INVESTMENT ADVISORY AGREEMENT
AGREEMENT, effective as of the 3rd day of March,
2008 between Old Mutual Capital, Inc. (the "Adviser") and Old
Mutual Funds III (the "Trust").
WHEREAS, the Trust is a Delaware statutory trust,
and is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end, management
investment company;
WHEREAS, the Trust wishes to retain the Adviser
to render investment advisory services to the Trust and the
Adviser is willing to furnish such services to the series funds of the
Trust listed on Schedule A hereto (each, a "Fund" and collectively,
the "Funds"); and
WHEREAS, the Adviser 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, intending to be
legally bound, it is agreed between the Trust and the Adviser as
follows:
1. APPOINTMENT. The Trust hereby appoints the Adviser to
act as investment adviser to the Funds for the periods and on the
terms set forth in this Agreement. The Adviser 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 of the Trust, the Adviser will, (a)
provide a program of continuous investment management for the
Funds in accordance with each Fund's investment objectives,
policies and limitations as stated in the Funds' Prospectus(es) and
Statement(s) of Additional Information included as part of the
Trust's Registration Statement filed with the Securities and
Exchange Commission, as they may be amended from time to
time; (b) make asset allocation and investment decisions for each
Fund; and (c) place orders to purchase and sell securities for each
Fund.
In performing its investment management services to the
Funds hereunder, the Adviser will provide each Fund with ongoing
investment guidance and policy direction, including oral and
written research, analysis, advice, statistical and economic data,
and judgments regarding individual investments, general
economic conditions and trends and long-range investment policy.
The Adviser will determine the securities, instruments, repurchase
agreements, options, futures and other investments and
techniques that each Fund will purchase, sell, enter into or use,
and will provide an ongoing evaluation of each Fund's
investments. The Adviser will determine what portion of each
Fund's investments shall be invested in securities and other
assets, and what portion, if any, should be held uninvested. The
Adviser shall furnish to the Trust adequate (i) office space, which
may be space within the offices of the Adviser or in such other
places as may be agreed upon from time to time, and (ii) office
furnishings, facilities and equipment as may be reasonably
required for managing the corporate affairs and conducting the
business of the Trust, including complying with the corporate
reporting requirements of the various states in which the Trust
does business, and conducting correspondence and other
communications with the stockholders of the Trust. Except as
otherwise provided in Section 4, the Adviser shall employ or
provide and compensate the executive, secretarial and clerical
personnel necessary to provide such services. Subject to the
approval of the Trust's Board of Trustees (including a majority of
the Trustees who are not "interested persons" of the Trust as
defined in the 1940 Act), the Adviser may delegate to one or more
sub-advisers any of its duties enumerated in Section 2 hereof.
The Adviser shall continue to supervise the performance of any
such sub-adviser and shall report regularly thereon to the Trust's
Board of Trustees. The Adviser further agrees that, in performing
its duties hereunder, it will:
(a) comply with the 1940 Act and all rules and
regulations thereunder, the Advisers Act, the Internal Revenue
Code (the "Code"), and all other applicable federal and state laws
and regulations, and with any applicable procedures adopted by
the Trustees;
(b) use reasonable efforts to manage each 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;
(c) place orders pursuant to its investment
determinations for each Fund directly with the issuer, or with any
broker or dealer, in accordance with applicable policies expressed
in the Fund's Prospectus and/or Statement of Additional
Information and in accordance with applicable legal requirements;
(d) furnish to the Trust whatever statistical information
the Trust may reasonably request with respect to each Fund's
assets or contemplated investments. In addition, the Adviser will
keep the Trust and the Trustees informed of developments
materially affecting each Fund's investments and shall, on the
Adviser's own initiative, furnish to the Trust from time to time
whatever information the Adviser believes appropriate for this
purpose;
(e) make available to the Trust, promptly upon its
request, such copies of the Adviser's investment records and
ledgers with respect to each Fund as may be required to assist
the Fund in its compliance with applicable laws and regulations.
The Adviser will furnish the Trustees with such periodic and
special reports regarding the Funds as they may reasonably
request; and
(f) immediately notify the Trust in the event that the
Adviser or any of its affiliates: (1) becomes aware that it is subject
to a statutory disqualification that prevents the Adviser from
serving as investment adviser 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 Adviser
further agrees to notify the Trust immediately of any material fact
known to the Adviser respecting or relating to the Adviser that is
not contained in the Trust's Registration Statement, or any
amendment or supplement thereto, but that is required to be
disclosed therein, and of any statement contained therein that
becomes untrue in any material respect.
3. ADDITIONAL SERVICES. If the Trust so requests, the
Adviser shall also maintain all internal bookkeeping, accounting
and auditing services and records in connection with maintaining
each Fund's financial books and records, and shall calculate each
Fund's daily net asset value. For these services, each Fund shall
pay to the Adviser a monthly fee, which shall be in addition to the
fees payable pursuant to Section 5 hereof, to reimburse the
Adviser for its costs, without profit, for performing such services.
4. ALLOCATION OF CHARGES AND EXPENSES. Except
as otherwise specifically provided in this Section 4, the Adviser
shall pay the compensation and expenses of all its directors,
officers and employees who serve as officers and executive
employees of the Trust (including the Trust's share of payroll taxes
for such persons), and the Adviser shall make available, without
expense to the Trust, the service of its directors, officers and
employees who may be duly-elected officers of the Trust, subject
to their individual consent to serve and to any limitations imposed
by law.
The Adviser shall not be required to pay any expenses of
the Trust other than those specifically allocated to the Adviser in
this Section 4. In particular, but without limiting the generality of
the foregoing, the Adviser shall not be responsible, except to the
extent of the reasonable compensation of such of the Trust's
employees as are officers or employees of the Adviser whose
services may be involved, for the following expenses of the Trust:
organization and certain offering expenses of the Trust (including
out-of-pocket expenses, but not including the Adviser's overhead
and employee costs); fees payable to the Adviser and to any other
Trust advisers or consultants; legal expenses; auditing and
accounting expenses; interest expenses, telephone, telex,
facsimile, postage and other communications expenses; taxes
and governmental fees; fees, dues and expenses incurred by or
with respect to the Trust in connection with membership in
investment company trade organizations; costs of insurance
relating to fidelity coverage for the Trust's officers and employees;
fees and expenses of the Trust's custodian, any sub-custodian,
transfer agent, registrar, or dividend disbursing agent; payments
to the Adviser for maintaining the Trust's financial books and
records and calculating the daily net asset value pursuant to
Section 3 hereof; other payments for portfolio pricing or valuation
services to pricing agents, accountants, bankers and other
specialists, if any; expenses of preparing share certificates; other
expenses in connection with the issuance, offering, distribution,
sale or redemption of securities issued by the Trust; expenses
relating to investor and public relations; expenses of registering
and qualifying shares of the Trust for sale, freight, insurance and
other charges in connection with the shipment of the Trust's
portfolio securities; brokerage commissions or other costs of
acquiring or disposing of any portfolio securities or other assets of
the Trust, or of entering into other transactions or engaging in any
investment practices with respect to the Trust; expenses of
printing and distributing Prospectuses, Statements of Additional
Information, reports, notices and dividends to shareholders; costs
of stationery; any litigation expenses; costs of shareholders'
meetings; the compensation and all expenses (specifically
including travel expenses relating to the Trust's business) of
officers, trustees and employees of the Trust who are not
interested persons of the Adviser; and travel expenses (or an
appropriate portion thereof) of officers or trustees of the Trust who
are officers, directors or employees of the Adviser to the extent
that such expenses relate to attendance at meetings of the Board
of Trustees of the Trust with respect to matters concerning the
Trust, or any committees thereof or advisers thereto.
Notwithstanding the foregoing, the Trust shall reimburse
the Adviser at the end of each calendar quarter for the reasonable
portion of the compensation of attorneys employed by the Adviser
attributable to work for the Trust, as determined from time to time
by the Trust's Board of Trustees. Compensation for this purpose
shall include salary, cash bonus and benefits and shall exclude
any equity participation and profit sharing paid to such attorney.
Determinations of the reasonable portion of such compensation
allocable to the Trust shall be made by the Trust's Board of
Trustees periodically, but at least as often as annually.
5. COMPENSATION. As compensation for the services
provided and expenses assumed by the Adviser under this
Agreement, except for any additional services provided by the
Adviser pursuant to Section 3 hereof, each Fund will pay the
Adviser at the end of each calendar month an advisory fee as set
forth in Schedule A hereto. The advisory fee is computed daily as
a percentage of a Fund's average daily net assets. The "average
daily net assets" of a Fund shall mean the average of the values
placed on the Fund's net assets as of 4:00 p.m. (Eastern time) on
each day on which the net asset value of the Fund is determined
consistent with the provisions of Rule 22c-1 under the 1940 Act or,
if the Fund lawfully determines the value of its net assets as of
some other time on each business day, as of such other time.
The value of net assets of a Fund shall always be determined
pursuant to the applicable provisions of the Trust's Agreement and
Declaration of Trust and the Registration Statement. If, pursuant
to such provisions, the determination of net asset value is
suspended for any particular business day, then for the purposes
of this Section 5, the value of the net assets of a Fund as last
determined shall be deemed to be the value of its net assets as of
the close of regular trading on the New York Stock Exchange, or
as of such other time as the value of the net assets of a Fund's
securities may lawfully be determined, on that day. If the
determination of the net asset value of the shares of a Fund has
been so suspended for a period including any month and when
the Adviser's compensation is payable at the end of such month,
then such value shall be computed on the basis of the value of the
net assets of the Fund as last determined (whether during or prior
to such month). If a Fund determines the value of the net assets
more than once on any day, then the last such determination
thereof on that day shall be deemed to be the sole determination
thereof on that day for the purposes of this Section 5. To the
extent that the Adviser defers advisory fees or absorbs operating
expenses of a Fund, the Adviser may seek payment of such
deferred fees or reimbursement of such absorbed expenses within
three (3) fiscal years after the fiscal year in which fees were
deferred or expenses were absorbed.
6. BOOKS AND RECORDS. The Adviser agrees to maintain
such books and records with respect to its services to the Trust as
are required by Section 31 under the 1940 Act, and rules adopted
thereunder, and by other applicable legal provisions, and to
preserve such records for the periods and in the manner required
by that Section, and those rules and legal provisions. The Adviser
also agrees that records it maintains and preserves pursuant to
Rules 31a-1 and 31a-2 under the 1940 Act and otherwise in
connection with its services hereunder are the property of the
Trust and will be surrendered promptly to the Trust upon its
request. And the Adviser 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 Trust are being conducted in accordance with
applicable law and regulations.
7. STANDARD OF CARE AND LIMITATION OF LIABILITY.
The Adviser shall exercise its best judgment in rendering the
services provided by it under this Agreement. The Adviser shall
not be liable for any error of judgment or mistake of law or for any
loss suffered by the Trust or the holders of the Trust's shares in
connection with the matters to which this Agreement relates,
provided that nothing in this Agreement shall be deemed to
protect or purport to protect the Adviser against any liability to the
Trust or to the holders of the Trust's shares to which the Adviser
would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence on its part in the performance of its
duties or by reason of the Adviser's reckless disregard of its
obligations and duties under this Agreement. As used in this
Section 7, the term "Adviser" shall include any officers, directors,
employees or other affiliates of the Adviser performing services
with respect to the Trust.
8. SERVICES NOT EXCLUSIVE. It is understood that the
services of the Adviser are not exclusive, and that nothing in this
Agreement shall prevent the Adviser from providing similar
services to other investment companies or to other series of
investment companies, or from engaging in other activities,
provided such other services and activities do not, during the term
of the Agreement, interfere in a material manner with the Adviser's
ability to meet its obligations to the Trust hereunder. When the
Adviser recommends the purchase or sale of the same security for
a 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 a Fund, neither the Adviser
nor any of its directors, officers, or employees shall act as
principal or agent or receive any commission provided that
portfolio transactions for the Fund may be executed through firms
affiliated with the Adviser, in accordance with applicable legal
requirements. If the Adviser provides any advice to its clients
concerning the shares of the Trust, the Adviser shall act solely as
investment counsel for such clients and not in any way on behalf
of the Trust.
9. DURATION AND TERMINATION. This Agreement shall
continue for an initial period of two years from its effective date,
and thereafter shall continue automatically for successive annual
periods, provided such continuance is specifically approved at
least annually by (i) the Trustees or (ii) a vote of a "majority" (as
defined in the 0000 Xxx) of a 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 "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 as to a Fund (a) at
any time without penalty by the Trust 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 Adviser
or (b) by the Adviser 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).
10. AMENDMENTS. No provision 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 an affirmative vote of (i) a majority of the
outstanding voting securities of the Fund, and (ii) a majority of the
Trustees, including a majority of Trustees who are not interested
persons of any party to this Agreement, cast in person at a
meeting called for the purpose of voting on such approval, if such
approval is required by applicable law.
11. PERSONAL LIABILITY OF TRUSTEES AND
SHAREHOLDERS. The parties agree that 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.
12. MISCELLANEOUS.
(a) This Agreement shall be governed by the laws of
the State of Delaware, 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) 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.
(c) 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 hereby and, to
this extent, the provisions of this Agreement shall be deemed to
be severable.
(d) Nothing herein shall be construed as constituting
the Adviser as an agent of the Fund.
IN WITNESS WHEREFORE, the parties hereto have
caused this Agreement to be executed by their officers designated
below.
OLD MUTUAL FUNDS III
OLD MUTUAL CAPITAL, INC.
By:
/s/ Xxxxxx X.
Sluyters
By:
/s/ Xxxx X. Xxxxx
Name:
Xxxxxx X.
Sluyters
Name:
Xxxx X. Xxxxx
Title:
President
Title:
Chief Financial Officer
Date:
February 20,
2008
Date:
February 20, 2008
SCHEDULE A
TO INVESTMENT ADVISORY AGREEMENT BETWEEN
OLD MUTUAL FUNDS III AND OLD MUTUAL CAPITAL, INC.
Pursuant to Section 5 of this Agreement, each Fund shall pay the Adviser,
at the end of each calendar month, compensation computed daily at an annual
rate of the Fund's average daily net assets based on the following schedule:
Fund
Fee
Asset Level
Old Mutual 2011-2020 Conservative Fund
0.200%
0.175%
0.150%
0.125%
Less than $1 billion
$1 billion to less than $2 billion
$2 billion to less than $3 billion
$3 billion or greater
Old Mutual 2011-2020 Moderate Fund
0.250%
0.225%
0.200%
0.175%
Less than $1 billion
$1 billion to less than $2 billion
$2 billion to less than $3 billion
$3 billion or greater
Old Mutual 2011-2020 Aggressive Fund
0.250%
0.225%
0.200%
0.175%
Less than $1 billion
$1 billion to less than $2 billion
$2 billion to less than $3 billion
$3 billion or greater
Old Mutual 2021-2030 Conservative Fund
0.200%
0.175%
0.150%
0.125%
Less than $1 billion
$1 billion to less than $2 billion
$2 billion to less than $3 billion
$3 billion or greater
Old Mutual 2021-2030 Moderate Fund
0.250%
0.225%
0.200%
0.175%
Less than $1 billion
$1 billion to less than $2 billion
$2 billion to less than $3 billion
$3 billion or greater
Old Mutual 2021-2030 Aggressive Fund
0.250%
0.225%
0.200%
0.175%
Less than $1 billion
$1 billion to less than $2 billion
$2 billion to less than $3 billion
$3 billion or greater
Old Mutual 2031-2040 Conservative Fund
0.200%
0.175%
0.150%
0.125%
Less than $1 billion
$1 billion to less than $2 billion
$2 billion to less than $3 billion
$3 billion or greater
Old Mutual 2031-2040 Moderate Fund
0.250%
0.225%
0.200%
0.175%
Less than $1 billion
$1 billion to less than $2 billion
$2 billion to less than $3 billion
$3 billion or greater
Fund
Fee
Asset Level
Old Mutual 2031-2040 Aggressive Fund
0.250%
0.225%
0.200%
0.175%
Less than $1 billion
$1 billion to less than $2 billion
$2 billion to less than $3 billion
$3 billion or greater
Old Mutual 2041-2050 Conservative Fund
0.200%
0.175%
0.150%
0.125%
Less than $1 billion
$1 billion to less than $2 billion
$2 billion to less than $3 billion
$3 billion or greater
Old Mutual 2041-2050 Moderate Fund
0.250%
0.225%
0.200%
0.175%
Less than $1 billion
$1 billion to less than $2 billion
$2 billion to less than $3 billion
$3 billion or greater
Old Mutual 2041-2050 Aggressive Fund
0.250%
0.225%
0.200%
0.175%
Less than $1 billion
$1 billion to less than $2 billion
$2 billion to less than $3 billion
$3 billion or greater
1
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