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Exhibit (d)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of this 12th day of October, 1999 between the DCM
Series Trust, an unincorporated business trust organized under the laws of the
Commonwealth of Massachusetts (hereinafter called the "Trust"), and Derby
Capital Management, a Massachusetts corporation, (hereinafter called the
"Adviser");
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act")
and is authorized to issue shares ("Shares") in separate series and classes; and
WHEREAS, a series of the Trust has been created under the name DCM
Growth Fund (the "Fund"); and
WHEREAS, the Adviser is registered as an Adviser under the Investment
Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Trust desires to retain the Adviser to render advisory
services to the Fund in the manner and on the terms and conditions hereinafter
set forth; and
WHEREAS, the Adviser is willing to perform such services on said terms
and conditions;
NOW THEREFORE, in consideration of the mutual promises and agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby agreed between the
Trust and the Adviser, as follows:
1. The Trust hereby retains the Adviser, and the Adviser hereby agrees,
to act as investment adviser to the Trust and, subject to such limitations as
the Board of Trustees of the Trust (the "Trustees") may impose, to assume all
investment duties and have full discretionary power and authority with respect
to investment of the assets of the Fund. Without limiting the generality of the
foregoing, the Adviser shall (i) obtain and evaluate such information and advice
relating to the economy and securities markets and securities as it deems
necessary or useful to discharge its duties hereunder; (ii) continuously invest
the assets of the Fund in a manner consistent with the investment objective and
policies thereof as stated in the Fund's Prospectus and Statement of Additional
Information on file with the Securities and Exchange Commission, as the same may
be amended from time to time; (iii) determine the securities to be purchased,
sold or otherwise disposed of by the Fund and the timing of such purchases,
sales and dispositions; (iv) vote all proxies for securities held by the Fund
and exercise all other voting rights with respect to such securities in the
manner it deems appropriate; (v) issue settlement instructions to custodians
designated by the Trust; (vi) evaluate the credit worthiness of securities
dealers, banks and other entities with which the Fund may engage in repurchase
agreements and monitor the status of such agreements; and (vii) take such
further action, including the placing of purchase and sale orders and the
selection of broker-dealers to execute such orders on behalf of the Fund, as the
Adviser shall deem necessary or appropriate, in its sole discretion, to carry
out its duties under this Agreement. The Adviser shall also furnish to or place
at the disposal of the Trust such information, evaluations, analyses and options
formulated or
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obtained by the Adviser in the discharge of its duties, as the Trust may, from
time to time, reasonably request.
The Adviser agrees, that in performing its duties hereunder, it will
comply with (i) the 1940 Act and the Advisers Act, and all rules and regulations
promulgated thereunder; (ii) all other applicable federal and state laws and
regulations, (iii) the provisions of the Declaration of Trust and By-Laws of the
Trust, as amended from time to time; and (iv) any applicable procedures adopted
by the Trust or the Adviser.
2. The Adviser is responsible for broker-dealer selection in its sole
discretion, and is not obligated to deal with any broker or group of brokers in
executing portfolio transactions for the Fund. In selecting broker-dealers, the
Adviser will generally seek the best combination of net price and execution and
may consider other factors, including: the broker's trading expertise, stature
in the industry, execution ability, facilities, clearing capabilities and
financial services offered, long-term relations with the Adviser, reliability
and financial responsibility, timing and size of order and execution, difficulty
of execution, current market conditions and depth of the market. Transaction
charges, being a component of price, may also be considered as a factor in
making such determination. Accordingly, the price to the Fund in any transaction
may be less favorable than that available from another broker-dealer if the
difference is reasonably justified by other aspects of the portfolio execution
services offered. Subject to such policies as the Trustees may determine, the
Adviser shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of its having
caused the Fund to pay a broker or dealer that provides brokerage or research
services to the Adviser an amount of commission for effecting a portfolio
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Adviser determines in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research services provided by such broker and dealer, viewed
in terms of either that particular transaction or the Adviser's overall
responsibilities with respect to the Trust. The Adviser is further authorized to
allocate the orders placed by it on behalf of the Fund to such brokers or
dealers who also provide research or statistical material, or other services, to
the Trust, the Adviser, or any affiliate of either. Such allocation shall be in
such amounts and proportions as the Adviser shall determine, and the Adviser
shall report on such allocations regularly to the Trust, indicating the
broker-dealers to whom such allocations have been made and the basis therefor.
The Adviser is also authorized to consider sales of shares as a factor in the
selection of brokers or dealers to execute portfolio transactions, subject to
the requirements of best execution, i.e., that such brokers or dealers are able
to execute the order promptly and at the best obtainable securities price.
3. The Adviser agrees to maintain and to preserve for the periods
prescribed under the 1940 Act any such records as are required to be maintained
by the Adviser with respect to the Fund by the 1940 Act. The Adviser further
agrees that all records which it maintains for the Fund are the property of the
Fund and it will promptly surrender any of such records upon request.
4. The Adviser shall bear the cost of rendering the advisory services
to be performed by it under this Agreement, and shall, at its own expense, pay
the compensation of any Trustees,
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officers and employees, if any, of the Trust who are affiliated persons of the
Adviser. All other operating costs and expenses relating to the Fund shall be
paid by the Trust from the assets of the Fund, including without limitation: (i)
the charges and expenses of any registrar, any custodian or depository appointed
by the Fund for the safekeeping of its cash, portfolio securities and other
property, and any stock transfer or dividend agent or agents appointed by the
Fund; (ii) brokers' commissions chargeable to the Fund in connection with
portfolio transactions to which the Fund is a party; (iii) all taxes, including
securities issuance and transfer taxes, and fees payable by the Fund to federal,
state or other governmental agencies; (iv) the cost and expense of engraving or
printing of certificates representing shares of the Fund; (v) all costs and
expenses in connection with the registration and maintenance of registration of
the Fund and its shares with the Securities and Exchange Commission and various
states and other jurisdictions (including filing fees and legal fees and
disbursements of counsel and the costs and expenses of preparation, printing
(including typesetting) and distributing prospectuses for such purposes); (vi)
all expenses of shareholders' and Trustees' meetings and preparing, printing and
mailing proxy statements and reports to shareholders; fees and travel expenses
of Trustees or members of any advisory board or committee who are not employees
of the Adviser; (vii) all expenses which the Trust or the Fund agrees to bear
pursuant to any plan adopted by the Trust and/or the Fund pursuant to Rule 12b-1
of the 1940 Act or any other dividend or distribution program or agreement;
(viii) charges and expenses of any outside service used for pricing of the
Fund's shares; (ix) charges and expenses of legal counsel, including counsel to
the Trustees who are not "interested persons" (as defined in the 0000 Xxx) of
the Fund or the Adviser, and of independent accountants, in connection with any
matter relating to the Fund; (x) membership dues of industry associations; (xi)
interest payable on Fund borrowings; (xii) postage; (xiii) insurance premiums on
property or personnel (including officers and Trustees) of the Fund which inure
to its benefit; (xiv) extraordinary expenses (including, but not limited to,
legal claims and liabilities and litigation costs and any indemnification
related thereto); and (xv) all other charges and costs of the Fund's operation
unless otherwise explicitly provided herein.
Notwithstanding anything in the immediately preceding paragraph to the
contrary, the Adviser hereby undertakes to limit total Fund expenses, including
the investment advisory fee set forth in Paragraph 5 below, to 1.75% of the
average daily net assets annually for the Fund.
5. For the services to be rendered by the Adviser to the Fund, the
Trust shall pay to the Adviser monthly compensation, calculated from the day of
commencement of operations of the Fund, determined by applying the annual rate
of one percent (1%) of the Fund's average daily net assets. Except as
hereinafter set forth, compensation under this Agreement shall be calculated and
accrued daily and paid monthly. If this Agreement becomes effective subsequent
to the First day of a month or shall terminate before the last day of a month,
compensation for that part of the month this Agreement is in effect shall be
prorated in a manner consistent with the calculation of the fees as set forth
above.
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The Adviser may reduce any portion of the compensation or reimbursement of
expenses due to it under this agreement, or may agree to make payments to limit
the expenses which are the responsibility of the Fund. Any such reduction or
payment shall be applicable only to such specific reduction or payment shall be
applicable only to such specific reduction or payment and shall not constitute
an agreement to reduce any future compensation or reimbursement due to the
Adviser hereunder or to continue future payments.
6. The Adviser will use its best judgment and effort in its investment
of the Fund's assets, but in the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of its obligations and duties hereunder,
the Adviser shall not be liable to the Trust, the Fund or any of its
shareholders for any error of judgment or mistake of law or for any act or
omission by the Adviser or for any losses sustained by any of them.
7. Nothing contained in this Agreement shall prevent the Adviser or any
affiliated person of the Adviser (as defined in the 0000 Xxx) from acting as
investment adviser or manager for any other investment companies and other
clients, whether or not the investment objectives or policies of any such other
clients are similar to those of the Fund, and shall not in any way bind or
restrict the Adviser or any such affiliated person from buying, selling or
trading any securities for their own accounts or for the account of others for
whom the Adviser or any such affiliated person may be acting. Nothing in this
Agreement shall limit or restrict the right of the Adviser or any manager,
officer or employee of the Adviser to engage in any other business or to devote
time and attention in part to the management or other aspects of any other
business whether of a similar or dissimilar nature, so long as the Adviser's
services hereunder are not impaired thereby.
8. This Agreement shall become effective on the date hereof and shall
continue in effect, unless sooner terminated as herein provided, for two (2)
years from such date, and from year to year thereafter provided such continuance
is approved at least annually by the vote of a majority of the Trustees,
including a majority of the Trustees who are not parties to this Agreement or
"interested persons" (as defined in the 0000 Xxx) of any such party, which vote
must be cast in person at a meeting called for the purpose of voting on such
approval, or by a majority of the outstanding voting securities of the Fund;
provided, however, that (a) the Fund may, at any time and without the payment of
any penalty, terminate this Agreement upon sixty (60) days' written notice to
the Adviser, either by majority vote of the Trustees or by the vote of a
majority of the outstanding voting securities of the Fund; (b) this Agreement
shall immediately terminate in the event of its assignment (to the extent
required by the 1940 Act and the rules thereunder) unless such automatic
termination shall be prevented by
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an exemptive order of the Securities and Exchange Commission; and (c) the
Adviser may terminate this Agreement without payment of penalty on sixty (60)
days written notice to the Trust.
9. Any notice to be given by the Adviser to the Trust under this
Agreement shall be given in writing, addressed and hand delivered or mailed
certified mail, to 0 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or such other
address as shall be specified in writing to the Adviser. Any notice to be given
by the Trust or the Fund to the Adviser under this Agreement shall be given in
writing, addressed and delivered or mailed certified mail, to 0 Xxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, or such other address as shall be specified in
writing to the Trust.
10. No provision of this Agreement may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by both
parties hereto, and no amendment of this Agreement shall be effective with
respect to the Fund until approved by an affirmative vote of (i) a majority of
the outstanding voting securities of the Fund, and (ii) a majority of the
Trustees, including a majority of Trustees who are not interested persons of any
party to this Agreement, cast in person at a meeting called for the purpose of
voting on such approval, if such approval is required by applicable law.
Notwithstanding anything herein to the contrary, this Agreement may be amended
by the parties without the vote or consent of the shareholders of the Fund to
supply any immaterial omission, to cure, correct or supplement any ambiguous,
defective or inconsistent provision hereof, or if they deem it necessary to
conform this Agreement to the requirements of applicable federal laws or
regulations, but neither the Fund nor the Adviser shall be liable for failing to
do so.
11. It is understood that the name "Derby Capital Management" and any
derivative thereof including any logo associated with that name, including
without limitation "DCM", Derby and Company, Inc. and "Derby", are the valuable
property of the Adviser and its affiliates, and that the Fund has the right to
use such names (or derivative thereof or associated logo) only so long as this
Agreement shall continue with respect to the Fund. Upon termination of this
Agreement, the Fund shall forthwith cease to use such name (or derivative
thereof or associated logo) and the Trust shall promptly amend its Declaration
of Trust to change its name and the name of the Fund to comply herewith.
12. This Agreement shall be construed in accordance with the laws of
the Commonwealth of Massachusetts. To the extent the applicable law of the
Commonwealth of Massachusetts, or any of the provisions herein, conflict with
the applicable provisions of the 1940 Act, the Advisers Act or any rules,
regulations or orders of the Securities and Exchange Commission, the latter
shall control.
13. The Adviser understands that the obligations of this Agreement are
not binding upon any shareholder of the Trust personally, but bind only the
Trust's property; the Adviser acknowledges that it has notice of the provisions
of the Trust's Declaration of Trust disclaiming shareholder liability for acts
or obligations of the Trust or any series of the Trust, including, without
limitation, the Fund. This Agreement has been executed by or with reference to
any Trustee in such person's capacity as a Trustee, and the Trustees shall not
be personally liable hereon.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written in Boston, Massachusetts.
THE DCM SERIES TRUST
By: /s/ Xxxxxxxx Xxxxx
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Name: Xxxxxxxx Xxxxx
Attest: ---------------------
/s/ Xxxxxxxxx X. Xxxxxxx Title: Vice President
-------------------------- --------------------
Xxxxxxxxx X. Xxxxxxx
DERBY CAPITAL MANAGEMENT
By: /s/ Xxxxxxxx Xxxxx
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Attest: Name: Xxxxxxxx Xxxxx
/s/ Xxxxxxxxx X. Xxxxxxx ---------------------
-------------------------- Title:
Xxxxxxxxx X. Xxxxxxx --------------------
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