Exhibit 6(a)
FUND MANAGEMENT AGREEMENT
FUND MANAGEMENT AGREEMENT dated November 6, 1995 between Liberty ALL-STAR
Growth Fund, Inc., a corporation organized under the laws of the State of
Maryland (the "Company"), and Liberty Asset Management Company, a corporation
organized under the laws of the State of Delaware (the "Manager").
WHEREAS, the Company desires to employ the Manager (i) to provide certain
administrative services as described herein to the Company, and (ii) to provide
investment management services as described herein in accordance with the
Company's investment objective and policies as stated in the Company's
Registration Statement, as from time to time in effect, under the Investment
Company Act of 1940 (the "Investment Company Act") and in conformity with the
Company's Articles of Incorporation and the Investment Company Act, as the same
may from time to time be amended.
WHEREAS the Manager is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and desires to provide services to
the Company in consideration of and on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, the Company and the Manager agree as follows:
1. Employment of the Manager. The Company hereby employs the Manager to
administer its business and administrative operations as set forth in Section
2(A) of this Agreement, and to manage the investment and reinvestment of the
Company's assets as set forth in Section 2(B) below, all subject to the
direction of the Board of Directors of the Company, for the period, in the
manner, and on the terms hereinafter set forth. The Manager hereby accepts such
employment and agrees during such period to render the services and to assume
the obligations herein set forth. The Manager shall for all purposes herein be
deemed to be an independent contractor and shall, except as expressly provided
or authorized (whether herein or otherwise), have no authority to act for or
represent the Company in any way or otherwise be deemed an agent of the Company.
2. Obligation of and Services to be Provided by the Manager. The
Manager undertakes to provide the services hereinafter set forth and to
assume the following obligations:
A. Administrative Services
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(1) The Manager shall provide, either directly or through an affiliate,
general administrative services and oversee the operations of the Company
("Administrative Services"). The Administrative Services shall not include
custodial, transfer agency, or pricing and bookkeeping services, but shall
include, without limitation:
(i) the maintenance of the Company's offices within the Manager's
offices in Boston, Massachusetts and the maintenance of the
corporate books and records of the Company, other than the books
and records maintained by the transfer agent, the custodian or the
fund accountant of the Company, and making arrangements for the
meetings of the Directors of the Company, including the preparation
of agendas and supporting materials therefor;
(ii) the preparation of such financial information as is reasonably
necessary for reports to shareholders of the Company, reports to the
Board of Directors and the officers of the Company, and reports of
the Company to the Securities and Exchange Commission, the Internal
Revenue Service and other Federal and state regulatory agencies;
(iii) the provision of such advice that may be reasonably
necessary properly to account for the Company's financial
transactions and to maintain the Company's accounting procedures and
records so as to insure compliance with generally accepted
accounting and tax practices and rules;
(iv) the monitoring of the preparation and maintenance by the
Company's custodian or other agents of all records that may be
reasonably required in connection with the audit performed by the
Company's independent auditors, the Securities and Exchange
Commission, the Internal Revenue Service or other Federal or state
regulatory agencies;
(v) the preparation of communications and reports to shareholders
of the Company and making arrangements for meetings
of such shareholders;
(vi) the preparation and filing of all reports and all
updating and other amendments to the Company's registration
statements necessary to maintain the registration of the Company
under the 1940 Act and the listing of its common stock on the New
York Stock Exchange;
(vii) the preparation of the Company's tax returns;
(viii) the periodic computation, and reporting as necessary to
the Directors of the Company, of the Company's compliance with its
investment objective, policies and restrictions and the portfolio
diversification and other portfolio requirements of the Investment
Company Act and the Internal Revenue Code of 1986, as amended (the
"Code"); and
(ix) the negotiation of agreements or other arrangements with,
and general oversight and coordination of, agents and others
retained by the Company to provide custodial, transfer agency, net
asset value computation, portfolio accounting, legal, tax and
accounting services.
2. The Manager will permit individuals who are officers or employees of
the Manager to serve (if duly elected or appointed) as officers, Directors,
members of any committee of the Board of Directors, members of any advisory
board, or members of any other committee of the Company, without remuneration or
other cost to the Company.
B. Investment Management Services.
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(1)The Manager shall have overall supervisory responsibility
for the general management and investment of the Company's assets,
subject to and in accordance with the investment objectives and
policies of the Company, and any directions which the Board of
Directors of the Company may issue to the Manager from time to time.
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(2)The Manager shall provide overall investment programs and
strategies with respect to the Company's assets, shall revise such
programs as necessary and shall monitor and report periodically to
the Board of Directors of the Company concerning the implementation
of the programs.
(3)The Company intends to appoint one or more persons or
companies ("Portfolio Managers"), each such Portfolio Manager to
have full investment discretion and to make all determinations with
respect to the investment and reinvestment of the portion of the
Company's assets assigned to that Portfolio Manager by the Manager
and the purchase and sale of portfolio securities with those assets,
all within the Company's investment objectives, policies and
restrictions, and the Company will take such steps as may be
necessary to implement such appointments. The Manager shall not be
responsible or liable for the investment merits of any decision by a
Portfolio Manager to purchase, hold or sell a security for the
portfolio of the Company. The Manager shall advise the Board of
Directors of the Company which Portfolio Managers the Manager
believes are best suited to invest the Company's assets; shall
monitor and evaluate the investment performance of each Portfolio
Manager employed by the Company; shall allocate and reallocate from
time to time, in its discretion, the portion of the Company's assets
to be managed by each Portfolio Manager; shall recommend changes of
or additional Portfolio Managers when appropriate; and shall
coordinate the investment activities of the Portfolio Managers to
ensure compliance with the Company's investment policies and
restrictions and applicable laws, including the Investment Company
Act and the Code.
(4)The Manager shall render regular reports to the Company, at
regular meetings of the Board of Directors, of, among other things,
the decisions which it has made with respect to the allocation of
the Company's assets among Portfolio Managers.
3. Allocation of Expenses
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(1) Expenses paid by the Manager. The Manager shall at its own expense
furnish or provide and pay the cost of such office space, office equipment,
personnel and office services as the Manager requires for the performance of its
administrative and investment management services hereunder. The Manager shall
not be obligated to bear any other expenses incidental to the operations or
business of the Company, and the payment or assumption by the Manager of any
expense of the Company that the Manager is not required by this Agreement to pay
or assume shall not obligate the Manager to pay or assume the same or any
similar expense on any subsequent occasion.
(2) Expenses paid by the Company. The Company shall pay all expenses
incurred in the operation of the Company including, among other things, expenses
for legal and auditing services, costs of printing proxies, stock certificates
and shareholder reports, charges of the custodian, any sub-custodian and
transfer agent, Securities and Exchange Commission fees, fees and expenses of
Directors of the Company who are not "affiliated persons" (as defined in the
Investment Company Act) of the Manager, any other investment adviser of the
Company, or any of their affiliated persons, accounting and pricing costs,
membership fees in trade associations, insurance, interest, brokerage costs,
taxes, stock exchange listing fees and
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expenses, expenses of qualifying the Company's shares for sale in various
states, litigation and other extraordinary or nonrecurring expenses, and other
expenses properly payable by the Company.
4. Activities and Affiliates of the Manager.
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A. The services of the Manager to the Company hereunder are not to be
deemed exclusive, and the Manager and any of its affiliates shall be free
to render similar services to others. The Manager shall use the same skill
and care in the management of the Company's assets as it uses in the
administration of other accounts to which it provides asset management,
consulting and portfolio manager selection services, but shall not be
obligated to give the Company more favorable or preferential treatment
vis-a-vis its other clients.
B. Subject to and in accordance with the Articles of Incorporation and
By-Laws of the Company and to Section 10(a) of the Investment Company Act,
it is understood that Directors, officers, agents and shareholders of the
Company may be interested in the Manager or its affiliates as directors,
officers, agents or stockholders of the Manager or its affiliates; that
directors, officers, agents and stockholders of the Manager or its
affiliates are or may be interested in the Company as Directors, officers,
agents, shareholders or otherwise; that the Manager or its affiliates may
be interested in the Company as shareholders or otherwise; and that the
effect of any such interests shall be governed by the Investment Company
Act.
5. Fees for Services: Compensation of Portfolio Managers. The
compensation of the Manager for its services under this Agreement shall be
calculated and paid by the Fund in accordance with the Exhibit I attached
hereto. The Manager will compensate the Portfolio Managers as provided in
Exhibit I.
6. Liabilities of the Manager.
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A. In the absence of willful misfeasance, bad faith, gross negligence, or
reckless disregard of obligations or duties hereunder on the part of the
Manager, the Manager shall not be subject to liability to the Company or to any
shareholder of the Company for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.
B. No provision of this Agreement shall be construed to protect any
Director or officer of the Company, or the Manager, from liability in violation
of Sections 17(h) and (i) of the Investment Company Act.
7. Renewal and Termination.
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A. This Agreement shall continue in effect until November 6, 1997, and
shall continue in effect thereafter provided such continuance is specifically
approved at least annually by (i) the Company's Board of Directors or (ii) a
vote of a "majority" (as defined in the Investment Company Act) of the Company's
outstanding voting securities, provided that in either event such continuance is
also approved by a majority of the Board of Directors who are not "interested
persons" (as defined in the Investment Company Act) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of voting
on such approval. The aforesaid requirement that continuance
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of this Agreement be "specifically approved at least annually" shall be
construed in a manner consistent with the Investment Company Act and the Rules
and Regulations thereunder.
B. This Agreement:
(a) may at any time be terminated without the payment of any penalty
either by vote of the Board of Directors of the Company or by vote of a
majority of the outstanding voting securities of the Company, on sixty
(60) days' written notice to the Manager;
(b)shall immediately terminate in the event of its assignment (as that
term is defined in the Investment Company Act); and
(c)may be terminated by the Manager on sixty (60) days' written notice
to the Company.
C. Any notice under this Agreement shall be given in writing addressed and
delivered or mailed postpaid to the other party to this Agreement at its
principal place of business.
8. Use of Name. The Company may use the name "Liberty ALL-STAR" only so
long as this Agreement remains in effect. If this Agreement is no longer in
effect, the Company (to the extent it lawfully can) shall cease using such name
or any other name indicating that it is advised by or otherwise connected with
the Manager. The Manager may grant the non-exclusive right to use the name
"Liberty ALL-STAR" to any other entity, including any other investment company
of which the Manager or any of its affiliates is the investment adviser or
distributor.
9. Severability. 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.
10. Governing Law. To the extent that state law has not been preempted by
the provisions of any law of the United States heretofore or hereafter enacted,
as the same may be amended from time to time, this Agreement shall be
administered, construed and enforced according to the laws of the Commonwealth
of Massachusetts.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed, as of the day and year first written above.
LIBERTY ALL-STAR GROWTH FUND, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
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Title: President
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LIBERTY ASSET MANAGEMENT COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
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Title: President
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EXHIBIT I
MANAGER FEE
(A) For the Administrative Services provided to the Company pursuant to
Section 2(A) of this Agreement, the Company will pay to the Manager, on the
first business day of each calendar quarter, a fee for the previous calendar
quarter at the rate of:
.0625% (.25% annually) of the average weekly net assets of
the Company up to and including $125 million;
.046875% (.1875% annually) of the average weekly net assets
of the Company exceeding $125 million and up to and including
$250 million;
.03125% (.125% annually) of the average weekly net assets of
the Company exceeding $250 million.
(B) For the investment management services provided to the Company
pursuant to Section 2(B) of this Agreement, the Company will pay to the Manager,
on the first business day of each calendar quarter, a fee for the previous
calendar quarter at the rate of:
.1875% (.75% annually) of the average weekly net assets of
the Company up to and including $125 million;
.140625% (.5625% annually) of the average weekly net assets
of the Company exceeding $125 million and up to and including
$250 million; and
.09375% (.375% annually) of the average weekly net assets of
the Company exceeding $250 million.
(C) Pursuant to Section 5 of this Agreement, the Manager will pay to each
Portfolio Manager, on or before the fifth business day of each calendar quarter,
a fee for the previous calendar quarter at the rate of:
.10% (.40% annually) of the Portfolio Manager's Percentage (as
defined below) of the average weekly net assets of the Company up to
and including $125 million;
.075% (.30% annually) of the Portfolio Manager's Percentage of
the average weekly net assets of the Company exceeding $125 million
and up to and including $250 million; and
.05% (.20% annually) of the Portfolio Manager's Percentage of
the average weekly net assets of the Company exceeding $250 million.
Each quarterly payment set forth above shall be based on the average
weekly net assets of the Company during such previous calendar quarter. The fee
for the period from the date this Agreement becomes effective to the end of the
calendar quarter will be prorated according to the proportion that such period
bears to the full quarterly period. Upon any termination of this Agreement
before the end of a calendar quarter, the fee for the part of that calendar
quarter during which this Agreement was in effect shall be prorated according to
the proportion that such period bears to the full quarterly period and will be
payable upon the date of termination of this Agreement. For
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the purpose of determining fees payable to the Manager, the value of the
Company's net assets will be computed at the times and in the manner specified
in the Company's Registration Statement under the Investment Company Act as
from time to time in effect.
"Portfolio Manager's Percentage" means the percentage obtained by dividing
the average weekly net assets of that portion of the Company's assets assigned
to that Portfolio Manager by the total of the Company's average weekly net
assets.
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