenses of the Fund other than those specifically allocated to you in
this section 4. In particular, but without limiting the generality of
the foregoing, you shall not be responsible, except to the extent of
the reasonable compensation of such of the Fund's Trustees and
officers as are directors, officers or employees of you whose services
may be involved, for the following expenses of the Fund: organization
expenses of the Fund (including out-of-pocket expenses, but not
including your overhead or employee costs); fees payable to you and to
any other Fund advisors or consultants; legal expenses; auditing and
accounting expenses; maintenance of books and records which are
required to be maintained by the Fund's custodian or other agents of
the Trust; telephone, telex, facsimile, postage and other
communications expenses; taxes and governmental fees; fees, dues and
expenses incurred by the Fund in connection with membership in
investment company trade organizations; fees and expenses of the
Fund's accounting agent, custodians, subcustodians, transfer agents,
dividend disbursing agents and registrars; payment for portfolio
pricing or valuation services to pricing agents, accountants, bankers
and other specialists, if any; expenses of preparing share
certificates and, except as provided below in this section 4, other
expenses in connection with the issuance, offering, distribution,
sale, redemption or repurchase of securities issued by the Fund;
expenses relating to investor and public relations; expenses and fees
of registering or qualifying Shares of the Fund for sale; interest
charges, bond premiums and other insurance expense; freight, insurance
and other charges in connection with the shipment of the Fund's
portfolio securities; the compensation and all expenses (specifically
including travel expenses relating to Trust business) of Trustees,
officers and employees of the Trust who are not affiliated persons of
you; brokerage commissions or other costs of acquiring or disposing of
any portfolio securities of the Fund; expenses of printing and
distributing reports, notices and dividends to shareholders; expenses
of printing and mailing Prospectuses and SAIs of the Fund and
supplements thereto; costs of stationery; any litigation expenses;
indemnification of Trustees and officers of the Trust; and costs of
shareholders' and other meetings. You shall be required to pay
expenses of any activity which is primarily intended to result in
sales of Shares of the Fund if and to the extent that such expenses
are generally required to be borne by a principal underwriter which
acts as the distributor of the Fund's Shares pursuant to an
underwriting agreement.
5. Management Fee. For all services to be rendered, payments to be
made and costs to be assumed by you as provided in sections 2, 3 and 4
hereof, the Trust on behalf of the Fund shall pay you in United States
Dollars on the last day of each month the unpaid balance of a fee
equal to an annual rate of ____% of the average daily net assets as
defined below of the Fund for such month. You agree to waive your
rights to compensation under this Agreement, for any calendar year, to
the extent that the compensation plus all other expenses of the Fund
exceeds ____% of the Fund's average daily net assets. The "average
daily net assets" of the Fund shall mean the average of the values
placed on the Fund's net assets on each day on which the net asset
value of the Fund is determined consistent with the provisions of Rule
22c-1 under the 1940 Act or, if the Fund lawfully determines the value
of its net assets as of some other time on each business day, as of
such time. The value of the net assets of the Fund shall always be
determined pursuant to the applicable provisions of the Trust
Instrument and the Registration Statement. If the determination of net
asset value does not take place for any particular day, then for the
purposes of this section 5, the value of the net assets of the Fund as
last determined shall be deemed to be the value of its net assets as
of such time as the value of the net assets of the Fund's portfolio
may be lawfully determined on that day. You may waive all or a portion
of your fees provided for hereunder and such waiver shall be treated
as a reduction in purchase price of your services. You shall be
contractually bound hereunder by the terms of any publicly announced
waiver of your fee, or any limitation of the Fund's expenses, as if
such waiver or limitation were fully set forth herein.
6. Avoidance of Inconsistent Position; Services Not Exclusive. In
connection with purchases or sales of portfolio securities and other
investments for the account of the Fund, neither you nor any of your
directors, officers or employees shall act as a principal or agent or
receive any commission. You or your agent shall arrange for the
placing of all orders for the purchase and sale of portfolio
securities and other investments for the Fund's account with brokers
or dealers selected by you in accordance with Fund policies as
expressed in the Registration Statement. If any occasion should arise
in which you give any advice to clients of yours concerning the Shares
of the Fund, you shall act solely as investment counsel for such
clients and not in any way on behalf of the Fund. Your services to the
Fund pursuant to this Agreement are not to be deemed to be exclusive
and it is understood that you may render investment advice, management
and services to others. In acting under this Agreement, you shall be
an independent contractor and not an agent of the Trust. Whenever the
Fund and one or more other accounts or investment companies advised by
the Manager have available funds for investment, investments suitable
and appropriate for each shall be allocated in accordance with
procedures believed by you to be equitable to each entity. Similarly,
opportunities to sell securities shall be allocated in a manner
believed by you to be equitable. The Fund recognizes that in some
cases this procedure may adversely affect the size of the position
that may be acquired or disposed of for the Fund.
7. Sublicense to Use the Dodge & Xxx Trademark. As exclusive licensee
of the rights to use and sublicense the use of the "Dodge & Xxx"
trademark ("Dodge & Xxx Xxxx"), you hereby grant the Trust a
nonexclusive right and sublicense to use (i) the "Dodge & Xxx" name
and mark as part of the Trust's name (the "Fund Name"), and (ii) the
Dodge & Xxx Xxxx in connection with the Trust's investment products
and services, in each case only for so long as this Agreement, any
other investment management agreement between you and the Trust, or
any extension, renewal or amendment hereof or thereof remains in
effect, and only for so long as you are a licensee of the Dodge & Xxx
Xxxx, provided however, that you agree to use your best efforts to
maintain your license to use and sublicense the Dodge & Xxx Xxxx. The
Trust agrees that it shall have no right to sublicense or assign
rights to use the Dodge & Xxx Xxxx, shall acquire no interest in the
Dodge & Xxx Xxxx other than the rights granted herein, that all of the
Trust's uses of the Dodge & Xxx Xxxx shall inure to the benefit of
Dodge & Xxx as owner and licensor of the Dodge & Xxx Xxxx (the
"Trademark Owner"), and that the Trust shall not challenge the
validity of the Dodge & Xxx Xxxx or the Trademark Owner's ownership
thereof. The Trust further agrees that all services and products it
offers in connection with the Dodge & Xxx Xxxx shall meet commercially
reasonable standards of quality, as may be determined by you or the
Trademark Owner from time to time, provided that you acknowledge that
the services and products the Trust rendered during the one-year
period preceding the date of this Agreement are acceptable. At your
reasonable request, the Trust shall cooperate with you and the
Trademark Owner and shall execute and deliver any and all documents
necessary to maintain and protect (including but not limited to in
connection with any trademark infringement action) the Dodge & Xxx
Xxxx and/or enter the Trust as a registered user thereof. At such time
as this Agreement or any other investment management agreement shall
no longer be in effect between you (or your successor) and the Trust,
or you no longer are a licensee of the Dodge & Xxx Xxxx, the Trust
shall (to the extent that, and as soon as, it lawfully can) cease to
use the Fund Name or any other name indicating that it is advised by,
managed by or otherwise connected with you (or any organization which
shall have succeeded to your business as investment manager) or the
Trademark Owner. In no event shall the Trust use the Dodge & Xxx Xxxx
or any other name or mark confusingly similar thereto (including, but
not limited to, any name or mark that includes the name "Dodge & Xxx")
if this Agreement or any other investment advisory agreement between
you (or your successor) and the Fund is terminated.
8. Limitation of Liability of Manager. As an inducement to your
undertaking to render services pursuant to this Agreement, the Trust
agrees that you shall not be liable under this Agreement 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 you against any liability to the Trust, the Fund or its
shareholders to which you would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance
of your duties, or by reason of your reckless disregard of your
obligations and duties hereunder. Any person, even though also
employed by you, who may be or become an employee of and paid by the
Fund shall be deemed, when acting within the scope of his or her
employment by the Fund, to be acting in such employment solely for the
Fund and not as your employee or agent.
9. Duration and Termination of This Agreement. This Agreement shall
remain in force until December 31, 1998, and continue in force from
year to year thereafter, but only so long as such continuance is
specifically approved at least annually (a) by the vote of a majority
of the Trustees who are not parties to this Agreement or interested
persons of any party to this Agreement, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the
Trustees of the Trust, or by the vote of a majority of the outstanding
voting securities of the Fund. The aforesaid requirement that
continuance of this Agreement be "specifically approved at least
annually" shall be construed in a manner consistent with the 1940 Act
and the rules and regulations thereunder and any applicable SEC
exemptive order therefrom. This Agreement may be terminated with
respect to the Fund at any time, without the payment of any penalty,
by the vote of a majority of the outstanding voting securities of the
Fund or by the Trust's Board of Trustees on 60 days' written notice to
you, or by you on 60 days' written notice to the Trust. This Agreement
shall terminate automatically in the event of its assignment.
10. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of
the change, waiver, discharge or termination is sought, and no
amendment of this Agreement shall be effective until approved in a
manner consistent with the 1940 Act and rules and regulations
thereunder and any applicable SEC exemptive order therefrom.
11. Limitation of Liability for Claims. The Trust Instrument, a copy
of which, together with all amendments thereto, is on file in the
Office of the Secretary of the State of Delaware, provides that the
name "Dodge & Xxx" refers to the Trustees under the Trust Instrument
collectively as Trustees and not as individuals or personally, and
that no shareholder of the Fund, or Trustee, officer, employee or
agent of the Trust, shall be subject to claims against or obligations
of the Trust or of the Fund to any extent whatsoever, but that the
Trust estate only shall be liable. You are hereby expressly put on
notice of the limitation of liability as set forth in the Trust
Instrument and you agree that the obligations assumed by the Trust on
behalf of the Fund pursuant to this Agreement shall be limited in all
cases to the Fund and its assets, and you shall not seek satisfaction
of any such obligation from the shareholders or any shareholder of the
Fund or any other series of the Trust, or from any Trustee, officer,
employee or agent of the Trust. You understand that the rights and
obligations of each Fund, or series, under the Trust Instrument are
separate and distinct from those of any and all other series.
12. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
In interpreting the provisions of this Agreement, the definitions
contained in Section 2(a) of the 1940 Act (particularly the definitions of
"affiliated person," "assignment" and "majority of the outstanding voting
securities"), as from time to time amended, shall be applied, subject, however,
to such exemptions as may be granted by the SEC by any rule, regulation or
order.
This Agreement shall be construed in accordance with the laws of the
State of Delaware, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, or in a manner which would cause the Fund to
fail to comply with the requirements of Subchapter M of the Code.
This Agreement shall supersede all prior investment advisory or
management agreements entered into between you and the Trust on behalf of the
Fund.
If you are in agreement with the foregoing, please execute the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Trust, whereupon this letter shall become a binding contract
effective as of the date of this Agreement.
Yours very truly,
DODGE & XXX FUNDS,
on behalf of DODGE & XXX
[STOCK, BALANCED OR INCOME] FUND
By: _________________________________
President
The foregoing Agreement is hereby accepted as of the date hereof.
DODGE & XXX
INCORPORATED
By: _________________________________
Chairman & Chief Executive Officer
