INVESTMENT ADVISORY AGREEMENT
XXXXXX ADVISORS TRUST, a Massachusetts business trust registered under the
Investment Company Act of 1940 (the "1940 Act") as an open-end management
investment company (the "Trust"), and LIBERTY XXXXXX ASSET MANAGEMENT, L.P., a
Delaware limited partnership registered under the Investment Advisers Act of
1940 as an investment adviser ("Liberty WAM"), agree that:
1. ENGAGEMENT OF LIBERTY WAM. Liberty WAM shall manage the investment and
reinvestment of the assets of Xxxxxx U.S. Small Cap Advisor, Xxxxxx
International Small Cap Advisor, Xxxxxx Twenty and Xxxxxx Foreign Forty, series
of the Trust (each, a "Fund," and collectively, the "Funds"), subject to the
supervision of the Board of Trustees of the Trust, for the period and on the
terms set forth in this agreement. If the Trust establishes one or more series
in addition to the Funds named above with respect to which it desires to retain
Liberty WAM as investment adviser hereunder, and if Liberty WAM is willing to
provide such services under this agreement, the Trust and Liberty WAM may add
such new series to this agreement, by written supplement to this agreement. Such
supplement shall include a schedule of compensation to be paid to Liberty WAM by
the Trust with respect to such series and such other modifications of the terms
of this agreement with respect to such series as the Trust and Liberty WAM may
agree. Upon execution of such a supplement by the Trust and Liberty WAM, that
series will become a Fund hereunder and shall be subject to the provisions of
this agreement to the same extent as the Funds named above, except as modified
by the supplement.
Liberty WAM shall give due consideration to the investment policies and
restrictions and the other statements concerning the Funds in the Trust's
agreement and declaration of trust, bylaws, and registration statement under the
1940 Act and the Securities Act of 1933 (the "1933 Act"), and to the provisions
of the Internal Revenue Code of 1986, as amended, applicable to the Funds as
regulated investment companies. Liberty WAM shall be deemed for all purposes to
be an independent contractor and not an agent of the Trust or the Funds, and
unless otherwise expressly provided or authorized, shall have no authority to
act or represent the Trust or the Funds in any way.
Liberty WAM is authorized to make the decisions to buy and sell securities,
options, futures contracts and any other investments in which the Funds may
invest pursuant to its investment objectives, policies and restrictions, to
place the Funds' portfolio transactions with broker-dealers, and to negotiate
the terms of such transactions, including brokerage commissions on brokerage
transactions, on behalf of the Funds. Liberty WAM is authorized to exercise
discretion with each Fund's policy concerning allocation of its portfolio
brokerage, consistent with the Trust's registration statement and under the
supervision of the Trust's Board of Trustees, and as permitted by law, including
but not limited to Section 28(e) of the Securities Exchange Act of 1934, and in
so doing shall not be required to make any reduction in its investment advisory
fees.
Liberty WAM may, where it deems it to be advisable, aggregate orders with other
securities of the same type to be sold or purchased by one or more Funds with
like orders on behalf of other clients of Liberty WAM (as well as clients of
other investment advisers affiliated with Liberty WAM, in the event that Liberty
WAM and such affiliated investment advisers share common trading facilities). In
such event, Liberty WAM (or Liberty WAM and its affiliated advisers, as the case
may be) will allocate the shares so sold or purchased, as well as the expenses
incurred in the transaction, in a manner it (or it and they) consider to be
equitable and fair and consistent with its (or its or their) fiduciary
obligations to clients.
2. ADMINISTRATIVE SERVICES. Liberty WAM shall supervise the business and affairs
of the Trust and each Fund and shall provide such services and facilities as may
be required for effective administration of the Trust and Funds as are not
provided by employees or other agents engaged by the Trust; provided that
Liberty WAM shall not have any obligation to provide under this agreement any
such services which are the subject of a separate agreement or arrangement
between the Trust and Liberty WAM, any affiliate of Liberty WAM, or any third
party administrator.
3. USE OF AFFILIATED COMPANIES AND SUBCONTRACTORS. In connection with the
services to be provided by Liberty WAM under this agreement, Liberty WAM may, to
the extent it deems appropriate, and subject to compliance with the requirements
of applicable laws and regulations and upon receipt of approval of the Trustees,
make use of (i) its affiliated companies and their directors, trustees,
officers, and employees and (ii) subcontractors selected by Liberty WAM,
provided that Liberty WAM shall supervise and remain fully responsible for the
services of all such third parties in accordance with and to the extent provided
by this agreement. All costs and expenses associated with services provided by
any such third parties shall be borne by Liberty WAM or such parties.
4. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, Liberty WAM agrees to maintain records relating to its services
under this agreement, and further agrees that all records that it maintains for
the Trust are the property
of the Trust and to surrender promptly to the Trust any of such records upon the
Trust's request; provided that Liberty WAM may at its own expense make and
retain copies of any such records. Liberty WAM further agrees to preserve for
the periods prescribed by Rule 31a-2 under the 1940 Act the records required to
be maintained by Rule 31a-1 under the 1940 Act.
5. EXPENSES TO BE PAID BY LIBERTY WAM. Liberty WAM shall furnish to the Trust,
at Liberty WAM's expense, office space and all necessary office facilities,
equipment and personnel for managing that portion of the Trust's business
relating to the Funds. Liberty WAM shall also assume and pay all other expenses
incurred by it in connection with managing the assets of the Funds, including
expenses in connection with placement of securities orders, all expenses of
printing and distributing the Funds' prospectus and reports to prospective
investors (except to the extent such expenses are allocated to a party other
than the Trust in any participation or operating agreement to which the Trust is
a party), and all expenses in determination of daily price computations,
portfolio accounting and related bookkeeping.
6. EXPENSES TO BE PAID BY THE TRUST. Except as otherwise provided in this
agreement or any other contract to which the Trust is a party, the Trust shall
pay all expenses incidental to its organization, operations and business,
including, without limitation:
(a) all charges of depositories, custodians, sub-custodians and other agencies
for the safekeeping and servicing of its cash, securities and other property and
of its transfer agents and registrars and its dividend disbursing and redemption
agents, if any;
(b) all charges of legal counsel and of independent auditors;
(c) all compensation of trustees other than those affiliated with Liberty WAM or
the Trust's administrator, if any, and all expenses incurred in connection with
their services to the Trust;
(d) all expenses of preparing, printing and distributing notices, proxy
solicitation materials and reports to shareholders of the Funds;
(e) all expenses of meetings of shareholders of the Funds;
(f) all expenses of registering and maintaining the registration of the Trust
under the 1940 Act and of shares of the Funds under the 1933 Act, including all
expenses of preparation, filing and printing of annual or more frequent
revisions of the Funds' registration statements under the 1940 Act and 1933 Act,
and of supplying each then existing shareholder or beneficial owner of shares of
the Funds of a copy of each revised prospectus or supplement thereto, and of
supplying a copy of the statement of additional information upon request to any
then existing shareholder;
(g) all costs of borrowing money;
(h) all expenses of publication of notices and reports to shareholders and to
governmental bodies or regulatory agencies;
(i) all taxes and fees payable to federal, state or other governmental
agencies, domestic or foreign, and all stamp or other taxes;
(j) all expenses of printing and mailing certificates for shares of a Fund;
(k) all expenses of bond and insurance coverage required by law or deemed
advisable by the Board;
(l) all expenses of qualifying and maintaining qualification of, or providing
appropriate notification of intention to sell relating to, shares of the Funds
under the securities laws of the various states and other jurisdictions, and of
registration and qualification of the Trust under any other laws applicable to
the Trust or its business activities;
(m) all fees, dues and other expenses related to membership of the Trust
in any trade association or other investment company organization; and
(n) any extraordinary expenses.
In addition to the payment of expenses, the Trust shall also pay all brokers'
commissions and other charges relating to the purchase and sale of portfolio
securities for each Fund.
Any expense borne by the Trust that is not solely attributable to a Fund, nor
solely to any other series of shares of the Trust, shall be
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apportioned in such manner as Liberty WAM determines is fair and appropriate,
or as otherwise specified by the Board of Trustees of the Trust.
7. COMPENSATION OF LIBERTY WAM. For the services to be rendered and the expenses
to be assumed and to be paid by Liberty WAM under this agreement, the Trust on
behalf of the respective Funds shall pay to Liberty WAM fees accrued daily and
paid monthly at the annual rates (as the percentage of the Fund's net assets)
shown below:
XXXXXX U.S. SMALL CAP
ASSETS RATE OF FEE
First $100 million..................................... 1.00%
$100 million to $250 million........................... 0.95%
In excess of $250 million.............................. 0.90%
XXXXXX INTERNATIONAL SMALL CAP
ASSETS RATE OF FEE
First $100 million..................................... 1.30%
$100 million to $250 million........................... 1.20%
In excess of $250 million.............................. 1.10%
XXXXXX TWENTY
All Assets............................................. 0.95%
XXXXXX FOREIGN FORTY
All Assets............................................. 1.00%
8. LIMITATION OF EXPENSES OF THE FUND. The total expenses of Xxxxxx U.S. Small
Cap, Xxxxxx International Small Cap, Xxxxxx Twenty and Xxxxxx Foreign Forty
through September 29, 2002, exclusive of taxes, of interest and of extraordinary
litigation expenses, but including fees paid to Liberty WAM, as a percentage of
the Fund's net assets, shall not exceed 2.0%, 2.0%, 1.35% or 1.45% per annum,
respectively, and Liberty WAM agrees to reimburse each Fund for any sums
expended for such expenses in excess of that amount. For purposes of calculating
the expenses subject to this limitation, (i) brokers' commissions and other
charges relating to the purchase and sale of portfolio securities and (ii) the
excess custodian costs attributable to investments in foreign securities
compared to the custodian costs which would have been incurred had the
investments been in domestic securities, shall not be regarded as expenses.
Reimbursement, if any, shall be made by reduction of the fees otherwise payable
to Liberty WAM under this agreement, no less frequently than quarterly.
Notwithstanding the foregoing, the limitations on total expenses set forth above
in this Section 8 shall not apply to any class of shares of a Fund established
after the effective date of this agreement.
9. SERVICES OF LIBERTY WAM NOT EXCLUSIVE. The services of Liberty WAM to the
Funds hereunder are not to be deemed exclusive, and Liberty WAM shall be free to
render similar services to others so long as its services under this agreement
are not impaired by such other activities.
10. SERVICES OTHER THAN AS MANAGER. Liberty WAM (or an affiliate of Liberty WAM)
may act as broker for the Funds in connection with the purchase or sale of
securities by or to the Funds if and to the extent permitted by procedures
adopted from time to time by the Board of Trustees of the Trust. Such brokerage
services are not within the scope of the duties of Liberty WAM under this
agreement, and, within the limits permitted by law and the Board of Trustees of
the Trust, Liberty WAM (or an affiliate of Liberty WAM) may receive brokerage
commissions, fees or other remuneration from the Funds for such services in
addition to its fee for services under this agreement. Within the limits
permitted by law, Liberty WAM or an affiliate of Liberty WAM may receive
compensation from the Funds for other services performed by it for the Funds
which are not within the scope of the duties of Liberty WAM under this
agreement. The Trust hereby authorizes any entity or person associated with
Liberty WAM that is a member of a national securities exchange to effect any
transaction on the exchange for the account of a Fund to the extent permitted by
and in accordance with Section 11(a) of the Securities Exchange Act of 1934 and
Rule 11a2-2(T) thereunder. The Trust hereby consents to the retention by such
entity or person of compensation for such transactions in accordance with Rule
11a-2(T)(a)(iv).
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11. LIMITATION OF LIABILITY OF LIBERTY WAM. To the extent permitted by
applicable law, neither Liberty WAM nor any of its partners, officers, agents,
employees or affiliates shall be liable to the Trust or its shareholders for any
loss suffered by the Trust or its shareholders as a result of any error of
judgment, or any loss arising out of any investment, or as a consequence of any
other act or omission of Liberty WAM or any of its affiliates in the performance
of Liberty WAM's duties under this agreement, except for liability resulting
from willful misfeasance, bad faith or gross negligence on the part of Liberty
WAM or such affiliate, or by reason of reckless disregard by Liberty WAM or such
affiliate of the obligations and duties of Liberty WAM under this agreement.
12. USE OF "XXXXXX" OR "LIBERTY" NAME. The Trust may use the name "Xxxxxx
Advisors Trust" or any name using the name "Liberty" or "Xxxxxx" or any
combination or derivation of either of them only for so long as this agreement
or any extension, renewal or amendment hereof remains in effect, including any
similar agreement with any organization that shall remain affiliated with
Liberty Financial Companies, Inc. and that shall have succeeded to the business
of Liberty WAM as investment adviser. At such time as this agreement or any
extension, renewal or amendment hereof, or such similar agreement, shall no
longer be in effect, the Trust will (by amendment of its agreement and
Declaration of Trust, if necessary) cease to use any name using the name
"Liberty" or "Xxxxxx" or any combination or derivation of either of them or any
name similar thereto or any other name indicating that it is advised by or
otherwise connected with Liberty WAM or with any organization which shall have
succeeded to Liberty WAM's business as investment adviser. Liberty WAM's consent
to the use of the name "Xxxxxx" by the Trust shall not prevent Liberty WAM's
permitting any other enterprise, including other investment companies, to use
that name.
13. DURATION AND RENEWAL. This agreement shall be effective on November 1, 2001.
Unless terminated as provided in Section 14, this agreement shall continue in
effect until July 31, 2003, and thereafter from year to year only so long as
such continuance is specifically approved at least annually (a) by a majority of
those trustees who are not interested persons of the Trust or of Liberty WAM,
voting in person at a meeting called for the purpose of voting on such approval,
and (b) by either the Board of Trustees of the Trust or vote of the holders of a
majority of the outstanding shares of each Fund.
14. TERMINATION. This agreement may be terminated at any time, without payment
of any penalty, by the Board of Trustees of the Trust, or by a vote of the
holders of a majority of the outstanding shares of each Fund, upon 60 days'
written notice to Liberty WAM. This agreement may be terminated by Liberty WAM
at any time upon 60 days' written notice to the Trust. This agreement shall
terminate automatically in the event of its assignment (as defined in Section
2(a)(4) of the 1940 Act).
15. NON-LIABILITY OF TRUSTEES AND SHAREHOLDERS. A copy of the declaration of
trust of the Trust is on file with the Secretary of The Commonwealth of
Massachusetts, and notice is hereby given that this instrument is executed on
behalf of the Trust by officers of the Trust as officers and not individually.
Any obligation of the Trust hereunder shall be binding only upon the assets of
the Trust (or applicable series thereof) and shall not be binding upon any
trustee, officer, employee, agent or shareholder of the Trust. Neither the
authorization of any action by the trustees or shareholders of the Trust nor the
execution of this agreement on behalf of the Trust shall impose any liability
upon any trustee, officer or shareholder of the Trust.
16. AMENDMENT. This agreement may be amended in accordance with the 1940 Act.
17. NOTICES. Any notice, demand, change of address or other communication to be
given in connection with this agreement shall be given in writing and shall be
given by personal delivery, by registered or certified mail or by transmittal by
facsimile or other electronic medium addressed to the recipient as follows (or
at such other address or addresses as a party may provide to the other from time
to time, by notice):
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If to Liberty WAM: Liberty Xxxxxx Asset
Management, L.P.
Attention: Xxxxx X. Xxxxx
000 Xxxx Xxxxxx Xxxxxx,
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telephone: 000 000-0000
Facsimile: 000 000-0000
with a copy to:
If to Xxxxxx Advisors Trust: Xxxxxx Advisors Trust
000 Xxxx Xxxxxx Xxxxxx,
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telephone: 000 000-0000
Facsimile: 000 000-0000
with a copy to:
Xxxx, Xxxx & Xxxxx LLC
Attention: Xxxxxxx X. Xxxxx
Three First Xxxxxxxx Xxxxx,
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telephone: 312/000-0000
Facsimile: 312/372-2098
All notices shall be conclusively deemed to have been given on the day of actual
delivery thereof and, if given by registered or certified mail, on the fifth
business day following the deposit thereof in the mail and, if given by
facsimile or other electronic medium, on the day of transmittal thereof (upon
electronic confirmation of receipt thereof).
Dated as of the effective time of this agreement
XXXXXX ADVISORS TRUST LIBERTY XXXXXX ASSET
MANAGEMENT, L.P.,
By WAM Acquisition GP, Inc.
Its General Partner
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxx
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