THE VIRTUS FUNDS
INVESTMENT ADVISORY CONTRACT
This Contract is made between Virtus Capital Management, Inc., a
Maryland Corporation having its principal place of business in Richmond,
Virginia (the "Adviser"), and The Virtus Funds, a Massachusetts business
trust having its principal place of business in Pittsburgh, Pennsylvania
(the "Trust").
WHEREAS, the Trust is an open-end management investment company as
that term is defined in the Investment Company Act of 1940 (the "Act")
and is registered as such with the Securities and Exchange Commission;
and
WHEREAS, the Adviser is engaged in the business of rendering
investment advisory and management services.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
1. The Trust hereby appoints Adviser as Investment Adviser for each
of the portfolios ("Funds") of the Trust, which may be offered in one or
more classes of shares ("Classes"), on whose behalf the Trust executes an
exhibit to this Contract, and Adviser, by its execution of each such
exhibit, accepts the appointments. Subject to the direction of the
Trustees of the Trust, Adviser shall provide investment research and
supervision of the investments of each of the Funds and conduct a
continuous program of investment evaluation and of appropriate sale or
other disposition and reinvestment of each Fund's assets.
2. Adviser, in its supervision of the investments of each of the Fund
will be guided by each of the Fund's fundamental investment policies and
the provisions and restrictions contained in the Declaration of Trust and
By-Laws of the Trust and as set forth in the Registration Statement and
exhibits as may be on file with the Securities and Exchange Commission.
3. The Trust shall pay or cause to be paid, on behalf of each Fund or
Class, all of the Fund's or Classes' expenses and the Fund's or Classes'
allocable share of Trust expenses.
4. The Trust, on behalf of each of the Funds shall pay to Adviser,
for all services rendered to such Fund by Adviser hereunder, the fees set
forth in the exhibits attached hereto.
5. The Adviser may from time to time and for such periods as it deems
appropriate reduce its compensation to the extent that any Fund's expenses
exceed such lower expense limitation as the Adviser may, by notice to the
Trust, voluntarily declare to be effective. Furthermore, the Adviser may,
if it deems appropriate, assume expenses of one or more Fund or Class to
the extent that any Fund's or Classes' expenses exceed such lower expense
limitation as the Adviser may, by notice to the Trust, voluntarily declare
to be effective.
6. This Contract shall begin for each Fund on the date that the Trust
executes an exhibit to this Contract relating to such Fund. This Contract
shall remain in effect for each Fund for two years from the date of its
execution and from year to year thereafter, subject to the provisions for
termination and all of the other terms and conditions hereof if: (a) such
continuation shall be specifically approved at least annually by the vote
of a majority of the Trustees of the Trust, including a majority of the
Trustees who are not parties to this Contract or interested persons of any
such party (other than as Trustees of the Trust) cast in person at a
meeting called for that purpose; and (b) Adviser shall not have notified
the Trust in writing at least sixty (60) days prior to the anniversary date
of this Contract in any year thereafter that it does not desire such
continuation with respect to that Fund.
7. Notwithstanding any provision in this Contract, it may be
terminated at any time with respect to any Fund, without the payment of any
penalty, by the Trustees of the Trust or by a vote of a majority of the
outstanding voting securities of that Fund, as defined in Section 2(a)(42)
of the Act on sixty (60) days' written notice to Adviser.
8. This Contract may not be assigned by Adviser and shall
automatically terminate in the event of any assignment. Adviser may employ
or contract with such other person, persons, corporation or corporations at
its own cost and expense as it shall determine in order to assist it in
carrying out this Contract.
9. In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties under this Contract on the
part of Adviser, Adviser shall not be liable to the Trust or to any of the
Funds or to any shareholder for any act or omission in the course of or
connected in any way with rendering services or for any losses that may be
sustained in the purchase, holding or sale of any security.
10. This Contract may be amended at any time by agreement of the
parties provided that the amendment shall be approved both by the vote of a
majority of the Trustees of the Trust, including a majority of Trustees who
are not parties to this Contract or interested persons of any such party to
this Contract (other than as Trustees of the Trust), cast in person at a
meeting called for that purpose, and on behalf of a Fund by a majority of
the outstanding voting securities of such Fund as defined in Section
2(a)(42) of the Act.
11. Adviser is hereby expressly put on notice of the limitation of
liability as set forth in Article XI of the Declaration of Trust and agrees
that the obligations pursuant to this Contract of a particular Fund and of
the Trust with respect to that particular Fund be limited solely to the
assets of that particular Fund, and Adviser shall not seek satisfaction of
any such obligation from the assets of any other Fund, the shareholders of
any Fund, the Trustees, officers, employees or agents of the Trust, or any
of them.
12. This Contract shall be construed in accordance with and governed
by the laws of the Commonwealth of Pennsylvania.
13. This Contract will become binding on the parties hereto upon
their execution of the attached exhibits to this Contract.
EXHIBIT A
THE U.S. GOVERNMENT SECURITIES FUND
THE STOCK FUND
THE VIRGINIA MUNICIPAL BOND FUND
THE MARYLAND MUNICIPAL BOND FUND
THE TREASURY MONEY MARKET FUND
THE MONEY MARKET FUND
THE TAX-FREE MONEY MARKET FUND
THE STRATEGIC STOCK FUND
Name of Fund Percentage of Net Assets
The U.S. Government Securities Fund .75 of 1%
The Stock Fund .75 of 1%
The Virginia Municipal Bond Fund .75 of 1%
The Maryland Municipal Bond Fund .75 of 1%
The Treasury Money Market Fund .50 of 1%
The Money Market Fund .50 of 1%
The Tax-Free Money Market Fund .50 of 1%
The Strategic Stock Fund 1.00%
For all services rendered by Adviser hereunder, the Trust shall pay to
Adviser and Adviser agrees to accept as full compensation for all services
rendered hereunder, an annual investment advisory fee equal to the
following percentage (the "applicable percentage") of the average daily net
assets of each Fund.
The fee shall be accrued daily at the rate of 1/365th of the
applicable percentage applied to the daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this 1st day of March, 1995.
Attest: VIRTUS CAPITAL MANAGEMENT, INC.
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxx
Secretary President
Attest:
THE VIRTUS FUNDS
/s/ S. Xxxxxxx Xxxxx By: /s/ Xxxx X. XxXxxxxxx
Assistant Secretary Vice President
