XXXXXX RETIREMENTREADY FUNDS
MANAGEMENT CONTRACT
Management Contract dated as of June 11, 2004, as revised March 10, 2005
between XXXXXX RETIREMENTREADY FUNDS, a Massachusetts business trust (the
"Fund"), and XXXXXX INVESTMENT MANAGEMENT, LLC, a Delaware limited liability
company (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is agreed
as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) The Manager, at its expense, will furnish continuously an investment
program for each series of the Fund, will determine what investments shall
be purchased, held, sold or exchanged by each series of the Fund and what
portion, if any, of the assets of each series of the Fund shall be held
uninvested and shall, on behalf of each series of the Fund, make changes in
such series' investments. Subject always to the control of the Trustees of
the Fund and except for the functions carried out by the officers and
personnel referred to in Section 1(d), the Manager will also manage,
supervise and conduct the other affairs and business of the Fund and matters
incidental thereto. In the performance of its duties, the Manager will
comply with the provisions of the Agreement and Declaration of Trust and
By-Laws of the Fund and the stated investment objectives, policies and
restrictions of each series of the Fund, and will use its best efforts to
safeguard and promote the welfare of the Fund and to comply with other
policies which the Trustees may from time to time determine and shall
exercise the same care and diligence expected of the Trustees.
(b) The Manager, at its expense, except as such expense is paid by the Fund
as provided in Section 1(d), will furnish (1) all necessary investment and
management facilities, including salaries of personnel, required for it to
execute its duties faithfully; (2) suitable office space for the Fund; and
(3) administrative facilities, including bookkeeping, clerical personnel and
equipment necessary for the efficient conduct of the affairs of the Fund,
including determination of the net asset value of each share class of each
series of the Fund, but excluding shareholder accounting services. Except
as otherwise provided in Section 1(d), the Manager will pay the
compensation, if any, of the officers of the Fund.
(c) The Manager, at its expense, shall place all orders for the purchase and
sale of portfolio investments for the Fund's account with brokers or dealers
selected by the Manager. In the selection of such brokers or dealers and
the placing of such orders, the Manager shall use its best efforts to obtain
for the Fund the most favorable price and execution available, except to the
extent it may be permitted to pay higher brokerage commissions for brokerage
and research services as described below. In using its best efforts to
obtain for the Fund the most favorable price and execution available, the
Manager, bearing in mind the Fund's best interests at all times, shall
consider all factors it deems relevant, including by way of illustration,
price, the size of the transaction, the nature of the market for the
security, the amount of the commission, the timing of the transaction taking
into account market prices and trends, the reputation, experience and
financial stability of the broker or dealer involved and the quality of
service rendered by the broker or dealer in other transactions. Subject to
such policies as the Trustees of the Fund may determine, the Manager shall
not be deemed to have acted unlawfully or to have breached any duty created
by this Contract or otherwise solely by reason of its having caused the Fund
to pay a broker or dealer that provides brokerage and research services to
the Manager an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker or dealer
would have charged for effecting that transaction, if the Manager determines
in good faith that such amount of commission was reasonable in relation to
the value of the brokerage and research services provided by such broker or
dealer, viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Fund and to other
clients of the Manager as to which the Manager exercises investment
discretion. The Manager agrees that in connection with purchases or sales
of portfolio investments for the Fund's account, neither the Manager nor any
officer, director, employee or agent of the Manager shall act as a principal
or receive any commission other than as provided in Section 3.
(d) The Fund will pay or reimburse the Manager for the compensation in whole
or in part of such officers of the Fund and persons assisting them as may be
determined from time to time by the Trustees of the Fund. The Fund will
also pay or reimburse the Manager for all or part of the cost of suitable
office space, utilities, support services and equipment attributable to such
officers and persons, as may be determined in each case by the Trustees of
the Fund. The Fund will pay the fees, if any, of the Trustees of the Fund.
(e) The Manager shall pay all expenses incurred in connection with the
organization of the Fund and the initial public offering and sale of its
shares of beneficial interest, provided that upon the issuance and sale of
such shares to the public pursuant to the offering, and only in such event,
the Fund shall become liable for, and to the extent requested reimburse the
Manager for, registration fees payable to the Securities and Exchange
Commission and for an additional amount not exceeding $125,000 as its agreed
share of such expenses.
(f) The Manager shall not be obligated to pay any expenses of or for the
Fund not expressly assumed by the Manager pursuant to this Section 1 other
than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Fund may be a shareholder, director, officer or employee
of, or be otherwise interested in, the Manager, and in any person controlled
by or under common control with the Manager, and that the Manager and any
person controlled by or under common control with the Manager may have an
interest in the Fund. It is also understood that the Manager and any person
controlled by or under common control with the Manager have and may have
advisory, management, service or other contracts with other organizations
and persons, and may have other interests and business.
3. COMPENSATION TO BE PAID BY THE FUND TO THE MANAGER.
Each series of the Fund will pay to the Manager as compensation for the
Manager's services rendered, for the facilities furnished and for the
expenses borne by the Manager pursuant to paragraphs (a), (b), (c) and (e)
of Section 1, a fee, computed and paid monthly at the following annual rate
for each of Xxxxxx RetirementReady 2050 Fund, Xxxxxx RetirementReady 2045
Fund, Xxxxxx RetirementReady 2040 Fund, Xxxxxx RetirementReady 2035 Fund,
Xxxxxx RetirementReady 2030 Fund, Xxxxxx RetirementReady 2025 Fund, Xxxxxx
RetirementReady 2020 Fund, Xxxxxx RetirementReady 2015 Fund, Xxxxxx
RetirementReady 2010 Fund and Xxxxxx RetirementReady Maturity Fund: 0.05%
of average net assets.
Such average net asset value shall be determined by taking an average of all
of the determinations of such net asset value during such month at the close
of business on each business day during such month while this Contract is in
effect. Such fee shall be payable for each fiscal month within 30 days
after the close of such month and shall commence accruing as of the date of
the initial issuance of shares of such series of the Fund to the public.
The fees payable by the Fund to the Manager pursuant to this Section 3 shall
be reduced by any commissions, fees, brokerage or similar payments received
by the Manager or any affiliated person of the Manager in connection with
the purchase and sale of portfolio investments of the Fund, less any direct
expenses approved by the Trustees incurred by the Manager or any affiliated
person of the Manager in connection with obtaining such payments.
In the event that expenses of the Fund or any series of the Fund for any
fiscal year should exceed the expense limitation on investment company
expenses imposed by any statute or regulatory authority of any jurisdiction
in which shares of the Fund or such series are qualified for offer or sale,
the compensation due the Manager for such fiscal year shall be reduced by
the amount of excess by a reduction or refund thereof. In the event that
the expenses of the Fund or any series of the Fund exceed any expense
limitation which the Manager may, by written notice to the Fund, voluntarily
declare to be effective subject to such terms and conditions as the Manager
may prescribe in such notice, the compensation due the Manager shall be
reduced, and, if necessary, the Manager shall assume expenses of the Fund or
such series to the extent required by the terms and conditions of such
expense limitation.
If the Manager shall serve for less than the whole of a month, the foregoing
compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be
amended as to any series of the Fund unless such amendment be approved at a
meeting by the affirmative vote of a majority of the outstanding shares of
such series, and by the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trustees of the
Fund who are not interested persons of the Fund or of the Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall remain in
full force and effect as to a particular series continuously thereafter
(unless terminated automatically as set forth in Section 4) until terminated
as follows:
(a) Either party hereto may at any time terminate this Contract as to any
series by not more than sixty days' nor less than thirty days' written
notice delivered or mailed by registered mail, postage prepaid, to the other
party, or
(b) If (i) the Trustees of the Fund or the shareholders by the affirmative
vote of a majority of the outstanding shares of such series, and (ii) a
majority of the Trustees of the Fund who are not interested persons of the
Fund or of the Manager, by vote cast in person at a meeting called for the
purpose of voting on such approval, do not specifically approve at least
annually the continuance of this Contract with respect to such series, then
this Contract shall automatically terminate with respect to such series at
the close of business on the second anniversary of its execution, or upon
the expiration of one year from the effective date of the last such
continuance, whichever is later.
Action by the Fund under (a) above may be taken either (i) by vote of a
majority of its Trustees, or (ii) by the affirmative vote of a majority of
the outstanding shares of the relevant series.
Termination of this Contract pursuant to this Section 5 will be without the
payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority of
the outstanding shares" of a series means the affirmative vote, at a duly
called and held meeting of shareholders of such series, (a) of the holders
of 67% or more of the shares of such series present (in person or by proxy)
and entitled to vote at such meeting, if the holders of more than 50% of the
outstanding shares of such series entitled to vote at such meeting are
present in person or by proxy, or (b) of the holders of more than 50% of the
outstanding shares of such series entitled to vote at such meeting,
whichever is less.
For the purposes of this Contract, the terms "affiliated person", "control",
"interested person" and "assignment" shall have their respective meanings
defined in the Investment Company Act of 1940 and the Rules and Regulations
thereunder (the "1940 Act"), subject, however, to such exemptions as may be
granted by the Securities and Exchange Commission under said Act; the term
"specifically approve at least annually" shall be construed in a manner
consistent with the 1940 Act, and the Rules and Regulations thereunder; and
the term "brokerage and research services" shall have the meaning given in
the Securities Exchange Act of 1934 and the Rules and Regulations
thereunder.
7. NON-LIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on the
part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Fund or
to any shareholder of the Fund, for any act or omission in the course of, or
connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES, OFFICERS, AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Fund is on file with
the Secretary of The Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of the Fund
as Trustees and not individually and that the obligations of or arising out
of this instrument are not binding upon any of the Trustees, officers or
shareholders individually but are binding only upon the assets and property
of the relevant series of the Fund.
IN WITNESS WHEREOF, XXXXXX RETIREMENTREADY FUNDS and XXXXXX INVESTMENT
MANAGEMENT, LLC have each caused this instrument to be signed in duplicate
in its behalf by its President or a Vice President thereunto duly
authorized, all as of the day and year first above written.
XXXXXX RETIREMENTREADY FUNDS
By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Executive Vice President, Associate Treasurer
and Principal Executive Officer
XXXXXX INVESTMENT MANAGEMENT, LLC
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Managing Director
