ADVISORY AGREEMENT ADVISORY AGREEMENT
AGREEMENT made as of the 27th day of October, 1989 between UNITED SERVICES
ADVISORS, INC., a corporation organized under the laws of the State of Texas and
having its principal place of business in San Antonio, Texas (the "Manager"),
and UNITED SERVICES FUNDS, a Massachusetts business trust having its principal
place of business in San Antonio, Texas (the "Trust").
WHEREAS, the Trust is engaged in business as an open-end management
investment company and is so registered under the Investment Company Act of 1940
(the "1940 Act"); and
WHEREAS, the Manager is engaged principally in the business of rendering
investment management services and is so registered under the Investment
Advisers Act of 1940; and
WHEREAS, the Trust is authorized to issue shares of beneficial interest in
separate series with each such series representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Trust intends to initially offer shares in eleven series, the
U.S. Gold Shares Fund, U.S. Growth Fund, U.S. Income Fund, Prospector Fund, U.S.
Tax Free Fund, U.S. Treasury Securities Fund, U.S. Good and Bad Times Fund, U.S.
LoCap Fund, U.S. New Prospector Fund, U.S. GNMA Fund, U.S. Real Estate Fund,
[such series (the "Initial Funds") together with all other series subsequently
established by the Trust with respect to which the Trust desires to retain the
Manager to render investment advisory services hereunder and the Manager is
willing so to do, being herein collectively referred to as the "Funds"];
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF MANAGER.
(a) Initial Funds. The Trust hereby appoints the Manager to act as manager
and investment adviser to each of the Initial Funds for the period and
on the terms herein set forth. The Manager accepts such appointment
and agrees to render the services herein set forth, for the
compensation herein provided.
(b) Additional Funds. In the event that the Trust establishes one or more
series of shares other than the Initial Funds with respect to which it
desires to retain the Manager to render management and investment
advisory services hereunder, it shall so notify the Manager in
writing, indicating the advisory fee which will be payable with
respect to the additional series of shares. If the Manager is willing
to render such services, it shall so notify the Trust in writing,
whereupon such series of shares shall become a Fund hereunder.
2. DUTIES OF MANAGER.
The Manager, at its own expense, shall furnish the following services and
facilities to the Trust:
(a) Investment Program. The Manager will (i) furnish continuously an
investment program of each Fund, (ii) determine (subject to the
overall supervision and review of the Board of Trustees of the Trust)
what investments shall be purchased, held, sold or exchanged by each
Fund and what portion, if any, of the assets of each Fund shall be
held uninvested, and (iii) make changes
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on behalf of the Trust in the investments of each Fund. The Manager will
also manage, supervise and conduct the other affairs and business of the
Trust and each Fund thereof and matters incidental thereto, subject always
to the control of the Board of Trustees of the Trust and to the provisions
of the Declaration of Trust and By-laws and the 1940 Act.
(b) Office Space and Facilities. The Manager shall furnish the Trust
office space in the offices of the Manager, or in such other place or
places as may be agreed upon from time to time, and all necessary
office facilities, simple business equipment, supplies, utilities, and
telephone service for managing the affairs and investments of the
Trust. These services are exclusive of the necessary services and
records of any dividend disbursing agent, transfer agent, registrar or
custodian, and accounting and bookkeeping services to be provided by
the custodian.
(c) Personnel. The Manager shall provide all necessary executive and
clerical personnel for administering the affairs of the Trust, and
shall compensate all personnel, officers and Trustees of the Trust if
such persons are also employees of the Manager or its affiliates,
except as provided in Paragraph 3(f) hereof.
(d) Distribution Expenses. The Manager shall bear all sales, promotions or
distribution expenses in connection with the distribution of shares of
any Fund and shall be the sole judge of the extent to which sales or
promotion expenses shall be incurred; provided however, that the
Manager shall not be obligated to pay for any portion of the cost of
prospectuses or periodic reports provided to shareholders. Expenses
incurred in complying with laws regulating the issue or sale of
securities shall not be deemed to be sales, promotion or distribution
expenses.
(e) Portfolio Transactions. The Manager shall place all orders for the
purchase and sale of portfolio securities for the account of each Fund
with brokers or dealers selected by the Manager, although the Trust
will pay the actual brokerage commissions on portfolio transactions in
accordance with Paragraph 3(c). In executing portfolio transactions
and selecting brokers or dealers, the Manager will use its best
efforts to seek on behalf of the Trust or any Fund thereof the best
overall terms available. In assessing the best overall terms available
for any transaction, the Manager shall consider all factors 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 (for the specific transaction and on a continuing
basis). In evaluating the best overall terms available, and in
selecting the broker or dealer to execute a particular transaction,
the Manager 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 any Fund and/or other accounts over which the
Manager or an affiliate of the Manager exercises investment
discretion. The Manager is authorized 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 Manager 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 all of the accounts over which investment discretion is so
exercised.
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3. ALLOCATION OF EXPENSES.
Except for the services and facilities to be provided by the Manager as set
forth in Paragraph 2 above, the Trust assumes and shall pay all expenses for all
other Trust operations and activities and shall reimburse the Manager for any
such expenses incurred by the Manager. The expenses to be borne by the Trust
shall include, without limitation:
(a) The charges and expenses of any registrar, stock transfer or dividend
disbursing agent, custodian, or depository appointed by the Trust for
the safekeeping of its cash, portfolio securities and other property;
(b) the charges and expenses of auditors;
(c) brokerage commissions for transactions in the portfolio securities of
the Trust;
(d) all taxes, including issuance and transfer taxes, and corporate fees
payable by the Trust to Federal, state or other governmental agencies;
(e) the cost of stock certificates (if any) representing shares of the
Trust;
(f) expenses involved in registering and maintaining registrations of the
Trust and of its shares with the Securities and Exchange Commission
and various states and other jurisdictions, including reimbursement of
actual expenses incurred by the Manager in performing such functions
for the Trust, and including compensation of persons who are Manager
employees in proportion to the relative time spent on such matters;
(g) all expenses of shareholders' and Trustees' meetings committees, and
of preparing, printing and mailing reports, semi-annual reports,
annual reports and other communications to shareholders;
(h) all expenses of preparing and setting in type prospectuses, and
expenses of printing and mailing the same to shareholders (but not
expenses of printing and mailing of prospectuses and literature used
for promotional purposes);
(i) compensation and travel expenses of Trustees who are not "interested
persons" within the meaning of the 1940 Act;
(j) the expense of furnishing, or causing to be furnished, to each
shareholder a statement of his account, including the expense of
mailing;
(k) charges and expenses of legal counsel in connection with matters
relating to the Trust, including, without limitation, legal services
rendered in connection with the Trust's corporate and financial
structure and relations with its shareholders, issuance of Trust
shares, and registration and qualification of securities under
Federal, state and other laws;
(1) the expenses of attendance at professional meetings of organizations
such as the Investment Company Institute, the No Load Mutual Fund
Association, or Commerce Clearing House by officers and Trustees of
the Trust, and the membership or association dues of such
organizations;
(m) the cost and expense of maintaining the books and records of the
Trust, including general ledger accounting;
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(n) the expense of obtaining and maintaining a fidelity bond as required
by Section 17(g) of the 1940 Act;
(o) interest payable on Trust borrowings; and
(p) postage.
4. ADVISORY FEE.
(a) For the services and facilities to be provided to each of the Funds by
the Manager as provided in Paragraph 2 hereof, the Trust shall pay the
Manager a monthly fee with respect to each of the Funds as soon as
practical after the last day of each calendar month, which fee shall
be paid at the rate set forth below based upon the Monthly Average Net
Assets [as defined in subparagraph (c) below] of such Fund for such
calendar month:
ADVISORY FEE SCHEDULE
MONTHLY AVERAGE MONTHLY
NET ASSETS FEE RATE
-------------------------------- --------------
U.S. GOLD SHARES FUND
Up to and including $250 million 1/12 of .75%
Over $250 million I/ 1 2 of .50%
U.S. GROWTH FUND
Up to and including $250 million 1/12 of .75%
Over $250 million 1/12 of .50%
U.S. INCOME FUND
Up to and including $250 million 1/12 of .75%
Over $250 million 1/12 of .50%
PROSPECTOR FUND
Up to and including $250 million 1/12 of 1%
Over $250 million 1/12 of .50%
U.S. TREASURY SECURITIES FUND
Up to and including $250 million 1/12 of .50%
Over $250 million 1/12 of .375%
U.S. GOOD AND BAD TIMES FUND
Up to and including $250 million 1/12 of .75%
Over $250 million 1/12 of .50%
U.S. LOCAP FUND
Up to and including $250 million 1/12 of 1%
Over $250 million 1/12 of .75%
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U.S. TAX FREE FUND
Up to and including $250 million 1/12 of .75%
Over $250 million 1/12 of .50%
U.S. NEW PROSPECTOR FUND
Up to and including $250 million 1/12 of 1%
Over $250 million 1/12 of .50%
U.S. GNMA FUND
Net Assets I/ 1 2 of .66%
U.S. REAL ESTATE FUND
Up to and including $250 million 1/12 of .75%
Over $250 million 1/12 of .50%
(b) In the case of termination of this Agreement with respect to any Fund
during any calendar month, the fee with respect to such Fund for that
month shall be reduced proportionately based upon the number of
calendar days during which it is in effect and the fee shall be
computed upon the average net assets of such Fund for the business
days during which it is so in effect.
(c) The "Monthly Average Net Assets" of any Fund of the Trust for any
calendar month shall be equal to the quotient produced by dividing (i)
the sum of the net assets of such Fund, determined in accordance with
procedures established from time to time by or under the direction of
the Board of Trustees of the Trust in accordance with the Declaration
of Trust of the Trust, as of the close of business on each day during
such month that such Fund was open for business, by (ii) the number of
such days.
13. EXPENSE LIMITATION.
The Manager agrees that for any fiscal year of the Trust during which the total
of all expenses of the Trust (including investment advisory fees under this
agreement, but excluding interest, portfolio brokerage commissions and expenses,
taxes and extraordinary items) exceeds the lowest expense limitation imposed in
any state in which the Trust is then making sales of its shares or in which its
shares are then qualified for sale, the Manager will reimburse the Trust for
such expenses not otherwise excluded from reimbursement by this Paragraph 5 to
the extent that they exceed such expense limitation.
14. TRUST TRANSACTIONS.
The Manager agrees that neither it nor any of its officers or Trustees will take
any long or short term position in the shares of the Trust; provided, however,
that such prohibition:
(a) shall not prevent the Manager from purchasing shares of the Trust if
orders to purchase such shares are placed upon the receipt by the
Manager of purchase orders for such shares and are not in excess of
such purchase orders received by the Manager; and
(b) shall not prevent the purchase of shares of the Trust by any of the
persons above described for their account and for investment at the
price at which such shares are available to the public at the time of
purchase or as part of the initial capital of the Trust.
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7. RELATIONS WITH TRUST.
Subject to and in accordance with the Declaration of Trust and By-laws of the
Trust and the Articles of Incorporation and By-laws of the Manager,
respectively, it is understood that Trustees, officers, agents and shareholders
of the Trust are or may be interested in the Manager (or any successor thereof)
as directors, officers, or otherwise, that directors, officers, agents and
shareholders of the Manager are or may be interested in the Trust as Trustees,
officers, shareholders, or otherwise, that the Manager (or any such successor)
is or may be interested in the Trust as a shareholder or otherwise and that the
effect of any such adverse interests shall be governed by said Declaration of
Trust, Articles of Incorporation and By-laws.
8. LIABILITY OF MANAGER AND OFFICERS AND TRUSTEES OF THE TRUST.
No provision of this Agreement shall be deemed to protect the Manager against
any liability to the Trust or its shareholders to which it might otherwise be
subject by reason of any willful misfeasance, bad faith or gross negligence in
the performance of its duties or the reckless disregard of its obligations and
duties under this Agreement. Nor shall any provision hereof be deemed to protect
any Trustee or officer of the Trust against any such liability to which he might
otherwise be subject by reason of any willful misfeasance, bad faith or gross
negligence in the performance of his duties or the reckless disregard of his
obligations and duties. 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.
9. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective with respect to each
Initial Fund on the date hereof and, with respect to any additional
Fund, on the date of receipt by the Trust of notice from the Manager
in accordance with Paragraph l(b) hereof that the Manager is willing
to serve as Manager with respect to such Fund. Unless terminated as
herein provided, this Agreement shall remain in full force and effect
until October 26, 1991 with respect to the Initial Funds and, with
respect to each additional Fund, until the October 26 following the
date on which such Fund becomes a Fund hereunder, and shall continue
in full force and effect for periods of one year thereafter with
respect to each Fund so long as such continuance with respect to any
such Fund is approved at least annually (i) by either the Trustees of
the Trust or by vote of a majority of the outstanding voting shares
(as defined in the 0000 Xxx) of such Fund, and (ii) 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. However, the continuance of
this Agreement with respect to any Fund other than the Initial Funds
is subject to the approval of this Agreement by a majority of the
outstanding voting shares of such Fund on or before the next October
26 following the date on which such Fund becomes a Fund hereunder.
Any approval of this Agreement by the holders of a majority of the
outstanding shares (as defined in the 0000 Xxx) of any Fund shall be
effective to continue this Agreement with respect to any such Fund
notwithstanding (i) that this Agreement has not been approved by the
holders of a majority of the outstanding shares of any other Fund
affected thereby, and (ii) that this Agreement has not been approved
by the vote of a majority of the outstanding shares of the Trust,
unless such approval shall be required by any other applicable law or
otherwise.
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(b) Termination. This Agreement may be terminated at any time, without
payment of any penalty, by vote of the Trustees of the Trust or by
vote of a majority of the outstanding shares (as defined in he 1940
Act), or by the Manager on sixty (60) days' written notice to the
other party.
(c) Automatic Termination. This Agreement shall automatically and
immediately terminate in the event of its assignment.
10. NAME OF TRUST.
It is understood that the name "United Services", and any logo associated with
that name, is the valuable property of United Services Advisors, Inc., and that
the Trust has the right to include "United Services' as a part of its name only
so long as this Agreement shall continue. Upon termination of this Agreement the
Trust shall forthwith cease to use the United Services name and logos and shall
submit to its shareholders an amendment to its Declaration of Trust to change
the Trust's name.
11. PRIOR AGREEMENT SUPERSEDED.
This Agreement supersedes any prior agreement relating to the subject matter
hereof between the parties.
12. SERVICES NOT EXCLUSIVE.
The services of the Manager to the Trust hereunder are not to be deemed
exclusive, and the Manager shall be free to render similar services to others so
long as its services hereunder are not impaired thereby.
13. LIMITATION OF LIABILITY.
The term "United Services Funds" means and refers to the Trustees from time to
time serving under the Master Trust Agreement of the Trust dated July 31, 1984,
as the same may subsequently thereto have been, or subsequently hereto be
amended. 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 bind only the assets and
property of the Trust, as provided in the Master Trust Agreement of the Trust.
The execution and delivery of this Agreement have been authorized by the
Trustees and shareholders of the Trust and signed by an authorized officer of
the Trust, acting as such, and neither such authorization by such Trustees and
shareholders 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 assets and property of the Trust as
provided in its Master Trust Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
UNITED SERVICES FUNDS UNITED SERVICES ADVISORS, INC.
By _____________________________ By _____________________________
Executive Vice President Executive Vice President
Attest: Attest:
------------------------------- -------------------------------
Secretary Secretary
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UNITED
SERVICES
ADVISORS
INC.
INVESTMENT ADVISOR TO UNITED SERVICES FUNDS
--------------------------------------------------------------------------------
November 1, 1990
United Services Advisors, Inc.
00000 XX 00 Xxxx, Xxx. 0000
Xxx Xxxxxxx, Xxxxx 00000
Gentlemen:
Pursuant to Section l(b) of the Advisory Agreement dated October 27,1989
between United Services Funds (the "Trust") and United Services Advisors, Inc.
(the "Manager"), please be advised that the Trust has established two new series
of its shares, namely, the U.S. Vision 2020 Fund and the U.S. California Double
Tax Free Fund, and please be further advised that the Trust desires to retain
the Manager to render management and investment advisor services under the
Advisory Agreement to these Funds at the fees stated below:
MONTHLY AVERAGE NET ASSETS MONTHLY FEE RATE
U.S. VISION 2020 FUND
Up to and including $250 million 1/12 of .75%
over $250 million 1/12 of .50%
U.S. CALIFORNIA DOUBLE TAX FREE FUND
Up to and including $250 million 1/12 of .75%
Over $250 million 1/12 of .50%
Please stated below whether you are willing to render such services at the
fees stated above.
UNITED SERVICES FUNDS
Attest:________________________ By: __________________________
Secretary Executive Vice President
Date: November 1, 1990
We are willing to render management and investment advisory services to the
U.S. Vision 2020 Fund and the U.S. California Double Tax Free Fund at the fees
stated above.
UNITED SERVICES ADVISORS, INC.
Attest: _______________________ By: __________________________
Assistant Secretary Executive Vice President
Date: November 1, 1990
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UNITED
SERVICES
ADVISORS
INC.
INVESTMENT ADVISOR TO UNITED SERVICES FUNDS
--------------------------------------------------------------------------------
November 1, 1990
United Services Advisors, Inc.
00000 XX 00 Xxxx, Xxx. 0000
Xxx Xxxxxxx, Xxxxx 00000
Gentlemen:
The purpose of this letter is to correct the November 1, 1990 Letter
Agreement which erroneously stated the fees to be charged to the named Funds
from effective registration.
Pursuant to Section l(b) of the Advisory Agreement dated October 27, 1989
between United Services Funds (the "Trust") and United Services Advisors, Inc.
(the "Manager"), please be advised that the Trust has established two new series
of its shares, namely, the U.S. Vision 2020 Fund and the U.S. California Double
Tax Free Fund, and please be further advised that the Trust desires to retain
the Manager to render management and investment advisor services under the
Advisory Agreement to these Funds at the fees stated below:
U.S. VISION 2020 FUND
Monthly Average Net Assets 1/12 of .50%
U.S. CALIFORNIA DOUBLE TAX FREE FUND
Monthly Average Net Assets 1/12 of .50%
Please state below whether you are willing to render such services at the
fees stated above.
UNITED SERVICES FUNDS
Attest:________________________ By: __________________________
Secretary Executive Vice President
Date: March 6, 199
We are willing to render management and investment advisory services to the
U.S. Vision 200 the U.S. California Double Tax Free Fund at the fees stated
above.
UNITED SERVICES ADVISORS, INC.
Attest: _______________________ By: __________________________
Secretary Executive Vice President
Date: March 6, 1991
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UNITED
SERVICES
ADVISORS
INC.
INVESTMENT ADVISOR TO UNITED SERVICES FUNDS
--------------------------------------------------------------------------------
March 6, 1992
United Services Advisors, Inc.
00000 XX 00 Xxxx, Xxx. 0000
Xxx Xxxxxxx, Xxxxx 00000
Gentlemen:
Pursuant to Section l(b) of the Advisory Agreement dated October 27, 1989
between United Services Funds (the "Trust") and United Services Advisors, Inc.
(the "Manager"), please be advised that the Trust has established one new series
of its shares, namely, the U.S. Treasury Bond Fund, and please be further
advised that the Trust desires to retain the Manager to render management and
investment advisory services under the Advisory Agreement to this Fund at the
fees stated below:
U.S. TREASURY BOND FUND
Monthly Average Net Assets 1/12 of .50%
Please state below whether you are willing to render such services at the
fees stated above.
UNITED SERVICES FUNDS
Attest: By:
Secretary President
Date: May 15, 1992
We are willing to render management and investment advisory services to the
U.S. Treasury Bond Fund at the fee stated above.
Attest: By
Secretary Executive Vice President
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UNITED SERVICES FUNDS
February 19, 1993
United Services Advisors, Inc.
0000 Xxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
Gentlemen:
Pursuant to Section l(b) of the Advisory Agreement dated October 27, 1989
between United Services Funds (the "Trust") and United Services Advisors, Inc.
(the "Manager"), please be advised that the Trust has established one new series
of its shares, namely, the United Services Adjustable Government Fund, and
please be further advised that the Trust desires to retain the Manager to render
management and investment advisory services under the Advisory Agreement to this
Fund at the fees stated below:
UNITED SERVICES ADJUSTABLE GOVERNMENT FUND
Monthly Average Net Assets 1/12 of .30%
Please state below whether you are willing to render such services at the
fees stated above.
UNITED SERVICES FUNDS
Attest: By:
Secretary Executive Vice President
Date: March 1, 1993
We are willing to render management and investment advisory services to the
United Services Adjustable Government Fund at the fee stated above.
UNITED SERVICES ADVISORS, INC.
Attest: By:
Secretary Executive Vice President
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UNITED SERVICES FUNDS
October 20, 1993
United Services Advisors, Inc.
0000 Xxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
Gentlemen:
Pursuant to Section I (b) of the Advisory Agreement dated October 27, 1989
between United Services Funds (the "Trust") and United Services Advisors, Inc.
(the "Manager"), please be advised that the Trust has established one new series
of its shares, namely, the U.S. China Opportunity Fund, and please be further
advised that the Trust desires to retain the Manager to render management and
investment advisory services under the Advisory Agreement to this Fund at the
fees stated below:
U.S. CHINA OPPORTUNITY FUND
Monthly Average Net Assets 1/12 of I.25%
Please state below whether you are willing to render such services at the
fees stated above.
UNITED SERVICES FUNDS
Attest: By:
Secretary Executive Vice President
Date:
We are willing to render management and investment advisory services to the
U.S. China Opportunity Fund at the fee stated above.
UNITED SERVICES ADVISORS, INC.
Attest: By:
Secretary Executive Vice President
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