INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made as of this 12th day of
March, 2010 by and among Old Mutual
Capital, Inc. (the "Adviser"), Xxxxxx Asset
Management Company LLC (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 April 19, 2006, the
Adviser acts as investment manager for the assets
of the portfolios listed on Schedule A to this Agreement
(each, a "Portfolio"); 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 all of the assets of each Portfolio, 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 each 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 Internal Revenue
Code of 1986, 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 a 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 each 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 a 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 a 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 each 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
Portfolios' 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 each
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 a Portfolio required by Rule 31a-1
under the 1940 Act. The Sub-Adviser agrees that all
records that it maintains on behalf of a Portfolio are
property of the Portfolio and the Sub-Adviser will surrender
promptly to a Portfolio any of such records upon that
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 each 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 Portfolios and shares of the Portfolios'
beneficial shares, and all amendments thereto; and
(c) Prospectus(es) of the Portfolios.
4. For the services to be provided by the
Sub-Adviser pursuant to this Agreement for the Portfolios,
the Adviser will pay to the Sub-Adviser as full
compensation therefor a fee at an annual rate equal to
a percentage of each Portfolio's average daily net assets,
as set forth on Schedule A (net of 50% of any waivers,
reimbursement payments, supermarket fees and alliance
fees waived, reimbursed or paid by the Adviser in respect
of the Portfolio). This fee will be paid to the Sub-Adviser
from the Adviser's advisory fee for such Portfolio.
This fee will be computed daily and paid to the
Sub-Adviser monthly.
To the extent that the Adviser is reimbursed by the
Trust for any waived fees or reimbursed expenses
pursuant to the terms of a separate expense limitation
agreement between the Trust and the Adviser, the Adviser
will pay to the Sub-Adviser its pro-rata share of any
such reimbursed amount.
5. The Sub-Adviser shall not be liable for any
error of judgment or for any loss suffered by a
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 March 11, 2012, 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 a 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 a 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 Portfolios,
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 each 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:
Old Mutual Capital, Inc.
0000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Attention: General Counsel
To the Sub-Adviser at:
Xxxxxx Asset Management Company LLC
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: President
To the Trust or a Portfolio at:
Old Mutual Funds II
0000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Attention: General Counsel
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.
As required by certain exemptive rules under the
1940 Act, the Sub-Adviser is prohibited from
consulting with the entities listed below concerning
transactions for the Portfolio in securities or other
assets:
1. other subadvisers to the Portfolio
2. other subadvisers to a Trust portfolio
3. other subadvisers to a portfolio under
common control with the Portfolio
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.
By:
Name: Xxxx X. Xxxxx
Title: Chief Financial Officer
OLD MUTUAL FUNDS II
By:
Name: Xxxxxx X. Xxxxx
Title: Treasurer and Principal Financial Officer
XXXXXX ASSET MANAGEMENT COMPANY LLC
By:
Name:Title:
SCHEDULE A
DATED MARCH 12, 2010
TO
INVESTMENT SUB-ADVISORY AGREEMENT
AMONG
XXXXXX ASSET MANAGEMENT COMPANY LLC
OLD MUTUAL CAPITAL, INC.
AND
OLD MUTUAL FUNDS II
DATED MARCH 12, 2010
FUND SUB-ADVISORY FEE
OLD MUTUAL CASH RESERVES FUND 0.09%
