Investment Advisory Agreement
Exhibit
(D)(1)
NORTH
TRACK FUNDS, INC.
This
INVESTMENT
ADVISORY AGREEMENT
is made
as of the ___ day of __________, 2007, by and between NORTH TRACK FUNDS,
INC.
(the “Company”), a Maryland corporation registered under the Investment Company
Act of 1940, as amended (the “1940 Act”), as an open-end diversified management
investment company, and XXXXXXX
CAPITAL MANAGEMENT,
LLC, a
Wisconsin limited liability company (the “Advisor”).
WITNESSETH:
In
consideration of the mutual promises and agreements herein contained and
other
good and valuable consideration, the receipt of which is hereby acknowledged,
it
is hereby agreed by and between the parties hereto as follows:
1. In
General
The
Company hereby appoints the Advisor to act as investment advisor with respect
to
each series of its common stock listed on Exhibit
A
attached
hereto. Each series is referred to herein as a “Fund,” and collectively as the
“Funds.” The Advisor agrees to provide professional investment management with
respect to the investment of the assets of each Fund and to supervise and
arrange the purchase and sale of securities held in the portfolio of each
Fund.
The Advisor may engage, on behalf of any Fund, the services of a Sub-Advisor,
subject to any limitations imposed by the 1940 Act. It is understood that
the
Company may create one or more additional series of shares and that, if it
does
so, this Agreement may be amended to include additional series under the
terms
of this Agreement.
2. Duties
and Obligations of the Advisor with Respect to the Funds
a. Subject
to the succeeding provisions of this section and subject to the direction
and
control of the Board of Directors of the Company, the Advisor
shall:
A. Decide
what portfolio securities shall be purchased or sold by each Fund and when;
and
B. Arrange
for the purchase and the sale of securities held in the portfolio of each
Fund
by placing purchase and sale orders for each Fund.
b. Any
purchases or sales of portfolio securities on behalf of each Fund shall at
all
times conform to, and be in accordance with, any requirements imposed by:
(1) the provisions of the 1940 Act and of any rules or regulations in force
thereunder; (2) any other applicable provisions of law; (3) the
provisions of the Articles of Incorporation and By-Laws of the Company as
amended from time to time; (4) any policies and determinations of the Board
of Directors of the Company; and (5) the fundamental policies of the
applicable Fund, as reflected in its registration statement under the 1940
Act,
or as amended by the shareholders of such Fund.
2
c. The
Advisor shall give each Fund the benefit of its best judgment and effort
in
rendering services hereunder. In the absence of willful misfeasance, bad
faith,
gross negligence or reckless disregard of obligations or duties (“disabling
conduct”) hereunder on the part of the Advisor (and its officers, directors,
agents, employees, controlling persons, shareholders and any other person
or
entity affiliated with the Advisor) the Advisor shall not be subject to
liability to the Company or to any shareholder of a Fund for any act or omission
in the course of, or connected with rendering services hereunder, including
without limitation, any error of judgment or mistake of law or for any loss
suffered by any of them in connection with the matters to which this Agreement
related, except to the extent specified in Section 36(b) of the 1940 Act
concerning loss resulting from a breach of fiduciary duty with respect to
the
receipt of compensation for services. Except for such disabling conduct,
the
Company shall indemnify the Advisor (and its officers, directors, agents,
employees, controlling persons, shareholders and any other person or entity
affiliated with the Advisor) from any liability arising from the Advisor’s
conduct under this Agreement to the extent permitted by the Company’s Articles
of Incorporation, By-Laws and applicable law.
d. Nothing
in this Agreement shall prevent the Advisor or any affiliated person (as
defined
in the 0000 Xxx) of the Advisor from acting as investment advisor or manager
and/or principal underwriter for any other person, firm or corporation and
shall
not in any way limit or restrict the advisor or any such affiliated person
from
buying, selling or trading any securities for its or their own accounts or
the
accounts of others for whom it or they may be acting, provided, however,
that
the Advisor expressly represents that it will undertake no activities which,
in
its judgment, will adversely affect the performance of its obligations to
the
Company under this Agreement.
e. It
is
agreed that the Advisor shall have no responsibility or liability for the
accuracy or completeness of the Company’s Registration Statement under the 1940
Act or the Securities Act of 1933 except for information supplied by the
Advisor
for inclusion therein.
3. Broker-Dealer
Relationships
In
connection with its duties set forth in Section 2(a)(ii) of this Agreement
to
arrange for the purchase and the sale of securities held by each Fund by
placing
purchase and sale orders for the Funds, the Advisor and/or any Sub-Advisor
shall
select such broker-dealers (“brokers”) and shall, in the Advisor’s or
Sub-Advisor’s judgment, implement the policy of the applicable Fund to achieve
“best execution,” i.e.,
prompt
and efficient execution at the most favorable securities’ price. In making such
selection, the Advisor and/or Sub-Advisor is also authorized to consider
whether
the broker provides brokerage and/or research services to the Fund and/or
other
accounts of the Advisor or Sub-Advisor. The commissions paid to such brokers
may
be higher than another broker would have charged if a good faith determination
is made by the Advisor and/or Sub-Advisor that the commission is reasonable
in
relation to the services provided, viewed in terms of either that particular
transaction or the Advisor’s or the Sub-Advisor’s overall responsibilities as to
the accounts as to which it exercises investment discretion. The Advisor
and/or
Sub-Advisor shall use its judgment in determining that the amount of commissions
paid are reasonable in relation to the value of brokerage and research services
provided and need not place or attempt to place a specific dollar value on
such
services or on the portion of commission rates reflecting such services.
To
demonstrate that such determinations were in good faith, and to show the
overall
reasonableness of commissions paid, the Advisor and/or Sub-Advisor shall
be
prepared to show that commissions paid (i) were for purposes contemplated
by this Agreement; (ii) provide lawful and appropriate assistance to the
Advisor and/or Sub-Advisor in the performance of its decision-making
responsibilities; and (iii) were within a reasonable range as compared to
the rates charged by qualified brokers to other institutional investors as
such
rates may become known from available information. The Company recognizes
that,
on any particular transaction, a higher than usual commission may be paid
due to
the difficulty of the transaction in question.
3
4. Allocation
of Expenses
The
Advisor agrees that it will furnish the Company, at the Advisor’s expense, with
all office space and facilities, and equipment and clerical personnel necessary
for carrying out its duties under this Agreement. The Advisor will also pay
all
compensation of all Directors, officers and employees of the Company who
are
affiliated persons of the Advisor. All costs and expenses not expressly assumed
by the Advisor under this Agreement shall be paid by the Company, including,
but
not limited to (i) interest and taxes; (ii) brokerage commissions;
(iii) insurance premiums; (iv) compensation and expenses of its
Directors other than those affiliated with the Advisor; (v) legal and audit
expenses; (vi) fees and expenses of the Funds’ administrator, custodian,
shareholder servicing or transfer agent and accounting and/or pricing services
agent; (vii) expenses incident to the issuance of its shares, including
stock certificates and issuance of shares on the payment of, or reinvestment
of,
dividends; (viii) fees and expenses incident to the registration under
federal or state securities laws of the Funds or their shares;
(ix) expenses of preparing, printing and mailing reports and notices, proxy
material and prospectuses to shareholders of the Funds; (x) all other
expenses incidental to holding meetings of the Funds’ shareholders;
(xi) dues or assessments of or contributions to the Investment Company
Institute or any successor or other industry association; (xii) such
non-recurring expenses as may arise, including litigation affecting the Company
and the legal obligations which the Company may have to indemnify its officers
and Directors with respect thereto; and (xiii) all expenses which the
Company or a Fund agrees to bear in any distribution agreement or in any
plan
adopted by the Company and/or a Fund pursuant to Rule 12b-1 under the 1940
Act.
5. Compensation
of the Advisor
The
Company agrees to pay the Advisor, out of the assets of the relevant Fund,
and
the Advisor agrees to accept as full compensation for all services rendered
by
the Advisor as such, an annual management fee, payable monthly and computed
on
the value of the average daily net asset value of the relevant Fund as shown
on
Exhibit A
attached
hereto.
6. Duration
and Termination
a. This
Agreement shall go into effect as to each Fund on the date set forth on
Exhibit A
attached
hereto and shall, unless terminated as hereinafter provided, continue in
effect
for a period of two years and thereafter from year to year, but only so long
as
such continuance is specifically approved at least annually by: (i) the
vote of a majority of the Board of Directors who are not parties to this
Agreement or “interested persons” (as defined in the 0000 Xxx) of any such party
case in person at a meeting called for the purpose of voting on such approval;
and (ii) either by a vote of a majority of the Board of Directors or by the
vote of the holders of a “majority” (as defined in the 0000 Xxx) of the
outstanding voting securities of such Fund.
4
b. This
Agreement may be terminated by the Advisor with respect to a Fund at any
time
without penalty upon giving the Company sixty (60) days’ written notice (which
notice may be waived by the Fund) and may be terminated by the Company with
respect to a Fund at any time without penalty upon giving the Advisor sixty
(60)
days’ written notice (which notice may be waived by the Advisor), provided that
such termination by the Company shall be directed or approved by the vote
of a
majority of all of its Directors in office at the time or by the vote of
the
holders of a majority (as defined in the 0000 Xxx) of the voting securities
of
such Fund. This Agreement shall automatically terminate in the event of its
assignment (as defined in the 1940 Act).
IN
WITNESS WHEREOF, the parties hereto have caused the foregoing instrument
to be
executed by duly authorized persons and their seals to be hereunto affixed,
all
as of the date first above written.
NORTH
TRACK FUNDS, INC.
By:
[Name],
[Title]
XXXXXXX
CAPITAL MANAGEMENT, LLC
By:
[Name],
[Title]
5
EXHIBIT
A
NORTH
TRACK FUNDS, INC.
INVESTMENT
ADVISORY MANAGEMENT FEES
|
Fund
Name
|
Effective
Date
|
Management
Fee
|
|
S&P
100 Plus Fund
|
_______,
2007
|
The
management fee for this Fund, calculated in accordance with paragraph
5 of
this Agreement, shall be at an annual rate of 0.575 of 1% of the
average
daily net assets of the Fund up to $20 million, 0.45 of 1% on the
next $30
million, 0.40 of 1% on the next $50 million, 0.35 of 1% on the
next $400
million and 0.30 of 1% on assets over $500 million
|
|
NYSE
Arca Tech 100 Index Fund
|
_______,
2007
|
The
management fee for this Fund, calculated in accordance with paragraph
5 of
this Agreement, shall be at an annual rate of 0.50 of 1% of the
first $50
million of the average daily net assets of the Fund, 0.30 of 1%
of the
next $200 million in net assets, 0.25 of 1% of the next $250 million
in
net assets, and 0.20 of 1% of net assets in excess of $500
million.
|
|
Dow
Xxxxx Equity Income 100 Plus Fund
|
_______,
2007
|
The
management fee for this Fund, calculated in accordance with
paragraph 5 of this Agreement, shall be at an annual rate of 0.55 of
1% on the first $100 million in average daily assets, 0.50 of 1% on
the next $400 million in average daily assets and 0.45 of 1% on
average daily assets in excess of $500 million.
|
|
Dow
Xxxxx U.S. Health Care 100 Plus Fund
|
_______,
2007
|
The
management fee for this Fund, calculated in accordance with paragraph
5 of
this Agreement, shall be at an annual rate of 0.55 of 1% of the
first $100
million of the average daily net assets of the Fund, 0.50 of 1%
on the
next $400 million of average daily net assets and 0.45 of 1% on
average
daily net assets in excess of $500 million.
|
|
Dow
Xxxxx U.S. Financial 100 Plus Fund
|
_______,
2007
|
The
management fee for this Fund, calculated in accordance with paragraph
5 of
this Agreement, shall be at an annual rate of 0.55 of 1% of the
first $100
million of the average daily net assets of the Fund, 0.50 of 1%
on the
next $400 million of average daily net assets and 0.45 of 1% on
average
daily net assets in excess of $500 million.
|
|
Strategic
Allocation Fund
|
_______,
2007
|
The
management fee for this Fund, calculated in accordance with paragraph
5 of
this Agreement, shall be at an annual rate of 0.10 of 1% of the
average
daily net assets of the Fund.
|
|
Geneva
Growth Fund
|
_______,
2007
|
The
management fee for this Fund, calculated in accordance with paragraph
5 of
this Agreement, shall be at an annual rate of 0.75 of 1% of the
first $250
million of the average daily net assets of the Fund, 0.70% of the
next
$250 million in net assets, and 0.65 of 1% on average daily net
assets in
excess of $500 million.
|
|
Wisconsin
Tax-Exempt Fund
|
_______,
2007
|
The
management fee for this Fund, calculated in accordance with paragraph
5 of
this Agreement, shall be at an annual rate of 0.50 of 1% of the
first $250
million of the average daily net assets of the Fund and 0.40 of
1% on
average daily net assets in excess of $250
million.
|
6
|
Cash
Reserve Fund
|
_______,
2007
|
The
management fee for this Fund, calculated in accordance with paragraph
5 of
this Agreement, shall be at an annual rate of 0.20 of 1% of the
Fund’s
average daily net assets.
|
|
Large
Cap Equity Fund
|
_______,
2007
|
The
management fee for this Fund, calculated in accordance with paragraph
5 of
this Agreement, shall be at an annual rate of 0.75 of 1% of the
first $250
million of the average daily net assets of the Fund, 0.70% of the
next
$250 million in net assets, and 0.65 of 1% on average daily net
assets in
excess of $500 million.
|
7
