INVESTMENT SUB-ADVISORY AGREEMENT
OLD MUTUAL DISCOVER VALUE FUND
AGREEMENT made as of this 19th day of November,
2007 by and among Old Mutual Capital, Inc. (the "Adviser"),
Barrow, Hanley, Xxxxxxxxx & Xxxxxxx, Inc. (the "Sub-Adviser"),
and Old Mutual Funds II, a Delaware statutory trust (the "Trust").
WHEREAS, the Trust is registered as an open-end
management investment company under the Investment Company
Act of 1940, as amended (the "1940 Act");
WHEREAS, pursuant to an Agreement between the
Adviser and the Trust dated November 19, 2007, the Adviser acts
as investment manager to the Old Mutual Discover Value Fund
(the "Fund"); and
WHEREAS, the Adviser and the Trust each desire to retain
the Sub-Adviser to provide investment advisory services to the
Trust in connection with the management of that portion of the
assets of the Fund that are allocated by the Adviser to the Sub-
Adviser in a designated custodial account established at the Fund's
custodian (each such portion, a "Portfolio"), which may constitute
some or all of the assets of a Fund, and the Sub-Adviser is willing
to render such investment advisory services.
NOW, THEREFORE, intending to be legally bound,
the parties hereto agree as follows:
1. (a) Subject to supervision and oversight by the Adviser
and the Trust's Board of Trustees, the Sub-Adviser shall manage
(i) the investment operations of the Portfolio, and (ii) the
composition of such assets, including the purchase, retention and
disposition thereof, in accordance with the Portfolio's investment
objectives, policies and restrictions as stated in such Portfolio's
Prospectus(es) (such Prospectus(es) and Statement(s) of Additional
Information as currently in effect and as amended or supplemented
from time to time, being herein called the "Prospectus"), and
subject to the following understandings:
(1) The Sub-Adviser shall provide supervision
of the Portfolio's investments and determine from time to time
what investments and securities will be purchased, retained or sold
by such Portfolio and what portion of such assets will be invested
or held uninvested in cash.
(2) In the performance of its duties and
obligations under this Agreement, the Sub-Adviser shall act in
conformity with the Trust's Prospectus and with the instructions
and directions of the Adviser and of the Board of Trustees and will
conform and comply with the requirements of the 1940 Act, the
Investment Advisers Act of 1940, as amended, and all other
applicable federal and state laws and regulations, as each is
amended from time to time.
(3) The Sub-Adviser shall determine the
securities to be purchased or sold with respect to the Portfolio and
will place orders with or through such persons, brokers or dealers
to carry out the policy with respect to brokerage set forth in such
Portfolio's Registration Statement (as defined herein) and
Prospectus or as the Board of Trustees or the Adviser may direct
from time to time, in conformity with federal securities laws. In
providing the Portfolio with investment supervision, the Sub-
Adviser will give primary consideration to securing the most
favorable price and efficient execution. Within the framework of
this policy, the Sub-Adviser 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 the
Sub-Adviser's other clients may be a party. It is understood that it
is desirable for the Portfolio that the Sub-Adviser have access to (i)
supplemental investment and market research and (ii) security and
economic analysis provided by brokers who may execute
brokerage transactions at a higher cost to the Portfolio than may
result when allocating brokerage to other brokers on the basis of
seeking the most favorable price and efficient execution.
Therefore, the Sub-Adviser is authorized to place orders for the
purchase and sale of securities on behalf of the Portfolio with
brokers, subject to review by the Trust's Board of Trustees from
time to time with respect to the extent and continuation of this
practice. It is understood that the services provided by such
brokers may be useful to the Sub-Adviser in connection with the
Sub-Adviser's services to other clients.
On occasions when the Sub-Adviser deems
the purchase or sale of a security to be in the best interest of the
Portfolio as well as other clients of the Sub-Adviser, the Sub-
Adviser, to the extent permitted by applicable laws and regulations,
may, but shall be under no obligation to, aggregate the securities to
be so purchased or sold 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 the Sub-
Adviser in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Portfolio in question
and to such other clients.
(4) The Sub-Adviser at its expense will make
available to the Trustees of the Portfolio and the Adviser at
reasonable times its portfolio managers and other appropriate
personnel, either in person or, at the mutual convenience of the
Adviser and the Sub-Adviser, by telephone, in order to review the
investment policies, performance and other investment related
information regarding the Portfolio and to consult with the
Trustees of the Portfolio and Adviser regarding the Portfolio's
investment affairs, including economic, statistical and investment
matters related to the Sub-Adviser's duties hereunder, and will
provide periodic reports to the Adviser relating to the investment
strategies it employs. The Sub-Adviser and its personnel shall also
cooperate fully with counsel and auditors for, and the Chief
Compliance Officers of, the Adviser and the Trust.
(5) In accordance with procedures adopted by
the Trustees of the Portfolio, as amended from time to time, the
Sub-Adviser is responsible for assisting in the fair valuation of all
Portfolio securities. The Sub-Adviser will use its reasonable
efforts to provide, based upon its own expertise, and to arrange
with parties independent of the Sub-Adviser such as broker-dealers
for the provision of, valuation information or prices for securities
for which prices are deemed by the Adviser or Trust's
administrator not to be readily available in the ordinary course of
business from an automated pricing service. In addition, the Sub-
Adviser will assist the Portfolio and its agents in determining
whether prices obtained for valuation purposes accurately reflect
market price information relating to the assets of the Portfolio at
such times as the Adviser shall reasonably request, including but
not limited to, the hours after the close of a securities market and
prior to the daily determination of the Portfolio's net asset value
per share.
(6) The Sub-Adviser at its expense will provide
the Adviser and/or the Trust's Chief Compliance Officer with such
compliance reports relating to its duties under this Agreement as
may be requested from time to time. Notwithstanding the
foregoing, the Sub-Adviser will promptly report to the Adviser any
material violations of the federal securities laws (as defined in Rule
38a-1 of the 0000 Xxx) that it is or should be aware of or of any
material violation of the Sub-Adviser's compliance policies and
procedures that pertain to the Portfolio, as well as any change in
portfolio manager(s) of the Portfolio.
(7) Unless otherwise directed by the Adviser or
the Trust's Board of Trustees, the Sub-Adviser will vote all proxies
received in accordance with the Trust's proxy voting policy or, if
the Sub-Adviser has a proxy voting policy approved by the Trust's
Board of Trustees, the Sub-Adviser's proxy voting policy. The
Adviser shall instruct the Portfolio's custodian to forward or cause
to be forwarded to the Sub-Adviser all relevant proxy solicitation
materials. The Sub-Adviser shall maintain and shall forward to the
Portfolio or its designated agent such proxy voting information as
is necessary for the Portfolio to timely file proxy voting results in
accordance with Rule 30b1-4 of the 0000 Xxx.
(8) The Sub-Adviser represents and warrants
that it has adopted a code of ethics meeting the requirements of
Rule 17j-1 under the 1940 Act and the requirements of Rule 204A-
1 under the Investment Advisers Act of 1940 and has provided the
Adviser and the Trustees of the Fund a copy of such code of ethics,
together with evidence of its adoption, and will promptly provide
copies of any changes thereto, together with evidence of their
adoption. Upon request of the Adviser, but in any event no less
frequently than annually, the Sub-Adviser will supply the Adviser a
written report that (A) describes any issues arising under the code
of ethics or procedures since the Sub-Adviser's last report,
including but not limited to material violations of the code of
ethics or procedures and sanctions imposed in response to the
material violations; and (B) certifies that the procedures contained
in the Sub-Adviser's code of ethics are reasonably designed to
prevent "access persons" from violating the code of ethics.
(9) The Sub-Adviser will review draft reports to
shareholders and other documents provided or available to it and
provide comments on a timely basis. In addition, the Sub-Adviser
and each officer and portfolio manager thereof designated by the
Adviser will provide on a timely basis such certifications or sub-
certifications as the Adviser may reasonably request in order to
support and facilitate certifications required to be provided by the
Trust's Principal Executive Officer and Principal Accounting
Officer.
(10) The Sub-Adviser shall maintain all books
and records with respect to the Portfolio's portfolio transactions
required by subparagraphs (b)(5), (6), (7), (9), (10) and (11) and
paragraph (f) of Rule 31a-1 under the 1940 Act and shall render to
the Trust's Board of Trustees such periodic and special reports as
the Trust's Board of Trustees may reasonably request.
(11) The Sub-Adviser shall provide the
Portfolio's custodian on each business day with information
relating to all transactions concerning the assets of the Portfolio
and shall provide the Adviser with such information upon request
of the Adviser.
(12) (a) The investment management services
provided by the Sub-Adviser under this Agreement are not to be
deemed exclusive and the Sub-Adviser shall be free to render
similar services to others, as long as such services do not impair
the services rendered to the Adviser or the Trust.
(b) Services to be furnished by the Sub-
Adviser under this Agreement may be furnished through the
medium of any of the Sub-Adviser's officers or employees.
(c) The Sub-Adviser shall keep the
Portfolio's books and records required to be maintained by the
Sub-Adviser pursuant to paragraph 1(a) of this Agreement and
shall timely furnish to the Adviser all information relating to the
Sub-Adviser's services under this Agreement needed by the
Adviser to keep the other books and records of the Portfolio
required by Rule 31a-1 under the 1940 Act. The Sub-Adviser
agrees that all records that it maintains on behalf of the Portfolio
are property of the Portfolio and the Sub-Adviser will surrender
promptly to the Portfolio any of such records upon the Portfolio's
request; provided, however, that the Sub-Adviser may retain a copy
of such records. The Sub-Adviser further agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act any such
records as are required to be maintained by it pursuant to paragraph
1(a) of this Agreement.
2. The Adviser shall continue to have responsibility for all
services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's
performance of its duties under this Agreement.
3. The Adviser has delivered to the Sub-Adviser copies of each of
the following documents and will deliver to it all future
amendments and supplements, if any:
(a) Certified resolutions of the Trust's Board of
Trustees authorizing the appointment of the Sub-Adviser and
approving the form of this Agreement;
(b) Registration Statement under the 1940 Act and the
Securities Act of 1933, as amended on Form N-1A (the
"Registration Statement"), as filed with the Securities and
Exchange Commission (the "Commission") relating to the
Portfolio and shares of the Portfolio's beneficial shares, and all
amendments thereto; and
(c) Prospectus(es) of the Portfolio.
4. For the services to be provided by the Sub-Adviser
pursuant to this Agreement for the Portfolio, the Adviser will pay
to the Sub-Adviser as full compensation therefore, a fee at an
annual rate of 0.65% of the Portfolio's average daily net assets.
This fee will be paid to the Sub-Adviser from the Adviser's
advisory fee for the Fund. This fee will be computed daily and
paid to the Sub-Adviser monthly.
5. The Sub-Adviser shall not be liable for any error of
judgment or for any loss suffered by the Portfolio or the Adviser in
connection with performance of its obligations under this
Agreement, 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 1940 Act), or a loss
resulting from willful misfeasance, bad faith or gross negligence on
the Sub-Adviser's part in the performance of its duties or from
reckless disregard of its obligations and duties under this
Agreement, except as may otherwise be provided under provisions
of applicable state law which cannot be waived or modified hereby.
6. This Agreement shall continue for an initial period ending
December 31, 2008, and thereafter shall continue automatically for
successive annual periods, provided such continuance is
specifically approved at least annually in conformance with the
1940 Act, provided, however, that this Agreement may be
terminated (a) by the Portfolio at any time, without the payment of
any penalty, by the vote of a majority of Trustees of the Trust or by
the vote of a majority of the outstanding voting securities of the
Portfolio, (b) by the Adviser at any time, without the payment of
any penalty, on not more than 60 days' nor less than 30 days'
written notice to the other parties, or (c) by the Sub-Adviser at any
time, without the payment of any penalty, on 90 days' written
notice to the other parties. This Agreement shall terminate
automatically and immediately in the event of its assignment. As
used in this Section 6, the terms "assignment" and "vote of a
majority of the outstanding voting securities" shall have the
respective meanings set forth in the 1940 Act and the rules and
regulations thereunder, subject to such exceptions as may be
granted by the Commission under the 1940 Act.
7. Nothing in this Agreement shall limit or restrict the right of
any of the Sub-Adviser's partners, officers, or employees 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 Sub-
Adviser's right to engage in any other business or to render
services of any kind to any other corporation, firm, individual or
association.
8. During the term of this Agreement, the Adviser agrees to
furnish the Sub-Adviser at its principal office all prospectuses,
proxy statements, reports to shareholders, sales literature or other
materials prepared for distribution to shareholders of the Portfolio,
the Trust or the public that refers to the Sub-Adviser or its clients
in any way prior to use thereof and not to use material if the Sub-
Adviser reasonably objects in writing within five business days (or
such other period as may be mutually agreed upon) after receipt
thereof. The Sub-Adviser's right to object to such materials is
limited to the portions of such materials that expressly relate to the
Sub-Adviser, its services and its clients. The Adviser agrees to use
its reasonable best efforts to ensure that materials prepared by its
employees or agents or its affiliates that refer to the Sub-Adviser or
its clients in any way are consistent with those materials previously
approved by the Sub-Adviser as referenced in the first sentence of
this paragraph. Sales literature may be furnished to the Sub-
Adviser by first-class mail, electronic mail or overnight delivery
service, facsimile transmission equipment or hand delivery.
9. No Trustee or Shareholder of the Trust shall be personally
liable for any debts, liabilities, obligations or expenses incurred by,
or contracted for under this Agreement.
10. No provisions of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, and no
amendment of this Agreement shall be effective until approved by
the vote of the majority of the outstanding voting securities of the
Portfolio.
11. This Agreement shall be governed by the laws of the state
of Delaware; provided, however, that nothing herein shall be
construed as being inconsistent with the 1940 Act.
12. This Agreement embodies the entire agreement and
understanding among the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject
matter. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original; all
such counterparts shall, together, constitute only one instrument.
13. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors.
14. Any notice, advice or report to be given pursuant to this
Agreement shall be delivered or mailed:
To the Adviser at: To the Sub-Adviser at:
Old Mutual Capital, Inc. Barrow, Hanley, Xxxxxxxxx & Xxxxxxx, Inc.
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000 0000 Xxxx Xxxxxx
Xxxxxx, XX 00000 31st Floor
Attention: General Counsel Xxxxxx, XX 00000
To the Trust or the Portfolio at:
Old Mutual Funds II
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: General Counsel
15. Where the effect of a requirement of the 1940 Act reflected
in any provision of this Agreement is altered by a rule, regulation or
order of the Commission, whether of special or general application,
such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
16. As required by certain exemptive rules under the 1940 Act,
Analytic is prohibited from consulting with the entities listed below
concerning transactions for the Fund in securities or other assets:
1. other subadvisers to the Fund, except Analytic
2. other subadvisers to a Trust portfolio
3. other subadvisers to a portfolio under common
control with the Fund
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers designated below as of
the day and year first written above.
OLD MUTUAL CAPITAL, INC.
OLD MUTUAL FUNDS II
By:
/s/ Xxxx X. Xxxxx
By:
/s/ Xxxxxx X. Xxxxx
Name:
Xxxx X. Xxxxx
Name:
Xxxxxx X. Xxxxx
Title:
Chief Financial Officer
Title:
Treasurer
BARROW, HANLEY,
XXXXXXXXX & XXXXXXX, INC.
By:
/s/ Xxxxx X. Xxxxxx
Name:
Xxxxx X. Xxxxxx
Title:
President, Secretary & Treasurer
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