Exhibit (d)(1)
NORWEST ADVANTAGE FUNDS
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 1st day of June, 1997, as amended the 1st day
of December, 1998, between Norwest Advantage Funds (the "Trust"), a business
trust organized under the laws of the State of Delaware with its principal place
of business at Two ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and Norwest Investment
Management, Inc. (the "Adviser"), a corporation organized under the laws of the
State of Minnesota with its principal place of business at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended, (the "Act") as an open-end management investment company and
is authorized to issue interests (as defined in the Trust's Trust Instrument),
in separate series;
WHEREAS, the Trust desires that the Adviser perform investment advisory
services for each series of the Trust as listed in Appendix A hereto (each a
"Fund" and collectively the "Funds"), and the Adviser is willing to provide
those services on the terms and conditions set forth in this Agreement;
NOW THEREFORE, the Trust and the Adviser agree as follows:
SECTION 1. THE TRUST; DELIVERY OF DOCUMENTS
The Trust is engaged in the business of investing and reinvesting its
assets in securities of the type and in accordance with the limitations
specified in its Trust Instrument, By-Laws and Registration Statement filed with
the Securities and Exchange Commission (the "Commission") under the Act and the
Securities Act of 1933 (the "Securities Act"), including any representations
made in the prospectus and statement of additional information relating to the
Funds contained therein and as may be supplemented from time to time, all in
such manner and to such extent as may from time to time be authorized by the
Trust's Board of Trustees (the "Board"). The Trust is currently authorized to
issue thirty-nine series of shares, and the Board is authorized to issue any
unissued shares in any number of additional classes or series. The Trust has
delivered copies of the documents listed in this Section 1 and will from time to
time furnish Adviser with any amendments thereof.
SECTION 2. INVESTMENT ADVISER; APPOINTMENT
The Trust hereby employs Adviser, subject to the direction and control
of the Board, to manage the investment and reinvestment of the assets in the
Funds and, without limiting the generality of the foregoing, to provide other
services specified in Section 3 hereof.
SECTION 3. DUTIES OF THE ADVISER
(a) The Adviser shall make decisions with respect to all purchases and sales of
securities and other investment assets in the Funds. Among other things,
the Adviser shall make all decisions with respect to the allocation of the
Funds' investments in various securities or other assets, in investment
styles and, if applicable, in other investment companies or pooled vehicles
in which a Fund may invest. To carry out such decisions, the Adviser is
hereby authorized, as agent and attorney-in-fact for the Trust, for the
account of, at the risk of and in the name of the Trust, to place orders
and issue instructions with respect to those transactions of the Funds. In
all purchases, sales and other transactions in securities for the Funds,
the Adviser is authorized to exercise full discretion and act for the Trust
in the same manner and with the same force and effect as the Trust might or
could do with respect to such purchases, sales or other transactions, as
well as with respect to all other things necessary or incidental to the
furtherance or conduct of such purchases, sales or other transactions.
(b) The Adviser will report to the Board at each meeting thereof all changes in
the Funds since the prior report, and will also keep the Board informed of
important developments affecting the Trust, each Fund and the Adviser, and
on its own initiative, will furnish the Board from time to time with such
information as the Adviser may believe appropriate for this purpose,
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whether concerning the individual companies whose securities are included
in a Fund's holdings, the industries in which they engage, or the economic,
social or political conditions prevailing in each country in which a Fund
maintains investments. The Adviser will also furnish the Board with such
statistical and analytical information with respect to securities in the
Funds as the Adviser may believe appropriate or as the Board reasonably may
request. In making purchases and sales of securities for the Funds, the
Adviser will bear in mind the policies set from time to time by the Board
as well as the limitations imposed by the Trust's Trust Instrument, By-Laws
and Registration Statement under the Act and the Securities Act, the
limitations in the Act and in the Internal Revenue Code of 1986, as
amended, in respect of regulated investment companies and the investment
objectives, policies and restrictions of each Fund.
(c) The Adviser will from time to time employ or associate with such persons as
the Adviser believes to be particularly fitted to assist in the execution
of the Adviser's duties hereunder, the cost of performance of such duties
to be borne and paid by the Adviser. No obligation may be incurred on the
Trust's behalf in any such respect.
(d) The Adviser shall maintain records relating to portfolio transactions and
the placing and allocation of brokerage orders as are required to be
maintained by the Trust under the Act. The Adviser shall prepare and
maintain, or cause to be prepared and maintained, in such form, for such
periods and in such locations as may be required by applicable law, all
documents and records relating to the services provided by the Adviser
pursuant to this Agreement required to be prepared and maintained by the
Trust pursuant to the rules and regulations of any national, state, or
local government entity with jurisdiction over the Trust, including the
Commission and the Internal Revenue Service. The books and records
pertaining to the Trust which are in possession of the Adviser shall be the
property of the Trust. The Trust, or the Trust's authorized
representatives, shall have access to such books and records at all times
during the Adviser's normal business hours. Upon the reasonable request of
the Trust, copies of any such books and records shall be provided promptly
by the Adviser to the Trust or the Trust's authorized representatives.
(e) With respect to a Fund, the Adviser shall have no duties or obligations
pursuant to this Agreement, including any obligation to reimburse Fund
expenses pursuant to Section 4 hereof, during any period during which the
Fund invests all (or substantially all) of its investment assets in a
registered, open-end management investment company, or separate series
thereof, in accordance with Section 12(d)(1)(E) under the Act.
SECTION 4. EXPENSES
(a) The Adviser shall be responsible for that portion of the net expenses of
the Fund (except interest, taxes, brokerage, fees and other expenses paid
by the fund in accordance with an effective plan pursuant to Rule 12b-1
under the Act and organization expenses, all to the extent such exceptions
are permitted by applicable state law and regulation) incurred by the Fund
during the Fund's fiscal year or portion thereof that this Agreement is in
effect which, as to the Funds, in any such year exceeds the limits
applicable to the Fund under the laws or regulations of any state in which
shares of the Fund are qualified for sale (reduced pro rata for any portion
of less than a year) and which is not assumed by Forum Financial Services,
Inc., the Trust's manager and distributor, or any other person.
(b) The Trust hereby confirms that, subject to the foregoing, the Trust shall
be responsible and shall assume the obligation for payment of all the
Trust's other expenses, including: interest charges, taxes, brokerage fees
and commissions; certain insurance premiums; fees, interest charges and
expenses of the Trust's custodian, transfer agent and dividend disbursing
agent; telecommunications expenses; auditing, legal and compliance
expenses; costs of the Trust's formation and maintaining its existence;
costs of preparing and printing the Trust's prospectuses, statements of
additional information, account application forms and shareholder reports
and delivering them to existing and prospective shareholders; costs of
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maintaining books of original entry for portfolio and fund accounting and
other required books and accounts and of calculating the net asset value of
shares in the Trust; costs of reproduction, stationery and supplies;
compensation of the Trust's trustees, officers, employees and other
personnel performing services for the Trust who are not the Adviser's
employees or employees of Forum Financial Services, Inc. or affiliated
persons of either; costs of corporate meetings; registration fees and
related expenses for registration with the Commission and the securities
regulatory authorities of other countries in which the Trust's shares are
sold; state securities law registration fees and related expenses; fees and
out-of-pocket expenses payable to Forum Financial Services, Inc. under any
distribution, management or similar agreement; and all other fees and
expenses paid by the Trust pursuant to any distribution or shareholder
service plan adopted pursuant to Rule 12b-1 under the Act.
SECTION 5. STANDARD OF CARE
The Trust shall expect of the Adviser, and the Adviser will give the
Trust the benefit of, the Adviser's best judgment and efforts in rendering its
services to the Trust, and as an inducement to the Adviser's undertaking these
services the Adviser shall not be liable hereunder for any mistake of judgment
or in any event whatsoever, except for lack of good faith, provided that nothing
herein shall be deemed to protect, or purport to protect, the Adviser against
any liability to the Trust or to the Trust's security holders to which the
Adviser would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of the Adviser's duties hereunder, or by
reason of the Adviser's reckless disregard of its obligations and duties
hereunder.
SECTION 6. COMPENSATION
(a) In consideration of the foregoing, the Trust shall pay the Adviser, with
respect to each of the Funds, a fee at an annual rate as listed in Appendix
A hereto. Such fees shall be accrued by the Trust daily and shall be
payable monthly in arrears on the first day of each calendar month for
services performed hereunder during the prior calendar month. The Adviser's
reimbursement, if any, of a Fund's expenses as provided in Section 4
hereof, shall be estimated and paid to the Trust monthly in arrears, at the
same time as the Trust's payment to the Adviser for such month. Payment of
the advisory fee will be reduced or postponed, if necessary, with any
adjustments made after the end of the year.
(b) No fee shall be payable hereunder with respect to a Fund during any period
in which the Fund invests all (or substantially all) of its investment
assets in a single registered, open-end management investment company, or
separate series thereof, in accordance with Section 12(d)(1)(E) under the
1940 Act;
(c) The adviser shall receive a fee of 0.25% (0.35% in the case of the
WealthBuilder Portfolios and 0.00% for Cash Investment Fund) for asset
allocation services if a Fund invests some or all (or substantially all) of
its investment assets in two or more registered, open-end management
investment companies, or separate series thereof, in each case, in
accordance with Section 12(d)(1)(h) under the Act, the rules thereunder or
an exemptive order issued by the Commission exempting the Fund from the
provisions of Section 12(d)(1)(A) under the Act (a "Fund of Funds
structure")
(d) To the extent the Board determines that a Fund should invest a portion of
its assets directly in portfolio securities, rather than in a portfolio of
Core Trust (Delaware) or other portfolio, with respect to those assets the
Fund will pay the Adviser the same fee that the portfolio was paying its
adviser (the fees of each portfolio will be disclosed in the proxy
statement and prospectus).
SECTION 7. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to a Fund immediately
upon approval by a majority of the outstanding voting securities of that
Fund.
(b) This Agreement shall remain in effect with respect to a Fund for a period
of one year from the date of its effectiveness and shall continue in effect
for successive twelve-month periods (computed from each anniversary date of
the approval) with respect to the Fund; provided that such continuance is
specifically approved at least annually (I) by the Board or by the vote of
a majority of the outstanding voting securities of the Fund, and, in either
case, (ii) by a majority of the Trust's trustees who are not parties to
this Agreement or interested persons of any such party (other than as
trustees of the Trust); provided further, however, that if this Agreement
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or the continuation of this Agreement is not approved as to a Fund, the
Adviser may continue to render to that Fund the services described herein
in the manner and to the extent permitted by the Act and the rules and
regulations thereunder.
(c) This Agreement may be terminated with respect to a Fund at any time,
without the payment of any penalty, (I) by the Board or by a vote of a
majority of the outstanding voting securities of the Fund on 60 days'
written notice to the Adviser or (ii) by the Adviser on 60 days' written
notice to the Trust. This Agreement shall terminate upon assignment.
SECTION 8. ACTIVITIES OF THE ADVISER
Except to the extent necessary to perform its obligations hereunder,
nothing herein shall be deemed to limit or restrict the Adviser's right, or the
right of any of the Adviser's officers, directors or employees who may also be a
trustee, officer or employee of the Trust, or persons otherwise affiliated
persons of the Trust to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to any other
corporation, trust, firm, individual or association.
SECTION 9. SUBADVISERS
At its own expense, the Adviser may carry out any of its obligations
under this Agreement by employing, subject to your supervision, one or more
persons who are registered as investment advisers pursuant to the Investment
Advisers Act of 1940, as amended, or who are exempt from registration thereunder
("Subadvisers"). Each Subadviser's employment will be evidenced by a separate
written agreement approved by the Board and, if required, by the shareholders of
the Fund. The Adviser shall not be liable hereunder for any act or omission of
any Subadviser, except to exercise good faith in the employment of the
Subadviser and except with respect to matters as to which the Adviser assumes
responsibility in writing.
SECTION 10. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY
The Trustees of the Trust and the interest holders of the Fund shall
not be liable for any obligations of the Trust or of the Fund under this
Agreement, and the Adviser agrees that, in asserting any rights or claims under
this Agreement, it shall look only to the assets and property of the Trust or
the Fund to which the Adviser's rights or claims relate in settlement of such
rights or claims, and not to the Trustees of the Trust or the interest holders
of the Fund.
SECTION 11. "NORWEST" NAME
If the Adviser ceases to act as investment adviser to the Trust or any
Fund whose name includes the word "Norwest," or if the Adviser requests in
writing, the Trust shall take prompt action to change the name of the Trust any
such Fund to a name that does not include the word "Norwest." The Adviser may
from time to time make available without charge to the Trust for the Trust's use
any marks or symbols owned by the adviser, including marks or symbols containing
the word "Norwest" or any variation thereof, as the Adviser deems appropriate.
Upon the Adviser's request in writing, the Trust shall cease to use any such
▇▇▇▇ or symbol at any time. The Trust acknowledges that any rights in or to the
word "Norwest" and any such marks or symbols which may exist on the date of this
Agreement or arise hereafter are, and under any and all circumstances shall
continue to be, the sole property of the Adviser. The Adviser may permit other
parties, including other investment companies, to use the word "Norwest" in
their names without the consent of the Trust. The Trust shall not use the word
"Norwest" in conducting any business other than that of an investment company
registered under the Act without the permission of the Adviser.
SECTION 12. MISCELLANEOUS
(a) No provisions of this Agreement may be amended or modified in any manner
except by a written agreement properly authorized and executed by both
parties hereto and, if required by the Act, by a vote of a majority of the
outstanding voting securities of any Fund thereby affected. No amendment to
this Agreement or the termination of this Agreement with respect to a Fund
shall effect this Agreement as it pertains to any other Fund, nor shall any
such amendment require the vote of any of the Fund's shareholders.
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(b) Section headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(c) This Agreement shall be governed by and shall be construed in
accordance with the laws of the State of Delaware.
(d) The terms "vote of a majority of the outstanding voting securities,"
"interested person," "affiliated person" and "assignment" shall have
the meanings ascribed thereto in the Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed effective as of the day and year first above written.
NORWEST ADVANTAGE FUNDS
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇
President
NORWEST INVESTMENT MANAGEMENT, INC.
By: P. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
President
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NORWEST ADVANTAGE FUNDS
INVESTMENT ADVISORY AGREEMENT
Appendix A
July 28, 1998
P. Investment Advisory Fees
Fee as a % of the Annual
Funds of the Trust Average Daily Net Assets of the Fund
Cash Investment Fund,
Treasury Plus Fund,
Treasury Fund and
U.S. Government Fund 0.20% of the first $300 million of assets
0.16% for next $400 million of assets
0.12% of the remaining net assets
Ready Cash Investment Fund 0.40% of the first $300 million of assets
0.36% for next $400 million of assets
0.32% of the remaining net assets
Municipal Money Market Fund
0.35% of the first
$500 million of assets
0.325% for next $500
million of assets
0.30% of the remaining
net assets
Stable Income Fund 0.30%
Limited Term Government Income Fund 0.33%
Intermediate Government Income Fund 0.33%
Diversified Bond Fund 0.35%
Income Fund 0.50%
Total Return Bond Fund 0.50%
Limited Term Tax-Free Fund 0.50%
Minnesota Intermediate Tax-Free Fund 0.25%
Minnesota Tax-Free Fund and
Colorado Tax-Free Fund 0.50% of the first $300 million of assets
0.46% of next $400 million of assets
0.42% of the remaining net assets
Tax-Free Income Fund 0.50%
Strategic Income Fund 0.45%
Moderate Balanced Fund 0.53%
Growth Balanced Fund 0.58%
Aggressive Balanced-Equity Fund 0.63%
Index Fund 0.15%
Income Equity Fund 0.50%
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Fee as a % of the Annual
Funds of the Trust Average Daily Net Assets of the Fund
ValuGrowth Stock Fund 0.80% of the first $300 million of assets
0.76% of the next $400 million of assets
0.72% of the remaining net assets
Diversified Equity Fund 0.65%
Growth Equity Fund 0.90%
Large Company Growth Fund 0.65%
Diversified Small Cap Fund 0.90%
Small Company Stock Fund 0.90%
Small Company Growth Fund 0.90%
Small Cap Opportunities Fund 0.60%
International Fund 0.85%
Performa Strategic Value Bond Fund 0.50%
Performa Disciplined Growth Fund 0.90%
Performa Small Cap Value Fund 0.95%
Performa Global Growth Fund 0.65%
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NORWEST ADVANTAGE FUNDS
INVESTMENT ADVISORY AGREEMENT
Appendix B
December 1, 1998
Norwest Investment Management, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
November 10, 1998
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
President
Norwest Advantage Funds
Two ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Dear ▇▇. ▇▇▇▇▇▇:
As you are aware, Norwest Advantage Funds (the "Trust"), MasterWorks
Funds Inc. ("Masterworks") and Managed Series Investment Trust ("MSIT") are
parties to the Agreement and Plan of Consolidation, dated as of November 10,
1998 (the "Plan"), by and among MasterWorks, for itself and on behalf of the
Growth Stock Fund (the GS Fund"), MSIT, for itself and on behalf of the Growth
Stock Master Portfolio, and the Trust, for itself and on behalf of the Large
Company Growth Fund (the "LCG Fund"). The Plan provides that the assets and
liabilities of the GS Fund will be conveyed to, and acquired and assumed by, the
LCG Fund, in exchange for shares of equal value of the LCG Fund which will
thereafter promptly be distributed to the shareholders of the GS Fund in
connection with its liquidation as described in the Plan (the "Consolidation"),
under the terms and conditions provided for in the Plan. The Plan provides that,
as a condition to the consummation of the Consolidation, the parties thereto
will receive an opinion of counsel to the Trust to the effect that the
Consolidation should constitute a reorganization within the meaning of Section
368(a)(1)(C) of the Internal Revenue Code of 1986, as amended (the
"Reorganization"). As an inducement for the Trust, on behalf of the LCG Fund, to
consummate the Consolidation, Norwest Investment Management, Inc. (the
"Adviser") is agreeing to indemnify the Trust and its Trustees and officers as
set forth below.
Pursuant to Section 12(a) of the Investment Advisory Agreement dated
June 1, 1997 between the Trust and the Adviser (the "Agreement"), the Trust and
the Adviser may amend the Agreement by a written agreement properly authorized
and executed by both parties thereto. The Trust and the Adviser hereby amend the
Agreement to add the following appendix:
Appendix B
(a) The Adviser (the "Indemnitor") hereby agrees to indemnify and hold the
Trust, its affiliates, successors and assigns, and each of their officers,
directors, trustees, and agents (the "Indemnitee(s)"), harmless from and
against any and all obligations, losses, claims, damages, costs, charges or
other expenses of every kind and character (including but not limited to
attorney's fees and litigation costs) ("Losses"), which may accrue or be
sustained by such Indemnitee(s) arising out of or as a result of a claim
that the Consolidation failed to constitute a Reorganization, except to the
extent that such loss is the proximate result of the negligence or willful
misconduct of an Indemnitee. "Losses" shall include all amounts paid in
settlement of any claim, demand, action, suit or proceeding, provided the
settlement is approved by the Indemnitor pursuant to paragraph (b) below,
and shall include all Losses arising from claims by shareholders of the GS
Fund based on a failure of the Consolidation to constitute a
Reorganization.
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(b) In the event any action, suit or other proceeding (a "case") is initiated
against any such Indemnitee(s) that may result in a claim against the
Indemnitor under this letter agreement, such Indemnitee(s) shall promptly
notify the Indemnitor in writing of the institution of such case (but the
failure to notify shall not relieve the Indemnitor from any liability it
may have pursuant to this letter agreement, except to the extent that the
Indemnitor is materially and adversely affected by such failure to notify)
and the Indemnitor shall be entitled to promptly assume the defense of such
case, including the employment of counsel reasonably satisfactory to such
Indemnitee(s) and payment of expenses. The Indemnitee(s) shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such Indemnitee(s)
unless (I) the Indemnitor fails to assume or pursue or unreasonably fails
to promptly assume or diligently pursue, the defense of such case; (ii) the
employment of such counsel shall have been authorized in writing by the
Indemnitor in connection with the defense of such case; (iii) the
Indemnitor shall not have promptly employed counsel reasonably satisfactory
to such Indemnitee(s) to have charge of the defense of such case; or (iv)
such Indemnitee(s) shall have been advised by counsel that there may be one
or more legal defenses available to it or them or to other Indemnitee(s)
which are different from or additional to those available to the Indemnitor
and which the Indemnitor will not or is not able to diligently pursue. In
any of these events, such reasonable fees and expenses of the
Indemnitee(s)' defense shall be borne by the Indemnitor and the Indemnitor
shall not have the right to direct the defense of such case on behalf of
the Indemnitee(s), it being understood, however, that the Indemnitor shall
not, in connection with any one such case or separate but substantially
similar or related cases in the same jurisdiction arising out of the same
general allegations or circumstances, be liable to any Indemnitee(s) for
the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to local counsel). Anything in this paragraph to the
contrary notwithstanding, the Indemnitor shall not be liable for any
settlement of any claim, demand or case effected without its written
consent, which shall not be unreasonably withheld.
(c) If the Indemnitor defends any case, it shall do so at its own cost and
expense, holding the Indemnitee(s) harmless from all costs, fees, expenses,
debts, liabilities, and charges in connection with such defense; shall
diligently defend against such case; and, during the pendency of the case,
shall hold such Indemnitee(s)' business and assets free and harmless from
any attachment, execution, judgement, lien or other legal process.
(d) The rights of the Indemnitee(s) with respect to any claim that the
Consolidation failed to qualify as a Reorganization shall not be limited to
the indemnification described herein, and shall be in addition to, and
shall not be exclusive of, any other rights or remedies at law or in equity
that may accrue to such Indemnitee(s).
(e) It is expressly agreed that all obligations of the Indemnitor set forth in
this Agreement shall be binding upon its successors and assigns and shall
survive the Consolidation.
If the foregoing amendment is satisfactory to you, please sign and return
the enclosed copy of this letter to acknowledge your agreement.
Very truly yours,
--------------------------------------------------------------------------------
P. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
President
Norwest Investment Management, Inc.
Accepted and agreed to as of November 10, 1998
--------------------------------------------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
President
Norwest Advantage Funds
cc: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice Chairman of the Board of Trustees of
Norwest Advantage Funds and Chairman of
the Audit Committee
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