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Exhibit (d)(4)
INVESTMENT ADVISORY AGREEMENT
This Agreement is made as of ___________, 2000, by and between GOVERNOR
FUNDS, a Delaware business trust (the "Trust"), and XXXXXXXXXX XXXXXX & COMPANY
LLC, a Pennsylvania limited liability company (the "Advisor").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Trust desires to retain the Advisor to provide, or to
arrange for the provision of, investment advisory services to investment
portfolios of the Trust and may retain the Advisor to serve in such capacity to
certain additional investment portfolios of the Trust, all as now or hereafter
may be identified in Schedule A hereto (such investment portfolios and any such
additional investment portfolios together called the "Funds") and the Advisor
represents that it is willing and possesses legal authority to so furnish such
services without violation of applicable laws and regulations;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
SECTION 1. APPOINTMENT. The Trust hereby appoints the Advisor to act as
advisor to the Funds for the period and on the terms set forth in this
Agreement. The Advisor accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein provided. Additional
investment portfolios may from time to time be added to those covered by this
Agreement by the parties executing a new Schedule A which shall become effective
upon its execution and shall supersede any Schedule A having an earlier date.
SECTION 2. DELIVERY OF DOCUMENTS. The Trust has furnished the Advisor
with copies properly certified or authenticated of each of the following:
(a) the Trust's Declaration of Trust (such Declaration of Trust,
as presently in effect and as it shall from time to time be
amended and restated, is herein called the "Declaration of
Trust");
(b) the Trust's By-Laws and any amendments thereto;
(c) resolutions of the Trust's Board of Trustees authorizing the
appointment of the Advisor and approving this Agreement;
(d) the Trust's Notification of Registration on Form N-8A under
the 1940 Act as filed with the Securities and Exchange
Commission on October 1, 1998 and all amendments thereto;
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(e) all of the Trust's procedures and guidelines and all
resolutions of the Trust's Board relevant to the services to
be provided by the Advisor hereunder;
(f) the Trust's Registration Statement on Form N-lA under the
Securities Act of 1933, as amended ("1933 Act"), (File No.
333-65213), and under the 1940 Act as filed with the
Securities and Exchange Commission and the most recent
amendment thereto; and
(g) the most recent Prospectus and Statement of Additional
Information of each of the Funds (such Prospectus and
Statement of Additional Information, as presently in effect,
and all amendments and supplements thereto, are herein
collectively called the "Prospectus").
The Trust will furnish the Advisor from time to time with copies of all
amendments of or supplements to the foregoing.
SECTION 3. MANAGEMENT. Subject to the supervision of the Trust's Board
of Trustees, the Advisor will provide a continuous investment program for each
of the Funds, including investment research and management with respect to all
securities and investments and cash equivalents in the Funds. The Advisor will
determine from time to time what securities and other investments will be
purchased, retained or sold by the Trust with respect to the Funds and will
implement such determinations through the placement, in the name of the Funds,
of orders for the execution of portfolio transactions with or through such
brokers or dealers as it may select. The Advisor will provide the services under
this Agreement in accordance with each of the Fund's investment objectives,
policies, and restrictions as stated in the Prospectus, as the same may be
amended, supplemented or restated from time to time, and resolutions of the
Trust's Board of Trustees.
In fulfilling its responsibilities hereunder, the Advisor further
agrees that it will:
(a) use the same skill and care in providing such services as
it uses in providing services to fiduciary accounts for which it has
investment responsibilities;
(b) conform with all applicable Rules and Regulations of the
Securities and Exchange Commission and in addition will conduct its
activities under this Agreement in accordance with any applicable
regulations of any governmental authority pertaining to the investment
advisory activities of the Advisor;
(c) not make loans to any person to purchase or carry shares
of beneficial interest in the Trust or make loans to the Trust;
(d) place orders pursuant to its investment determinations for
the Funds either directly with the issuer or with any broker or dealer.
In placing orders with brokers and dealers, the Advisor will attempt to
obtain prompt execution of orders in an effective manner at the most
favorable price. In assessing the best execution available for any
transaction, the Advisor shall consider all factors it deems relevant,
including the breadth
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of the market in the security, the price of the security, the financial
condition and execution capability of the broker-dealer and the
reasonableness of the commission, if any (for the specific transaction
and on a continuing basis). Consistent with this obligation, the
Advisor may, in its discretion and to the extent permitted by law,
purchase and sell portfolio securities to and from brokers and dealers
who provide brokerage and research services (within the meaning of
Section 28(e) of the Securities Exchange Act of 1934) to or for the
benefit of the Funds and/or other accounts over which the Advisor
exercises investment discretion. Subject to the review of the Trust's
Board of Trustees from time to time with respect to the extent and
continuation of the policy, the Advisor is authorized to pay a broker
or dealer who provides such brokerage and research services a
commission for effecting a securities transaction for any of the Funds
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
by such broker or dealer, viewed in terms of either that particular
transaction or the overall responsibilities of the Advisor with respect
to the accounts as to which it exercises investment discretion. In
placing orders with brokers and dealers, consistent with applicable
laws, rules and regulations, the Advisor may consider the sale of
shares of the Trust. Except as otherwise permitted by applicable laws,
rules and regulations, in no instance will portfolio securities be
purchased from or sold to BISYS Fund Services Ohio Inc., the Advisor or
any affiliated person of the Trust, BISYS Fund Services Ohio Inc. or
the Advisor. In executing portfolio transactions for any Fund, the
Advisor may, but shall not be obligated to, to the extent permitted by
applicable laws and regulations, aggregate the securities to be sold or
purchased with those of other Funds and its other clients where such
aggregation is not inconsistent with the policies set forth in the
Trust's registration statement. In such event, the Advisor will
allocate the securities so purchased or sold, and the expenses incurred
in the transaction, pursuant to any applicable law or regulation and in
the manner it considers to be the most equitable and consistent with
its fiduciary obligations to the Funds and such other clients.
(e) will maintain all books and records with respect to the
securities transactions of the Funds and will furnish the Trust's Board
of Trustees such periodic and special reports as the Board may request;
(f) will treat confidentially and as proprietary information
of the Trust all records and other information relative to the Trust
and the Funds and prior, present, or potential shareholders, and will
not use such records and information for any purpose other than
performance of its responsibilities and duties hereunder, except after
prior notification to and approval in writing by the Trust, which
approval shall not be withheld where the Advisor may be exposed to
civil or criminal contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities,
or when so requested by the Trust; and
(g) will 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
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proposed for purchase or sale for the Trust's account are customers of
the Advisor or of its parents, subsidiaries or affiliates. In dealing
with such customers, the Advisor and its parents, subsidiaries, and
affiliates will not inquire or take into consideration whether
securities of those customers are held by the Trust.
SECTION 4. SUB-ADVISOR. It is understood that the Advisor may from time
to time employ or associate with itself such person or persons as the Advisor
believes to be fitted to assist it in the performance of this Agreement (each a
"Sub-Advisor"); provided, however, that the compensation of such person or
persons shall be paid by the Advisor and that the Advisor shall be as fully
responsible to the Trust for the acts and omissions of any such person as it is
for its own acts and omissions; and provided further, that the retention of any
Sub-Advisor shall be approved as may be required by the 1940 Act. In the event
that any Sub-Advisor appointed hereunder is terminated, the Advisor may provide
investment advisory services pursuant to this Agreement to the Funds without
further shareholder approval.
SECTION 5. SERVICES NOT EXCLUSIVE. The Advisor will for all purposes
herein be deemed to be an independent contractor and will, unless otherwise
expressly provided herein or authorized by the Board from time to time, have no
authority to act for or represent the Trust in any way or otherwise be deemed
its agent. The investment management services furnished by the Advisor hereunder
are not to be deemed exclusive, and the Advisor shall be free to furnish similar
services to others so long as its services under this Agreement are not impaired
thereby.
SECTION 6. BOOKS AND RECORDS. In compliance with the requirements of
Rule 3la-3 under the 1940 Act, the Advisor hereby agrees that all records which
it maintains for the Funds are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's request.
The Advisor further agrees to preserve for the periods prescribed by Rule 3la-2
under the 1940 Act the records required to be maintained by Rule 3la-1 under the
1940 Act.
SECTION 7. EXPENSES. During the term of this Agreement, the Advisor
will pay all expenses incurred by it in connection with its activities under
this Agreement other than the cost of securities (including brokerage
commissions, if any) purchased for the Funds.
SECTION 8. COMPENSATION. For the services provided and the expenses
assumed pursuant to this Agreement, each of the Funds will pay the Advisor and
the Advisor will accept as full compensation therefor a fee as set forth on
Schedule A hereto. The obligations of the Funds to pay the above-described fee
to the Advisor will begin as of the date first above written; provided, however,
that the Advisor may from time to time waive some or all of such fees until such
time as it notifies the Trust that it has terminated such waiver. Upon any
termination of this Agreement before the end of any month, the fee for such part
of a month shall be prorated according to the proportion which such period bears
to the full monthly period and shall be payable upon the date of termination of
this Agreement.
For the purpose of determining fees payable to the Advisor, the value
of the net assets of a particular Fund shall be computed in the manner described
in the Trust's Declaration of Trust or in the Prospectus or Statement of
Additional Information respecting that Fund as from time to
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time is in effect for the computation of the value of such net assets in
connection with the determination of the liquidating value of the shares of such
Fund.
SECTION 9. LIMITATION OF LIABILITY. Notwithstanding anything herein to
the contrary, the Advisor shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Funds in connection with the
performance of this Agreement, except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services or a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of the Advisor in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement.
SECTION 10. DURATION AND TERMINATION. This Agreement will become
effective as of the date first written above (or, if a particular Fund is not in
existence on that date, on the date a registration statement or post-effective
amendment to a registration statement relating to that Fund becomes effective
with the Securities and Exchange Commission and Schedule A hereto is amended to
add such Fund), provided that it shall have been approved by vote of a majority
of the outstanding voting securities of such Fund, in accordance with the
requirements under the 1940 Act, and, unless sooner terminated as provided
herein, shall continue in effect until June 30, 2001.
Thereafter, if not terminated, this Agreement shall continue in effect
as to a particular Fund for successive periods of twelve months each ending on
June 30 of each year, provided such continuance is specifically approved at
least annually (a) by the vote of a majority of those members of the Trust's
Board of Trustees who are not parties to this Agreement or interested persons of
any party to this Agreement, cast in person at a meeting called for the purpose
of voting on such approval, and (b) by the vote of a majority of the Trust's
Board of Trustees or by the vote of a majority of all votes attributable to the
outstanding Shares of such Fund. Notwithstanding the foregoing, this Agreement
may be terminated as to a particular Fund at any time on sixty days' written
notice to the other party, without the payment of any penalty, by the Trust (by
vote of the Trust's Board of Trustees or by vote of a majority of the
outstanding voting securities of such Fund) or by the Advisor. This Agreement
will immediately terminate in the event of its assignment and will immediately
terminate upon the consummation of the reorganization of the Trust into Vision
Group of Funds. (As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested persons" and "assignment" shall have
the same meanings as ascribed to such terms in the 1940 Act.)
SECTION 11. ADVISOR'S REPRESENTATIONS. The Advisor hereby represents
that it is willing and possesses all requisite legal authority to provide the
services contemplated by this Agreement without violation of applicable laws and
regulations.
SECTION 12. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.
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SECTION 13. NAME. The Trust hereby acknowledges that the name
"Governor(s)" is a property right of the Advisor. The Advisor agrees that the
Trust and the Funds may, so long as this Agreement remains in effect, use
"Governor(s)" as part of its name. The Advisor may permit other persons, firms
or corporations, including other investment companies, to use such name and may,
upon termination of this Agreement, require the Trust and the Funds to refrain
from using the name "Governor(s)" in any form or combination in its name or in
its business or in the name of any of its Funds, and the Trust shall, as soon as
practicable following its receipt of any such request from the Advisor, so
refrain from using such name.
SECTION 14. YEAR 2000 COMPLIANT. The Advisor represents and warrants
that all services rendered and all computer systems used in the performance of
the Advisor's obligations under this Agreement are Year 2000 Compliant. "Year
2000 Compliant" means that the services and systems are designed to and:
(a) operate in the year 2000 and later with four digit year
date capability;
(b) operate fault-free in the processing of date and
date-dependent data before, during and after January 1, 2000, including
but not limited to accepting date input, providing date output, and
performing date calculations, comparison and sequencing;
(c) function accurately and without interruption before,
during, and after January 1, 2000, without any adverse effect on
operations and associated with the advent of the new century;
(d) store and provide output of date information in ways that
are unambiguous as to century.
The representations and warranties contained herein may not be disclaimed or
limited by operation of law.
SECTION 15. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
Governor Funds is a business trust organized under Delaware law and under a
Declaration of Trust, to which reference is hereby made and a copy of which is
on file at the Office of the Secretary of State of Delaware as required by law,
and to any and all amendments thereto so filed or hereafter filed. The
obligations of "Governor Funds" entered into in the name or on behalf thereof by
any of the Trustees, officers, employees or agents are made not individually,
but in such capacities, and are not binding upon any of the Trustees, officers,
employees, agents or shareholders of the Trust personally, but bind only the
assets of the Trust, and all persons dealing with any of the Funds of the Trust
must look solely to the assets of the Trust belonging to such Fund for the
enforcement of any claims against the Trust.
SECTION 16. MISCELLANEOUS. The captions in this Agreement are included
for convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of
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the parties hereto and their respective successors and shall be governed by the
law of the State of Delaware; provided that nothing herein shall be construed in
a manner inconsistent with the 1940 Act, the Investment Advisers Act of 1940, as
amended, or any rule or regulation of the Securities and Exchange Commission
thereunder. This Agreement may be executed in two or more counterparts which
together shall constitute a single Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
GOVERNOR FUNDS
By: _____________________
Name:
Title:
XXXXXXXXXX XXXXXX & COMPANY LLC
By: _____________________
Name:
Title:
Dated: __________, 2000
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Schedule A
to the
Investment Advisory Agreement
between Governor Funds and
Xxxxxxxxxx Xxxxxx & Company LLC
dated as of ___________, 2000
NAME OF FUND COMPENSATION* DATE
------------ ------------- ----
Prime Money Market Fund Annual Rate of .40% of such Fund's
average net assets ________________, 2000
Pennsylvania Annual Rate of .60% of such Fund's
Municipal Bond average daily net assets ________________, 2000
Fund
Established Growth Annual Rate of .75% of such Fund's
Fund average daily net assets ________________, 2000
Intermediate Term Income Annual Rate of .60% of such Fund's
Fund average daily net assets ________________, 2000
Aggressive Growth Annual Rate of 1.00% of such Fund's
Fund average daily net assets ________________, 2000
U.S. Treasury Annual Rate of .40% of such Fund's
Obligations Money average daily net assets ________________, 2000
Market Fund
Limited Duration Annual Rate of .60% of such Fund's
Government average daily net assets ________________, 2000
Securities Fund
Emerging Growth Annual Rate of 1.25% of such Fund's
Fund average daily net assets ________________, 2000
International Equity Fund Annual Rate of 1.25% of such Fund's
average daily net assets ________________, 2000
Lifestyle Conservative Annual Rate of .25% of such Fund's
Growth Fund average daily net assets ________________, 2000
Lifestyle Moderate Annual Rate of .25% of such Fund's
Growth Fund average daily net assets ________________, 2000
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NAME OF FUND COMPENSATION* DATE
------------ ------------- ----
Lifestyle Growth Fund Annual Rate of .25% of such Fund's
average daily net assets ________________, 2000
*All Fees are computed daily and paid monthly.
XXXXXXXXXX XXXXXX & COMPANY LLC GOVERNOR FUNDS
By: _________________ By: ______________________
Name: . Name:
Title: Title:
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