Xxxxxxx Institutional Fund, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
December 31, 1997
Xxxxxxx Xxxxxx Investments, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Investment Management Agreement
Institutional International Equity Portfolio
Ladies and Gentlemen:
Xxxxxxx Institutional Fund, Inc. (the "Corporation") has been
established as a Maryland corporation to engage in the business of an investment
company. Pursuant to the Corporation's Articles of Incorporation, as amended
from time-to-time (the "Articles"), the Board of Directors has divided the
Corporation's shares of capital stock, par value $0.001 per share, (the
"Shares") into separate series, or portfolios, including Institutional
International Equity Portfolio (the "Portfolio"). Series may be abolished and
dissolved, and additional series established, from time to time by action of the
Directors.
The Corporation, on behalf of the Portfolio, has selected you to act as
the sole investment manager of the Portfolio 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 Corporation on
behalf of the Portfolio agrees with you as follows:
1. Delivery of Documents. The Corporation engages in the business of
investing and reinvesting the assets of the Portfolio 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 Portfolio included in the
Corporation's Registration Statement on Form N-1A, as amended from time to time,
(the "Registration Statement") filed by the Corporation 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 Corporation. The Corporation has also
furnished you with copies properly certified or authenticated of each of the
following additional documents related to the Corporation and the Portfolio:
(a) The Articles dated January 2, 1986, as amended to date.
(b) By-Laws of the Corporation as in effect on the date hereof (the "By-Laws").
(c) Resolutions of the Directors of the Corporation and the shareholders of
the Portfolio selecting you as investment manager and approving the form
of this Agreement.
The Corporation 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. Sublicense to Use the Xxxxxxx Trademarks. As exclusive licensee of
the rights to use and sublicense the use of the "Xxxxxxx," "Xxxxxxx Xxxxxx
Investments, Inc." and "Xxxxxxx, Xxxxxxx & Xxxxx, Inc." trademarks (together,
the "Xxxxxxx Marks"), you hereby grant the Corporation a nonexclusive right and
sublicense to use (i) the "Xxxxxxx" name and xxxx as part of the Corporation's
name (the "Portfolio Name"), and (ii) the Xxxxxxx Marks in connection with the
Corporation's investment products and services, in each case only for so long as
this Agreement, any other investment management agreement between you (or any
organization which shall have succeeded to your business as investment manager
("your Successor")) and the Corporation, or any extension, renewal or amendment
hereof or thereof remains in effect, and only for so long as you are a licensee
of the Xxxxxxx Marks, provided however, that you agree to use your best efforts
to maintain your license to use and sublicense the Xxxxxxx Marks. The
Corporation agrees that it shall have no right to sublicense or assign rights to
use the Xxxxxxx Marks, shall acquire no interest in the Xxxxxxx Marks other than
the rights granted herein, that all of the Corporation's uses of the Xxxxxxx
Marks shall inure to the benefit of Xxxxxxx Trust Company as owner and licensor
of the Xxxxxxx Marks (the "Trademark Owner"), and that the Corporation shall not
challenge the validity of the Xxxxxxx Marks or the Trademark Owner's ownership
thereof. The Corporation further agrees that all services and products it offers
in connection with the Xxxxxxx Marks 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
Corporation rendered during the one-year period preceding the date of this
Agreement are acceptable. At your reasonable request, the Corporation 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 Xxxxxxx Marks and/or
enter the Corporation 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 Corporation, or you no longer are
a licensee of the Xxxxxxx Marks, the Corporation shall (to the extent that, and
as soon as, it lawfully can) cease to use the Portfolio Name or any other name
indicating that it is advised by, managed by or otherwise connected with you (or
your Successor) or the Trademark Owner. In no event shall the Corporation use
the Xxxxxxx Marks or any other name or xxxx confusingly similar thereto
(including, but not limited to, any name or xxxx that includes the name
"Xxxxxxx") if this Agreement or any other investment advisory agreement between
you (or your Successor) and the Portfolio is terminated.
3. Portfolio Management Services. As manager of the assets of the
Portfolio, you shall provide continuing investment management of the assets of
the Portfolio 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 Corporation's Board of Directors. In connection therewith, you shall use
reasonable efforts to manage the Portfolio so that it will qualify as a
regulated investment company under Subchapter M of the Code and regulations
issued thereunder. The Portfolio 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 Portfolio in accordance with the
requirements set forth in this section 3, you shall be entitled to receive and
act upon advice of counsel to the Corporation or counsel to you. You shall also
make available to the Corporation promptly upon request all of the Portfolio's
investment records and ledgers as are necessary to assist the Corporation in
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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 Corporation are being conducted in a
manner consistent with applicable laws and regulations.
You shall determine the securities, instruments, investments,
currencies, repurchase agreements, futures, options and other contracts relating
to investments to be purchased, sold or entered into by the Portfolio and place
orders with broker-dealers, foreign currency dealers, futures commission
merchants or others pursuant to your determinations and all in accordance with
Portfolio policies as expressed in the Registration Statement. You shall
determine what portion of the Portfolio's portfolio shall be invested in
securities and other assets and what portion, if any, should be held uninvested.
You shall furnish to the Corporation's Board of Directors periodic
reports on the investment performance of the Portfolio and on the performance of
your obligations pursuant to this Agreement, and you shall supply such
additional reports and information as the Corporation's officers or Board of
Directors shall reasonably request.
4. Administrative Services. In addition to the portfolio management
services specified above in section 3, you shall furnish at your expense for the
use of the Portfolio such office space and facilities in the United States as
the Portfolio may require for its reasonable needs, and you (or one or more of
your affiliates designated by you) shall render to the Corporation
administrative services on behalf of the Portfolio 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 Corporation's Board of Directors and reports and notices to
Portfolio 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 Portfolio
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; overseeing the
tabulation of proxies by the Portfolio's transfer agent; assisting in the
preparation and filing of the Portfolio's federal, state and local tax returns;
preparing and filing the Portfolio's federal excise tax return pursuant to
Section 4982 of the Code; 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
Portfolio under applicable federal and state securities laws; maintaining or
causing to be maintained for the Portfolio 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
Portfolio's custodian or other agents of the Portfolio; assisting in
establishing the accounting policies of the Portfolio; assisting in the
resolution of accounting issues that may arise with respect to the Portfolio's
operations and consulting with the Portfolio's independent accountants, legal
counsel and the Portfolio's other agents as necessary in connection therewith;
establishing and monitoring the Portfolio's operating expense budgets; reviewing
the Portfolio's bills; processing the payment of bills that have been approved
by an authorized person; assisting the Portfolio in determining the amount of
dividends and distributions available to be paid by the Portfolio to its
shareholders, preparing and arranging for the printing of dividend notices to
shareholders, and providing the transfer and dividend paying agent, the
custodian, and the accounting agent with such information as is required for
such parties to effect the payment of dividends and distributions; and otherwise
assisting the Corporation as it may reasonably request in the conduct of the
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Portfolio's business, subject to the direction and control of the Corporation's
Board of Directors. Nothing in this Agreement shall be deemed to shift to you or
to diminish the obligations of any agent of the Portfolio or any other person
not a party to this Agreement which is obligated to provide services to the
Portfolio.
5. Allocation of Charges and Expenses. Except as otherwise specifically
provided in this section 5, you shall pay the compensation and expenses of all
Directors, officers and executive employees of the Corporation (including the
Portfolio's share of payroll taxes) who are affiliated persons of you, and you
shall make available, without expense to the Portfolio, the services of such of
your directors, officers and employees as may duly be elected officers of the
Corporation, 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 3 hereof and the administrative services described
in section 4 hereof.
You shall not be required to pay any expenses of the Portfolio other
than those specifically allocated to you in this section 5. 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 Portfolio's
Directors and officers as are directors, officers or employees of you whose
services may be involved, for the following expenses of the Portfolio:
organization expenses of the Portfolio (including out-of-pocket expenses, but
not including your overhead or employee costs); fees payable to you and to any
other Portfolio advisors or consultants; legal expenses; auditing and accounting
expenses; maintenance of books and records which are required to be maintained
by the Portfolio's custodian or other agents of the Corporation; telephone,
telex, facsimile, postage and other communications expenses; taxes and
governmental fees; fees, dues and expenses incurred by the Portfolio in
connection with membership in investment company trade organizations; fees and
expenses of the Portfolio'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 5, other expenses in connection with
the issuance, offering, distribution, sale, redemption or repurchase of
securities issued by the Portfolio; expenses relating to investor and public
relations; expenses and fees of registering or qualifying Shares of the
Portfolio for sale; interest charges, bond premiums and other insurance expense;
freight, insurance and other charges in connection with the shipment of the
Portfolio's portfolio securities; the compensation and all expenses
(specifically including travel expenses relating to Corporation business) of
Directors, officers and employees of the Corporation who are not affiliated
persons of you; brokerage commissions or other costs of acquiring or disposing
of any portfolio securities of the Portfolio; expenses of printing and
distributing reports, notices and dividends to shareholders; expenses of
printing and mailing Prospectuses and SAIs of the Portfolio and supplements
thereto; costs of stationery; any litigation expenses; indemnification of
Directors and officers of the Corporation; costs of shareholders' and other
meetings; and travel expenses (or an appropriate portion thereof) of Directors
and officers of the Corporation who are directors, officers or employees of you
to the extent that such expenses relate to attendance at meetings of the Board
of Directors of the Corporation or any committees thereof or advisors thereto
held outside of Boston, Massachusetts or New York, New York.
You shall not be required to pay expenses of any activity which is
primarily intended to result in sales of Shares of the Portfolio if and to the
extent that (i) such expenses are required to be borne by a principal
underwriter which acts as the distributor of the Portfolio's Shares pursuant to
an underwriting agreement which provides that the underwriter shall assume some
or all of such expenses, or (ii) the Corporation on behalf of the Portfolio
shall have adopted a plan in conformity with Rule 12b-1 under the 1940 Act
providing that the Portfolio (or some other party) shall assume some or all of
such expenses. You shall be required to pay such of the foregoing sales expenses
as are not required to be paid by the principal underwriter pursuant to the
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underwriting agreement or are not permitted to be paid by the Portfolio (or some
other party) pursuant to such a plan.
6. Management Fee. For all services to be rendered, payments to be made
and costs to be assumed by you as provided in sections 3, 4 and 5 hereof, the
Corporation on behalf of the Portfolio shall pay you in United States Dollars on
the last day of each month the unpaid balance of a fee equal to the excess of
1/12 of 0.90 of 1 percent of the average daily net assets as defined below of
the Portfolio for such month over any compensation waived by you from time to
time (as more fully described below). You shall be entitled to receive during
any month such interim payments of your fee hereunder as you shall request,
provided that no such payment shall exceed 75 percent of the amount of your fee
then accrued on the books of the Portfolio and unpaid.
The "average daily net assets" of the Portfolio shall mean the average
of the values placed on the Portfolio's net assets as of 4:00 p.m. (New York
time) on each day on which the net asset value of the Portfolio is determined
consistent with the provisions of Rule 22c-1 under the 1940 Act or, if the
Portfolio 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
Portfolio shall always be determined pursuant to the applicable provisions of
the Articles 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 6, the value of the net assets of the Portfolio as last determined shall
be deemed to be the value of its net assets as of 4:00 p.m. (New York time), or
as of such other time as the value of the net assets of the Portfolio's
portfolio may be lawfully determined on that day. If the Portfolio determines
the value of the net assets of its portfolio more than once on any day, then the
last such determination thereof on that day shall be deemed to be the sole
determination thereof on that day for the purposes of this section 6.
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 Portfolio's expenses, as
if such waiver or limitation were fully set forth herein.
7. Avoidance of Inconsistent Position; Services Not Exclusive. In
connection with purchases or sales of portfolio securities and other investments
for the account of the Portfolio, 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
Portfolio's account with brokers or dealers selected by you in accordance with
Portfolio 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 Portfolio, you shall act solely as investment counsel for such
clients and not in any way on behalf of the Portfolio.
Your services to the Portfolio 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 Corporation. Whenever
the Portfolio and one or more other accounts or investment companies advised by
the Manager have available Portfolios for investment, investments suitable and
appropriate for each shall be allocated in accordance with procedures believed
by the Manager to be equitable to each entity. Similarly, opportunities to sell
securities shall be allocated in a manner believed by the Manager to be
equitable. The Portfolio recognizes that in some cases this procedure may
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adversely affect the size of the position that may be acquired or disposed of
for the Portfolio.
8. Limitation of Liability of Manager. As an inducement to your
undertaking to render services pursuant to this Agreement, the Corporation
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 Portfolio 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 Corporation, the Portfolio 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
Portfolio shall be deemed, when acting within the scope of his or her employment
by the Portfolio, to be acting in such employment solely for the Portfolio and
not as your employee or agent.
9. Duration and Termination of This Agreement. This Agreement shall
remain in force until July 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 Directors 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 Directors of the Corporation, or by the vote of a majority of the
outstanding voting securities of the Portfolio. 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 Portfolio at any
time, without the payment of any penalty, by the vote of a majority of the
outstanding voting securities of the Portfolio or by the Corporation's Board of
Directors on 60 days' written notice to you, or by you on 60 days' written
notice to the Corporation. 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. 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.
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This Agreement shall be construed in accordance with the laws of the
State of Maryland, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, or in a manner which would cause the Portfolio
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 Corporation on behalf of
the Portfolio.
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 Corporation, whereupon this letter shall become a binding
contract effective as of the date of this Agreement.
Yours very truly,
XXXXXXX INSTITUTIONAL FUND, INC., on
behalf of
Institutional International Equity Portfolio
By: ______________________________
President
The foregoing Agreement is hereby accepted as of the date hereof.
XXXXXXX XXXXXX INVESTMENTS, INC.
By: ______________________________
Managing Director
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