SUBADVISORY AGREEMENT JOHN HANCOCK FUNDS II - INTERNATIONAL VALUE FUND
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XXXXXXX FUNDS II - INTERNATIONAL VALUE FUND
This SUBADVISORY AGREEMENT made as of December 14, 2007 (this “Agreement”) by and between
XXXXXXXXX INVESTMENT COUNSEL, LLC, a Delaware limited liability company (“TIC”) and XXXXXXXXX
GLOBAL ADVISORS LIMITED (‘TGAL”), a Bahamian corporation located in Nassau.
WITNESSETH
WHEREAS, TIC and TGAL are each registered as an investment adviser under the Investment
Advisers Act of 1940, as amended (the “Advisers Act”), and are engaged in the business of
supplying investment management services, each as an independent contractor; and
WHEREAS, TIC and TGAL are affiliates and are under common control and management; and
WHEREAS, TIC, pursuant to a Subadvisory Agreement with XXXX XXXXXXX INVESTMENT MANAGEMENT
SERVICES, LLC (the “Client”) dated the 17th day of October, 2005 (the “Investment
Subadvisory Agreement”), has been retained to render investment advisory services with respect to
certain assets of the International Value Fund, which is a separate series of Xxxx Xxxxxxx Funds II
(the “Account”); and
WHEREAS, E. Xxxxxx Xxxxx, a portfolio manager for the Account, has relocated to Nassau,
Bahamas and is employed by TGAL, and TIC wishes to enter into this agreement with TGAL to enable
Xx. Xxxxx to continue to perform his responsibilities as a portfolio manager of the Account during
his employment with TGAL; and
WHEREAS, E. Xxxxxx Xxxxx continues to serve as an officer of TIC, but performs investment
advisory services as an employee of TGAL.
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. TIC hereby retains TGAL, and TGAL hereby accepts such engagement, to
furnish certain investment advisory services with respect to the assets of the Account, as more
fully set forth herein.
(a) Subject to the overall policies, control, direction and review of the Client and to the
instructions and supervision of TIC, TGAL agrees to provide certain investment advisory services
with respect to securities and investments and cash equivalents in the Account. TIC will continue
to have full responsibility for all investment advisory services provided to the Account. TIC
acknowledges that the only services that TGAL will provide under this agreement are the portfolio
management services of E. Xxxxxx Xxxxx while he remains employed by TGAL.
(b) Both TGAL and TIC may place all purchase and sale orders on behalf of the Account. The
placement of these orders will take place in the State of Florida or in Nassau.
(c) Unless otherwise instructed by TIC or the Client, and subject to the provisions of this
Agreement and to any guidelines or limitations specified from time to time by TIC or by the
Client, TGAL shall report daily all transactions effected by TGAL on behalf of the Account to TIC
and to other entities as reasonably directed by TIC or the
Client.
(d) For the term of this Agreement, TGAL shall provide TIC with a report of its activities
hereunder on behalf of the Account and its proposed strategy as TIC may reasonably request from
time to time, all in such form and detail as requested by TIC. E. Xxxxxx Xxxxx shall also be
available to respond to inquiries from TIC or the Client as either may reasonably request.
(e) In performing its services under this Agreement, TGAL shall adhere to the Account’s
investment guidelines (as described in the Investment Subadvisory Agreement and the disclosure
documents of the Account), as may be amended from time to time, and shall comply with the
provisions of the Advisers Act and the rules and regulations of the Securities and Exchange
Commission (the “SEC”) thereunder in all material respects.
(f) In carrying out its duties hereunder, TGAL shall comply with all reasonable instructions
of the Account or TIC in connection therewith. Such instructions may be given by letter, telex,
telefax or telephone confirmed by telex, by TIC, the Client or by any other person authorized by
the Client, provided a certification of such authorization has been supplied to TGAL.
2. In performing the services described above, TGAL shall use its best efforts to obtain for
the Account the most favorable price and execution available. Subject to prior authorization of
appropriate policies and procedures by the Client, TGAL may, to the extent authorized by law and
in accordance with the terms of the Investment Subadvisory Agreement, cause the Account to pay a
broker who provides brokerage and research services an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission another broker would have
charged for effecting that transaction, in recognition of the brokerage and research services mat
such broker provides, viewed in terms of either the particular transaction or TGAL’s overall
responsibilities with respect to accounts managed by TGAL. TGAL may use for the benefit of its
other clients, or make available to companies affiliated with TGAL or to its Directors for the
benefit of TGAL’s clients, any such brokerage and research services that TGAL obtains from brokers
or dealers. To the extent authorized by applicable law, TGAL shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or otherwise solely by reason of
such action.
3. (a) TIC shall pay to TGAL a fee equal to 60% of the advisory fee paid to TIC under the
Investment Subadvisory Agreement, which fee shall be payable in the U.S.
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dollars, on the first business day of each calendar quarter as compensation for the services to be
rendered and obligations assumed by TGAL during the preceding quarter. The advisory fee under this
Agreement shall be payable on the first business day of the first calendar quarter following the
effective day of this Agreement and shall be reduced by the amount of any advance payments made by
TIC relating to the previous quarter.
(b) If this Agreement is terminated prior to the end of any calendar quarter, the quarterly
fee shall be prorated for the portion of any quarter in which this Agreement is in effect which is
not a complete quarter according to the proportion which the number of calendar days in the quarter
during which the Agreement is in effect bears to the total number of calendar days in the quarter,
and shall be payable within 10 days after the date of termination.
4. It is understood that the services provided by TGAL are not to be deemed exclusive. TIC
acknowledges that TGAL may have investment responsibilities, render investment advice, or perform
other investment advisory services to other investment clients, which may invest in the same type
of securities as the Account (collectively, “TGAL Advisory Clients”). TIC agrees that TGAL may give
advice or exercise investment responsibility and take such other action with respect to such TGAL
Advisory Clients that may differ from advice given or the timing or nature of action taken with
respect to the Account. In providing services, TGAL may use information furnished by others to TIC
and TGAL in providing services to other TGAL Advisory Clients.
5. TGAL agrees to use its best efforts in performing the services to be provided by it
pursuant to this Agreement.
6. During the term of this Agreement, TGAL will pay all expenses incurred by it in connection
with the services to be provided by it under this Agreement other than the cost of securities
(including brokerage commissions, if any) purchased for the Account. The Account and TIC will be
responsible for all of their respective expenses and liabilities.
7. TGAL shall, unless otherwise expressly provided and authorized, have no authority to act
for or represent TIC, the Client or the Account in any way, or in any way be deemed an agent for
TIC, the Client or the Account.
8. TGAL will treat confidentially and as proprietary information of the Client and the
Account all records and other information relative to the Account, and will not use such records
and information for any purpose other than performance of its responsibilities and duties
hereunder, except after prior notification to and approval in writing by TIC, which approval shall
not be unreasonably withheld and may not be withheld, where TGAL may be exposed to civil or
criminal contempt proceedings for failure to comply when requested to divulge such information by
duly constituted authorities, or when so requested by the Client or the Account.
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9. Should TGAL desire to undertake litigation against an issuer on behalf of the Account,
TGAL shall obtain the prior written consent of the Client to undertake such litigation.
10. This Agreement shall automatically terminate in the event that E. Xxxxxx Xxxxx ceases to
be employed by TGAL, for whatever reason.
11. (a) Notwithstanding the foregoing, this Agreement shall become effective as of the date
first written above and shall continue in effect for a period more than two years from the date of
its execution only so long as such continuance is specifically approved at least annually by either
(i) the Board of Trustees of Xxxx Xxxxxxx Funds II or (ii) a vote of a majority of the
International Value Fund’s outstanding voting securities, provided that in either event the
continuance is also approved by a vote of the majority of the Board of Trustees who are not
interested persons of any party to this Agreement, by a vote cast at a meeting called for the
purpose of voting on such approval. This Agreement may be terminated at any time without payment of
penalty: (i) by the Board of Trustees of Xxxx Xxxxxxx Funds II or by a vote of a majority of the
outstanding voting securities of the International Value Fund on not more than sixty days’ prior
written notice, or (ii) by the Client or either party hereto upon at least sixty days’ prior
written notice to the other parties. This Agreement will terminate automatically upon its
assignment, upon any termination of the Investment Management Agreement or in the event of its
assignment, and upon any termination of the Investment Sub-Advisory Agreement or in the event of
its assignment. The terms “interested person,” “assignment” and “vote of a majority of the
outstanding voting securities” shall have the meanings set forth in the Investment Company Act of
1940, as amended.
(b) This Agreement may be amended by the parties only if such amendment is specifically
approved by the vote of a majority of the Trustees of Xxxx Xxxxxxx Funds II and by the vote of a
majority of the Trustees who are not interested persons of any party to this Agreement cast in
person at a meeting called for the purpose of voting on such approval. Any required shareholder
approval shall be effective with respect to the Account if a majority of the outstanding voting
securities of the Account vote to approve the amendment, notwithstanding that the amendment may
not have been approved by a majority of the outstanding voting securities of (a) any other
portfolio affected by the amendment or (b) all the portfolios of Xxxx Xxxxxxx Funds II.
12. (a) In
the absence of willful misfeasance, bad faith, gross negligence, or reckless disregard of its obligations or duties hereunder on the part of TGAL, neither
TGAL nor any of its directors, officers, employees or affiliates shall be subject to
liability
to TIC for any error of judgement or mistake of law or any other 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 Account.
(b) Notwithstanding paragraph 11(a), to the extent that TIC is found by a court of competent
jurisdiction, or the SEC or any other regulatory agency to be liable to the Client or the Account
(a “liability”), for any acts undertaken by TGAL pursuant to authority delegated as described in
Xxxxxxxxx 00(x), XXXX shall indemnify TIC and each
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of its affiliates, officers, directors and employees (each an “Indemnified Party”) harmless from,
against, for and in respect of all losses, damages, costs and expenses incurred by an Indemnified
Party with respect to such liability, together with all legal and other expenses reasonably
incurred by any such Indemnified Party, in connection with such liability.
13. In compliance with the requirements of the Advisers Act, TGAL hereby agrees that all
records which it maintains for the Account are the property of the Client or the Account and
further agrees to surrender promptly to TIC or the Client, or to any third party at either’s
direction, any of such records upon the TIC’s request. TGAL further agrees to preserve for periods
prescribed by the Advisers Act the records required to be maintained under the Advisers Act.
14. Upon termination of TGAL’s engagement under this Agreement or at the Client’s direction,
TGAL shall forthwith deliver to TIC, the Client, or to any third party at TIC’s direction, all
records, documents and books of accounts which are in the possession or control of TGAL and relate
directly and exclusively to the performance by TGAL of its obligations under this Agreement;
provided, however, that TGAL shall be permitted to keep such records or copies thereof for such
periods of time as are necessary to comply with applicable laws, in which case TGAL shall provide
TIC, the Client, or a designated third party with copies of such retained documents unless
providing such copies would contravene such rules, regulations and laws.
Termination of this Agreement or of TGAL’s engagement hereunder shall be without prejudice to
the rights and liabilities created hereunder prior to such termination.
15. If any provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, in whole or in part, the other provisions hereof shall remain in full
force and effect. Invalid provisions shall, in accordance with the intent and purpose of this
Agreement, be replaced by such valid provisions that in their economic effect come as closely as
legally possible to such invalid provisions.
16. Any notice or other communication required to be given pursuant to this Agreement shall
be in writing and given by personal delivery or by facsimile transmission and shall be effective
upon receipt. Notices and communications shall be given:
| to TGAL: | Box N-7759 Xxxxxx Xxx | |||
| Nassau, Bahamas Facsimile: 000-000-0000 | ||||
| to TIC: | 000 Xxxx Xxxxxxx Xxxxxxxxx | |||
| Xxxxx 0000 | ||||
| Xxxx Xxxxxxxxxx, Xxxxxxx 00000 | ||||
| Facsimile: 000-000-0000 |
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17. This Agreement shall be interpreted in accordance with and governed by the laws of the
State of Florida.
18. Notwithstanding any other provision of this Agreement, the rights and duties of TGAL
shall in all cases be subject to the provisions of the Investment Subadvisory Agreement and, in
the event of any conflict between the provisions of this Agreement and the provisions of the
Investment Subadvisory Agreement, the provisions of the Investment Subadvisory Agreement shall
prevail.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
duly authorized officers.
| XXXXXXXXX GLOBAL ADVISORS LIMITED |
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| By: | /s/Xxxxxxx X. XxXxxxx | |||
| Xxxxxxx X. XxXxxxx | ||||
| Executive Vice President and Secretary | ||||
| XXXXXXXXX INVESTMENT COUNSEL, LLC |
||||
| By: | /s/Xxxx X. Xxxxx | |||
| Xxxx X. Xxxxx | ||||
| President | ||||
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