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 Technology 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
0.95% 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,
Smit
h Barney Sector
Series Inc.,
on behalf
of
Smit
h Barney
Technology 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 TF
