AMENDED AND RESTATED AMERICAN BEACON FUNDS INVESTMENT ADVISORY AGREEMENT
Exhibit
(d)(2)(Z)
AGREEMENT dated the 1st day of December, 2010 and amended and restated this 20th day of
January 2011, by and between American Beacon Advisors, Inc., a Delaware Corporation (the
“Manager”), and Xxxxxxx Investment Partners, L.P. (the “Adviser”);
WHEREAS, American Beacon Funds (the “Trust”), a Massachusetts Business Trust, is an open-end,
diversified management investment company registered under the Investment Company Act of 1940, as
amended, consisting of several series (portfolios) of shares, each having its own investment
policies; and
WHEREAS, the Trust has retained the Manager to provide the Trust with business and asset
management services, subject to the control of the Board of Trustees;
WHEREAS, the Trust’s agreement with the Manager permits the Manager to delegate to other
parties certain of its asset management responsibilities; and
WHEREAS, the Manager desires to retain the Adviser to render investment management services to
the Trust with respect to certain of its investment portfolios and such other investment portfolios
as the Trust and the Adviser may agree upon and so specify in the Schedule(s) attached hereto
(collectively the “Portfolios”) and as described in the Trust’s registration statement on Form N-1A
as amended from time to time, and the Adviser is willing to render such services;
NOW, THEREFORE, in consideration of mutual covenants herein contained, the parties hereto
agree as follows:
1. Duties of the Adviser. The Manager employs the Adviser to manage the investment
and reinvestment of such portion, if any, of the Portfolios’ assets as is designated by the Manager
from time to time, and, with respect to such assets, to continuously review, supervise, and
administer the investment program of the Portfolios, to determine in the Adviser’s discretion the
securities to be purchased or sold, to provide the Manager and the Trust with agreed upon records
concerning the Adviser’s activities which the Trust is required to maintain, and to render regular
agreed upon reports to the Manager and to the Trust’s officers and Trustees concerning the
Adviser’s discharge of the foregoing responsibilities. The Adviser shall discharge the foregoing
responsibilities subject to the Manager’s oversight and the control of the officers and the
Trustees of the Trust and in compliance with such policies as the Trustees may from time to time
establish and provide to Adviser, and in compliance with the objectives, policies, and limitations
for each such Portfolio set forth in the Trust’s current registration statement as amended from
time to time and made available to Adviser, and applicable laws and regulations. The Adviser
accepts such employment and agrees to render the services for the compensation specified herein and
to provide at its own expense the office space, furnishings and equipment and the personnel
required by it to perform the services on the terms and for the compensation provided herein. (For
the avoidance of doubt, Adviser shall not have responsibility for or
discretionary authority over the selection of any cash management or short-term vehicle for
uninvested cash in the Account. The Manager will instruct the Trust’s Custodian(s) to hold and/or
transfer the Portfolios’ assets in accordance with Proper Instructions received from the Adviser.
(For this purpose, the term “Proper Instructions” shall have the meaning(s) specified in the
applicable agreement(s) between the Trust and its custodian(s) and provided to Adviser.) The
Adviser will not be responsible for the cost of securities or brokerage commissions or any other
Trust expenses except as specified in this Agreement. The adviser shall not be liable for any act,
conduct or omission of the Trust’s Custodian(s).
(b) Valuation. In accordance with procedures and methods established by the Board,
which may be amended from time to time, the Adviser will provide assistance to the Manager in
determining the fair value of all securities and other investments owned by the Portfolios, and use
reasonable efforts to arrange for the provision of valuation information or prices from parties
independent of the Adviser with respect to the securities or other investments owned by the
Portfolios for which market prices are not readily available. The Adviser will monitor the
securities and other investments owned by the Portfolios for potential significant events that
could affect their values and notify the Manager when, in its opinion, a significant event has
occurred that may not be reflected in the market values of such securities.
(c) Compliance Matters. The Adviser, at its expense, will provide the Manager with such
compliance reports and certifications relating to its duties under this Agreement and the federal
securities laws as may be agreed upon by such parties from time to time. The Adviser also
reasonably shall: (i) cooperate with and provide assistance to the Manager, the Trust’s
administrator, custodian, transfer agent and pricing agents and all other agents and
representatives of the Portfolios, the Trust and the Manager; (ii) keep all such persons fully
informed as to such matters as they may reasonably deem necessary to the performance of their
obligations to the Portfolios, the Trust and the Manager; (iii) provide prompt responses to
reasonable requests made by such persons; and (iv) maintain any appropriate interfaces with each so
as to promote the efficient exchange of information.
2. Portfolio Transactions. The Adviser is authorized to select the brokers or dealers
(including, to the extent permitted by law and applicable Trust guidelines, the Adviser or any of
its affiliates) that will execute the purchases and sales of portfolio securities for the
Portfolios and is directed to use its best efforts to obtain best execution as described in the
Trust’s current registration statement as amended from time to time and made available to Adviser.
In selecting brokers or dealers, the Adviser may give consideration to factors other than price,
including, but not limited to, research services and market information. Any such services or
information which the Adviser receives in connection with activities for the Trust may also be used
for the benefit of other clients and customers of the Adviser or any of its affiliates. The Adviser
will promptly communicate to the Manager and to the officers and the Trustees of the Trust such
information relating to portfolio transactions as they may reasonably request. The Adviser shall
not consult with any other investment sub-adviser of the Portfolio concerning transactions for the
Portfolio in securities or other assets.
3. Voting Rights. Unless otherwise directed by the Manager, the Adviser shall receive and
automatically exercise the voting rights with respect to any and all proxies regarding the
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assets in the Portfolios in accordance with the Adviser’s proxy voting policy and procedures, a
current copy of which has been provided to the Manager.
4. Compensation of the Adviser. For the services to be rendered by the Adviser as provided in
Sections 1 and 2 of this Agreement, the Manager shall pay to the Adviser compensation at the rate
specified in Schedule(s) attached hereto and made a part of this Agreement. Such compensation shall
be paid to the Adviser quarterly in arrears, and the Manager shall calculate the fee by applying
the annual percentage rate(s) as specified in the attached Schedule(s) to the average daily assets
of the specified Portfolios during the relevant quarter. Solely for the purpose of calculating the
applicable annual percentage rates specified in the attached Schedule(s), there shall be included
such other assets as are specified in said Schedule(s).
The Adviser agrees: (l) that the blended fee in basis points contracted with the Manager will
not exceed the blended fee in basis points contracted with an account of the same or smaller size
(including other accounts managed for the same client); and (2) that the actual annual dollar fee
paid by any other client of the same or larger size for whom the Adviser provides investment
advisory services under an asset based fee arrangement (i.e., not a performance fee arrangement)
will not be less than the actual annual dollar fee paid by the Manager. In the event that the fee
charged to the Manager exceeds the fee charged to an account described in (1) or (2) above, the fee
charged to the Manager shall automatically be reduced to match the fee charged to such other
account from the time such fee is charged to such other account.
5. Other Services. At the request of the Trust or the Manager, the Adviser in its discretion
may make available to the Trust office facilities, equipment, personnel, and other services. Such
office facilities, equipment, personnel and services shall be provided for or rendered by the
Adviser and billed to the Trust or the Manager at a price to be agreed upon by the Adviser and the
Trust or the Manager.
6. Reports. The Manager (on behalf of the Trust) and the Adviser agree to furnish to each
other, if applicable, current prospectuses, proxy statements, reports to shareholders, and such
other information with regard to their affairs as each may reasonably request.
7. Status of Adviser. The services of the Adviser to the Trust are not to be deemed exclusive,
and the Adviser and its directors, officers, employees and affiliates shall be free to render
similar services to others so long as its services to the Trust are not impaired thereby. The
Adviser shall be deemed to be an independent contractor and shall, unless otherwise expressly
provided or authorized, have no authority to act for or represent the Manager or the Trust in any
way or otherwise be deemed an agent to the Manager of the Trust.
8. Certain Records. Any records required to be maintained and preserved pursuant to the
provisions of Rule 31a-1 and Rule 31a-2 promulgated under the Investment Company Act of 1940 which
are prepared or maintained by the Adviser solely on behalf of the Manager or the Trust are the
property of the Manager or the Trust and will be surrendered promptly to the Manager or Trust on
request.
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9. Liability of Adviser. The Adviser shall have no liability to the Trust, its shareholders or
any third party arising out of or related to this Agreement except with respect to claims which
occur due to any willful misfeasance, bad faith, or gross negligence in the performance of its
duties or the reckless disregard of its obligations under this Agreement.
10. Permissible Interests. To the extent permitted by law, Trustees, agents, and shareholders
of the Trust are or may be interested in the Adviser (or any successor thereof) as directors,
partners, officers, or shareholders, or otherwise; directors, partners, officers, agents, and
shareholders of the Adviser are or may be interested in the Trust as Trustees, shareholders or
otherwise; and the Adviser (or any successor thereof) is or may be interested in the Trust as a
shareholder or otherwise; provided that all such interests shall be fully disclosed between the
parties on an ongoing basis and in the Trust’s registration statement as required by law.
11. Duration and Termination. This Agreement, unless sooner terminated as provided herein,
shall continue for two years after its initial approval as to each Portfolio and thereafter for
periods of one year for so long as such continuance thereafter is specifically approved at least
annually (a) by the vote of a majority of those Trustees of the Trust who are not parties to this
Agreement or interested persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval, and (b) by the Trustees of the Trust or by vote of a majority
of the outstanding voting securities of each Portfolio; provided, however, that if the shareholders
of any Portfolio fail to approve the Agreement as provided herein, the Adviser may continue to
serve hereunder in the manner and to the extent permitted by the Investment Company Act of 1940 and
rules thereunder. The foregoing requirement that continuance of this Agreement be “specifically
approved at least annually” shall be construed in a manner consistent with the Investment Company
Act of 1940 and the rules and regulations thereunder. This Agreement may be terminated as to any
Portfolio at any time, without the payment of any penalty, by the Manager, by vote of a majority of
the Trustees of the Trust or by vote of a majority of the outstanding voting securities of the
Portfolio on not less than 30 days nor more than 60 days written notice to the Adviser, or by the
Adviser ~t any time without the payment of any penalty, on 60 days written notice to the Trust.
This Agreement will automatically and immediately terminate in the event of its assignment. Any
notice under this Agreement shall be given in writing, addressed and delivered, or mailed postpaid,
to the other party at the primary office of such party, unless such party has previously designated
another address.
As used in this Section 11, the terms “assignment”, “interested persons”, and a “vote of a
majority of the outstanding voting securities” shall have the respective meanings set forth in the
Investment Company Act of 1940 and the rules and regulations thereunder, subject to such
exemptions as may be granted by the Securities and Exchange Commission under said Act.
12. 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.
13. Amendments. This Agreement may be amended by mutual consent, subject to approval by the
Board and the Portfolios’ shareholders to the extent required by the 1940 Act.
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14. Governing Law. This Agreement shall be governed by the laws of Texas.
15. Trust and Shareholder Liability. The Adviser is hereby expressly put on notice of the
limitation of shareholder liability as set forth in the Declaration of Trust and agrees that
obligations assumed by the Trust pursuant to this Agreement shall be limited in all cases to the
Trust and its assets, and if the liability relates to one or more Portfolio, the obligations
hereunder shall be limited to the respective assets of that Portfolio. The Adviser further agrees
that they shall not seek satisfaction of any such obligation from the shareholders or any
individual shareholder of the Portfolio, nor from the Trustees or any individual Trustee of the
Trust.
A copy of the Declaration of Trust of the Trust is on file with the Secretary of The
Commonwealth of Massachusetts, and notice is hereby given that this instrument is not binding upon
any of the Trustees, officers, or shareholders of the Trust individually.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and
year first written above.
| Xxxxxxx Investment Partners, L.P. | American Beacon Advisors, Inc. | |||||||||
By
|
/s/ Xxxxx Xxxxxxx | By | /s/ Xxxx X. Needles, Jr. | |||||||
| Xxxxx Xxxxxxx | Xxxx X. Needles, Jr. | |||||||||
| CEO | President & CEO | |||||||||
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Schedule A
To the
American Beacon Funds
Investment Advisory Agreement
between
American Beacon Advisors, Inc.
and
Xxxxxxx Investment Partners, L.P.
To the
American Beacon Funds
Investment Advisory Agreement
between
American Beacon Advisors, Inc.
and
Xxxxxxx Investment Partners, L.P.
American Beacon Advisors, Inc. (“Manager”) shall pay compensation to Xxxxxxx Investment
Partners, L.P. (“Adviser”) pursuant to Section 4 of the Investment Advisory Agreement between said
parties for rendering investment management services with respect to the American Beacon Emerging
Markets Fund in accordance with the following annual percentage rates for all Trust assets under
Adviser’s management:
All assets 0.75 of 1.00%
If the management of the accounts commences or terminates at any time other than the beginning
or end of a calendar quarter, the fee shall be prorated based on the portion of such calendar
quarter during which the Agreement was in force.
Dated: as of December 1st, 2010, and restated on January 20, 2011
Xxxxxxx Investment Partners, L.P.
|
American Beacon Advisors, Inc. | |||||||||
By:
|
/s/ Xxxxx Xxxxxxx | By: | /s/ Xxxx X. Needles, Jr. | |||||||
| Title: CEO | President & CEO | |||||||||
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