EXHIBIT (d)(1)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 1st day of April, 2002, between Legacy Funds
Group, a Massachusetts business trust (the "Trust"), and First Financial Capital
Advisors LLC, an Ohio limited liability company (the "Advisor").
WHEREAS, the Advisor is registered as an investment advisor under the
Investment Advisors Act of 1940, as amended, and is engaged principally in the
business of rendering investment management services;
WHEREAS, 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 Trust is authorized to issue shares of beneficial interest
("Shares") in separate series with each such series representing interests in a
separate portfolio of securities and other assets;
WHEREAS, the Trust currently offers the series of Shares named on
Schedule 1 hereto, as such Schedule may be revised from time to time (each, a
"Fund"), and may offer additional series in the future;
WHEREAS, the Trust desires to retain the services of the Advisor to
provide a continuous program of investment management for the Funds; and
WHEREAS, the Advisor is willing, in accordance with the terms and
conditions hereof to provide such services to the Trust on behalf of the Funds.
NOW, THEREFORE, in consideration of the mutual agreements set forth
herein and intending to be legally bound hereby, it is agreed between the
parties as follows:
1. APPOINTMENT OF ADVISOR
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The Trust hereby appoints the Advisor to provide the advisory services
set forth herein to the Funds and the Advisor agrees to accept such appointment
and agrees to render the services set forth herein for the compensation herein
provided. In carrying out its responsibilities under this Agreement, the Advisor
shall at all times act in accordance with the investment objectives, policies
and restrictions applicable to the Funds as set forth in the then-current
Registration Statement of the Trust, applicable provisions of the 1940 Act and
the rules and regulations promulgated thereunder and other applicable federal
securities laws and regulations.
2. DUTIES OF ADVISOR
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The Advisor shall provide a continuous program of investment management
for each Fund. Subject to the general supervision of the Trust's Board of
Trustees, the Advisor shall have sole investment discretion with respect to the
Funds, including investment research, selection of the securities to be
purchased and sold and the portion of the assets of each Fund, if any, that
shall be held uninvested, and the selection of broker-dealers through which
securities transactions in the Funds will be executed. The Advisor shall manage
the Funds in accordance with the objectives, policies and limitations set forth
in the Trust's current Prospectus and Statement of Additional Information. The
Advisor shall be permitted to employ one or more sub-investment advisors (each,
a "Sub-Advisor") to provide the day-to-day management of the investment of those
Funds indicated on Schedule 1 hereto. Specifically, and without limiting the
generality of the foregoing, the Advisor agrees that it will:
(a) promptly advise each Fund's designated custodian bank and
administrator or accounting agent of each purchase and sale, as the
case may be, made on behalf of the Fund, specifying the name and
quantity of the security purchased or sold, the unit and aggregate
purchase or sale price, commission paid, the market on which the
transaction was effected, the trade date, the settlement date, the
identity of the effecting broker or dealer and/or such other
information, and in such manner, as may from time to time be reasonably
requested by the Trust;
(b) maintain all applicable books and records with respect to
the securities transactions of the Funds. Specifically, but without
limitation, the Advisor agrees to maintain with respect to each Fund
those records required to be maintained under Rule 31a-1(b)(1), (b)(5)
and (b)(6) under the 1940 Act including, without limitation, records
which reflect securities purchased or sold by the Fund, showing for
each such transaction, the market on which the transaction was
effected, the trade date, the settlement date, and the identity of the
executing broker or dealer. The Advisor will preserve such records in
the manner and for the periods prescribed by Rule 31a-2 under the 1940
Act. The Advisor acknowledges and agrees that all such records it
maintains for the Trust are the property of the Trust and the Advisor
will surrender promptly to the Trust any such records upon the Trust's
request;
(c) provide, in a timely manner, such information as may be
reasonably requested by the Trust or its designated agents in
connection with, among other things, the daily computation of each
Fund's net asset value and net income, preparation of proxy statements
or amendments to the Trust's registration statement and monitoring
investments made by the Fund to ensure compliance with the various
limitations on investments applicable to the Fund and to ensure that
the Fund will continue to qualify for the tax treatment accorded to
regulated investment companies under Subchapter M of the Internal
Revenue Code of 1986, as amended;
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(d) render regular reports to the Trust concerning the
performance by the Advisor of its responsibilities under this
Agreement. In particular, the Advisor agrees that it will, at the
reasonable request of the Board of Trustees, attend meetings of the
Board or its validly constituted committees and will, in addition, make
its officers and employees available to meet with the officers and
employees of the Trust at least quarterly and at other times upon
reasonable notice, to review the investments and investment program of
each Fund;
(e) maintain its policy and practice of conducting its
fiduciary functions independently. In making investment recommendations
for the Funds, the Advisor's personnel will not inquire or take into
consideration whether the issuers of securities proposed for purchase
or sale for a Fund are customers of the Advisor or of its affiliates.
In dealing with such customers, the Advisor and its affiliates will not
inquire or take into consideration whether securities of those
customers are held by a Fund; and
(f) review periodically and take responsibility for the
material accuracy and completeness of the information supplied by or at
the request of the Advisor for inclusion in Trust's registration
statement under the 1940 Act and the Securities Act of 1933.
3. PORTFOLIO TRANSACTIONS
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The Advisor shall be responsible for selecting members of securities
exchanges, brokers and dealers (herein after referred to as "brokers") for the
execution of purchase and sale transactions for the Funds. In executing
portfolio transactions and selecting brokers or dealers, if any, the Advisor
will use its best efforts to seek on behalf of a Fund the best overall terms
available. In assessing the best overall terms available for any transaction,
the Advisor shall consider all factors it deems relevant, including brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided to a Fund and/or other accounts over
which the Advisor or an affiliate of the Advisor exercises investment
discretion. The Advisor may pay to a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if, but only if, the
Advisor determines in good faith that such commission was reasonable in relation
to the value of the brokerage and research services provided. The Advisor will
report to the Trust's Board of Trustees from time to time regarding its
portfolio execution and brokerage practices.
4. DUTIES OF THE TRUST
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The Trust has furnished or will furnish the Advisor with copies of each
of the following documents and will furnish to the Advisor at its principal
office all future amendments and supplements to such documents, if any, as soon
as practicable after such documents become available:
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(1) The Trust's Declaration of Trust, as filed with the Commonwealth of
Massachusetts, as in effect on the date hereof and as amended from time
to time;
(2) The By-Laws of the Trust as in effect on the date hereof and as
amended from time to time;
(3) Certified resolutions of the Board of Trustees of the Trust and the
initial shareholder of the Funds authorizing the appointment of the
Advisor and approving this Agreement;
(4) The Trust's Registration Statement under the 1940 Act and the
Securities Act of 1933, as amended, on Form N-1A, as filed with the
Securities and Exchange Commission ("SEC") relating to the Funds and
all amendments to such Registration Statement ("Registration
Statement");
(5) The Notification of Registration of the Trust under the 1940 Act on
Form N-8A as filed with the SEC and any amendments to such Notification
of Registration;
(6) The Trust's Prospectus and Statement of Additional Information, as
currently in effect and as amended or supplemented from time to time;
(7) Copies of any publicly available financial statement or report
prepared for the Trust by certified or independent public accountants,
and copies of any financial statements or reports made by the Funds to
shareholders or to any governmental body or securities exchange;
(8) A copy of each of the following Fund documents: Code of Ethics,
liquidity procedures, cross-trade procedures, repurchase agreement
procedures, directed brokerage procedures, 10f-3, 17a-7 and 17e-1
procedures, any SEC exemptive orders applicable to the Fund and other
procedures of the Fund that may affect the duties of the Advisor with
respect to the Fund; and
The Trust shall furnish the Advisor with any further documents,
materials or information that the Advisor may reasonably request to enable it to
perform its duties pursuant to this Agreement.
5. EXPENSES AND COMPENSATION
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a) ALLOCATION OF EXPENSES
The Advisor shall, at its expense, employ or associate with
itself such persons (including a Sub-Advisor) as it believes
appropriate to assist in performing its obligations under this
Agreement and provide all advisory services, equipment, facilities and
personnel necessary to perform its obligations under this Agreement.
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The Trust shall be responsible for all its expenses and
liabilities, including, without limitation, compensation of its
Trustees who are not affiliated with the Trust's Administrator or the
Advisor or any of their affiliates; taxes and governmental fees;
interest charges; fees and expenses of the Trust's independent
accountants and legal counsel; trade association membership dues; fees
and expenses of any custodian (including for keeping books and accounts
and calculating the net asset value of Shares of each Fund), transfer
agent, registrar and dividend disbursing agent of the Trust; expenses
of issuing, selling, redeeming, registering and qualifying for sale the
Shares; expenses of preparing and printing share certificates (if any),
certain prospectuses, shareholders' reports, notices, proxy statements
and reports to regulatory agencies; the cost of office supplies; travel
expenses of all officers, Trustees and employees; insurance premiums;
brokerage and other expenses of executing portfolio transactions;
expenses of shareholders' meetings; organizational expenses; and
extraordinary expenses.
b) COMPENSATION
For its services under this Agreement, the Advisor shall be
entitled to receive the fee, payable monthly, at the annual rate set
forth opposite the Fund's name on Schedule 1 hereto, based upon the
value of the Fund's average daily net assets for the previous month.
For the purpose of accruing compensation, the net asset value of the
Funds will be determined in the manner provided in the then-current
Prospectus of the Trust.
c) EXPENSE LIMITATIONS
The Advisor may waive all or a portion of its fees provided
for hereunder and such waiver will be treated as a reduction in
compensation for its services. The Advisor shall be contractually bound
hereunder by the terms of any publicly announced waiver of its fee, or
any limitation of the Fund's expenses, as if such waiver were fully set
forth herein.
6. LIABILITY OF ADVISOR
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Neither the Advisor nor its officers, directors, employees, agents or
controlling person ("Associated Person") of the Advisor shall be liable for any
error of judgment or mistake of law or for any loss suffered by the Trust in
connection with the matters to which this Agreement relates including, without
limitation, losses that may be sustained in connection with the purchase,
holding, redemption or sale of any security or other investment by the Trust
except a loss resulting from willful misfeasance, bad faith or gross negligence
on the part of the Advisor or such Associated Persons in the performance of
their duties or from reckless disregard by them of their duties under this
Agreement. The Trust will indemnify the Advisor against, and hold harmless from,
any and all losses, claims, damages, liabilities or expenses (including
reasonable counsel fees and expenses), including any amount paid in satisfaction
of judgments, in
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compromise or as fines or penalties, not resulting from the willful misfeasance,
bad faith or gross negligence of Advisor or such Associated Persons in the
performance of their duties or from reckless disregard by them of their duties
under this Agreement.
7. LIABILITY OF THE TRUST AND FUNDS
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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 shall bind only the trust
property of the Trust as provided in the Declaration of Trust. The execution and
delivery of this Agreement have been authorized by the Trustees, and it has been
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 as provided in its Declaration of Trust.
With respect to any obligation of the Trust on behalf of any Fund
arising hereunder, the Advisor shall look for payment or satisfaction of such
obligations solely to the assets and property of the Fund to which such
obligation relates as though the Trust had separately contracted with the
Advisor by separate written instrument with respect to each Fund.
8. DURATION AND TERMINATION OF THIS AGREEMENT
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(a) DURATION. As to each Fund, unless terminated as herein
provided, this Agreement shall remain in full force and effect until
the date set forth opposite such Fund's name on Schedule 1 hereto (the
"Reapproval Date") and thereafter shall continue in full force and
effect for successive annual periods so long as such is approved at
least annually (a) by either the Trustees of the Trust or by vote of a
majority of the outstanding voting securities (as defined in the 0000
Xxx) of such Fund, and (b), in either event, by the vote of a majority
of the Trustees of the Trust who are not parties to this Agreement or
"interested persons" (as defined in the 0000 Xxx) of any such party,
cast in person at a meeting called for the purpose of voting on such
approval. (b) AMENDMENT. Any amendment to this Agreement shall become
effective with respect to a Fund upon approval by the Advisor and the
Trustees, and to the extent required by applicable law, a majority of
the outstanding voting securities (as defined in the 0000 Xxx) of that
Fund.
(c) TERMINATION. This Agreement may be terminated with respect
to any Fund at any time, without payment of any penalty, by vote of the
Trustees or by vote of a majority of the outstanding voting securities
(as defined in the 0000 Xxx) of that Fund, or by the Advisor, in each
case upon sixty (60) days' prior written notice to the other party. Any
termination of this Agreement will be without prejudice to the
completion of transactions already initiated by the Advisor on behalf
of the Trust at the time of such termination. The Advisor shall take
all steps reasonably necessary after such termination to complete any
such transactions and is hereby authorized to take such steps. In
addition, this
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Agreement may be terminated with respect to one or more Funds without
affecting the rights, duties or obligations of any of the other Funds.
(d) AUTOMATIC TERMINATION. This Agreement shall automatically
and immediately terminate, as to the relevant Fund, in the event of its
assignment (as defined in the 1940 Act).
(e) APPROVAL, AMENDMENT OR TERMINATION BY INDIVIDUAL FUND. Any
approval, amendment or termination of this Agreement by the holders of
a majority of the outstanding voting securities (as defined in the 0000
Xxx) of any Fund shall be effective to continue, amend or terminate
this Agreement with respect to any such Fund notwithstanding (i) that
such action has not been approved by the holders of a majority of the
outstanding voting securities of any other Fund affected thereby, and
(ii) that such action has not been approved by the vote of a majority
of the outstanding voting securities of the Trust, unless such action
shall be required by any applicable law or otherwise.
9. SERVICES NOT EXCLUSIVE
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The services of the Advisor to the Trust hereunder are not to be deemed
exclusive, and the Advisor shall be free to render similar services to others so
long as its services hereunder are not impaired thereby.
10. MISCELLANEOUS
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(a) NOTICE. Any notice under this Agreement shall be in
writing, addressed and delivered or mailed, postage prepaid, to the
other party at such address as such other party may designate in
writing for the receipt of such notices.
(b) SEVERABILITY. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise,
the remainder shall not be thereby affected.
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(c) APPLICABLE LAW. This Agreement shall be construed in
accordance with and governed by the laws of Massachusetts.
FIRST FINANCIAL CAPITAL ADVISORS LLC,
AN OHIO LIMITED LIABILITY COMPANY
ATTEST: ______________________________ By:___________________________________
___________________________________
LEGACY FUNDS GROUP, A MASSACHUSETTS
BUSINESS TRUST
ATTEST: ______________________________ By:__________________________________
__________________________________
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INVESTMENT ADVISORY AGREEMENT
SCHEDULE 1
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Annual Fee as a Percentage of
Name of Fund Average Daily Net Assets Reapproval Date
The Mid-Cap Core Equity Fund 0.92% _________, 2004
The Core Bond Fund 0.70% _________, 2004
The Money Market Fund* 0.20% _________, 2004
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* The Advisor has engaged Munder Capital Management to act as Sub-Advisor to
this Fund.
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