EXHIBIT 5(A)
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NORWEST FUNDS-REGISTERED TRADEMARK-
INVESTMENT ADVISORY AGREEMENT
June 1, 1997
AGREEMENT made as of this 1st day of June, 1997, between Norwest Funds (the
"Trust"), a business trust organized under the laws of the State of Delaware
with its principal place of business at Two Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx
00000 and Norwest Investment Management, Inc. (the "Adviser"), a corporation
organized under the laws of the State of Minnesota with its principal place of
business at Xxxxx Xxxxxx xxx Xxxxxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended, (the "Act") as an open-end management investment company and is
authorized to issue interests (as defined in the Trust's Trust Instrument), in
separate series;
WHEREAS, the Trust desires that the Adviser perform investment advisory
services for each series of the Trust as listed in Appendix A hereto (each a
"Fund" and collectively the "Funds"), and the Adviser is willing to provide
those services on the terms and conditions set forth in this Agreement;
NOW THEREFORE, the Trust and the Adviser agree as follows:
SECTION 1. THE TRUST; DELIVERY OF DOCUMENTS
The Trust is engaged in the business of investing and reinvesting its
assets in securities of the type and in accordance with the limitations
specified in its Trust Instrument, By-Laws and Registration Statement filed with
the Securities and Exchange Commission (the "Commission") under the Act and the
Securities Act of 1933 (the "Securities Act"), including any representations
made in the prospectus and statement of additional information relating to the
Funds contained therein and as may be supplemented from time to time, all in
such manner and to such extent as may from time to time be authorized by the
Trust's Board of Trustees (the "Board"). The Trust is currently authorized to
issue twenty-eight series of shares, and the Board is authorized to issue any
unissued shares in any number of additional classes or series. The Trust has
delivered copies of the documents listed in this Section 1 and will from time to
time furnish Adviser with any amendments thereof.
SECTION 2. INVESTMENT ADVISER; APPOINTMENT
The Trust hereby employs Adviser, subject to the direction and control of
the Board, to manage the investment and reinvestment of the assets in the Funds
and, without limiting the generality of the foregoing, to provide other services
specified in Section 3 hereof.
SECTION 3. DUTIES OF THE ADVISER
(a) The Adviser shall make decisions with respect to all purchases and
sales of securities and other investment assets in the Funds. Among other
things, the Adviser shall make all decisions with respect to the allocation of
the Funds' investments in various securities or other assets, in investment
styles and, if applicable, in other investment companies or pooled vehicles in
which a Fund may invest. To carry out such decisions, the Adviser is hereby
authorized, as agent and attorney-in-fact for the Trust, for the account of, at
the risk of and in the name of the Trust, to place orders and issue instructions
with respect to those transactions of the Funds. In all purchases, sales and
other transactions in securities for the Funds, the Adviser is authorized to
exercise full discretion and act for the Trust in the same manner and with the
same force and effect as the Trust might or could do with respect to such
purchases, sales or other transactions, as well as with respect to all other
things necessary or incidental to the furtherance or conduct of such purchases,
sales or other transactions.
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(b) The Adviser will report to the Board at each meeting thereof all
changes in the Funds since the prior report, and will also keep the Board
informed of important developments affecting the Trust, each Fund and the
Adviser, and on its own initiative, will furnish the Board from time to time
with such information as the Adviser may believe appropriate for this purpose,
whether concerning the individual companies whose securities are included in a
Fund's holdings, the industries in which they engage, or the economic, social or
political conditions prevailing in each country in which a Fund maintains
investments. The Adviser will also furnish the Board with such statistical and
analytical information with respect to securities in the Funds as the Adviser
may believe appropriate or as the Board reasonably may request. In making
purchases and sales of securities for the Funds, the Adviser will bear in mind
the policies set from time to time by the Board as well as the limitations
imposed by the Trust's Trust Instrument, By-Laws and Registration Statement
under the Act and the Securities Act, the limitations in the Act and in the
Internal Revenue Code of 1986, as amended, in respect of regulated investment
companies and the investment objectives, policies and restrictions of each Fund.
(c) The Adviser will from time to time employ or associate with such
persons as the Adviser believes to be particularly fitted to assist in the
execution of the Adviser's duties hereunder, the cost of performance of such
duties to be borne and paid by the Adviser. No obligation may be incurred on
the Trust's behalf in any such respect.
(d) The Adviser shall maintain records relating to portfolio transactions
and the placing and allocation of brokerage orders as are required to be
maintained by the Trust under the Act. The Adviser shall prepare and maintain,
or cause to be prepared and maintained, in such form, for such periods and in
such locations as may be required by applicable law, all documents and records
relating to the services provided by the Adviser pursuant to this Agreement
required to be prepared and maintained by the Trust pursuant to the rules and
regulations of any national, state, or local government entity with jurisdiction
over the Trust, including the Commission and the Internal Revenue Service. The
books and records pertaining to the Trust which are in possession of the Adviser
shall be the property of the Trust. The Trust, or the Trust's authorized
representatives, shall have access to such books and records at all times during
the Adviser's normal business hours. Upon the reasonable request of the Trust,
copies of any such books and records shall be provided promptly by the Adviser
to the Trust or the Trust's authorized representatives.
(e) With respect to a Fund, the Adviser shall have no duties or
obligations pursuant to this Agreement, including any obligation to reimburse
Fund expenses pursuant to Section 4 hereof, during any period during which the
Fund invests all (or substantially all) of its investment assets in a
registered, open-end management investment company, or separate series thereof,
in accordance with Section 12(d)(1)(E) under the Act.
SECTION 4. EXPENSES
(a) The Adviser shall be responsible for that portion of the net expenses
of the Fund (except interest, taxes, brokerage, fees and other expenses paid by
the fund in accordance with an effective plan pursuant to Rule 12b-1 under the
Act and organization expenses, all to the extent such exceptions are permitted
by applicable state law and regulation) incurred by the Fund during the Fund's
fiscal year or portion thereof that this Agreement is in effect which, as to the
Funds, in any such year exceeds the limits applicable to the Fund under the laws
or regulations of any state in which shares of the Fund are qualified for sale
(reduced pro rata for any portion of less than a year) and which is not assumed
by Forum Financial Services, Inc., the Trust's manager and distributor, or any
other person.
(b) The Trust hereby confirms that, subject to the foregoing, the Trust
shall be responsible and shall assume the obligation for payment of all the
Trust's other expenses, including: interest charges, taxes, brokerage fees and
commissions; certain insurance premiums; fees, interest charges and expenses of
the Trust's custodian, transfer agent and dividend disbursing agent;
telecommunications expenses; auditing, legal and compliance expenses; costs of
the Trust's formation and maintaining its existence; costs of preparing and
printing the Trust's prospectuses, statements of additional information, account
application forms and shareholder reports and delivering them to existing and
prospective shareholders; costs of maintaining books of original entry for
portfolio and fund accounting and other required books and accounts and of
calculating the net asset value of shares in the Trust; costs
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of reproduction, stationery and supplies; compensation of the Trust's trustees,
officers, employees and other personnel performing services for the Trust who
are not the Adviser's employees or employees of Forum Financial Services, Inc.
or affiliated persons of either; costs of corporate meetings; registration fees
and related expenses for registration with the Commission and the securities
regulatory authorities of other countries in which the Trust's shares are sold;
state securities law registration fees and related expenses; fees and out-of-
pocket expenses payable to Forum Financial Services, Inc. under any
distribution, management or similar agreement; and all other fees and expenses
paid by the Trust pursuant to any distribution or shareholder service plan
adopted pursuant to Rule 12b-1 under the Act.
SECTION 5. STANDARD OF CARE
The Trust shall expect of the Adviser, and the Adviser will give the Trust
the benefit of, the Adviser's best judgment and efforts in rendering its
services to the Trust, and as an inducement to the Adviser's undertaking these
services the Adviser shall not be liable hereunder for any mistake of judgment
or in any event whatsoever, except for lack of good faith, provided that nothing
herein shall be deemed to protect, or purport to protect, the Adviser against
any liability to the Trust or to the Trust's security holders to which the
Adviser would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of the Adviser's duties hereunder, or by
reason of the Adviser's reckless disregard of its obligations and duties
hereunder.
SECTION 6. COMPENSATION
In consideration of the foregoing, the Trust shall pay the Adviser, with
respect to each of the Funds, a fee at an annual rate as listed in Appendix A
hereto. Such fees shall be accrued by the Trust daily and shall be payable
monthly in arrears on the first day of each calendar month for services
performed hereunder during the prior calendar month. The Adviser's
reimbursement, if any, of a Fund's expenses as provided in Section 4 hereof,
shall be estimated and paid to the Trust monthly in arrears, at the same time as
the Trust's payment to the Adviser for such month. Payment of the advisory fee
will be reduced or postponed, if necessary, with any adjustments made after the
end of the year.
SECTION 7. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to a Fund
immediately upon approval by a majority of the outstanding voting securities of
that Fund.
(b) This Agreement shall remain in effect with respect to a Fund for a
period of one year from the date of its effectiveness and shall continue in
effect for successive twelve-month periods (computed from each anniversary date
of the approval) with respect to the Fund; provided that such continuance is
specifically approved at least annually (i) by the Board or by the vote of a
majority of the outstanding voting securities of the Fund, and, in either case,
(ii) by a majority of the Trust's trustees who are not parties to this Agreement
or interested persons of any such party (other than as trustees of the Trust);
provided further, however, that if this Agreement or the continuation of this
Agreement is not approved as to a Fund, the Adviser may continue to render to
that Fund the services described herein in the manner and to the extent
permitted by the Act and the rules and regulations thereunder.
(c) This Agreement may be terminated with respect to a Fund at any time,
without the payment of any penalty, (i) by the Board or by a vote of a majority
of the outstanding voting securities of the Fund on 60 days' written notice to
the Adviser or (ii) by the Adviser on 60 days' written notice to the Trust.
This agreement shall terminate upon assignment.
SECTION 8. ACTIVITIES OF THE ADVISER
Except to the extent necessary to perform its obligations hereunder,
nothing herein shall be deemed to limit or restrict the Adviser's right, or the
right of any of the Adviser's officers, directors or employees who may also be a
trustee, officer or employee of the Trust, or persons otherwise affiliated
persons of the Trust to engage in any other
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business or to devote time and attention to the management or other aspects of
any other business, whether of a similar or dissimilar nature, or to render
services of any kind to any other corporation, trust, firm, individual or
association.
SECTION 9. SUBADVISERS
At its own expense, the Adviser may carry out any of its obligations under
this agreement by employing, subject to your supervision, one or more persons
who are registered as investment advisers pursuant to the Investment Advisers
Act of 1940, as amended, or who are exempt from registration thereunder
("Subadvisers"). Each Subadviser's employment will be evidenced by a separate
written agreement approved by the Board and, if required, by the shareholders of
the Fund. The Adviser shall not be liable hereunder for any act or omission of
any Subadviser, except to exercise good faith in the employment of the
Subadviser and except with respect to matters as to which the Adviser assumes
responsibility in writing.
SECTION 10. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY
The Trustees of the Trust and the interest holders of the Fund shall not be
liable for any obligations of the Trust or of the Fund under this Agreement, and
the Adviser agrees that, in asserting any rights or claims under this Agreement,
it shall look only to the assets and property of the Trust or the Fund to which
the Adviser's rights or claims relate in settlement of such rights or claims,
and not to the Trustees of the Trust or the interest holders of the Fund.
SECTION 11. "NORWEST" NAME
If the Adviser ceases to act as investment adviser to the Trust or any Fund
whose name includes the word "Norwest," or if the Adviser requests in writing,
the Trust shall take prompt action to change the name of the Trust any such Fund
to a name that does not include the word "Norwest." The Adviser may from time
to time make available without charge to the Trust for the Trust's use any marks
or symbols owned by the adviser, including marks or symbols containing the word
"Norwest" or any variation thereof, as the Adviser deems appropriate. Upon the
Adviser's request in writing, the Trust shall cease to use any such xxxx or
symbol at any time. The Trust acknowledges that any rights in or to the word
"Norwest" and any such marks or symbols which may exist on the date of this
Agreement or arise hereafter are, and under any and all circumstances shall
continue to be, the sole property of the Adviser. The Adviser may permit other
parties, including other investment companies, to use the word "Norwest" in
their names without the consent of the Trust. The Trust shall not use the word
"Norwest" in conducting any business other than that of an investment company
registered under the Act without the permission of the Adviser.
SECTION 12. MISCELLANEOUS
(a) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto and, if required by the Act, by a vote of a majority of the
outstanding voting securities of any Fund thereby affected. No amendment to
this Agreement or the termination of this Agreement with respect to a Fund shall
effect this Agreement as it pertains to any other Fund, nor shall any such
amendment require the vote of any of the Fund's shareholders.
(b) Section headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(c) This Agreement shall be governed by and shall be construed in
accordance with the laws of the State of Delaware.
(d) The terms "vote of a majority of the outstanding voting securities,"
"interested person," "affiliated person" and "assignment" shall have the
meanings ascribed thereto in the Act.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
NORWEST FUNDS
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Xxxxxx X. Xxxxxxxxx
Trustee
NORWEST INVESTMENT MANAGEMENT, INC.
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P. Xxx Xxxxxxxxxx
Executive Vice President
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APPENDIX C
NORWEST FUNDS
INVESTMENT ADVISORY AGREEMENT
APPENDIX A
(a) INVESTMENT ADVISORY FEES
Fee as a % of the Annual
Funds of the Trust Average Daily Net Assets of the Fund
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Cash Investment Fund,
Treasury Fund and
U.S. Government Fund 0.20% of the first $300 million of assets
0.16% for next $400 million of assets
0.12% of the remaining net assets
Ready Cash Investment Fund 0.40% of the first $300 million of assets
0.36% for next $400 million of assets
0.32% of the remaining net assets
Municipal Money Market Fund 0.35% of the first $500 million of assets
0.325% for next $500 million of assets
0.30% of the remaining net assets
Stable Income Fund 0.30%
Intermediate Government
Income Fund 0.33%
Diversified Bond Fund 0.35%
Income Fund 0.50%
Total Return Bond Fund 0.50%
Limited Term Tax-Free Fund, 0.50%
Minnesota Tax-Free Fund and
Colorado Tax-Free Fund 0.50% of the first $300 million of assets
0.46% of next $400 million of assets
0.42% of the remaining net assets
Tax-Free Income Fund 0.50%
Conservative Balanced Fund 0.45%
Moderate Balanced Fund 0.53%
Growth Balanced Fund 0.58%
Index Fund 0.15%
Income Equity Fund 0.50%
Fee as a % of the Annual
Funds of the Trust Average Daily Net Assets of the Fund
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ValuGrowth Stock Fund 0.80% of the first $300 million of assets
0.76% of the next $400 million of assets
0.72% of the remaining net assets
Diversified Equity Fund 0.65%
Growth Equity Fund 0.90%
Large Company Growth Fund 0.65%
Small Company Stock Fund 0.90%
Small Company Growth Fund 0.90%
Small Cap Opportunities Fund 0.925%
Contrarian Stock Fund 0.80% of the first $300 million of assets
0.76% of the next $400 million of assets
0.72% of the remaining net assets
International Fund 0.85%
(b) SECTION 12(d)(1)(E) ("MASTER-FEEDER") STRUCTURES
No fee shall be payable hereunder with respect to a Fund during any period in
which the Fund invests all (or substantially all) of its investment assets in a
registered, open-end, management investment company, or separate series thereof,
in accordance with and reliance upon Section 12(d)(1)(E) under the Act.
(c) FUND OF FUNDS STRUCTURES
The fee payable hereunder with respect to a Fund shall be 0.25% (0.00% in the
case of Cash Investment Fund) of the annual average daily net assets of the Fund
during any period in which the Fund invests (i) some or all of its investment
assets in two or more registered, open-end management investment companies, or
separate series thereof, or (ii) some of its investment assets in a registered,
open-end management investment company, or separate series thereof, in each
case, in accordance with Section 12(d)(1)(H) under the Act, the rules thereunder
or an exemptive order issued by the Commission exempting the Fund from the
provisions of Section 12(d)(1)(A) under the Act (a "Fund of Funds structure").
In addition to the fee payable under the preceding paragraph, to the extent a
Fund invests in a Fund of Funds structure and invests a portion of the Fund's
assets directly in portfolio securities or other assets, the fee payable
hereunder with respect to that portion of the Fund's assets invested directly in
portfolio securities or other assets shall be the fee as stated in paragraph (a)
of this Appendix A.
