INVESTMENT ADVISORY AGREEMENT
COLUMBIA FUNDS SERIES TRUST
THIS AGREEMENT is made as of September 30, 2006 by and between COLUMBIA
FUNDS SERIES TRUST, a Delaware statutory trust ("Funds Trust"), and COLUMBIA
MANAGEMENT ADVISORS, LLC, a Delaware limited liability company (the "Adviser"),
on behalf of those portfolios of Funds Trust now or hereafter identified on
Schedule I hereto (each a "Fund" and collectively, the "Funds").
WHEREAS, Funds Trust is registered with the Securities and Exchange
Commission (the "Commission") as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Adviser is registered with the Commission under the Investment
Advisers Act of 1940, as amended (the "Advisers Act") as an investment adviser;
WHEREAS, Funds Trust and the Adviser desire to enter into an agreement to
provide for investment advisory services to Funds Trust upon the terms and
conditions hereinafter set forth; and
WHEREAS, Funds Trust and the Adviser contemplate that certain duties of the
Adviser under this Agreement will be delegated to one or more investment
sub-adviser(s) (the "Sub-Adviser(s)") pursuant to separate sub-advisory
agreement(s) (the "Sub-Advisory Agreement(s)");
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
it is agreed between the parties hereto as follows:
1. APPOINTMENT. Funds Trust hereby appoints the Adviser to act as
investment adviser to each Fund for the period and on the terms set forth in
this Agreement. The Adviser accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein provided. In the event
that Funds Trust establishes one or more portfolios other than the Funds with
respect to which it desires to retain the Adviser to act as investment adviser
hereunder, it shall notify the Adviser in writing. If the Adviser is willing to
render such services under this Agreement it shall notify Funds Trust in writing
whereupon such portfolio shall become a Fund hereunder and shall be subject to
the provisions of this Agreement except to the extent that said provisions
(including those relating to the compensation payable by the Fund to the
Adviser) are modified with respect to such Fund in writing by Funds Trust and
the Adviser at the time.
2. DELEGATION OF RESPONSIBILITIES. Subject to the approval of Funds Trust's
Board of Trustees and, if required, the interestholders of the Funds, the
Adviser may, pursuant to the Sub-Advisory Agreement(s), delegate to the
Sub-Adviser(s) those of its duties hereunder identified in the Sub-Advisory
Agreement(s), provided that the Adviser shall continue to supervise and monitor
the performance of the duties delegated to the Sub-Adviser(s) and any such
delegation
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shall not relieve the Adviser of its duties and obligations under this
Agreement. The Adviser shall be solely responsible for compensating the
Sub-Adviser(s) for services rendered under the Sub-Advisory Agreement(s).
3. DELIVERY OF DOCUMENTS. Funds Trust has furnished the Adviser with
copies, properly certified or authenticated, of each of the following:
(a) Funds Trust's Certificate of Trust, as filed with the Secretary of
State of Delaware on January 14, 1999, and Declaration of Trust and all
amendments thereto (such Declaration of Trust, as presently in effect and as it
shall from time to time be amended, is herein called the "Declaration of
Trust");
(b) Funds Trust's By-Laws and amendments thereto (such By-Laws, as
presently in effect and as it shall from time to time be amended, is herein
called the "By-Laws");
(c) votes of Funds Trust's Board of Trustees authorizing the
appointment of the Adviser and approving this Agreement;
(d) Funds Trust's Registration Statement, as amended, on Form N-1A
under the 1940 Act (File No. 811-09347); and
(e) the most recent prospectus of Funds Trust relating to each Fund
(such prospectus together with the related statement of additional information,
as presently in effect and all amendments and supplements thereto, are herein
called the "Prospectus").
Funds Trust will furnish the Adviser from time to time with copies of all
amendments of or supplements to the foregoing, if any.
4. MANAGEMENT. Subject to the supervision of Funds Trust's Board of
Trustees, the Adviser will provide a continuous investment program for each
Fund, including investment research and management with respect to all
securities, investments, cash and cash equivalents in each Fund. The Adviser
will determine from time to time what securities and other investments will be
purchased, retained or sold by the Funds and will place the daily orders for the
purchase or sale of securities. The Adviser will provide the services rendered
by it under this Agreement in accordance with each Fund's investment objective,
policies and restrictions as stated in the Prospectus and votes of Funds Trust's
Board of Trustees. The Adviser further agrees that it will:
(a) update each Fund's cash availability throughout the day as
required;
(b) maintain historical tax lots for each portfolio security held by
each Fund;
(c) transmit trades to Funds Trust's custodian for proper settlement;
(d) maintain all books and records with respect to each Fund's
securities and transactions;
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(e) supply Funds Trust and its Board of Trustees with reports and
statistical data as requested; and
(f) prepare a quarterly broker security transaction summary and
monthly security transaction listing for each Fund.
5. OTHER COVENANTS. The Adviser agrees that it:
(a) will comply with all applicable Rules and Regulations of the
Commission and will in addition conduct its activities under this Agreement in
accordance with other applicable law, including but not limited to the 1940 Act
and the Advisers Act;
(b) will 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;
(c) will not make loans to any person to purchase or carry Fund
shares;
(d) will place orders pursuant to its investment determinations for
the Funds either directly with the issuer or with any broker or dealer. Subject
to the other provisions of this paragraph, in executing portfolio transactions
and selecting brokers or dealers, the Adviser will use its best efforts to seek
on behalf of each Fund the best overall terms available. In assessing the best
overall terms available for any transaction, the 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 or 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 may also consider the brokerage and
research services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934, as amended) provided to the Fund(s) and/or other accounts
over which the Adviser or an affiliate of the Adviser exercises investment
discretion. The Adviser is authorized, subject to the prior approval of Funds
Trust's Board of Trustees, to pay to a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for any Fund 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 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 or dealer, viewed in terms of that particular transaction or in terms of
the overall responsibilities of the Adviser to the particular Fund and to Funds
Trust. In addition, the Adviser is authorized to take into account the sale of
shares of Funds Trust in allocating purchase and sale orders for portfolio
securities to brokers or dealers (including brokers and dealers that are
affiliated with the Adviser or Funds Trust's principal underwriter), provided
that 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 portfolio securities be purchased from or sold to the Adviser or
Funds Trust's principal underwriter for the Funds or an affiliated person of
either acting as principal or broker, except as permitted by the Commission or
applicable law;
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(e) will maintain a policy and practice of conducting its investment
advisory services hereunder independently of the commercial banking operations
of its affiliates. In making investment recommendations for a Fund, its
investment advisory personnel will not inquire or take into consideration
whether the issuer (or related supporting institution) of securities proposed
for purchase or sale for the Fund's account are customers of the commercial
departments of its affiliates. In dealing with commercial customers, such
commercial departments will not inquire or take into consideration whether
securities of those customers are held by the Fund; and
(f) will treat confidentially, and as proprietary information of Funds
Trust, all records and other information relative to Funds Trust and prior,
present or potential interestholders, 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
Funds Trust, which approval shall not be unreasonably withheld and may not be
withheld and will be deemed granted 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 Funds
Trust).
6. SERVICES NOT EXCLUSIVE. The services furnished by the Adviser hereunder
are deemed not to be exclusive, and the Adviser shall be free to furnish similar
services to others so long as its services under this Agreement are not impaired
thereby. To the extent that the purchase or sale of securities or other
investments of the same 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 procedure may
adversely affect the price paid or received by a Fund or the size of the
position obtainable for or disposed of by a Fund.
7. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Adviser hereby agrees that all records which it
maintains for each Fund are the property of Funds Trust and further agrees to
surrender promptly to Funds Trust any of such records upon Funds Trust's
request. The Adviser further agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act the records required to be maintained by Rule
31a-1 under the 1940 Act.
8. EXPENSES. During the term of this Agreement, the Adviser will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities, commodities and other investments (including
brokerage commissions and other transaction charges, if any) purchased or sold
for the Funds. In addition, if the aggregate expenses borne by any Fund in any
fiscal year exceed the applicable expense limitations imposed by the securities
regulations of any state in which its shares are registered or qualified for
sale to the public, the Adviser together with the Fund's administrator(s) shall
reimburse such Fund for such excess in proportion to the fees otherwise payable
to them for such year. The obligation of the Adviser to reimburse Funds Trust
hereunder is limited in any fiscal year to the amount of its fee hereunder for
such fiscal year, provided, however, that notwithstanding the foregoing, the
Adviser shall reimburse Funds Trust for the full amount of its share of any such
excess expenses regardless of the fees paid to it during such fiscal year to the
extent that the
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securities regulations of any state having jurisdiction over Funds Trust so
require. Such expense reimbursement, if any, will be estimated, reconciled and
paid on a monthly basis.
9. COMPENSATION. For the services provided to each Fund and the expenses
assumed pursuant to this Agreement, Funds Trust will pay the Adviser and the
Adviser will accept as full compensation therefor a fee for that Fund determined
in accordance with Schedule I attached hereto. The fee attributable to each Fund
shall be a separate charge to such Fund and shall be the several (and not joint
or joint and several) obligation of each such Fund. Funds Trust and the Adviser
may, from time to time, agree to reduce, limit or waive the amounts payable
hereunder with respect to one or more Funds for such period or periods they deem
advisable.
10. LIMITATION OF LIABILITY. The Adviser shall not be liable for any error
of judgment or mistake of law or for any loss suffered by Funds Trust 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 Adviser or any of its officers, directors,
employees or agents, in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement.
11. TERM AND APPROVAL. This Agreement succeeds to the predecessor Agreement
between the Adviser and Columbia Funds Master Investment Trust ("CFMIT")
identified in Schedule I from which it is adopted, with the original effective
dates presented in Schedule I (the "CFMIT Agreement"). The CFMIT Agreement has
continued in effect for successive annual periods after the original effective
dates, with the continuation of the CFMIT Agreement having been approved at
least annually after the second anniversary of the original effective dates.
This Agreement will continue in effect for each Fund after each anniversary of
the original effective date of the CFMIT Agreement with respect to such Fund,
for successive annual periods ending on each subsequent anniversary, provided
that the continuation of the Agreement is specifically approved for the Fund at
least annually:
(a)(i) by Funds Trust's Board of Trustees or (ii) by the vote of "a
majority of the outstanding voting securities" of the Fund (as defined in
Section 2(a)(42) of the 0000 Xxx); and
(b) by the affirmative vote of a majority of the Trustees of Funds
Trust who are not parties to this Agreement or "interested persons" (as
defined in the 0000 Xxx) of a party to this Agreement (other than as
Trustees of Funds Trust), by votes cast in person at a meeting specifically
called for such purpose.
12. TERMINATION. This Agreement may be terminated at any time with respect
to:
(a) a Fund, without the payment of any penalty, by vote of Funds
Trust's Board of Trustees or by vote of a majority of a Fund's outstanding
voting securities, or by the Adviser, upon written notice to the other
parties to this Agreement; or
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(b) by the Adviser on sixty (60) days' written notice to the other
parties to this Agreement.
Any party entitled to notice may waive the notice provided for herein.
This Agreement shall automatically terminate in the event of its assignment, the
term "assignment" for purposes of this paragraph having the meaning defined in
Section 2(a)(4) of the 1940 Act.
13. 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. No amendment of this Agreement affecting a
Fund shall be effective until approved by vote of a majority of the outstanding
voting securities of such Fund. However, this shall not prevent the Adviser from
reducing, limiting or waiving its fee.
14. RELEASE. The names "Columbia Funds Series Trust" and "Trustees of
Columbia Funds Series Trust" refer respectively to Funds Trust and Funds Trust
Trustees, as trustees but not individually or personally, acting from time to
time under a Declaration of Trust and the Certificate of Trust dated January 14,
1999, as amended on September 26, 2005, which is hereby referred to and copies
of which are on file at the principal office of Funds Trust. The obligations of
"Columbia Funds Series Trust" entered into in the name or on behalf thereof by
any of the Trustees, representatives or agents are made not individually, but in
such capacities, and are not binding upon any of Funds Trust Trustees,
interestholders, or representatives of Funds Trust personally, but bind only
Funds Trust Property (as defined in the Declaration of Trust) and all persons
dealing with any class of shares of Funds Trust must look solely to Funds Trust
Property belonging to such class for the enforcement of any claims against Funds
Trust.
15. 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, the parties hereto and their respective successors and shall be
governed by Delaware law.
16. COUNTERPARTS. This Agreement may be executed in any manner of
counterparts, each of which shall be deemed an original.
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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.
COLUMBIA FUNDS SERIES TRUST
on behalf of the Fund
By: /s/ Xxxxxxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxxxxxx X. Xxxxxx
President
COLUMBIA MANAGEMENT ADVISORS, LLC
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------------
Xxxx X. Xxxxxxxxx
Managing Director
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SCHEDULE I
Funds Trust shall pay the Adviser as full compensation for services
provided and expenses assumed hereunder an advisory fee for each Fund, computed
daily and payable monthly at the annual rates listed below as a percentage of
the average daily net assets of the Fund:
Fund RATE OF COMPENSATION EFFECTIVE DATE
---- -------------------------------- -----------------------
Columbia Multi-Advisor - 0.70% up to $500 million 10/01/06
International Equity Fund
- 0.65% in excess of $500 (Adopted from CFMIT
million and up to $1 Agreement, effective
billion 8/19/1999, rate amended
12/01/04)
- 0.60% in excess of $1
billion and up to $1.5
billion
- 0.55% in excess of $1.5
billion and up to $3
billion
- 0.53% in excess of $3
billion and up to $6
billion
- 0.51% in excess of $6
billion
Current as of the 30th day of September, 2006.
COLUMBIA FUNDS SERIES TRUST
on behalf of the Fund
By: /s/ Xxxxxxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxxxxxx X. Xxxxxx
President
COLUMBIA MANAGEMENT ADVISORS, LLC
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------------
Xxxx X. Xxxxxxxxx
Managing Director
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