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Exhibit d.4.
INVESTMENT ADVISORY AGREEMENT
WANGER ADVISORS TRUST, a Massachusetts business trust registered under
the Investment Company Act of 1940 (the "1940 Act") as an open-end management
investment company (the "Trust"), and LIBERTY WANGER ASSET MANAGEMENT, L.P., a
Delaware limited partnership registered under the Investment Advisers Act of
1940 as an investment adviser ("Liberty WAM"), agree that:
1. Engagement of Liberty WAM. Liberty WAM shall manage the investment
and reinvestment of the assets of Wanger U.S. Small Cap Advisor, Wanger
International Small Cap Advisor, Wanger Twenty and Wanger Foreign Forty, series
of the Trust (each, a "Fund," and collectively, the "Funds"), subject to the
supervision of the Board of Trustees of the Trust, for the period and on the
terms set forth in this agreement. If the Trust establishes one or more series
in addition to the Funds named above with respect to which it desires to retain
Liberty WAM as investment adviser hereunder, and if Liberty WAM is willing to
provide such services under this agreement, the Trust and Liberty WAM may add
such new series to this agreement, by written supplement to this agreement. Such
supplement shall include a schedule of compensation to be paid to Liberty WAM by
the Trust with respect to such series and such other modifications of the terms
of this agreement with respect to such series as the Trust and Liberty WAM may
agree. Upon execution of such a supplement by the Trust and Liberty WAM, that
series will become a Fund hereunder and shall be subject to the provisions of
this agreement to the same extent as the Funds named above, except as modified
by the supplement.
Liberty WAM shall give due consideration to the investment policies and
restrictions and the other statements concerning the Funds in the Trust's
agreement and declaration of trust, bylaws, and registration statement under the
1940 Act and the Securities Act of 1933 (the "1933 Act"), and to the provisions
of the Internal Revenue Code of 1986, as amended, applicable to the Funds as
regulated investment companies. Liberty WAM shall be deemed for all purposes to
be an independent contractor and not an agent of the Trust or the Funds, and
unless otherwise expressly provided or authorized, shall have no authority to
act or represent the Trust or the Funds in any way.
Liberty WAM is authorized to make the decisions to buy and sell
securities, options, futures contracts and any other investments in which the
Funds may invest pursuant to its investment objectives, policies and
restrictions, to place the Funds' portfolio transactions with broker-dealers,
and to negotiate the terms of such transactions, including brokerage commissions
on brokerage transactions, on behalf of the Funds. Liberty WAM is authorized to
exercise discretion with each Fund's policy concerning allocation of its
portfolio brokerage, consistent with the Trust's registration statement and
under the supervision of the Trust's Board of Trustees, and as permitted by law,
including but not limited to Section 28(e) of the Securities Exchange Act of
1934, and in so doing shall not be required to make any reduction in its
investment advisory fees.
Liberty WAM may, where it deems it to be advisable, aggregate orders
with other securities of the same type to be sold or purchased by one or more
Funds with like orders on behalf of other clients of Liberty WAM (as well as
clients of other investment advisers affiliated
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with Liberty WAM, in the event that Liberty WAM and such affiliated investment
advisers share common trading facilities). In such event, Liberty WAM (or
Liberty WAM and its affiliated advisers, as the case may be) will allocate the
shares so sold or purchased, as well as the expenses incurred in the
transaction, in a manner it (or it and they) consider to be equitable and fair
and consistent with its (or its or their) fiduciary obligations to clients.
2. Administrative Services. Liberty WAM shall supervise the business
and affairs of the Trust and each Fund and shall provide such services and
facilities as may be required for effective administration of the Trust and
Funds as are not provided by employees or other agents engaged by the Trust;
provided that Liberty WAM shall not have any obligation to provide under this
agreement any such services which are the subject of a separate agreement or
arrangement between the Trust and Liberty WAM, any affiliate of Liberty WAM, or
any third party administrator.
3. Use of Affiliated Companies and Subcontractors. In connection with
the services to be provided by Liberty WAM under this agreement, Liberty WAM
may, to the extent it deems appropriate, and subject to compliance with the
requirements of applicable laws and regulations and upon receipt of approval of
the Trustees, make use of (i) its affiliated companies and their directors,
trustees, officers, and employees and (ii) subcontractors selected by Liberty
WAM, provided that Liberty WAM shall supervise and remain fully responsible for
the services of all such third parties in accordance with and to the extent
provided by this agreement. All costs and expenses associated with services
provided by any such third parties shall be borne by Liberty WAM or such
parties.
4. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, Liberty WAM agrees to maintain records relating to its
services under this agreement, and further agrees that all records that it
maintains for the Trust are the property of the Trust and to surrender promptly
to the Trust any of such records upon the Trust's request; provided that Liberty
WAM may at its own expense make and retain copies of any such records. Liberty
WAM further agrees to preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act the records required to be maintained by Rule 31a-1 under the 1940
Act.
5. Expenses to be Paid by Liberty WAM. Liberty WAM shall furnish to the
Trust, at Liberty WAM's expense, office space and all necessary office
facilities, equipment and personnel for managing that portion of the Trust's
business relating to the Funds. Liberty WAM shall also assume and pay all other
expenses incurred by it in connection with managing the assets of the Funds,
including expenses in connection with placement of securities orders, all
expenses of printing and distributing the Funds' prospectus and reports to
prospective investors (except to the extent such expenses are allocated to a
party other than the Trust in any participation or operating agreement to which
the Trust is a party), and all expenses in determination of daily price
computations, portfolio accounting and related bookkeeping.
6. Expenses to be Paid by the Trust. Except as otherwise provided in
this agreement or any other contract to which the Trust is a party, the Trust
shall pay all expenses incidental to its organization, operations and business,
including, without limitation:
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(a) all charges of depositories, custodians, sub-custodians and other
agencies for the safekeeping and servicing of its cash, securities and
other property and of its transfer agents and registrars and its
dividend disbursing and redemption agents, if any;
(b) all charges of legal counsel and of independent auditors;
(c) all compensation of trustees other than those affiliated with Liberty
WAM or the Trust's administrator, if any, and all expenses incurred in
connection with their services to the Trust;
(d) all expenses of preparing, printing and distributing notices, proxy
solicitation materials and reports to shareholders of the Funds;
(e) all expenses of meetings of shareholders of the Funds;
(f) all expenses of registering and maintaining the registration of the
Trust under the 1940 Act and of shares of the Funds under the 1933
Act, including all expenses of preparation, filing and printing of
annual or more frequent revisions of the Funds' registration
statements under the 1940 Act and 1933 Act, and of supplying each then
existing shareholder or beneficial owner of shares of the Funds of a
copy of each revised prospectus or supplement thereto, and of
supplying a copy of the statement of additional information upon
request to any then existing shareholder;
(g) all costs of borrowing money;
(h) all expenses of publication of notices and reports to shareholders and
to governmental bodies or regulatory agencies;
(i) all taxes and fees payable to federal, state or other governmental
agencies, domestic or foreign, and all stamp or other taxes;
(j) all expenses of printing and mailing certificates for shares of a
Fund;
(k) all expenses of bond and insurance coverage required by law or deemed
advisable by the Board;
(l) all expenses of qualifying and maintaining qualification of, or
providing appropriate notification of intention to sell relating to,
shares of the Funds under the securities laws of the various states
and other jurisdictions, and of registration and qualification of the
Trust under any other laws applicable to the Trust or its business
activities;
(m) all fees, dues and other expenses related to membership of the Trust
in any trade association or other investment company organization; and
(n) any extraordinary expenses.
In addition to the payment of expenses, the Trust shall also pay all
brokers' commissions and other charges relating to the purchase and sale of
portfolio securities for each Fund.
Any expense borne by the Trust that is not solely attributable to a Fund,
nor solely to any other series of shares of the Trust, shall be apportioned in
such manner as Liberty WAM determines is fair and appropriate, or as otherwise
specified by the Board of Trustees of the Trust.
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7. Compensation of Liberty WAM. For the services to be rendered and
the expenses to be assumed and to be paid by Liberty WAM under this agreement,
the Trust shall pay to Liberty WAM fees accrued daily and paid monthly at the
annual rates shown below:
Wanger U.S. Small Cap
Assets Rate of Fee
------ -----------
First $100 million 1.00%
$100 million to $250 million 0.95%
In excess of $250 million 0.90%
Wanger International Small Cap
Assets Rate of Fee
------ -----------
First $100 million 1.30%
$100 million to $250 million 1.20%
In excess of $250 million 1.10%
Wanger Twenty
All Assets 0.95%
Wanger Foreign Forty
All Assets 1.00%
8. Limitation of Expenses of the Fund. The total expenses of Wanger
U.S. Small Cap, Wanger International Small Cap, Wanger Twenty and Wanger Foreign
Forty, exclusive of taxes, of interest and of extraordinary litigation expenses,
but including fees paid to Liberty WAM, shall not for the period ending on the
second anniversary of the Effective Date (as defined in the Agreement and Plan
of Merger referred to in Section 13 below) exceed 2.0%, 2.0%, 1.35% and 1.45%
per annum, respectively, and Liberty WAM agrees to reimburse each Fund for any
sums expended for such expenses in excess of that amount with respect to such
period. For purposes of calculating the expenses subject to this limitation, (i)
brokers' commissions and other charges relating to the purchase and sale of
portfolio securities and (ii) the excess custodian costs attributable to
investments in foreign securities compared to the custodian costs which would
have been incurred had the investments been in domestic securities, shall not be
regarded as expenses. Reimbursement, if any, shall be made by reduction of the
fees otherwise payable to Liberty WAM under this agreement, no less frequently
than quarterly. Notwithstanding the foregoing, the limitations on total expenses
set forth above in this Section 8 shall not apply to any class of shares of a
Fund established after the effective date of this agreement.
9. Services of Liberty WAM Not Exclusive. The services of Liberty
WAM to the Funds hereunder are not to be deemed exclusive, and Liberty WAM shall
be free to render similar services to others so long as its services under this
agreement are not impaired by such other activities.
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10. Services Other Than as Manager. Liberty WAM (or an affiliate of
Liberty WAM) may act as broker for the Funds in connection with the purchase or
sale of securities by or to the Funds if and to the extent permitted by
procedures adopted from time to time by the Board of Trustees of the Trust. Such
brokerage services are not within the scope of the duties of Liberty WAM under
this agreement, and, within the limits permitted by law and the Board of
Trustees of the Trust, Liberty WAM (or an affiliate of Liberty WAM) may receive
brokerage commissions, fees or other remuneration from the Funds for such
services in addition to its fee for services under this agreement. Within the
limits permitted by law, Liberty WAM or an affiliate of Liberty WAM may receive
compensation from the Funds for other services performed by it for the Funds
which are not within the scope of the duties of Liberty WAM under this
agreement. The Trust hereby authorizes any entity or person associated with
Liberty WAM that is a member of a national securities exchange to effect any
transaction on the exchange for the account of a Fund to the extent permitted by
and in accordance with Section 11(a) of the Securities Exchange Act of 1934 and
Rule 11a2-2(T) thereunder. The Trust hereby consents to the retention by such
entity or person of compensation for such transactions in accordance with Rule
11a-2(T)(a)(iv).
11. Limitation of Liability of Liberty WAM. To the extent permitted by
applicable law, neither Liberty WAM nor any of its partners, officers, agents,
employees or affiliates shall be liable to the Trust or its shareholders for any
loss suffered by the Trust or its shareholders as a result of any error of
judgment, or any loss arising out of any investment, or as a consequence of any
other act or omission of Liberty WAM or any of its affiliates in the performance
of Liberty WAM's duties under this agreement, except for liability resulting
from willful misfeasance, bad faith or gross negligence on the part of Liberty
WAM or such affiliate, or by reason of reckless disregard by Liberty WAM or such
affiliate of the obligations and duties of Liberty WAM under this agreement.
12. Use of "Wanger" or "Liberty" name. The Trust may use the name
"Wanger Advisors Trust" or any name using the name "Liberty" or "Wanger" or any
combination or derivation of either of them only for so long as this agreement
or any extension, renewal or amendment hereof remains in effect, including any
similar agreement with any organization that shall remain affiliated with
Liberty Financial Companies, Inc. and that shall have succeeded to the business
of Liberty WAM as investment adviser. At such time as this agreement or any
extension, renewal or amendment hereof, or such similar agreement, shall no
longer be in effect, the Trust will (by amendment of its agreement and
Declaration of Trust, if necessary) cease to use any name using the name
"Liberty" or "Wanger" or any combination or derivation of either of them or any
name similar thereto or any other name indicating that it is advised by or
otherwise connected with Liberty WAM or with any organization which shall have
succeeded to Liberty WAM's business as investment adviser. Liberty WAM's consent
to the use of the name "Wanger" by the Trust shall not prevent Liberty WAM's
permitting any other enterprise, including other investment companies, to use
that name.
13. Duration and Renewal. This agreement shall be effective at the
Effective Time as defined in the Agreement and Plan of Merger among Wanger Asset
Management, Ltd., Wanger Asset Management, L.P. and Liberty Financial Companies,
Inc. and WAM Acquisition L.P. dated as of June 9, 2000 (the "Merger Agreement").
Unless terminated as provided in Section 14, this agreement shall continue in
effect until the second anniversary of the Effective
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Date (as defined in the Merger Agreement), and thereafter from year to year only
so long as such continuance is specifically approved at least annually (a) by a
majority of those trustees who are not interested persons of the Trust or of
Liberty WAM, voting in person at a meeting called for the purpose of voting on
such approval, and (b) by either the Board of Trustees of the Trust or vote of
the holders of a majority of the outstanding shares of each Fund.
14. Termination. This agreement may be terminated at any time, without
payment of any penalty, by the Board of Trustees of the Trust, or by a vote of
the holders of a majority of the outstanding shares of each Fund, upon 60 days'
written notice to Liberty WAM. This agreement may be terminated by Liberty WAM
at any time upon 60 days' written notice to the Trust. This agreement shall
terminate automatically in the event of its assignment (as defined in Section
2(a)(4) of the 1940 Act).
15. Non-Liability of Trustees and Shareholders. A copy of the
Declaration of Trust of the Trust is on file with the Secretary of The
Commonwealth of Massachusetts, and notice is hereby given that this instrument
is executed on behalf of the Trust by officers of the Trust as officers and not
individually. Any obligation of the Trust hereunder shall be binding only upon
the assets of the Trust (or applicable series thereof) and shall not be binding
upon any trustee, officer, employee, agent or shareholder of the Trust. Neither
the authorization of any action by the trustees or shareholders of the Trust nor
the execution of this agreement on behalf of the Trust shall impose any
liability upon any trustee, officer or shareholder of the Trust.
16. Amendment. This agreement may be amended in accordance with the
1940 Act.
17. Notices. Any notice, demand, change of address or other
communication to be given in connection with this agreement shall be given in
writing and shall be given by personal delivery, by registered or certified mail
or by transmittal by facsimile or other electronic medium addressed to the
recipient as follows (or at such other address or addresses as a party may
provide to the other from time to time, by notice):
If to Liberty Liberty Wanger Asset Management, L.P.
WAM: Attention: Bruce H. Lauer
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606
Telephone: 312 634-9200
Facsimile: 312 634-0016
with a copy to:
Liberty Funds Group LLC
One Financial Center
Boston, Massachusetts 02114
Attention: General Counsel
Telephone: 617-426-3750
Facsimile: 617-772-3650
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If to Wanger Wanger Advisors Trust
Advisors Trust: 227 West Monroe Street, Suite 3000
Chicago, Illinois 60606
Telephone: 312 634-9200
Facsimile: 312 634-1919
with a copy to:
Bell, Boyd & Lloyd LLC
Attention: Janet D. Olsen
Three First National Plaza, Suite 3300
Chicago, Illinois 60602
Telephone: 312/372-1121
Facsimile: 312/372-2098
All notices shall be conclusively deemed to have been given on the day
of actual delivery thereof and, if given by registered or certified mail, on the
fifth business day following the deposit thereof in the mail and, if given by
facsimile or other electronic medium, on the day of transmittal thereof (upon
electronic confirmation of receipt thereof).
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Dated as of the effective time of this agreement
WANGER ADVISORS TRUST LIBERTY WANGER ASSET
MANAGEMENT, L.P.,
By _________________________
Its General Partner
________________________________ ____________________________
By: By:
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