PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT made this __________day of August, 1995, between Frontier
Capital Management Company, a corporation organized under the laws of
Massachusetts ("Portfolio Manager") 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; and WHEREAS, the Trust desires to retain the
Portfolio Manager to provide a continuous program of investment management
for The Small Capitalization 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, in the view of the Trust, 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 through which securities transactions in the Account shall be
executed. 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 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 of 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 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. 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 in such a
manner that the total cost or proceeds in each transaction is the most
favorable under the circumstances. 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 shall not 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, without prior
written approval of the Trust. The Trust shall provide a list of such
affiliated brokers and dealers to Portfolio Manager and will promptly advise
Portfolio Manager of any changes in such list.
4. Expenses and Compensation. Portfolio Manager shall pay all of its
expenses incurred in the performance of its duties under this Agreement and
shall not be required to pay any other expenses of the Trust. For its
services under this Agreement, Portfolio Manager shall be entitled to receive
a fee at the annual rate of .45% of the average daily net asset value of the
Account, which fee shall be payable monthly.
5. Limitation of Liability and Indemnification. (a) Portfolio Manager shall
not 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
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, in writing, by Portfolio Manager to the Trust (including, without
limitation, information contained in Portfolio Manager's then current Form
ADV) 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 Filings"). 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 as a result of any untrue statement or alleged
untrue statement of a material fact made by Portfolio Manager in any such
written information and upon which theTrust relies in preparing any SEC
Filing, or any omission or alleged omission to state in such written
information a material fact necessary to make such statements not misleading
("material omission"). Portfolio Manager will not, however, be required to so
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,
Administrator or Accounting Agent.
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 first written above and shall continue in effect for
two years. Thereafter, this Agreement shall continue in effect 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 upon its assignment. For
purposes of this Agreement, the terms "majority of the outstanding voting
securities, "assignment" and "interested person" shall have the meanings set
forth in the Investment Company Act.
8. Confidentiality; Use of Name. 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. 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. 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 xxxxxxxxxxxx.Xx is acknowledged and agreed that the names "Xxxxxx
Xxxxxxxxx," "Xxxxxx Xxxxxxxxx Chief Investment Officers" (which is a
registered trademark of Xxxxxx, Callagha & Co., Inc. ("HCCI")) and
derivatives of either, as well as any logo that is now or shall later become
associated with either name ("Marks") are valuable property of Xxxxxx,
Xxxxxxxxx and Co. Inc. ("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 without
the prior written consent of the Trust. Portfolio Manager consents to use of
its name, performance data, biographical data and other pertinent data by the
Trust for use in marketing and sales literature, provided that any such
marketing and sales literature shall not be used by the Trust without the
prior written consent of Portfolio Manager, which consent shall not be
unreasonably withheld. 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" of the Trust 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 during the
prior year; and that either (i) that no violation of such code 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. 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 every effort 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
stockholders, employees and affiliates 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 Trust and Portfolio Manager acknowledge
and agree that the relationship between Portfolio Manager and the Trust is
that of an independent contractor and under no circumstances shall any
employee of Portfolio Manager be deemed an employee of the Trust or any other
organization that the Trust may, from time to time, engage to provide services
to the Trust, its Portfolios or its shareholders. The parties also
acknowledge and agree that nothing in this Agreement shall be construed to
restrict the right of Portfolio Manager or its affiliates to perform
investment management or other services to any person or entity, including
without limitation, other investment companies and persons who may retain
Portfolio Manager to provide investment management services and the
performance of such services shall not be deemed to violate or give rise to
any duty or obligations to the Trust.11. 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 X. Xxxxxxxxxx
Frontier Capital Management Company
00 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
12. 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 Small Capitalization 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.
Frontier Capital Management Company
By: /s/
The Xxxxxx Xxxxxxxxx Trust
By: /s/
