EXHIBIT 99.5
MANAGEMENT AGREEMENT
AGREEMENT made this 4th day of February, 1987, by and between XXXXXXX
XXXXX RETIREMENT EQUITY FUND, a Massachusetts business trust (hereinafter
referred to as the "Fund"), and XXXXXXX XXXXX ASSET MANAGEMENT, INC., a Delaware
corporation, (hereinafter referred to as the "Manager").
W I T N E S S E T H:
WHEREAS, the Fund is engaged in business as a diversified open-end
investment company registered under the Investment Company Act of 1940, as
amended (hereinafter referred to as the "Investment Company Act") and
WHEREAS, the Manager is engaged principally in rendering management and
investment advisory services and is registered as an investment adviser under
the Investment Adviser's Act of 1940; and
WHEREAS, the Fund's assets will be invested primarily in equity
securities of high quality companies with large total market capitalization; and
WHEREAS, the Fund desires to retain the Manager to provide management
and investment advisory services to the Fund in the manner and on the terms
hereinafter set forth; and
WHEREAS, the Manager is willing to provide management and investment
advisory services to the Fund on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Fund and the Manager hereby agree as follows:,
ARTICLE I
Duties of the Manager
The Fund hereby employs the Manager to act as a manager and investment
adviser of the Fund and to furnish, or arrange for affiliates to furnish, the
management and investment advisory services described below, subject to the
policies of, review by and overall control of the Board of Trustees of the Fund,
for the period and on the terms and conditions set forth in this Agreement. The
Manager hereby accepts such employment and agrees during such period, at its own
expense, to render, or arrange for the rendering of, such services and to assume
the obligations herein set forth for the compensation provided for herein. The
manager and its affiliates shall for all purposes herein be deemed to be
independent contractors and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Fund in any way or
otherwise be deemed agents of the Fund.
(a) Management Services. The Manager shall perform (or arrange for the
performance by affiliates of) the management and administrative services
necessary for the operation of the Fund including administering shareholder
accounts and handling shareholder relations. The Manager shall provide the Fund
with office space, facilities, equipment and necessary personnel and such
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other services as the Manager, subject to review by the Trustees, shall from
time to time determine to be necessary or useful to perform its obligations
under this Agreement. The Manager shall also, on behalf of the Fund, conduct
relations with custodians, depositories, transfer agents, dividend disbursing
agents, other shareholder servicing agents, accountants, attorneys,
underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and
such other persons in any such other capacity deemed to be necessary or
desirable. The Manager shall generally monitor the fund's compliance with
investment policies and restrictions as set forth in the currently effective
prospectus and statement of additional information relating to the shares of the
Fund under the Securities Act of 1933, as amended (the "Prospectus" and
"Statement of Additional Information", respectively). The Manager shall make
reports to the Trustees of its performance of obligations hereunder and furnish
advice and recommendations with respect to such other aspects of the business
and affairs of the Fund as it shall determine to be desirable.
(b) Investment Advisory Services. The Manager shall provide the Fund
with such investment research, advice and supervision as the latter may from
time to time consider necessary for the proper supervision of the assets of the
Fund, shall furnish continuously an investment program for the Fund and shall
deterrine from time to time which securities shall be purchased, sold or
exchanged and what portion of the assets of the Fund shall be held in the
various securities in which the Fund invests or cash,
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subject always to the restrictions of the Declaration of Trust and By-Laws of
the Fund, as amended from time to time, the provisions of the Investment Company
Act and the statements relating to the Fund's investment objectives, investment
policies and investment restrictions as the same are set forth in the Prospectus
and Statement of Additional Information. The Manager shall take decisions for
the Fund as to foreign currency matters and take determinations as to foreign
exchange contracts. The manager shall make decisions for the Fund as to the
manner in which voting rights, rights to consent to corporate action and any
other rights pertaining to the Fund's portfolio securities shall be exercised.
Should the Trustees at any time, however, take any definite determination as to
investment policy and notify the Manager thereof in writing, the Manager shall
be bound by such determination for the period, if any, specified in such notice
or until similarly notified that such determination has been revoked. The
Manager shall take, on behalf of the Fund, all actions which it deems necessary
to implement the investment policies determined as provided above, and in
particular to place all orders for the purchase or sale of portfolio securities
for the Fund's account with brokers or dealers selected by it, and to that end,
the Manager is authorized as the agent of the Fund to give instructions to the
Custodian of the Fund as to deliveries of securities and payments of cash for
the account of the Fund. In connection with the selection of such brokers or
dealers and the Placing of such orders with respect to assets of the Fund,
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The Manager is directed at all times to seek to obtain execution and prices
within the policy guidelines determined by the, and Trustees and set forth in
the Prospectus and Statement of Additional Information. Subject to this
requirement and the provisions of the Investment company Act, the Securities
Exchange Act of 1934, as amended, and other applicable provisions of law, the
Manager may select brokers or dealers with which it or the Fund is affiliated.
ARTICLE II
Allocation of Charges and Expenses
(a) The Manager. The Manager assumes and shall pay for maintaining the
staff and personnel necessary to perform its obligations under this Agreement,
and shall at its own expense, Provide the office space, facilities, equipment
and necessary personnel which it is obligated to provide under Article I hereof,
and shall pay all compensation of officers of the Fund and all trustees of the
Fund who are affiliated persons of the Manager
(b) The Fund. The Fund assumes and shall pay or cause to be paid all
other expenses of the Fund (except for the expenses Paid by the Distributor),
including, without limitation, taxes, expenses for legal and auditing services,
costs of printing proxies, stock certificates, shareholder reports, prospectuses
and statements of additional information, charges of the custodian, any sub-
custodian and transfer agent, expenses of portfolio transactions, expenses of
redemption of shares, Securities and
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Exchange Commission fees, expenses of registering the shares under Federal,
state and foreign laws, fees and actual out-of-pocket expenses of trustees who
are not affiliated persons of the Manager, accounting and pricing costs
(including the daily calculation of the net asset value), insurance, interest,
brokerage costs, litigation and other extraordinary or non-recurring expenses,
and other expenses properly payable by the Fund. It is also understood that the
Fund will reimburse the Manager for its costs in providing accounting services
to the Fund. The Distributor will pay certain of the expenses of the Fund
incurred in connection with the continuous offering of shares of beneficial
interest in the Fund.
ARTICLE III
Compensation of the Manager
(a) Management and investment Advisory Fee. For the services rendered,
the facilities furnished and expenses assumed by the Manager, the Fund shall pay
to the Manager at the end of each calendar month a fee based upon the average
daily value of the net assets of the Fund, as determined and computed in
accordance with the description of the determination of net asset value
contained in the Prospectus and Statement of Additional information, at the
annual rate of 0.65 of 1.0% (0.65%) of the average daily net assets of the Fund,
commencing on the day following effectiveness hereof. If this Agreement becomes
effective subsequent to the first day of a month or shall terminate before the
last day of a month, compensation for that part of the month this
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Agreement is in effect shall be prorated in a manner consistent with the
calculation of the fee as set forth above. Subject to the provisions of
subsection (b) hereof, payment of the Manager's compensation for the preceding
month shall be made as promptly as possible after completion of the computations
contemplated by subsection (b) hereof. During any period when the determination
of net asset value is suspended by the Trustees, the net asset value of a share
as of the last business day prior to such suspension shall for this purpose be
deemed to be the net asset value at the close of each succeeding business day
until it is again determined.
(b) Expense Limitations. In the event the operating expenses of the
Fund, including amounts payable to the Manager pursuant to subsection (a)
hereof, for any fiscal year ending on a date on which this Agreement is in
effect exceed the expense limitations applicable to the Fund imposed by
applicable state securities laws or regulations thereunder, as such limitations
xxx.xx raised or lowered from time to time, the Manager shall reduce its
management fee by the extent of such excess and, if required pursuant to any
such laws or regulations, will reimburse the Fund in the amount of such excess;
provided, however, to the extent permitted by law, there shall be excluded from
such expenses the amount of any interest, taxes, brokerage commissions and
extraordinary expenses (including but not limited to legal claims and
liabilities and litigation costs and any indemnification related thereto) paid
or payable by the Fund. Whenever the
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expenses of the Fund exceed a pro rata portion of the applicable expense
limitations, the estimated amount of reimbursement, under such limitations shall
be applicable as an offset against the monthly payment of the fee due to the
Manager. Should two or more such expenses limitations be applicable as at the
end of the last business day of the month, that expense limitation which results
in the largest reduction in the Manager's fee shall be applicable.
ARTICLE IV
Limitation of Liability of the Manager
The Manager shall not be liable for any error of judgment or mistake of
law or for any loss arising out of any investment or for any act or omission in
the management of the Fund, except for willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of reckless disregard
of its obligations and duties hereunder. As used in this Article IV, the term
"Manager" shall include any affiliates of the Manager performing services for
the Fund contemplated hereby and directors, officers and employees of the
Manager and such affiliates.
ARTICLE V
Activities of the Manager
The services of the Manager to the Fund are not to be deemed to be
exclusive, the Manager and any person controlled by or under common control with
the Manager (for purposes of this Article V referred to as "affiliates") is free
to render services to others. It is understood that Trustees, officers,
employees
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and shareholders of the Fund are or may become interested in the Manager and
its affiliates", as directors, officers, employees, partners and shareholders
or otherwise, and that directors, officers, employees, partners and
shareholders of the Manager and its affiliates are or may become similarly
interested in the Fund, and that the Manager and directors, officers,
employees, partners and shareholders of its affiliates may become interested
in the Fund as shareholder or otherwise.
ARTICLE VI
Duration and Termination of this Agreement
This Agreement shall become effective as of the date first above written
and shall remain in force until February 4, 1989 and thereafter, but only so
long as such continuance is specifically approved at least annually by (i) the
Trustees, or by the vote of a majority of the outstanding voting securities of
the Fund, and (ii) a majority of those Trustees who are not parties to this
Agreement or interested persons of any such party cast in person at a meeting
called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Trustees or by vote of a majority of the outstanding voting
securities of the Fund, or by the Manager, on sixty days' written notice to the
other party. This Agreenent shall automatically terminate in the event of its
assignment.
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ARTICLE VII
Amendments of this Agreement
This Agreement may be amended by the parties only if such amendment is
specifically approved by (i) the vote of a majority of outstanding voting
securities of the Fund, and (ii) a majority of those Trustees who are not
parties to this Agreement or interested persons of any such party cast in person
at a meeting called for the purpose of voting on such approval.
ARTICLE VIII
Definitions of Certain Terms
The terms "vote of a majority of the outstanding voting securities",
"assignment", "affiliated person" and "interested person", when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act of 1940 and the Rules and Regulations thereunder, subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
under said Act.
ARTICLE IX
Governing Law
This Agreement shall be construed in accordance with laws of the State
of New York and the applicable provisions of the Investment company Act. To the
extent that the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Investinent
Company the latter shall control.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
XXXXXXX XXXXX RETIREMENT EQUITY FUND
By /s/ Xxxxxx Xxxxxx
---------------------------------
XXXXXXX XXXXX ASSET MANAGEMENT, INC.
By /s/ Xxxxxx X. Xxxxxx
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