EXHIBIT 99.5(a)
MANAGEMENT AGREEMENT
Agreement dated and effective as of _________________, 1997 between
THE SARATOGA ADVANTAGE TRUST, a Delaware Trust (herein referred to as the
"Trust"), and SARATOGA CAPITAL MANAGEMENT, a Delaware general partnership (the
"Manager").
WHEREAS, the Trust is an open-end diversified management investment
company registered with the Securities and Exchange Commission (the
"Commission") pursuant to the Investment Company Act of 1940 (the "1940 Act");
WHEREAS, the Trust is organized in series form and each of the U.S.
Government Money Market Portfolio, the Investment Quality Bond Portfolio, the
Municipal Bond Portfolio, the Large Capitalization Value Portfolio, the Large
Capitalization Growth Portfolio, the Small Capitalization Portfolio and the
International Equity Portfolio is a separately capitalized series ("Portfolio")
of shares of beneficial interest to be issued by the Trust pursuant to the Trust
Registration Statement;
NOW THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the Trust and the Manager agree as follows:
1. Appointment of Manager. The Manager hereby undertakes and agrees, upon
the terms and conditions herein set to (i) supervise the Trust's investment
program, including advising and consulting with the Trust's board of trustees
and the investment advisers for each of the Trust's portfolios (the "Investment
Advisers") regarding the Trust's overall investment strategy and make
recommendations to the Trust's board of trustees regarding the retention by the
Portfolios of the Investment Advisers, (ii) monitor the performance of the
Trust's outside service providers, including the Trust's administrator, agent
and custodian and (iii) pay the salaries, fees and expenses of such of the
Trust's officers, trustees or employees as are directors, officers or employees
of the Manager. In addition, the Manager hereby undertakes and agrees to appoint
investment advisers to the Portfolios to (a) make, in consultation with the
Manager and the Trust's Board of Trustees, investment strategy decisions for the
respective Portfolio (b) manage the investing and reinvesting of the Trust
assets (c) place purchase and sale orders on behalf of the Trust's Portfolios,
and (d) provide research and statistical data to the Trust in relation to
investing and other matters within the scope of the investment objectives and
limitations of the Trust's Portfolios. The Investment Advisers shall have the
sole ultimate discretion over investment decisions for the Trust's Portfolios.
2. In connection herewith, the Manager agrees to (i) maintain a staff
within its organization to furnish the above services to the Trust and to the
Investment Advisers and (ii) provide the Trust with persons satisfactory to the
Trust's Board of Trustees to serve as officers and employees of the Trust. The
Manager shall bear all expenses arising out of its duties hereunder.
Except as otherwise provided in this Agreement and the Advisory
Agreements (as defined below) and the Administration Agreement between the Trust
and Unified Advisers, Inc., the Trust shall be responsible for all of the
Trust's expenses and liabilities, including but not limited to organizational
and offering expenses (which include out-of-pocket expenses, but not overhead or
employee costs of the Manager and the Investment Advisers); expenses for legal,
accounting and auditing services; tax and governmental fees; dues and expenses
incurred in connection with membership in investment company organizations;
printing and distributing shareholder reports, proxy materials, prospectuses,
stock certificates and distributions of dividends; charges of the Trust's
custodians, sub-custodians, registrars, transfer agents, dividend-paying agents
and dividend reinvestment plan agents; payment for portfolio pricing services to
a pricing agent, if any; costs of the determination of the Portfolios' daily net
asset values; registration and filing fees of the Securities and Exchange
Commission; expenses of registering or qualifying securities of the Trust for
sale in the various states; freight and other charges in connection with the
shipment of the Trust's portfolio securities; fees and expenses of
non-interested trustees; travel expenses or an appropriate portion thereof of
trustees and officers of the Trust who are directors, officers or employees of
the Manager or the Investment Advisers to the extent that such expenses relate
to attendance at meetings of the Board of Trustees or any committee thereof;
costs of shareholders meetings; insurance; interest; brokerage costs; fees
payable to the Trust's Administrator pursuant to an Administration Agreement;
litigation and other extraordinary or non-recurring expenses.
3. Remuneration. (a) The Trust agrees to pay the Manager, and the Manager
agrees to accept as full compensation for the performance of all its functions
and duties to be performed hereunder, a fee based on the total net assets of
each Portfolio at the end of each business day as set forth on Schedule A
hereto. Determination of net asset value of each Portfolio will be made in
accordance with the policies disclosed in the Trust's registration statement
under the ▇▇▇▇ ▇▇▇. The fee is payable at the close of business on the last day
of each calendar month and shall be made on the first business day following
such last calendar day. The payment due on such day shall be computed by (1)
adding together the results of multiplying (i) the total net assets of each
Portfolio on each day of the month by (ii) the applicable daily fraction of the
advisory fee percentage rate of such Portfolio as set on Schedule A hereto and
then (2) adding together the total monthly amounts computed for each Portfolio.
(b) Compensation of the Investment Advisers for services provided
under the Advisory Agreements is the sole responsibility of the Manager.
4. Representations and Warranties. The Manager represents and warrants
that it is duly registered and authorized as an investment adviser under the
Investment Advisers Act of 1940, as amended, and the Manager agrees to maintain
effective requisite registrations, authorizations and licenses, as the case may
be, until the termination of this agreement.
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5. Services Not Deemed Exclusive. The services provided hereunder by the
Manager are not to be deemed exclusive and the Manager and any of its affiliates
or related persons are free to render similar services to others and to use the
research developed in connection with this agreement for other clients or
affiliates. Nothing herein shall be construed as constituting the Manager an
agent of any of the Investment Advisers or of the Trust.
6. Limit of Liability. The Manager shall exercise its best judgment in
rendering the services in accordance with the terms of this agreement. The
Manager shall not be liable for any error of judgment or mistake of law or for
any act or omission or any loss suffered by the Trust in connection with the
matters to which this agreement relates, provided that nothing herein shall be
deemed to protect or purport to protect the Manager against any liability to the
Trust or its shareholders to which the Manager would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties or from reckless disregard of its obligations and duties under
this agreement ("disabling conduct"). The Trust will indemnify the Manager
against, and hold it harmless from, any and all losses, claims, damages,
liabilities or expenses (including reasonable counsel fees and expenses),
including but not limited to any amounts paid in satisfaction of judgments, in
compromise or as fines or penalties, not resulting from disabling conduct.
Indemnification shall be made only upon the happening of one of the following
events: (i) a final decision on the merits by a court or other body before whom
the proceeding was brought that the Manager was not liable by reason of
disabling conduct or (ii) in the absence of such a decision, a reasonable
determination, based upon a review of the facts, that the Manager was not liable
by reason of disabling conduct by (a) the vote of a majority of a quorum of
trustees of the Trust who are neither "interested persons" of the Trust nor
parties to the proceeding ("disinterested non-party trustees") or (b) an
independent legal counsel in a written opinion. The Manager shall be entitled to
advances from the Trust for payment of the reasonable expenses incurred by it in
connection with the matter as to which it is seeking indemnification in the
manner and to the fullest extent permissible under law. Prior to any such
advance, the Manager shall provide to the Trust a written affirmation of its
good faith belief that the standard of conduct necessary for indemnification by
the Trust has been met. In addition, at least one of the following additional
conditions shall be met: (a) the Manager shall provide security in form and
amount acceptable to the Trust for its undertaking; (b) the Trust is insured
against losses arising by reason of the advance; or (c) a majority of a quorum
of disinterested non-party trustees or independent legal counsel, in a written
opinion, shall have determined, based on a review of facts readily available to
the Trust at the time the advance is proposed to be made, that there is reason
to believe that the Manager will ultimately be found to be entitled to
indemnification.
7. Duration and Termination. This agreement shall become effective as of
the date hereof and shall continue in effect for two years from the date hereof
(unless sooner terminated in accordance with this agreement) and thereafter for
successive annual periods, but only so long as such continuance is specifically
approved at least annually with respect to each Portfolio by the affirmative
vote of (i) a majority of the members of the Trust's Board of Trustees who are
not
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parties to this Agreement or "interested persons" (as defined in the ▇▇▇▇ ▇▇▇)
of any such party, cast in person at a meeting called for the purpose of voting
on such approval and (ii) a majority of Trust's Board of Trustees or the holders
of a majority of the outstanding voting securities (as defined in the ▇▇▇▇ ▇▇▇)
of the respective Portfolio.
Notwithstanding the above, this agreement may nevertheless be
terminated with respect to one or more Portfolios at any time, without penalty,
by the Trust's Board of Trustees, by vote of holders of a majority of the
outstanding voting securities (as defined in the ▇▇▇▇ ▇▇▇) of the respective
Portfolio or by the Manager, upon 60 days' written notice delivered to each
party hereto. Any such notice shall be deemed given when received by the
addressee.
8. Amendment or Assignment. This Agreement may be amended only if such
amendment is specifically approved with respect to each Portfolio by (i) the
vote of a majority of the outstanding voting securities of the respective
Portfolio and (ii) a majority of the Trustees, including a majority of those
Trustees who are not parties to this agreement or interested persons of such
party, cast in person at a meeting called for the purpose of voting on such
approval. This Agreement shall automatically and immediately terminate in the
event of its assignment, as that term is defined in the 1940 Act and the rules
thereunder.
9. Severability. If any provisions of this Agreement shall be held or made
unenforceable by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
10. Definitions. As used in this Agreement, the terms "interested person"
and "vote of a majority of the outstanding securities" shall have the respective
meanings set forth in Section 2(a)(19) and 2(a)(42) of the 1940 Act.
11. No Liability of Shareholders. This Agreement is executed by the
Trustees of the Trust, not individually, but in their capacity as Trustees under
the Declaration of Trust made April 4, 1994. None of the Shareholders, Trustees,
officers, employees, or agents of the Trust shall be personally bound or liable
under this Agreement, nor shall resort be had to their private property for the
satisfaction of any obligation or claim hereunder but only to the property of
the Trust and, if the obligation or claim relates to the property held by the
Trust for the benefit of one or more but fewer than all Portfolios, then only to
the property held for the benefit of the affected Portfolio.
12. Governing Law. This Agreement shall be governed, construed and
interpreted in accordance with the laws of the State of New York, provided,
however, that nothing herein shall be construed as being inconsistent with the
1940 Act.
13. Notices. Any notice hereunder shall be in writing and shall be
delivered in person or by telex or facsimile (followed by delivery in person) to
the parties at the addresses set
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forth below.
If to the Trust:
Saratoga Advantage Trust
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Manager:
Saratoga Capital Management
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: President
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as to which the recipient shall have informed the other
party in writing.
Unless specifically provided elsewhere, notice given as provided
above shall be deemed to have been given, if by personal delivery, or the day of
such delivery, and, it by telex or facsimile and mail, on the date on which such
telex or facsimile and mail, on the date on which such telex or facsimile is
sent.
14. Counterparts. This agreement may be executed in more counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
15. Notification of Change in Membership of Partnership. The Manager
agrees to notify the Trust of any change in the membership of the Manager within
a reasonable period of time after such change.
IN WITNESS WHEREOF, the parties hereto caused their authorized
signatories to execute this agreement as of the day and year first written
above.
THE SARATOGA ADVANTAGE TRUST
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By:
-------------------------------------
Name:
Title:
SARATOGA CAPITAL MANAGEMENT
By:
-------------------------------------
Name:
Title:
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Schedule A
to
Management Agreement
between
Saratoga Advantage Trust and Saratoga Capital Management
Annual Fee as a
Percentage of Daily
Name of Series Net Assets
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U.S. Government Money Market Portfolio .475%
Investment Quality Bond Portfolio .55%
International Equity Portfolio .75%
Small Capitalization Portfolio .65%
Municipal Bond Portfolio .55%
Large Capitalization Value Portfolio .65%
Large Capitalization Growth Portfolio .65%
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