EXHIBIT d(ii)
RS INVESTMENT TRUST
INVESTMENT ADVISORY AGREEMENT
This INVESTMENT ADVISORY AGREEMENT ("Agreement") made as of the 26th day of
February, 1999, by and between RS INVESTMENT TRUST, a business trust organized
and existing under the laws of The Commonwealth of Massachusetts (the "Trust"),
on behalf of each of its series of shares of beneficial interest named on
Schedule 1 to this Agreement, as it may be amended by the parties from time to
time (each, a "Fund"), and RS INVESTMENT MANAGEMENT, INC. (the "Adviser")
WITNESSETH:
WHEREAS, the Trust is an open-end, management investment company,
registered as such under the Investment Company Act of 1940, as amended (the
"Act"); and
WHEREAS, the Trust desires to retain the Adviser to render advice and
services to the Trust and each Fund pursuant to the terms and provisions of this
Agreement, and the Adviser is interested in furnishing said advice and services;
NOW, THEREFORE, in consideration of the covenants and the mutual promises
hereinafter set forth, the parties hereto mutually agree as follows:
1. EMPLOYMENT OF ADVISER. (a) The Trust hereby employs the Adviser, and
the Adviser hereby accepts such employment, to render investment advice and
investment management services with respect to the assets of each Fund,
consistent with the investment objective and policies of such Fund and subject
to the supervision and direction of the Trust's Board of Trustees. The Adviser
shall, except as otherwise provided for herein, as part of its duties hereunder,
(i) furnish the Trust with investment advice, research, and recommendations with
respect to the investment of each Fund's assets and the purchase and sale of its
portfolio securities, including the taking of such other steps as may be
necessary to implement such advice and recommendations, (ii) furnish the Trust
and each Fund with reports, statements, and other data on securities, economic
conditions, and other pertinent subjects in respect of the investment management
of each Fund which the Trust's Board of Trustees may request, and (iii) in
general superintend and manage the investments of each Fund, subject to the
ultimate supervision and direction of the Trust's Board of Trustees. In
addition, in respect of each Fund designated as an "Administrative Fund" on
Schedule 1 to this Agreement, the Adviser shall, except as otherwise provided
for herein, render or make available all administrative services needed for the
management and operation of the Fund, and shall furnish such office space and
personnel as are needed by the Fund.
(b) The Adviser shall determine the securities to be purchased or sold by
each Fund and will place orders pursuant to its determinations with or through
such persons, brokers, or dealers in conformity with the policy with respect to
brokerage as set forth in the Trust's Registration Statement and each Fund's
Prospectus and Statement of Additional Information or as the Trustees may direct
from time to time.
2. SUB-ADVISERS AND CONSULTANTS. The Adviser may from time to time, in its
discretion, delegate certain of its responsibilities under this Agreement in
respect of any Fund to one or more qualified companies, each of which is
registered under the Investment Advisers Act of 1940, as amended, provided that
the separate costs of employing such companies and of the companies themselves
are borne by the Adviser and not by the Fund in question.
3. ADVISER IS INDEPENDENT CONTRACTOR. The Adviser shall, for all purposes
herein, be deemed to be an independent contractor, and shall, unless otherwise
expressly provided and authorized, have no authority to act for or represent the
Trust or any Fund in any way, or in any way be deemed an agent for the Trust or
any Fund. It is expressly understood and agreed that the services to be rendered
by the Adviser to the Trust and each Fund under the provisions of this Agreement
are not to be deemed exclusive, and the Adviser shall be free to render similar
or different services to others so long as its ability to render the services
provided for in this Agreement shall not be impaired thereby.
4. RESPONSIBILITIES AND PERSONNEL OF ADVISER. The Adviser agrees to use
its best efforts in the furnishing of investment advice, research, and
recommendations to each Fund, in the preparation of reports and information, and
in the management of each Fund's assets, all pursuant to this Agreement, and for
this purpose the Adviser shall, at its own expense, maintain such staff and
employ or retain such personnel and consult with such other persons as it shall
from time to time determine to be necessary to the performance of its
obligations under this Agreement. Without limiting the generality of the
foregoing, the staff and personnel of the Adviser shall be deemed to include
persons employed or retained by the Adviser to furnish statistical, research,
and other factual information, advice regarding economic factors and trends,
information with respect to technical and scientific developments, and such
other information, advice, and assistance as the Adviser may desire and request.
5. FURNISHING OF STATEMENTS AND REPORTS. The Trust shall from time to time
furnish to the Adviser detailed statements of the portfolio investments and
assets of each Fund and information as to each Fund's investment objectives and
needs, and shall make available to the Adviser such financial reports, business
descriptions and plans, proxy statements, legal information, and other
information relating to its investments as may be in the possession of the Trust
or available to it and such other information as the Adviser may reasonably
request.
6. EXPENSES OF EACH PARTY. (a) The Adviser shall bear all expenses in
connection with the performance of its services under this Agreement. The
Adviser shall also pay (i) all compensation, if any, to the executive officers
of the Trust and their related expenses and (ii) all compensation, if any, and
out-of-pocket expenses of the Trust's Trustees, who are "interested persons" of
the Trust (as defined in the Act).
(b) The Trust shall bear all expenses of each Fund's organization,
operations, and business not specifically assumed or agreed to be paid by the
Adviser as provided in this Agreement. In particular, but without limiting the
generality of the foregoing, the Trust on behalf of each Fund and out of such
Fund's assets shall pay:
(A) CUSTODY AND ACCOUNTING SERVICES. All expenses of the transfer,
receipt, safekeeping, servicing, and accounting for the cash, securities,
and other property of the Fund, including all charges of depositories,
custodians, and other agents, if any;
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(B) SHAREHOLDER SERVICING. All expenses of maintaining and servicing
shareholder accounts, including all charges for transfer, shareholder
recordkeeping, dividend disbursing, redemption, and other agents for the
benefit of the Fund;
(C) BOOKS AND RECORDS. All costs and expenses associated with the
maintenance of the Fund's books of account and records as required by the
Act;
(D) SHAREHOLDER MEETINGS. All fees and expenses incidental to holding
meetings of shareholders, including the printing of notices and proxy
material, and proxy solicitation therefor, provided that the Adviser shall
be responsible for and assume all expenses and fees with respect to
meetings of the Fund's shareholders held solely for the benefit of the
Adviser;
(E) PROSPECTUSES AND STATEMENTS OF ADDITIONAL INFORMATION. All
expenses of preparing and printing of annual or more frequent revisions of
the Prospectus and Statement of Additional Information relating to the
offering of the Fund's shares and of mailing them to shareholders;
(F) PRICING. All expenses of computing the Fund's net asset values per
share, including the cost of any equipment or services used for obtaining
price quotations;
(G) COMMUNICATION EQUIPMENT. All charges for equipment or services
used for communication between the Adviser or the Trust and the custodian,
transfer agent, or any other agent selected by the Trust;
(H) LEGAL AND ACCOUNTING FEES AND EXPENSES. All charges for services
and expenses of the Trust's legal counsel and independent auditors for the
benefit of the Trust;
(I) TRUSTEES' FEES AND EXPENSES. All compensation of Trustees, other
than those who are interested persons of or affiliated with the Adviser,
and all expenses incurred in connection with their service and meetings;
(J) FEDERAL REGISTRATION FEES. All fees and expenses of registering
and maintaining the registration of the Trust under the Act and the
registration of Fund shares under the Securities Act of 1933, as amended
(the "1933 Act"), including all fees and expenses incurred in connection
with the preparation, printing, and filing of any registration statement,
Prospectus, and Statement of Additional Information under the 1933 Act or
the Act, and any amendments or supplements thereto that may be made from
time to time;
(K) STATE REGISTRATION FEES. All fees and expenses (including the
compensation of personnel who may be employed by the Adviser or an
affiliate) of qualifying and maintaining qualification of the Trust and of
the Fund shares for sale under securities laws of various states or
jurisdictions, and of registration and qualification of the Trust under all
other laws applicable to the Trust or its business activities (including
registering the Trust as a broker-dealer, or any officer of the Trust or
any person as agent or salesman of the Trust in any state);
(L) ISSUE AND REDEMPTION OF TRUST SHARES. All expenses incurred in
connection with the issue, redemption, and transfer of Fund shares,
including the expense of confirming all Fund share transactions, and of
preparing and transmitting the Fund's share certificates;
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(M) BONDING AND INSURANCE. All expenses of bond, liability, and other
insurance coverage required by law or deemed advisable by the Board of
Trustees;
(N) BROKERAGE COMMISSIONS. All brokerage commissions and other charges
incident to the purchase, sale, or lending of the Fund's portfolio
securities;
(O) TAXES. All taxes or governmental fees payable by or in respect of
the Trust or Fund to federal, state, or other governmental agencies,
domestic or foreign, including stamp or other transfer taxes;
(P) TRADE ASSOCIATION FEES. All fees, dues, and other expenses
incurred in connection with the Trust's membership in any trade association
or other investment organization;
(Q) INTEREST. All interest which may accrue and be payable as a result
of the Fund's activities;
(R) STATIONERY AND POSTAGE. The cost of all stationery and postage
required by the Fund, unless otherwise payable by another party with
respect to an activity or expense referred to above; and
(S) NONRECURRING AND EXTRAORDINARY EXPENSES. Such nonrecurring
expenses as may arise, including the costs of actions, suits, or
proceedings to which the Trust on behalf of a Fund is a party and the
expenses the Trust on behalf of a Fund may incur as a result of its legal
obligation to provide indemnification to its officers, Trustees, and
agents.
7. REIMBURSEMENT FOR ADVANCED COSTS AND EXPENSES. To the extent the
Adviser incurs any costs or performs any services which are an obligation of the
Trust or the Fund, as set forth herein, the Trust on behalf of such Fund and out
of such Fund's assets shall promptly reimburse the Adviser for such costs and
expenses. To the extent the services for which the Fund is obligated to pay are
performed by the Adviser, the Adviser shall be entitled to recover from such
Fund only to the extent of its actual costs for such services.
8. FEES. (a) The Trust on behalf of each Fund and out of each Fund's
assets agrees to pay to the Adviser, and the Adviser agrees to accept, as full
compensation for all services furnished or provided to such Fund hereunder, and
as full reimbursement for all expenses assumed by the Adviser, a management fee
computed at the rate per annum set out on Schedule 1 hereto of the average daily
net assets of such Fund.
(b) The management fee shall be accrued daily during each month by the
Trust on behalf of each Fund and paid to the Adviser on the first business day
of the succeeding month. The initial monthly fee under this Agreement shall be
payable on the first business day of the first month following the effective
date of this Agreement. The fee to the Adviser shall be prorated for the portion
of any month in which this Agreement is in effect which is not a complete month
according to the proportion which the number of calendar days in the month
during which the Agreement is in effect bears to the calendar days in the month.
If this Agreement is terminated prior to the end of any month, the fee to the
Adviser shall be payable within ten (10) days after the date of termination.
(c) The Adviser may reduce or waive any portion of the compensation due to
it hereunder, or for reimbursement of expenses by the Trust pursuant to
Paragraph 7 of this Agreement, and any such reduction or waiver shall be
applicable only with respect to the specific items waived and shall not
constitute a waiver of any future compensation or reimbursement due to the
Adviser hereunder.
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(d) The Adviser may agree not to require payment of any portion of the
compensation or reimbursement of expenses otherwise due to it pursuant to this
Agreement prior to the time such compensation or reimbursement has accrued as a
liability of the Fund in question. Any such agreement shall be applicable only
with respect to the specific items covered thereby and shall not constitute an
agreement not to require payment of any future compensation or reimbursement due
to the Adviser hereunder.
9. SHORT POSITIONS IN FUNDS' SHARES. The Adviser agrees that neither it
nor any of its officers or employees shall take any short position in the shares
of any Fund. This prohibition shall not prevent the purchase of such shares by
any of the officers and Trustees or employees of the Adviser or any trust,
pension, profit-sharing, or other benefit plan for such persons or affiliates
thereof, at a price not less than the net asset value thereof at the time of
purchase, as allowed pursuant to rules promulgated under the Act.
10. RELATIONSHIP TO PROVISIONS OF AGREEMENT AND DECLARATION OF TRUST.
Nothing herein contained shall be deemed to require the Trust to take any action
contrary to its Agreement and Declaration of Trust or any applicable statute or
regulation, or to relieve or deprive the Board of Trustees of the Trust of its
responsibility for and control of the conduct of the affairs of the Trust and
any Fund.
11. DUTIES AND STANDARDS OF CARE. (a) In the absence of willful
misfeasance, bad faith, gross negligence, or reckless disregard of obligations
or duties hereunder on the part of the Adviser, the Adviser shall not be subject
to liability to the Trust or any Fund or to any shareholder of any Fund for any
act or omission in the course of, or connected with, rendering services
hereunder or for any losses that may be sustained in the purchase, holding, or
sale of any security by the Fund.
(b) No provision of this Agreement shall be construed to protect any
Trustee or officer of the Trust or director or officer of the Adviser from
liability in violation of Sections 17(h) and (i) of the Act.
12. TERM AND RENEWAL. This Agreement shall remain in effect for a period
of two (2) years, unless sooner terminated in accordance with Paragraph 13
hereof, and shall continue in effect from year to year thereafter in respect of
each Fund so long as such continuation is approved at least annually by (i) the
Board of Trustees of the Trust or by the vote of a majority of the outstanding
voting securities of such Fund, and (ii) the vote of a majority of the Trustees
of the Trust who are not parties to this Agreement or interested persons of any
such party, cast in person at a meeting for the purpose of voting on such
approval.
13. TERMINATION. This Agreement may be terminated in respect of a Fund at
any time, without payment of any penalty, by the Board of Trustees of the Trust
or by a vote of a majority of the Fund's outstanding voting securities, upon
sixty (60) days written notice to the Adviser, and by the Adviser upon sixty
(60) days written notice to the Trust. This Agreement shall also terminate in
the event of any assignment thereof, as defined in the Act.
14. CERTAIN DEFINITIONS. The terms "majority of the outstanding voting
securities" of the Trust or the Fund and "interested persons" shall have the
meanings as set forth in the Act. The term "net assets" shall have the meaning
and shall be calculated as set forth in the Trust's Registration Statement from
time to time.
15. SEVERABILITY. 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 thereby.
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16. HEADINGS. The headings used herein are for convenience and ease of
reference only. No legal effect is intended, nor is to be derived from such
headings.
17. NOTICE. A copy of the Agreement and Declaration of Trust of the Trust
is on file with the Secretary of State of The Commonwealth of Massachusetts and
notice is hereby given that this Agreement is executed on behalf of the Trustees
of the Trust as Trustees, and not individually, and that the obligations arising
out of this Agreement are not binding upon the Trustees or holders of the
Trust's shares individually but are binding only upon the assets and property of
the Fund in question. The Adviser acknowledges that it has received notice of
and accepts the limitations of liability as set forth in the Agreement and
Declaration of Trust of the Trust. The Adviser agrees that the Trust's
obligations hereunder shall be limited to the Fund in question and to its
assets, and that the Adviser or any affiliated or related party shall not seek
satisfaction of any such obligation from any shareholder of any Fund nor from
any Trustee, officer, employee, or agent of the Trust.
18. NAME. The Adviser owns or has the right to use the words "Xxxxxxxxx
Xxxxxxxx," "Xxxxxxxxx, Xxxxxxxx & Company Investment Management," "RS," and
"RSIM" which may be used by the Trust only with the consent of the Adviser. The
Adviser consents to the use by the Trust of such words in such forms as the
Adviser shall in writing approve, but only on condition and so long as (i) this
Agreement shall remain in full force and (ii) the Trust shall fully perform,
fulfill, and comply with all provisions of this Agreement expressed herein to be
performed, fulfilled, or complied with by it. No such name shall be used by the
Trust at any time or in any place or for any purposes or under any conditions
except as in this section provided. The foregoing authorization by the Adviser
to the Trust to use said name as part of a business or name is not exclusive of
the right of the Adviser itself to use, or to authorize others to use, the same;
the Trust acknowledges and agrees that as between the Adviser and the Trust, the
Adviser has the exclusive right to so authorize others to use the same; the
Trust acknowledges and agrees that as between the Adviser and the Trust, the
Adviser has the exclusive right so to use, or authorize others to use, said
words and the Trust agrees to take such action as may reasonably be requested by
the Adviser to give full effect to the provisions of this section (including,
without limitation, consenting to such use of said words). Without limiting the
generality of the foregoing, the Trust agrees that, upon any termination of this
Agreement by either party or upon the violation of any of its provisions by the
Trust, the Trust will, at the request of the Adviser, use its best efforts to
change the name of the Trust so as to eliminate all reference, if any, to the
words "Xxxxxxxxx Xxxxxxxx," "Xxxxxxxxx, Xxxxxxxx & Company Investment
Management," "RS," or "RSIM" and will not thereafter transact any business in a
name containing the words "Xxxxxxxxx Xxxxxxxx," "Xxxxxxxxx, Xxxxxxxx & Company
Investment Management," "RS," and "RSIM" in any form or combination whatsoever,
or designate itself as the same entity as or successor to an entity of such
name, or otherwise use the words "Xxxxxxxxx Xxxxxxxx," "Xxxxxxxxx, Xxxxxxxx &
Company Investment Management," "RS," or "RSIM" or any other reference to the
Adviser. Such covenants on the part of the Trust shall be binding upon it, its
trustees, officers, stockholders, creditors, and all other persons claiming
under or through it.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested by their duly authorized officers, all as of the day
and year first above written.
RS INVESTMENT TRUST
/s/ Xxxxxx X. Xxxxx
President
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RS INVESTMENT MANAGEMENT, INC.
By RS Investment Management Co. LLC
/s/ Xxxxxx X. Xxxxx
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SCHEDULE 1
ADMINISTRATIVE FUNDS
RS Emerging Growth Fund 1.00%
