Exhibit 23(d)(1)
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made and entered into on this 15th day of August, 2003 between
GARTMORE MUTUAL FUNDS II, INC. (formerly known as GAMNA Series Funds, Inc., the
"Company"), a Maryland corporation, and GARTMORE MUTUAL FUND CAPITAL TRUST (the
"Adviser"), a Delaware business trust registered under the Investment Advisers
Act of 1940, as amended (the "Advisers Act").
W I T N E S S E T H:
WHEREAS, the Company is registered with the Securities and Exchange
Commission (the "SEC") as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Company desires to retain the Adviser to furnish certain
investment advisory services, as described herein, with respect to the
investment portfolios of the Company listed on Exhibit A to this Agreement
(each, a "Fund"); and
WHEREAS, the Adviser represents that it is willing and possesses legal
authority to render such services subject to the terms and conditions set forth
in this Agreement.
NOW, THEREFORE, the Company and the Adviser do mutually agree and promise
as follows:
1. Appointment as Adviser. The Company hereby appoints the Adviser to act
as investment adviser to the Fund subject to the terms and conditions set forth
in this Agreement. The Adviser hereby accepts such appointment and agrees to
furnish the services hereinafter described for the compensation provided for in
this Agreement.
2. Duties of Adviser.
(a) Investment Management Services. (1) Subject to the supervision of
the Company's Board of Directors (and except as otherwise permitted under the
terms of any exemptive relief obtained by the Adviser from the SEC, or by rule
or regulation), the Adviser will provide, or arrange for the provision of, a
continuous investment program and overall investment strategies for the Fund,
including investment research and management with respect to all securities and
investments and cash equivalents in the Fund. The Adviser will determine, or
arrange for others to determine, from time to time what securities and other
investments will be purchased, retained or sold by the Fund and will implement,
or arrange for others to implement, such determinations through the placement,
in the name of the Fund, of orders for the execution of portfolio transactions
with or through such brokers or dealers as may be so selected. The Adviser will
provide, or arrange for the provision of, the services under this Agreement in
accordance with investment objectives and limitations specified in the Company's
Articles of Incorporation (the "Articles"), the By-laws and the currently
effective prospectus, including the documents incorporated by reference therein
(the "Prospectus"), relating to the Company and the Fund, included in the
Company's Registration Statement, as amended from time to time, filed by the
Company under the 1940 Act and the Securities Act of 1933, as amended, and
subject to the directions of the Company's Board of Directors. Copies of the
documents referred to in the preceding sentence have been furnished to the
Adviser. Any amendments to these documents shall be furnished to the Adviser
promptly.
(2) Subject to the provisions of this Agreement and the 1940 Act and any
exemptions thereto, the Adviser is authorized to appoint one or more qualified
subadvisers (each a "Subadviser") to provide the Fund with certain services
required by this Agreement. Each Subadviser shall have such investment
discretion and shall make all determinations with respect to the investment of
the Fund's assets as shall be assigned to that Subadviser by the Adviser and the
purchase and sale of portfolio securities with respect to those assets and shall
take such steps as may be necessary to implement its decisions. Subject to
Section 2(a)(3) and (4) of this Agreement, the Adviser shall not be responsible
or liable for the investment merits of any decision by a Subadviser to purchase,
hold, or sell a security for the Fund.
(3) Subject to the supervision and direction of the Board of Directors, the
Adviser shall (i) have overall supervisory responsibility for the general
management and investment of the Fund's assets; (ii) determine the allocation of
assets among the Subadvisers, if any; and (iii) have full investment discretion
to make all determinations with respect to the investment of Fund assets not
otherwise assigned to a Subadviser.
(4) The Adviser shall research and evaluate each Subadviser, if any,
including (i) performing initial due diligence on prospective Subadvisers and
monitoring each Subadviser's ongoing performance; (ii) communicating performance
expectations and evaluations to the Subadvisers; and (iii) recommending to the
Company's Board of Directors whether a Subadviser's contract should be renewed,
modified or terminated. The Adviser shall also recommend changes or additions
to the Subadvisers and shall compensate the Subadvisers.
(5) The Adviser shall provide to the Company's officers and Board of
Directors such periodic reports concerning the Fund's business and investments
as the Board of Directors shall reasonably request, and supply the reasons for
making such investments.
(b) Compliance with Applicable Laws and Governing Documents. In the
performance of the Adviser's duties and obligations under this Agreement, the
Adviser shall act in conformity with the Company's Articles and By-Laws and the
Prospectus and with the instructions and directions received from the Company's
Board of Directors and will conform to and comply with the requirements of the
1940 Act, the Internal Revenue Code of 1986, as amended (including the
requirements for qualification as a regulated investment company) and all other
applicable federal and state laws and regulations.
The Adviser acknowledges and agrees that subject to the supervision and
directions of the Company's Board of Directors, the Company shall be solely
responsible for compliance with all disclosure requirements under all applicable
federal and state laws and regulations relating to the Company or the Fund,
including, without limitation, the 1940 Act, and the rules and regulations
thereunder, except that the Adviser shall have liability in connection with
information furnished to the Fund and each Subadviser shall have liability in
connection with information furnished by the Subadviser to the Fund or to the
Adviser.
(c) Consistent Standards. It is recognized that the Adviser will
perform various investment management and administrative services for entities
other than the Company and the Fund; in connection with providing such services,
the Adviser agrees to exercise the same skill and care in performing its
services under this Agreement as the Adviser exercises in performing similar
services with respect to the other fiduciary accounts for which the Adviser has
investment responsibilities.
(d) Brokerage. The Adviser is authorized, subject to the supervision
of the Company's Board of Directors, to establish and maintain accounts on
behalf of the Fund with, and place orders for the purchase and sale of assets
not allocated to a Subadviser, with or through, such persons, brokers or dealers
("brokers") as Adviser may select and negotiate commissions to be paid on such
transactions. In the selection of such brokers and the placing of such orders,
the Adviser shall seek to obtain for the Fund the most favorable price and
execution available, except to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research services, as provided below.
In using its reasonable efforts to obtain for the Fund the most favorable price
and execution available, the Adviser, bearing in mind the Fund's best interests
at all times, shall consider all factors it deems relevant, including price, the
size of the transaction, the nature of the market for the security, the amount
of the commission, if any, the timing of the transaction, market prices and
trends, the reputation, experience and financial stability of the broker
involved, and the quality of service rendered by the broker in other
transactions. Subject to such policies as the Board of Directors may determine,
the Adviser shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of its having
caused the Fund to pay a broker that provides brokerage and research services
(within the meaning of Section 28(e) of the Securities Exchange Act of 1934, as
amended) to the Adviser an amount of commission for effecting the Fund
investment transaction that is in excess of the amount of commission that
another broker would have charged for effecting that transaction if, but only
if, the Adviser determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
overall responsibilities of the Adviser with respect to the accounts as to which
it exercises investment discretion.
It is recognized that the services provided by such brokers may be useful
to the Adviser in connection with the Adviser's services to other clients. On
occasions when the Adviser deems the purchase or sale of a security to be in the
best interests of the Fund as well as other clients of the Adviser, the Adviser,
to the extent permitted by applicable laws and regulations, may, but shall be
under no obligation to, aggregate the securities to be sold or purchased in
order to obtain the most favorable price or lower brokerage commissions and
efficient execution. In such event, allocation of securities so sold or
purchased, as well as the expenses incurred in the transaction, will be made by
the Adviser in the manner the Adviser considers to be the most equitable and
consistent with its fiduciary obligations to the Fund and to such other clients.
It is recognized that in some cases, this procedure may adversely affect the
price paid or received by the Fund or the size of the position obtainable for,
or disposed of by, the Fund.
(e) Securities Transactions. The Adviser and any affiliated person of
the Adviser will not purchase securities or other instruments from or sell
securities or other instruments to the Fund; provided, however, the Adviser or
any affiliated person of the Adviser may purchase securities or other
instruments from or sell securities or other instruments to the Fund if such
transaction is permissible under applicable laws and regulations, including,
without limitation, the 1940 Act and the Advisers Act and the rules and
regulations promulgated thereunder or any exemption therefrom.
The Adviser, including its Access Persons (as defined in subsection (e) of
Rule 17j-1 under the 1940 Act), agrees to observe and comply with Rule 17j-1 and
its Code of Ethics (which shall comply in all material respects with Rule
17j-1), as the same may be amended from time to time. On at least an annual
basis, the Adviser will comply with the reporting requirements of Rule 17j-1,
which may include either (i) certifying to the Company that the Adviser and its
Access Persons have complied with the Adviser's Code of Ethics or (ii)
identifying any violations which have occurred. The Adviser will have also
submitted its Code of Ethics for its initial approval by the Board of Directors
no later than the date of execution of this agreement and subsequently within
six months of any material change thereto.
(f) Books and Records. In accordance with the 1940 Act and the rules
and regulations promulgated thereunder, the Adviser shall maintain separate
books and detailed records of all matters pertaining to the Fund and the Company
(the "Fund's Books and Records"), including, without limitation, a daily ledger
of such assets and liabilities relating thereto and brokerage and other records
of all securities transactions. The Adviser acknowledges that the Fund's Books
and Records are property of the Company. In addition, the Fund's Books and
Records shall be available to the Company at any time upon request and shall be
available for telecopying without delay to the Company during any day that the
Fund is open for business.
3. Expenses. During the term of this Agreement, the Adviser will pay
all expenses incurred by the Adviser in connection with its activities under
this Agreement other than the cost of securities, commodities and other
investments (including brokerage commissions and other transaction charges, if
any) purchased for the Fund. The Adviser shall, at its sole expense, employ or
associate itself with such persons as it believes to be particularly fitted to
assist it in the execution of its duties under this Agreement. The Adviser
shall be responsible for the expenses and costs for the officers of the Company
and the Board of Directors of the Company who are "interested persons" (as
defined in the 0000 Xxx) of the Adviser.
It is understood that the Company will pay all of its own expenses
including, without limitation, (1) all charges and expenses of any custodian or
depository appointed by the Company for the safekeeping of its cash, securities
and other assets, (2) all charges and expenses paid to an administrator
appointed by the Company to provide administrative or compliance services, (3)
the charges and expenses of any transfer agents and registrars appointed by the
Company, (4) the charges and expenses of independent certified public
accountants and of general ledger accounting and internal reporting services for
the Company, (5) the charges and expenses of dividend and capital gain
distributions, (6) the compensation and expenses of Board of Directors of the
Company who are not "interested persons" of the Adviser, (7) brokerage
commissions and issue and transfer taxes chargeable to the Company in connection
with securities transactions to which the Company is a party, (8) all taxes and
fees payable by the Company to federal, state or other governmental agencies,
(9) the cost of stock certificates representing shares of the Company, (10) all
expenses of shareholders' and Board of Directors' meetings and of preparing,
printing and distributing prospectuses and reports to shareholders, (11) charges
and expenses of legal counsel for the Company in connection with legal matters
relating to the Company, including without limitation, legal services rendered
in connection with the Company's existence, financial structure and relations
with its shareholders, (12) insurance and bonding premiums, (13) association
membership dues, (14) bookkeeping and the costs of calculating the net asset
value of shares of the Company's Funds, and (15) expenses relating to the
issuance, registration and qualification of the Company's shares.
4. Compensation. For the services provided and the expenses assumed
with respect to the Fund pursuant to this Agreement, the Adviser will be
entitled to the fee listed for the Fund on Exhibit A. Such fees will be
computed daily and payable monthly at an annual rate based on the Fund's average
daily net assets. The method of determining net assets of the Fund for purposes
hereof shall be the same as the method of determining net assets for purposes of
establishing the offering and redemption price of the Shares as described in the
Fund's Prospectus. If this Agreement shall be effective for only a portion of a
month, the aforesaid fee shall be prorated for the portion of such month during
which this Agreement is in effect.
Notwithstanding any other provision of this Agreement, the Adviser may from
time to time agree not to impose all or a portion of its fee otherwise payable
hereunder (in advance of the time such fee or portion thereof would otherwise
accrue). Any such fee reduction may be discontinued or modified by the Adviser
at any time.
5. Representations and Warranties of Adviser. The Adviser represents
and warrants to the Company as follows:
(a) The Adviser is registered as an investment adviser under the
Advisers Act and is not prohibited under Section 9 of the 1940 Act from acting
as an investment adviser under this Agreement;
(b) The Adviser has filed a notice of exemption pursuant to Rule 4.14
under the Commodity Exchange Act with the Commodity Futures Trading Commission
and the National Futures Association, or is not required to file such
registration.
(c) The Adviser is a business trust duly organized, validly existing and in
good standing under the laws of the State of Delaware with the power to own and
possess its assets and carry on its business as it is now being conducted;
(d) The execution, delivery and performance by the Adviser of this
Agreement are within the Adviser's powers and have been duly authorized by all
necessary action on the part of its shareholders and/or directors, and no action
by or in respect of, or filing with, any governmental body, agency or official
is required on the part of the Adviser for the execution, delivery and
performance by the Adviser of this Agreement, and the execution, delivery and
performance by the Adviser of this Agreement do not contravene or constitute a
default under (i) any provision of applicable law, rule or regulation, (ii) the
Adviser's governing instruments, or (iii) any agreement, judgment, injunction,
order, decree or other instrument binding upon the Adviser; and
(e) The Form ADV of the Adviser previously provided to the Company is a
true and complete copy of the form filed with the SEC and the information
contained therein is accurate and complete in all material respects and does not
omit to state any material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not misleading.
6. Representations and Warranties of the Company. The Company
represents and warrants to the Adviser:
(a) The Company is a corporation duly organized and validly existing
under the laws of the State of Maryland with the power to own and possess its
assets and carry on its business as it is now being conducted;
(b) The Company is registered as an investment company under the 1940
Act and the Fund's shares are registered under the Securities Act; and
(c) The execution, delivery and performance by the Company of this
Agreement are within the Company's powers and have been duly authorized by all
necessary action on the part of the Company and its Board of Directors, and no
action by or in respect of, or filing with, any governmental body, agency or
official is required on the part of the Company for the execution, delivery and
performance by the Adviser of this Agreement, and the execution, delivery and
performance by the Company of this Agreement do not contravene or constitute a
default under (i) any provision of applicable law, rule or regulation, (ii) the
Company's governing instruments, or (iii) any agreement, judgment, injunction,
order, decree or other instrument binding upon the Company.
7. Survival of Representations and Warranties; Duty to Update Information.
All representations and warranties made by the Adviser and the Company pursuant
to Section 5 and 6, respectively, shall survive for the duration of this
Agreement and the parties hereto shall promptly notify each other in writing
upon becoming aware that any of the foregoing representations and warranties are
no longer true.
8. Liability and Indemnification.
(a) Liability. In the absence of willful misfeasance, bad faith or
gross negligence on the part of the Adviser or a reckless disregard of its
obligations and duties hereunder, the Adviser shall not be liable to the Fund or
the Company, for any error of judgment or mistake of law or for any loss in the
case of, or connected with, rendering services hereunder; provided, however,
that nothing herein shall relieve the Adviser from any of its obligations under
applicable law, including, without limitation, the federal and state securities
laws.
(b) Indemnification. The Adviser shall indemnify the Company and its
officers and Board of Directors, for any liability and expenses, including
attorneys fees, which may be sustained as a result of the Adviser's willful
misfeasance, bad faith, gross negligence, reckless disregard of its duties
hereunder or violation of applicable law, including, without limitation, the
federal and state securities laws.
9. Duration and Termination.
(a) Duration. Unless sooner terminated, this Agreement shall continue
until August 15, 2005 with respect to any Fund covered by the Agreement
initially and for an initial two-year period for any Fund subsequently added to
the Agreement and thereafter shall continue automatically for successive annual
periods, provided such continuance is specifically approved at least annually by
the Company's Board of Directors or the vote of the lesser of (a) 67% of the
voting securities of the Fund present at a meeting if holders of more than 50%
of the outstanding voting securities of the Fund are present in person or
represented by proxy or (b) more than 50% of the outstanding voting securities
of the Fund; provided that in either event its continuance also is approved by a
majority of the Company's Board of Directors who are not parties to this
Agreement or "interested persons" (as defined in the 0000 Xxx) of any party to
this Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval.
(b) Termination. Notwithstanding whatever may be provided herein to
the contrary, this Agreement may be terminated at any time, without payment of
any penalty by vote of a majority of the Company's Board of Directors, or by
vote of a majority of the outstanding voting securities (as such term is defined
in the 0000 Xxx) of the Fund, or by the Adviser, in each case, upon not less
than sixty (60) days' written notice to the other party.
This Agreement shall not be assigned (as such term is defined in the 0000
Xxx) and shall terminate automatically in the event of its assignment.
10. Services Not Exclusive. The services furnished by the Adviser
hereunder are not to be deemed exclusive, and the Adviser shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby. It is understood that the action taken by the Adviser
under this Agreement may differ from the advice given or the timing or nature of
action taken with respect to other clients of the Adviser, and that a
transaction in a specific security may not be accomplished for all clients of
the Adviser at the same time or at the same price.
11. Amendment. This Agreement may be amended by mutual consent of the
parties, provided that the terms of each such amendment shall be approved by the
Company's Board of Directors or by a vote of a majority of the outstanding
voting securities of the Fund (if required by the 1940 Act).
12. Confidentiality. Subject to the duties of the Adviser and the
Company to comply with applicable law, including any demand of any regulatory or
taxing authority having jurisdiction, the parties hereto shall treat as
confidential all information pertaining to the Fund and the Company and the
actions of the Adviser and the Fund in respect thereof.
13. Notice. Any notice that is required to be given by the parties to
each other under the terms of this Agreement shall be in writing, delivered, or
mailed postpaid to the other party, or transmitted by facsimile with
acknowledgment of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to the Adviser:
GARTMORE MUTUAL FUND CAPITAL TRUST
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Legal Department
Facsimile: (000) 000-0000
(b) If to the Company:
GARTMORE MUTUAL FUNDS II, INC.
00 Xxxxx Xxxxxxxx
Xxxxxxxxx, XX 00000
Attention: Legal Department
Facsimile: (000) 000-0000
14. Jurisdiction. This Agreement shall be governed by, and construed
and interpreted in accordance with, the law of the State of New York and in
accordance with the 1940 Act. In the case of any conflict, the 1940 Act shall
control.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, all of which shall
together constitute one and the same instrument.
16. Certain Definitions. For the purposes of this Agreement,
"interested person," "affiliated person," "assignment" shall have their
respective meanings as set forth in the 1940 Act, subject, however, to such
exemptions as may be granted by the SEC.
17. Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
18. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision or applicable law, the remainder of the
Agreement shall not be affected adversely and shall remain in full force and
effect.
19. Gartmore Mutual Funds II, Inc. (formerly GAMNA Series Fund, Inc.)
and its Board of Directors. The terms "Gartmore Mutual Funds II, Inc." and the
"Board of Directors of Gartmore Mutual Funds II, Inc." refer respectively to the
Company created and the Board of Directors, as directors but not individually or
personally, acting from time to time under the Articles of Incorporation of the
Company dated as of March 12, 1999, as has been or may be amended from time to
time, and to which reference is hereby made and a copy of which is on file at
the office of the Secretary of State of Maryland and elsewhere as required by
law, and to any and all amendments thereto so filed or hereafter filed. The
obligations of the Company entered into in the name or on behalf thereof by any
of Gartmore Mutual Funds II, Inc.'s Board of Directors, representatives, or
agents are not made individually, but only in their capacities with respect to
Gartmore Mutual Funds II, Inc. Such obligations are not binding upon any of the
Board of Directors, shareholders, or representatives of the Company personally,
but bind only the assets of the Company. All persons dealing with any series of
Shares of the Company must look solely to the assets of the Company belonging to
such series for the enforcement of any claims against the Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first written above.
ADVISER
GARTMOR MUTUAL FUND CAPITAL TRUST
By:_____________________________________
Name:___________________________________
Title:__________________________________
COMPANY
GARMTORE MUTUAL FUNDS II, INC.
(formerly GAMNA Series Fund, Inc.)
By:_____________________________________
Name:___________________________________
Title:__________________________________
EXHIBIT A
GARMTORE MUTUAL FUNDS II, INC.
(formerly GAMNA Series Funds, Inc.)
INVESTMENT ADVISORY AGREEMENT
FUND(S) OF THE COMPANY ADVISORY FEES
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Gartmore Focus Fund (formerly GAMNA Focus Fund) 0.55% of the average daily
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net assets of the first $1 billion
0.50% of the average daily
net assets greater than $1 billion
Dated as of August 15, 2003.
