EX-99.(d)(2)
THE LAZARD FUNDS, INC.
INVESTMENT MANAGEMENT AGREEMENT
Agreement, made the 11th day of August, 2005, between The Lazard
Funds, Inc., a Maryland corporation (the "Fund"), on behalf of the portfolios
named on Schedule 1 hereto, as such Schedule may be revised from time to time
(each, a "Portfolio"), and Lazard Asset Management LLC, a New York limited
liability company (the "Investment Manager").
W I T N E S S E T H
WHEREAS, the Fund is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), authorized to reclassify and issue any unissued shares to any number of
additional classes or series each having its own investment objective, policies
and restrictions; and
WHEREAS, the Fund desires to retain the Investment Manager to render
investment advisory services to each Portfolio and the Investment Manager is
willing to render such investment advisory services;
NOW, THEREFORE, the parties agree as follows:
1. The Fund hereby appoints the Investment Manager to act as
manager of each Portfolio for the period and on the terms set forth in this
Agreement. The Investment Manager accepts such appointment and agrees to render
the services herein described, for the compensation herein provided.
2. Subject to the supervision of the Board of Directors of the
Fund, the Investment Manager shall manage the investment operations of each
Portfolio and the assets of each Portfolio, including the purchase, retention
and disposition thereof, in accordance with the Portfolio's investment
objective, policies and restrictions as stated in the Fund's Prospectus
(hereinafter defined) and subject to the following understandings:
(a) The Investment Manager shall provide supervision of each
Portfolio's investments and determine from time to time what
investments or securities will be purchased, retained, sold or
loaned by the Portfolio, and what portion of the assets will be
invested or held uninvested as cash.
(b) The Investment Manager shall use its best judgment in
the performance of its duties under this Agreement.
(c) The Investment Manager, in the performance of its duties
and obligations under this Agreement, shall act in conformity with
the Articles of Incorporation, By-Laws and Prospectus of the Fund
(each hereinafter defined) and with the instructions and directions
of the Board of Directors of the Fund and will conform to and comply
with the requirements of the 1940 Act and all other applicable
federal and state laws and regulations.
(d) The Investment Manager shall determine the securities to
be purchased or sold by each Portfolio and will place orders
pursuant to its determinations with or through such persons, brokers
or dealers (including Lazard Freres & Co. LLC) to carry out the
policy with respect to brokerage as set forth in the Fund's
Prospectus or as the Fund's Board of Directors may direct from time
to time. In providing a Portfolio with investment supervision, it is
recognized that the Investment Manager will give primary
consideration to securing the most favorable price and efficient
execution.
On occasions when the Investment Manager deems the purchase or
sale of a security to be in the best interest of a Portfolio as well
as other clients, the Investment Manager, to the extent permitted by
applicable laws and regulations, may aggregate the securities to be
so sold or purchased 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
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the Investment Manager in the manner it considers to be the most
equitable and consistent with its fiduciary obligations to the
Portfolio and to such other clients.
(e) The Investment Manager shall render to the Fund's Board
of Directors such periodic and special reports with respect to each
Portfolio's securities transactions as the Board may reasonably
request.
(f) The Investment Manager shall provide the Fund's
custodian on each business day with information relating to all
transactions concerning a Portfolio's assets.
3. The Fund has delivered to the Investment Manager copies of
each of the following documents and will deliver to it all future amendments and
supplements, if any:
(a) Articles of Incorporation of the Fund, filed with the
State Department of Assessments and Taxation of Maryland (such
Articles of Incorporation, as in effect on the date hereof and as
amended from time to time, are herein called the "Articles of
Incorporation");
(b) By-Laws of the Fund (such By-Laws, as in effect on the
date hereof and as amended from time to time, are herein called the
"By-Laws");
(c) Resolutions of the Board of Directors of the Fund
authorizing the appointment of the Investment Manager and approving
the form of this Agreement;
(d) Registration Statement under the 1940 Act and the
Securities Act of 1933, as amended, on Form N-lA (the "Registration
Statement"), as filed with the Securities and Exchange Commission
(the "Commission") relating to the Fund and shares of the Fund's
Common Stock;
(e) Notification of Registration of the Fund under the 1940
Act on Form N-8A as filed with the Commission; and
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(f) Prospectus of the Fund (such prospectus and the
statement of additional information, each as currently in effect and
as amended or supplemented from time to time, being herein called
the "Prospectus").
4. The Investment Manager shall authorize and permit any of the
general members, officers and employees of the Investment Manager, and any of
the general members, directors, officers and employees of any of its affiliates,
who may be elected as Directors or officers of the Fund to serve in the
capacities in which they are elected. All services to be furnished by the
Investment Manager under this Agreement may be furnished through the medium of
any such general members, directors, officers or employees of the Investment
Manager or any of its affiliates.
5. The Investment Manager shall keep the books and records of the
Fund and the Portfolios required to be maintained by it pursuant to this
Agreement and by the Fund pursuant to the 1940 Act. The Investment Manager
agrees that all records which it maintains for the Fund or the Portfolios are
the property of the Fund or the relevant Portfolio and it will surrender
promptly to the Fund or such Portfolio any of such records upon the request of
the Fund or such Portfolio. The Investment Manager further agrees to preserve
such records as prescribed by Rule 3la-2 under the 1940 Act.
6. The Investment Manager will bear all of its expenses incurred
in connection with the services to be rendered by the Investment Manager to the
Portfolios under this Agreement, including without limitation, the compensation
of all personnel of the Fund and the Investment Manager, except the fees of
Directors of the Fund who are not affiliated persons of the Investment Manager
or its affiliates. The Fund or the relevant Portfolio assumes and will pay all
other expenses in connection with the Fund or such Portfolio not assumed by the
Investment Manager, including but not limited to:
(a) the fees and expenses of Directors who are not
affiliated persons of the Investment Manager or any of its
affiliates;
(b) the fees and expenses of the Fund's administrator, if
any;
(c) the fees and expenses of the custodian which relate to
(i) the custodial function and the recordkeeping connected
therewith, (ii) the maintenance of the required accounting records
of the Fund, (iii) the pricing of the shares of the Portfolio,
including the cost of any pricing service or services which may be
retained pursuant to the authorization of the Directors of the Fund
and (iv) for both mail and wire orders, the cashiering function in
connection with the issuance and redemption of the Portfolio's
securities;
(d) the fees and expenses of the Fund's transfer agent,
which may be the custodian, which relate to the maintenance of, and
communications with respect to, each stockholder account;
(e) the charges and expenses of legal counsel and
independent accountants for the Fund;
(f) brokers' commissions, any issue or transfer taxes and
any other charges in connection with portfolio transactions on
behalf of the Portfolio;
(g) all taxes and corporate fees payable by the Fund or the
Portfolio to federal, state or other governmental agencies, and all
costs of maintaining corporate existence;
(h) the allocable share of the fees of any trade association
of which the Fund may be a member;
(i) the cost of share certificates, if any, representing
shares of the Portfolio;
(j) the fees and expenses involved in registering and
maintaining registrations of the Fund and of its shares with the
Commission and, if required, qualifying the shares of the Portfolio
under state securities laws, including the preparation and printing
of the Fund's registration statements and Prospectuses for filing
under federal and state securities laws for such purposes;
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(k) all expenses of stockholders' and Directors' meetings
and of preparing, printing and mailing Prospectuses and reports to
stockholders in quantities required for distribution to the
stockholders, and communications expenses with respect to individual
stockholder accounts;
(l) the cost of obtaining fidelity insurance and any
liability insurance covering the Directors and officers of the Fund
as such;
(m) litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the
Fund's business;
(n) expenses of issue, repurchase or redemption of shares of
the Fund;
(o) fees payable to the Investment Manager hereunder;
(p) interest expenses of the Fund; and
(q) all other expenses properly payable by the Fund.
7. For the services provided to the Portfolios and the expenses
assumed pursuant to this Agreement, each Portfolio will pay monthly to the
Investment Manager as full compensation therefor a management fee, accrued
daily, at the annual rate set forth opposite the Portfolio's name on Schedule 1
hereto.
8. The Investment Manager shall not be liable for any error of
judgment or for any loss suffered by a Portfolio in connection with the matters
to which this Agreement relates, 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 0000 Xxx) or a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement. The federal securities laws may impose liabilities even, under
certain circumstances, on persons who act in good faith, and therefore nothing
herein shall in any way constitute a waiver or limitation of any right which a
Portfolio may have under any federal securities law.
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9. As to each Portfolio, this Agreement shall continue until the
date set forth opposite such Portfolio's name on Schedule 1 hereto (the
"Reapproval Date") and thereafter shall continue automatically for successive
annual periods ending on the day of each year set forth opposite the Portfolio's
name on Schedule 1 hereto (the "Reapproval Day"), provided such continuance is
specifically approved at least annually by (i) the Fund's Board of Directors or
(ii) vote of a majority (as defined in the 0000 Xxx) of such Portfolio's
outstanding voting securities, provided that in either event its continuance
also is approved by a majority of the Fund's Directors 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.
As to each Portfolio, this Agreement may be terminated at any time, without
payment of penalty by the Portfolio, on 60 days' written notice to the
Investment Manager, by vote of the Board of Directors of the Fund, or by vote of
a majority (as defined in the 0000 Xxx) of the outstanding voting securities of
such Portfolio. This Agreement shall automatically terminate, as to the relevant
Portfolio, in the event of its assignment (as defined in the 1940 Act).
10. Nothing in this Agreement shall limit or restrict the right of
any general member, officer or employee of the Investment Manager or any general
member, director, officer or employee of any of its affiliates who may also be a
Director, officer or employee of the Fund 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 right of the Investment Manager to engage in any other business or
to render services of any kind to any other corporation, firm, individual or
association.
11. During the term of this Agreement, the Fund agrees to furnish
to the Investment Manager at its principal office all Prospectuses, proxy
statements, reports to stockholders, sales literature, or other material
prepared for distribution to stockholders of the Fund or the public, which refer
in any way to the Investment Manager, prior to use thereof and not to use such
material if the Investment Manager reasonably objects in writing within five
business days (or such other time as may be mutually agreed) after receipt
thereof. In the event of termination of this Agreement, the Fund will continue
to
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furnish to the Investment Manager copies of any of the above-mentioned materials
which refer in any way to the Investment Manager. The Fund shall furnish or
otherwise make available to the Investment Manager such other information
relating to the business affairs of the Fund as the Investment Manager at any
time, or from time to time, reasonably requests in order to discharge its
obligations hereunder.
12. This Agreement may be amended by mutual consent, but the
consent of the Fund must be approved in conformity with the requirements of the
1940 Act.
13. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (1) to the Investment Manager at 00
Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Secretary, or (2) to the
Fund at 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: President.
14. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated
below as of the day and year first above written.
THE LAZARD FUNDS, INC.
By:
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Name:
Title:
LAZARD ASSET MANAGEMENT LLC
By:
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Name:
Title:
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SCHEDULE 1
Annual Fee
as a
Percentage of
Average Daily Reapproval Reapproval
Name of Portfolio Net Assets Date Day
----------------- ------------- ---------- ----------
U.S. Equity Value Portfolio .75% December 31, 2006 December 31
U.S. Strategic Equity Portfolio .85% December 31, 2006 December 31
Mid Cap Portfolio .75% December 31, 2006 December 31
Small Cap Portfolio .75% December 31, 2006 December 31
International Equity Portfolio .75% December 31, 2006 December 31
International Equity Select Portfolio .85% December 31, 2006 December 31
International Strategic Equity Portfolio .75% December 31, 2006 December 31
International Small Cap Portfolio .75% December 31, 2006 December 31
Emerging Markets Portfolio 1.00% December 31, 2006 December 31
Bond Portfolio .50% December 31, 2006 December 31
High Yield Portfolio .75% December 31, 2006 December 31
As Revised: September 13, 2005
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