Ex-99.23.d.ii
MANAGEMENT AGREEMENT
TO: XXXXXXX INVESTMENT COUNSEL, INC.
0000 Xxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
Dear Sirs:
Xxxxxxx Mutual Funds Trust (hereinafter referred to as the "Trust")
herewith confirms our agreement with you.
The Trust has been organized to engage in the business of an investment
company. The Trust currently offers several series of shares to investors, two
of which are the Xxxxxxx Opportunity Fund and the Xxxxxxx Municipal Income Fund
(the "Funds").
You have been selected to act as the sole investment adviser to the
Funds and to provide certain other services to the Funds, as more fully set
forth below, and you are willing to act as such investment adviser and to
perform such services under the terms and conditions hereinafter set forth.
Accordingly, the Trust agrees with you as follows upon the date of the execution
of this Agreement.
1. ADVISORY SERVICES
You will regularly provide the Funds with such investment
advice as you in your discretion deem advisable and will furnish a continuous
investment program for each of the Funds consistent with the respective series'
investment objectives and policies. You will determine the securities to be
purchased for the Funds, the portfolio securities to be held or sold by each
Fund and the portion of each Funds' assets to be held uninvested, subject always
to the series' investment objectives, policies and restrictions, as each of the
same shall be from time to time in effect, and subject further to such policies
and instructions as the Board may from time to time establish. You will advise
and assist the officers of the Trust in taking such steps as are necessary or
appropriate to carry out the decisions of the Board and the appropriate
committees of the Board regarding the conduct of the business of the Funds.
2. ALLOCATION OF CHARGES AND EXPENSES
You will pay all operating expenses of the Funds, including
the compensation and expenses of any trustees, officers and employees of the
Trust and of any other persons rendering any services to the Funds; clerical and
shareholder service staff salaries; office space and other office expenses; fees
and expenses incurred by the Funds in connection with membership in investment
company organizations; legal, auditing and accounting expenses;
non-organizational expenses of registering shares under federal and state
securities laws; insurance expenses; fees and expenses of the custodian,
transfer agent, dividend disbursing agent, shareholder service agent, plan
agent, administrator, accounting and pricing services agent and underwriter of
the Funds; expenses, including clerical expenses, of issue, sale, redemption or
repurchase of shares of the Funds; the cost of preparing and distributing
reports and notices to shareholders, the cost of printing or preparing
prospectuses and statements of additional information for delivery to the Funds'
current and prospective shareholders; the cost of printing or preparing stock
certificates or any other documents, statements or reports to shareholders;
expenses of shareholders' meetings and proxy solicitations; advertising,
promotion and other expenses incurred directly or indirectly in connection with
the sale or distribution of the Funds' shares; and all other operating expenses
not specifically assumed by the Funds.
The Funds will pay all brokerage fees and commissions, taxes,
interest, and their share of such extraordinary or non-recurring expenses as may
arise, including litigation to which the Trust may be a party and
indemnification of the Trust's trustees and officers with respect thereto. You
may obtain reimbursement from the Funds, at such time or times as you may
determine in your sole discretion, for any of the expenses advanced by you,
which the Funds are obligated to pay, and such reimbursement shall not be
considered to be part of your compensation pursuant to this Agreement.
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3. COMPENSATION OF THE ADVISER
For all of the services to be rendered and payments to be made
as provided in this Agreement, as of the last day of each month, the Xxxxxxx
Opportunity Fund will pay you a fee at the annual rate of 1.00% of the average
value of its daily net assets and the Xxxxxxx Municipal Income Fund will pay you
a fee of 1.00% of the average value of its daily net assets.
The average value of the daily net assets of the Funds shall
be determined pursuant to the applicable provisions of the Declaration of Trust
of the Trust or a resolution of the Board, if required. If, pursuant to such
provisions, the determination of net asset value of a Fund is suspended for any
particular business day, then for the purposes of this paragraph, the value of
the net assets of the Fund as last determined shall be deemed to be the value of
the net assets as of the close of the business day, or as of such other time as
the value of the Fund's net assets may lawfully be determined, on that day. If
the determination of the net asset value of a Fund has been suspended for a
period including such month, your compensation payable at the end of such month
shall be computed on the basis of the value of the net assets of the series as
last determined (whether during or prior to such month).
4. EXECUTION OF PURCHASE AND SALE ORDERS
In connection with purchases or sales of portfolio securities
for the account of the Funds, it is understood that you will arrange for the
placing of all orders for the purchase and sale of portfolio securities for the
account with brokers or dealers selected by you, subject to review of this
selection by the Board from time to time. You will be responsible for the
negotiation and the allocation of principal business and portfolio brokerage. In
the selection of such brokers or dealers and the placing of such orders, you are
directed at all times to seek for the series the best qualitative execution,
taking into account such factors as price (including the applicable brokerage
commission or dealer spread), the execution capability, financial responsibility
and responsiveness of the broker or dealer and the brokerage and research
services provided by the broker or dealer.
You should generally seek favorable prices and commission
rates that are reasonable in relation to the benefits received. In seeking best
qualitative execution, you are authorized to select brokers or dealers who also
provide brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to the Trust and/or the other
accounts over which you exercise investment discretion. You are authorized to
pay a broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Funds which is in
excess of the amount of commission another broker or dealer would have charged
for effecting that transaction if you determine in good faith that the amount of
the commission is reasonable in relation to the value of the brokerage and
research services provided by the executing broker or dealer. The determination
may be viewed in terms of either a particular transaction or your overall
responsibilities with respect to the Trust and to accounts over which you
exercise investment discretion. The Trust and you understand and acknowledge
that, although the information may be useful to the Funds and you, it is not
possible to place a dollar value on such information. The Board shall
periodically review the commissions paid by the Funds to determine if the
commissions paid over representative periods of time were reasonable in relation
to the benefits to the Funds.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and subject to seeking best qualitative
execution as described above, you may give consideration to sales of shares of
the Trust as a factor in the selection of brokers and dealers to execute Trust
portfolio transactions.
Subject to the provisions of the Investment Company Act of
1940, as amended, and other applicable law, you or any of your affiliates may
retain compensation in connection with effecting the Funds' portfolio
transactions, including transactions effected through others. If any occasion
should arise in which you give any advice to clients of yours concerning the
shares of the Funds, you will act solely as investment counsel for such client
and not in any way on behalf of the Funds. Your services to the Funds pursuant
to this Agreement are not to be deemed to be exclusive and it is understood that
you may render investment advice, management and other services to others,
including other registered investment companies.
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5. LIMITATION OF LIABILITY OF ADVISER
You may rely on information reasonably believed by you to be
accurate and reliable. Except as may otherwise be required by the Investment
Company Act of 1940 or the rules thereunder, neither you nor your shareholders,
officers, directors, employees, agents, control persons or affiliates of any
thereof shall be subject to any liability for, or any damages, expenses or
losses incurred by the Trust in connection with, any error of judgment, mistake
of law, any act or omission connected with or arising out of any services
rendered under or payments made pursuant to this Agreement or any other matter
to which this Agreement relates, except by reason of willful misfeasance, bad
faith or gross negligence on the part of any such persons in the performance of
your duties under this Agreement or by reason of reckless disregard by any of
such persons of your obligations and duties under this Agreement.
Any person, even though also a director, officer, employee,
shareholder or agent of you, who may be or become an officer, director, trustee,
employee or agent of the Trust, shall be deemed, when rendering services to the
Trust or acting on any business of the Trust (other than services or business in
connection with your duties hereunder), to be rendering such services to or
acting solely for the Trust and not as a director, officer, employee,
shareholder or agent of you, or one under your control or direction, even though
paid by you.
6. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall take effect on the date of its execution
and shall remain in force for a period of two (2) years from the date of its
execution and from year to year thereafter, subject to annual approval by (i)
the Board or (ii) a vote of a majority (as defined in the Investment Company Act
of 1940) of the outstanding voting securities of a Fund, provided that in either
event continuance is also approved by a majority of the trustees who are not
"interested persons" as defined in the Investment Company Act of 1940 of you or
the Trust, by a vote cast in person at a meeting called for the purpose of
voting such approval.
If the shareholders of a Fund fail to approve the Agreement in
the manner set forth above, upon request of the Board, you will continue to
serve or act in such capacity for the Fund for the period of time pending
required approval of the Agreement, of a new agreement with you or a different
adviser or other definitive action; provided that the compensation to be paid by
the Fund to you for your services to and payments on behalf of the series will
be equal to the lesser of your actual costs incurred in furnishing such services
and payments or the amount you would have received under this Agreement for
furnishing such services and payments.
This Agreement may, on sixty days written notice, be
terminated with respect to either Fund at any time without the payment of any
penalty, by the Board, by a vote of a majority of the outstanding voting
securities of a Fund or by you. This Agreement shall automatically terminate in
the event of its assignment.
7. USE OF NAME
The Trust and you acknowledge that all rights to the name
"Xxxxxxx" belong to you and that the Funds are being granted a limited license
to use such words in the name of the Funds. In the event you cease to be the
adviser to the Funds, the Funds' right to the use of the name "Xxxxxxx" shall
automatically cease on the thirtieth day following the termination of this
Agreement. The right to the name may also be withdrawn by you during the term of
this Agreement upon thirty (30) days' written notice by you to the Funds.
Nothing contained herein shall impair or diminish in any respect, your right to
use the name "Xxxxxxx" in the name of or in connection with any other business
enterprises with which you are or may become associated. There is no charge to
the Funds for the right to use this name.
8. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived,
discharged or terminated orally, and no amendment of this Agreement shall be
effective until approved (a) by the Board, including a majority of the Trustees
who are not interested persons of you or of the Trust, cast in person at a
meeting called for the purpose of voting on such approval, and (b) if and only
if required by the Investment Company Act of 1940, by vote of the holders of a
majority of the outstanding voting securities of the Fund to which the amendment
relates.
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9. LIMITATION OF LIABILITY TO TRUST PROPERTY
The term "Xxxxxxx Mutual Funds Trust" means and refers to the
Trustees from time to time serving under the Trust's Declaration of Trust as the
same may subsequently thereto have been, or subsequently hereto be, amended. It
is expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust, personally, but bind only the trust property of the
Trust, as provided in the Declaration of Trust of the Trust. The execution and
delivery of this Agreement have been authorized by the trustees and shareholders
of the Funds and signed by officers of the Trust, acting as such, and neither
such authorization by such trustees and shareholders nor such execution and
delivery by such officers shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Trust as provided in its Declaration of
Trust. A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of the State of Ohio.
10. SEVERABILITY
In the event any provision of this Agreement is determined to
be void or unenforceable, such determination shall not affect the remainder of
this Agreement, which shall continue to be in force.
11. QUESTIONS OF INTERPRETATION
(a) This Agreement shall be governed by the laws of the
State of Ohio.
(b) Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the Investment Company Act of 1940, as amended (the "Act") shall be
resolved by reference to such term or provision of the Act and to interpretation
thereof, if any, by the United States courts or in the absence of any
controlling decision of any such court, by rules, regulations or orders of the
Securities and Exchange Commission issued pursuant to said Act. In addition,
where the effect of a requirement of the Act, reflected in any provision of this
Agreement is revised by rule, regulation or order of the Securities and Exchange
Commission, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
12. NOTICES
Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Trust
and your address for this purpose shall be 0000 Xxxx Xxxx Xxxx, Xxxxxxxxxx, Xxxx
00000.
13. COUNTERPARTS
This Agreement may be in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
14. BINDING EFFECT
Each of the undersigned expressly warrants and represents that
he has the full power and authority to sign this Agreement on behalf of the
party indicated, and that his signature will operate to bind the party indicated
to the foregoing terms.
15. CAPTIONS
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.
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If you are in agreement with the foregoing, please sign the
form of acceptance on the accompanying counterpart of this letter and return
such counterpart to the Trust, whereupon this letter shall become a binding
contract upon the date thereof.
Yours very truly,
XXXXXXX MUTUAL FUNDS TRUST
Dated as of December 18, 2001 By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx, President
MANAGEMENT AGREEMENT
ACCEPTANCE
The foregoing Management Agreement is hereby accepted.
XXXXXXX INVESTMENT COUNSEL, INC.
Dated as of December 18, 2001 By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx, President
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