EXHIBIT 6.1
INVESTMENT ADVISORY AGREEMENT
LIBERTY ACORN TRUST, a Massachusetts business trust registered under the
Investment Company Act of 1940 (the "1940 Act") as an open-end diversified
management investment company ("Liberty Acorn"), and LIBERTY XXXXXX ASSET
MANAGEMENT, L.P., a Delaware limited partnership registered under the Investment
Advisers Act of 1940 as an investment adviser ("Liberty WAM"), agree that:
1. ENGAGEMENT OF LIBERTY WAM. Liberty Acorn appoints Liberty WAM to furnish
investment advisory and other services to Liberty Acorn for its series
designated Liberty Acorn Fund, Liberty Acorn International, Liberty Acorn USA,
Liberty Acorn Twenty and Liberty Acorn Foreign Forty (each, a "Fund," and
collectively, the "Funds")), and Liberty WAM accepts that appointment, for the
period and on the terms set forth in this agreement.
If Liberty Acorn establishes one or more series in addition to the Funds named
above with respect to which it desires to retain Liberty WAM as investment
adviser hereunder, and if Liberty WAM is willing to provide such services under
this agreement, Liberty Acorn and Liberty WAM may add such new series to this
agreement, by written supplement to this agreement. Such supplement shall
include a schedule of compensation to be paid to Liberty WAM by Liberty Acorn
with respect to such series and such other modifications of the terms of this
agreement with respect to such series as Liberty Acorn and Liberty WAM may
agree. Upon execution of such a supplement by Liberty Acorn and Liberty WAM,
that series will become a Fund hereunder and shall be subject to the provisions
of this agreement to the same extent as the Funds named above, except as
modified by the supplement.
2. SERVICES OF LIBERTY WAM.
(a) INVESTMENT MANAGEMENT. Subject to the overall supervision and control of
Liberty Acorn's board of trustees (the "Board"), Liberty WAM shall have
supervisory responsibility for the general management and investment of the
Funds' assets. Liberty WAM shall comply with the 1940 Act and with all
applicable rules and regulations of the Securities and Exchange Commission, the
provisions of the Internal Revenue Code applicable to the Funds as regulated
investment companies, the investment policies and restrictions, portfolio
transaction policies and the other statements concerning the Funds in Liberty
Acorn's agreement and declaration of trust, bylaws, and registration statements
under the 1940 Act and the Securities Act of 1933 (the "1933 Act"), and policy
decisions and procedures adopted by the Board from time to time.
Liberty WAM is authorized to make the decisions to buy and sell securities and
other assets for the Funds, to place the Funds' portfolio transactions with
broker-dealers, and to negotiate the terms of such transactions including
brokerage commissions on brokerage transactions, on behalf of the Funds. Liberty
WAM is authorized to exercise discretion within the Funds' policy concerning
allocation of its portfolio brokerage, as permitted by law, including but not
limited to section 28(e) of the Securities Exchange Act of 1934, and in so doing
shall not be required to make any reduction in its investment advisory fees.
Liberty Acorn hereby authorizes any entity or person associated with Liberty WAM
that is a member of a national securities exchange to effect any transaction on
the exchange for the account of a Fund to the extent permitted by and in
accordance with Section 11(a) of the Securities Exchange Act of 1934 and Rule
11a2-2(T) thereunder. Liberty Acorn hereby consents to the retention by such
entity or person of compensation for such transactions in accordance with Rule
11a-2(T)(a)(iv).
Liberty WAM may, where it deems it to be advisable, aggregate orders with other
securities of the same type to be sold or purchased by one or more Funds with
like orders on behalf of other clients of Liberty WAM (as well as clients of
other investment advisers affiliated with Liberty WAM, in the event that Liberty
WAM and such affiliated investment advisers share common trading facilities). In
such event, Liberty WAM (or Liberty WAM and its affiliated advisers, as the case
may be) will allocate the shares so sold or purchased, as well as the expenses
incurred in the transaction, in a manner it (or it and they) consider to be
equitable and fair and consistent with its (or its or their) fiduciary
obligations to clients.
(b) REPORTS AND INFORMATION. Liberty WAM shall furnish to the Board periodic
reports on the investment strategy and performance of the Funds and such
additional reports and information as the Board or the officers of Liberty Acorn
may reasonably request. Liberty Acorn shall furnish or otherwise make available
to Liberty WAM such copies of financial statements, proxy statements, reports,
and other information relating to the business and affairs of each Fund as
Liberty WAM may, at any time or from time to time, reasonably require in order
to discharge its obligations under this agreement.
(c) CUSTOMERS OF FINANCIAL INSTITUTIONS. It is understood that Liberty WAM may,
but shall not be obligated to, make payments from its own resources to financial
institutions (which may include banks, broker-dealers, recordkeepers,
administrators and others) that provide, either directly or through agents,
administrative and other services with respect to shareholders who are customers
of such institutions, including establishing shareholder accounts, assisting
Liberty Acorn's transfer agent with respect to recording purchase and redemption
transactions, advising shareholders about the status of their accounts, current
yield and dividends declared and such related services as the shareholders or
the Funds may request.
(d) BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, Liberty WAM agrees to maintain records relating to its services
under this agreement, and further agrees that all records that it maintains for
Liberty Acorn are the property of Liberty Acorn and to surrender promptly to
Liberty Acorn any of such records upon Liberty Acorn's request; provided that
Liberty WAM may at its own expense make and retain copies of any such records.
Liberty WAM further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act.
(e) STATUS OF LIBERTY WAM. Liberty WAM shall for all purposes herein be deemed
to be an independent contractor and not an agent of Liberty Acorn and shall,
unless otherwise expressly provided or authorized, have no authority to act for
or represent Liberty Acorn in any way. Liberty WAM agrees to notify the Trust
promptly of any change in the identity of Liberty WAM's general partner.
3. ADMINISTRATIVE SERVICES. Liberty WAM shall supervise the business and affairs
of Liberty Acorn and each Fund and shall provide such services and facilities as
may be required for effective administration of Liberty Acorn and the Funds as
are not provided by employees or other agents engaged by Liberty Acorn; provided
that Liberty WAM shall not have any obligation to provide under this agreement
any such services which are the subject of a separate agreement or arrangement
between Liberty Acorn and Liberty WAM, any affiliate of Liberty WAM, or any
third party administrator.
4. USE OF AFFILIATED COMPANIES AND SUBCONTRACTORS. In connection with the
services to be provided by Liberty WAM under this agreement, Liberty WAM may, to
the extent it deems appropriate, and subject to compliance with the requirements
of applicable laws and regulations and upon receipt of approval of the Trustees,
make use of (i) its affiliated companies and their directors, trustees,
officers, and employees and (ii) subcontractors selected by Liberty WAM,
provided that Liberty WAM shall supervise and remain fully responsible for the
services of all such third parties in accordance with and to the extent provided
by this agreement. All costs and expenses associated with services provided by
any such third parties shall be borne by Liberty WAM or such parties.
5. EXPENSES TO BE PAID BY LIBERTY ACORN. Except as otherwise provided in this
agreement or any other contract to which Liberty Acorn is a party, Liberty Acorn
shall pay all expenses incidental to its organization, operations and business,
including, without limitation:
(a) all charges of depositories, custodians, sub-custodians and other agencies
for the safekeeping and servicing of its cash, securities and other property and
of its transfer agents and registrars and its dividend disbursing and redemption
agents, if any;
(b) all charges of its administrator, if any;
(c) all charges of legal counsel and of independent auditors;
(d) all compensation of trustees other than those affiliated with Liberty WAM or
Liberty Acorn's administrator, if any, and all expenses incurred in connection
with their services to Liberty Acorn;
(e) all expenses of preparing, printing and distributing notices, proxy
solicitation materials and reports to shareholders of the Funds;
(f) all expenses of meetings of shareholders of the Funds;
(g) all expenses of registering and maintaining the registration of Liberty
Acorn under the 1940 Act and of shares of the Funds under the 1933 Act,
including all expenses of preparation, filing and printing of annual or more
frequent revisions of the Funds' registration statements under the 1940 Act and
1933 Act, and of supplying each then existing shareholder or beneficial owner of
shares of the Funds of a copy of each revised prospectus or supplement thereto,
and of supplying a copy of the statement of additional information upon request
to any then existing shareholder;
(h) all costs of borrowing money;
2
(i) all expenses of publication of notices and reports to shareholders and to
governmental bodies or regulatory agencies;
(j) all taxes and fees payable to federal, state or other governmental agencies,
domestic or foreign, and all stamp or other taxes;
(k) all expenses of printing and mailing certificates for shares of a Fund;
(l) all expenses of bond and insurance coverage required by law or deemed
advisable by the Board;
(m) all expenses of qualifying and maintaining qualification of, or providing
appropriate notification of intention to sell relating to, shares of the Funds
under the securities laws of the various states and other jurisdictions, and of
registration and qualification of Liberty Acorn under any other laws applicable
to Liberty Acorn or its business activities;
(n) all fees, dues and other expenses related to membership of Liberty Acorn in
any trade association or other investment company organization; and
(o) any extraordinary expenses.
In addition to the payment of expenses, Liberty Acorn shall also pay all
brokers' commissions and other charges relating to the purchase and sale of
portfolio securities for each Fund.
6. ALLOCATION OF EXPENSES PAID BY LIBERTY ACORN. Any expenses paid by Liberty
Acorn that are attributable solely to the organization, operation or business of
a Fund or Funds shall be paid solely out of the assets of that Fund or Funds.
Any expense paid by Liberty Acorn that is not solely attributable to a Fund or
Funds, nor solely to any other series of Liberty Acorn, shall be apportioned in
such manner as Liberty Acorn or Liberty Acorn's administrator determines is fair
and appropriate, or as otherwise specified by the Board.
7. EXPENSES TO BE PAID BY LIBERTY WAM. Liberty WAM shall furnish to Liberty
Acorn, at Liberty WAM's own expense, office space and all necessary office
facilities, equipment and personnel required to provide its services pursuant to
this agreement. Liberty WAM shall also assume and pay all expenses of placement
of securities orders and related bookkeeping.
8. COMPENSATION OF LIBERTY WAM. For the services to be rendered and the expenses
to be assumed and to be paid by Liberty WAM under this agreement, Liberty Acorn
on behalf of the respective Funds shall pay to Liberty WAM fees accrued daily
and paid monthly at the annual rates (as a percentage of the Fund's net assets)
shown below:
LIBERTY ACORN FUND
ASSETS RATE OF FEE
------ -----------
First $700 million 0.75%
$700 million to $2 billion 0.70%
In excess of $2 billion 0.65%
LIBERTY ACORN INTERNATIONAL
ASSETS RATE OF FEE
------ -----------
First $100 million 1.20%
$100 million to $500 million 0.95%
In excess of $500 million 0.75%
LIBERTY ACORN USA
ASSETS RATE OF FEE
------ -----------
First $200 million 0.95%
In excess of $200 million 0.90%
3
LIBERTY ACORN TWENTY
All Assets 0.90%
LIBERTY ACORN FOREIGN FORTY
All Assets 0.95%
The fees attributable to each Fund shall be a separate charge to such Fund and
shall be the several (and not joint or joint and several) obligation of each
such Fund.
9. SERVICES OF LIBERTY WAM NOT EXCLUSIVE. The services of Liberty WAM to Liberty
Acorn under this agreement are not exclusive, and Liberty WAM shall be free to
render similar services to others so long as its services under this agreement
are not impaired by such other activities.
10. SERVICES OTHER THAN AS ADVISER. Within the limits permitted by law, Liberty
WAM or an affiliate of Liberty WAM may receive compensation from Liberty Acorn
for other services performed by it for Liberty Acorn which are not within the
scope of the duties of Liberty WAM under this agreement, including the provision
of brokerage services.
11. STANDARD OF CARE. To the extent permitted by applicable law, neither Liberty
WAM nor any of its partners, officers, agents, employees or affiliates shall be
liable to Liberty Acorn or its shareholders for any loss suffered by Liberty
Acorn or its shareholders as a result of any error of judgment, or any loss
arising out of any investment, or as a consequence of any other act or omission
of Liberty WAM or any of its affiliates in the performance of Liberty WAM's
duties under this agreement, except for liability resulting from willful
misfeasance, bad faith or gross negligence on the part of Liberty WAM or such
affiliate, or by reason of reckless disregard by Liberty WAM or such affiliate
of the obligations and duties of Liberty WAM under this agreement.
12. EFFECTIVE DATE, DURATION AND RENEWAL. This agreement shall become effective
on November 1, 2001. Unless terminated as provided in Section 13, this agreement
shall continue in effect as to a Fund until July 31, 2003 and thereafter from
year to year only so long as such continuance is specifically approved at least
annually (a) by a majority of those trustees who are not interested persons of
Liberty Acorn or of Liberty WAM, voting in person at a meeting called for the
purpose of voting on such approval, and (b) by either the Board or vote of the
holders of a "majority of the outstanding shares" of that Fund (which term as
used throughout this agreement shall be construed in accordance with the
definition of "vote of a majority of the outstanding voting securities of a
company" in section 2(a)(42) of the 1940 Act).
13. TERMINATION. This agreement may be terminated as to a Fund at any time,
without payment of any penalty, by the Board, or by a vote of the holders of a
majority of the outstanding shares of that Fund, upon 60 days' written notice to
Liberty WAM. This agreement may be terminated by Liberty WAM at any time upon 60
days' written notice to Liberty Acorn. This agreement shall terminate
automatically in the event of its assignment (as defined in Section 2(a)(4) of
the 1940 Act).
14. AMENDMENT. This agreement may be amended in accordance with the 1940 Act.
15. NON-LIABILITY OF TRUSTEES AND SHAREHOLDERS. A copy of the declaration of
trust of Liberty Acorn is on file with the Secretary of The Commonwealth of
Massachusetts, and notice is hereby given that this instrument is executed on
behalf of Liberty Acorn by its officers as officers and not individually. All
obligations of Liberty Acorn hereunder shall be binding only upon the assets of
Liberty Acorn (or the appropriate Fund) and shall not be binding upon any
trustee, officer, employee, agent or shareholder of Liberty Acorn. Neither the
authorization of any action by the trustees or shareholders of Liberty Acorn nor
the execution of this agreement on behalf of Liberty Acorn shall impose any
liability upon any trustee, officer or shareholder of Liberty Acorn.
16. USE OF MANAGER'S NAME. Liberty Acorn may use the name "Liberty" or any other
name derived from the name "Liberty" only for so long as this agreement or any
extension, renewal or amendment hereof remains in effect, including any similar
agreement with any organization that shall remain affiliated with Liberty
Financial Companies, Inc. and shall have succeeded to the business of Liberty
WAM as investment adviser. At such time as this agreement or any extension,
renewal or amendment hereof, or such other similar agreement shall no longer be
in effect, Liberty Acorn will (by amendment of its agreement and declaration of
trust if necessary) cease to use any name derived from the name "Liberty" or
otherwise connected with Liberty WAM, or with any organization that shall have
succeeded to Liberty WAM's business as investment adviser.
4
17. NOTICES. Any notice, demand, change of address or other communication to be
given in connection with this agreement shall be given in writing and shall be
given by personal delivery, by registered or certified mail or by transmittal by
facsimile or other electronic medium addressed to the recipient as follows (or
at such other address or addresses as a party may provide to the other from time
to time, by notice):
If to Liberty WAM: Liberty Xxxxxx Asset
Management, L.P.
Attention: Xxxxx X. Xxxxx
000 Xxxx Xxxxxx Xxxxxx,
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telephone: 000 000-0000
Facsimile: 000 000-0000
with a copy to:
If to Liberty Acorn: Liberty Acorn Trust
000 Xxxx Xxxxxx Xxxxxx,
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telephone: 000 000-0000
Facsimile: 000 000-0000
with a copy to:
Xxxx, Xxxx & Xxxxx LLC
Attention: Xxxxxxx X. Xxxxx
Three First Xxxxxxxx Xxxxx,
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telephone: 312/000-0000
Facsimile: 312/372-2098
All notices shall be conclusively deemed to have been given on the day of actual
delivery thereof and, if given by registered or certified mail, on the fifth
business day following the deposit thereof in the mail and, if given by
facsimile or other electronic medium, on the day of transmittal thereof (upon
electronic confirmation of receipt thereof).
18. GOVERNING LAW. This agreement shall be construed and interpreted in
accordance with the laws of the State of Illinois and the laws of the United
States of America applicable to contracts executed and to be performed therein.
5
Dated as of November 1, 2001
LIBERTY ACORN TRUST
By: /s/ XXXXX XXXXXX
Name:
Title:
LIBERTY XXXXXX ASSET
MANAGEMENT, L.P.
By WAM Acquisition GP, Inc.
Its General Partner
By: /S/ XXXXX XXXXX
6
