EXHIBIT (d)(i)
UNDISCOVERED MANAGERS BEHAVIORAL GROWTH FUND
MANAGEMENT AGREEMENT
AGREEMENT made this [insert] day of [insert month], 2004 by and between
UNDISCOVERED MANAGERS FUNDS, a Massachusetts business trust (the "Fund"), with
respect to its Behavioral Growth Fund series (the "Series"), and X.X. XXXXXX
INVESTMENT MANAGEMENT INC., a Delaware corporation (the "Manager").
WITNESSETH:
WHEREAS, the Fund and the Manager wish to enter into an agreement
setting forth the terms upon which the Manager (or certain other parties acting
pursuant to delegation from the Manager) will perform certain services for the
Series;
NOW, THEREFORE, in consideration of the premises and covenants
hereinafter contained, the parties agree as follows:
1. (a) The Fund hereby employs the Manager to furnish the Fund
with Portfolio Management Services (as defined in Section 2 hereof),
subject to the authority of the Manager to delegate certain of its
responsibilities hereunder to other parties as provided in Section 1(b)
hereof. The Manager hereby accepts such employment and agrees, at its
own expense, to furnish such services (either directly or pursuant to
delegation to other parties as and to the extent permitted by Section
1(b) hereof) and to assume the obligations herein set forth, for the
compensation herein provided. The Manager shall, unless otherwise
expressly provided or authorized, have no authority to act for or
represent the Fund in any way or otherwise be deemed an agent of the
Fund.
(b) The Manager may delegate any or all of its
responsibilities hereunder with respect to the provision of Portfolio
Management Services (and assumption of related expenses) to one or more
other parties (each such party, a "Sub-Adviser"), pursuant in each case
to a written agreement with such Sub-Adviser that meets the
requirements of Section 15 of the Investment Company Act of 1940 and
the rules thereunder (the "1940 Act") applicable to contracts for
service as investment adviser of a registered investment company
(including without limitation the requirements for approval by the
trustees of the Fund and the shareholders of the Series), subject,
however, to such exemptions as may be granted by the Securities and
Exchange Commission. Any Sub-Adviser may (but need not) be affiliated
with the Manager.
(c) In the event that the Manager delegates to one or more
Sub-Advisers all or part of its responsibilities hereunder with respect
to the provision of Portfolio Management Services, the Manager hereby
agrees to furnish to the Fund the following services ("Oversight
Services"):
(i) supervision and oversight of each Sub-Adviser's
provision of Portfolio Management Services with
respect to the Series;
(ii) periodic evaluation of the Portfolio Management
Services provided by each Sub-Adviser, and of the
investment performance of the Series;
(iii) advice to and consultation with the Board of
Trustees of the Fund with respect to matters relating
to the investment operations of the Series, including
matters relating to the selection, evaluation,
retention and possible termination of each
Sub-Adviser; and
(iv) regular reporting to the Board of Trustees of
the Fund with respect to the foregoing matters.
2. As used in this Agreement, "Portfolio Management Services" means
management of the investment and reinvestment of the assets belonging to the
Series, consisting specifically of the following:
(a) obtaining and evaluating such economic, statistical and
financial data and information and undertaking such additional
investment research as shall be necessary or advisable for the
management of the investment and reinvestment of the assets belonging
to the Series in accordance with the Series' investment objectives and
policies;
(b) taking such steps as are necessary to implement the
investment policies of the Series by purchasing and selling of
securities, including the placing of orders for such purchase and sale;
and
(c) regularly reporting to the Board of Trustees of the Fund
with respect to the implementation of the investment policies of the
Series.
3. Nothing in this Agreement shall require the Manager to bear, or to
reimburse the Fund for:
(a) office space, office supplies, facilities and equipment
for the Fund;
(b) executive and other personnel for managing the affairs of
the Fund, other than for the provision of (1) Portfolio Management
Services and (2) Oversight Services (if the Manager shall have
delegated to one or more Sub-Advisers any or all of its
responsibilities hereunder with respect to the provision of Portfolio
Management Services);
-2-
(c) any of the costs of printing and mailing the items
referred to in Sub-Section (p) of this Section 3;
(d) any of the costs of preparing, printing and distributing
sales literature;
(e) compensation of trustees of the Fund who are not
directors, officers or employees of the Manager or of any affiliated
person (other than a registered investment company) of the Manager;
(f) registration, filing and other fees in connection with
requirements of regulatory authorities;
(g) the charges and expenses of any entity appointed by the
Fund for custodial, paying agent, shareholder servicing and plan agent
services;
(h) charges and expenses of independent accountants retained
by the Fund;
(i) charges and expenses of any transfer agents and registrars
appointed by the Fund;
(j) brokers' commissions and issue and transfer taxes
chargeable to the Fund in connection with securities transactions to
which the Fund is a party;
(k) taxes and fees payable by the Fund to federal, state or
other governmental agencies;
(l) any cost of certificates representing shares of the Fund;
(m) legal fees and expenses in connection with the affairs of
the Fund, including registering and qualifying its shares with federal
and state regulatory authorities;
(n) expenses of meetings of shareholders and trustees of the
Fund;
(o) interest, including interest on borrowings by the Fund;
(p) the costs of services, including services of counsel,
required in connection with the preparation of the Fund's registration
statements and prospectuses, including amendments and revisions
thereto, annual, semiannual and other periodic reports of the Fund, and
notices and proxy solicitation material furnished to shareholders of
the Fund or regulatory authorities; and
(q) the Fund's expenses of bookkeeping, accounting, auditing
and financial reporting, including related clerical expenses.
-3-
4. All activities undertaken by the Manager or any Sub-Adviser pursuant
to this Agreement shall at all times be subject to the supervision and control
of the Board of Trustees of the Fund, any duly constituted committee thereof or
any officer of the Fund acting pursuant to like authority.
5. The services to be provided by the Manager and any Sub-Adviser
hereunder are not to be deemed exclusive and the Manager and any Sub-Adviser
shall be free to render similar services to others, so long as its services
hereunder are not impaired thereby.
6. As full compensation for all services rendered, facilities furnished
and expenses borne by the Manager hereunder, the Fund shall pay the Manager
compensation at the annual rate of 0.95% of the average daily net assets of the
Series (or such lesser amount as the Manager may from time to time agree to
receive). Such compensation shall be payable monthly in arrears or at such other
intervals, not less frequently than quarterly, as the Board of Trustees of the
Fund may from time to time determine and specify in writing to the Manager. The
Manager hereby acknowledges that the Fund's obligation to pay such compensation
is binding only on the assets and property belonging to the Series.
7. It is understood that any of the shareholders, trustees, officers,
employees and agents of the Fund may be a shareholder, director, officer,
employee or agent of, or be otherwise interested in, the Manager, any affiliated
person of the Manager, any organization in which the Manager may have an
interest or any organization which may have an interest in the Manager; that the
Manager, any such affiliated person or any such organization may have an
interest in the Fund; and that the existence of any such dual interest shall not
affect the validity hereof or of any transactions hereunder except as otherwise
provided in the Agreement and Declaration of Trust of the Fund, the
constitutional documents of the Manager or specific provisions of applicable
law.
8. The Fund acknowledges that, as between the Fund and the Manager, the
Manager owns and controls the name "Undiscovered Managers." The Manager consents
to the use by the Fund of the name "Undiscovered Managers Funds" and by the
Series of the name "Undiscovered Managers Behavioral Growth Fund" or any other
name embodying the words "Undiscovered Managers," in such forms as the Manager
shall in writing approve, but only on condition and so long as (i) this
Agreement shall remain in full force and (ii) the Fund shall fully perform,
fulfill and comply with all provisions of this Agreement expressed herein to be
performed, fulfilled or complied with by it. No such name shall be used by the
Fund or the Series at any time or in any place or for any purposes or under any
conditions except as in this section provided. The foregoing authorization by
the Manager to the Fund and the Series to use said words as part of a business
or name is not exclusive of the right of the Manager itself to use, or to
authorize others to use, the same; the Fund acknowledges and agrees that as
between the Manager and the Fund, the Manager has the exclusive right so to use,
or authorize others to use, said words, and the Fund agrees to take such action
as may reasonably be requested by the Manager to give full effect to the
provisions of this section (including, without limitation, consenting to such
use of
-4-
said words). Without limiting the generality of the foregoing, the Fund agrees
that, upon any termination of this Agreement by either party or upon the
violation of any of its provisions by the Fund, the Fund will, at the request of
the Manager made at any time after the Manager has knowledge of such termination
or violation, use its best efforts to change the name of the Fund and the Series
so as to eliminate all reference, if any, to the words "Undiscovered" and
"Managers" and will not thereafter transact any business in a name containing
the words "Undiscovered" or "Managers" in any form or combination whatsoever, or
(except as may otherwise be required by law) designate itself as the same entity
as or successor to any entity of such name, or otherwise use the words
"Undiscovered" or "Managers" or any other reference to the Manager. Such
covenants on the part of the Fund and the Series shall be binding upon it, its
trustees, officers, shareholders, creditors and all other persons claiming under
or through it.
9. This Agreement shall become effective as of the date of its
execution, and
(a) unless otherwise terminated, this Agreement shall continue
in effect for two years from the date of execution, and from year to
year thereafter so long as such continuance is specifically approved at
least annually (i) by the Board of Trustees of the Fund or by vote of a
majority of the outstanding voting securities of the Series, and (ii)
by vote of a majority of the trustees of the Fund who are not
interested persons of the Fund or the Manager, cast in person at a
meeting called for the purpose of voting on, such approval;
(b) this Agreement may at any time be terminated on sixty
days' written notice to the Manager either by vote of the Board of
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Series;
(c) this Agreement shall automatically terminate in the event
of its assignment;
(d) this Agreement may be terminated by the Manager on ninety
days' written notice to the Fund; and
(e) if the Manager requires the Fund or the Series to change
its name so as to eliminate all references to the words "Undiscovered
Managers," this Agreement shall automatically terminate at the time of
such change unless the continuance of this Agreement after such change
shall have been specifically approved by vote of a majority of the
outstanding voting securities of the Series and by vote of a majority
of the trustees of the Fund who are not interested persons of the Fund
or the Manager, cast in person at a meeting called for the purpose of
voting on such approval.
Termination of this Agreement pursuant to this Section 9 shall be
without the payment of any penalty.
-5-
10. This Agreement may be amended at any time by mutual consent of the
parties, provided that such consent on the part of the Fund shall have been
approved by vote of a majority of the outstanding voting securities of the
Series and by vote of a majority of the trustees of the Fund who are not
interested persons of the Fund or the Manager, cast in person at a meeting
called for the purpose of voting on such approval.
11. For the purpose of this Agreement, the terms "vote of a majority of
the outstanding voting securities," "interested person," "affiliated person" and
"assignment" shall have their respective meanings defined in the 1940 Act,
subject, however, to such exemptions as may be granted by the Securities and
Exchange Commission under the 1940 Act. References in this Agreement to any
assets, property or liabilities "belonging to" the Series shall have the meaning
defined in the Fund's Agreement and Declaration of Trust as amended from time to
time.
12. 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, to any shareholder of the Fund or to any other person, firm or
organization, for any act or omission in the course of, or connected with,
rendering services hereunder.
-6-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
UNDISCOVERED MANAGERS FUNDS
on behalf of its Behavioral Growth Fund series
By: ________________________________
Name:
Title:
X.X. XXXXXX INVESTMENT
MANAGEMENT INC.
By: ________________________________
Name:
Title:
NOTICE
A copy of the Agreement and Declaration of Trust establishing
Undiscovered Managers Funds (the "Fund") is on file with the Secretary of The
Commonwealth of Massachusetts, and notice is hereby given that this Agreement is
executed with respect to the Fund's Behavioral Growth Fund series (the "Series")
on behalf of the Fund by officers of the Fund as officers and not individually
and that the obligations of or arising out of this Agreement are not binding
upon any of the trustees, officers or shareholders individually but are binding
only upon the assets and property belonging to the Series.
-7-
UNDISCOVERED MANAGERS BEHAVIORAL VALUE FUND
MANAGEMENT AGREEMENT
AGREEMENT made this [insert] day of [insert month], 2004 by and between
UNDISCOVERED MANAGERS FUNDS, a Massachusetts business trust (the "Fund"), with
respect to its Behavioral Value Fund series (the "Series"), and X.X. XXXXXX
INVESTMENT MANAGEMENT INC., a Delaware corporation (the "Manager").
WITNESSETH:
WHEREAS, the Fund and the Manager wish to enter into an agreement
setting forth the terms upon which the Manager (or certain other parties acting
pursuant to delegation from the Manager) will perform certain services for the
Series;
NOW, THEREFORE, in consideration of the premises and covenants
hereinafter contained, the parties agree as follows:
1. (a) The Fund hereby employs the Manager to furnish the Fund
with Portfolio Management Services (as defined in Section 2 hereof),
subject to the authority of the Manager to delegate certain of its
responsibilities hereunder to other parties as provided in Section 1(b)
hereof. The Manager hereby accepts such employment and agrees, at its
own expense, to furnish such services (either directly or pursuant to
delegation to other parties as and to the extent permitted by Section
1(b) hereof) and to assume the obligations herein set forth, for the
compensation herein provided. The Manager shall, unless otherwise
expressly provided or authorized, have no authority to act for or
represent the Fund in any way or otherwise be deemed an agent of the
Fund.
(b) The Manager may delegate any or all of its
responsibilities hereunder with respect to the provision of Portfolio
Management Services (and assumption of related expenses) to one or more
other parties (each such party, a "Sub-Adviser"), pursuant in each case
to a written agreement with such Sub-Adviser that meets the
requirements of Section 15 of the Investment Company Act of 1940 and
the rules thereunder (the "1940 Act") applicable to contracts for
service as investment adviser of a registered investment company
(including without limitation the requirements for approval by the
trustees of the Fund and the shareholders of the Series), subject,
however, to such exemptions as may be granted by the Securities and
Exchange Commission. Any Sub-Adviser may (but need not) be affiliated
with the Manager.
(c) In the event that the Manager delegates to one or more
Sub-Advisers all or part of its responsibilities hereunder with respect
to the provision of Portfolio Management Services, the Manager hereby
agrees to furnish to the Fund the following services ("Oversight
Services"):
(i) supervision and oversight of each Sub-Adviser's
provision of Portfolio Management Services with
respect to the Series;
(ii) periodic evaluation of the Portfolio Management
Services provided by each Sub-Adviser, and of the
investment performance of the Series;
(iii) advice to and consultation with the Board of
Trustees of the Fund with respect to matters relating
to the investment operations of the Series, including
matters relating to the selection, evaluation,
retention and possible termination of each
Sub-Adviser; and
(iv) regular reporting to the Board of Trustees of
the Fund with respect to the foregoing matters.
2. As used in this Agreement, "Portfolio Management Services" means
management of the investment and reinvestment of the assets belonging to the
Series, consisting specifically of the following:
(a) obtaining and evaluating such economic, statistical and
financial data and information and undertaking such additional
investment research as shall be necessary or advisable for the
management of the investment and reinvestment of the assets belonging
to the Series in accordance with the Series' investment objectives and
policies;
(b) taking such steps as are necessary to implement the
investment policies of the Series by purchasing and selling of
securities, including the placing of orders for such purchase and sale;
and
(c) regularly reporting to the Board of Trustees of the Fund
with respect to the implementation of the investment policies of the
Series.
3. Nothing in this Agreement shall require the Manager to bear, or to
reimburse the Fund for:
(a) office space, office supplies, facilities and equipment
for the Fund;
(b) executive and other personnel for managing the affairs of
the Fund, other than for the provision of (1) Portfolio Management
Services and (2) Oversight Services (if the Manager shall have
delegated to one or more Sub-Advisers any or all of its
responsibilities hereunder with respect to the provision of Portfolio
Management Services);
-2-
(c) any of the costs of printing and mailing the items
referred to in Sub-Section (p) of this Section 3;
(d) any of the costs of preparing, printing and distributing
sales literature;
(e) compensation of trustees of the Fund who are not
directors, officers or employees of the Manager or of any affiliated
person (other than a registered investment company) of the Manager;
(f) registration, filing and other fees in connection with
requirements of regulatory authorities;
(g) the charges and expenses of any entity appointed by the
Fund for custodial, paying agent, shareholder servicing and plan agent
services;
(h) charges and expenses of independent accountants retained
by the Fund;
(i) charges and expenses of any transfer agents and registrars
appointed by the Fund;
(j) brokers' commissions and issue and transfer taxes
chargeable to the Fund in connection with securities transactions to
which the Fund is a party;
(k) taxes and fees payable by the Fund to federal, state or
other governmental agencies;
(l) any cost of certificates representing shares of the Fund;
(m) legal fees and expenses in connection with the affairs of
the Fund, including registering and qualifying its shares with federal
and state regulatory authorities;
(n) expenses of meetings of shareholders and trustees of the
Fund;
(o) interest, including interest on borrowings by the Fund;
(p) the costs of services, including services of counsel,
required in connection with the preparation of the Fund's registration
statements and prospectuses, including amendments and revisions
thereto, annual, semiannual and other periodic reports of the Fund, and
notices and proxy solicitation material furnished to shareholders of
the Fund or regulatory authorities; and
(q) the Fund's expenses of bookkeeping, accounting, auditing
and financial reporting, including related clerical expenses.
-3-
4. All activities undertaken by the Manager or any Sub-Adviser pursuant
to this Agreement shall at all times be subject to the supervision and control
of the Board of Trustees of the Fund, any duly constituted committee thereof or
any officer of the Fund acting pursuant to like authority.
5. The services to be provided by the Manager and any Sub-Adviser
hereunder are not to be deemed exclusive and the Manager and any Sub-Adviser
shall be free to render similar services to others, so long as its services
hereunder are not impaired thereby.
6. As full compensation for all services rendered, facilities furnished
and expenses borne by the Manager hereunder, the Fund shall pay the Manager
compensation at the annual rate of 1.05% of the average daily net assets of the
Series (or such lesser amount as the Manager may from time to time agree to
receive). Such compensation shall be payable monthly in arrears or at such other
intervals, not less frequently than quarterly, as the Board of Trustees of the
Fund may from time to time determine and specify in writing to the Manager. The
Manager hereby acknowledges that the Fund's obligation to pay such compensation
is binding only on the assets and property belonging to the Series.
7. It is understood that any of the shareholders, trustees, officers,
employees and agents of the Fund may be a shareholder, director, officer,
employee or agent of, or be otherwise interested in, the Manager, any affiliated
person of the Manager, any organization in which the Manager may have an
interest or any organization which may have an interest in the Manager; that the
Manager, any such affiliated person or any such organization may have an
interest in the Fund; and that the existence of any such dual interest shall not
affect the validity hereof or of any transactions hereunder except as otherwise
provided in the Agreement and Declaration of Trust of the Fund, the
constitutional documents of the Manager or specific provisions of applicable
law.
8. The Fund acknowledges that, as between the Fund and the Manager, the
Manager owns and controls the name "Undiscovered Managers." The Manager consents
to the use by the Fund of the name "Undiscovered Managers Funds" and by the
Series of the name "Undiscovered Managers Behavioral Value Fund" or any other
name embodying the words "Undiscovered Managers," in such forms as the Manager
shall in writing approve, but only on condition and so long as (i) this
Agreement shall remain in full force and (ii) the Fund shall fully perform,
fulfill and comply with all provisions of this Agreement expressed herein to be
performed, fulfilled or complied with by it. No such name shall be used by the
Fund or the Series at any time or in any place or for any purposes or under any
conditions except as in this section provided. The foregoing authorization by
the Manager to the Fund and the Series to use said words as part of a business
or name is not exclusive of the right of the Manager itself to use, or to
authorize others to use, the same; the Fund acknowledges and agrees that as
between the Manager and the Fund, the Manager has the exclusive right so to use,
or authorize others to use, said words, and the Fund agrees to take such action
as may reasonably be requested by the Manager to give full effect to the
provisions of this section (including, without limitation, consenting to such
use of
-4-
said words). Without limiting the generality of the foregoing, the Fund agrees
that, upon any termination of this Agreement by either party or upon the
violation of any of its provisions by the Fund, the Fund will, at the request of
the Manager made at any time after the Manager has knowledge of such termination
or violation, use its best efforts to change the name of the Fund and the Series
so as to eliminate all reference, if any, to the words "Undiscovered" and
"Managers" and will not thereafter transact any business in a name containing
the words "Undiscovered" or "Managers" in any form or combination whatsoever, or
(except as may otherwise be required by law) designate itself as the same entity
as or successor to any entity of such name, or otherwise use the words
"Undiscovered" or "Managers" or any other reference to the Manager. Such
covenants on the part of the Fund and the Series shall be binding upon it, its
trustees, officers, shareholders, creditors and all other persons claiming under
or through it.
9. This Agreement shall become effective as of the date of its
execution, and
(a) unless otherwise terminated, this Agreement shall continue
in effect for two years from the date of execution, and from year to
year thereafter so long as such continuance is specifically approved at
least annually (i) by the Board of Trustees of the Fund or by vote of a
majority of the outstanding voting securities of the Series, and (ii)
by vote of a majority of the trustees of the Fund who are not
interested persons of the Fund or the Manager, cast in person at a
meeting called for the purpose of voting on, such approval;
(b) this Agreement may at any time be terminated on sixty
days' written notice to the Manager either by vote of the Board of
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Series;
(c) this Agreement shall automatically terminate in the event
of its assignment;
(d) this Agreement may be terminated by the Manager on ninety
days' written notice to the Fund; and
(e) if the Manager requires the Fund or the Series to change
its name so as to eliminate all references to the words "Undiscovered
Managers," this Agreement shall automatically terminate at the time of
such change unless the continuance of this Agreement after such change
shall have been specifically approved by vote of a majority of the
outstanding voting securities of the Series and by vote of a majority
of the trustees of the Fund who are not interested persons of the Fund
or the Manager, cast in person at a meeting called for the purpose of
voting on such approval.
Termination of this Agreement pursuant to this Section 9 shall be
without the payment of any penalty.
-5-
10. This Agreement may be amended at any time by mutual consent of the
parties, provided that such consent on the part of the Fund shall have been
approved by vote of a majority of the outstanding voting securities of the
Series and by vote of a majority of the trustees of the Fund who are not
interested persons of the Fund or the Manager, cast in person at a meeting
called for the purpose of voting on such approval.
11. For the purpose of this Agreement, the terms "vote of a majority of
the outstanding voting securities," "interested person," "affiliated person" and
"assignment" shall have their respective meanings defined in the 1940 Act,
subject, however, to such exemptions as may be granted by the Securities and
Exchange Commission under the 1940 Act. References in this Agreement to any
assets, property or liabilities "belonging to" the Series shall have the meaning
defined in the Fund's Agreement and Declaration of Trust as amended from time to
time.
12. 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, to any shareholder of the Fund or to any other person, firm or
organization, for any act or omission in the course of, or connected with,
rendering services hereunder.
-6-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
UNDISCOVERED MANAGERS FUNDS
on behalf of its Behavioral Value Fund series
By: ________________________________
Name:
Title:
X.X. XXXXXX INVESTMENT
MANAGEMENT INC.
By: ________________________________
Name:
Title:
NOTICE
A copy of the Agreement and Declaration of Trust establishing
Undiscovered Managers Funds (the "Fund") is on file with the Secretary of The
Commonwealth of Massachusetts, and notice is hereby given that this Agreement is
executed with respect to the Fund's Behavioral Value Fund series (the "Series")
on behalf of the Fund by officers of the Fund as officers and not individually
and that the obligations of or arising out of this Agreement are not binding
upon any of the trustees, officers or shareholders individually but are binding
only upon the assets and property belonging to the Series.
-7-
UNDISCOVERED MANAGERS REIT FUND
MANAGEMENT AGREEMENT
AGREEMENT made this [insert] day of [insert month], 2004 by and between
UNDISCOVERED MANAGERS FUNDS, a Massachusetts business trust (the "Fund"), with
respect to its REIT Fund series (the "Series"), and X.X. XXXXXX INVESTMENT
MANAGEMENT INC., a Delaware corporation (the "Manager").
WITNESSETH:
WHEREAS, the Fund and the Manager wish to enter into an agreement
setting forth the terms upon which the Manager (or certain other parties acting
pursuant to delegation from the Manager) will perform certain services for the
Series;
NOW, THEREFORE, in consideration of the premises and covenants
hereinafter contained, the parties agree as follows:
1. (a) The Fund hereby employs the Manager to furnish the Fund
with Portfolio Management Services (as defined in Section 2 hereof),
subject to the authority of the Manager to delegate certain of its
responsibilities hereunder to other parties as provided in Section 1(b)
hereof. The Manager hereby accepts such employment and agrees, at its
own expense, to furnish such services (either directly or pursuant to
delegation to other parties as and to the extent permitted by Section
1(b) hereof) and to assume the obligations herein set forth, for the
compensation herein provided. The Manager shall, unless otherwise
expressly provided or authorized, have no authority to act for or
represent the Fund in any way or otherwise be deemed an agent of the
Fund.
(b) The Manager may delegate any or all of its
responsibilities hereunder with respect to the provision of Portfolio
Management Services (and assumption of related expenses) to one or more
other parties (each such party, a "Sub-Adviser"), pursuant in each case
to a written agreement with such Sub-Adviser that meets the
requirements of Section 15 of the Investment Company Act of 1940 and
the rules thereunder (the "1940 Act") applicable to contracts for
service as investment adviser of a registered investment company
(including without limitation the requirements for approval by the
trustees of the Fund and the shareholders of the Series), subject,
however, to such exemptions as may be granted by the Securities and
Exchange Commission. Any Sub-Adviser may (but need not) be affiliated
with the Manager.
(c) In the event that the Manager delegates to one or more
Sub-Advisers all or part of its responsibilities hereunder with respect
to the provision of Portfolio Management Services, the Manager hereby
agrees to furnish to the Fund the following services ("Oversight
Services"):
(i) supervision and oversight of each Sub-Adviser's
provision of Portfolio Management Services with
respect to the Series;
(ii) periodic evaluation of the Portfolio Management
Services provided by each Sub-Adviser, and of the
investment performance of the Series;
(iii) advice to and consultation with the Board of
Trustees of the Fund with respect to matters relating
to the investment operations of the Series, including
matters relating to the selection, evaluation,
retention and possible termination of each
Sub-Adviser; and
(iv) regular reporting to the Board of Trustees of
the Fund with respect to the foregoing matters.
2. As used in this Agreement, "Portfolio Management Services" means
management of the investment and reinvestment of the assets belonging to the
Series, consisting specifically of the following:
(a) obtaining and evaluating such economic, statistical and
financial data and information and undertaking such additional
investment research as shall be necessary or advisable for the
management of the investment and reinvestment of the assets belonging
to the Series in accordance with the Series' investment objectives and
policies;
(b) taking such steps as are necessary to implement the
investment policies of the Series by purchasing and selling of
securities, including the placing of orders for such purchase and sale;
and
(c) regularly reporting to the Board of Trustees of the Fund
with respect to the implementation of the investment policies of the
Series.
3. Nothing in this Agreement shall require the Manager to bear, or to
reimburse the Fund for:
(a) office space, office supplies, facilities and equipment
for the Fund;
(b) executive and other personnel for managing the affairs of
the Fund, other than for the provision of (1) Portfolio Management
Services and (2) Oversight Services (if the Manager shall have
delegated to one or more Sub-Advisers any or all of its
responsibilities hereunder with respect to the provision of Portfolio
Management Services);
-2-
(c) any of the costs of printing and mailing the items
referred to in Sub-Section (p) of this Section 3;
(d) any of the costs of preparing, printing and distributing
sales literature;
(e) compensation of trustees of the Fund who are not
directors, officers or employees of the Manager or of any affiliated
person (other than a registered investment company) of the Manager;
(f) registration, filing and other fees in connection with
requirements of regulatory authorities;
(g) the charges and expenses of any entity appointed by the
Fund for custodial, paying agent, shareholder servicing and plan agent
services;
(h) charges and expenses of independent accountants retained
by the Fund;
(i) charges and expenses of any transfer agents and registrars
appointed by the Fund;
(j) brokers' commissions and issue and transfer taxes
chargeable to the Fund in connection with securities transactions to
which the Fund is a party;
(k) taxes and fees payable by the Fund to federal, state or
other governmental agencies;
(l) any cost of certificates representing shares of the Fund;
(m) legal fees and expenses in connection with the affairs of
the Fund, including registering and qualifying its shares with federal
and state regulatory authorities;
(n) expenses of meetings of shareholders and trustees of the
Fund;
(o) interest, including interest on borrowings by the Fund;
(p) the costs of services, including services of counsel,
required in connection with the preparation of the Fund's registration
statements and prospectuses, including amendments and revisions
thereto, annual, semiannual and other periodic reports of the Fund, and
notices and proxy solicitation material furnished to shareholders of
the Fund or regulatory authorities; and
(q) the Fund's expenses of bookkeeping, accounting, auditing
and financial reporting, including related clerical expenses.
-3-
4. All activities undertaken by the Manager or any Sub-Adviser pursuant
to this Agreement shall at all times be subject to the supervision and control
of the Board of Trustees of the Fund, any duly constituted committee thereof or
any officer of the Fund acting pursuant to like authority.
5. The services to be provided by the Manager and any Sub-Adviser
hereunder are not to be deemed exclusive and the Manager and any Sub-Adviser
shall be free to render similar services to others, so long as its services
hereunder are not impaired thereby.
6. As full compensation for all services rendered, facilities furnished
and expenses borne by the Manager hereunder, the Fund shall pay the Manager
compensation at the annual rate of 1.05% of the average daily net assets of the
Series (or such lesser amount as the Manager may from time to time agree to
receive). Such compensation shall be payable monthly in arrears or at such other
intervals, not less frequently than quarterly, as the Board of Trustees of the
Fund may from time to time determine and specify in writing to the Manager. The
Manager hereby acknowledges that the Fund's obligation to pay such compensation
is binding only on the assets and property belonging to the Series.
7. It is understood that any of the shareholders, trustees, officers,
employees and agents of the Fund may be a shareholder, director, officer,
employee or agent of, or be otherwise interested in, the Manager, any affiliated
person of the Manager, any organization in which the Manager may have an
interest or any organization which may have an interest in the Manager; that the
Manager, any such affiliated person or any such organization may have an
interest in the Fund; and that the existence of any such dual interest shall not
affect the validity hereof or of any transactions hereunder except as otherwise
provided in the Agreement and Declaration of Trust of the Fund, the
constitutional documents of the Manager or specific provisions of applicable
law.
8. The Fund acknowledges that, as between the Fund and the Manager, the
Manager owns and controls the name "Undiscovered Managers." The Manager consents
to the use by the Fund of the name "Undiscovered Managers Funds" and by the
Series of the name "Undiscovered Managers REIT Fund" or any other name embodying
the words "Undiscovered Managers," in such forms as the Manager shall in writing
approve, but only on condition and so long as (i) this Agreement shall remain in
full force and (ii) the Fund shall fully perform, fulfill and comply with all
provisions of this Agreement expressed herein to be performed, fulfilled or
complied with by it. No such name shall be used by the Fund or the Series at any
time or in any place or for any purposes or under any conditions except as in
this section provided. The foregoing authorization by the Manager to the Fund
and the Series to use said words as part of a business or name is not exclusive
of the right of the Manager itself to use, or to authorize others to use, the
same; the Fund acknowledges and agrees that as between the Manager and the Fund,
the Manager has the exclusive right so to use, or authorize others to use, said
words, and the Fund agrees to take such action as may reasonably be requested by
the Manager to give full effect to the provisions of this section (including,
without limitation, consenting to such use of said
-4-
words). Without limiting the generality of the foregoing, the Fund agrees that,
upon any termination of this Agreement by either party or upon the violation of
any of its provisions by the Fund, the Fund will, at the request of the Manager
made at any time after the Manager has knowledge of such termination or
violation, use its best efforts to change the name of the Fund and the Series so
as to eliminate all reference, if any, to the words "Undiscovered" and
"Managers" and will not thereafter transact any business in a name containing
the words "Undiscovered" or "Managers" in any form or combination whatsoever, or
(except as may otherwise be required by law) designate itself as the same entity
as or successor to any entity of such name, or otherwise use the words
"Undiscovered" or "Managers" or any other reference to the Manager. Such
covenants on the part of the Fund and the Series shall be binding upon it, its
trustees, officers, shareholders, creditors and all other persons claiming under
or through it.
9. This Agreement shall become effective as of the date of its
execution, and
(a) unless otherwise terminated, this Agreement shall continue
in effect for two years from the date of execution, and from year to
year thereafter so long as such continuance is specifically approved at
least annually (i) by the Board of Trustees of the Fund or by vote of a
majority of the outstanding voting securities of the Series, and (ii)
by vote of a majority of the trustees of the Fund who are not
interested persons of the Fund or the Manager, cast in person at a
meeting called for the purpose of voting on, such approval;
(b) this Agreement may at any time be terminated on sixty
days' written notice to the Manager either by vote of the Board of
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Series;
(c) this Agreement shall automatically terminate in the event
of its assignment;
(d) this Agreement may be terminated by the Manager on ninety
days' written notice to the Fund; and
(e) if the Manager requires the Fund or the Series to change
its name so as to eliminate all references to the words "Undiscovered
Managers," this Agreement shall automatically terminate at the time of
such change unless the continuance of this Agreement after such change
shall have been specifically approved by vote of a majority of the
outstanding voting securities of the Series and by vote of a majority
of the trustees of the Fund who are not interested persons of the Fund
or the Manager, cast in person at a meeting called for the purpose of
voting on such approval.
Termination of this Agreement pursuant to this Section 9 shall be
without the payment of any penalty.
-5-
10. This Agreement may be amended at any time by mutual consent of the
parties, provided that such consent on the part of the Fund shall have been
approved by vote of a majority of the outstanding voting securities of the
Series and by vote of a majority of the trustees of the Fund who are not
interested persons of the Fund or the Manager, cast in person at a meeting
called for the purpose of voting on such approval.
11. For the purpose of this Agreement, the terms "vote of a majority of
the outstanding voting securities," "interested person," "affiliated person" and
"assignment" shall have their respective meanings defined in the 1940 Act,
subject, however, to such exemptions as may be granted by the Securities and
Exchange Commission under the 1940 Act. References in this Agreement to any
assets, property or liabilities "belonging to" the Series shall have the meaning
defined in the Fund's Agreement and Declaration of Trust as amended from time to
time.
12. 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, to any shareholder of the Fund or to any other person, firm or
organization, for any act or omission in the course of, or connected with,
rendering services hereunder.
-6-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
UNDISCOVERED MANAGERS FUNDS
on behalf of its REIT Fund series
By: ________________________________
Name:
Title:
X.X. XXXXXX INVESTMENT
MANAGEMENT INC.
By: ________________________________
Name:
Title:
NOTICE
A copy of the Agreement and Declaration of Trust establishing
Undiscovered Managers Funds (the "Fund") is on file with the Secretary of The
Commonwealth of Massachusetts, and notice is hereby given that this Agreement is
executed with respect to the Fund's REIT Fund series (the "Series") on behalf of
the Fund by officers of the Fund as officers and not individually and that the
obligations of or arising out of this Agreement are not binding upon any of the
trustees, officers or shareholders individually but are binding only upon the
assets and property belonging to the Series.
-7-
UM SMALL CAP GROWTH FUND
MANAGEMENT AGREEMENT
AGREEMENT made this [insert] day of [insert month], 2004 by and between
UNDISCOVERED MANAGERS FUNDS, a Massachusetts business trust (the "Fund"), with
respect to its Small Cap Growth Fund series (the "Series"), and X.X. XXXXXX
INVESTMENT MANAGEMENT INC., a Delaware corporation (the "Manager").
WITNESSETH:
WHEREAS, the Fund and the Manager wish to enter into an agreement
setting forth the terms upon which the Manager (or certain other parties acting
pursuant to delegation from the Manager) will perform certain services for the
Series;
NOW, THEREFORE, in consideration of the premises and covenants
hereinafter contained, the parties agree as follows:
1. (a) The Fund hereby employs the Manager to furnish the Fund
with Portfolio Management Services (as defined in Section 2 hereof),
subject to the authority of the Manager to delegate certain of its
responsibilities hereunder to other parties as provided in Section 1(b)
hereof. The Manager hereby accepts such employment and agrees, at its
own expense, to furnish such services (either directly or pursuant to
delegation to other parties as and to the extent permitted by Section
1(b) hereof) and to assume the obligations herein set forth, for the
compensation herein provided. The Manager shall, unless otherwise
expressly provided or authorized, have no authority to act for or
represent the Fund in any way or otherwise be deemed an agent of the
Fund.
(b) The Manager may delegate any or all of its
responsibilities hereunder with respect to the provision of Portfolio
Management Services (and assumption of related expenses) to one or more
other parties (each such party, a "Sub-Adviser"), pursuant in each case
to a written agreement with such Sub-Adviser that meets the
requirements of Section 15 of the Investment Company Act of 1940 and
the rules thereunder (the "1940 Act") applicable to contracts for
service as investment adviser of a registered investment company
(including without limitation the requirements for approval by the
trustees of the Fund and the shareholders of the Series), subject,
however, to such exemptions as may be granted by the Securities and
Exchange Commission. Any Sub-Adviser may (but need not) be affiliated
with the Manager.
(c) In the event that the Manager delegates to one or more
Sub-Advisers all or part of its responsibilities hereunder with respect
to the provision of Portfolio Management Services, the Manager hereby
agrees to furnish to the Fund the following services ("Oversight
Services"):
(i) supervision and oversight of each Sub-Adviser's
provision of Portfolio Management Services with
respect to the Series;
(ii) periodic evaluation of the Portfolio Management
Services provided by each Sub-Adviser, and of the
investment performance of the Series;
(iii) advice to and consultation with the Board of
Trustees of the Fund with respect to matters relating
to the investment operations of the Series, including
matters relating to the selection, evaluation,
retention and possible termination of each
Sub-Adviser; and
(iv) regular reporting to the Board of Trustees of
the Fund with respect to the foregoing matters.
2. As used in this Agreement, "Portfolio Management Services" means
management of the investment and reinvestment of the assets belonging to the
Series, consisting specifically of the following:
(a) obtaining and evaluating such economic, statistical and
financial data and information and undertaking such additional
investment research as shall be necessary or advisable for the
management of the investment and reinvestment of the assets belonging
to the Series in accordance with the Series' investment objectives and
policies;
(b) taking such steps as are necessary to implement the
investment policies of the Series by purchasing and selling of
securities, including the placing of orders for such purchase and sale;
and
(c) regularly reporting to the Board of Trustees of the Fund
with respect to the implementation of the investment policies of the
Series.
3. Nothing in this Agreement shall require the Manager to bear, or to
reimburse the Fund for:
(a) office space, office supplies, facilities and equipment
for the Fund;
(b) executive and other personnel for managing the affairs of
the Fund, other than for the provision of (1) Portfolio Management
Services and (2) Oversight Services (if the Manager shall have
delegated to one or more Sub-Advisers any or all of its
responsibilities hereunder with respect to the provision of Portfolio
Management Services);
-2-
(c) any of the costs of printing and mailing the items
referred to in Sub-Section (p) of this Section 3;
(d) any of the costs of preparing, printing and distributing
sales literature;
(e) compensation of trustees of the Fund who are not
directors, officers or employees of the Manager or of any affiliated
person (other than a registered investment company) of the Manager;
(f) registration, filing and other fees in connection with
requirements of regulatory authorities;
(g) the charges and expenses of any entity appointed by the
Fund for custodial, paying agent, shareholder servicing and plan agent
services;
(h) charges and expenses of independent accountants retained
by the Fund;
(i) charges and expenses of any transfer agents and registrars
appointed by the Fund;
(j) brokers' commissions and issue and transfer taxes
chargeable to the Fund in connection with securities transactions to
which the Fund is a party;
(k) taxes and fees payable by the Fund to federal, state or
other governmental agencies;
(l) any cost of certificates representing shares of the Fund;
(m) legal fees and expenses in connection with the affairs of
the Fund, including registering and qualifying its shares with federal
and state regulatory authorities;
(n) expenses of meetings of shareholders and trustees of the
Fund;
(o) interest, including interest on borrowings by the Fund;
(p) the costs of services, including services of counsel,
required in connection with the preparation of the Fund's registration
statements and prospectuses, including amendments and revisions
thereto, annual, semiannual and other periodic reports of the Fund, and
notices and proxy solicitation material furnished to shareholders of
the Fund or regulatory authorities; and
(q) the Fund's expenses of bookkeeping, accounting, auditing
and financial reporting, including related clerical expenses.
-3-
4. All activities undertaken by the Manager or any Sub-Adviser pursuant
to this Agreement shall at all times be subject to the supervision and control
of the Board of Trustees of the Fund, any duly constituted committee thereof or
any officer of the Fund acting pursuant to like authority.
5. The services to be provided by the Manager and any Sub-Adviser
hereunder are not to be deemed exclusive and the Manager and any Sub-Adviser
shall be free to render similar services to others, so long as its services
hereunder are not impaired thereby.
6. As full compensation for all services rendered, facilities furnished
and expenses borne by the Manager hereunder, the Fund shall pay the Manager
compensation at the annual rate of 0.95% of the average daily net assets of the
Series (or such lesser amount as the Manager may from time to time agree to
receive). Such compensation shall be payable monthly in arrears or at such other
intervals, not less frequently than quarterly, as the Board of Trustees of the
Fund may from time to time determine and specify in writing to the Manager. The
Manager hereby acknowledges that the Fund's obligation to pay such compensation
is binding only on the assets and property belonging to the Series.
7. It is understood that any of the shareholders, trustees, officers,
employees and agents of the Fund may be a shareholder, director, officer,
employee or agent of, or be otherwise interested in, the Manager, any affiliated
person of the Manager, any organization in which the Manager may have an
interest or any organization which may have an interest in the Manager; that the
Manager, any such affiliated person or any such organization may have an
interest in the Fund; and that the existence of any such dual interest shall not
affect the validity hereof or of any transactions hereunder except as otherwise
provided in the Agreement and Declaration of Trust of the Fund, the
constitutional documents of the Manager or specific provisions of applicable
law.
8. The Fund acknowledges that, as between the Fund and the Manager, the
Manager owns and controls the names "Undiscovered Managers" and "UM." The
Manager consents to the use by the Fund of the name "Undiscovered Managers
Funds" and by the Series of the name "UM Small Cap Growth Fund" or any other
name embodying the words "Undiscovered Managers" or the letters "UM," in such
forms as the Manager shall in writing approve, but only on condition and so long
as (i) this Agreement shall remain in full force and (ii) the Fund shall fully
perform, fulfill and comply with all provisions of this Agreement expressed
herein to be performed, fulfilled or complied with by it. No such names shall be
used by the Fund or the Series at any time or in any place or for any purposes
or under any conditions except as in this section provided. The foregoing
authorization by the Manager to the Fund and the Series to use said words and
letters as part of a business or name is not exclusive of the right of the
Manager itself to use, or to authorize others to use, the same; the Fund
acknowledges and agrees that as between the Manager and the Fund, the Manager
has the exclusive right so to use, or authorize others to use, said words and
letters, and the Fund agrees to take such action as may reasonably be requested
by the Manager to give full effect to the provisions of this section (including,
-4-
without limitation, consenting to such use of said words and letters). Without
limiting the generality of the foregoing, the Fund agrees that, upon any
termination of this Agreement by either party or upon the violation of any of
its provisions by the Fund, the Fund will, at the request of the Manager made at
any time after the Manager has knowledge of such termination or violation, use
its best efforts to change the name of the Fund and the Series so as to
eliminate all reference, if any, to the words "Undiscovered" and "Managers" and
to the letters "UM," and will not thereafter transact any business in a name
containing the words "Undiscovered" or "Managers" or the letters "UM" in any
form or combination whatsoever, or (except as may otherwise be required by law)
designate itself as the same entity as or successor to any entity of such name,
or otherwise use the words "Undiscovered" or "Managers" or the letters "UM" or
any other reference to the Manager. Such covenants on the part of the Fund and
the Series shall be binding upon it, its trustees, officers, shareholders,
creditors and all other persons claiming under or through it.
9. This Agreement shall become effective as of the date of its
execution, and
(a) unless otherwise terminated, this Agreement shall continue
in effect for two years from the date of execution, and from year to
year thereafter so long as such continuance is specifically approved at
least annually (i) by the Board of Trustees of the Fund or by vote of a
majority of the outstanding voting securities of the Series, and (ii)
by vote of a majority of the trustees of the Fund who are not
interested persons of the Fund or the Manager, cast in person at a
meeting called for the purpose of voting on, such approval;
(b) this Agreement may at any time be terminated on sixty
days' written notice to the Manager either by vote of the Board of
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Series;
(c) this Agreement shall automatically terminate in the event
of its assignment;
(d) this Agreement may be terminated by the Manager on ninety
days' written notice to the Fund; and
(e) if the Manager requires the Fund or the Series to change
its name so as to eliminate all references to the words "Undiscovered
Managers" or the letters "UM," this Agreement shall automatically
terminate at the time of such change unless the continuance of this
Agreement after such change shall have been specifically approved by
vote of a majority of the outstanding voting securities of the Series
and by vote of a majority of the trustees of the Fund who are not
interested persons of the Fund or the Manager, cast in person at a
meeting called for the purpose of voting on such approval.
Termination of this Agreement pursuant to this Section 9 shall be
without the payment of any penalty.
-5-
10. This Agreement may be amended at any time by mutual consent of the
parties, provided that such consent on the part of the Fund shall have been
approved by vote of a majority of the outstanding voting securities of the
Series and by vote of a majority of the trustees of the Fund who are not
interested persons of the Fund or the Manager, cast in person at a meeting
called for the purpose of voting on such approval.
11. For the purpose of this Agreement, the terms "vote of a majority of
the outstanding voting securities," "interested person," "affiliated person" and
"assignment" shall have their respective meanings defined in the 1940 Act,
subject, however, to such exemptions as may be granted by the Securities and
Exchange Commission under the 1940 Act. References in this Agreement to any
assets, property or liabilities "belonging to" the Series shall have the meaning
defined in the Fund's Agreement and Declaration of Trust as amended from time to
time.
12. 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, to any shareholder of the Fund or to any other person, firm or
organization, for any act or omission in the course of, or connected with,
rendering services hereunder.
-6-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
UNDISCOVERED MANAGERS FUNDS
on behalf of its Small Cap Growth Fund series
By: ________________________________
Name:
Title:
X.X. XXXXXX INVESTMENT
MANAGEMENT INC.
By: ________________________________
Name:
Title:
NOTICE
A copy of the Agreement and Declaration of Trust establishing
Undiscovered Managers Funds (the "Fund") is on file with the Secretary of The
Commonwealth of Massachusetts, and notice is hereby given that this Agreement is
executed with respect to the Fund's Small Cap Growth Fund series (the "Series")
on behalf of the Fund by officers of the Fund as officers and not individually
and that the obligations of or arising out of this Agreement are not binding
upon any of the trustees, officers or shareholders individually but are binding
only upon the assets and property belonging to the Series.
-7-
