Exhibit 5(b)(ii)
LIBERTY ALL-STAR GROWTH AND INCOME FUND
PORTFOLIO MANAGEMENT AGREEMENT
_______________, 1999
OpCap Advisors
Xxxxxxxxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Re: Portfolio Management Agreement
Ladies and Gentlemen:
Liberty All-Star Growth and Income Fund (the "Fund") is a series of
LAMCO Trust I (the "Trust"), a diversified open-end investment company
registered under the Investment Company Act of 1940 (the "Act"), and is subject
to the rules and regulations promulgated thereunder.
Pursuant to a Fund Management Agreement (the "Fund Management
Agreement") between Liberty Asset Management Company (the "Fund Manager") and
the Trust on behalf of the Fund, the Fund Manager evaluates and recommends
portfolio managers for the Fund.
l. Employment as a Portfolio Manager. The Trust being duly authorized
hereby employs OpCap Advisors (the "Portfolio Manager") as a discretionary
portfolio manager, on the terms and conditions set forth herein, of those assets
of the Fund which the Fund Manager determines to assign to the Portfolio Manager
(those assets being referred to as the "Fund Account"). The Fund Manager may,
from time to time, make additions to and withdrawals from the Fund Account.
2. Acceptance of Employment; Standard of Performance. The Portfolio
Manager accepts its employment as a discretionary portfolio manager and agrees
to use its best professional judgment to make timely investment decisions for
the Fund Account in accordance with the provisions of this Agreement.
3. Portfolio Management Services of Portfolio Manager. In providing
portfolio management services to the Fund Account, the Portfolio Manager shall
be subject to the investment objectives, policies and restrictions of the Fund
as set forth in the Trust's current
registration statement under the Act (as the same may be modified from time to
time), and the investment restrictions set forth in the Act and the Rules
thereunder, as and to the extent set forth in such registration statement or in
other documentation furnished to the Portfolio Manager by the Fund or the Fund
Manager, to the supervision and control of the Trustees of the Trust (the
"Trustees"), and to instructions from the Fund Manager. The Portfolio Manager
shall not, without the prior approval of the Fund or the Fund Manager, effect
any transactions which would cause the Fund Account, treated as a separate fund,
to be out of compliance with any of such restrictions or policies.
4. Transaction Procedures. All portfolio transactions for the Fund
Account will be consummated by payment to or delivery by the custodian of the
assets of the Fund (the "Custodian"), or such depositories or agents as may be
designated by the Custodian in writing, as custodian for the Fund, of all cash
and/or securities due to or from the Fund Account, and the Portfolio Manager
shall not have possession or custody thereof or any responsibility or liability
with respect to such custody. The Portfolio Manager shall advise and confirm to
the Custodian all investment orders for the Fund Account placed by it with
brokers and dealers at the time and in the manner set forth in Schedule A hereto
(as Schedule A may be amended by the Fund Manager from time to time). The Fund
shall issue to the Custodian such instructions as may be appropriate in
connection with the settlement of any transaction initiated by the Portfolio
Manager. The Fund shall be responsible for all custodial arrangements and the
payment of all custodial charges and fees, and, upon giving proper instructions
to the Custodian, the Portfolio Manager shall have no responsibility or
liability with respect to custodial arrangements or the acts, omissions or other
conduct of the Custodian.
5. Allocation of Brokerage. The Portfolio Manager shall have authority
and discretion to select brokers and dealers to execute portfolio transactions
initiated by the Portfolio Manager, and to select the markets on or in which the
transaction will be executed.
A. In doing so, the Portfolio Manager's primary responsibility
shall be to seek to obtain best net price and execution for
the Fund. However, this responsibility shall not obligate the
Portfolio Manager to solicit competitive bids for each
transaction or to seek the lowest available commission cost to
the Fund, so long as the Portfolio Manager reasonably believes
that the broker or dealer selected by it can be expected to
obtain a "best execution" market price on the particular
transaction and determines in good faith that the commission
cost is reasonable in relation to the value of the brokerage
and research services (as defined in Section 28(e)(3) of the
Securities Exchange Act of 1934) provided by such broker or
dealer to the Portfolio Manager viewed in terms of either that
particular transaction or of the Portfolio Manager's overall
responsibilities with respect to its clients, including the
Fund, as to which the Portfolio Manager exercises investment
discretion, notwithstanding that the Fund may not be the
direct or exclusive beneficiary of any such services or that
another broker may be willing to charge the Fund a lower
commission on the particular transaction.
2
B. The Fund Manager shall have the right to request that
transactions giving rise to brokerage commissions shall be
executed by brokers and dealers (and in amounts), to be agreed
upon from time to time between the Fund Manager and the
Portfolio Manager, that provide or make available brokerage or
research services to the Fund or the Fund Manager, or as to
which an on-going relationship will be of value to the Fund in
the management of its assets, which services and relationship
may, but need not, be of direct benefit to the Fund Account.
The Portfolio Manager shall not be responsible under paragraph
A above with respect to transactions executed through any such
broker or dealer.
C. The Portfolio Manager shall not execute any portfolio
transactions for the Fund Account with a broker or dealer
which is an "affiliated person" (as defined in the Act) of the
Fund, the Portfolio Manager or any other Portfolio Manager of
the Fund without the prior written approval of the Fund. The
Fund will provide the Portfolio Manager with a list of brokers
and dealers which are "affiliated persons" of the Fund or its
Portfolio Managers.
6. Proxies. The Portfolio Manager will vote all proxies solicited by or
with respect to the issuers of securities in which assets of the Fund Account
may be invested from time to time in accordance with such policies as shall be
determined or approved by the Fund Manager.
7. Fees for Services. As its compensation for its services under this
Agreement, the Fund Manager will pay the Portfolio Manager monthly in arrears a
fee at an annual rate equal to 0.40% of the net asset value of the Fund Account
up to and including $100 million and 0.30% of net asset value of the Fund
Account in excess of $100 million. The fee shall be accrued for each calendar
day and the sum of the daily fee accruals shall be paid monthly on or before the
fifteenth day of the following calendar month. The daily accruals of the fee
will be computed by (A)(i) multiplying 0.40% by the fraction the numerator of
which is one and the denominator of which is the number of days in the year, and
(ii) multiplying the product obtained pursuant to clause (A)(i) above by the net
asset value of the Fund Account as determined in accordance with the Trust's
Registration Statement as of the previous day on which the Fund was open for
business, up to and including $100 million, (B)(i) multiplying 0.30% by such
fraction, and (ii) multiplying the product obtained pursuant to clause (B)(i)
above by the net asset value of the Fund Account, as so determined, in excess of
$100 million, and (C) adding the products obtained pursuant to clauses (A) and
(B) above. The foregoing fee shall be prorated for any month during which this
Agreement is in effect for only a portion of the month. Pursuant to the Fund
Management Agreement, the Fund Manager is solely responsible for the payment of
fees to the Portfolio Manager, and the Portfolio Manager agrees to seek payment
of its fees solely from the Fund Manager.
8. Other Investment Activities of Portfolio Manager. The Trust on
behalf of the Fund acknowledges that the Portfolio Manager or one or more of its
affiliates has investment responsibilities, renders investment advice to and
performs other investment advisory services for other individuals or entities
("Client Accounts"), and that the Portfolio Manager, its affiliates or
3
any of its or their directors, officers, agents or employees may buy, sell or
trade in any securities for its or their respective accounts ("Affiliated
Accounts"). Subject to the provisions of paragraph 2 hereof, the Trust on behalf
of the Fund agrees that the Portfolio Manager or its affiliates may give advice
or exercise investment responsibility and take such other action with respect to
other Client Accounts and Affiliated Accounts which may differ from the advice
given or the timing or nature of action taken with respect to the Fund Account,
provided that the Portfolio Manager acts in good faith, and provided further,
that it is the Portfolio Manager's policy to allocate, within its reasonable
discretion, investment opportunities to the Fund Account over a period of time
on a fair and equitable basis relative to the Client Accounts and the Affiliated
Accounts, taking into account the cash position and the investment objectives
and policies of the Fund and any specific investment restrictions applicable
thereto. The Trust on behalf of the Fund acknowledges that one or more Client
Accounts and Affiliated Accounts may at any time hold, acquire, increase,
decrease, dispose of or otherwise deal with positions in investments in which
the Fund Account may have an interest from time to time, whether in transactions
which involve the Fund Account or otherwise. The Portfolio Manager shall have no
obligation to acquire for the Fund Account a position in any investment which
any Client Account or Affiliated Account may acquire, and the Fund shall have no
first refusal, coinvestment or other rights in respect of any such investment,
either for the Fund Account or otherwise.
9. Limitation of Liability. The Portfolio Manager shall not be liable
for any action taken, omitted or suffered to be taken by it in its reasonable
judgment, in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement, or in
accordance with (or in the absence of) specific directions or instructions from
the Fund or the Fund Manager, provided, however, that such acts or omissions
shall not have resulted from the Portfolio Manager's willful misfeasance, bad
faith or gross negligence, a violation of the standard of care established by
and applicable to the Portfolio Manager in its actions under paragraph 2 hereof
or breach of its duty or of its obligations hereunder (provided, however, that
the foregoing shall not be construed to protect the Portfolio Manager from
liability in violation of Section 17(i) of the Act).
10. Confidentiality. Subject to the duty of the Portfolio Manager and
the Fund to comply with applicable law, including any demand of any regulatory
or taxing authority having jurisdiction, the parties hereto shall treat as
confidential all information pertaining to the Fund Account and the actions of
the Portfolio Manager and the Fund in respect thereof.
11. Assignment. This Agreement shall terminate automatically in the
event of its assignment, as that term is defined in Section 2(a)(4) of the Act.
The Portfolio Manager shall notify the Fund in writing sufficiently in advance
of any proposed change of control, as defined in Section 2(a)(9) of the Act, as
will enable the Fund to consider whether an assignment as defined in Section
2(a)(4) of the Act will occur, and whether to take the steps necessary to enter
into a new contract with the Portfolio Manager.
12. Representations, Warranties and Agreements of the Fund. The Trust
on behalf of the Fund represents, warrants and agrees that:
4
A. The Portfolio Manager has been duly appointed to provide
investment services to the Fund Account as contemplated
hereby.
B. The Trust on behalf of the Fund will deliver to the Portfolio
Manager either a true and complete copy of its then current
registration statement as effective from time to time, or such
other information governing the Portfolio Manager's investment
of the Fund Account (including the investment objectives,
policies and restrictions set forth in such registration
statement) as is necessary for the Portfolio Manager to carry
out its obligations under this Agreement.
13. Representations, Warranties and Agreements of the Portfolio
Manager. The Portfolio Manager represents, warrants and agrees that:
A. It is registered as an "Investment Adviser" under the
Investment Advisers Act of 1940 ("Advisers Act").
B. It will maintain, keep current and preserve on behalf of the
Fund, in the manner required or permitted by the Act and the
Rules thereunder, the records identified in Schedule B (as
Schedule B may be amended by the Fund Manager from time to
time). The Portfolio Manager agrees that such records are the
property of the Fund, and will be surrendered to the Fund
promptly upon request.
C. It will maintain in effect a written code of ethics complying
with the requirements of Rule l7j-l under the Act. Within 45
days of the end of each year while this Agreement is in
effect, an officer or general partner of the Portfolio Manager
shall certify to the Fund that the Portfolio Manager has
complied with the requirements of Rule l7j-l during the
previous year and that there has been no violation of its code
of ethics or, if such a violation has occurred, that
appropriate action was taken in response to such violation.
D. Upon request, the Portfolio Manager will promptly supply the
Trust with any information concerning the Portfolio Manager
and its stockholders, employees and affiliates which the Trust
may reasonably require in connection with the preparation of
its registration statement, proxy material, reports and other
documents relating to the Fund required to be filed under the
Act, the Securities Act of 1933, or other applicable
securities laws.
E. Reference is hereby made to the Agreement and Declaration of
Trust dated November 3, 1998 establishing the Trust, a copy of
which has been filed with the Secretary of the Commonwealth of
Massachusetts and elsewhere as required by law, and to any and
all amendments thereto so filed or
5
hereafter filed. The name LAMCO Trust I refers to the Trustees
under said Agreement and Declaration of Trust, as Trustees and
not personally, and no Trustee, shareholder, officer, agent or
employee of the Trust shall be held to any personal liability
hereunder or in connection with the affairs of the Trust or
the Fund, but only the assets of the Fund are liable under
this Agreement. Without limiting the generality of the
foregoing, neither the Portfolio Manager nor any of its
officers, directors, partners, shareholders or employees
shall, under any circumstances, have recourse or cause or
willingly permit recourse to be had directly or indirectly to
any personal, statutory, or other liability of any
shareholder, Trustee, officer, agent or employee of the Trust
or of any successor of the Trust or the Fund, whether such
liability now exists or is hereafter incurred, for claims
against the Trust estate, but shall look for payment solely to
the assets of the Fund or any successor thereto.
14. Amendment. This Agreement may be amended at any time, but only by
written agreement among the Portfolio Manager, the Fund Manager and the Trust,
on behalf of the Fund, which amendment, other than amendments to Schedules A and
B hereto (which may be amended by the Fund Manager acting alone), is subject to
the approval of the Trustees and the Shareholders of the Fund as and to the
extent required by the Act.
15. Effective Date; Term. This Agreement shall continue in effect until
________, 2001 and shall continue in effect thereafter provided such continuance
is specifically approved at least annually by (i) the Trust's Board of Trustees
or (ii) a vote of a "majority" (as defined in the Act) of the Fund's outstanding
voting securities, provided that in either event the continuance is also
approved by a majority of the Board of Trustees who are not "interested persons"
(as defined in the Act) of any party to this Agreement, by vote cast in person
at a meeting called for the purpose of voting on such approval. The aforesaid
requirement that continuance of this Agreement be "specifically approved at
least annually" shall be construed in a manner consistent with the Act and the
Rules and Regulations thereunder. Notwithstanding the foregoing, this Agreement
shall terminate upon the effective date of the termination or expiration of the
Fund Management Agreement.
16. Termination. This Agreement may be terminated by any party, without
penalty, immediately upon written notice to the other parties in the event of a
breach of any provision thereof by a party so notified, or otherwise upon not
less than thirty (30) days' written notice to the Portfolio Manager in the case
of termination by the Trust on behalf of the Fund or the Fund Manager, or ninety
(90) days' written notice to the Trust and the Fund Manager in the case of
termination by the Portfolio Manager. This Agreement shall immediately terminate
in the event of its assignment (as that term is defined in the Act). No such
termination shall affect the status, obligations or liabilities of any party
hereto to the other parties arising prior to such termination.
17. Applicable Law. To the extent that state law is not preempted by
the provisions of any law of the United States heretofore or hereafter enacted,
as the same may be amended from
6
time to time, this Agreement shall be administered, construed and enforced
according to the laws of the Commonwealth of Massachusetts.
18. Severability. If any term or condition of this Agreement shall be
invalid or unenforceable to any extent or in any application, then the remainder
of this Agreement, and such term or condition except to such extent or in such
application, shall not be affected thereby, and each and every term and
condition of this Agreement shall be valid and enforced to the fullest extent
and in the broadest application permitted by law.
IN WITNESS WHEREOF, the parties have hereunto set their hands as of the
date first written above.
LAMCO TRUST I
on its own behalf and on behalf of the
Liberty All-Star Growth and Income Fund
By:___________________________________________
Title:________________________________________
LIBERTY ASSET MANAGEMENT COMPANY
By:___________________________________________
Title:________________________________________
ACCEPTED AND AGREED TO:
OPCAP ADVISORS
By: _____________________________
SCHEDULES:
A. Operational Procedures
B. Record Keeping Requirements
