INVESTMENT ADVISORY AGREEMENT
Exhibit (d) (3)
AGREEMENT, made the 17th day of February, 2012, between Allianz Funds, a Massachusetts
business trust (the “Trust”), on behalf of the Allianz Global Investors Money Market Fund (the
“Fund”), a series of the Trust, and Allianz Global Investors Fund Management LLC (the “Adviser”), a
Delaware limited liability company.
WHEREAS, the Trust is registered with the Securities and Exchange Commission (“SEC”) as an
open-end management investment company under the Investment Company Act of 1940, as amended (the
“1940 Act”); and
WHEREAS, the Trust is authorized to issue shares of beneficial interest in separate series
with each such series representing interests in a separate portfolio of securities and other
assets; and
WHEREAS, the Trust has established multiple series, including the Fund; and
WHEREAS, the Adviser is registered with the SEC as an investment adviser under the Investment
Advisers Act of 1940; and
WHEREAS, the Adviser is an affiliate of other companies that render investment advisory
services and are registered as investment advisers under the Investment Advisers Act of 1940; and
WHEREAS, the Trust, on behalf of the Fund, desires to retain the Adviser so that it and its
affiliates will render investment advisory services to the Fund in the manner and on the terms
hereinafter set forth; and
WHEREAS, the Adviser is willing to render such services and engage its affiliates and others
to render such services to the Fund;
NOW, THEREFORE, in consideration of the premises, the promises, and mutual covenants herein
contained, it is agreed between the parties as follows:
1. Appointment. The Trust, on behalf of the Fund, hereby appoints the Adviser to provide
investment advisory services to the Fund for the period and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to render the services herein set forth
for the compensation herein provided.
2. Duties. Subject to the general supervision of the Board of Trustees of the Trust (the
“Board of Trustees”), the Adviser shall provide general, overall advice and guidance with respect
to the Fund and provide advice and guidance to the Trust’s Trustees. In discharging these duties
the Adviser shall, either directly or indirectly through others (“Portfolio Managers”) engaged by
it pursuant to Section 3 of this Agreement, provide a continuous investment program for the Fund
and determine the composition of the assets of the Fund, including determination of the purchase,
retention, or sale of the securities, cash, and other investments for the Fund. The Adviser (or
Portfolio Manager) will provide investment research and analysis, which may consist of a
computerized investment methodology, and will conduct a continuous program of evaluation,
investment, sales, and reinvestment of the Fund assets by determining the securities and other
investments that shall be purchased, entered into, sold, closed, or exchanged for the Fund, when
these transactions should be executed, and what portion of the assets of the Fund should be held in
the various securities and other investments in which it may invest, and the Adviser (or Portfolio
Manager) is hereby authorized to execute and perform such services on behalf of the Fund. Following
commencement of operations of the Fund, the Adviser (or Portfolio Manager) initially intends to
invest, under ordinary circumstances substantially all of the Fund’s assets in the State Street
Money Market Portfolio, a series of State Street Master Fund, or another master portfolio (the
“Master Portfolio”). In its discretion, or upon the direction of the Fund, the Adviser (or
Portfolio Manager) may
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withhold some portion of the Fund’s assets from investment in the Master
Fund for liquidity, temporary cash management or other purposes or may, subject to the
authorization and general supervision of the Board of Trustees, actively invest some or all of the
Fund’s assets in securities other than shares of the Master Portfolio. The Adviser (or Portfolio
Manager) may invest such assets in investments suitable for purchase by the Master Fund or in any
other investment deemed suitable by the Adviser (or Portfolio Manager). To the extent permitted by
the investment policies of the Fund, the Adviser (or Portfolio Manager) shall make decisions for
the Fund as to foreign currency matters and make determinations as to the retention or disposition
of foreign currencies or securities or other instruments denominated in foreign currencies or
derivative instruments based upon foreign currencies, including forward foreign currency contracts
and options and futures on foreign currencies, and shall execute and perform the same. The Adviser
(or Portfolio Manager) will provide the services under this Agreement for the Fund in accordance
with the Fund’s investment objective or objectives, investment policies, and investment
restrictions as stated in the Trust’s Registration Statement filed on Form N-1A with the SEC as
supplemented or amended from time to time.
In performing these duties, the Adviser, either directly or indirectly through others selected
by the Adviser:
a. Shall conform with the 1940 Act and all rules and regulations thereunder (including
Rule 2a-7), all other applicable federal and state laws and regulations, with any applicable
procedures adopted by the Board of Trustees, and with the provisions of the Trust’s
Registration Statement filed on Form N-1A as supplemented or amended from time to time.
b. Shall use reasonable efforts to manage the Fund so that it qualifies as a regulated
investment company under Subchapter M of the Internal Revenue Code.
c. Is responsible, in connection with its responsibilities under this Section 2, for
decisions to buy and sell securities and other investments for the Fund, for broker-dealer and
futures commission merchant (“FCM”) selection, and for negotiation of commission rates. The
Adviser’s (or Portfolio Manager’s) primary consideration in effecting a security or other
transaction will be to obtain the best execution for the Fund, taking into account the factors
specified in the Prospectus and Statement of Additional Information for the Fund, as they may
be amended or supplemented from time to time. Subject to such policies as the Board of
Trustees may determine and consistent with Section 28(e) of the Securities Exchange Act of
1934, the Adviser (or Portfolio Manager) 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 or dealer, acting as agent, for effecting a portfolio
transaction at a price in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Adviser (or Portfolio Manager) determines
in good faith that such amount of 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 Adviser’s (or Portfolio Manager’s) overall responsibilities
with respect to the Fund and to their other clients as to which they exercise investment
discretion. To the extent consistent with these standards, and in accordance with Section
11(a) of the Securities Exchange Act of 1934 and Rule 11a2-(T) thereunder, and subject to any
other applicable laws and regulations, the Adviser (or Portfolio Manager) is further
authorized to allocate the orders placed by it on behalf of the Fund to the Adviser (or
Portfolio Manager) if it is registered as a broker or dealer with the SEC, to its affiliate
that is registered as a broker or dealer with the SEC, or to such brokers and dealers that
also provide research or statistical research and material, or other services to the Fund or
the Adviser (or Portfolio Manager). Such allocation shall be in such amounts and proportions
as the Adviser shall determine consistent with the above standards, and, upon request, the
Adviser will report on said allocation regularly to the Board of Trustees of the Trust
indicating the broker-dealers to which such allocations have been made and the basis therefor.
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d. May, on occasions when the purchase or sale of a security is deemed to be in the best
interest of the Fund as well as any other investment advisory clients, to the extent permitted
by applicable laws and regulations, but shall not be obligated to, aggregate the securities to
be so sold or purchased with those of its other clients where such aggregation is not
inconsistent with the policies set forth in the Registration Statement. 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 Adviser (or Portfolio Manager) in a manner that is fair and
equitable in the judgment of the Adviser (or Portfolio Manager) in the exercise of its
fiduciary obligations to the Fund and to such other clients.
e. Will, in connection with the purchase and sale of securities for the Fund, arrange for
the transmission to the custodian for the Fund on a daily basis, such confirmation, trade
tickets, and other documents and information, including, but not limited to, Cusip, Sedol, or
other numbers that identify securities to be purchased or sold on behalf of the Fund, as may
be reasonably necessary to enable the custodian to perform its administrative and
recordkeeping responsibilities with respect to the Fund, and, with respect to portfolio
securities to be purchased or sold through the Depository Trust Company, will arrange for the
automatic transmission of the confirmation of such trades to the Fund’s custodian.
f. Will make available to the Fund, promptly upon request, any of the Fund’s investment
records and ledgers as are necessary to assist the Fund to comply with requirements of the
1940 Act and the Investment Advisers Act of 1940, as well as other applicable laws, and will
furnish to regulatory authorities having the requisite authority any information or reports in
connection with such services which may be requested in order to ascertain whether the
operations of the Fund are being conducted in a manner consistent with applicable laws and
regulations.
g. Will regularly report to the Trust’s Board of Trustees on the investment program for
the Fund and the issuers and securities represented in the Fund’s portfolio, and will furnish
the Trust’s Board of Trustees with respect to the Fund such periodic and special reports as
the Trustees may reasonably request.
3. Appointment of Portfolio Managers. The Adviser may, at its expense and subject to its
supervision, engage one or more persons, including, but not limited to, subsidiaries and affiliated
persons of the Adviser, to render any or all of the investment advisory services that the Adviser
is obligated to render under this Agreement including, for the Fund and, to the extent required by
applicable law, subject to the approval of the Board of Trustees and/or the shareholders of the
Fund, a person to render investment advisory services including the provision of a continuous
investment program and the determination of the composition of the securities and other assets of
the Fund.
4. Documentation. The Fund has delivered copies of each of the following documents to the
Adviser and will deliver to it all future amendments and supplements thereto, if any:
a. the Fund’s Registration Statement as filed with the SEC and any amendments thereto;
b. exhibits, powers of attorneys, certificates and any and all other documents relating
to or filed in connection with the Fund’s Registration Statement described above; and
c. the Master Portfolio’s Registration Statement as filed with the SEC and any amendments
thereto.
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The Adviser has delivered to the Fund copies of the Adviser’s Uniform Application for
Investment Adviser Registration on Form ADV, as filed with the SEC. The Adviser agrees to provide
the Fund with current copies of the Adviser’s and the Portfolio Managers’ Forms ADV, and any
supplements or amendments thereto, as filed with the SEC.
5. Records. The Adviser agrees to maintain and to preserve for the periods prescribed under
the 1940 Act any such records as are required to be maintained by the Adviser with respect to the
Fund by the 1940 Act. The Adviser further agrees that all records which it maintains for the Fund
are the property of the Fund and it will promptly surrender any of such records upon request.
6. Expenses. During the term of this Agreement, the Adviser will pay all expenses incurred
by it in connection with its obligations under this Agreement, except such expenses as are assumed
by the Fund under this Agreement and any expenses that are paid by a party other than the Trust, on
behalf of the Fund, under the terms of any other agreement to which the Trust, on behalf of the
Fund, is a party or a third-party beneficiary. The Adviser further agrees to pay or cause its
subsidiaries or affiliates to pay all salaries, fees, and expenses of any officer or Trustee of the
Trust who is an officer, director, or employee of the Adviser or a subsidiary or affiliate of the
Adviser. The Adviser assumes and shall pay for maintaining its staff and personnel and shall, at
its own expense provide the equipment, office space, and facilities necessary to perform its
obligations under this Agreement. The Adviser shall not, under the terms of this Agreement, bear
the following expenses (although the Adviser or an affiliate may bear certain of these expenses
under one or more other agreements):
a. Expenses of all audits by the Fund’s independent accountants;
b. Expenses of the Fund’s transfer agent(s), registrar, dividend disbursing agent(s), and
shareholder recordkeeping services;
c. Expenses of the Fund’s custodial services, including recordkeeping services provided
by the custodian;
d. Expenses of obtaining quotations for calculating the value of the Fund’s net assets;
e. Expenses of obtaining Portfolio Activity Reports for the Fund;
f. Expenses of maintaining the Fund’s tax records;
g. Salaries and other compensation of any of the Fund’s executive officers and employees,
if any, who are not officers, directors, stockholders, or employees of the Adviser, its
subsidiaries or affiliates, or any Portfolio Manager of the Fund;
h. Taxes, if any, levied against the Trust or the Fund;
i. Brokerage fees and commissions in connection with the purchase and sale of portfolio
securities for the Fund;
j. Costs, including the interest expenses, of borrowing money;
k. Costs and/or fees incident to meetings of the Fund’s shareholders, the preparation and
mailings of prospectuses and reports of the Fund to its shareholders, the filing of reports
with regulatory bodies, the
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maintenance of the Fund’s existence and qualification to do
business, and the registration of shares with federal and state securities authorities;
l. The Fund’s legal fees, including the legal fees related to the registration and
continued qualification of the Fund’s shares for sale;
m. Costs of printing certificates representing shares of the Fund;
n. Trustees’ fees and expenses to trustees who are not officers, employees, or
stockholders of the Adviser, its subsidiaries or affiliates, or any Portfolio Manager of the
Trust;
o. The Fund’s pro rata portion of the fidelity bond required by Section 17(g) of the 1940
Act, or other insurance premiums;
p. Association membership dues;
q. Extraordinary expenses as may arise, including expenses incurred in connection with
litigation, proceedings, other claims and the legal obligations of the Trust to indemnify its
trustees, officers, employees, shareholders, distributors, and agents with respect thereto;
and
r. Organizational and offering expenses and, if applicable, reimbursement (with interest)
of underwriting discounts and commissions.
7. Liability. The Adviser shall give the Fund the benefit of the Adviser’s best judgment
and efforts in rendering services under this Agreement. The Adviser may rely on information
reasonably believed by it to be accurate and reliable. As an inducement for the Adviser’s
undertaking to render services under this Agreement, the Fund agrees that neither the Adviser nor
its stockholders, partners, limited partners, officers, directors, employees, or agents shall be
subject to any liability for, or any damages, expenses or losses incurred in connection with, any
act or omission or mistake in judgment connected with or arising out of any services rendered under
this Agreement, except by reason of willful misfeasance, bad faith, or gross negligence in
performance of the Adviser’s duties, or by reason of reckless disregard of the Adviser’s investment
advisory obligations and duties under this Agreement.
8. Independent Contractor. The Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided herein or authorized by the
Board of Trustees of the Trust from time to time, have no authority to act for or represent the
Trust in any way or otherwise be deemed its agent.
9. Compensation. As compensation for the services rendered under this Agreement, the Trust,
on behalf of the Fund, shall pay to the Adviser a fee at an annual rate of 0.05% of the average
daily net assets of the Fund, provided, however, that no such fee shall be due or payable for each
day the Fund has invested substantially all (i.e., greater than 90%) of its investible assets in
one or more other registered investment companies pursuant to a master-feeder structure. The fees
payable to the Adviser for the Fund shall be computed and accrued daily and paid monthly. If the
Adviser shall serve for less than any whole month, the foregoing compensation shall be prorated.
10. Non-Exclusivity. It is understood that the services of the Adviser hereunder are not
exclusive, and the Adviser shall be free to render similar services to other investment companies
and other clients whether or not their investment objectives are similar to those of the Fund.
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11. Term and Continuation. This Agreement shall take effect as of the date hereof, and
shall remain in effect, unless sooner terminated as provided herein, with respect to the Fund for a
period of two years following the date set forth on the attached Schedule. This Agreement shall
continue thereafter on an annual basis with respect to the Fund provided that such continuance is
specifically approved at least annually (a) by the vote of a majority of the Board of Trustees of
the Trust, or (b) by vote of a majority of the outstanding voting shares of the Fund, and provided
continuance is also approved by the vote of a majority of the Board of Trustees of the Trust who
are not parties to this Agreement or “interested persons” (as defined in the 0000 Xxx) of the
Trust, or the Adviser, cast in person at a meeting called for the purpose of voting on such
approval. This Agreement may not be materially amended without a vote of a majority of the
outstanding voting shares (as defined in the 0000 Xxx) of the Fund.
This Agreement will terminate automatically with respect to the services provided by the
Adviser in the event of its assignment, as that term is defined in the 1940 Act, by the Adviser.
This Agreement may be terminated:
a. by the Fund at any time with respect to the services provided by the Adviser, without
the payment of any penalty, by vote of a majority of the Board of Trustees of the Trust or by
a vote of a majority of the outstanding voting shares of the Fund, on 60 days’ written notice
to the Adviser; and by a vote of a majority of the Trustees of the Trust who are not
“interested persons” (as such term is defined in the 0000 Xxx) of the Trust;
b. by the Adviser at any time, without the payment of any penalty, upon 60 days’ written
notice to the Fund.
12. Use of Name. It is understood that the name “Allianz Global Investors Fund Management
LLC” or “Allianz Global Investors” or “Allianz” or any derivative thereof or logo associated with
those names are the valuable property of the Adviser and its affiliates, and that the Fund has the
right to use such names (or derivatives or logos) only so long as this Agreement shall continue
with respect to the Fund. Upon termination of this Agreement, the Fund shall forthwith cease to use
such names (or derivatives or logos).
13. Notices. Notices of any kind to be given to the Adviser by the Trust, on behalf of the
Fund, shall be in writing and shall be duly given if mailed or delivered to the Adviser at 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or to such other address or to such individual as shall be
specified by the Adviser. Notices of any kind to be given to the Trust, on behalf of the Fund, by
the Adviser shall be in writing and shall be duly given if mailed or delivered to 0000 Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, or to such other address or to such individual as shall be specified by
the Trust.
14. Fund Obligation. A copy of the Trust’s Fifth Amended and Restated Agreement and
Declaration of Trust is on file with the Secretary of The Commonwealth of Massachusetts and notice
is hereby given that the Agreement has been executed on behalf of the Trust by a trustee of the
Trust in his or her capacity as trustee and not individually. The obligations of this Agreement
shall only be binding upon the assets and property of the Trust and shall not be binding upon any
trustee, officer, or shareholder of the Trust individually.
15. Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original.
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16. Miscellaneous
a. This Agreement shall be governed by the laws of New York, provided that nothing herein
shall be construed in a manner inconsistent with the 1940 Act, the Investment Advisers Act of
1940, or any rule or order to the SEC thereunder.
b. If any provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby and,
to this extent, the provisions of this Agreement shall be deemed to be severable. To the
extent that any provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise with regard to any part hereunder, such provisions with respect to
other parties hereto shall not be affected thereby.
c. The captions in this Agreement are included for convenience only and in no way define
any of the provisions hereof or otherwise affect their construction or effect.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their
officers designated below on the day and year first above written.
| ALLIANZ FUNDS | ||||||||||||||
| on behalf of ALLIANZ GLOBAL INVESTORS | ||||||||||||||
| MONEY MARKET FUND | ||||||||||||||
Attest:
|
/s/ Xxxxxx X. Xxxxxxxx
|
By: | /s/ Xxxxx X. Xxxxxxxx
|
|||||||||||
| Title: Secretary | Title: President | |||||||||||||
| ALLIANZ GLOBAL INVESTORS FUND MANAGEMENT LLC |
||||||||||||||
Attest:
|
/s/ Xxxxxx X. Xxxxxxxx
|
By: | /s/ Xxxxx X. Xxxxxxxx
|
|||||||||||
| Title: Secretary | Title: Managing Director | |||||||||||||
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