INVESTMENT ADVISORY AGREEMENT
Exhibit 99.d.1
AGREEMENT, entered into as of this 7th day of September, 2004 between Old Mutual
Capital, Inc. (the “Adviser”) and Old Mutual Advisor Funds (the “Fund”).
WHEREAS, the Fund is a Delaware statutory trust, and is registered under the Investment
Company Act of 1940, as amended (the “1940 Act”), as an open-end, management investment company;
WHEREAS, the Fund wishes to retain the Adviser to render investment advisory services to the
Fund and the Adviser is willing to furnish such services to the portfolios listed on Schedule A
hereto (the “Portfolios”); and
WHEREAS, the Adviser is registered as an investment adviser under the Investment Advisers Act
of 1940, as amended (the “Advisers Act”).
NOW THEREFORE, in consideration of the promises and mutual covenants herein contained,
intending to be legally bound, it is agreed between the Fund and the Adviser as follows:
1. APPOINTMENT. The Fund hereby appoints the Adviser to act as investment adviser to the Fund for
the periods and on the terms set forth in this Agreement. The Adviser accepts such appointment and
agrees to furnish the services herein set forth, for the compensation herein provided.
2. INVESTMENT ADVISORY DUTIES. Subject to the supervision of the Trustees of the Fund, the Adviser
will, (a) provide a program of continuous investment management for the Portfolios in accordance
with the Portfolios’ investment objectives, policies and limitations as stated in each Portfolio’s
Prospectus(es) and Statement(s) of Additional Information included as part of the Fund’s
Registration Statement filed with the Securities and Exchange Commission, as they may be amended
from time to time, copies of which shall be provided to the Adviser by the Fund; (b) make asset
allocation and investment decisions for the Portfolios; and (c) place orders to purchase and sell
securities for the Portfolios.
In performing its investment management services to the Portfolios hereunder, the Adviser will
provide the Portfolios with ongoing investment guidance and policy direction, including oral and
written research, analysis, advice, statistical and economic data, and judgments regarding
individual investments, general economic conditions and trends and long-range investment policy.
The Adviser will determine the securities, instruments, repurchase agreements, options, futures and
other investments and techniques that the Portfolios will purchase, sell, enter into or use, and
will provide an ongoing evaluation of the Portfolios’ investments. The Adviser will determine what
portion of the Portfolios’ investments shall be invested in securities and other assets, and what
portion, if any, should be held uninvested. The Adviser shall furnish to the Fund adequate (i)
office space, which may be space within the offices of the Adviser or in such other places as may
be agreed upon from time to time, and
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(ii) office furnishings, facilities and equipment as may be reasonably required for managing the
corporate affairs and conducting the business of the Fund, including complying with the corporate
reporting requirements of the various states in which the Fund does business, and conducting
correspondence and other communications with the stockholders of the Fund. Except as otherwise
provided in Section 4, the Adviser shall employ or provide and compensate the executive,
secretarial and clerical personnel necessary to provide such services. Subject to the approval of
the Fund’s Board of Trustees (including a majority of the Trustees who are not “interested persons”
of the Fund as defined in the 1940 Act), the Adviser may delegate to one or more sub-advisers any
of its duties enumerated in Section 2 hereof. The Adviser shall continue to supervise the
performance of any such sub-adviser and shall report regularly thereon to the Fund’s Board of
Trustees. The Adviser further agrees that, in performing its duties hereunder, it will:
(a) comply with the 1940 Act and all rules and regulations thereunder, the Advisers Act, the
Internal Revenue Code (the “Code”), and all other applicable federal and state laws and
regulations, and with any applicable procedures adopted by the Trustees;
(b) use reasonable efforts to manage each Portfolio so that it will qualify, and continue to
qualify, as a regulated investment company under Subchapter M of the Code and regulations issued
thereunder;
(c) place orders pursuant to its investment determinations for each Portfolio directly with
the issuer, or with any broker or dealer, in accordance with applicable policies expressed in each
Portfolio’s Prospectus(es) and/or Statement(s) of Additional Information and in accordance with
applicable legal requirements;
(d) furnish to the Fund whatever statistical information the Fund may reasonably request with
respect to each Portfolio’s assets or contemplated investments. In addition, the Adviser will keep
the Fund and the Trustees informed of developments materially affecting each Portfolio’s
investments and shall, on the Adviser’s own initiative, furnish to the Fund from time to time
whatever information the Adviser believes appropriate for this purpose;
(e) make available to the Fund, promptly upon its request, such copies of the Adviser’s
investment records and ledgers with respect to the Portfolios as may be required to assist the Fund
in its compliance with applicable laws and regulations. The Adviser will furnish the Trustees with
such periodic and special reports regarding each Portfolio as they may reasonably request; and
(f) immediately notify the Fund in the event that the Adviser or any of its affiliates: (1)
becomes aware that it is subject to a statutory disqualification that prevents the Adviser from
serving as investment adviser pursuant to this Agreement; or (2) becomes aware that it is the
subject of an administrative proceeding or enforcement action by the Securities and Exchange
Commission (“SEC”) or other regulatory authority. The Adviser further agrees to notify the Fund
immediately of any material fact known to the Adviser respecting or relating to the Adviser that is
not contained in the Fund’s Registration Statement, or any amendment or supplement
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thereto, but that is required to be disclosed therein, and of any statement contained therein that
becomes untrue in any material respect.
3. ADDITIONAL SERVICES. If the Fund so requests, the Adviser shall also maintain all internal
bookkeeping, accounting and auditing services and records in connection with maintaining the Fund’s
financial books and records, and shall calculate each Portfolio’s daily net asset value. For these
services, each Portfolio shall pay to the Adviser a monthly fee, which shall be in addition to the
fees payable pursuant to Section 5 hereof, to reimburse the Adviser for its costs, without profit,
for performing such services.
4. ALLOCATION OF CHARGES AND EXPENSES. Except as otherwise specifically provided in this Section
4, the Adviser shall pay the compensation and expenses of all its directors, officers and employees
who serve as officers and executive employees of the Fund (including the Fund’s share of payroll
taxes for such persons), and the Adviser shall make available, without expense to the Fund, the
service of its directors, officers and employees who may be duly-elected officers of the Fund,
subject to their individual consent to serve and to any limitations imposed by law.
The Adviser shall not be required to pay any expenses of the Fund other than those
specifically allocated to the Adviser in this Section 4. In particular, but without limiting the
generality of the foregoing, the Adviser shall not be responsible, except to the extent of the
reasonable compensation of such of the Fund’s employees as are officers or employees of the Adviser
whose services may be involved, for the following expenses of the Fund: organization and certain
offering expenses of the Fund (including out-of-pocket expenses, but not including the Adviser’s
overhead and employee costs); fees payable to the Adviser and to any other Fund advisers or
consultants; legal expenses; auditing and accounting expenses; interest expenses, telephone, telex,
facsimile, postage and other communications expenses; taxes and governmental fees; fees, dues and
expenses incurred by or with respect to the Fund in connection with membership in investment
company trade organizations; costs of insurance relating to fidelity coverage for the Fund’s
officers and employees; fees and expenses of the Fund’s custodian, any sub-custodian, transfer
agent, registrar, or dividend disbursing agent; payments to the Adviser for maintaining the Fund’s
financial books and records and calculating the daily net asset value pursuant to Section 3 hereof;
other payments for portfolio pricing or valuation services to pricing agents, accountants, bankers
and other specialists, if any; expenses of preparing share certificates; other expenses in
connection with the issuance, offering, distribution, sale or redemption of securities issued by
the Fund; expenses relating to investor and public relations; expenses of registering and
qualifying shares of the Fund for sale, freight, insurance and other charges in connection with the
shipment of the Fund’s portfolio securities; brokerage commissions or other costs of acquiring or
disposing of any portfolio securities or other assets of the Fund, or of entering into other
transactions or engaging in any investment practices with respect to the Fund; expenses of printing
and distributing Prospectuses, Statements of Additional Information, reports, notices and dividends
to shareholders; costs of stationery; any litigation expenses; costs of shareholders’ meetings; the
compensation and all expenses (specifically including travel expenses relating to the Fund’s
business) of officers, trustees and employees of the Fund who are not interested persons of the
Adviser; and travel expenses (or an appropriate portion thereof) of officers or trustees of the
Fund who are officers, directors or employees of the
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Adviser to the extent that such expenses relate to attendance at meetings of the Board of Trustees
of the Fund with respect to matters concerning the Fund, or any committees thereof or advisers
thereto.
Notwithstanding the foregoing, the Trust shall reimburse the Adviser at the end of each
calendar quarter for the reasonable portion of the compensation of attorneys employed by the
Adviser attributable to work for the Trust, as determined from time to time by the Trust’s Board of
Trustees. Compensation for this purpose shall include salary, cash bonus and benefits and shall
exclude any equity participation and profit sharing paid to such attorney. Determinations of the
reasonable portion of such compensation allocable to the Trust shall be made by the Trust’s Board
of Trustees periodically, but at least as often as annually.
5. COMPENSATION. As compensation for the services provided and expenses assumed by the Adviser
under this Agreement, except for any additional services provided by the Adviser pursuant to
Section 3 hereof, each Portfolio will pay the Adviser at the end of each calendar month an advisory
fee as set forth in Schedule A hereto. The advisory fee is computed daily as a percentage of each
portfolio’s average daily net assets. The “average daily net assets” of a Portfolio shall mean the
average of the values placed on the Portfolio’s net assets as of 4:00 p.m. (Eastern time) on each
day on which the net asset value of the Portfolio is determined consistent with the provisions of
Rule 22c-1 under the 1940 Act or, if the Portfolio lawfully determines the value of its net assets
as of some other time on each business day, as of such other time. The value of net assets of the
Portfolio shall always be determined pursuant to the applicable provisions of the Fund’s Agreement
and Declaration of Trust and the Registration Statement. If, pursuant to such provisions, the
determination of net asset value is suspended for any particular business day, then for the
purposes of this Section 5, the value of the net assets of the Portfolio as last determined shall
be deemed to be the value of its net assets as of the close of regular trading on the New York
Stock Exchange, or as of such other time as the value of the net assets of the Portfolio’s
securities may lawfully be determined, on that day. If the determination of the net asset value of
the shares of a Portfolio has been so suspended for a period including any month and when the
Adviser’s compensation is payable at the end of such month, then such value shall be computed on
the basis of the value of the net assets of the Portfolio as last determined (whether during or
prior to such month). If the Portfolio determines the value of the net assets more than once on
any day, then the last such determination thereof on that day shall be deemed to be the sole
determination thereof on that day for the purposes of this Section 5. To the extent that the
Adviser defers advisory fees or absorbs operating expenses of a Portfolio, the Adviser may seek
payment of such deferred fees or reimbursement of such absorbed expenses within two (2) fiscal
years after the fiscal year in which fees were deferred or expenses were absorbed.
6. BOOKS AND RECORDS. The Adviser agrees to maintain such books and records with respect to its
services to the Fund as are required by Section 31 under the 1940 Act, and rules adopted
thereunder, and by other applicable legal provisions, and to preserve such records for the periods
and in the manner required by that Section, and those rules and legal provisions. The Adviser also
agrees that records it maintains and preserves pursuant to Rules 31a-1 and 31a-2 under the 1940 Act
and otherwise in connection with its services hereunder are the property of the Fund and will be
surrendered promptly to the Fund upon its request. And the Adviser further agrees that it will
furnish to regulatory authorities having the requisite authority, any information
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or reports in connection with its services hereunder which may be requested in order to determine
whether the operations of the Fund are being conducted in accordance with applicable law and
regulations.
7. STANDARD OF CARE AND LIMITATION OF LIABILITY. The Adviser shall exercise its best judgment in
rendering the services provided by it under this Agreement. The Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the Fund or the holders of the
Fund’s shares in connection with the matters to which this Agreement relates, provided that nothing
in this Agreement shall be deemed to protect or purport to protect the Adviser against any
liability to the Fund or to the holders of the Fund’s shares to which the Adviser would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of the Adviser’s reckless disregard of its obligations and
duties under this Agreement. As used in this Section 7, the term “Adviser” shall include any
officers, directors, employees or other affiliates of the Adviser performing services with respect
to the Fund.
8. SERVICES NOT EXCLUSIVE. It is understood that the services of the Adviser are not exclusive,
and that nothing in this Agreement shall prevent the Adviser from providing similar services to
other investment companies or to other series of investment companies, or from engaging in other
activities, provided such other services and activities do not, during the term of the Agreement,
interfere in a material manner with the Adviser’s ability to meet its obligations to the Fund
hereunder. When the Adviser recommends the purchase or sale of the same security for a Portfolio,
it is understood that in light of its fiduciary duty to the Portfolio, such transactions will be
executed on a basis that is fair and equitable to the Portfolio. In connection with purchases or
sales of portfolio securities for the account of a Portfolio, neither the Adviser nor any of its
directors, officers, or employees shall act as principal or agent or receive any commission
provided that portfolio transactions for a Portfolio may be executed through firms affiliated with
the Adviser, in accordance with applicable legal requirements. If the Adviser provides any advice
to its clients concerning the shares of the Fund, the Adviser shall act solely as investment
counsel for such clients and not in any way on behalf of the Fund.
9. DURATION AND TERMINATION. This Agreement shall continue for an initial period of two years, and
thereafter shall continue automatically for successive annual periods, provided such continuance is
specifically approved at least annually by (i) the Trustees or (ii) a vote of a “majority” (as
defined in the 0000 Xxx) of each Portfolio’s outstanding voting securities (as defined in the 1940
Act), provided that in either event the continuance is also approved by a majority of the Trustees
who are not “interested persons” (as defined in the 0000 Xxx) of any party to this Agreement, by
vote cast in person at a meeting called for the purpose of voting on such approval.
Notwithstanding the foregoing, this Agreement may be terminated as to a Portfolio (a) at any time
without penalty by the Fund upon the vote of a majority of the Trustees or by vote of the majority
of the Portfolio’s outstanding voting securities, upon sixty (60) days’ written notice to the
Adviser or (b) by the Adviser at any time without penalty, upon sixty (60) days’ written notice to
the Fund. This Agreement will also terminate automatically in the event of its assignment (as
defined in the 1940 Act).
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10. AMENDMENTS. No provision of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, and no amendment of this Agreement shall be
effective until approved by an affirmative vote of (i) a majority of the outstanding voting
securities of the Fund, and (ii) a majority of the Trustees, including a majority of Trustees who
are not interested persons of any party to this Agreement, cast in person at a meeting called for
the purpose of voting on such approval, if such approval is required by applicable law.
11. PERSONAL LIABILITY OF TRUSTEES AND SHAREHOLDERS. The parties agree that no Trustee or
Shareholder of the Trust shall be personally liable for any debts, liabilities, obligations or
expenses incurred by, or contracted for under this Agreement.
12. MISCELLANEOUS.
(a) This Agreement shall be governed by the laws of the State of Delaware, provided that
nothing herein shall be construed in a manner inconsistent with the 1940 Act, the Advisers Act, or
rules or orders of the SEC thereunder.
(b) The captions of this Agreement are included for convenience only and in no way define or
limit any of the provisions hereof or otherwise affect their construction or effect.
(c) If any provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be affected hereby and, to
this extent, the provisions of this Agreement shall be deemed to be severable.
(d) Nothing herein shall be construed as constituting the Adviser as an agent of the Fund.
IN WITNESS WHEREFORE, the parties hereto have caused this Agreement to be executed by their
officers designated below as of September 7, 2004.
| OLD MUTUAL CAPITAL, INC. | ||
By: /s/ Xxx X. Xxxxxxxx
|
By: /s/ Xxxx X. Xxxx | |
Name: Xxx X. Xxxxxxxx
|
Name: Xxxx X. Xxxx | |
Title: CFO
|
Title: Executive Vice President |
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SCHEDULE A
DATED SEPTEMBER 7, 2004
TO
INVESTMENT ADVISORY AGREEMENT
BETWEEN
OLD MUTUAL ADVISOR FUNDS
AND
OLD MUTUAL CAPITAL, INC.
DATED SEPTEMBER 7, 2004
DATED SEPTEMBER 7, 2004
TO
INVESTMENT ADVISORY AGREEMENT
BETWEEN
OLD MUTUAL ADVISOR FUNDS
AND
OLD MUTUAL CAPITAL, INC.
DATED SEPTEMBER 7, 2004
Pursuant to Section 5 of this Agreement, each Portfolio shall pay the Adviser, at the end of
each calendar month, compensation computed daily at an annual rate of the Portfolio’s average daily
net assets based on the following schedule:
| Fund | Fee | Asset Level | ||
OM Asset Allocation Conservative Portfolio |
0.85% | Less than $1 billion | ||
| 0.825% | Between $1 - $2 billion | |||
| 0.80% | Between $2 - $3 billion | |||
| 0.775% | Greater than $3 billion | |||
OM Asset Allocation Balanced Portfolio |
0.90% | Less than $1 billion | ||
| 0.875% | Between $1 - $2 billion | |||
| 0.85% | Between $2 - $3 billion | |||
| 0.825% | Greater than $3 billion | |||
OM Asset Allocation Moderate Growth
Portfolio |
0.90% | Less than $1 billion | ||
| 0.875% | Between $1 - $2 billion | |||
| 0.85% | Between $2 - $3 billion | |||
| 0.825% | Greater than $3 billion | |||
OM Asset Allocation Growth Portfolio |
0.95% | Less than $1 billion | ||
| 0.925% | Between $1 - $2 billion | |||
| 0.90% | Between $2 - $3 billion | |||
| 0.875% | Greater than $3 billion |
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