FORM OF AMENDMENT NO. 2 TO ADVISORY AGREEMENT
THE CATHOLIC FUNDS, INC.
AMENDMENT NO. 2 TO INVESTMENT ADVISORY AGREEMENT
WITH
CATHOLIC FINANCIAL SERVICES CORPORATION
THIS AMENDMENT NO. 2 (the "Amendment") is entered into as of this 14th day
of February, 2002, by and between The Catholic Funds, Inc. ("CFI"), a Maryland
corporation registered under the Investment Company Act of 1940 ("1940 Act") as
an open-end management investment company, and Catholic Financial Services
Corporation (the "Manager"), a Wisconsin corporation registered under the
Investment Advisers Act of 1940 as an investment adviser.
WHEREAS, CFI and the Manager are parties to that certain Investment
Advisory Agreement, dated as of February 17, 1999, whereby CFI appointed the
Manager as, and the Manager agreed to serve as, investment adviser for the three
equity mutual fund series of CFI known as The Catholic Equity Income Fund, The
Catholic Large-Cap Growth Fund and The Catholic Disciplined Capital Appreciation
Fund (the "Existing Equity Funds"), as said Investment Advisory Agreement was
amended by Amendment No. 1 thereto, dated August 31, 1999, to extend the terms
thereof to CFI's additional money market mutual fund series known as The
Catholic Money Market Fund; and
WHEREAS, CFI has filed with the Securities and Exchange Commission a
Post-Effective Amendment to its Registration Statement on Form N-1A to register
a newly designated equity mutual fund series known as The Catholic Equity Fund
(the "New Equity Fund") and, upon effectiveness of that Post-Effective
Amendment, CFI desires to appoint the Manager as, and the Manager is willing to
serve as, investment adviser to the New Equity Fund pursuant to the terms of the
Investment Advisory Agreement;
WHEREAS, CFI's Board of Directors has approved the terms of three separate
Plans of Reorganization and Liquidation pursuant to which each of the three
Existing Equity Funds would transfer substantially all of its net assets to the
New Equity Fund in exchange for Class A shares of the New Equity Fund, said
exchanges to occur at relative net asset value, and, following such exchanges,
each of the Existing Equity Funds would be liquidated and would distribute the
Class A shares of the New Equity Fund received by it in the exchange pro rata to
its shareholders, thereby resulting in the consolidation of all of the Existing
Equity Funds with and into the New Equity Fund (together the "Reorganizations");
WHEREAS, following the completion of the Reorganizations, the three
Existing Equity Funds no longer will exist, and the parties therefore intend
that, effective with the consummation of the Reorganizations, the terms of the
Investment Advisory Agreement, insofar as they relate to the three Existing
Equity Funds, automatically will terminate;
NOW, THEREFORE, the parties to this Amendment agree as follows:
1. Appointment. CFI hereby appoints the Manager to furnish investment
advisory and portfolio management services with respect to the portion
of its assets represented by the shares of common stock of the New
Equity Fund (including Class A shares, Class C shares, Class I shares
and any other classes of shares hereinafter designated by the Board of
Directors of CFI with respect to the New Equity Fund), and Schedule A
attached to the Investment Advisory Agreement hereby is amended in the
form attached hereto to add the New Equity Fund on the terms set forth
in the Investment Advisory Agreement and in said Schedule A (including
the compensation of the Manager). The Manager accepts such appointment
and agrees to perform the services described in the Investment
Advisory Agreement, as amended by this Amendment, with respect to the
New Equity Fund.
2. Termination of Investment Advisory Agreement with Respect to the
Existing Equity Funds. CFI and the Manager agree that, effective with
the consummation of each of the Reorganizations of the Existing Equity
Funds, the terms of the Investment Advisory Agreement, insofar as they
relate to the relevant Existing Equity Fund, shall be deemed
terminated and of no further force or effect as of the date of the
consummation of such Reorganization, and from and after the effective
date of such Reorganization Schedule A attached to the Investment
Advisory Agreement shall be deemed amended to eliminate the relevant
Existing Equity Fund.
3. Effect on Investment Advisory Agreement. Except as expressly modified
and amended by the terms of this Amendment, the terms of the
Investment Advisory Agreement, as amended by Amendment No. 1 thereto,
shall continue in full force and effect unaffected by the terms of
this Amendment.
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
be executed by its duly authorized officer as of the day and year written above.
THE CATHOLIC FUNDS, INC.
By:
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▇▇▇▇▇ ▇. ▇▇▇▇▇, President
CATHOLIC FINANCIAL SERVICES CORPORATION
By:
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▇▇▇▇▇ ▇. ▇▇▇▇▇, President
THE CATHOLIC ALLIANCE FUNDS, INC.
MANAGEMENT AGREEMENT
SCHEDULE A
The Funds of The Catholic Alliance Funds, Inc. currently subject to this
Agreement are as follows:
1. Equity Income Fund
A. Effective Date: May 3, 1999.
B. Management Fee: The management fee for this Fund, calculated in
accordance with Paragraph 8 of the Investment Advisory Agreement,
shall be at an annual rate of 0.80 of 1% of the average daily net
assets of the Fund.
2. Large-Cap Growth Fund
A. Effective Date: May 3, 1999.
B. Management Fee: The management fee for this Fund, calculated in
accordance with Paragraph 8 of the Investment Advisory Agreement,
shall be at an annual rate of 0.90 of 1% of the average daily net
assets of the Fund.
3. Disciplined Capital Appreciation Fund
A. Effective Date: May 3, 1999.
B. Management Fee: The management fee for this Fund, calculated in
accordance with Paragraph 8 of the Investment Advisory Agreement,
shall be at an annual rate of 0.90 of 1% of the average daily net
assets of the Fund.
4. Money Market Fund
A. Effective Date: January 7, 2000.
B. Management Fee: The management fee for this Fund, calculated in
accordance with Paragraph 8 of the Investment Advisory Agreement,
shall be at an annual rate of 0.30 of 1% of the average daily net
assets of $50 million or less; 0.25 of 1% of average daily net
assets greater than $50 million but equal to or less than $100
million; 0.20 of 1% of average daily net assets greater than $100
million but less than or equal to $200 million; and 0.15 of 1% of
average daily net assets in excess of $200 million.
5. Catholic Equity Fund
A. Effective Date: The date on which Post-Effective Amendment No. 4
to the Registration Statement on Form N-1A of The Catholic Funds,
Inc. becomes effective with the SEC.
B. Management Fee: The management fee for this Fund, calculated in
accordance with Paragraph 8 of the Investment Advisory Agreement,
shall be at an annual rate of 0.50 of 1% of the average daily net
assets.
