Exhibit 23(d)(1)
Amended Investment Advisory Agreement
AMENDED AND RESTATED
INVESTMENT MANAGEMENT AGREEMENT
THIS AMENDED AND RESTATED INVESTMENT MANAGEMENT AGREEMENT (the "Agreement")
made as of the 30th day of August, 2002, amends and restates in its entirety the
Investment Management Agreement dated July 31, 1997, by and between THE
XXXXXXXXXX FUNDS II, a Delaware business trust (hereinafter called the "Trust"),
on behalf of each series of the Trust listed in APPENDIX A hereto, as may be
amended from time to time (hereinafter referred to individually as a "Fund" and
collectively as the "Funds") and XXXXXXXXXX ASSET MANAGEMENT, LLC, a limited
liability company organized and existing under the laws of the State of Delaware
(hereinafter called the "Manager").
WITNESSETH:
WHEREAS, the Trust is an open-end management investment company, registered
as such under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Manager is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and is engaged in the business of
supplying investment advice, investment management and administrative services,
as an independent contractor; and
WHEREAS, the Trust desires to retain the Manager to render advice and
services to the Funds pursuant to the terms and provisions of this Agreement,
and the Manager is interested in furnishing said advice and services;
NOW, THEREFORE, in consideration of the covenants and the mutual promises
hereinafter set forth, the parties hereto, intending to be legally bound hereby,
mutually agree as follows:
1. APPOINTMENT OF MANAGER. The Trust hereby employs the Manager and the
Manager hereby accepts such employment, to render investment advice and
management services with respect to the assets of the Funds for the period and
on the terms set forth in this Agreement, subject to the supervision and
direction of the Trust's Board of Trustees.
2. DUTIES OF MANAGER.
(a) GENERAL DUTIES. The Manager shall act as investment manager to the
Funds and shall supervise investments of the Funds on behalf of the Funds in
accordance with the investment objectives, programs and restrictions of the
Funds as provided in the Trust's governing documents, including, without
limitation, the Trust's Agreement and Declaration of Trust and By-Laws, or
otherwise and such other limitations as the Trustees may impose from time to
time in writing to the Manager. Without limiting the generality of the
foregoing, the Manager shall: (i) furnish the Funds with advice and
recommendations with respect to the investment of each Fund's assets and the
purchase and sale of portfolio securities for the Funds, including the taking of
such other steps as may be necessary to implement such advice and
recommendations; (ii) furnish the Funds with reports, statements and other data
on securities, economic conditions and other pertinent subjects which the
Trust's Board of Trustees may reasonably request; (iii) manage the investments
of the Funds, subject to the ultimate supervision and direction of the Trust's
Board of Trustees; (iv) provide persons satisfactory to the Trust's Board of
Trustees to act as officers and employees of the Trust and the Funds (such
officers and employees, as well as certain trustees, may be trustees, directors,
officers, partners, or employees
of the Manager or its affiliates) but not including personnel to provide
administrative service or distribution services to the Fund; and (v) render to
the Trust's Board of Trustees such periodic and special reports with respect to
each Fund's investment activities as the Board may reasonably request.
(b) BROKERAGE. The Manager shall place orders for the purchase and sale of
securities either directly with the issuer or with a broker or dealer selected
by the Manager. In placing each Fund's securities trades, it is recognized that
the Manager will give primary consideration to securing the most favorable price
and efficient execution, so that each Fund's total cost or proceeds in each
transaction will be the most favorable under all the circumstances. Within the
framework of this policy, the Manager may consider the financial responsibility,
research and investment information, and other services provided by brokers or
dealers who may effect or be a party to any such transaction or other
transactions to which other clients of the Manager may be a party.
It is also understood that it is desirable for the Funds that the Manager
have access to investment and market research and securities and economic
analyses provided by brokers and others. It is also understood that brokers
providing such services may execute brokerage transactions at a higher cost to
the Funds than might result from the allocation of brokerage to other brokers on
the basis of seeking the most favorable price and efficient execution.
Therefore, the purchase and sale of securities for the Funds may be made with
brokers who provide such research and analysis, subject to review by the Trust's
Board of Trustees from time to time with respect to the extent and continuation
of this practice to determine whether each Fund benefits, directly or
indirectly, from such practice. It is understood by both parties that the
Manager may select broker-dealers for the execution of the Funds' portfolio
transactions who provide research and analysis as the Manager may lawfully and
appropriately use in its investment management and advisory capacities, whether
or not such research and analysis may also be useful to the Manager in
connection with its services to other clients.
On occasions when the Manager deems the purchase or sale of a security to
be in the best interest of one or more of the Funds as well as of other clients,
the Manager, to the extent permitted by applicable laws and regulations, may
aggregate the securities to be so purchased or sold in order to obtain the most
favorable price or lower brokerage commissions and the most efficient execution.
In such event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Manager in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to the Funds and to such other clients.
(c) ADMINISTRATIVE SERVICES. The Manager shall oversee the administration
of the Funds' business and affairs although the provision of administrative
services, to the extent not covered by subparagraphs (a) or (b) above, is not
the obligation of the Manager under this Agreement. Notwithstanding any other
provisions of this Agreement, the Manager shall be entitled to reimbursement
from the Funds for all or a portion of the reasonable costs and expenses,
including salary, associated with the provision by Manager of personnel to
render administrative services to the Funds.
3. BEST EFFORTS AND JUDGMENT. The Manager shall use its best judgment and
efforts in renderingthe advice and services to the Funds as contemplated by this
Agreement.
4. INDEPENDENT CONTRACTOR. The Manager shall, for all purposes herein, be
deemed to be an independent contractor, and shall, unless otherwise expressly
provided and authorized to do so, have no authority to act for or represent the
Trust or the Funds in any way, or in any way be deemed an agent for the Trust or
for the Funds. It is expressly understood and agreed that the services to be
rendered by the Manager to the Funds under the provisions of this Agreement are
not to be deemed exclusive, and the Manager shall be free to render similar or
different services to others so long as its ability to render the services
provided for in this Agreement shall not be impaired thereby.
5. MANAGER'S PERSONNEL. The Manager shall, at its own expense, maintain
such staff and employ or retain such personnel and consult with such other
persons as it shall from time to time determine to be necessary to the
performance of its obligations under this Agreement. Without limiting the
generality of the foregoing, the staff and personnel of the Manager shall be
deemed to include persons employed or retained by the Manager to furnish
statistical information, research, and other factual information, advice
regarding economic factors and trends, information with respect to technical and
scientific developments, and such other information, advice and assistance as
the Manager or the Trust's Board of Trustees may desire and reasonably request.
6. REPORTS BY FUNDS TO MANAGER. Each Fund will from time to time furnish to
the Manager detailed statements of its investments and assets, and information
as to its investment objective and needs, and will make available to the Manager
such financial reports, proxy statements, legal and other information relating
to each Fund's investments as may be in its possession or available to it,
together with such other information as the Manager may reasonably request.
7. EXPENSES.
(a) With respect to the operation of each Fund, the Manager is responsible
for (i) the compensation of any of the Trust's trustees, officers, and employees
who are affiliates of the Manager (but not the compensation of employees
performing services in connection with expenses which are the Fund's
responsibility under Subparagraph 7(b) below), (ii) the expenses of printing and
distributing the Funds' prospectuses, statements of additional information, and
sales and advertising materials (but not the legal, auditing or accounting fees
attendant thereto) to prospective investors (but not to existing shareholders),
and (iii) providing office space and equipment reasonably necessary for the
operation of the Funds.
(b) Each Fund is responsible for and has assumed the obligation for payment
of all of its expenses, other than as stated in Subparagraph 7(a) above,
including but not limited to: fees and expenses incurred in connection with the
issuance, registration and transfer of its shares; brokerage and commission
expenses; all expenses of transfer, receipt, safekeeping, servicing and
accounting for the cash, securities and other property of the Trust for the
benefit of the Funds including all fees and expenses of its custodian,
shareholder services agent and accounting services agent; interest charges on
any borrowings; costs and expenses of pricing and calculating its daily net
asset value and of maintaining its books of account required under the 1940 Act;
taxes, if any; expenditures in connection with meetings of each Fund's
Shareholders and Board of Trustees that are properly payable by the Fund;
salaries and expenses of officers and fees and expenses of members of the
Trust's Board of Trustees or members of any advisory board or committee who are
not members of, affiliated with or interested persons of the Manager;
insurance premiums on property or personnel of each Fund which inure to its
benefit, including liability and fidelity bond insurance; the cost of preparing
and printing reports, proxy statements, prospectuses and statements of
additional information of the Fund or other communications for distribution to
existing shareholders; legal, auditing and accounting fees; trade association
dues; fees and expenses (including legal fees) of obtaining and maintaining any
required registration or notification for its shares for sale under federal and
applicable state and foreign securities laws; all expenses of maintaining and
servicing shareholder accounts, including all charges for transfer, shareholder
recordkeeping, dividend disbursing, redemption, and other agents for the benefit
of the Funds, if any; and all other charges and costs of its operation plus any
extraordinary and non-recurring expenses, except as herein otherwise prescribed.
(c) To the extent the Manager incurs any costs by assuming expenses which
are an obligation of a Fund as set forth herein, such Fund shall promptly
reimburse the Manager for such costs and expenses, except to the extent the
Manager has otherwise agreed to bear such expenses. To the extent the services
for which a Fund is obligated to pay are performed by the Manager, the Manager
shall be entitled to recover from such Fund to the extent of the Manager's
actual costs for providing such services.
8. INVESTMENT ADVISORY AND MANAGEMENT FEE.
(a) Each Fund shall pay to the Manager, and the Manager agrees to accept,
as full compensation for all administrative and investment management and
advisory services furnished or provided to such Fund pursuant to this Agreement,
a management fee as set forth in the Fee Schedule attached hereto as APPENDIX B,
as may be amended in writing from time to time by the Trust and the Manager.
(b) The management fee shall be accrued daily by each Fund and paid to the
Manager upon its request.
(c) The initial fee under this Agreement shall be payable on the first
business day of the first month following the effective date of this Agreement
and shall be prorated as set forth below. If this Agreement is terminated prior
to the end of any month, the fee to the Manager shall be prorated for the
portion of any month in which this Agreement is in effect which is not a
complete month according to the proportion which the number of calendar days in
the month during which the Agreement is in effect bears to the number of
calendar days in the month, and shall be payable within ten (10) days after the
date of termination.
(d) FEE REDUCTION. The Manager may, but is not required to, reduce all or a
portion of its fees and/or reimburse a Fund for other expenses in order to
decrease the operating expenses of a Fund. Any such reduction, reimbursement, or
payment (collectively "subsidies") shall be applicable only to such specific
subsidy and shall not constitute an agreement to continue such subsidy in the
future. Any such subsidy will be agreed to prior to accrual of the related
expense or fee and will be estimated daily and reconciled and paid on a monthly
basis. The Manager may also agree contractually to limit a Fund's operating
expenses. To the extent such an expense limitation has been agreed to by the
Manager and such limit has been disclosed to shareholders of a Fund in the
Prospectus, the Manager may not change the limitation without first disclosing
the change in an updated Prospectus.
The Manager may seek reimbursement of any subsidies made by the Manager
either voluntarily or pursuant to contract. The reimbursement of any subsidy
must be approved by the
Trust's Board of Trustees and must be sought no later than the end of the third
fiscal year following the year to which the subsidy relates. The Manager may not
request nor receive reimbursement for any subsidies before payment of a Fund's
operating expenses for the current year and cannot cause a Fund to exceed any
more restrictive limitation to which the Manager has agreed in making such
reimbursement.
(e) The Manager may agree not to require payment of any portion of the
compensation or reimbursement of expenses otherwise due to it pursuant to this
Agreement prior to the time such compensation or reimbursement has accrued as a
liability of the Fund. Any such agreement shall be applicable only with respect
to the specific items covered thereby and shall not constitute an agreement not
to require payment of any future compensation or reimbursement due to the
Manager hereunder.
9. FUND SHARE ACTIVITIES OF MANAGER'S DIRECTORS, PARTNERS, OFFICERS AND
EMPLOYEES. The Manager agrees that neither it nor any of its directors,
partners, officers or employees shall take any short position in the shares of
the Funds. This prohibition shall not prevent the purchase of such shares by any
of the officers and partners or bona fide employees of the Manager or any trust,
pension, profit-sharing or other benefit plan for such persons or affiliates
thereof, at a price not less than the net asset value thereof at the time of
purchase, as allowed pursuant to rules promulgated under the 1940 Act.
10. CONFLICTS WITH TRUST'S GOVERNING DOCUMENTS AND APPLICABLE LAWS. Nothing
herein contained shall be deemed to require the Trust or the Funds to take any
action contrary to the Trust's Agreement and Declaration of Trust, By-Laws, or
any applicable statute or regulation, or to relieve or deprive the Board of
Trustees of the Trust of its responsibility for and control of the conduct of
the affairs of the Trust and Funds.
11. MANAGER'S LIABILITIES.
(a) In the absence of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the obligations or duties hereunder on the part of the
Manager, the Manager shall not be subject to liability to the Trust or the Funds
or to any shareholder of the Funds 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 Funds.
(b) The Funds shall indemnify and hold harmless the Manager, its general
partner and the shareholders, directors, officers and employees of each of them
(any such person, an "Indemnified Party") against any loss, liability, claim,
damage or expense (including the reasonable cost of investigating and defending
any alleged loss, liability, claim, damage or expenses and reasonable counsel
fees incurred in connection therewith) arising out of the Indemnified Party's
performance or non-performance of any duties under this Agreement provided,
however, that nothing herein shall be deemed to protect any Indemnified Party
against any liability to which such Indemnified Party would otherwise be subject
by reason of willful misfeasance, bad faith or negligence in the performance of
duties hereunder or by reason of reckless disregard of obligations and duties
under this Agreement.
(c) No provision of this Agreement shall be construed to protect any
Trustee or officer of the Trust, or partner or officer of the Manager, from
liability in violation of Sections 17(h) and (i) of the 1940 Act.
12. NON-EXCLUSIVITY. The Trust's employment of the Manager is not an
exclusive arrangement, and the Trust may from time to time employ other
individuals or entities to furnish it with the services provided for herein. In
the event this Agreement is terminated with respect to any Fund, this Agreement
shall remain in full force and effect with respect to all other Funds listed on
Appendix A hereto, as the same may be amended.
13. TERM. This Agreement shall become effective on the date that is the
latest of (1) the execution of this Agreement, (2) the approval of this
Agreement by the Board of Trustees of the Trust and (3) the approval of this
Agreement by the shareholders of each Fund in a special meeting of shareholders
of the Fund. This Agreement shall remain in effect for a period of two (2)
years, unless sooner terminated as hereinafter provided. This Agreement shall
continue in effect thereafter for additional periods not exceeding one (l) year
so long as such continuation is approved for each Fund at least annually by (i)
the Board of Trustees of the Trust or by the vote of a majority of the
outstanding voting securities of each Fund and (ii) the vote of a majority of
the Trustees of the Trust who are not parties to this Agreement nor interested
persons thereof, cast in person at a meeting called for the purpose of voting on
such approval.
14. TERMINATION. This Agreement may be terminated by the Trust on behalf of
any one or more of the Funds at any time without payment of any penalty, by the
Board of Trustees of the Trust or by vote of a majority of the outstanding
voting securities of a Fund, upon sixty (60) days' written notice to the
Manager, and by the Manager upon sixty (60) days' written notice to a Fund.
15. TERMINATION BY ASSIGNMENT. This Agreement shall terminate automatically
in the event of any transfer or assignment thereof, as defined in the 1940 Act.
16. TRANSFER, ASSIGNMENT. This Agreement may not be transferred, assigned,
sold or in any manner hypothecated or pledged without the affirmative vote or
written consent of the holders of a majority of the outstanding voting
securities of each Fund.
17. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute or rule, or shall be otherwise rendered
invalid, the remainder of this Agreement shall not be affected thereby.
18. DEFINITIONS. The terms "majority of the outstanding voting securities"
and "interested persons" shall have the meanings as set forth in the 1940 Act.
19. NOTICE OF DECLARATION OF TRUST. The Manager agrees that the Trust's
obligations under this Agreement shall be limited to the Funds and to their
assets, and that the Manager shall not seek satisfaction of any such obligation
from the shareholders of the Funds nor from any trustee, officer, employee or
agent of the Trust or the Funds.
20. CAPTIONS. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
21. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California without giving effect to
the conflict of laws principles thereof; provided that nothing herein shall be
construed to preempt, or to be inconsistent with, any federal law, regulation or
rule, including the 1940 Act and the Investment Advisors Act of 1940 and any
rules and regulations promulgated thereunder.
22. NONPUBLIC PERSONAL INFORMATION. Notwithstanding any provision herein to
the contrary, the Manager agrees on behalf of itself and its directors,
officers, and employees (1) to treat confidentially and as proprietary
information of the Trust (a) all records and other information relative to the
series of the Trust and their prior, present, or potential shareholders (and
clients of said shareholders) and (b) any Nonpublic Personal Information, as
defined under Section 248.3(t) of Regulation S-P ("Regulation S-P"), promulgated
under the Xxxxx-Xxxxx-Xxxxxx Act (the "Privacy Act"), and (2) not to use such
records and information for any purpose other than the performance of its
responsibilities and duties hereunder, or as otherwise permitted by the privacy
policies adopted by the Trust, Regulation S-P or the Privacy Act, except after
prior notification to and approval in writing by the Trust. Such written
approval shall not be unreasonably withheld by the Trust and may not be withheld
where the Manager may be exposed to civil or criminal contempt proceedings for
failure to comply after being requested to divulge such information by duly
constituted authorities, or when so requested by the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested by their duly authorized officers, all on the day and
year first above written.
THE XXXXXXXXXX FUNDS II XXXXXXXXXX ASSET MANAGEMENT, LLC
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxx Xxxxxxx
---------------------------------- ---------------------------------------------------
Name: Xxxxxxx Xxxxxx Name: Xxxx Xxxxxxx
Title: Assistant Secretary Title: Chief Administrative Officer
Date: August 30, 2002 Date: August 30, 0000
XXXXXXXX A
FUND SCHEDULE - THE XXXXXXXXXX FUNDS II
(updated July 10, 2002)
FUND EFFECTIVE DATE
- Xxxxxxxxxx Institutional Series: Emerging Markets July 31, 1997
Portfolio
- Xxxxxxxxxx Global Long-Short Fund December 31, 1997
- Xxxxxxxxxx Emerging Markets Focus Fund December 31, 1997, as amended May 26, 1999 and
October 31, 2001
- Xxxxxxxxxx Institutional Series: September 30, 1998
International Growth Portfolio
THE XXXXXXXXXX FUNDS II XXXXXXXXXX ASSET MANAGEMENT, LLC
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxx Xxxxxxx
---------------------------------- ---------------------------------------------------
Name: Xxxxxxx Xxxxxx Name: Xxxx Xxxxxxx
Title: Assistant Secretary Title: Chief Administrative Officer
Date: August 30, 2002 Date: August 30, 0000
XXXXXXXX X
FEE SCHEDULE - THE XXXXXXXXXX FUNDS II
(updated July 10, 2002)
1. Xxxxxxxxxx Institutional Series: 1.25% of the first $50 million of net
Emerging Markets Portfolio assets; plus 1.00% of the next $50 million
of net assets; plus 0.90% of net assets
over $100 million.
2. Xxxxxxxxxx Global Long-Short Fund 1.50% of the first $250 million; plus
1.25% of net assets over $250 million.
3. Xxxxxxxxxx Emerging Markets Focus Fund 1.10% of the first $250 million; plus
1.00% of the next $250 million of net
assets; plus 0.90% of net assets over $500
million.
4. Xxxxxxxxxx Institutional Series: 0.75% of the first $500 million; plus
International Growth Portfolio 0.65% of net assets over $500 million.
THE XXXXXXXXXX FUNDS II XXXXXXXXXX ASSET MANAGEMENT, LLC
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxx Xxxxxxx
---------------------------------- ---------------------------------------------------
Name: Xxxxxxx Xxxxxx Name: Xxxx Xxxxxxx
Title: Assistant Secretary Title: Chief Administrative Officer
Date: August 30, 2002 Date: August 30, 2002
