XXXXXX INCOME FUND
MANAGEMENT CONTRACT
Management Contract dated as of April 6, 1995 between XXXXXX
INCOME FUND, a Massachusetts business trust (the "Fund"), and
XXXXXX INVESTMENT MANAGEMENT, INC., a Massachusetts corporation
(the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein
contained, it is agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) The Manager, at its expense, will furnish continuously an
investment program for the Fund, will determine what investments
shall be purchased, held, sold or exchanged by the Fund and what
portion, if any, of the assets of the Fund shall be held uninvested
and shall, on behalf of the Fund, make changes in the Fund's
investments. Subject always to the control of the Trustees of the
Fund and except for the functions carried out by the officers and
personnel referred to in Section 1(d), the Manager will also
manage, supervise and conduct the other affairs and business of the
Fund and matters incidental thereto. In the performance of its
duties, the Manager will comply with the provisions of the
Agreement and Declaration of Trust and By-Laws of the Fund and its
stated investment objectives, policies and restrictions, and will
use its best efforts to safeguard and promote the welfare of the
Fund and to comply with other policies which the Trustees may from
time to time determine and shall exercise the same care and
diligence expected of the Trustees.
(b) The Manager, at its expense, except as such expense is paid by
the Fund as provided in Section 1(d), will furnish (1) all
necessary investment and management facilities, including salaries
of personnel, required for it to execute its duties faithfully; (2)
suitable office space for the Fund; and (3) administrative
facilities, including bookkeeping, clerical personnel and equipment
necessary for the efficient conduct of the affairs of the Fund,
including determination of the Fund's net asset value, but
excluding shareholder accounting services. Except as otherwise
provided in Section 1(d), the Manager will pay the compensation, if
any, of the officers of the Fund.
(c) The Manager, at its expense, shall place all orders for the
purchase and sale of portfolio investments for the Fund's account
with brokers or dealers selected by the Manager. In the selection
of such brokers or dealers and the placing of such orders, the
Manager shall use its best efforts to obtain for the Fund the most
favorable price and execution available, except to the extent it
may be permitted to pay higher brokerage commissions for brokerage
and research services as described below. In using its best
efforts to obtain for the Fund the most favorable price and
execution available, the Manager, bearing in mind the Fund's best
interests at all times, shall consider all factors it deems
relevant, including by way of illustration, price, the size of the
transaction, the nature of the market for the security, the amount
of the commission, the timing of the transaction taking into
account market prices and trends, the reputation, experience and
financial stability of the broker or dealer involved and the
quality of service rendered by the broker or dealer in other
transactions. Subject to such policies as the Trustees of the Fund
may determine, the Manager shall not be deemed to have acted
unlawfully or to have breached any duty created by this Contract or
otherwise solely by reason of its having caused the Fund to pay a
broker or dealer that provides brokerage and research services to
the Manager an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission
another broker or dealer would have charged for effecting that
transaction, if the Manager determines in good faith that such
amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer,
viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Fund and to
other clients of the Manager as to which the Manager exercises
investment discretion. The Manager agrees that in connection with
purchases or sales of portfolio investments for the Fund's account,
neither the Manager nor any officer, director, employee or agent of
the Manager shall act as a principal or receive any commission
other than as provided in Section 3.
(d) The Fund will pay or reimburse the Manager for the
compensation in whole or in part of such officers of the Fund and
persons assisting them as may be determined from time to time by
the Trustees of the Fund. The Fund will also pay or reimburse the
Manager for all or part of the cost of suitable office space,
utilities, support services and equipment attributable to such
officers and persons, as may be determined in each case by the
Trustees of the Fund. The Fund will pay the fees, if any, of the
Trustees of the Fund.
(e) The Manager shall not be obligated to pay any expenses of or
for the Fund not expressly assumed by the Manager pursuant to this
Section 1 other than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers
and employees of the Fund may be a shareholder, director, officer
or employee of, or be otherwise interested in, the Manager, and in
any person controlled by or under common control with the Manager,
and that the Manager and any person controlled by or under common
control with the Manager may have an interest in the Fund. It is
also understood that the Manager and any person controlled by or
under common control with the Manager have and may have advisory,
management, service or other contracts with other organizations and
persons, and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE FUND TO THE MANAGER.
The Fund will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the
expenses borne by the Manager pursuant to paragraphs (a), (b), (c)
and (e) of Section 1, a fee, computed and paid quarterly at the
annual rates of:
(a) 0.65% of the first $500 million of the average net asset value
of the Fund;
(b) 0.55% of the next $500 million of such average net asset
value;
(c) 0.50% of the next $500 million of such average net asset
value;
(d) 0.45% of the next $5 billion of such average net asset value;
(e) 0.425% of the next $5 billion of such average net asset value;
(f) 0.405% of the next $5 billion of such average net asset value;
(g) 0.39% of the next $5 billion of such average net asset value;
and
(h) 0.38% of any excess thereafter.
Such average net asset value shall be determined by taking an
average of all of the determinations of such net asset value during
such quarter at the close of business on each business day during
such quarter while this Contract is in effect. Such fee shall be
payable for each fiscal quarter within 30 days after the close of
such quarter.
The fees payable by the Fund to the Manager pursuant to this
Section 3 shall be reduced by any commissions, fees, brokerage or
similar payments received by the Manager or any affiliated person
of the Manager in connection with the purchase and sale of
portfolio investments of the Fund, less any direct expenses
approved by the Trustees incurred by the Manager or any affiliated
person of the Manager in connection with obtaining such payments.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses
imposed by any statute or regulatory authority of any jurisdiction
in which shares of the Fund are qualified for offer or sale, the
compensation due the Manager for such fiscal year shall be reduced
by the amount of such excess by a reduction or refund thereof.
If the Manager shall serve for less than the whole of a quarter,
the foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS
CONTRACT.
This Contract shall automatically terminate, without the payment of
any penalty, in the event of its assignment; and this Contract
shall not be amended unless such amendment be approved at a meeting
by the affirmative vote of a majority of the outstanding shares of
the Fund, and by the vote, cast in person at a meeting called for
the purpose of voting on such approval, of a majority of the
Trustees of the Fund who are not interested persons of the Fund or
of the Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect continuously thereafter (unless
terminated automatically as set forth in Section 4) until
terminated as follows:
(a) Either party hereto may at any time terminate this Contract by
not more than sixty days' nor less than thirty days' written notice
delivered or mailed by registered mail, postage prepaid, to the
other party, or
(b) If (i) the Trustees of the Fund or the shareholders by the
affirmative vote of a majority of the outstanding shares of the
Fund, and (ii) a majority of the Trustees of the Fund who are not
interested persons of the Fund or of the Manager, by vote cast in
person at a meeting called for the purpose of voting on such
approval, do not specifically approve at least annually the
continuance of this Contract, then this Contract shall
automatically terminate at the close of business on the second
anniversary of its execution or upon the expiration of one year
from the effective date of the last such continuance, whichever is
later.
Action by the Fund under (a) above may be taken either (i) by vote
of a majority of its Trustees, or (ii) by the affirmative vote of
a majority of the outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 will be
without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a
majority of the outstanding shares of the Fund" means the
affirmative vote, at a duly called and held meeting of shareholders
of the Fund, (a) of the holders of 67% or more of the shares of the
Fund present (in person or by proxy) and entitled to vote at such
meeting, if the holders of more than 50% of the outstanding shares
of the Fund entitled to vote at such meeting are present in person
or by proxy, or (b) of the holders of more than 50% of the
outstanding shares of the Fund entitled to vote at such meeting,
whichever is less.
For the purposes of this Contract, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their
respective meanings defined in the Investment Company Act of 1940
and the Rules and Regulations thereunder (the "1940 Act"), subject,
however, to such exemptions as may be granted by the Securities and
Exchange Commission under said Act; the term "specifically approve
at least annually" shall be construed in a manner consistent with
the 1940 Act; and the Rules and Regulations thereunder; and the
term "brokerage and research services" shall have the meaning given
in the Securities Exchange Act of 1934 and the Rules and
Regulations thereunder.
7. NON-LIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross
negligence on the part of the Manager, or reckless disregard of its
obligations and duties hereunder, the Manager shall not be subject
to any liability to the Fund or to any shareholder of the Fund, for
any act or omission in the course of, or connected with, rendering
services hereunder.
8. TERMINATION OF PRIOR CONTRACT.
This Contract shall become effective as of its date, and supersedes
the Management Contract dated November 5, 1982.
9. LIMITATION OF LIABILITY OF THE TRUSTEES, OFFICERS, AND
SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Fund is on
file with the Secretary of State of The Commonwealth of
Massachusetts, and notice is hereby given that this instrument is
executed on behalf of the Trustees of the Fund as Trustees and not
individually and that the obligations of or arising out of this
instrument are not binding upon any of the Trustees, officers or
shareholders individually but are binding only upon the assets and
property of the Fund.
IN WITNESS WHEREOF, XXXXXX INCOME FUND and XXXXXX INVESTMENT
MANAGEMENT, INC. have each caused this instrument to be signed in
duplicate in its behalf by its President or a Vice President
thereunto duly authorized, all as of the day and year first above
written.
XXXXXX INCOME FUND
/s/ Xxxxxxx X. Xxxxxx
By----------------------------------
Xxxxxxx X. Xxxxxx
Executive Vice President
XXXXXX INVESTMENT MANAGEMENT, INC.
/s/ Xxxxxx X. Silver
By----------------------------------
Xxxxxx X. Silver
Senior Managing Director
