EXHIBIT (d)(18)
FORWARD FUNDS
INVESTMENT SUB-ADVISORY AGREEMENT
This INVESTMENT SUB-ADVISORY AGREEMENT ("Agreement") effective as of September
1, 2008, is by and among Xxxxx Asset Management Group, L.P. (the "Sub-Advisor"),
Forward Funds (the "Trust"), on behalf of the Accessor Growth Fund, a series of
the Trust (the "Fund"), and Forward Management, LLC (the "Advisor").
WHEREAS, the Trust is a Delaware statutory trust of the series type organized
under an Amended and Restated Declaration of Trust dated as of June 9, 2005, as
amended, and is registered under the Investment Company Act of 1940, as amended
(the "1940 Act"), as an open-end, diversified management investment company, and
the Fund is a series of the Trust; and
WHEREAS, the Advisor has been retained by the Trust to provide investment
advisory services to the Fund with regard to the Fund's investments, as further
described in the Trust's registration statement on Form N-1A (the "Registration
Statement") and pursuant to an Amended and Restated Investment Management
Agreement dated as of July 1, 2005, as amended ("Investment Management
Agreement"); and
WHEREAS, the Trust's Board of Trustees (the "Trustees"), including a majority of
the Trustees who are not "interested persons" as defined in the 1940 Act, and
the Fund's shareholders to the extent required under applicable law and
regulation have approved the appointment of the Sub-Advisor to perform certain
investment advisory services for the Trust, on behalf of the Fund, pursuant to
this Agreement and as described in the Registration Statement, and the
Sub-Advisor is willing to perform such services for the Fund; and
WHEREAS, the Sub-Advisor is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act").
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed among the Advisor, the Trust and the Sub-Advisor as
follows:
1. Appointment. The Trust and the Advisor hereby appoint the Sub-Advisor to
perform advisory services to the Fund for the periods and on the terms set forth
in this Agreement. The Sub-Advisor accepts such appointment and agrees to
furnish the services herein set forth, for the compensation herein provided.
2. Investment Advisory Duties. Subject to the supervision of the Trustees and
the Advisor, the Sub-Advisor will, in coordination with the Advisor as described
below: (a) provide a program of continuous investment management for the Fund;
(b) make investment decisions for the Fund; and (c) place orders to purchase and
sell securities for the Fund in accordance with the Fund's investment
objectives, policies and limitations as stated in the Fund's current Prospectus
and Statement of Additional Information as provided to the Sub-Advisor by the
Advisor, as they may be amended from time to time; provided, that the Advisor
shall provide the Sub-Advisor reasonable advance notice of any change to such
investment objectives, policies and limitations.
The Sub-Advisor further agrees that, in performing its duties hereunder, it
will:
(a) with regard to its activities under this Agreement, use reasonable efforts
to comply in all material respects with the applicable provisions of the 1940
Act, the Advisers Act, and all applicable rules and regulations thereunder, the
U.S. Internal Revenue Code of 1986, as amended (the "Code"), and all other
applicable federal and state laws and regulations, and with any applicable
procedures adopted by the Trustees, as they may be amended from time to time,
provided that written copies of such procedures and amendments thereto are
provided to the Sub-Advisor by the Advisor;
(b) use reasonable efforts to manage the Fund so that it will qualify, and
continue to qualify, as a regulated investment company under Subchapter M of the
Code and regulations issued thereunder; provided, however, the Sub-Advisor shall
not be responsible for the tax effect of any decisions made by or any actions
taken by any person other than the Sub-Advisor;
(c) place orders pursuant to its investment determinations for the Fund, in
accordance with applicable policies expressed in the Fund's Prospectus and/or
Statement of Additional Information or otherwise established through written
guidelines established by the Fund and provided to the Sub-Advisor by the
Advisor, including without limitation, Section 4 hereof;
(d) furnish to the Trust and the Advisor whatever statistical information the
Trust or the Advisor may reasonably request with respect to the Fund's assets or
investments. In addition, the Sub-Advisor will keep the Trust, the Advisor and
the Trustees informed of developments that the Sub-Advisor reasonably believes
will materially affect the Fund's portfolio, and shall, on the Sub-Advisor's own
initiative, furnish to the Trust from time to time whatever information the
Sub-Advisor believes appropriate for this purpose;
(e) make available to the Fund's administrator (the "Administrator"), the
Advisor and the Trust, promptly upon their request, such copies of its
investment records and ledgers with respect to the Fund as may reasonably be
required to assist the Advisor, the Administrator and the Trust in their
compliance with applicable laws and regulations. The Sub-Advisor will furnish
the Trustees, the Administrator, the Advisor and the Trust with such periodic
and special reports regarding the Fund as they may reasonably request;
(f) meet periodically with the Advisor and the Trustees, in person or by
teleconference, to explain its investment management activities, and any reports
related to the Fund as may reasonably be requested by the Advisor and/or the
Trust;
(g) immediately notify the Advisor, in writing, of the receipt of any notice of
a class action proceeding related to the Fund or any other action or proceeding
in which the Advisor or the Fund may be entitled to participate as a result of
the Fund's securities holdings. The Sub-Advisor shall have no responsibility for
filing claims on behalf of the Advisor or the Trust with respect to any such
actions. The Sub-Advisor's responsibility with respect to such matters shall be
to comply with the foregoing notification obligations and to cooperate with the
Advisor and the Trust in making such filings, which shall include providing any
relevant information regarding the Fund's securities holdings to the Advisor;
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(h) provide assistance to the Advisor, custodian or recordkeeping agent for the
Fund in determining or confirming, consistent with the procedures and policies
stated in the Fund's valuation procedures and/or Registration Statement, the
value of any portfolio securities or other assets of the Fund for which the
Advisor, custodian or recordkeeping agent seeks assistance from the Sub-Advisor
or identifies for review by the Sub-Advisor. This assistance includes (but is
not limited to): (i) designating an employee of the Sub-Advisor for consultation
when the Trustees convene; (ii) notifying the Advisor in the event the
Sub-Advisor determines, with respect to a security that is held both by the Fund
and by another account managed by the Sub-Advisor, to price the security
pursuant to such other account's policies and procedures for determining the
fair value of a security; (iii) obtaining bids and offers or quotes from
broker/dealers or market-makers with respect to securities held by the Fund,
upon the request of the Advisor; (iv) verifying pricing and providing fair
valuations or recommendations for fair valuation in accordance with the Fund's
valuation procedures, as they may be amended from time to time; and (v)
maintaining adequate records and written backup information with respect to the
securities valuation services provided hereunder, and providing such information
to the Advisor upon request;
(i) assist the Advisor, the Fund, and any of its or their trustees, directors,
officers, and/or employees in complying with the provisions of the
Xxxxxxxx-Xxxxx Act of 2002 to the extent such provisions relate to the services
to be provided by, and obligations of, the Sub-Advisor hereunder. Specifically,
and without limitation to the foregoing, the Sub-Advisor agrees to provide
certifications to the principal executive and financial officers of the Fund
that correspond to the drafting and/or filing of the Fund's Form N-CSRs. N-Qs,
N-SARs, shareholder reports, financial statements, and other disclosure
documents or regulatory filings, in such form and content as the Advisor shall
reasonably request or as in accordance with procedures adopted by the Trust;
(j) assist the Fund, and accordingly, the Trust's Chief Compliance Officer
("CCO") in complying with Rule 38a-1 under the 1940 Act. Specifically, the
Sub-Advisor represents and warrants that it shall maintain a compliance program
in accordance with the requirements of Rule 206(4)-7 under the Advisers Act, and
shall provide the CCO with reasonable access to information regarding the
Sub-Advisor's compliance program, which access shall include on-site visits with
the Sub-Advisor as may be reasonably requested from time to time. In connection
with the periodic review and annual report required to be prepared by the CCO
pursuant to Rule 38a-1, the Sub-Advisor agrees to provide certifications as may
be reasonably requested by the CCO related to the design and implementation of
the Sub-Advisor's compliance program;
(k) provide assistance as may be reasonably requested by the Advisor in
connection with compliance by the Fund with any current or future legal and
regulatory requirements related to the services provided by the Sub-Advisor
hereunder;
(l) immediately notify the Advisor and the Trust to the extent required by
applicable law in the event that the Sub-Advisor or any of its affiliates: (1)
becomes aware that it is subject to a statutory disqualification that prevents
the Sub-Advisor from serving as an investment advisor pursuant to this
Agreement; or (2) becomes aware that it is the subject of an administrative
proceeding or enforcement action by the Securities and Exchange Commission
("SEC") or other regulatory authority. The Sub-Advisor further agrees to notify
the Trust and the Advisor
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immediately of any material fact known to the Sub-Advisor respecting or relating
to the Sub-Advisor that would make any written information previously provided
to the Advisor or the Trust materially inaccurate or incomplete or if any such
written information becomes untrue in any material respect;
(m) immediately notify the Advisor and the Trust if the Sub-Advisor suffers a
material adverse change in its business that would materially impair its ability
to perform its relevant duties for the Fund. For the purposes of this paragraph,
a "material adverse change" shall include, but is not limited to, a material
loss of assets or accounts under management or the departure of senior
investment professionals to the extent such professionals are not replaced
promptly with professionals of comparable experience and quality;
(n) use no inside information that may be in its possession in making investment
decisions for the Fund, nor seek to obtain any such information; and
(o) use its best judgment and efforts in rendering the advice and services
contemplated by this Agreement.
3. Investment Authority. The Sub-Advisor's investment authority shall include,
to the extent permitted under Section 2 hereof, the authority to purchase, sell,
and cover open positions, and generally to deal in securities, swaps (including
but not limited to interest rate swaps and credit default swaps), financial
futures contracts and options thereon, currency transactions, and other
derivatives and investment instruments and techniques as may be permitted for
use by the Fund and consistent with the Registration Statement.
The Sub-Advisor may: (i) open and maintain brokerage accounts for financial
futures and options and securities (such accounts hereinafter referred to as
"Brokerage Accounts") on behalf of and in the name of the Fund; and (ii) execute
for and on behalf of the Brokerage Accounts, standard customer agreements with a
broker or brokers. The Sub-Advisor may, using such of the securities and other
property in the Brokerage Accounts as the Sub-Advisor deems necessary or
desirable, direct the custodian to deposit on behalf of the Fund, original and
maintenance brokerage deposits and otherwise direct payments of cash, cash
equivalents and securities and other property into such brokerage accounts and
to such brokers as the Sub-Advisor deems desirable or appropriate.
4. Investment Guidelines. In addition to the information to be provided to the
Sub-Advisor under Section 2 hereof, the Trust or the Advisor shall supply the
Sub-Advisor with such other information as the Sub-Advisor shall reasonably
request concerning the Fund's investment policies, restrictions, limitations,
tax position, liquidity requirements and other information useful in managing
the Fund's investments.
5. Representations, Warranties and Covenants of the Trust, Advisor and
Sub-Advisor. The Trust represents and warrants to the Sub-Advisor that: (i) the
retention of the Sub-Advisor as contemplated by this Agreement is authorized by
the respective governing documents of the Fund; (ii) the execution, delivery and
performance of this Agreement does not violate any obligation by which either
the Fund or its property is bound, whether arising by contract, operation of law
or otherwise; and (iii) this Agreement has been duly authorized by appropriate
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action of the Fund and when executed and delivered by the Advisor, on behalf of
the Fund (and assuming due execution and delivery by the Sub-Advisor), will be
the legal, valid and binding obligation of the Fund, enforceable against the
Fund in accordance with its terms, subject, as to enforcement, to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights generally
and to general equitable principles (regardless of whether enforcement is sought
in a proceeding in equity or law).
The Advisor represents and warrants to the Sub-Advisor that: (i) the execution,
delivery and performance of this Agreement does not violate any obligation by
which it or its property is bound, whether arising by contract, operation of law
or otherwise; and (ii) this Agreement has been duly authorized by appropriate
action of the Advisor and when executed and delivered by the Advisor (and
assuming due execution and delivery by the Sub-Advisor) will be the legal, valid
and binding obligation of the Advisor, enforceable against the Advisor in
accordance with its terms, subject, as to enforcement, to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and to general
equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or law).
The Sub-Advisor represents and warrants to the Advisor and the Trust that: (i)
it is authorized to perform the services hereunder; (ii) the execution, delivery
and performance of this Agreement does not violate any obligation by which the
Sub-Advisor or its property is bound, whether arising by contract, operation of
law or otherwise; (iii) this Agreement has been duly authorized by appropriate
action of the Sub-Advisor and when executed and delivered by the Sub-Advisor
(and assuming due execution and delivery by the Advisor and the Trust) will be
the legal, valid and binding obligation of the Sub-Advisor, enforceable against
the Sub-Advisor in accordance with its terms, subject, as to enforcement, to
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
generally and to general equitable principles (regardless of whether enforcement
is sought in a proceeding in equity or law); (iv) it is registered as an
investment advisor with the SEC; and (v) it is not barred by operation of law,
or any rule, or order of the SEC or any other regulatory body from acting as an
investment advisor.
6. Use of Securities Brokers and Dealers. In placing purchase and sale orders
for the Fund with brokers or dealers, the Sub-Advisor will attempt to obtain
"best execution" of such orders. "Best execution" shall mean prompt and reliable
execution at the most favorable terms of execution, taking into account price,
speed and efficiency of execution, other factors that may be deemed relevant by
the Sub-Advisor, and the other provisions hereinafter set forth. Whenever the
Sub-Advisor places orders, or directs the placement of orders, for the purchase
or sale of portfolio securities on behalf of the Fund, in selecting brokers or
dealers to execute such orders, the Sub-Advisor is expressly authorized to
consider the fact that a broker or dealer has furnished statistical, research or
other information or services that enhance the Sub-Advisor's research and
portfolio management capability generally. It is further understood in
accordance with Section 28(e) of the Securities Exchange Act of 1934, as
amended, that the Sub-Advisor may negotiate with and assign to a broker a
commission that may exceed the commission that another broker would have charged
for effecting the transaction if the Sub-Advisor determines in good faith that
the amount of commission charged was reasonable in relation to the value of
brokerage and/or research services (as defined in Section 28(e)) provided by
such broker, viewed in terms either of the Fund's or the Sub-Advisor's overall
responsibilities to the Sub-Advisor's discretionary accounts (the "Section 28(e)
Actions"); provided, however, that Sub-Advisor's ability to engage
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in Section 28(e) Actions shall be subject to review by the Trustees from time to
time, and if such Trustees reasonably determine that the Fund does not benefit,
directly or indirectly, from such Section 28(e) Actions, the Sub-Advisor shall
be prohibited from engaging in the same.
Unless otherwise directed by the Trust or the Advisor in writing, the
Sub-Advisor may utilize the service of whatever securities brokerage firm or
firms it deems appropriate to the extent that such firms are competitive with
respect to price of services and execution, and so long as the Sub-Advisor
complies with the "best execution" practices described above and applicable law
and regulation.
7. Compensation. The Trust agrees to pay a Fee to the Sub-Advisor for the Fund
assets managed by the Sub-Advisor, calculated as set forth in Exhibit A attached
hereto and incorporated by reference herein. The Sub-Advisor acknowledges that
the fee is payable solely out of the assets of the Fund.
The Fee shall be computed and accrued daily and paid monthly in arrears based on
the average daily net asset value of the Fund as determined according to the
manner provided in the then-current prospectus of the Fund.
The Advisor shall provide to the Sub-Advisor, promptly following request
therefor, all information reasonably requested by the Sub-Advisor to support the
calculation of the Fee and shall permit the Sub-Advisor or its agents, upon
reasonable notice and at reasonable times and at Sub-Advisor's cost, to inspect
the books and records of the Fund pertaining to such calculation.
8. Expenses. The Sub-Advisor will not be required to pay any expenses of the
Fund except as expressly set forth in this Section 8. The Sub-Advisor will pay
the cost of maintaining the staff and personnel necessary for it to perform its
obligations under this Agreement, the expenses of office rent, telephone,
telecommunications and other facilities it is obligated to provide in order to
perform the services specified in Section 2, and any other expenses incurred by
the Sub-Advisor in the performance of its duties hereunder.
9. Books and Records. The Sub-Advisor agrees to maintain such books and records
with respect to its services to the Fund as are required by Section 31 under the
1940 Act, and rules adopted thereunder, and to preserve such records for the
periods and in the manner required by that Section, and those rules. The
Sub-Advisor also agrees that records it maintains and preserves pursuant to
Rules 31a-1 and Rule 31a-2 under the 1940 Act with respect to the Fund are the
property of the Trust and will be surrendered promptly to the Trust upon its
request, except that the Sub-Advisor may retain copies of such documents as may
be required by law. The Sub-Advisor further agrees that it will furnish to
regulatory authorities having the requisite authority any information or reports
in connection with its services hereunder which may be requested in order to
determine whether the operations of the Fund are being conducted in accordance
with applicable laws and regulations. Each party shall make available to the
others, upon reasonable request, copies of any books, records, and other
relevant information that enables the requesting party to comply with its
obligations under applicable federal or state rules or regulations, including
Rule 38a-1 of the 1940 Act and Rule 206(4)-7 of the Advisers Act, that arise as
a result of the Agreement. Each party shall cooperate fully to assist the others
with any review or audit conducted by another party or a third party designated
by another party, for the
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limited purpose of ensuring compliance with obligations under applicable federal
or state laws that the parties become subject to as a result of the Agreement.
10. Aggregation of Orders. Provided the investment objectives, policies and
restrictions of the Fund as provided to the Sub-Advisor in accordance with this
Agreement are adhered to, the Fund agrees that the Sub-Advisor may aggregate
sales and purchase orders of securities held in the Fund with similar orders
being made simultaneously for other accounts managed by the Sub-Advisor or with
accounts of the affiliates of the Sub-Advisor, if in the Sub-Advisor's
reasonable judgment such aggregation shall result in an overall economic benefit
to the Fund, taking into consideration the advantageous selling or purchase
price, brokerage commission and other expenses. The Fund acknowledges that the
determination of such economic benefit to the Fund by the Sub-Advisor represents
the Sub-Advisor's evaluation that the Fund may be benefited by relatively better
purchase or sales prices, lower commission expenses and beneficial timing of
transactions or a combination of these and other factors.
11. Liability. Neither the Sub-Advisor nor its officers, directors, employees,
affiliates, agents or controlling persons shall be liable to the Trust, the
Fund, its shareholders and/or any other person for the acts, omissions, errors
of judgment and/or mistakes of law of any other fiduciary and/or other person
with respect to the Fund.
Neither the Sub-Advisor nor its officers, directors, employees, affiliates,
agents or controlling persons or assigns shall be liable for any act, omission,
error of judgment or mistake of law (whether or not deemed a breach of this
Agreement) and/or for any loss suffered by the Trust, the Fund, its shareholders
and/or any other person in connection with the matters to which this Agreement
relates; provided that no provision of this Agreement shall be deemed to protect
the Sub-Advisor against any liability to the Trust, the Fund and/or its
shareholders to which it might otherwise be subject by reason of any willful
misfeasance, bad faith or gross negligence in the performance of its duties or
the reckless disregard of its obligations and duties under this Agreement.
The Trust, on behalf of the Fund, hereby agrees to indemnify and hold harmless
the Sub-Advisor, its directors, officers, employees, affiliates, agents and
controlling persons (collectively, the "Indemnified Parties") against any and
all losses, claims damages or liabilities (including reasonable attorneys fees
and expenses), joint or several, relating to the Trust or the Fund, to which any
such Indemnified Party may become subject under the Securities Act of 1933, as
amended (the "1933 Act"), the Securities Exchange Act of 1934, the Advisers Act,
or other federal or state statutory law or regulation, at common law or
otherwise. It is understood, however, that nothing in this paragraph 13 shall
protect any Indemnified Party against, or entitle any Indemnified Party to,
indemnification against any liability to the Trust, the Fund or its shareholders
to which such Indemnified Party is subject, by reason of its willful
misfeasance, bad faith or gross negligence in the performance of its duties, or
by reason of any reckless disregard of its obligations and duties under this
Agreement.
12. Services Not Exclusive. The services of the Sub-Advisor are not exclusive,
and nothing in this Agreement shall prevent the Sub-Advisor from providing
similar services to other investment advisory clients, including but not by way
of limitation, investment companies or to other series of investment companies,
including the Trust, or from engaging in other activities,
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provided such other services and activities do not, during the term of this
Agreement, interfere in a material manner with the Sub-Advisor's ability to meet
its obligations to the Fund hereunder. When the Sub-Advisor recommends the
purchase or sale of a security for other investment companies and other clients,
and at the same time the Sub-Advisor recommends the purchase or sale of the same
security for the Fund, it is understood that in light of its fiduciary duty to
the Fund, such transactions will be executed on a basis that is fair and
equitable to the Fund. In connection with purchases or sales of portfolio
securities for the account of the Fund, neither the Sub-Advisor nor any of its
directors, officers or employees shall act as a principal. If the Sub-Advisor
provides any advice to its clients concerning the shares of the Fund, the
Sub-Advisor shall act solely as investment counsel for such clients and not in
any way on behalf of the Trust or the Fund.
The Sub-Advisor provides investment advisory services to numerous other
investment advisory clients, including but not limited to other funds, and may
give advice and take action which may differ from the timing or nature of action
taken by the Sub-Advisor with respect to the Fund. Nothing in this Agreement
shall impose upon the Sub-Advisor any obligations other than those imposed by
law to purchase, sell or recommend for purchase or sale, with respect to the
Fund, any security which the Sub-Advisor, or the shareholders, officers,
directors, employees or affiliates may purchase or sell for their own account or
for the account of any client.
13. Materials. Each of the Advisor, the Trust and the Fund shall not make any
representations regarding the Sub-Advisor or any of its affiliates in any
disclosure document, advertisement, sales literature or other promotional
materials without prior written consent of the Sub-Advisor, which consent shall
not be unreasonably withheld. If the Sub-Advisor has not notified the Advisor of
its disapproval of sample materials within twenty (20) days after its receipt
thereof, such materials shall be deemed approved. The Sub-Advisor will be
provided with any Registration Statements containing references or information
with respect to the Sub-Advisor prior to the filing of same with any regulatory
authority and shall be afforded the opportunity to comment thereon.
14. Duration and Termination. This Agreement shall continue until September 30,
2009, and thereafter shall continue automatically for successive annual periods,
provided such continuance is specifically approved at least annually by (i) the
Board of Trustees or (ii) a vote of a "majority" (as defined in the 0000 Xxx) of
the Fund's outstanding voting securities (as defined in the 1940 Act), provided
that in either event the continuance is also approved by a majority of the
Trustees 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.
Notwithstanding the foregoing, this Agreement may be terminated: (a) at any time
without penalty by the Fund upon the vote of a majority of the Trustees or by
vote of the majority of the Fund's outstanding voting securities, upon sixty
(60) days' written notice to the Sub-Advisor; (b) by the Advisor at any time
without penalty, upon sixty (60) days' written notice to the Sub-Advisor; or (c)
by the Sub-Advisor at any time without penalty, upon sixty (60) days ' written
notice to the Trust. This Agreement will also terminate automatically in the
event of its assignment (as defined in the 1940 Act).
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The Agreement will terminate immediately upon written notification from the
Advisor or the Trust if the Investment Management Agreement terminates with
respect to the Fund.
15. Amendments. This Agreement may be amended at any time, but only by the
mutual written agreement of the parties.
16. Proxies. Unless the Trust gives written instructions to the contrary, the
Sub-Advisor shall vote all proxies solicited by or with respect to the issuers
of securities invested in by the Fund. The Sub-Advisor shall maintain a record
of how the Sub-Advisor voted and such record shall be available to the Trust
upon its request. The Sub-Advisor shall use its best good faith judgment to vote
such proxies in a manner which best serves the interests of the Fund's
shareholders. The Sub-Advisor may delegate proxy voting to a third-party company
provided, however, that the Sub-Advisor remains liable for the proxy voting.
17. Notices. Any written notice required by or pertaining to this Agreement
shall be personally delivered to the party for whom it is intended or shall be
sent to such party by prepaid first class mail or facsimile, at the address or
number stated below.
If to the Trust:
Forward Funds
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
If to the Sub-Advisor:
Xxxxx Asset Management Group, L.P.
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Legal Department
If to the Advisor:
Forward Management, LLC
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
18. Confidential Information. Any information supplied by the Trust, the Fund or
the Advisor, which is not otherwise in the public domain, in connection with the
Fund or the Advisor is to be regarded as confidential and for use only by the
Sub-Advisor and/or its agents, and only in connection with the Sub-Advisor's
services under this Agreement. Any information supplied by the Sub-Advisor,
which is not otherwise in the public domain, in connection with the performance
of its duties hereunder is to be regarded as confidential and for use only by
the Fund and/or its agents, and only in connection with the Fund and its
investments. Any party in receipt
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of confidential information shall use reasonable precautions (substantially
identical to those used in safeguarding of its own confidential information)
that its directors, officers, employees and advisors abide by these
confidentiality provisions.
19. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by the laws of the State of
California, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act, or rules or orders of the SEC
thereunder.
(b) Delivery of Form ADV. Concurrently with the execution of this Agreement, the
Sub-Advisor is delivering to the Advisor and the Trust a copy of Part II of its
Form ADV, as revised. The Advisor and the Trust hereby acknowledge receipt of
such copy.
(c) Captions. The captions of this Agreement are included for convenience only
and in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.
(d) Severability. 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.
(e) Agency Relationship. Nothing herein shall be construed as constituting the
Sub-Advisor as an agent of the Trust or the Fund, except as otherwise
contemplated herein.
(f) Prior Agreement. This Agreement supersedes any prior agreement relating to
the subject matter hereof among the parties.
(g) Counterparts. This Agreement may be executed in counterparts and by the
different parties hereto on separate counterparts and by facsimile signature,
each of which when so executed and delivered, shall be deemed an original and
all of which counterparts shall constitute but one and the same agreement.
(h) Limited Liability of the Trust. The Sub-Advisor agrees that the Trust's
obligations under this Agreement shall be limited to the Fund and its assets,
and that the Sub-Advisor shall not seek satisfaction of any such obligation from
the shareholders of the Fund nor from any Trustee, officer, employee or agent of
the Trust.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the effective date above
written.
FORWARD FUNDS
By: /s/ J. Xxxx Xxxx, Jr.
-----------------------------------
Name: J. Xxxx Xxxx, Jr.
Title: President
XXXXX ASSET MANAGEMENT GROUP, L.P.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Member
FORWARD MANAGEMENT, LLC
By: /s/ Xxxx Xxxxxx
-----------------------------------
Name: Xxxx Xxxxxx
Title: Secretary
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EXHIBIT A
The management fee with respect to the Accessor Growth Fund (the "Fund") is
comprised of a monthly base fee (the "Base Fee") payable by the Fund to the
Sub-Advisor at an annual rate of 25 basis points (0.25%) of the Fund's average
daily net assets over such month and a performance fee adjustment (the
"Performance Fee Adjustment") as discussed below.
A. Calculating the Performance Fee Adjustment.
The Performance Fee Adjustment shall be calculated monthly by:
i. Determining the difference in performance (the "Performance
Difference") between the Fund and the S&P 500/Citigroup Growth
Index (the "Index"), as described in paragraph B;
ii. Using the Performance Difference to determine the performance
adjustment rate (the "Performance Adjustment Rate"), as
illustrated in paragraph C; and
iii. Applying the Performance Fee Adjustment Rate to the average
daily net assets of the Fund during the Performance
Measurement Period (as defined below).
B. Computing the Performance Difference.
The Performance Difference is calculated monthly, and is determined by measuring
the percentage difference between the performance of one Advisor Class Share of
the Fund and the performance of the Index over the performance measurement
period as defined below (the "Performance Measurement Period"). The performance
of one Advisor Class Share of the Fund shall be measured by computing the
percentage difference, carried to five decimal places, between the net asset
value as of the last business day of the period selected for comparison and the
net asset value of such share as of the last business day of the prior period,
adjusted for dividends or capital gain distributions treated as reinvested
immediately. The performance of the Index will be established by measuring the
percentage difference, carried to five decimal places, between the beginning and
ending values of the Index for the comparison period, with dividends or capital
gain distributions on the securities that comprise the Index being treated as
reinvested immediately.
C. Determining the Performance Adjustment Rate
The Performance Adjustment Rate will increase or decrease proportionately with
the Performance Difference. To the extent that the Performance Difference falls
within a "null zone" that is equal to plus 100 basis points (1.0%) or minus 100
basis points (-1.0%), the Performance Fee Adjustment Rate shall be zero and
there shall be no Performance Fee Adjustment. The Performance Fee Adjustment
Rate shall not exceed an absolute value of 15 basis points (0.15%) (the "Maximum
Performance Fee Adjustment Rate") and the Maximum Performance Fee Adjustment
Rate shall be made when the Performance Difference reaches plus or minus 350
basis points (3.50%). Therefore, the minimum possible annual fee payable to the
Sub-Advisor
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will be 10 basis points (0.10%) and the maximum possible annual fee will be 40
basis points (0.40%).
D. Performance Measurement Periods
For the period from September 21, 2007 through September 30, 2008, the
Sub-Advisor will be paid at the Base Rate, without regard to any Performance
Adjustment. Thereafter, the Performance Measurement Period shall equal the
12-month period prior to and including the month for which the fee is being
calculated. The 12-month comparison period will roll over with each succeeding
month, so that it will always equal 12 months, ending with the month for which
the performance incentive adjustment is being computed. For the purpose of this
paragraph, the performance of the Accessor Growth Fund, a series of Accessor
Funds, Inc. and the accounting predecessor of the Fund, will be treated as the
performance of the Fund.
E. Changes to the "Index" or the "Class"
The Trustees of the Trust have initially designated the S&P 500/Citigroup Growth
Index and the Advisor Class Shares of the Fund as the index and class to be used
for purposes of determining the Performance Adjustment (referred to herein as
the "Index" and the "Class," respectively). From time to time, to the extent
permitted by the Investment Company Act of 1940, as amended (the "1940 Act") and
the rules and regulations thereunder, the Trustees may, by a vote of the
Trustees voting in person, including a majority of the Trustees who are not
parties to this Agreement or "interested persons" (as defined in the 0000 Xxx)
of any such parties, determine (i) that another securities index is a more
appropriate benchmark than the Index for purposes of evaluating the performance
of the Fund; and/or (ii) that a different class of shares of the Fund other than
the Class is most appropriate for use in calculating the Performance Adjustment.
After ten days' written notice to the Sub-Advisor, a different index (the
"Successor Index") may be substituted for the Index in prospectively calculating
the Performance Adjustment, and/or a different class of shares (the "Successor
Class") may be substituted in calculating the Performance Adjustment. However,
the calculation of that portion of the Performance Adjustment attributable to
any portion of the Performance Measurement Period prior to the adoption of the
Successor Index will still be based upon the Performance Difference. The use of
a Successor Class of shares for purposes of calculating the Performance
Adjustment shall apply to the entire Performance Measurement Period so long as
such Successor Class was outstanding at the beginning of such period. In the
event that such Successor Class of shares was not outstanding for all or a
portion of the Performance Measurement Period, it may only be used in
calculating that portion of the Performance Adjustment attributable to the
period during which such Successor Class was outstanding and any prior portion
of the Performance Measurement Period shall be calculated using the Class of
shares previously designated.
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