Exhibit (d)
INVESTMENT ADVISORY AGREEMENT
VANTAGE FUNDS
AGREEMENT, made this ___ day of ________, 2004, among The Vantage Funds (the
"Trust"), on behalf of each of its series and Stellar Advisors, Inc.
("Advisor"), a Delaware corporation.
WHEREAS, the Trust is a Massachusetts business trust, which is authorized to
issue shares in series (each, a "Fund" and collectively, the "Funds,") as set
forth in Schedule A, as may be amended from time to time, and the Trust is
registered as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Advisor is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended ("Advisers Act");
NOW, THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between the Trust and the Advisor as follows:
1. Appointment
(a) The Trust hereby appoints the Advisor to act as investment advisor to
the Funds for the periods and on the terms set forth herein. The Advisor
accepts the appointment and agrees to furnish the services set forth
herein for the compensation provided herein.
(b) In the event that the Trust establishes one or more series other than
the Funds listed on Schedule A attached hereto, with respect to which it
desires to retain the Advisor to act as investment adviser hereunder, it
shall notify the Advisor in writing. If the Advisor is willing to render
such services under this Agreement, it shall notify the Trust in writing
whereupon such series shall become a Fund hereunder and shall be subject
to the provisions of this Agreement to the same extent as the Funds named
herein, except to the extent that said provisions (including those
relating to the compensation payable by the Fund to the Advisor) are
modified with respect to such Fund in writing by the Trust and the Advisor
at that time.
2. Services as Investment Advisor
Subject to the general supervision and direction of The Vantage Funds
Trustees (the "Trustees"), the Advisor will:
(a) provide overall investment management to the Funds in accordance with
each Fund's investment objective and policies as stated in each Fund's
Prospectus and Statement of Additional Information filed with the
Securities and Exchange Commission, as they may be amended from time to
time;
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(b) cause investment decisions for the Funds to be made;
(c) oversee the placement of purchase and sale orders on behalf of the
Funds;
(d) employ professional portfolio managers and securities analysts to
provide research services to the Funds;
(e) maintain books and records with respect to each Fund's securities
transactions; and
(f) provide periodic and special reports to the Trustees, as requested. In
providing those services, the Advisor will provide the Funds with ongoing
research, analysis, advice and judgments regarding individual investments,
general economic conditions and trends and long-range investment policy.
In addition, the Advisor will furnish the Funds with whatever statistical
information the Funds may reasonably request with respect to the
securities that the Funds may hold or contemplate purchasing.
The Advisor further agrees that, in performing its duties hereunder, it will:
(a) comply with the 1940 Act and all rules and regulations thereunder and
under the Advisers Act, the Internal Revenue Code of 1986, as amended
("Code"), and all other applicable federal and state law and regulations,
and with any applicable procedures adopted by the Trustees;
(b) use reasonable efforts to manage each Fund so that it will qualify,
and continue to qualify, as a regulated investment company under
Subchapter M of the Code and regulations issued thereunder;
(c) maintain books and records with respect to each Fund's securities
transactions, render to the Trustees such periodic and special reports as
the Trustees may reasonably request, and keep the Trustees informed of
developments materially affecting each Fund's portfolio;
(d) make available to the Funds' administrator and, as appropriate, the
Trust promptly upon their request, such copies of its investment records
and ledgers with respect to the Funds as may be required to assist the
administrator and the Trust in their compliance with applicable laws and
regulations. The Advisor will furnish the Trustees with such periodic and
special reports regarding the Funds as they may reasonably request; and
(e) immediately notify the Trust in the event that the Advisor or any of
its affiliates:
(1) becomes aware that it is subject to a statutory disqualification
that prevents the Advisor from serving as investment advisor
pursuant to this Agreement; or
(2) becomes aware that it is the subject of an administrative
proceeding or enforcement action by the Securities and Exchange
Commission or other regulatory authority. The Advisor further agrees
to notify the Trust immediately of any material fact known to the
Advisor respecting or relating to the Advisor
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that is not contained in the Trust's Registration Statement
regarding the Funds, or any amendment or supplement thereto, but
that is required to be disclosed therein, and of any statement
contained therein that becomes untrue in any material respect.
The Advisor may enter into an agreement with one or more sub-advisors
(each, a "Sub-Advisor") pursuant to which each Sub-Advisor shall furnish
to the Trust on behalf of one or more of the Funds, the investment
advisory services specified therein in connection with the management of
the Funds ("Sub-Advisory Agreements"). The Advisor will continue to have
ultimate responsibility for all investment advisory services furnished
pursuant to any Sub-Advisory Agreement.
3. Documents
The Trust has delivered properly certified or authenticated copies of each
of the following documents to the Advisor and will deliver to it all
future amendments and supplements thereto, if any:
(a) certified resolution of the Trustees authorizing the appointment of
the Advisor and approving the form of this Agreement;
(b) the Registration Statements describing the Funds as filed with the
Securities and Exchange Commission and any amendments thereto; and
(c) exhibits, powers of attorneys, certificates and any and all other
documents relating to or filed in connection with the Registration
Statements described above.
4. Brokerage
In selecting brokers or dealers to execute transactions on behalf of the
Funds involving common and preferred stocks, the Advisor shall use its
best judgment to obtain the best overall terms available and involving
bonds and other fixed income obligations, the Advisor shall attempt to
obtain best net price and execution. In assessing the best overall terms
available for any transaction of a Fund, the Advisor will consider all
factors it deems relevant, including, but not limited to, the breadth of
the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer and the
reasonableness of the commission, if any, for the specific transaction and
on a continuing basis. In selecting broker-dealers to execute a particular
transaction, and in evaluating the best overall terms available, the
Advisor is authorized to consider the brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of
1934, as amended (the "1934 Act")) provided to the Funds and/or other
accounts over which the Advisor or its affiliates exercise investment
discretion. The parties hereto acknowledge that it is desirable for the
Trust that the Advisor have access to supplemental investment and market
research and security and
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economic analysis provided by broker-dealers who may execute brokerage
transactions at a higher cost to the Funds than may result when allocating
brokerage to other brokers on the basis of seeking the most favorable
price and efficient execution. Therefore, the Advisor may cause the Funds
to pay a broker-dealer which furnishes brokerage and research services a
higher commission than that which might be charged by another
broker-dealer for effecting the same transaction, provided that the
Advisor determines in good faith that such commission is reasonable in
relation the value of the brokerage and research services provided by such
broker-dealer, viewed in terms of either the particular transaction or the
overall responsibilities of the Advisor to the Funds. It is understood
that the services provided by such brokers may be useful to the Advisor in
connection with the Advisor's services to other clients. In accordance
with Section 11(a) of the 1934 Act and Rule 11a2-2(T) thereunder and
subject to any other applicable laws and regulations, the Advisor and its
affiliates are authorized to effect portfolio transactions for the Funds
and to retain brokerage commissions on such transactions.
5. Records
The Advisor 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 Advisor with respect to the Funds by the 1940 Act. The Advisor further
agrees that all records which it maintains for the Funds are the property
of the Funds and it will promptly surrender any of such records upon
request.
6. Standard of Care
The Advisor shall exercise its best judgment in rendering the services
under this Agreement. The Advisor shall not be liable for any error of
judgment or mistake of law or for any loss suffered by a Fund or the
Funds' shareholders in connection with the matters to which this Agreement
relates, provided that nothing herein shall be deemed to protect or
purport to protect the Advisor against any liability to a Fund or to its
shareholders to which the Advisor would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of the Advisor's reckless disregard
of its obligations and duties under this Agreement. As used in this
Section 6, the term "Advisor" shall include any officers, directors,
employees, or other affiliates of the Advisor performing services with
respect to a Fund.
7. Compensation
In consideration of the services rendered pursuant to this Agreement, each
Fund will pay the Advisor a fee as set forth on Schedule B attached
hereto. This fee shall be computed and accrued daily and payable daily.
For the purpose of determining fees payable to the
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Advisor, the value of a Fund's daily net assets shall be computed at the
times and in the manner specified in the Fund's Prospectus or Statement of
Additional Information.
8. Expenses
The Advisor will bear all expenses in connection with the performance of
its services under this Agreement and will bear the costs and expenses
payable to Sub-Advisors under the Sub-Advisory Agreements. Each Fund will
bear certain other expenses to be incurred in its operation, including:
taxes; interest; brokerage fees and commissions, if any; fees of the
Trustees of the Trust who are not officers, directors or employees of the
Advisor or any Sub-Advisor; Securities and Exchange Commission fees and
state blue sky fees; charges of custodians and transfer and dividend
disbursing agents; the Fund's proportionate share of insurance premiums;
outside auditing and legal expenses; costs of maintenance of the Fund's
existence; costs attributable to investor services, including, without
limitation, telephone and personal expenses; charges of an independent
pricing service, costs of preparing and printing Prospectuses and
Statements of Additional Information for regulatory purposes and for
distribution to existing shareholders; costs of shareholders' reports and
meetings of the shareholders of the Fund and of the officers and the
Trustees of the Trust; and any extraordinary expenses.
9. Services to Other Companies or Accounts
The investment advisory services of the Advisor to the Funds under this
Agreement are not to be deemed exclusive, and the Advisor, or any affiliate
thereof, shall be free to render similar services to other investment companies
and clients (whether or not their investment objective and policies are similar
those of a Fund) and to engage in activities so long as its services hereunder
are not impaired thereby.110. Duration and Termination
(a) Current Funds. With respect to each of the Funds listed on Schedule A
as of ____________, 2004 ("Current Funds"), this Agreement shall be
effective as of the date hereof. For each Current Fund, this Agreement
shall continue in effect from the date hereof, unless sooner terminated,
as provided herein, for two years and shall continue from year to year
thereafter, provided each continuance is specifically approved at least
annually by
(i) the vote of a majority of the Trustees or
(ii) a vote of a "majority" (as defined in the 0000 Xxx) of the
Current Fund's outstanding voting securities, provided that in
either event the continuance is also approved by a majority of the
Trustees who are not "interested persons" (as defined in the 0000
Xxx) of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such approval.
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(b) New Funds. With respect to any Fund not listed on Schedule A
hereto as of ____________, 2004 ("New Fund"), this Agreement shall
become effective on such date as determined by the Trustees,
provided that with respect to any New Fund, this Agreement shall not
take effect unless it has been approved
(i) by a vote of a majority of the Trustees, including a
majority of those Trustees members who are not "interested
persons" (as defined in the 0000 Xxx) of any party to this
Agreement cast in person at a meeting called for the purpose
of voting on such approval, and
(ii) by vote of a majority of that New Fund's outstanding
voting securities and shall continue in effect with respect to
the New Fund, unless sooner terminated, as provided herein,
for two years from the initial approval date for each New Fund
and shall continue from year to year thereafter, provided each
continuance is specifically approved at least annually by
(A) the vote of a majority of the Trustees or
(B) a vote of a "majority" (as defined in the 0000 Xxx)
of the New Fund's outstanding voting securities,
provided that in either event the continuance is also
approved by a majority of the Trustees who are not
"interested persons" (as defined in the 0000 Xxx) of any
party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such
approval.
(c) Termination. This Agreement is terminable with respect to the Funds,
or any Fund, without penalty, on sixty (60) days' written notice by the
Trustees or by vote of the holders of a "majority" (as defined in the 0000
Xxx) of the shares of the affected Funds or upon ninety (90) days' written
notice by the Advisor. Termination of this Agreement with respect to any
given Fund, shall in no way affect the continued validity of this
Agreement or the performance thereunder with respect to any other Fund.
This Agreement will be terminated automatically in the event of its
"assignment" (as defined in the 1940 Act).
11. Amendment
No provision of this Agreement shall be changed, waived or discharged or
terminated orally, but only by an instrument in writing signed by the
party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement with respect to
any Fund shall be effective until approved by an affirmative vote of (i) a
majority of the outstanding voting securities of that Fund, and (ii) a
majority of the members of the Trustees, including a majority of Trustees
members who are not "interested persons" (as defined in the 0000 Xxx) 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.
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12. Use of Name
It is understood that the name of "Stellar Advisors" or any derivative
thereof or logo associated with that name is the valuable property of the
Advisor and its affiliates, and that the Trust and each Fund have the
right to use such name (or derivative or logo) on a royalty-free basis
only so long as this Agreement shall continue with respect to a given
Fund. Upon termination of this Agreement or upon termination of this
Agreement with respect to a given Fund, the Trust, as appropriate, and any
affected Fund shall forthwith cease to use such name (or derivative or
logo) and, if necessary, the Trust shall promptly amend its Declaration of
Trust or other governing documents to change the Fund name to comply
herewith.
13. Miscellaneous
(a) This Agreement constitutes the full and complete agreement of the
parties hereto with respect to the subject matter hereof.
(b) Titles or captions of sections in this Agreement are inserted only as
a matter of convenience and for reference, and in no way define, limit,
extend or describe the scope of this Agreement or the intent of any
provisions thereof.
(c) This Agreement may be executed in several counterparts, all of which
together shall for all purposes constitute one Agreement, binding on all
the parties.
(d) This Agreement shall be construed in accordance with the laws of the
State of New York, provided, however, that nothing herein shall be
construed as being inconsistent with the 1940 Act.
(e) If any provisions of this Agreement or the application thereof to any
party or circumstances shall be determined by any court of competent
jurisdiction to be invalid or unenforceable to any extent, the remainder
of this Agreement or the application of such provision to such person or
circumstance, other than these as to which it so determined to be invalid
or unenforceable, shall not be affected thereby, and each provision hereof
shall be valid and shall be enforced to the fullest extent permitted by
law.
(f) Notices of any kind to be given to the Advisor by the Trust shall be
in writing and shall be duly given if mailed or delivered to the Advisor
at 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
other address or to such individual as shall be specified by the Advisor.
Notices of any kind to be given to the Trust by the Advisor shall be in
writing and shall be duly given if mailed or delivered to Xxxxxxxx
Business Center, 000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxx, XX, 00000, or
at such other address or to such individual as shall be specified by the
Trust.
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(g) This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original.
14. Acknowledgment of Disclaimer of Liability.
The Advisor acknowledges that the Declaration of Trust of the Trust states
that all persons extending credit to, contracting with or having any claim
against the Trust or a particular series of sharesof the Trust shall look only
to the assets of the Trust or the assets of that particular series of shares for
payment under such credit, contract or claim; and neither the shareholders nor
the trustees, nor any of the Trust's officers, employees or agents, whether
past, present or future, shall be personally liable therefor.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the date first set forth
above.
THE VANTAGE FUNDS
By:_______________________________
Xxx Xxxxx-Xxxxx
President
STELLAR ADVISORS, INC.
By:_______________________________
Xxxx X. Xxxxxx
Chief Administrative Officer
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SCHEDULE A
As ______ , 2004
Vantage Money Market Fund
Vantage Balanced Fund
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SCHEDULE B
As of______ , 2004
Annual Fees (as a Percentage of Daily Net Assets)
Vantage Money Market Fund 0.10%
Vantage Balanced Fund 0.35%
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