EXHIBIT 5.1
INVESTMENT ADVISORY AGREEMENT
This Agreement, made as of the 30th day of April, 1997, by and between
VAM Institutional Funds, Inc., a Minnesota corporation (the "Company"), on
behalf of each Fund represented by a series of shares of common stock of the
Fund that adopts this Agreement (each a "Fund" and, collectively, the "Funds")
(the Funds, together with the date each Fund adopts this Agreement, are set
forth in Exhibit A hereto, which shall be updated from time to time to reflect
additions, deletions or other changes thereto), and Voyageur Asset Management
LLC, a Minnesota limited liability company ("VAM LLC"),
WITNESSETH:
1. Investment Advisory Services.
(a) The Company hereby engages VAM LLC on behalf of the Funds,
and VAM LLC hereby agrees to act, as investment adviser for, and to
manage the investment of the assets of, the Funds.
(b) The investment of the assets of each Fund shall at all
times be subject to the applicable provisions of the Articles of
Incorporation, the Bylaws, the Registration Statement, and the current
Prospectus and the Statement of Additional Information, if any, of the
Company and each Fund and shall conform to the policies and purposes of
each Fund as set forth in such documents and as interpreted from time
to time by the Board of Directors of the Company. Within the framework
of the investment policies of each Fund, and except as otherwise
permitted by this Agreement, VAM LLC shall have the sole and exclusive
responsibility for the management of each Fund's investment portfolio
and for making and executing all investment decisions for each Fund;
provided that VAM LLC shall be authorized to retain a sub-adviser or
sub-advisers to assist VAM LLC in furnishing investment advice to the
Funds, and provided further that VAM LLC shall be responsible for
monitoring compliance by the sub-adviser(s) with the investment
policies and restrictions of such Funds and with such other limitations
or directions as the Board of Directors of the Company may from time to
time prescribe. VAM LLC shall report to the Board of Directors of the
Company regularly at such times and in such detail as the Board may
from time to time determine to be appropriate, in order to permit the
Board to determine the adherence of VAM LLC to the investment policies
of each Fund.
(c) VAM LLC shall, at its own expense, furnish all office
facilities, equipment and personnel necessary to discharge its
responsibilities and duties hereunder. VAM LLC shall arrange, if
requested by the Company, for officers or employees of VAM LLC to serve
without compensation from any Fund as directors, officers, or employees
of the Company if duly elected to such
positions by the shareholders or directors of the Company (as required
by law).
(d) VAM LLC hereby acknowledges that all records pertaining to
each Fund's investments are the property of the Company, and in the
event that a transfer of investment advisory services to someone other
than VAM LLC should ever occur, VAM LLC will promptly, and at its own
cost, take all steps necessary to segregate such records and deliver
them to the Company.
2. Compensation for Services. In payment for the investment advisory
and management services to be rendered by VAM LLC hereunder, each Fund shall pay
to VAM LLC a monthly fee, which fee shall be paid to VAM LLC not later than the
fifth business day of the month following the month in which said services were
rendered. The monthly fee payable by each Fund shall be as set forth in Exhibit
A hereto, which may be updated from time to time to reflect amendments, if any,
to Exhibit A. The monthly fee payable by each Fund shall be based on the average
of the net asset values of all of the issued and outstanding shares of the Fund
as determined as of the close of each business day of the month pursuant to the
Articles of Incorporation, Bylaws, and currently effective Prospectus and
Statement of Additional Information of the Company and the Fund. For purposes of
calculating each Fund's average daily net assets, as such term is used in this
Agreement, each Fund's net assets shall equal its total assets minus (a) its
total liabilities and (b) its net orders receivable from dealers.
3. Allocation of Expenses.
(a) In addition to the fee described in Section 2 hereof, each
Fund shall pay all its costs and expenses which are not assumed by VAM
LLC. These Fund expenses include, by way of example, but not by way of
limitation, all expenses incurred in the operation of the Fund and any
public offering of its shares, including, among others, Rule 12b-1 plan
of distribution fees (if any), interest, taxes, brokerage fees and
commissions, fees of the directors who are not employees of VAM LLC or
the principal underwriter of the Fund's shares (the "Underwriter"), or
any of their affiliates, expenses of directors' and shareholders'
meetings, including the cost of printing and mailing proxies, expenses
of insurance premiums for fidelity and other coverage, expenses of
redemption of shares, expenses of issue and sale of shares (to the
extent not borne by the Underwriter under its agreement with the Fund),
expenses of printing and mailing stock certificates representing shares
of the Fund, association membership dues, charges of custodians,
transfer agents, dividend disbursing agents, accounting services
agents, investor servicing agents, and bookkeeping, auditing, and legal
expenses. Each Fund will also pay the fees and bear the expense of
registering and maintaining the registration of the Fund and its shares
with the Securities and Exchange Commission and registering or
qualifying its shares under state
or other securities laws and the expense of preparing and mailing
prospectuses and reports to shareholders.
(b) The Underwriter shall bear all advertising and promotional
expenses in connection with the distribution of each Fund's shares,
including paying for prospectuses for new shareholders, except as
provided in the following sentence. No Fund shall use any of its assets
to finance costs incurred in connection with the distribution of its
shares except pursuant to a Plan of Distribution, if any, adopted
pursuant to Rule 12b-1 under the Investment Company Act of 1940 (as
amended, the "Act").
4. Freedom to Deal With Third Parties. VAM LLC shall be free to render
services to others similar to those rendered under this Agreement or of a
different nature except as such services may conflict with the services to be
rendered or the duties to be assumed hereunder.
5. Reports to Directors of the Fund. Appropriate officers of VAM LLC
shall provide the directors of the Company with such information as is required
by any plan of distribution adopted by the Company on behalf of any Fund
pursuant to Rule 12b-1 under the Act.
6. Effective Date, Duration and Termination of Agreement.
(a) The effective date of this Agreement with respect to each
Fund shall be the date set forth on Exhibit A hereto.
(b) Unless sooner terminated as hereinafter provided, this
Agreement shall continue in effect with respect to each Fund for a
period more than two years from the date of its execution but only as
long as such continuance is specifically approved at least annually by
(i) the Board of Directors of the Company or by the vote of a majority
of the outstanding voting securities of the applicable Fund, and (ii)
by the vote of a majority of the directors of the Company who are not
parties to this Agreement or "interested persons", as defined in the
Act, of VAM LLC or of the Company cast in person at a meeting called
for the purpose of voting on such approval.
(c) This Agreement may be terminated with respect to any Fund
at any time, without the payment of any penalty, by the Board of
Directors of the Company or by the vote of a majority of the
outstanding voting securities of such Fund, or by VAM LLC, upon 60
days' written notice to the other party.
(d) This agreement shall terminate automatically in the event
of its "assignment" (as defined in the Act).
(e) No amendment to this Agreement shall be effective with
respect to any Fund until approved by the vote of: (i) a majority of
the directors of the
Company who are not parties to this Agreement or "interested persons"
(as defined in the Act) of VAM LLC or of the Company cast in person at
a meeting called for the purpose of voting on such approval; and (ii) a
majority of the outstanding voting securities of the applicable Fund.
(f) Wherever referred to in this Agreement, the vote or
approval of the holders of a majority of the outstanding voting
securities or shares of a Fund shall mean the lesser of (i) the vote of
67% or more of the voting securities of such Fund present at a regular
or special meeting of shareholders duly called, if more than 50% of the
Fund's outstanding voting securities are present or represented by
proxy, or (ii) the vote of more than 50% of the outstanding voting
securities of such Fund.
7. Notices. Any notice under this Agreement shall be in writing,
addressed, delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate in writing for receipt of such notice.
IN WITNESS WHEREOF, the Company and VAM LLC have caused this Agreement
to be executed by their duly authorized officers as of the day and year first
above written.
VAM INSTITUTIONAL FUNDS, INC.
By /s/ Xxxx X. Xxxx
---------------------------------
Name: Xxxx X. Xxxx
Title: President
VOYAGEUR ASSET MANAGEMENT LLC
By /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
Exhibit A
to
Investment Advisory Agreement
between
Voyageur Asset Management LLC
and
VAM Institutional Funds, Inc.
MONTHLY
ADVISORY FEE
(as % of average
FUND EFFECTIVE DATE daily net assets)
-------------------------------------- -------------- -----------------
Series B -- VAM Short Duration Total
Return Fund July 11, 1997 .041667
Series C -- VAM Intermediate Duration
Total Return Fund July 11, 1997 .041667
Series D -- VAM Core Total Return Fund July 11, 1997 .041667
Series E -- VAM Mid Cap Stock Fund July 11, 1997 .083333
Series F -- VAM Growth Stock Fund July 11, 1997 .083333
Series H -- Xxxxxx Xxxxxx & Xxxxxx Xxxxx 30, 1997 .062500
Growth and Income Fund
