AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT
Columbia Acorn Trust, a Massachusetts business trust registered under the
Investment Company Act of 1940 (the "1940 Act") as an open-end diversified
management investment company ("Columbia Acorn"), and Columbia Xxxxxx Asset
Management, L.P., a Delaware limited partnership registered under the Investment
Advisers Act of 1940 as an investment adviser ("Columbia WAM"), agree that:
1. Engagement of Columbia WAM. Columbia Acorn appoints Columbia WAM to
furnish investment advisory and other services to Columbia Acorn for its series
designated Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn
USA, Columbia Acorn Select , Columbia Acorn International Select and Columbia
Thermostat Fund (each, a "Fund," and collectively, the "Funds")), and Columbia
WAM accepts that appointment, for the period and on the terms set forth in this
agreement.
If Columbia Acorn establishes one or more series in addition to the Funds
named above with respect to which it desires to retain Columbia WAM as
investment adviser hereunder, and if Columbia WAM is willing to provide such
services under this agreement, Columbia Acorn and Columbia WAM may add such new
series to this agreement, by written supplement to this agreement. Such
supplement shall include a schedule of compensation to be paid to Columbia WAM
by Columbia Acorn with respect to such series and such other modifications of
the terms of this agreement with respect to such series as Columbia Acorn and
Columbia WAM may agree. Upon execution of such a supplement by Columbia Acorn
and Columbia WAM, that series will become a Fund hereunder and shall be subject
to the provisions of this agreement to the same extent as the Funds named above,
except as modified by the supplement.
2. Services of Columbia WAM.
(a) Investment Management. Subject to the overall supervision and control
of Columbia Acorn's board of trustees (the "Board"), Columbia WAM shall have
supervisory responsibility for the general management and investment of the
Funds' assets. Columbia WAM shall comply with the 1940 Act and with all
applicable rules and regulations of the Securities and Exchange Commission, the
provisions of the Internal Revenue Code applicable to the Funds as regulated
investment companies, the investment policies and restrictions, portfolio
transaction policies and the other statements concerning the Funds in Columbia
Acorn's agreement and declaration of trust, bylaws, and registration statements
under the 1940 Act and the Securities Act of 1933 (the "1933 Act"), and policy
decisions and procedures adopted by the Board from time to time.
Columbia WAM is authorized to make the decisions to buy and sell
securities and other assets for the Funds, to place the Funds' portfolio
transactions with broker-dealers, and to negotiate the terms of such
transactions including brokerage commissions on brokerage transactions, on
behalf of the Funds. Columbia WAM is authorized to exercise discretion within
the Funds' policy concerning allocation of its portfolio brokerage, as permitted
by law, including but not limited to section 28(e) of the Securities Exchange
Act of 1934, and in so doing shall not be required to make any reduction in its
investment advisory fees. Columbia Acorn hereby authorizes any entity or person
associated with Columbia WAM that is a member of a national securities exchange
to effect any transaction on the exchange for the account of a Fund to the
extent permitted by and in accordance with Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder. Columbia Acorn hereby
consents to the retention by such entity or person of compensation for such
transactions in accordance with Rule 11a-2(T)(a)(iv).
Columbia WAM may, where it deems it to be advisable, aggregate orders with
other securities of the same type to be sold or purchased by one or more Funds
with like orders on behalf of other clients of Columbia WAM (as well as clients
of other investment advisers affiliated with Columbia WAM, in the event that
Columbia WAM and such affiliated investment advisers share common trading
facilities). In such event, Columbia WAM (or Columbia WAM and its affiliated
advisers, as the case may be) will allocate the shares so sold or purchased, as
well as the expenses incurred in the transaction, in a manner it (or it and
they) consider to be equitable and fair and consistent with its (or its or
their) fiduciary obligations to clients.
(b) Reports and Information. Columbia WAM shall furnish to the Board
periodic reports on the investment strategy and performance of the Funds and
such additional reports and information as the Board or the officers of Columbia
Acorn may reasonably request. Columbia Acorn shall furnish or otherwise make
available to Columbia WAM such copies of financial statements, proxy statements,
reports, and other information relating to the business and affairs of each Fund
as Columbia WAM may, at any time or from time to time, reasonably require in
order to discharge its obligations under this agreement.
(c) Customers of Financial Institutions. It is understood that Columbia
WAM may, but shall not be obligated to, make payments from its own resources to
financial institutions (which may include banks, broker-dealers, recordkeepers,
administrators and others) that provide, either directly or through agents,
administrative and other services with respect to shareholders who are customers
of such institutions, including establishing shareholder accounts, assisting
Columbia Acorn's transfer agent with respect to recording purchase and
redemption transactions, advising shareholders about the status of their
accounts, current yield and dividends declared and such related services as the
shareholders or the Funds may request.
(d) Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, Columbia WAM agrees to maintain records relating to its
services under this agreement, and further agrees that all records that it
maintains for Columbia Acorn are the property of Columbia Acorn and to surrender
promptly to Columbia Acorn any of such records upon Columbia Acorn's request;
provided that Columbia WAM may at its own expense make and retain copies of any
such records. Columbia WAM 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.
(e) Status of Columbia WAM. Columbia WAM shall for all purposes herein be
deemed to be an independent contractor and not an agent of Columbia Acorn and
shall, unless otherwise expressly provided or authorized, have no authority to
act for or represent Columbia Acorn in any way. Columbia WAM agrees to notify
the Trust promptly of any change in the identity of Columbia WAM's general
partner.
3. Administrative Services. Columbia WAM shall supervise the business and
affairs of Columbia Acorn and each Fund and shall provide such services and
facilities as may be required for effective administration of Columbia Acorn and
the Funds as are not provided by employees or other agents engaged by Columbia
Acorn; provided that Columbia WAM shall not have any obligation to provide under
this agreement any such services which are the subject of a separate agreement
or arrangement between Columbia Acorn and Columbia WAM, any affiliate of
Columbia WAM, or any third party administrator.
4. Use of Affiliated Companies and Subcontractors. In connection with the
services to be provided by Columbia WAM under this agreement, Columbia WAM may,
to the extent it deems appropriate, and subject to compliance with the
requirements of applicable laws and regulations and upon receipt of approval of
the Trustees, make use of (i) its affiliated companies and their directors,
trustees, officers, and employees and (ii) subcontractors selected by Columbia
WAM, provided that Columbia WAM shall supervise and remain fully responsible for
the services of all such third parties in accordance with and to the extent
provided by this agreement. All costs and expenses associated with services
provided by any such third parties shall be borne by Columbia WAM or such
parties.
5. Expenses to be Paid by Columbia Acorn. Except as otherwise provided in
this agreement or any other contract to which Columbia Acorn is a party,
Columbia Acorn shall pay all expenses incidental to its organization, operations
and business, including, without limitation:
(a) all charges of depositories, custodians, sub-custodians and other
agencies for the safekeeping and servicing of its cash, securities
and other property and of its transfer agents and registrars and its
dividend disbursing and redemption agents, if any;
(b) all charges of its administrator, if any;
(c) all charges of legal counsel and of independent auditors;
(d) all compensation of trustees other than those affiliated with
Columbia WAM or Columbia Acorn's administrator, if any, and all
expenses incurred in connection with their services to Columbia
Acorn;
(e) all expenses of preparing, printing and distributing notices, proxy
solicitation materials and reports to shareholders of the Funds;
(f) all expenses of meetings of shareholders of the Funds;
(g) all expenses of registering and maintaining the registration of
Columbia Acorn under the 1940 Act and of shares of the Funds under
the 1933 Act, including all expenses of preparation, filing and
printing of annual or more frequent revisions of the Funds'
registration statements under the 1940 Act and 1933 Act, and of
supplying each then existing shareholder or beneficial owner of
shares of the Funds of a copy of each revised prospectus or
supplement thereto, and of supplying a copy of the statement of
additional information upon request to any then existing
shareholder;
(h) all costs of borrowing money;
(i) all expenses of publication of notices and reports to shareholders
and to governmental bodies or regulatory agencies;
(j) all taxes and fees payable to federal, state or other governmental
agencies, domestic or foreign, and all stamp or other taxes;
(k) all expenses of printing and mailing certificates for shares of a
Fund;
(l) all expenses of bond and insurance coverage required by law or
deemed advisable by the Board;
(m) all expenses of qualifying and maintaining qualification of, or
providing appropriate notification of intention to sell relating to,
shares of the Funds under the securities laws of the various states
and other jurisdictions, and of registration and qualification of
Columbia Acorn under any other laws applicable to Columbia Acorn or
its business activities;
(n) all fees, dues and other expenses related to membership of Columbia
Acorn in any trade association or other investment company
organization; and
(o) any extraordinary expenses.
In addition to the payment of expenses, Columbia Acorn shall also pay all
brokers' commissions and other charges relating to the purchase and sale of
portfolio securities for each Fund.
6. Allocation of Expenses Paid by Columbia Acorn. Any expenses paid by
Columbia Acorn that are attributable solely to the organization, operation or
business of a Fund or Funds shall be paid solely out of the assets of that Fund
or Funds. Any expense paid by Columbia Acorn that is not solely attributable to
a Fund or Funds, nor solely to any other series of Columbia Acorn, shall be
apportioned in such manner as Columbia Acorn or Columbia Acorn's administrator
determines is fair and appropriate, or as otherwise specified by the Board.
7. Expenses to be Paid by Columbia WAM. Columbia WAM shall furnish to
Columbia Acorn, at Columbia WAM's own expense, office space and all necessary
office facilities, equipment and personnel required to provide its services
pursuant to this agreement. Columbia WAM shall also assume and pay all expenses
of placement of securities orders and related bookkeeping.
8. Compensation of Columbia WAM. For the services to be rendered and the
expenses to be assumed and to be paid by Columbia WAM under this agreement,
Columbia Acorn on behalf of the respective
Funds shall pay to Columbia WAM fees accrued daily and paid monthly at the
annual rates (as a percentage of the Fund's net assets) shown below:
Columbia Acorn Fund
Assets Rate of Fee
------ -----------
First $700 million 0.75%
$700 million to $2 billion 0.70%
In excess of $2 billion 0.65%
Columbia Acorn International
Assets Rate of Fee
------ -----------
First $100 million 1.20%
$100 million to $500 million 0.95%
In excess of $500 million 0.75%
Columbia Acorn USA
Assets Rate of Fee
------ -----------
First $200 million 0.95%
In excess of $200 million 0.90%
Columbia Acorn Select
Assets Rate of Fee
------ -----------
First $700 million 0.90%
In excess of $700 million 0.85%
Columbia Acorn International Select
All Assets 0.95%
Columbia Thermostat Fund
All Assets 0.10%
The fees 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.
9. Services of Columbia WAM Not Exclusive. The services of Columbia WAM to
Columbia Acorn under this agreement are not exclusive, and Columbia WAM shall be
free to render similar services to others so long as its services under this
agreement are not impaired by such other activities.
10. Services Other Than as Adviser. Within the limits permitted by law,
Columbia WAM or an affiliate of Columbia WAM may receive compensation from
Columbia Acorn for other services performed by it for Columbia Acorn which are
not within the scope of the duties of Columbia WAM under this agreement,
including the provision of brokerage services.
11. Standard of Care. To the extent permitted by applicable law, neither
Columbia WAM nor any of its partners, officers, agents, employees or affiliates
shall be liable to Columbia Acorn or its shareholders for any loss suffered by
Columbia Acorn or its shareholders as a result of any error of judgment, or any
loss arising out of any investment, or as a consequence of any other act or
omission of Columbia WAM or any of its affiliates in the performance of Columbia
WAM's duties under this agreement, except for liability resulting from willful
misfeasance, bad faith or gross negligence on the part of Columbia WAM or such
affiliate, or by reason of reckless disregard by Columbia WAM or such affiliate
of the obligations and duties of Columbia WAM under this agreement.
12. Effective Date, Duration and Renewal. This agreement shall become
effective on August 1, 2004. Unless terminated as provided in Section 13, this
agreement shall continue in effect as to a Fund until July 31, 2005 and
thereafter from year to year only so long as such continuance is specifically
approved at least annually (a) by a majority of those trustees who are not
interested persons of Columbia Acorn or of Columbia WAM, voting in person at a
meeting called for the purpose of voting on such approval, and (b) by either the
Board or vote of the holders of a "majority of the outstanding shares" of that
Fund (which term as used throughout this agreement shall be construed in
accordance with the definition of "vote of a majority of the outstanding voting
securities of a company" in section 2(a)(42) of the 1940 Act).
13. Termination. This agreement may be terminated as to a Fund at any
time, without payment of any penalty, by the Board, or by a vote of the holders
of a majority of the outstanding shares of that Fund, upon 60 days' written
notice to Columbia WAM. This agreement may be terminated by Columbia WAM at any
time upon 60 days' written notice to Columbia Acorn. This agreement shall
terminate automatically in the event of its assignment (as defined in Section
2(a)(4) of the 1940 Act).
14. Amendment. This agreement may be amended in accordance with the 1940
Act.
15. Non-Liability of Trustees and Shareholders. A copy of the declaration
of trust of Columbia Acorn is on file with the Secretary of The Commonwealth of
Massachusetts, and notice is hereby given that this instrument is executed on
behalf of Columbia Acorn by its officers as officers and not individually. All
obligations of Columbia Acorn hereunder shall be binding only upon the assets of
Columbia Acorn (or the appropriate Fund) and shall not be binding upon any
trustee, officer, employee, agent or shareholder of Columbia Acorn. Neither the
authorization of any action by the trustees or shareholders of Columbia Acorn
nor the execution of this agreement on behalf of Columbia Acorn shall impose any
liability upon any trustee, officer or shareholder of Columbia Acorn.
16. Use of Manager's Name. Columbia Acorn may use the name "Columbia" or
any other name derived from the name "Columbia" only for so long as this
agreement or any extension, renewal or amendment hereof remains in effect,
including any similar agreement with any organization that shall remain
affiliated with Columbia Management Group, Inc. and shall have succeeded to the
business of Columbia WAM as investment adviser. At such time as this agreement
or any extension, renewal or amendment hereof, or such other similar agreement
shall no longer be in effect, Columbia Acorn will (by amendment of its agreement
and declaration of trust if necessary) cease to use any name derived from the
name "Columbia" or otherwise connected with Columbia WAM, or with any
organization that shall have succeeded to Columbia WAM's business as investment
adviser.
17. Notices. Any notice, demand, change of address or other communication
to be given in connection with this agreement shall be given in writing and
shall be given by personal delivery, by registered or certified mail or by
transmittal by facsimile or other electronic medium addressed to the recipient
as follows (or at such other address or addresses as a party may provide to the
other from time to time, by notice):
If to Columbia WAM: Columbia Xxxxxx Asset Management, L.P.
Attention: Xxxxx X. Xxxxx
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telephone: 000 000-0000
Facsimile: 000 000-0000
with a copy to:
If to Columbia Acorn: Columbia Acorn Trust
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telephone: 000 000-0000
Facsimile: 000 000-0000
with a copy to:
Xxxx, Xxxx & Xxxxx LLC
Attention: Xxxxxxx X. Xxxxx
Three First Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telephone: 312/000-0000
Facsimile: 312/827-8000
All notices shall be conclusively deemed to have been given on the day of
actual delivery thereof and, if given by registered or certified mail, on the
fifth business day following the deposit thereof in the mail and, if given by
facsimile or other electronic medium, on the day of transmittal thereof (upon
electronic confirmation of receipt thereof).
18. Governing Law. This agreement shall be construed and interpreted in
accordance with the laws of the State of Illinois and the laws of the United
States of America applicable to contracts executed and to be performed therein.
Dated as of August 1, 2004
COLUMBIA ACORN TRUST
By /s/ Xxxxxxx X. XxXxxxx
-----------------------------------
Xxxxxxx X. XxXxxxx
COLUMBIA XXXXXX ASSET MANAGEMENT, L.P.
By WAM Acquisition GP, Inc.
Its General Partner
By /s/ Xxxxx X. Xxxxx
-----------------------------------
Xxxxx X. Xxxxx
