EXHIBIT 99(d)(2)
THE LAZARD FUNDS, INC.
INVESTMENT MANAGEMENT AGREEMENT
Agreement, made the 13th day of January, 2003, between The
Lazard Funds, Inc., a Maryland corporation (the "Fund"), on behalf of the
portfolios named on Schedule 1 hereto, as such Schedule may be revised from time
to time (each, a "Portfolio"), and Lazard Asset Management LLC, a New York
limited liability company (the "Investment Manager").
W I T N E S S E T H
WHEREAS, the Fund is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), authorized to reclassify and issue any unissued shares to any number of
additional classes or series each having its own investment objective, policies
and restrictions; and
WHEREAS, the Fund desires to retain the Investment Manager to
render investment advisory services to each Portfolio and the Investment Manager
is willing to render such investment advisory services;
NOW, THEREFORE, the parties agree as follows:
1. The Fund hereby appoints the Investment Manager to
act as manager of each Portfolio for the period and on the terms set forth in
this Agreement. The Investment Manager accepts such appointment and agrees to
render the services herein described, for the compensation herein provided.
2. Subject to the supervision of the Board of Directors
of the Fund, the Investment Manager shall manage the investment operations of
each Portfolio and the assets of each Portfolio, including the purchase,
retention and disposition thereof, in accordance with the Portfolio's investment
objective, policies and restrictions as stated in the Fund's Prospectus
(hereinafter defined) and subject to the following understandings:
(a) The Investment Manager shall provide supervision
of each Portfolio's investments and determine from time to
time what investments or securities will be purchased,
retained, sold or loaned by the Portfolio, and what portion of
the assets will be invested or held uninvested as cash.
(b) The Investment Manager shall use its best
judgment in the performance of its duties under this
Agreement.
(c) The Investment Manager, in the performance of its
duties and obligations under this Agreement, shall act in
conformity with the Articles of Incorporation, By-Laws and
Prospectus of the Fund (each hereinafter defined) and with the
instructions and directions of the Board of Directors of the
Fund and will conform to and comply with the requirements of
the 1940 Act and all other applicable federal and state laws
and regulations.
(d) The Investment Manager shall determine the
securities to be purchased or sold by each Portfolio and will
place orders pursuant to its determinations with or through
such persons, brokers or dealers (including Lazard Freres &
Co. LLC) to carry out the policy with respect to brokerage as
set forth in the Fund's Prospectus or as the Fund's Board of
Directors may direct from time to time. In providing a
Portfolio with investment supervision, it is recognized that
the Investment Manager will give primary consideration to
securing the most favorable price and efficient execution.
On occasions when the Investment Manager deems the
purchase or sale of a security to be in the best interest of a
Portfolio as well as other clients, the Investment Manager, to
the extent permitted by applicable laws and regulations, may
aggregate the securities to be so sold or purchased in order
to obtain the most favorable price or lower brokerage
commissions and 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
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the Investment Manager in the manner it considers to be the
most equitable and consistent with its fiduciary obligations
to the Portfolio and to such other clients.
(e) The Investment Manager shall render to the Fund's
Board of Directors such periodic and special reports with
respect to each Portfolio's securities transactions as the
Board may reasonably request.
(f) The Investment Manager shall provide the Fund's
custodian on each business day with information relating to
all transactions concerning a Portfolio's assets.
3. The Fund has delivered to the Investment Manager
copies of each of the following documents and will deliver to it all future
amendments and supplements, if any:
(a) Articles of Incorporation of the Fund, filed with
the State Department of Assessments and Taxation of Maryland
(such Articles of Incorporation, as in effect on the date
hereof and as amended from time to time, are herein called the
"Articles of Incorporation");
(b) By-Laws of the Fund (such By-Laws, as in effect
on the date hereof and as amended from time to time, are
herein called the "By-Laws");
(c) Resolutions of the Board of Directors of the Fund
authorizing the appointment of the Investment Manager and
approving the form of this Agreement;
(d) Registration Statement under the 1940 Act and the
Securities Act of 1933, as amended, on Form N-lA (the
"Registration Statement"), as filed with the Securities and
Exchange Commission (the "Commission") relating to the Fund
and shares of the Fund's Common Stock;
(e) Notification of Registration of the Fund under
the 1940 Act on Form N-8A as filed with the Commission; and
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(f) Prospectus of the Fund (such prospectus and the
statement of additional information, each as currently in
effect and as amended or supplemented from time to time, being
herein called the "Prospectus").
4. The Investment Manager shall authorize and permit any
of the general members, officers and employees of the Investment Manager, and
any of the general members, directors, officers and employees of any of its
affiliates, who may be elected as Directors or officers of the Fund to serve in
the capacities in which they are elected. All services to be furnished by the
Investment Manager under this Agreement may be furnished through the medium of
any such general members, directors, officers or employees of the Investment
Manager or any of its affiliates.
5. The Investment Manager shall keep the books and
records of the Fund and the Portfolios required to be maintained by it pursuant
to this Agreement and by the Fund pursuant to the 1940 Act. The Investment
Manager agrees that all records which it maintains for the Fund or the
Portfolios are the property of the Fund or the relevant Portfolio and it will
surrender promptly to the Fund or such Portfolio any of such records upon the
request of the Fund or such Portfolio. The Investment Manager further agrees to
preserve such records as prescribed by Rule 3la-2 under the 1940 Act.
6. The Investment Manager will bear all of its expenses
incurred in connection with the services to be rendered by the Investment
Manager to the Portfolios under this Agreement, including without limitation,
the compensation of all personnel of the Fund and the Investment Manager, except
the fees of Directors of the Fund who are not affiliated persons of the
Investment Manager or its affiliates. The Fund or the relevant Portfolio assumes
and will pay all other expenses in connection with the Fund or such Portfolio
not assumed by the Investment Manager, including but not limited to:
(a) the fees and expenses of Directors who are not
affiliated persons of the Investment Manager or any of its
affiliates;
(b) the fees and expenses of the Fund's
administrator, if any;
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(c) the fees and expenses of
the custodian which relate to (i) the custodial function and
the recordkeeping connected therewith, (ii) the maintenance of
the required accounting records of the Fund, (iii) the pricing
of the shares of the Portfolio, including the cost of any
pricing service or services which may be retained pursuant to
the authorization of the Directors of the Fund and (iv) for
both mail and wire orders, the cashiering function in
connection with the issuance and redemption of the Portfolio's
securities;
(d) the fees and expenses of the Fund's transfer
agent, which may be the custodian, which relate to the
maintenance of, and communications with respect to, each
stockholder account;
(e) the charges and expenses of legal counsel and
independent accountants for the Fund;
(f) brokers' commissions, any issue or transfer taxes
and any other charges in connection with portfolio
transactions on behalf of the Portfolio;
(g) all taxes and corporate fees payable by the Fund
or the Portfolio to federal, state or other governmental
agencies, and all costs of maintaining corporate existence;
(h) the allocable share of the fees of any trade
association of which the Fund may be a member;
(i) the cost of share certificates, if any,
representing shares of the Portfolio;
(j) the fees and expenses involved in registering and
maintaining registrations of the Fund and of its shares with
the Commission and, if required, qualifying the shares of the
Portfolio under state securities laws, including the
preparation and printing of the Fund's registration statements
and Prospectuses for filing under federal and state securities
laws for such purposes;
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(k) all expenses of stockholders' and Directors'
meetings and of preparing, printing and mailing Prospectuses
and reports to stockholders in quantities required for
distribution to the stockholders, and communications expenses
with respect to individual stockholder accounts;
(l) the cost of obtaining fidelity insurance and any
liability insurance covering the Directors and officers of the
Fund as such;
(m) litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of
the Fund's business;
(n) expenses of issue, repurchase or redemption of
shares of the Fund;
(o) fees payable to the Investment Manager hereunder;
(p) interest expenses of the Fund; and
(q) all other expenses properly payable by the Fund.
7. For the services provided to the Portfolios and the
expenses assumed pursuant to this Agreement, each Portfolio will pay monthly to
the Investment Manager as full compensation therefor a management fee, accrued
daily, at the annual rate set forth opposite the Portfolio's name on Schedule 1
hereto.
8. The Investment Manager shall not be liable for any
error of judgment or for any loss suffered by a Portfolio in connection with the
matters to which this Agreement relates, except a loss resulting from a breach
of fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the 0000 Xxx) or a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement. The federal securities laws may impose liabilities even, under
certain circumstances, on persons who act in good faith, and therefore nothing
herein shall in any way constitute a waiver or limitation of any right which a
Portfolio may have under any federal securities law.
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9. As to each Portfolio, this Agreement shall continue
until the date set forth opposite such Portfolio's name on Schedule 1 hereto
(the "Reapproval Date") and thereafter shall continue automatically for
successive annual periods ending on the day of each year set forth opposite the
Portfolio's name on Schedule 1 hereto (the "Reapproval Day"), provided such
continuance is specifically approved at least annually by (i) the Fund's Board
of Directors or (ii) vote of a majority (as defined in the 0000 Xxx) of such
Portfolio's outstanding voting securities, provided that in either event its
continuance also is approved by a majority of the Fund's Directors who are not
"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. As to each Portfolio, this Agreement may be terminated at any
time, without payment of penalty by the Portfolio, on 60 days' written notice to
the Investment Manager, by vote of the Board of Directors of the Fund, or by
vote of a majority (as defined in the 0000 Xxx) of the outstanding voting
securities of such Portfolio. This Agreement shall automatically terminate, as
to the relevant Portfolio, in the event of its assignment (as defined in the
1940 Act).
10. Nothing in this Agreement shall limit or restrict the
right of any general member, officer or employee of the Investment Manager or
any general member, director, officer or employee of any of its affiliates who
may also be a Director, officer or employee of the Fund to engage in any other
business or to devote his or her time and attention in part to the management or
other aspects of any business, whether of a similar or dissimilar nature, nor
limit or restrict the right of the Investment Manager to engage in any other
business or to render services of any kind to any other corporation, firm,
individual or association.
11. During the term of this Agreement, the Fund agrees to
furnish to the Investment Manager at its principal office all Prospectuses,
proxy statements, reports to stockholders, sales literature, or other material
prepared for distribution to stockholders of the Fund or the public, which refer
in any way to the Investment Manager, prior to use thereof and not to use such
material if the Investment Manager reasonably objects in writing within five
business days (or such other time as may be mutually agreed) after receipt
thereof. In the event of termination of this Agreement, the Fund will continue
to
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furnish to the Investment Manager copies of any of the above-mentioned
materials which refer in any way to the Investment Manager. The Fund shall
furnish or otherwise make available to the Investment Manager such other
information relating to the business affairs of the Fund as the Investment
Manager at any time, or from time to time, reasonably requests in order to
discharge its obligations hereunder.
12. This Agreement may be amended by mutual consent, but
the consent of the Fund must be approved in conformity with the requirements of
the 1940 Act.
13. Any notice or other communication required to be
given pursuant to this Agreement shall be deemed duly given if delivered or
mailed by registered mail, postage prepaid, (1) to the Investment Manager at 00
Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Secretary, or (2) to the
Fund at 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: President.
14. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
THE LAZARD FUNDS, INC.
By:
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Name:
Title:
LAZARD ASSET MANAGEMENT LLC
By:
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Name:
Title:
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SCHEDULE 1
Annual Fee
as a
Percentage of Average
Daily Reapproval Reapproval
Name of Portfolio Net Assets Date Day
----------------- ---------- ---------- ----------
Bond Portfolio .50% December 31, 2003 December 31
Emerging Markets Portfolio 1.00% December 31, 2003 December 31
High Yield Portfolio .75% December 31, 2003 December 31
International Equity Portfolio .75% December 31, 2003 December 31
International Equity Select Portfolio .85% December 31, 2003 December 31
International Small Cap Portfolio .75% December 31, 2003 December 31
Mid Cap Portfolio .75% December 31, 2003 December 31
Small Cap Portfolio .75% December 31, 2003 December 31
U.S. Strategic Equity Portfolio .85% December 30, 2006 December 30
As Revised: December 30, 2004
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