Exhibit d(1)
MANAGEMENT AGREEMENT
CITIFUNDS TRUST I
CITI FORTUNE 500 INDEX FUND
CITI FORTUNE e-50 INDEX FUND
MANAGEMENT AGREEMENT, dated as of November , 2000, by and between
CitiFunds Trust I, a Massachusetts trust (the "Trust"), and SSB Citi Fund
Management LLC, a Delaware limited liability company ("SSB Citi" or the
"Manager").
W I T N E S S E T H:
WHEREAS, the Trust engages in business as an open-end management
investment company and is registered as such under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder and any exemptive orders thereunder, the "1940 Act"), and
WHEREAS, the Trust wishes to engage SSB Citi to provide certain management
services for the series of the Trust designated in Schedule A annexed hereto
(the "Funds"), and SSB Citi is willing to provide such management services for
the Funds on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Duties of Manager. (a) SSB Citi shall act as the Manager for each Fund
and as such shall furnish continuously an investment program and shall
determine from time to time what securities shall be purchased, sold or
exchanged and what portion of the assets of each Fund shall be held uninvested,
subject always to the restrictions of the Trust's Declaration of Trust, dated
as of April 23, 1984, and By-Laws, as each may be amended and restated from
time to time (respectively, the "Declaration" and the "By-Laws"), the
provisions of the 1940 Act, and the then-current Registration Statement of the
Trust with respect to each Fund. The Manager shall also make recommendations as
to the manner in which voting rights, rights to consent to corporate action and
any other rights pertaining to each Fund's portfolio securities shall be
exercised. Should the Board of Trustees of the Trust at any time, however, make
any definite determination as to investment policy applicable to a Fund 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similarly notified that such determination has been revoked.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 each 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 securities for the Fund's account
with the brokers or dealers selected by it, and to that end the Manager is
authorized as the agent of the Trust to give instructions to the custodian or
any subcustodian 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, brokers or dealers may be
selected 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 Funds
and/or the other accounts over which the Manager or its affiliates exercise
investment discretion. The Manager is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for a Fund which is 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 is
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer. This determination may be viewed in terms of
either that particular transaction or the overall responsibilities which the
Manager and its affiliates have with respect to accounts over which they
exercise investment discretion. In making purchases or sales of securities or
other property for the account of a Fund, the Manager may deal with itself or
with the Trustees of the Trust or the Trust's underwriter or distributor, to
the extent such actions are permitted by the 1940 Act. In providing the
services and assuming the obligations set forth herein, the Manager may employ,
at its own expense, or may request that the Trust employ at each Fund's
expense, one or more subadvisers; provided that in each case the Manager shall
supervise the activities of each subadviser. Any agreement between the Manager
and a subadviser shall be subject to the renewal, termination and amendment
provisions applicable to this Agreement. Any agreement between the Trust on
behalf of a Fund and a subadviser may be terminated by the Manager at any time
on not more than 60 days' nor less than 30 days' written notice to the Trust
and the subadviser.
(b) Subject to the direction and control of the Board of Trustees of
the Trust, SSB Citi shall perform such administrative and management services
as may from time to time be reasonably requested by the Trust with respect to
each Fund, which shall include without limitation: (i) providing office space,
equipment and clerical personnel necessary for maintaining the organization of
the Trust and each Fund and for performing the administrative and management
functions herein set forth; (ii) supervising the overall administration of each
Fund, including negotiation of contracts and fees with and the monitoring of
performance and xxxxxxxx of the Fund's transfer agent, shareholder servicing
agents, custodian and other independent contractors or agents; (iii) preparing
and, if applicable, filing all documents required for compliance by each Fund
with applicable laws and regulations, including registration statements,
prospectuses and statements of additional information, semi-annual and annual
reports to shareholders, proxy statements and tax returns; (iv) preparation of
agendas and supporting documents for and minutes of meetings of Trustees,
committees of Trustees and shareholders; and (v) arranging for maintenance of
books and records of the Trust with respect to each Fund. Notwithstanding the
foregoing, SSB Citi shall not be deemed to have assumed any duties with respect
to, and shall not be responsible for, the distribution of shares of beneficial
interest in any Fund, nor shall the Manager be deemed to have assumed or have
any responsibility with respect to functions specifically assumed by any
transfer agent, fund accounting agent, custodian or shareholder servicing agent
of the Trust or any Fund. In providing administrative and management services
as set forth herein, Manager may, at its own expense, employ one or more
subadministrators; provided that Manager shall remain fully responsible for the
performance of all administrative and management duties set forth herein and
shall supervise the activities of each subadministrator.
2. Allocation of Charges and Expenses. SSB Citi shall furnish at its own
expense all necessary services, facilities and personnel in connection with its
responsibilities under Section 1 above. Except as provided in the foregoing
sentence, it is understood that the Trust will pay from the assets of each Fund
all of its own expenses allocable to that Fund including, without limitation,
organization costs of the Fund; compensation of Trustees who are not
"affiliated persons" of the Trust or SSB Citi; governmental fees; interest
charges; loan commitment fees; taxes; membership dues in industry associations
allocable to the Trust; fees and expenses of independent auditors, legal
counsel and any transfer agent, distributor, shareholder servicing agent,
registrar or dividend disbursing agent of the Trust; expenses of issuing and
redeeming shares of beneficial interest and servicing shareholder accounts;
expenses of preparing, typesetting, printing and mailing prospectuses,
statements of additional information, shareholder reports, notices, proxy
statements and reports to governmental officers and commissions and to existing
shareholders of the Fund; expenses connected with the execution, recording and
settlement of security transactions; insurance premiums; fees and expenses of
the custodian for all services to the Fund, including safekeeping of funds and
securities and maintaining required books and accounts; expenses of calculating
the net asset value of the Fund (including but not limited to the fees of
independent pricing services); expenses of meetings of the Fund's shareholders;
expenses relating to the registration and qualification of shares of the Fund;
and such nonrecurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Trust on behalf of the
Fund may be a party and the legal obligation which the Trust may have to
indemnify its Trustees and officers with respect thereto.
3. Compensation of Manager. For the services to be rendered and the
facilities to be provided by the Manager hereunder, the Trust shall pay to the
Manager from the assets of each Fund a management fee computed daily and paid
monthly at an annual rate equal to the lesser of (i) that percentage of that
Fund's average daily net assets for the Fund's then-current fiscal year set
forth opposite the Fund's name on Schedule A annexed hereto (the "Aggregate
Management Fee"), minus that Fund's Aggregate Subadviser Fee (as defined
below), if any, and (ii) the difference between that Fund's Aggregate
Management Fee for the Fund's then-current fiscal year and the aggregate
investment management fees allocated to that Fund for the Fund's then-current
fiscal year from the portfolios in which it invests. To the extent that any
Fund's Aggregate Subadviser Fee exceeds that Fund's Aggregate Management Fee,
the Manager shall pay such amount to the applicable subadvisers on the Fund's
behalf. A Fund's Aggregate Subadviser Fee is the aggregate amount payable by
that Fund to subadvisers pursuant to agreements between the Trust on behalf of
the Fund and the subadvisers. If the Manager provides services hereunder for
less than the whole of any period specified in this Section 3, the compensation
to Manager shall be accordingly adjusted and prorated.
4. Covenants of Manager. Manager agrees that it will not deal with itself,
or with the Trustees of the Trust or the Trust's principal underwriter or
distributor, as principals in making purchases or sales of securities or other
property for the account of a Fund, except as permitted by the 1940 Act, will
not take a long or short position in shares of beneficial interest in a Fund
except as permitted by the Declaration, and will comply with all other
provisions of the Declaration and By-Laws and the then-current Registration
Statement applicable to each Fund relative to Manager and its directors and
officers.
5. Limitation of Liability of Manager. 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 execution of securities
transactions for a 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 Section 5, the term
"SSB Citi" shall include directors, officers and employees of Manager as well
as Manager itself.
6. Activities of Manager. The services of Manager to the Funds are not to
be deemed to be exclusive, Manager being free to render investment advisory,
administrative and/or other services to others. It is understood that Trustees,
officers, and shareholders of the Trust are or may be or may become interested
in Manager, as directors, officers, employees, or otherwise and that directors,
officers and employees of Manager are or may become similarly interested in the
Trust and that Manager may be or may become interested in the Trust as a
shareholder or otherwise.
7. Duration, Termination and Amendments of this Agreement. This Agreement
shall become effective as of the day and year first above written, shall govern
the relations between the parties hereto thereafter and shall remain in force
until November , 2002, on which date it will terminate unless its continuance
with respect to a Fund after November , 2002 is "specifically approved at least
annually" (a) by the vote of a majority of the Trustees of the Trust who are
not "interested persons" of the Trust or of SSB Citi at a meeting specifically
called for the purpose of voting on such approval, and (b) by the Board of
Trustees of the Trust or by "vote of a majority of the outstanding voting
securities" of the Fund.
This Agreement may be terminated at any time with respect to a Fund
without the payment of any penalty by the Trustees or by the "vote of a
majority of the outstanding voting securities" of the Fund, or by Manager, in
each case on not more than 60 days' nor less than 30 days' written notice to
the other party. This Agreement shall automatically terminate in the event of
its "assignment."
This Agreement may be amended with respect to a Fund only if such
amendment is approved by the "vote of a majority of the outstanding voting
securities" of the Fund (except for any such amendment as may be effected in
the absence of such approval without violating the 1940 Act).
The terms "specifically approved at least annually," "vote of a majority
of the outstanding voting securities," "assignment," "affiliated person," and
"interested persons," when used in this Agreement, shall have the respective
meanings specified in, and shall be construed in a manner consistent with, the
1940 Act, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
Each party acknowledges and agrees that all obligations of the Trust under
this Agreement are binding only with respect to the applicable Fund; that any
liability of the Trust under this Agreement, or in connection with the
transactions contemplated herein, shall be discharged only out of the assets of
that Fund; and that no other series of the Trust shall be liable with respect
to this Agreement or in connection with the transactions contemplated herein.
The undersigned officer of the Trust has executed this Agreement not
individually, but as an officer under the Declaration and the obligations of
this Agreement are not binding upon any of the Trustees, officers or
shareholders of the Trust individually.
8. Licenses. The Trust hereby agrees, on behalf of each Fund, to reimburse
Manager for any and all reasonable costs incurred by Manager relating to the
acquisition and retention of licenses to be used in connection with the
management of that Fund.
9. Governing Law. This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of The Commonwealth
of Massachusetts.
10. Use of Name. The Trust hereby acknowledges that any and all rights in
or to the name "Citi" which exist on the date of this Agreement or which may
arise hereafter are, and under any and all circumstances shall continue to be,
the sole property of Manager; that Manager may assign any or all of such rights
to another party or parties without the consent of the Trust; and that Manager
may permit other parties, including other investment companies, to use the word
"Citi" in their names. If Manager, or its assignee as the case may be, ceases
to serve as the adviser to and administrator of the Trust, the Trust hereby
agrees to take promptly any and all actions which are necessary or desirable to
change its name so as to delete the word "Citi."
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
CITIFUNDS TRUST I SSB CITI FUND
on behalf of the series listed MANAGEMENT LLC
on Schedule A
By:_______________________________ By: __________________________________
Title:____________________________ Title: _______________________________
Schedule A
Fund Aggregate Management Fee
(expressed as a percentage of
each Fund's aggregate net assets
for its then-current fiscal year)
Citi FORTUNE 500 Index Fund ____%
Citi FORTUNE e-50 Index Fund ____%
