Exhibit d(5)
FORM OF
MANAGEMENT AGREEMENT
CITIFUNDS TRUST II
CITI FORTUNE 500 INDEX FUND
CITI FORTUNE e-50 INDEX FUND
MANAGEMENT AGREEMENT, dated as of ______________, ____, by and between
CitiFunds Trust II, 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such determination has been revoked.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 ▇▇▇▇▇▇▇▇ 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 non-recurring
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 ________ __, ____ on which date it will terminate unless
its continuance with respect to a Fund after ________ __, ____, 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 II 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)
▇▇▇▇▇ ▇▇▇▇▇▇ Research Fund 0.85%
▇▇▇▇▇ ▇▇▇▇▇▇ Global Research Fund 0.95%