INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 27th day of August, 2001, by and between Zodiac Trust,
a Delaware business trust (the "Trust"), and Conning Asset Management Company, a
Missouri corporation (the "Adviser").
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust is authorized to create several separate series shares,
each having its own investment objectives and policies; and
WHEREAS, the Adviser is a registered investment adviser under the
Investment Advisers Act of 1940, as amended, and engages in the business of
providing investment management services; and
WHEREAS, the Trust desires to retain the Adviser to render investment
management services with respect to the individual series (each a "Portfolio")
listed on Schedule A, as may be amended from time to time, attached hereto and
made a part of this Agreement, and the Adviser is willing to render such
services on the following terms and conditions; and
WHEREAS, the Board of Trustees of the Trust has approved this Agreement,
subject to approval by the shareholders of the Portfolio, and the Adviser is
willing to furnish such services upon the terms and conditions herein set forth;
and
WHEREAS, each series of the Trust may use, employ and engage a different
investment adviser and/or Sub-Adviser.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT AND DUTIES OF THE ADVISER.
(a) The Trust hereby appoints the Adviser to act as investment adviser
to the Trust for the Portfolio and hereby employs the Adviser generally to
manage the investment and reinvestment of the assets of the Portfolio for
the period and the terms set forth in this Agreement. The Adviser hereby
accepts such appointment and agrees to render services set forth in this
Agreement and for the compensation herein provided.
(b) In so doing, it is understood that the Adviser may hire one or
more Sub-Advisers for a Portfolio to carry out the investment program of
the Portfolio(s) (subject to the approval of the Trust's Board of Trustees
and, except as otherwise permitted under the terms of any exemptive relief
obtained by the Adviser from the U.S. Securities and Exchange Commission,
or by rule or regulation, a majority of the outstanding voting securities
of any affected Portfolio(s)). To the extent that the Adviser does hire any
Sub-Adviser, it will thereafter continuously review, supervise and (where
appropriate) administer the investment program of the Portfolio(s).
(c) The Adviser will provide, or direct any Sub-Adviser to provide to
the Administrator and the Trust records concerning the Adviser's or
Sub-Adviser(s)' activities which the Trust is required to maintain, and to
render regular reports to the Administrator and to the Trust's officers and
Trustees concerning the Adviser's and Sub-Adviser(s)' performance of the
foregoing responsibilities. The retention of a Sub-Adviser by the Adviser
shall not relieve the Adviser of its responsibilities under this Agreement.
(d) The Adviser shall discharge the foregoing responsibilities subject
to the control of the Board of Trustees of the Trust and in compliance with
such policies as the Trustees may from time to time establish, and in
compliance with the objectives, policies, and limitations for each such
Portfolio set forth in the Trust's prospectus and statement of additional
information, as amended from time to time (referred to collectively as the
"Prospectus"), and applicable laws and regulations. The Trust will furnish
the Adviser from time to time with copies of all amendments or supplements
to the Prospectus, if any.
(e) The Adviser agrees to treat confidentially and as proprietary
information of a Portfolio any and all records and other information
relative to any Portfolio and prior, present, or potential shareholders,
and will not use such records and/or information for any purpose other than
performance of its responsibilities and duties under this Agreement, except
after prior notification to an approval in writing by the applicable
Portfolio, which approval shall not be unreasonably withheld and may not be
withheld where the Adviser 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
applicable Portfolio.
The Adviser accepts such employment and agrees, at its own expense, to
render the services and to provide the office space, furnishings and
equipment and the personnel (including the costs of retaining any
Sub-Advisers) required by it to perform the services on the terms and for
the compensation provided herein. The Adviser will not, however, pay for
the cost of securities, commodities, and other investments (including
brokerage commissions and other transaction charges, if any) purchased or
sold for the Trust.
2. DUTIES OF THE TRUST.
(a) The Trust, except as otherwise provided in this Agreement, is
responsible for conducting its own business and affairs and for all
necessary and incidental expenses and salaries including, but not limited
to, the costs incurred in: the maintenance of its corporate existence; the
maintenance of its own books, records and procedures; dealing with its own
shareholders; the payment of dividends; transfer of stock, including
issuance, redemption and repurchase of shares; preparation of share
certificates; preparation and filing of such forms as may be required by
the various jurisdictions in which the Trust's shares may be sold;
preparation, printing and mailing of reports and notices to shareholders;
calling and holding of shareholders' meetings; miscellaneous office
expenses; brokerage commissions; custodian fees; legal and accounting fees;
taxes, and state and federal registration fees.
3. DELIVERY OF DOCUMENTS.
(a) The Trust agrees to furnish, upon request, the Adviser with copies
properly certified or authenticated of each of the following and any
amendments and restatements as they are effected:
(i) The Trust's Agreement and Declaration of Trust, as filed with
the Secretary of State of Delaware (such Agreement and Declaration of
Trust, as presently in effect and as it shall from time to time be
amended, is herein called the "Declaration of Trust");
(ii) Bylaws of the Trust (such Bylaws, as in effect on the date
of this Agreement and as amended from time to time, are herein called
the "Bylaws");
(iii) Prospectus(es) of the Portfolio(s).
(b) The Adviser has furnished the Trust, a copy of its most current
Form ADV as filed with the U.S. Securities and Exchange Commission, and
will furnish any amendment thereto as it may be effected.
4. OTHER COVENANTS. The Adviser agrees that it:
(a) will comply with all applicable Rules and Regulations of the U.S.
Securities and Exchange Commission and will in addition conduct its
activities under this Agreement in accordance with other applicable law;
(b) will make investment decisions for the Portfolio independently
from those for any other investment companies and/or accounts advised or
managed by the Adviser or its affiliated persons. Furthermore, the Adviser
will place (or will direct any Sub-Advisers to place) orders pursuant to
its/their investment determinations for the Portfolio(s) either directly
with the issuer or with any broker-dealer. In executing portfolio
transactions and selecting broker-dealers, the Adviser will, or will direct
the Sub-Advisers to, use its/their best efforts to seek on behalf of a
Portfolio the best overall terms available. In assessing the best overall
terms available for any transaction, the Adviser (or any Sub-Adviser) shall
consider all factors that it deems relevant, including the breadth 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, both for the specific transaction and on a
continuing basis. In evaluating the best overall terms available, and in
selecting the broker-dealer to execute a particular transaction, the
Adviser (or any Sub-Adviser) may also consider the brokerage and research
services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) provided to a Portfolio and/or other accounts over
which the Adviser or an affiliate of the Adviser may exercise investment
discretion. Research services so received shall be in addition to, and not
in lieu of, services required to be performed by the Adviser and does not
reduce the compensation provided for in Section 5 of this Agreement.
The Adviser (or any Sub-Adviser) is authorized, subject to the prior
approval of the Trust's Board of Trustees, to pay to a broker-dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the Portfolio(s) that is in excess of the amount
of commission another broker-dealer would have charged for effecting that
transaction if, but only if, the Adviser (or any Sub-Adviser) determines in
good faith that such commission was reasonable in relation to the value of
the brokerage and research services provided by such broker-dealer --
viewed in terms of that particular transaction or terms of the overall
responsibilities of the Adviser to a Portfolio. In addition, the Adviser
(or any Sub-Adviser) is authorized to allocate purchase and sale orders for
portfolio securities to broker-dealers (including broker-dealers that are
affiliated with the Adviser or the Trust's principal underwriter) to take
into account the sale of shares of the Trust if the Adviser believes that
the quality of the transaction and the commission are comparable to what
they would be with other qualified firms. In no instance, however, will any
Portfolio's securities be purchased from or sold to the Adviser, any
Sub-Adviser engaged with respect to that Portfolio, the Trust's principal
underwriter, or any affiliated person of either the Trust, the Adviser (or
any Sub-Adviser) or the principal underwriter, acting as principal in the
transaction, except to the extent permitted by the U.S. Securities and
Exchange Commission and the 1940 Act.
The Adviser (and any Sub-Adviser) is also authorized to enter into any
directed brokerage/service arrangements with broker-dealers whereby certain
broker-dealers agree to pay all or a portion of a Portfolio's custodian,
administrative, transfer agency, and/or other fees in exchange for such
Portfolio directing certain minimum brokerage amounts to such
broker-dealer, if, and only if, the Adviser (or any Sub-Adviser) determines
in good faith that such arrangement was reasonable - viewed in terms of
that particular transaction or terms of the overall responsibilities of the
Adviser (or Sub-Adviser) to a Portfolio.
5. COMPENSATION OF THE ADVISER.
(a) For the services to be rendered by the Adviser as provided in
Sections 1 and 2 of this Agreement, the Trust shall pay to the Adviser
compensation at the rate(s) specified in Schedule A, as may be amended from
time to time, attached hereto and made a part of this Agreement. Such
compensation shall be paid to the Adviser at the end of each month and
calculated by applying a daily rate to the assets of each Portfolio, based
on the annual percentage rates as specified in the attached Schedule A. The
fee shall be based on the average daily net assets for the month involved.
(b) Any Advisory fees which may be charged by Sub-Advisers hired by
the Adviser are the sole obligation of the Adviser, and not of the Trust
nor the Portfolio.
(c) If this Agreement is terminated prior to the end of any calendar
month, the management fee shall be prorated for the portion of any month in
which this Agreement is in effect according to the proportion which the
number of calendar days, during which the Agreement is in effect, bears to
the number of calendar days in the month, and shall be payable within 10
days after the date of termination.
(d) The Adviser may voluntarily or contractually agree to reduce any
portion of the compensation or reimbursement of expenses due to it pursuant
to this Agreement and may similarly agree to make payments to limit
expenses which are the responsibility of the Trust under this Agreement.
Any such reduction or payment shall be applicable only to such specific
reduction or payment and shall not constitute an agreement to reduce any
future compensation or reimbursement due to the Adviser hereunder or to
continue future payments. Any such reduction will be agreed upon prior to
accrual of the related expense or fee and will be estimated daily. Any fee
withheld shall be voluntarily reduced and any Portfolio expense paid by the
Adviser voluntarily or pursuant to an agreed expense limitation shall be
reimbursed by the Portfolio to the Adviser in the first, second, or third
(or any combination thereof) fiscal year next succeeding the fiscal year of
the withholding, reduction, or payment to the extent permitted by
applicable law if the aggregate expenses for the next succeeding fiscal
year, second fiscal year or third succeeding fiscal year do not exceed any
limitation to which the Adviser has agreed.
6. REPORTS.
The Trust and the Adviser agree to furnish to each other, if
applicable, current prospectuses, proxy statements, reports to
shareholders, certified copies of their financial statements, and such
other information with regard to their affairs as each may reasonably
request. The Adviser further agrees to furnish to the Trust, if applicable,
the same such documents and information pertaining to any sub-Adviser as
the Trust may reasonably request.
7. STATUS OF THE ADVISER.
The services furnished by the Adviser hereunder are deemed not to be
exclusive, and nothing in this Agreement shall (i) prevent Adviser or any
affiliated person (as defined in the 0000 Xxx) of Adviser from acting as
investment adviser or manager for any other person or persons, including
other management investment companies with investment objectives and
policies the same as or similar to those of the Portfolio or (ii) limit or
restrict Adviser or any such affiliated person from buying, selling or
trading any securities or other investments (including any securities or
other investments which the Portfolio is eligible to buy) for its or their
own accounts or for the accounts of others for whom it or they may be
acting; provided, however, that Adviser agrees that it will not undertake
any activities which, in its reasonable judgment, will adversely affect the
performance of its obligations to the Portfolio under this Agreement.
Except to the extent provided herein, the Adviser shall be deemed to
be an independent contractor and shall, unless otherwise expressly provided
or authorized, have no authority to act for or represent the Trust in any
way or otherwise be deemed an agent of the Trust. To the extent that the
purchase or sale of securities or other investments of any issuer may be
deemed by the Adviser to be suitable for two or more accounts managed by
the Adviser, the available securities or investments may be allocated in a
manner believed by the Adviser to be equitable to each account. It is
recognized that in some cases this may adversely affect the price paid or
received by the Trust or the size or position obtainable for or disposed by
the Trust or any Portfolio.
8. CERTAIN RECORDS.
Any records required to be maintained and preserved pursuant to the
provisions of Rule 31a-1 and Rule 31a-2 promulgated under the 1940 Act
which are prepared or maintained by the Adviser (or any Sub-Adviser) on
behalf of the Trust are the property of the Trust and will be surrendered
promptly to the Trust on request. The Adviser further agrees to preserve
for the periods prescribed in Rule 31a-2 under the 1940 Act the records
required to be maintained under Rule 31a-1 under the 1940 Act.
9. LIMITATION OF LIABILITY; INDEMNIFICATION.
The Adviser shall not be liable for any loss, liability, or damage
incurred by the Trust as a result of any investment decision,
recommendation, or other action taken or omitted in what the Adviser, in
good faith, believes to be the proper performance of its duties under this
Agreement, except that the Adviser shall be liable and indemnify the Trust
to the extent such loss, liability, or damage results from the gross
negligence or bad faith of the Adviser or the reckless disregard by the
Adviser of its obligations and duties under this Agreement. Notwithstanding
the foregoing, the Adviser shall not be liable for any liability, loss or
damage resulting from: (i) the willful misconduct, negligence or bad faith
of any independent representative, consultant, independent contractor,
broker, agent, or other person who is selected, engaged or retained by the
Adviser on behalf of the Trust in connection with the performance of
services under this Agreement, unless such person was selected, engaged or
retained by the Adviser in a negligent manner; (ii) any act or failure to
act by any Custodian; or (iii) any investment made by the Adviser
consistent with the Fundamental Investment Limitations as set forth in the
Statement of Additional Information for the Portfolio. Nothing in this
Agreement, however, shall be interpreted as providing that the Trust shall
have waived compliance by the Adviser of any provisions of the 1940 Act,
the Investment Advisers Act of 1940, as amended, or other applicable
federal or state law.
10. PERMISSIBLE INTERESTS.
Trustees, agents, and shareholders of the Trust are or may be
interested in the Adviser (or any successor thereof) as directors,
partners, officers, or shareholders, or otherwise; directors, partners,
officers, agents, and shareholders of the Adviser are or may be interested
in the Trust as Trustees, officers, shareholders or otherwise; and the
Adviser (or any successor) is or may be interested in the Trust as a
shareholder or otherwise subject to the provisions of applicable law. All
such interests shall be fully disclosed between the parties on an ongoing
basis and in the Trust's Prospectus as required by law. In addition,
brokerage transactions for the Trust may be effected through affiliates of
the Adviser or any sub-Adviser if approved by the Board of Trustees,
subject to the rules and regulations of the U.S. Securities and Exchange
Commission.
11. DURATION AND TERMINATION.
This Agreement, unless sooner terminated as provided herein, shall for
each Portfolio listed on Schedule A attached hereto remain in effect from
the date of execution or, if later, the date the initial capital to a
series of the Trust is first provided (the "Effective Date."), until one
year from the Effective Date, and thereafter, for periods of one year so
long as such continuance thereafter is specifically approved at least
annually (a) by the vote of a majority of those Trustees of the Trust who
are not parties to this Agreement or interested persons of any such party,
cast in person at a meeting called for the purpose of voting on such
approval, and (b) by the Trustees of the Trust or by vote of a majority of
the outstanding voting securities of each Portfolio; provided, however,
that if the shareholders of any Portfolio fail to approve the Agreement as
provided herein, the Adviser may continue to serve hereunder in the manner
and to the extent permitted by the 1940 Act and rules and regulations
thereunder. The foregoing requirement that continuance of this Agreement be
"specifically approved at least annually" shall be construed in a manner
consistent with the 1940 Act and the rules and regulations thereunder.
This Agreement may be terminated as to any Portfolio at any time,
without the payment of any penalty by vote of a majority of the Trustees of
the Trust or by vote of a majority of the outstanding voting securities of
the Portfolio on not less than 30 days nor more than 60 days written notice
to the Adviser, or by the Adviser at any time without the payment of any
penalty, on 90 days written notice to the Trust. This Agreement will
automatically and immediately terminate in the event of its assignment.
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. No amendment of this Agreement shall be effective with respect
to the Portfolio until approved in accordance with the 1940 Act.
As used in this Section 11, the terms "assignment", "interested
persons", and a "vote of a majority of the outstanding voting securities"
shall have the respective meanings set forth in the 1940 Act and the rules
and regulations thereunder, subject to such exemptions as may be granted by
the U.S. Securities and Exchange Commission.
12. GOVERNING LAW.
This Agreement shall be governed by the internal laws of the State of
Delaware, without regard to conflict of law principles; provided, however
that nothing herein shall be construed as being inconsistent with the 1940
Act.
13. NOTICE.
Any notice, advice or report to be given pursuant to this Agreement
shall be deemed sufficient if delivered or mailed by registered, certified
or overnight mail, postage prepaid addressed by the party giving notice to
the other party at the last address furnished by the other party:
To the Adviser at: To the Trust at:
----------------- ---------------
Conning Asset Management Company Zodiac Trust
000 Xxxxxx Xxxxxx 000 Xxxx Xxxxxxxx Xxxxxx,
Xx. Xxxxx, XX 00000 2nd Floor
Attention: Xxxx Xxxxxx Xxxxxxxxx, XX 00000
Attention: Xxx Xxxxxxxxx
14. ENTIRE AGREEMENT.
This Agreement embodies the entire agreement and understanding between
the parties hereto, and supersedes all prior agreements and understandings
relating to this Agreement's subject matter. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an
original, but such counterparts shall, together, constitute only one
instrument.
15. SEVERABILITY AND MISCELLANEOUS.
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. 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.
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of State of Delaware, and notice is hereby given that this
instrument is executed on behalf of the Trustees of the Trust as Trustees,
and is not binding upon any of the Trustees, officers, or shareholders of
the Trust individually but binding only upon the assets and property of the
Trust.
No series of the Trust shall be liable for the obligations of any
other series of the Trust. Without limiting the generality of the
foregoing, the Adviser shall look only to the assets of a particular
Portfolio for payment of fees for services rendered to that Portfolio.
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of
the U.S. Securities and Exchange Commission, whether of special or general
application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first written above.
ZODIAC TRUST CONNING ASSET MANAGEMENT COMPANY
By:/s/ Xxxxxx X. Xxxxxxxxx By:/s/ Xxxxx X. Xxxxxxxx
----------------------- -------------------------
Title: President Title: Executive Vice President
------------------- ------------------------
Schedule A
to the
Investment Advisory Agreement
between
Zodiac Trust
and
Conning Asset Management Company
Pursuant to Sections 4 and 5 of the Agreement, the Trust shall pay the
Adviser compensation at an annual rate as follows:
SERIES/PORTFOLIO: Compensation Date Added:
(as a percentage of
daily net assets):
Conning Money Market Portfolio 0.40%
