EX.99.D.1
UMB SCOUT FUNDS
INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT made between UMB Scout Funds, a
Delaware statutory trust (the "Trust"), on behalf of the various series listed
on Exhibit A hereto, as such exhibit may be amended from time to time (each such
series is referred to as a "Fund" and collectively as, the "Funds"), and Scout
Investment Advisors, Inc., a Missouri corporation (the "Advisor").
WHEREAS, the Trust has been organized and operates as an investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), for the purpose of investing and reinvesting its assets in
securities, as set forth in its Agreement and Declaration of Trust, its By-Laws
and its Registration Statement under the 1940 Act and the Securities Act of
1933, all as heretofore and hereafter amended and supplemented; and the Trust
desires to avail itself of the services, information, advice, assistance and
facilities of an investment adviser and to have an investment adviser perform
various management, statistical, research, investment advisory and other
services for the Fund; and,
WHEREAS, the Advisor is registered as an investment adviser under the
Investment Advisers Act of 1940, is engaged in the business of rendering
investment advisory, counseling and supervisory services to investment companies
and desires to provide these services to the Trust.
NOW THEREFORE, in consideration of the terms and conditions hereinafter
set forth, it is mutually agreed as follows:
1. Employment of the Advisor. The Trust hereby employs the Advisor to
manage the investment and reinvestment of each Fund's assets and to administer
its affairs, subject to the direction of the Board of Trustees and the officers
of the Trust, for the period and on the terms hereinafter set forth. The Advisor
hereby accepts such employment and agrees during such period to render the
services and to assume the obligations herein set forth for the compensation
herein provided. The Advisor 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 any
Fund or the Trust in any way or otherwise be deemed an agent of any Fund or the
Trust.
2. Obligations of and Services to be Provided by the Advisor. The
Advisor undertakes to provide the services hereinafter set forth and to assume
the following obligations:
A. Investment Advisory Services.
(a) The Advisor shall manage each Fund's assets subject to
and in accordance with the investment objectives and policies of the Fund and
any directions that the Trust's Board of Trustees may issue from time to time.
In pursuance of the foregoing, the Advisor shall make all determinations with
respect to the investment of each Fund's assets and the purchase and sale of its
investment securities, and shall take such steps as may be necessary to
implement the same. Such determinations and services shall include determining
the manner in which any voting rights, rights to consent to corporate action and
any other rights pertaining to the Fund's investment securities shall be
exercised. The Advisor shall render or cause to be rendered regular reports to
the Trust, at regular meetings of its Board of Trustees and at such other times
as may be reasonably requested by the Trust's Board of Trustees, of (i) the
decisions made with respect to the investment of the Fund's assets and the
purchase and sale of its investment securities, (ii) the reasons for such
decisions, and (iii) the extent to which those decisions have been implemented.
(b) The Advisor, subject to and in accordance with any
directions that the Trust's Board of Trustees may issue from time to time, shall
place, in the name of each Fund, orders for the execution of the Fund's
securities transactions. When placing such orders, the Advisor shall seek to
obtain the best net price and execution for the Fund, but this requirement
shall] not be deemed to obligate the Advisor to place any order solely on the
basis of obtaining the lowest commission rate if the other standards set forth
in this section have been satisfied. The parties recognize that there are likely
to be many cases in which different brokers are equally able to provide such
best price and execution and that, in selecting among such brokers with respect
to particular trades, it is desirable to choose those brokers who furnish
research, statistical, quotations and other information to the Fund and the
Advisor. Moreover, to the extent that it continues to be lawful to do so and so
long as the Board of Trustees determines that the Fund will benefit, directly or
indirectly, by doing so, the Advisor may place orders with a broker who charges
a commission for that transaction which is in excess of the amount of commission
that another broker would have charged for effecting that transaction, provided
that the excess commission is reasonable in relation to the value of "brokerage\
and research services" (as defined in Section 28(e)(3) of the Securities
Exchange Act of 1934) provided by that broker.
(c) The Advisor shall render regular reports to the Trust,
on a quarterly basis, of how much total brokerage business has been placed by
the Advisor, on behalf of the Fund, with brokers in various categories and the
manner in which the allocation has been accomplished.
(d) Decisions on proxy voting shall be made by the Advisor
(or any Sub-Advisor) unless the Board of Trustees determines otherwise. Subject
to the foregoing, pursuant to its authority, Advisor shall have the power to
vote, either in person or by proxy, all securities in which a Fund may be
invested from time to time, and shall not be required to seek or take
instructions from the Fund with respect thereto. Advisor shall not be expected
or required to take any action other than the rendering of investment-related
advice with respect to lawsuits
involving securities presently or formerly held in the Fund, or the issuers
thereof, including actions involving bankruptcy.
B. Provision of Information Necessary for Preparation of
Securities Registration Statements, Amendments and Other Materials. The Advisor,
its officers and employees will make available and provide accounting and
statistical information required by a Fund in the preparation of registration
statements, reports and other documents required by federal and state securities
laws and with such information as the Fund may reasonably request for use in the
preparation of such documents or of other materials necessary or helpful for the
underwriting and distribution of the Fund's shares.
C. Other Obligations and Services. The Advisor shall make its
officers and employees available to the Board of Trustees and officers of the
Trust for consultation and discussions regarding the administration and
management of the Fund and its investment activities.
D. Delegation of Services. Subject to the requisite approval
of Fund's shareholders the Advisor may, at its expense, select and contract with
one or more investment advisers registered under the Investment Advisers Act of
1940 ("Sub-Advisors") to perform some or all of the services for the Fund for
which it is responsible under this Agreement. The Advisor will compensate any
Sub-Advisor for its services to the Fund. The Advisor may terminate the services
of any Sub-Advisor at any time in its sole discretion, and shall at such time
assume the responsibilities of such Sub-Advisor unless and until a successor
Sub-Advisor is selected and the requisite approval of the Fund's shareholders is
obtained. The Advisor will continue to have responsibility for all advisory
services furnished by any Sub-Advisor.
3. Expenses of the Funds. It is understood that each Fund will pay all
of its own expenses other than those expressly assumed by the Advisor herein,
which expenses payable by the Fund shall include:
A. Fees and expenses paid to the Advisor as provided herein;
B. Expenses of all audits by independent public accountants;
C. Expenses of fund administration and accounting agent,
transfer agent, registrar, custodian, dividend disbursing agent and shareholder
record-keeping services, including the expenses of issue, repurchase or
redemption of its shares;
D. Expenses of obtaining quotations for calculating the value
of the Fund's net assets;
E. Salaries and other compensation of executive officers of
the Trust who are not officers, directors, stockholders or employees of the
Advisor or its affiliates; provided however, that the Fund may bear its
proportionate share of the cost of any chief compliance officer even if such
officer is an officer, director, stockholder or employee of the Advisor or its
affiliates;
F. Taxes levied against the Fund;
G. Brokerage fees and commissions in connection with the
purchase and sale of securities for the Fund;
H. Costs, including the interest expense, of borrowing money;
I. Costs incident to meetings of the Board of Trustees and
shareholders of the Fund, reports to the Fund's shareholders, the filing of
reports with regulatory bodies and the maintenance of the Fund's and the Trust's
legal existence;
J. Legal fees, including the legal fees related to the
registration and continued qualification of the Fund's shares for sale;
K. Trustees' fees and expenses to trustees who are not
directors, officers, employees or stockholders of the Advisor or any of its
affiliates;
L. Costs and expense of registering and maintaining the
registration of the Trust and its shares under federal and any applicable state
laws; including the printing and mailing of prospectuses to its shareholders;
M. Trade association dues;
N. The Fund's pro rata portion of fidelity bond, errors and
omissions, and trustees and officer liability insurance premiums; and
O. The Fund's portion of the cost of any proxy voting service
used on its behalf.
4. Compensation of the Advisor. Each Fund shall pay, on a monthly
basis, an advisory fee in cash to the Advisor based upon an annual percentage of
the value of the Fund's average daily net assets, calculated as set forth in
Exhibit B hereto, as such exhibit may be amended from time to time, as
compensation for the services rendered and obligations assumed by the Advisor
during the preceding month.
The Advisor may agree to voluntarily or contractually reduce any portion of the
compensation or reimbursement of expenses due to it pursuant to this Agreement
and may agree to voluntarily or contractually make payments to limit expenses
that are the responsibility of a Fund under this Agreement. Except as
specifically agreed to under a contractual arrangement, 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 Advisor 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 and any Fund expense paid by the Advisor
pursuant to a contractual or voluntary expense limitation arrangement shall be
reimbursed by the Fund to the Advisor 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 Advisor had agreed.
If this Agreement is terminated prior to the end of any month, the accrued
advisory fee shall be paid to the date of termination.
5. Activities of the Advisor. The services of the Advisor to the Fund
hereunder are not to be deemed exclusive, and the Advisor and any of its
affiliates shall be free to render similar services to others.
6. Liabilities of the Advisor.
A. In the absence of willful misfeasance, bad faith, gross
negligence, or reckless disregard of obligations or duties hereunder on the part
of the Advisor, its officers and employees, the Advisor shall not be subject to
liability to the Trust or any Fund or to any shareholder of the Fund 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 by the Fund.
B. No provision of this Agreement shall be construed to
protect any trustee or officer of the Trust, or director or officer of the
Advisor, from liability in violation of Sections 17(h) and (i) of the 1940 Act.
7. Renewal and Termination.
A. This Agreement shall not become effective as to any Fund
until it is approved by the vote of a majority of the outstanding voting
securities of that Fund, and thereafter shall continue in effect for two (2)
years, unless sooner terminated as hereinafter provided and shall continue in
effect thereafter for periods not exceeding one (1) year so long as such
continuation is approved at least annually (i) by a vote of a majority of the
outstanding voting securities of the Fund or by a vote of the Board of Trustees
of the Trust, and (ii) by a vote of a majority of the Trustees of the Trust who
are not parties to the Agreement (other than as Trustees of the Trust) or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on the Agreement.
B. This Agreement:
(i) may at any time be terminated as to a Fund without the
payment of any penalty either by vote of the Board of Trustees of the Trust or
by vote of a majority of the outstanding voting securities of the Fund on sixty
(60) days' written notice to the Advisor;
(ii) shall immediately terminate with respect to any Fund
in the event of its assignment; and
(iii) may be terminated as to any Fund by the Advisor on
sixty (60) days' written notice to the Trust.
C. As used in this Paragraph the terms "assignment,"
"interested person" and "vote of a majority of the outstanding voting
securities" shall have the meanings set forth for any such terms in the 1940
Act.
D. Any notice under this Agreement shall be given in writing
addressed and delivered, or mailed post-paid, to the other party at any office
of such party.
8. 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.
9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and effective on the 1st day of April 2005.
UMB Scout Funds, on behalf of the series listed on Exhibit A
By: /S/ C. ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Title: Treasurer
----------------------------------
Scout Investment Advisors, Inc.
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: President
----------------------------------
EXHIBIT A
UMB Scout Stock Fund
UMB Scout Growth Fund
UMB Scout Small-Cap Fund
UMB Scout Worldwide Fund
UMB Scout Bond Fund
UMB Scout Kansas Tax-Exempt Bond Fund
UMB Scout Money Market Fund-Federal Portfolio
UMB Scout Money Market Fund - Prime Portfolio
UMB Scout Tax-Free Money Market Fund
EXHIBIT B
--------------------------------------------------------------------------------
FUND ADVISORY FEE
--------------------------------------------------------------------------------
UMB Scout Stock Fund 0.60% for the first $1 billion of annual average
daily net assets 0.575% for annual average daily
net assets over $1 billion
--------------------------------------------------------------------------------
UMB Scout Growth Fund 0.60% for the first $1 billion of annual average
daily net assets 0.575% for annual average daily
net assets over $1 billion
--------------------------------------------------------------------------------
UMB Scout Small Cap Fund 0.75% for the first $1 billion of annual average
daily net assets 0.65% for annual average daily
net assets over $1 billion
--------------------------------------------------------------------------------
UMB Scout WorldWide Fund 0.80% for the first $1 billion of annual average
daily net assets
0.70% for annual average daily net assets over
$1 billion
--------------------------------------------------------------------------------
UMB Scout Bond Fund 0.57% for the first $1 billion of annual average
daily net assets
0.52% for annual average daily net assets over
$1 billion
--------------------------------------------------------------------------------
UMB Scout Money Market 0.30% of annual average daily net assets
Fund - Federal Portfolio
--------------------------------------------------------------------------------
UMB Scout Money Market 0.34% of annual average daily net assets
Fund - Prime Portfolio
--------------------------------------------------------------------------------
UMB Scout Tax-Free 0.30% of annual average daily net assets
Money Market Fund
--------------------------------------------------------------------------------
UMB Scout Kansas Tax- 0.30% for the first $1 billion of annual average
Exempt Bond Fund daily net assets
0.25% for annual average daily net assets over
$1 billion
--------------------------------------------------------------------------------