FORM OF
INVESTMENT MANAGEMENT AGREEMENT
(FOR NON-ERISA ACCOUNTS)
This AGREEMENT is made as of the ___ of February, 2000, between
XXXX.XXX, INC. (the "Client"), and FLEET INVESTMENT ADVISORS INC., a New York
corporation (the "Investment Manager").
WHEREAS, the Client has the authority to appoint an investment manager
to manage the investment and reinvestment of certain assets (the "Account") of
the Client identified in APPENDIX A hereto; and
WHEREAS, the Client desires to appoint and retain the Investment
Manager as investment manager with respect to the Account.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the Client and the Investment Manager do hereby
covenant and agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE INVESTMENT MANAGER. The
Investment Manager represents and warrants that:
(a) It is registered as an investment adviser under the Investment
Advisers Act of 1940 and that it will promptly advise the Client if at any time
it is not so registered; and
(b) Its execution and delivery of this Agreement have been authorized
by appropriate corporate action and do not violate any obligation by which it is
bound, and this Agreement when executed and delivered by the parties will be
binding upon the Investment Manager.
2. REPRESENTATIONS AND WARRANTIES OF THE CLIENT.
The Client represents and warrants that its execution and delivery of
this Agreement is duly authorized if required, by appropriate corporate action
and does not violate any obligation by which the Client or Account is bound,
that this Agreement when executed and delivered by the parties will be binding
upon the Client and the Client is authorized to grant investment discretion to
the Investment Manager with respect to the Account.
3. APPOINTMENT OF INVESTMENT MANAGER AND ITS ACCEPTANCE.
(a) The Investment Manager is hereby appointed investment manager of
the Account to direct the investment and reinvestment of the assets in the
Account in accordance with the terms of this Agreement.
(b) By its execution and delivery of this Agreement, the Investment
Manager accepts its appointment as Investment Manager of the Account and agrees
to supervise and direct the investment and reinvestment of the assets of the
Account in accordance with the provisions of this Agreement.
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4. INVESTMENT DISCRETION BY THE INVESTMENT MANAGER.
(a) The Investment Manager shall have full authority and complete
discretion in the investment and reinvestment of the Account in accordance with
the Investment Guidelines for the Account, as set forth in APPENDIX B attached
hereto, and shall determine what securities or other property shall be acquired,
held or disposed of, and what portion of the Account shall be held uninvested.
It is understood that the Investment Manager shall not be held responsible or
liable for the selection of the Investment Guidelines for the Account or for the
management of any assets of the Client not included in the Account. Except as
may be referenced in the Investment Guidelines in APPENDIX B, the Investment
Manager shall not be limited by the "legal investment" or any other laws of
jurisdiction relating to investments by fiduciaries.
(b) The Client has selected the Custodian for the Account and the
Investment Manager shall not act as custodian for the Account or take or have
possession of assets of the Client. The Investment Manager is authorized to
direct the Custodian with respect to the investment and management of the assets
held in the Account.
(c) The Investment Manager is authorized to determine the brokers,
dealers or other persons with whom orders for the purchase, sale or exchange of
securities or other property for the Account shall be placed and to place such
orders on behalf of the Account. In making such purchases and sales, the
Investment Manager may use the services of a registered broker or securities
dealer (a "broker") (including, to the extent permitted by the instruments
governing the Account, if any, and by applicable law, and subject to compliance
with the provisions of Section 11 (a)(1)(H) of the Securities Exchange Act of
1934 and Section 206(3) of the Investment Advisers Act of 1940, if applicable,
any broker owning, owned by or under common ownership or control with, the
Investment Manager). Any such broker may receive the usual commission or xxxx-up
earned on such transactions. In placing transactions for the Account, the
Investment Manager may combine orders on behalf of the Account with orders on
behalf of its other Clients. All commissions and related charges and fees with
respect to transactions for the Account (including commissions and related
charges and fees paid to brokers that are affiliated with the Investment
Manager) shall be payable by the Account and are in addition to the Management
fees payable under this Agreement.
(d) The Investment Manager shall be empowered to exercise, in what it
deems to be the wisest manner, all voting rights, to execute consents and to
exercise or sell stock subscription and conversion rights and to join in or
oppose (alone or jointly with others) reorganizations, recapitalizations and
liquidations, unless the Client specifically reserves to itself or another the
right to take such actions.
(e) To the extent not inconsistent with the Investment Guidelines for
the Account set forth in APPENDIX B, the Client authorizes the Investment
Manager to make investments for the Account in any one or more of the following:
interest bearing accounts, certificates of deposit, commercial paper, treasury
bills, master notes, money market instruments (including, without limitation,
certificates of deposit and interest bearing accounts of any bank owning, owned
by or under common ownership or control with the Investment Manager or any
mutual fund for which any affiliate of the Investment Manager is receiving
management, administrative, advisory or other compensation).
5. COMPENSATION TO THE INVESTMENT MANAGER. The Investment Manager, as
compensation for its services rendered under this Agreement, shall be paid
according to the management fee schedule attached hereto as APPENDIX C. As noted
above, the Account may directly or indirectly bear other fees or expenses
payable to the Investment Manager or its affiliates, including (but not limited
to) brokerage
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commissions or similar expenses, Galaxy Fund investment advisory fees or, as may
be provided by other agreements to which the Client is a party.
6. PROVISION OF INFORMATION TO THE CLIENT.
(a) The Investment Manager shall provide the Client with a report on
the Account and of the investments therein as the Client may reasonably request.
(b) The Investment Manager shall from time to time certify to the
Client the names of all persons authorized to act on its behalf and specimens of
their signatures, and any person so certified shall, until notice to the
contrary is received by the Client, be deemed to be the authorized
representative of the Investment Manager.
(c) The Client confirms that it has received from the Investment
Manager, read and understands a copy of Part II of the Investment Manager's Form
ADV under the Investment Advisers Act of 1940 in the form attached to this
Agreement, but not forming a part of this Agreement. Any other provision of this
Agreement to the contrary notwithstanding, within 10 business days next
following the date of this Agreement, the Client may terminate this Agreement
without penalty by giving written notice to the Investment Manager.
7. PROVISION OF INFORMATION TO THE INVESTMENT MANAGER.
(a) The Client shall provide the Investment Manager with reasonable
advance notice of the extent, if any, to which assets in the Account are
expected to be required to be withdrawn during the year following the
notification.
(b) The Client shall from time to time certify to the Investment
Manager the names of all persons authorized to act on its behalf and specimens
of their signatures, and any person so certified shall, until notice to the
contrary is received by the Investment Manager, be deemed to be the authorized
representative of the Client.
8. SERVICE TO OTHER CLIENTS. The Investment Manager and any of its
officers, and employees and persons affiliated with it, (a) may render
investment management and advisory services to other investors and institutions;
(b) may own, purchase or sell securities or other interests in property which
are the same, similar to or different from those which the Investment Manager
owns, purchases or sells for the Account; and (c) in rendering investment
management and advisory services to others, shall be free to take action with
respect to investments in securities or other interests in property which is the
same as, similar to or different from the action taken for the Account.
9. INSIDE INFORMATION. The Investment Manager shall have no obligation
to seek to obtain any material, non-public information about any issuer of
securities.
10. CONFIDENTIALITY: USE OF INFORMATION. The Investment Manager and the
Client shall each maintain the confidentiality of the decisions of, and other
information furnished by, the other, subject, however, to the provisions of any
laws requiring the disclosure of such investments.
11. LIABILITY OF INVESTMENT MANAGER. In the absence of its own
negligence, misfeasance, bad faith or violation of a provision of applicable
law, the Investment Manager shall not be liable for (1) any loss resulting from
any act or omission of the Client or any trustee or custodian of the assets held
in the Account; (2) any diminution in value of any investment or investments
resulting from the recommendations
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or advice of the Investment Manager or any loss in portfolio value from an error
of judgment of the Investment Manager as to the types of securities held in the
Account's portfolio; or (3) any loss resulting from any act or omission of any
broker selected by the Investment Manager with due care in the selection.
Nothing herein shall constitute a waiver or limitation of any rights which the
Client or any other person may have under applicable state or federal law.
12. TERMINATION, AMENDMENT AND ASSIGNMENT.
(a) Either party hereto may terminate this Agreement at any time by
giving written notice to the other.
(b) This Agreement may be amended at any time by a written document
signed by the parties without the need of executing an entirely new Agreement in
revised form.
(c) No assignment (as defined in the Investment Advisers Act of 1940
and the rules and regulations thereunder) of this Agreement shall be made by the
Investment Manager without the written consent of the Client.
13. EFFECTIVE DATE. This Agreement shall not be effective until receipt
by both the Investment Manager and the Client of an executed copy of this
Agreement.
14. NOTICES. Unless otherwise specified in this Agreement, all notices
with respect to matters contemplated by this Agreement shall be deemed duly
given when received in writing by the Investment Manager or the Client at their
respective addresses set forth below, or at such other address as may be
specified in each case in a notice similarly given:
To the Client: Xx. Xxxx Xxxxxxx
xxXX.xxx, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
To the Investment Manager: ______________________________
Fleet Investment Advisors Inc.
00 Xxxxx Xxxxxx XX XX X00X
Xxxxxx, XX 00000
15. APPLICABLE LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York except to the extent such laws
are preempted by the laws of the United States of America.
16. MISCELLANEOUS. This Agreement may be executed in several
counterparts, each of which shall be considered as an original. This Agreement
constitutes the entire Agreement between the parties with respect to the subject
matter hereof.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf as of the date first
written above.
FLEET INVESTMENT ADVISORS INC. xxXX.xxx, Inc.
By _________________________ By ____________________________________
Title _______________________ Title _________________________________
Federal Employer ID Number: 00-0000000
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APPENDIX A
ASSETS CONSTITUTING THE ACCOUNT
Cash or Cash Equivalent securities in the amount of approximately $450
million on or about March 30, 2000.
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[LOGO]
FLEET INVESTMENT ADVISORS
APPENDIX B
INVESTMENT POLICY
xxXX.xxx, Inc.
SHORT TERM INVESTMENT PORTFOLIO
OBJECTIVES
The primary objective of this Investment Policy with regard to
xxXX.xxx, Inc. (the "Client") investment portfolio is to provide as high a level
of current income as is consistent with the preservation of capital and the
maintenance of liquidity to transition this portfolio into equities and other
long-term securities. Fleet Investment Advisors (the "Investment Manager") will
construct and manage a diversified portfolio that meets these objectives.
Securities that the Investment Manager purchases for the Client's portfolio may
not earn as high a level of current income as long-term or lower quality
securities which generally have less liquidity, greater market risk and more
fluctuation in market value.
INVESTMENT GUIDELINES
1. APPROVED INSTRUMENTS
The following fixed income instruments are considered appropriate for
the portfolio:
a. U.S. Government and Agency securities.
b. Money market instruments; repurchase agreements, commercial paper,
certificates of deposit, bank obligations, Eurodollar certificates
of deposit, and approved money market funds.
c. Corporate bonds, including Eurodollar issues of U.S. corporations,
and U.S. dollar denominated issues of foreign corporations.
d. Floating rate securities without interest rate caps.
2. QUALITY
Individual holdings of commercial paper must be rated A-1, P-1, or
better by Standard and Poor's Corporation ("S&P") and Xxxxx'x Investor
Services ("Moody's") at the time of purchase.
Securities of Issuers with a long-term credit rating must be rated at
least A/A2 by Standard & Poor's or Moody's, respectively. If a security
held in the portfolio is downgraded by S&P or Moody's below the minimum
rating specified above, the Investment Manager will notify the Client's
Investment Committee or its designee and recommend appropriate action.
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3. DIVERSIFICATION
Securities of a single issuer, valued at cost at the time of purchase,
should not exceed 5% of the market value of the portfolio or $1
million, whichever is greater. Corporate securities (excluding
commercial paper) of a single industry sector, valued at cost at the
time of purchase, should generally not exceed 25% of the market value
of the portfolio.
For purposes of this diversification policy, securities of a parent
company and its subsidiaries will always be combined except for captive
finance companies. Such captives will be included with their parent
company only if their primary purpose is to finance the parent's
business. Securities issued by the U.S. Treasury and U.S. Government
Agencies are specifically exempted from these restrictions.
4. MARKETABILITY/LIQUIDITY
The Investment Manager shall purchase liquid securities that regularly
trade in a secondary market under normal conditions. The Investment
Manager shall also structure the portfolio so that securities mature as
needed to meet anticipated liquidity demands.
5. MATURITY/PORTFOLIO DURATION
The portfolio's duration shall approximate the projected cash flows set
forth in paragraph four above. In addition, the final maturity or put
date of each security within the portfolio shall not exceed March 30,
2001.
6. PERFORMANCE MEASUREMENT
The Investment Manager will meet with the Client's Investment
Committee, Chief Financial Officer or a designee no less than annually
and will be available for regular telephone contact. Monthly, the
Investment Manager will provide statements of transactions and market
valuation of portfolio assets. Quarterly, the Investment Manager will
provide the Company with a review of its performance relative to an
appropriate Index.
7. RESTRICTED INVESTMENTS
No futures contracts or options shall be used.
Exceptions to this Investment Policy are prohibited without the prior
approval of the Client Investment Committee or its designee.
APPROVED BY: XXXX XXXXXXX
SIGNATURE:
TITLE: CHIEF OPERATING OFFICER
DATE: FEBRUARY 22, 2000
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APPENDIX C
FEE SCHEDULE
FLEET INVESTMENT ADVISORS INC.
ANNUAL FEE SCHEDULE FOR INVESTMENT MANAGEMENT SERVICES
AS DESCRIBED IN APPENDIX B:
xxXX.xxx, Inc.
SHORT TERM INVESTMENT PORTFOLIO
INVESTMENT POLICY
10 basis points (0.10%) for all of assets
Note: The fee to the Investment Manager shall be calculated and paid on
a calendar quarter basis, based on the market value of the portfolio as of the
close of business on the last business day of each quarter.
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