INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT is dated as of the 19th
day of December 2011 between Curian Variable Series Trust, a Massachusetts
business trust, (the "Trust") and Curian Capital, LLC, a Michigan limited
liability company (the "Adviser").
WHEREAS, the Trust is authorized to issue separate funds, each fund having
its own investment objective or objectives, policies and limitations;
WHEREAS, the Trust on behalf of its investment funds listed on Schedule A
hereto (each, a "Fund") desires to retain Adviser to perform investment advisory
services, on the terms and conditions set forth herein; and
WHEREAS, the Adviser agrees to serve as the investment adviser and
business manager for the Funds on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the mutual covenants contained herein
and for other good and valuable consideration, the Trust and the Adviser agree
as follows:
1. APPOINTMENT
-----------
The Trust hereby appoints the Adviser to provide certain investment
advisory services to the Funds for the period 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.
In the event the Trust designates one or more Funds other than the Funds
with respect to which the Trust wishes to retain the Adviser to render
investment advisory services hereunder, it shall notify the Adviser in writing.
If the Adviser is willing to render such services, it shall so notify the Trust
in writing, whereupon such Funds shall become a Fund hereunder, and be subject
to this Agreement.
2. DUTIES
------
The Adviser shall manage the affairs and oversee the investments of the
Trust, including but not limited to, continuously providing the Trust with
investment advice and business management, including investment research, advice
and supervision, determining which securities shall be purchased or sold by each
Fund, effecting purchases and sales of securities on behalf of each Fund (and
determining how voting and other rights with respect to securities owned by each
Fund shall be exercised). The management of the Funds by the Adviser shall be
subject to the control of the Board of Trustees of the Trust (the "Trustees")
and in accordance with the objectives, policies and principles for each Fund set
forth in the Trust's Registration Statement and its current Prospectus and
Statement of Additional Information, as amended from time to time, the
requirements of the Investment Company Act of 1940, as amended (the "Act") and
other applicable law, as well as to the factors affecting the Trust's status as
a regulated investment company under the Internal Revenue Code of 1986, as
amended, (the "Code") and the regulations thereunder and the status of variable
contracts under the diversification requirements set forth in Section 817(h) of
the Code and the regulations thereunder. In performing such duties, the Adviser
shall (i) provide such office space, bookkeeping, accounting, clerical,
secretarial, and administrative services (exclusive of, and in addition to, any
such service provided by any others retained by the Trust or any of its Funds)
and such executive and
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other personnel as shall be necessary for the operations of each Fund, (ii) be
responsible for the financial and accounting records required to be maintained
by each Fund (including those maintained by the Trust's custodian), and (iii)
oversee the performance of services provided to each Fund by others, including
the custodian, transfer agent, shareholder servicing agent and sub-adviser, if
any. The Trust acknowledges that the Adviser may also act as the investment
adviser of other investment companies.
With respect to any money market funds listed on Schedule A, the Adviser
hereby accepts the responsibilities for making the determinations required by
Rule 2a-7 under the Act and which are delegable by the Trustees pursuant to
Paragraph (e) of such Rule, to the extent that the Trustees may hereinafter
delegate such responsibilities to the Adviser.
The Adviser may delegate certain of its duties under this Agreement with
respect to a Fund to a sub-adviser or sub-advisers, subject to the approval of
the Trustees, by entering into sub-advisory agreements (the "Sub-Advisory
Agreements") with one or more sub-advisers. The Adviser is solely responsible
for payment of any fees or other charges arising from such delegation and the
Trust shall have no liability therefor. The Adviser shall be responsible for
overseeing the performance of the sub-advisers and recommending changes in
sub-advisers if appropriate. Consistent with the provisions of the Act and any
applicable exemption thereto, the Trust may enter into Sub-Advisory Agreements
or amend Sub-Advisory Agreements without the approval of the shareholders of the
affected Fund.
3. EXPENSES
--------
The Adviser shall pay all of its expenses arising from the performance of
its obligations under this Agreement and shall pay any salaries, fees and
expenses of the Trustees and any officers of the Trust who are employees of the
Adviser. The Adviser shall not be required to pay any other expenses of the
Trust pursuant to this Agreement (although the Adviser may bear certain of these
expenses under one or more other agreements). The Adviser shall not be required
to pay any other expenses of the Trust, including, but not limited to direct
charges relating to the purchase and sale of Fund securities, interest charges,
fees and expenses of independent attorneys and auditors, taxes and governmental
fees, cost of stock certificates and any other expenses (including clerical
expenses) of issue, sale, repurchase or redemption of shares, expenses of
registering and qualifying shares for sale, expenses of printing and
distributing reports and notices to shareholders, expenses of data processing
and related services, shareholder recordkeeping and shareholder account service,
expenses of printing and filing reports and other documents filed with
governmental agencies, expenses of printing and distributing Prospectuses, fees
and disbursements of transfer agents and custodians, expenses of disbursing
dividends and distributions, fees and expenses of Trustees who are not employees
of the Adviser or its affiliates, membership dues in the investment company
trade association, insurance premiums and extraordinary expenses such as
litigation expenses.
4. COMPENSATION
------------
As compensation for services performed and the facilities and personnel
provided by the Adviser under this Agreement, the Trust will pay to the Adviser,
a fee, accrued daily and payable monthly on the average daily net assets in the
Funds, in accordance with Schedule B.
Upon any termination of this Agreement on a day other than the last day of
the month, the fee for the period from the beginning of the month in which
termination occurs to the date of termination shall be prorated according to the
proportion which such period bears to the full month.
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Nothing herein shall prohibit the Trustees from approving the payment by
the Trust of additional compensation to others for consulting services,
supplemental research and security, and economic analysis.
5. PURCHASE AND SALE OF SECURITIES
-------------------------------
The Adviser shall purchase securities from or through and sell securities
to or through such persons, brokers or dealers (including affiliated brokers or
dealers) as the Adviser shall deem appropriate to carry out the policies with
respect to Fund transactions as set forth in the Trust's Registration Statement
and its current Prospectus or Statement of Additional Information, as amended
from time to time, or as the Trustees may direct from time to time.
For any Funds that are subject to Sub-Advisory Agreements, in accordance
with the Sub-Advisory Agreements, each sub-adviser is responsible for decisions
to buy and sell securities for each Fund, broker-dealer selection, and
negotiation of brokerage commission rates. Each sub-adviser shall have the
express authority to negotiate, open, continue and terminate brokerage accounts
and other brokerage arrangements with respect to all portfolio transactions
entered into by sub-adviser on behalf of the Funds. Each sub-adviser will
provide copies of all such agreements to the Adviser. It is the sub-adviser's
general policy in selecting a broker to effect a particular transaction to seek
to obtain "best execution," which means prompt and efficient execution of the
transaction at the best obtainable price with payment of commissions which are
reasonable in relation to the value of the brokerage services provided by the
broker.
Consistent with this policy, each sub-adviser, in selecting broker-dealers
and negotiating commission rates, will take all relevant factors into
consideration, including, but not limited to: the best price available; the
reliability, integrity and financial condition of the broker-dealer; the size of
and difficulty in executing the order; and the value of the expected
contribution of the broker-dealer to the investment performance of the
applicable Fund on a continuing basis. Subject to such policies and procedures
as the Board of Trustees may determine, the sub-adviser shall have discretion to
effect investment transactions for each Fund through broker-dealers (including,
to the extent permissible under applicable law, broker-dealer affiliates) who
provide brokerage and/or research services, as such services are defined in
Section 28(e) of the Securities Exchange Act of 1934, as amended (the "1934
Act"), and as interpreted by the SEC, and to cause such Fund to pay any such
broker-dealers an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker-dealer would
have charged for effecting that transaction, if the sub-adviser determines in
good faith that such amount of commission is reasonable in relation to the value
of the brokerage or research services provided by such broker-dealer, viewed in
terms of either that particular investment transaction or the sub-adviser's
overall responsibilities with respect to such Fund and other accounts to which
the sub-adviser exercises investment discretion (as such term is defined in
Section 3(a)(35) of the 1934 Act). Allocation of orders placed by the
sub-adviser on behalf of a Fund to such broker-dealers shall be in such amounts
and proportions as the sub-adviser shall determine in good faith in conformity
with its responsibilities under applicable laws, rules and regulations. The
sub-adviser will submit reports on such allocations to the Adviser as reasonably
requested by the Adviser, in such form as may be mutually agreed to by the
parties hereto, indicating the broker-dealers to whom such allocations have been
made and the basis therefor.
6. TERM OF AGREEMENT
-----------------
This Agreement will become effective as to a Fund upon execution or, if later,
the date that initial capital for such Fund is first provided to it. If approved
by the affirmative vote of a
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majority of the outstanding voting securities (as defined by the Act) of a Fund
with respect to such Fund, voting separately from any other Fund of the Trust,
this Agreement shall continue in full force and effect with respect to such Fund
for two years from the date thereof and thereafter from year to year, PROVIDED
such continuance is approved at least annually (i) by the Trustees by vote cast
in person at a meeting called for the purpose of voting on such renewal, or by
the vote of a majority of the outstanding voting securities (as defined by the
Act) of such Fund with respect to which renewal is to be effected, and (ii) by a
majority of the Trustees who are not parties to this Agreement nor "interested
persons" (as such term is defined in Section 2(a)(19) of the Act) of such
parties ( the Non-Interested Trustees") by a vote cast in person at a meeting
called for the purpose of voting on such renewal. Any approval of this Agreement
or the renewal thereof with respect to a Fund by the vote of a majority of the
outstanding voting securities of that Fund, or by the Trustees which shall
include a majority of the Non-Interested Trustees, shall be effective to
continue this Agreement with respect to that Fund notwithstanding (a) that this
Agreement or the renewal thereof has not been so approved as to any other Fund,
or (b) that this Agreement or the renewal thereof has not been so approved by
the vote of a majority of the outstanding voting securities of the Trust as a
whole.
7. TERMINATION
-----------
This Agreement may be terminated at any time as to a Fund, without payment
of any penalty, by the Trustees or by the vote of a majority of the outstanding
voting securities (as defined in the Act) of such Fund on sixty (60) days'
written notice to the Adviser. Similarly, the Adviser may terminate this
Agreement without penalty on like notice to the Trust provided, however, that
this Agreement may not be terminated by the Adviser unless another investment
advisory agreement has been approved by the Trust in accordance with the Act, or
after six months' written notice, whichever is earlier. This Agreement shall
automatically terminate in the event of its assignment (as defined in the Act).
Section 10 herein shall survive the termination of this Agreement.
8. REPORTS
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The Adviser shall report to the Trustees, or to any committee or officers
of the Trust acting pursuant to the authority of the Trustees, at such times and
in such detail as shall be reasonable and as the Trustees may deem appropriate
in order to enable the Trustees to determine that the investment policies of
each Fund are being observed and implemented and that the obligations of the
Adviser under this Agreement are being fulfilled. Any investment program
undertaken by the Adviser pursuant to this Agreement and any other activities
undertaken by the Adviser on behalf of the Trust shall at all times be subject
to any directives of the Trustees or any duly constituted committee or officer
of the Trust acting pursuant to the authority of the Trustees.
The Adviser shall furnish all such information as may reasonably be
necessary for the Trustees to evaluate the terms of this Agreement.
9. RECORDS
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The Adviser will maintain such records and ledgers as are required to be
maintained by an investment adviser to a registered investment company under
Rule 31a-2 of the Act for each Fund and will preserve such records in the form
and for the period prescribed such Rule. The Adviser and Trust agree and
understand that other records required to be maintained by the Trust under such
Rule will be maintained by the Administrator to the Trust pursuant to a separate
agreement.
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The Adviser and the Trust agree that all accounts, books and other records
maintained and preserved by each as required hereby shall be subject at any
time, and from time to time, to such reasonable periodic, special and other
examinations by the Securities and Exchange Commission, the Trust's auditors,
the Trust or any representative of the Trust, or any governmental agency or
other instrumentality having regulatory authority over the Trust. It is
expressly understood and agreed that the books and records maintained by the
Adviser on behalf of each Fund shall, at all times, remain the property of the
Trust.
10. LIABILITY AND INDEMNIFICATION
-----------------------------
Adviser, its officers, directors, employees, agents or affiliates will not
be subject to any liability to Trust or its trustees, officers, employees,
agents or affiliates for any error of judgment or mistake of law or for any loss
suffered by the Trust, any shareholder of the Trust, either in connection with
the performance of Adviser's duties under this Agreement or its failure to
perform due to events beyond the reasonable control of the Adviser or its
agents, except for a loss resulting from Adviser's willful misfeasance, or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement.
11. MISCELLANEOUS
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Anything herein to the contrary notwithstanding, this Agreement shall not
be construed to require, or to impose any duty upon either of the parties, to do
anything in violation of any applicable laws or regulations.
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 Trustees as Trustees, and is not
binding upon any of the Trustees, officers, or shareholders of the Trust
individually but binding only upon the assets and property of the Trust. With
respect to any claim by the Adviser for recovery of that portion of the
investment management fee (or any other liability of the Trust arising
hereunder) allocated to a particular Fund, whether in accordance with the
express terms hereof or otherwise, the Adviser shall have recourse solely
against the assets of that Fund to satisfy such claim and shall have no recourse
against the assets of any other Fund for such purpose.
Each Fund hereby agrees that if the Adviser shall at any time for any
reason cease to serve as Adviser to a Fund, such Fund shall, if and when
requested by the Adviser, thereafter refrain from using the name "Curian
Capital, LLC" or the name "Curian" in connection with its business or
activities, and the foregoing agreement of each Fund shall survive any
termination of this Agreement and any extension or renewal thereof.
IN WITNESS WHEREOF, the Trust and the Adviser have caused this Agreement
to be executed by their duly authorized officers as of the date first above
written.
CURIAN VARIABLE SERIES TRUST CURIAN CAPITAL, LLC
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxx
--------------------------- ----------------------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxxxxx X. Xxxx
------------------------ -------------------------------------
Title: Assistant Secretary Title: President and Chief Executive Officer
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SCHEDULE A
DECEMBER 19, 2011
(Funds)
Curian Guidance - Maximize Income Fund
Curian Guidance - Balanced Income Fund
Curian Guidance - Rising Income Fund
Curian Guidance - Moderate Growth Fund
Curian Guidance - Maximum Growth Fund
Curian Guidance - Tactical Moderate Growth Fund
Curian Guidance - Tactical Maximum Growth Fund
Curian Guidance - Institutional Alt 65 Fund
Curian Guidance - Institutional Alt 100 Fund
Curian Tactical Advantage 35 Fund
Curian Tactical Advantage 60 Fund
Curian Tactical Advantage 75 Fund
Curian Dynamic Risk Advantage - Diversified Fund
Curian Dynamic Risk Advantage - Aggressive Fund
Curian Dynamic Risk Advantage - Income Fund
Curian/American Funds(R) Growth Fund
Curian/AQR Risk Parity Fund
Curian/Epoch Global Shareholder Yield Fund
Curian/FAMCO Flex Core Covered Call Fund
Curian/Franklin Xxxxxxxxx Natural Resources Fund
Curian/Invesco Balanced-Risk Commodities Fund
Curian/Xxxxxxxx Convertible Arbitrage Fund
Curian/PIMCO Income Fund
Curian/PineBridge Merger Arbitrage Fund
Curian/The Boston Company Equity Income Fund
Curian/The Boston Company Multi-Alpha Market Neutral Equity Fund
A-1
SCHEDULE B
DECEMBER 19, 2011
(Compensation)
FUND ASSETS ADVISORY FEE
---- ---------------- ------------------
(Annual Rate Based
on Average Net
Assets of each
Fund)
Curian Guidance - Maximize Income Fund All Assets .20%
Curian Guidance - Balanced Income Fund All Assets .20%
Curian Guidance - Rising Income Fund All Assets .20%
Curian Guidance - Moderate Growth Fund All Assets .20%
Curian Guidance - Maximum Growth Fund All Assets .20%
Curian Guidance - Tactical Moderate Growth Fund All Assets .20%
Curian Guidance - Tactical Maximum Growth Fund All Assets .20%
Curian Guidance - Institutional Alt 65 Fund All Assets .20%
Curian Guidance - Institutional Alt 100 Fund All Assets .20%
Curian Tactical Advantage 35 Fund $0 to $1 billion .75%
Over $1 billion .70%
Curian Tactical Advantage 60 Fund $0 to $1 billion .75%
Over $1 billion .70%
Curian Tactical Advantage 75 Fund $0 to $1 billion .75%
Over $1 billion .70%
Curian Dynamic Risk Advantage - Diversified Fund $0 to $1 billion .95%
Over $1 billion .90%
Curian Dynamic Risk Advantage - Aggressive Fund $0 to $1 billion .95%
Over $1 billion .90%
Curian Dynamic Risk Advantage - Income Fund $0 to $1 billion .95%
Over $1 billion .90%
Curian/American Funds(R) Growth Fund $0 to $1 billion .85%
Over $1 billion .80%
Curian/AQR Risk Parity Fund $0 to $1 billion .85%
Over $1 billion .80%
Curian/Epoch Global Shareholder Yield Fund $0 to $1 billion .70%
Over $1 billion .65%
Curian/FAMCO Covered Call Fund $0 to $1 billion .60%
Over $1 billion .55%
Curian/Franklin Xxxxxxxxx Natural Resources Fund $0 to $1 billion .80%
Over $1 billion .75%
Curian/Invesco Balanced-Risk Commodities Fund $0 to $1 billion .75%
Over $1 billion .70%
Curian/Xxxxxxxx Convertible Arbitrage Fund $0 to $1 billion .85%
Over $1 billion .80%
Curian/PIMCO Credit Income Fund $0 to $1 billion .50%
Over $1 billion .45%
Curian/PineBridge Merger Arbitrage Fund $0 to $1 billion .85%
Over $1 billion .80%
B-1
FUND ASSETS ADVISORY FEE
---- ---------------- ------------------
(Annual Rate Based
on Average Net
Assets of each
Fund)
Curian/The Boston Company Equity Income Fund $0 to $1 billion .55%
Over $1 billion .50%
Curian/The Boston Company Multi-Alpha Market Neutral Equity Fund $0 to $1 billion .90%
Over $1 billion .85%
B-2
