Atalanta/Sosnoff Capital Corporation (Delaware)
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: Advisory Agreement
Ladies and Gentlemen:
Atalanta/Sosnoff Investment Trust (the "Trust") is an open-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "Act"), and subject to the rules and regulations promulgated
thereunder. The Trust's shares of beneficial interest are divided into separate
series and each such share of a series represents an undivided interest in the
assets, subject to the liabilities, allocated to that series and each series has
separate investment objectives and policies. The Atalanta/Sosnoff Fund (the
"Fund") is a separate series of the Trust.
1. APPOINTMENT AS ADVISER. The Trust being duly authorized hereby appoints
and employs Atalanta/Sosnoff Capital Corporation (Delaware) (the "Adviser") as
discretionary portfolio manager of the Fund on the terms and conditions set
forth herein.
2. ACCEPTANCE OF APPOINTMENT; STANDARD OF PERFORMANCE. The Adviser accepts
the appointment as discretionary portfolio manager and agrees to use its best
professional judgement to make investment decisions for the Fund in accordance
with the provisions of this Agreement.
3. DISCRETIONARY PORTFOLIO MANAGEMENT SERVICES OF THE ADVISER. The Adviser
is hereby employed and authorized to select portfolio securities for investment
by the Trust on behalf of the Fund, to purchase and sell securities of the Fund,
and, upon making any purchase or sale decision, to place orders for the
execution of such portfolio transactions in accordance with
paragraphs 5 and 6 hereof. In providing discretionary portfolio management
services to the Fund, the Adviser shall be subject to such investment
restrictions as are set forth in the Act and the rules thereunder, Subchapter M
of the Internal Revenue Code of 1986, as amended, applicable state securities
laws, the supervision and control of the Trustees of the Trust, such specific
instructions as the Trustees may adopt and communicate to the Adviser and the
investment objectives, policies and restrictions of the Trust applicable to the
Fund furnished pursuant to paragraph 4. The Adviser is not authorized by the
Trust to take any action, including the purchase or sale of securities for the
Fund, in contravention of any restriction, limitation, objective, policy or
instruction described in the previous sentence. The Adviser shall maintain on
behalf of the Trust the records listed in Schedule A hereto (as amended from
time to time). At the Trust's reasonable request, the Adviser will consult with
the Trust with respect to any decision made by it with respect to the
investments of the Fund.
4. INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS. The Trust will provide
the Adviser with the statement of investment objectives, policies and
restrictions applicable to the Fund as contained in the Trust's registration
statement under the Act and the Securities Act of 1933, and any instructions
adopted by the Trustees supplemental thereto. The Trust will provide the Adviser
with such further information concerning the investment objectives, policies and
restrictions applicable thereto as the Adviser may from time to time reasonably
request. The Trust retains the right, on written notice to the Adviser from the
Trust, to modify any such objectives, policies or restrictions in any manner at
any time.
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5. TRANSACTION PROCEDURES. All transactions will be consummated by payment
to or delivery by the Trust's custodian (the "Custodian"), or such depositories
or agents as may be designated by the Custodian in writing, as custodian for the
Trust, of all cash and/or securities due to or from the Fund, and the Adviser
shall not have possession or custody thereof. The Adviser shall advise the
Custodian and confirm in writing to the Trust and to the Trust's transfer agent
or any other designated agent of the Trust, all investment orders for the Fund
placed by it with brokers and dealers. The Adviser shall issue to the Custodian
such instructions as may be appropriate in connection with the settlement of any
transaction initiated by the Adviser.
6. ALLOCATION OF BROKERAGE. The Adviser shall have authority and discretion
to select brokers and dealers to execute portfolio transactions initiated by the
Adviser and to select the markets on or in which the transactions will be
executed.
In doing so, the Adviser will give primary consideration to securing the
most favorable price and efficient execution. Consistent with this policy, the
Adviser may consider the financial responsibility, research and investment
information and other services provided by brokers or dealers who may effect or
be a party to any such transaction or other transactions to which other clients
of the Adviser may be a party. It is understood that neither the Trust nor the
Adviser has adopted a formula for allocation of the Fund's investment
transaction business. It is also understood that it is desirable for the Trust
that the Adviser have access to supplemental investment and market research and
security and economic analyses provided by certain brokers who may execute
brokerage transactions at a higher commission to the Fund than may result when
allocating brokerage to other brokers on the basis of seeking the lowest
commission. Therefore, the Adviser is authorized to place orders for the
purchase and sale of securities for the
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Fund with such certain brokers, subject to review by the Trust's Trustees from
time to time with respect to the extent and continuation of this practice. It is
understood that the services provided by such brokers may be useful to the
Adviser in connection with its services to other clients.
On occasions when the Adviser deems the purchase or sale of a security to
be in the best interest of the Fund as well as other clients, the Adviser, to
the extent permitted by applicable laws and regulations, may, but shall be under
no obligation to, aggregate the securities to be sold or purchased in order to
obtain the most favorable price or lower brokerage commissions and efficient
execution. In such event, allocation of the securities so purchased or sold, as
well as expenses incurred in the transaction, will be made by the Adviser in the
manner it considers to be the most equitable and consistent with its fiduciary
obligations to the Trust and to such other clients.
For each fiscal quarter of the Trust, the Adviser shall prepare and render
reports to the Trust's Trustees of the total brokerage business placed and the
manner in which the allocation has been accomplished. Such reports shall set
forth at a minimum the information required to be maintained by Rule 31a-1(b)(9)
under the Act.
7. PROXIES. The Trust will vote all proxies solicited by or with respect to
the issuers of securities in which assets of the Fund may be invested from time
to time. At the request of the Trust, the Adviser shall provide the Trust with
its recommendations as to the voting of such proxies.
8. REPORTS TO THE ADVISER. The Trust will provide the Adviser with such
periodic reports concerning the status of the Fund as the Adviser may reasonably
request.
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9. FEES FOR SERVICES. For all of the services to be rendered and payments
made as provided in this Agreement, the Fund will pay the Adviser a fee,
computed and accrued daily and paid monthly, calculated as detailed in Schedule
B hereto.
10. ALLOCATION OF CHARGES AND EXPENSES. The Adviser shall employ or provide
and compensate the executive, administrative, secretarial and clerical personnel
necessary to provide the services set forth herein, and shall bear the expense
thereof. The Adviser shall compensate all Trustees, officers and employees of
the Trust who are also employees of the Adviser. The Adviser will pay all
expenses incurred in connection with the sale or distribution of the Fund's
shares to the extent such expenses are not assumed by the Fund under a plan of
distribution pursuant to Rule 12b-1 under the Act.
The Fund will be responsible for the payment of all operating expenses of
the Fund, including fees and expenses incurred by the Fund in connection with
membership in investment company organizations, brokerage fees and commissions,
legal, auditing and accounting expenses, expenses of registering shares under
federal and state securities laws, insurance expenses, taxes or governmental
fees, fees and expenses of the custodian, the transfer, shareholder service and
dividend disbursing agent and the accounting and pricing agent of the Fund,
expenses including clerical expenses of the issue, sale, redemption or
repurchase of shares of the Fund, the fees and expenses of Trustees of the Trust
who are not interested persons of the Trust, the cost of preparing, printing and
distributing prospectuses, statements, reports and other documents to
shareholders, expenses of shareholders' meetings and proxy solicitations, and
such extraordinary or non-recurring expenses as may arise, including litigation
to which the Trust may be a party and indemnification of the Trust's officers
and Trustees with respect thereto, or any
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other expense not specifically described above incurred in the performance of
the Trust's obligations. All other expenses not expressly assumed by the Adviser
herein incurred in connection with the organization, registration of shares and
operations of the Fund will be borne by the Fund.
11. OTHER INVESTMENT ACTIVITIES OF THE ADVISER. The Trust acknowledges that
the Adviser or one or more of its affiliates may have investment
responsibilities or render investment advice to or perform other investment
advisory services for other individuals or entities and that the Adviser, its
affiliates or 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 agrees that the Adviser or its affiliates may give advice or exercise
investment responsibility and take such other action with respect to other
Affiliated Accounts which may differ from the advice given or the timing or
nature of action taken with respect to the Fund, provided that the Adviser acts
in good faith, and provided further, that it is the Adviser's policy to
allocate, within its reasonable discretion, investment opportunities to the Fund
over a period of time on a fair and equitable basis relative to the Affiliated
Accounts, taking into account the investment objectives and policies of the Fund
and any specific investment restrictions applicable thereto. The Trust
acknowledges that one or more of the Affiliated Accounts may at any time hold,
acquire, increase, decrease, dispose of or otherwise deal with positions in
investments in which the Fund may have an interest from time to time, whether in
transactions which involve the Fund or otherwise. The Adviser shall have no
obligation to acquire for the Fund a position in any investment which any
Affiliated Account
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may acquire, and the Trust shall have no first refusal, co-investment or other
rights in respect of any such investment, either for the Fund or otherwise.
12. CERTIFICATE OF AUTHORITY. The Trust and the Adviser shall furnish to
each other from time to time certified copies of the resolutions of their
Trustees or Board of Directors or executive committees, as the case may be,
evidencing the authority of officers and employees who are authorized to act on
behalf of the Trust, the Fund and/or the Adviser.
13. A. LIMITATION OF LIABILITY. The Adviser may rely on information
reasonably believed by it to be accurate and reliable. Except as may otherwise
be required by the Act and the rules thereunder, neither the Adviser nor its
shareholders, officers, directors, employees, agents, control persons or
affiliates of any thereof shall be subject to any liability for, or any damages,
expenses or losses incurred by the Trust in connection with, any error of
judgment, mistake of law, any act or omission connected with or arising out of
any services rendered under or payments made pursuant to this Agreement or any
other matter to which this Agreement relates, except by reason of willful
misfeasance, bad faith or gross negligence on the part of any such persons in
the performance of the duties of the Adviser under this Agreement or by reason
of reckless disregard by any of such persons of the obligations and duties of
the Adviser under this Agreement.
B. Any person, even though also a director, officer, employee, shareholder
or agent of the Adviser, or any of its affiliates, who may be or become an
officer, trustee, employee or agent of the Trust, shall be deemed, when
rendering services to the Trust or acting on any business of the Trust, to be
rendering such services to or acting solely as an officer, trustee, employee or
agent of the Trust and not as a director, officer, employee, shareholder or
agent of or
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one under the control or direction of the Adviser or any of its affiliates, even
though paid by one of these entities.
C. Notwithstanding any other provision of this Agreement, the Trust shall
indemnify and hold harmless the Adviser, its directors, officers, employees,
shareholders, agents, control persons and affiliates from and against any and
all claims, demands, expenses and liabilities (whether with or without basis in
fact or law) of any and every nature which the Adviser may sustain or incur or
which may be asserted against the Adviser by any person by reason of, or as a
result of: (i) any action taken or omitted to be taken by the Adviser in good
faith in reliance upon any certificate, instrument, order or share certificate
reasonably believed by it to be genuine and to be signed, countersigned or
executed by any duly authorized person, upon the oral instructions or written
instructions of an authorized person of the Trust or upon the opinion of legal
counsel for the Trust or its own counsel; or (ii) any action taken or omitted to
be taken by the Trust in connection with its appointment in good faith in
reliance upon any law, act, regulation or interpretation of the same even though
the same may thereafter have been altered, changed, amended or repealed.
However, indemnification under this subparagraph shall not apply to actions or
omissions of the Adviser or its directors, officers, employees, shareholders or
agents in cases of its or their own gross negligence, willful misconduct, bad
faith, or reckless disregard of its or their own duties hereunder.
Nothing in this paragraph 13 shall be construed in a manner inconsistent
with Sections 17(h) and (i) of the Act.
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14. CONFIDENTIALITY. Subject to the duty of the Adviser and the Trust 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 and the actions of the Adviser and the
Trust in respect thereof.
15. ASSIGNMENT. No assignment of this Agreement shall be made by the
Adviser, and this Agreement shall terminate automatically in the event of such
assignment. The Adviser shall notify the Trust 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 Trust to consider whether an assignment will occur, and
to take the steps necessary to enter into a new contract with the Adviser.
16. REPRESENTATION, WARRANTIES AND AGREEMENTS OF THE TRUST. The Trust
represents, warrants and agrees that:
A. The Adviser has been duly appointed by the Trustees of the Trust to
provide investment advisory services to the Fund as contemplated hereby.
B. The Trust will deliver to the Adviser true and complete copies of its
then current prospectus and statement of additional information as effective
from time to time and such other documents or instruments governing the
investments of the Fund and such other information as is necessary for the
Adviser to carry out its obligations under this Agreement.
C. The Trust is currently in compliance and shall at all times comply with
the requirements imposed upon the Trust by applicable law and regulations.
17. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE ADVISER. The Adviser
represents, warrants and agrees that:
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A. The Adviser is registered as an investment adviser under the Investment
Advisers Act of 1940.
B. The Adviser will maintain, keep current and preserve on behalf of the
Trust, in the manner and for the time periods required or permitted by the Act,
the records identified in Schedule A. The Adviser agrees that such records
(unless otherwise indicated on Schedule A) are the property of the Trust, and
will be surrendered to the Trust promptly upon request.
C. The Adviser will complete such reports concerning purchases or sales of
securities on behalf of the Fund as the Trust may from time to time require to
ensure compliance with the Act, the Internal Revenue Code of 1986 and applicable
state securities laws.
D. The Adviser has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the Act and will provide the Trust with a copy
of the code of ethics and evidence of its adoption. Within forty-five (45) days
of the end of the last calendar quarter of each year while this Agreement is in
effect, an executive officer of the Adviser shall certify to the Trust that the
Adviser has complied with the requirements of Rule 17j-1 during the previous
year and that there has been no violation of the Adviser's code of ethics or, if
such a violation has occurred, that appropriate action was taken in response to
such violation. Upon the written request of the Trust, the Adviser shall permit
the Trust, its employees or its agents to examine the reports required to be
made to the Adviser by Rule 17j-1(c)(1).
E. The Adviser will, promptly after filing with the Securities and Exchange
Commission an amendment to its Form ADV, furnish a copy of such amendment to the
Trust.
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F. Upon request of the Trust, the Adviser will provide assistance to the
Custodian in the collection of income due or payable to the Fund.
G. The Adviser will immediately notify the Trust of the occurrence of any
event which would disqualify the Adviser from serving as an investment adviser
of an investment company pursuant to Section 9(a) of the Act or otherwise.
18. AMENDMENT. This Agreement may be amended at any time, but only by
written agreement between the Adviser and the Trust, which amendment, other than
amendments to Schedule A, is subject to the approval of the Trustees and the
shareholders of the Fund in the manner required by the Act and the rules
thereunder, subject to any applicable exemptive order or interpretive position
of the Securities and Exchange Commission or its staff modifying the provisions
of the Act with respect to approval of amendments to this Agreement.
19. EFFECTIVE DATE; TERM. This Agreement shall become effective on the date
of its execution and shall remain in force for a period of two (2) years from
such date, and from year to year thereafter but only so long as such continuance
is specifically approved at least annually by the vote of a majority of the
Trustees who are not interested persons of the Trust or the Adviser, cast in
person at a meeting called for the purpose of voting on such approval, and by a
vote of the Board of Trustees or of a majority of the outstanding voting
securities of the Fund. The aforesaid requirement that this Agreement may be
continued "annually" shall be construed in a manner consistent with the Act and
the rules and regulations thereunder.
20. TERMINATION. This Agreement may be terminated by either party hereto,
without the payment of any penalty, immediately upon written notice to the other
in the event of a breach of any provision thereof by the party so notified, or
otherwise upon sixty (60) days' written notice
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to the other, but any such termination shall not affect the status, obligations
or liabilities of any party hereto to the other.
21. OBLIGATIONS OF THE TRUST. It is expressly agreed that the obligations
of the Trust hereunder shall not be binding upon any of the trustees,
shareholders, nominees, officers, agents or employees of the Trust, personally,
but bind only the trust property of the Trust. The execution and delivery of
this Agreement have been authorized by the trustees of the Trust and signed by
an officer of the Trust, acting as such, and neither such authorization by such
trustees nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, but shall bind only the trust property of the Trust.
22. FORCE MAJEURE. If The Adviser shall be delayed in its performance of
services or prevented entirely or in part from performing services due to causes
or events beyond its control, including and without limitation, acts of God,
interruption of power or other utility, transportation or communication
services, acts of civil or military authority, sabotages, national emergencies,
explosion, flood, accident, earthquake or other catastrophe, fire, strike or
other labor problems, legal action, present or future law, governmental order,
rule or regulation, or shortages of suitable parts, materials, labor or
transportation, such delay or non-performance shall be excused and a reasonable
time for performance in connection with this Agreement shall be extended to
include the period of such delay or non-performance.
23. DEFINITIONS. As used in paragraphs 15 and 19 of this Agreement, the
terms "assignment," "interested person" and "vote of a majority of the
outstanding voting securities" shall have the meanings set forth in the Act and
the rules and regulations hereunder.
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24. 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 time to time, this Agreement shall be administered,
construed and enforced according to the laws of the State of New York.
ATALANTA/SOSNOFF INVESTMENT TRUST
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Title: Chairman and President
------------------------
Date: July 1, 2001
------------------------
ACCEPTANCE
----------
The foregoing Agreement is hereby accepted.
ATALANTA/SOSNOFF CAPITAL
CORPORATION (DELAWARE)
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Title: Executive Vice President
------------------------
Date: July 1, 2001
------------------------
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SCHEDULE A
RECORDS TO BE MAINTAINED BY THE ADVISER
---------------------------------------
1. (Rule 31a-1(b)(5) and (6)) A record of each brokerage order, and all other
portfolio purchases or sales, given by the Adviser on behalf of the Fund
for, or in connection with, the purchase or sale of securities, whether
executed or unexecuted. Such records shall include:
A. The name of the broker;
B. The terms and conditions of the order and of any modification or
cancellation thereof;
C. The time of entry or cancellation;
D. The price at which executed;
E. The time of receipt of a report of execution; and
F. The name of the person who placed the order on behalf of the Trust.
2. (Rule 31a-1(b)(9)) A record for each fiscal quarter, completed within ten
(10) days after the end of the quarter, showing specifically the basis or
bases upon which the allocation of orders for the purchase and sale of
portfolio securities to named brokers or dealers was effected, and the
division of brokerage commissions or other compensation on such purchase
and sale orders. Such record:
A. Shall include the consideration given to:
(i) The sale of shares of the Fund by brokers or dealers.
(ii) The supplying of services or benefits by brokers or dealers to:
(a) The Trust;
(b) The Adviser; and,
(c) Any person affiliated with the foregoing persons.
(iii)Any other consideration other than the technical qualifications
of the brokers and dealers as such.
B. Shall show the nature of the services or benefits made available.
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C. Shall describe in detail the application of any general or specific
formula or other determinant used in arriving at such allocation of
purchase and sale orders and such division of brokerage commissions or
other compensation.
D. The name of the person responsible for making the determination of
such allocation and such division of brokerage commissions or other
compensation.
3. (Rule 31a-1(b)(10)) A record in the form of an appropriate memorandum
identifying the person or persons, committees or groups authorizing the
purchase or sale of portfolio securities. Where an authorization is made by
a committee or group, a record shall be kept of the names of its members
who participate in the authorization. There shall be retained as part of
this record any memorandum, recommendation or instruction supporting or
authorizing the purchase or sale of portfolio securities and such other
information as is appropriate to support the authorization.*
4. (Rule 31a-1(f)) Such accounts, books and other documents as are required to
be maintained by registered investment advisers by rule adopted under
Section 204 of the Investment Advisers Act of 1940, to the extent such
records are necessary or appropriate to record the Adviser's transactions
with respect to the Fund.
_______________________
* Such information might include: the current Form 10-K, annual and quarterly
reports, press releases, reports by analysts and from brokerage firms
(including their recommendation; i.e., buy, sell, hold) or any internal
reports or portfolio adviser reviews.
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SCHEDULE B
COMPENSATION OF THE ADVISER. The Fund will pay to the Adviser, for all of
the services to be rendered and payments made as provided in this Agreement, a
base fee, computed and accrued daily and paid monthly, at an annual rate of
0.75% of its average daily net assets (the "Base Fee"), which fee is subject to
adjustment based on the investment performance of the Fund in relation to the
investment performance of the Fund's benchmark index, which is the S&P 500
Index.
Adjustments to the Base Fee will be made by comparison of the Fund's
investment performance for the applicable performance period to the investment
performance of the Fund's benchmark index for the same period (the "Performance
Fee Adjustment"). The applicable performance period is a rolling twelve (12)
month period whereby the most recent calendar month is substituted for the
earliest month as time passes. The Base Fee with respect to each Fund will be
increased by 0.25% if the Fund outperforms its benchmark by at least 2.00% for
the previous 12 months, and decreased by 0.25% if the Fund underperforms its
benchmark by at least 2.00% for the previous 12 months.
The Adviser will not receive a Performance Fee Adjustment for periods
during which the Fund incurs negative investment performance yet outperforms its
benchmark by at least 2.00%. During such periods, the Fund will receive only the
Base Fee. If the Fund incurs negative investment performance and underperforms
its benchmark by at least 2.00%, the Base Fee will be reduced by 0.25%.
The maximum monthly fee rate as adjusted for performance will be 1/12 of
1.00% of the Fund's average daily net assets and will be payable if the Fund's
performance is positive and if it exceeds the Fund's benchmark index by 2.00 or
more percentage points for the performance period. The minimum monthly fee rate
as adjusted for performance will be 1/12 of 0.50% of the Fund's average daily
net assets and will be payable if the investment performance of the Fund is
exceeded by the investment performance of the Fund's benchmark index by 2.00 or
more percentage points for the performance period.
INITIAL PERIOD. The Performance Fee Adjustment will not be applied until
this Agreement has been in effect for 12 months (the "Initial Period"). For the
first 12 months of the Initial Period, the Adviser will receive the Base Fee.
SUBSEQUENT PERIODS. For each month following the Initial Period, the
Adviser will receive the Base Fee, subject to the Performance Fee Adjustment
calculated as described above.
The Fund's investment performance will be measured by comparing (i) the
opening net asset value of one share of the Fund on the first business day of
the performance period with (ii) the closing net asset value of one share of the
Fund as of the last business day of such period. In computing the investment
performance of the Fund and the investment record of the Fund's benchmark index,
distributions of realized capital gains, the value of capital gains taxes per
share paid or payable on undistributed realized long-term capital gains
accumulated to the end of such
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period and dividends paid out of investment income on the part of the Fund, and
all cash distributions of the securities included in the Fund's benchmark index,
will be treated as reinvested in accordance with Rule 205-1 or any other
applicable rules under the Investment Advisers Act of 1940, as the same from
time to time may be amended.
Any calculations of the investment performance of the Fund and the
investment performance of the Fund's benchmark index shall be in accordance with
any then applicable rules of the Securities and Exchange Commission.
In the event of any termination of this Agreement, the fee provided for in
this Schedule B shall be calculated on the basis of a period ending on the last
day on which this Agreement is in effect, subject to a pro rata adjustment based
on the number of days elapsed in the current period as a percentage of the total
number of days in such period.
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