AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT
COLUMBIA 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 ("Columbia Acorn"), and COLUMBIA XXXXXX ASSET
MANAGEMENT, L.P., a Delaware limited partnership registered under the Investment
Advisers Act of 1940 as an investment adviser ("Columbia WAM"), agree that:
1. ENGAGEMENT OF COLUMBIA WAM. The Board of Trustees of Columbia Acorn,
including a majority of independent trustees, on behalf of Columbia Acorn,
appoints Columbia WAM to furnish investment advisory and other services to
Columbia Acorn for its series designated Columbia Acorn Fund, Columbia Acorn
International, Columbia Acorn USA, Columbia Acorn Select, Columbia Acorn
International Select and Columbia Thermostat Fund (each, a "Fund," and
collectively, the "Funds")), and Columbia WAM accepts that appointment, for the
period and on the terms set forth in this agreement.
If Columbia Acorn establishes one or more series in addition to the
Funds named above with respect to which it desires to retain Columbia WAM as
investment adviser hereunder, and if Columbia WAM is willing to provide such
services under this agreement, Columbia Acorn and Columbia 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 Columbia WAM
by Columbia Acorn with respect to such series and such other modifications of
the terms of this agreement with respect to such series as Columbia Acorn and
Columbia WAM may agree. Upon execution of such a supplement by Columbia Acorn
and Columbia 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 COLUMBIA WAM.
(a) (i) INVESTMENT MANAGEMENT. Subject to the overall supervision and
control of Columbia Acorn's board of trustees (the "Board"), Columbia
WAM shall have supervisory responsibility for the general management
and investment of the Funds' assets and will endeavor to preserve the
autonomy of Columbia Acorn. Columbia WAM will remain a wholly-owned
subsidiary of Columbia Management Group, Inc. ("CMG") (or its
successor) as a Chicago-based management firm. Columbia 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
Columbia 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.
(ii) INVESTMENT OPERATIONS. Columbia WAM will maintain the
investment philosophy and research that the Chicago-based management
deems appropriate; its research activities will be separate and
dedicated solely to Columbia WAM and it will maintain its own domestic
and international trading activities. Columbia WAM will use its best
efforts to maintain information systems that will provide timely and
uninterrupted operating information and data consistent with all
regulatory and compliance requirements. The Chicago-based management
will have the responsibility and considerable latitude to recruit and
compensate (on a competitive basis) investment management personnel and
to control travel budgets for analysts consistent with its operational
and strategic plans while subject to the approval of the management of
CMG.
(iii) BROKERAGE. Columbia 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. Columbia
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. Columbia Acorn hereby
authorizes any entity or person associated with
Columbia 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. Columbia
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).
Columbia 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
Columbia WAM (as well as clients of other investment advisers
affiliated with Columbia WAM, in the event that Columbia WAM and such
affiliated investment advisers share common trading facilities). In
such event, Columbia WAM (or Columbia 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.
(iv) COMPLIANCE. Columbia WAM acknowledges the importance that
the Board and its compliance committee place on full legal and
regulatory compliance by CMG, Columbia WAM, and all other Columbia
Acorn service providers and their personnel (collectively, "Providers")
and agrees to (i) fully cooperate with the Board, the compliance
committee and the Chief Compliance Officer of Columbia Acorn with all
inquiries by Columbia Acorn concerning such compliance by the Providers
and (ii) proactively communicate with the Board, the compliance
committee and the Chief Compliance Officer of Columbia Acorn concerning
material compliance matters and any instance of legal or regulatory
non-compliance by the Providers of which Columbia WAM is aware and that
Columbia WAM deems to be material. Such cooperation and communication
by Columbia WAM will be done after receipt of an inquiry or upon
learning of any such legal or regulatory non-compliance.
(b) REPORTS AND INFORMATION. Columbia 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 Columbia
Acorn may reasonably request. Columbia Acorn shall furnish or otherwise make
available to Columbia WAM such copies of financial statements, proxy statements,
reports, and other information relating to the business and affairs of each Fund
as Columbia 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 Columbia
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
Columbia 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, Columbia WAM agrees to maintain records relating to
its services under this agreement, and further agrees that all records that it
maintains for Columbia Acorn are the property of Columbia Acorn and to surrender
promptly to Columbia Acorn any of such records upon Columbia Acorn's request;
provided that Columbia WAM may at its own expense make and retain copies of any
such records. Columbia 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 COLUMBIA WAM. Columbia WAM shall for all purposes herein
be deemed to be an independent contractor and not an agent of Columbia Acorn and
shall, unless otherwise expressly provided or authorized, have no authority to
act for or represent Columbia Acorn in any way. Columbia WAM agrees to notify
the Trust promptly of any change in the identity of Columbia WAM's general
partner.
3. ADMINISTRATIVE SERVICES. Columbia WAM shall supervise the business
and affairs of Columbia Acorn and each Fund and shall provide such services and
facilities as may be required for effective administration of
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Columbia Acorn and the Funds as are not provided by employees or other agents
engaged by Columbia Acorn; provided that Columbia 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 Columbia Acorn and
Columbia WAM, any affiliate of Columbia WAM, or any third party administrator.
4. USE OF AFFILIATED COMPANIES AND SUBCONTRACTORS. In connection with
the services to be provided by Columbia WAM under this agreement, Columbia 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 Columbia
WAM, provided that Columbia 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 Columbia WAM or such
parties.
5. EXPENSES TO BE PAID BY COLUMBIA ACORN. Except as otherwise provided
in this agreement or any other contract to which Columbia Acorn is a party,
Columbia 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
Columbia WAM or Columbia Acorn's administrator, if any, and
all expenses incurred in connection with their services to
Columbia 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 Columbia 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;
(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 Columbia Acorn under any
other laws applicable to Columbia Acorn or its business
activities;
(n) all fees, dues and other expenses related to membership of
Columbia Acorn in any trade association or other investment
company organization; and
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(o) any extraordinary expenses.
In addition to the payment of expenses, Columbia 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 COLUMBIA ACORN. Any expenses paid by
Columbia 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 Columbia Acorn that is not solely attributable to
a Fund or Funds, nor solely to any other series of Columbia Acorn, shall be
apportioned in such manner as Columbia Acorn or Columbia Acorn's administrator
determines is fair and appropriate, or as otherwise specified by the Board.
7. EXPENSES TO BE PAID BY COLUMBIA WAM. Columbia WAM shall furnish to
Columbia Acorn, at Columbia WAM's own expense, office space and all necessary
office facilities, equipment and personnel required to provide its services
pursuant to this agreement. Columbia WAM shall also assume and pay all expenses
of placement of securities orders and related bookkeeping.
8. COMPENSATION OF COLUMBIA WAM. For the services to be rendered and
the expenses to be assumed and to be paid by Columbia WAM under this agreement,
Columbia Acorn on behalf of the respective Funds shall pay to Columbia WAM fees
accrued daily and paid monthly at the annual rates (as a percentage of the
Fund's net assets) shown below:
COLUMBIA ACORN FUND
ASSETS RATE OF FEE
------ -----------
Up to $700 million 0.740%
$700 million to $2 billion 0.690%
$2 billion to $6 billion 0.640%
$6 billion and over 0.630%
COLUMBIA ACORN INTERNATIONAL
ASSETS RATE OF FEE
------ -----------
Up to $100 million 1.190%
$100 million to $500 million 0.940%
$500 million and over 0.740%
COLUMBIA ACORN USA
ASSETS RATE OF FEE
------ -----------
Up to $200 million 0.940%
$200 million to $500 million 0.890%
$500 million and over 0.840%
COLUMBIA ACORN SELECT
ASSETS RATE OF FEE
------ -----------
Up to $700 million 0.850%
$700 million and over 0.800%
COLUMBIA ACORN INTERNATIONAL SELECT
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ALL ASSETS 0.940%
COLUMBIA THERMOSTAT FUND
ALL ASSETS 0.100%
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 COLUMBIA WAM NOT EXCLUSIVE. The services of Columbia WAM
to Columbia Acorn under this agreement are not exclusive, and Columbia 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. The principal investment
management focus and responsibilities of Columbia WAM's portfolio managers and
analysts will be dedicated to Columbia Acorn and Xxxxxx Advisors Trust.
10. SERVICES OTHER THAN AS ADVISER. Within the limits permitted by law,
Columbia WAM or an affiliate of Columbia WAM may receive compensation from
Columbia Acorn for other services performed by it for Columbia Acorn which are
not within the scope of the duties of Columbia WAM under this agreement,
including the provision of brokerage services.
11. STANDARD OF CARE. To the extent permitted by applicable law,
neither Columbia WAM nor any of its partners, officers, agents, employees or
affiliates shall be liable to Columbia Acorn or its shareholders for any loss
suffered by Columbia 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 Columbia WAM or any of its affiliates in the
performance of Columbia WAM's duties under this agreement, except for liability
resulting from willful misfeasance, bad faith or gross negligence on the part of
Columbia WAM or such affiliate, or by reason of reckless disregard by Columbia
WAM or such affiliate of the obligations and duties of Columbia WAM under this
agreement.
12. EFFECTIVE DATE, DURATION AND RENEWAL. This agreement shall become
effective on September ___, 2005. Unless terminated as provided in Section 13,
this agreement shall continue in effect as to a Fund until July 31, 2006 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 Columbia Acorn or of Columbia 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 Columbia WAM. This agreement may be terminated by Columbia WAM at any
time upon 60 days' written notice to Columbia 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 Columbia 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 Columbia Acorn by its officers as officers and not
individually. All obligations of Columbia Acorn hereunder shall be binding only
upon the assets of Columbia Acorn (or the appropriate Fund) and shall not be
binding upon any trustee, officer, employee, agent or shareholder of Columbia
Acorn. Neither the authorization of any action by the trustees or shareholders
of Columbia Acorn nor the execution of this agreement on behalf of Columbia
Acorn shall impose any liability upon any trustee, officer or shareholder of
Columbia Acorn.
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16. USE OF MANAGER'S NAME. Columbia Acorn may use the name "Columbia"
or any other name derived from the name "Columbia" 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 CMG and shall have succeeded to the business of Columbia 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,
Columbia Acorn will (by amendment of its agreement and declaration of trust if
necessary) cease to use any name derived from the name "Columbia" or otherwise
connected with Columbia WAM, or with any organization that shall have succeeded
to Columbia WAM's business as investment adviser.
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 Columbia WAM: Columbia 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 Columbia Acorn: Columbia 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
00 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telephone: 312/000-0000
Facsimile: 312/827-8000
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.
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Dated as of September 27, 2005
COLUMBIA ACORN TRUST
By /s/ Xxxxxxx X. XxXxxxx
----------------------------------
Xxxxxxx X. XxXxxxx
COLUMBIA XXXXXX ASSET MANAGEMENT, L.P.
By WAM Acquisition GP, Inc.
Its General Partner
By /s/ Xxxxx X. Xxxxx
----------------------------------
Xxxxx X. Xxxxx
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