FORM OF
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made and entered into [as of the] _____ day of
________ 2005 by and between GARTMORE MUTUAL FUNDS (the "Trust"), a Delaware
statutory trust, and GARTMORE GLOBAL ASSET MANAGEMENT TRUST (the "Adviser"), a
Delaware business trust registered under the Investment Advisers Act of 1940, as
amended (the "Advisers Act").
WITNESSETH:
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "SEC") as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Trust desires to retain the Adviser to furnish certain
investment advisory services, as described herein, with respect to certain of
the series of the Trust, all as now are or may be hereafter listed on Exhibit A
to this Agreement (each, a "Fund"); and
WHEREAS, the Adviser represents that it is willing and possesses legal
authority to render such services subject to the terms and conditions set forth
in this Agreement,
NOW, THEREFORE, the Trust and the Adviser do mutually agree and promise
as follows:
1. Appointment as Adviser. The Trust hereby appoints the Adviser
to act as investment adviser to each Fund subject to the terms and conditions
set forth in this Agreement. The Adviser hereby accepts such appointment and
agrees to furnish the services hereinafter described for the compensation
provided for in this Agreement.
2. Duties of Adviser.
(a) Investment Management Services. (1) Subject to the
supervision of the Trust's Board of Trustees (and except as otherwise
permitted under the terms of any exemptive relief obtained by the
Adviser from the Securities and Exchange Commission, or by rule or
regulation), the Adviser will provide, or arrange for the provision of,
a continuous investment program and overall investment strategies for
each Fund, including investment research and management with respect to
all securities and investments and cash equivalents in each Fund. The
Adviser will determine, or arrange for others to determine, from time to
time what securities and other investments will be purchased, retained
or sold by each Fund and will implement, or arrange for others to
implement, such determinations through the placement, in the name of a
Fund, of orders for the execution of portfolio transactions with or
through such brokers or dealers as may be so selected. The Adviser will
provide, or arrange for the provision of, the services under this
Agreement in accordance with the stated investment policies and
restrictions of each Fund as set forth in that Fund's current prospectus
and statement of additional information as currently in effect and as
supplemented or amended from time to time (collectively referred to
hereinafter as the "Prospectus") and subject to the directions of the
Trust's Board of Trustees.
(2) Subject to the provisions of this Agreement and the 1940 Act and any
exemptions thereto, the Adviser is authorized to appoint one or more
qualified subadvisers (each a "Subadviser") to provide each Fund with
certain services required by this Agreement. Each Subadviser shall have
such investment discretion and shall make all determinations with
respect to the investment of a Fund's assets as shall be assigned to
that Subadviser by the Adviser and the purchase and sale of portfolio
securities with respect to those assets and shall take such steps as may
be necessary to implement its decisions. The Adviser shall not be
responsible or liable for the investment merits of any decision by a
Subadviser to purchase, hold, or sell a security for a Fund.
(3) Subject to the supervision and direction of the Trustees, the
Adviser shall (i) have overall supervisory responsibility for the
general management and investment of a Fund's assets; (ii) determine the
allocation of assets among the Subadvisers, if any; and (iii) have full
investment discretion to make all determinations with respect to the
investment of Fund assets not otherwise assigned to a Subadviser.
(4) The Adviser shall research and evaluate each Subadviser, if any,
including (i) performing initial due diligence on prospective
Subadvisers and monitoring each Subadviser's ongoing performance; (ii)
communicating performance expectations and evaluations to the
Subadvisers; and (iii) recommending to the Trust's Board of Trustees
whether a Subadviser's contract should be renewed, modified or
terminated. The Adviser shall also recommend changes or additions to the
Subadvisers and shall compensate the Subadvisers.
(5) The Adviser shall provide to the Trust's Board of Trustees such
periodic reports concerning a Fund's business and investments as the
Board of Trustees shall reasonably request.
(b) Compliance with Applicable Laws and Governing Documents. In the
performance of its duties and obligations under this Agreement, the
Adviser shall act in conformity with the Trust's Agreement and
Declaration of Trust, as from time to time amended and/or restated, and
By-Laws, as from time to time amended and/or restated, and the
Prospectus and with the instructions and directions received from the
Trustees of the Trust and will conform to and comply with the
requirements of the 1940 Act, the Internal Revenue Code of 1986, as
amended (the "Code") (including the requirements for qualification as a
regulated investment company) and all other applicable federal and state
laws and regulations.
The Adviser acknowledges and agrees that subject to the
supervision and directions of the Trust's Board of Trustees, it shall be
solely responsible for compliance with all disclosure requirements under
all applicable federal and state laws and regulations relating to the
Trust or a Fund, including, without limitation, the 1940 Act, and the
rules and regulations thereunder, except that each Subadviser shall have
liability in connection with information furnished by the Subadviser to
a Fund or to the Adviser.
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(c) Consistent Standards. It is recognized that the Adviser
will perform various investment management and administrative services
for entities other than the Trust and the Funds; in connection with
providing such services, the Adviser agrees to exercise the same skill
and care in performing its services under this Agreement as the Adviser
exercises in performing similar services with respect to the other
fiduciary accounts for which the Adviser has investment
responsibilities.
(d) Brokerage. The Adviser is authorized, subject to the
supervision of the Trust's Board of Trustees, (1) to establish and
maintain accounts on behalf of each Fund with; (2) to place orders for
the purchase and sale of assets not allocated to a Subadviser, with or
through, such persons, brokers or dealers ("brokers") as the Adviser may
select; and (3) to negotiate commissions to be paid on such
transactions. In the selection of such brokers and the placing of such
orders, the Adviser shall seek to obtain for a Fund the most favorable
price and execution available, except to the extent the Adviser may be
permitted to pay higher brokerage commissions for brokerage and research
services, as provided below. In using its reasonable efforts to obtain
for a Fund the most favorable price and execution available, the
Adviser, bearing in mind the Fund's best interests at all times, shall
consider all factors it deems relevant, including price, the size of the
transaction, the nature of the market for the security, the amount of
the commission, if any, the timing of the transaction, market prices and
trends, the reputation, experience and financial stability of the broker
involved, and the quality of service rendered by the broker in other
transactions. Subject to such policies as the Trustees may determine,
the Adviser shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by
reason of its having caused a Fund to pay a broker that provides
brokerage and research services (within the meaning of Section 28(e) of
the Securities Exchange Act of 1934, as amended) to the Adviser an
amount of commission for effecting a Fund investment transaction that is
in excess of the amount of commission that another broker would have
charged for effecting that transaction, if, but only if, the Adviser
determines in good faith that such commission was reasonable in relation
to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction
or the overall responsibilities of the Adviser with respect to the
accounts as to which it exercises investment discretion.
It is recognized that the services provided by such brokers may
be useful to the Adviser in connection with the Adviser's services to
other clients. On occasions when the Adviser deems the purchase or sale
of a security to be in the best interests of a Fund as well as other
clients of the Adviser, the Adviser, to the extent permitted by
applicable laws and regulations, may, but shall be under no obligation
to, aggregate the securities to be sold or purchased in order to obtain
the most favorable price or lower brokerage commissions and efficient
execution. In such event, allocation of securities so sold or purchased,
as well as the expenses incurred in the transaction, will be made by the
Adviser in the manner the Adviser considers to be the most equitable and
consistent with its fiduciary obligations to each Fund and to such other
clients.
(e) Securities Transactions. The Adviser will not purchase
securities or other instruments from or sell securities or other
instruments to a Fund; provided, however, the Adviser may purchase
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securities or other instruments from or sell securities or other
instruments to a Fund if such transaction is permissible under
applicable laws and regulations, including, without limitation, the 1940
Act, the Advisers Act and the rules and regulations promulgated
thereunder or any exemption therefrom.
The Adviser agrees to observe and comply with Rule 17j-1 under
the 1940 Act and the Trust's Code of Ethics, as the same may be amended
from time to time.
(f) Books and Records. In accordance with the 1940 Act and the
rules and regulations promulgated thereunder, the Adviser shall maintain
separate books and detailed records of all matters pertaining to the
Funds and the Trust (the "Fund's Books and Records"), including, without
limitation, a daily ledger of such assets and liabilities relating
thereto and brokerage and other records of all securities transactions.
The Adviser acknowledges that the Fund's Books and Records are property
of the Trust. In addition, the Fund's Books and Records shall be
available to the Trust at any time upon request and shall be available
for telecopying without delay to the Trust during any day that the Funds
are open for business.
3. Expenses. During the term of this Agreement, the Adviser will
pay all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities, commodities and other investments
(including brokerage commissions and other transaction charges, if any)
purchased for a Fund. The Adviser shall, at its sole expense, employ or
associate itself with such persons as it believes to be particularly fitted to
assist it in the execution of its duties under this Agreement. The Adviser shall
be responsible for the expenses and costs for the officers of the Trust and the
Trustees of the Trust who are "interested persons" (as defined in the 0000 Xxx)
of the Adviser.
It is understood that the Trust will pay all of its own expenses,
including, without limitation, (1) all charges and expenses of any custodian or
depository appointed by the Trust for the safekeeping of its cash, securities
and other assets, (2) all charges and expenses paid to an administrator
appointed by the Trust to provide administrative or compliance services, (3) the
charges and expenses of any transfer agents and registrars appointed by the
Trust, (4) the charges and expenses of independent certified public accountants
and of general ledger accounting and internal reporting services for the Trust,
(5) the charges and expenses of dividend and capital gain distributions, (6) the
compensation and expenses of Trustees of the Trust who are not "interested
persons" of the Adviser, (7) brokerage commissions and issue and transfer taxes
chargeable to the Trust in connection with securities transactions to which the
Trust is a party, (8) all taxes and fees payable by the Trust to Federal, State
or other governmental agencies, (9) the cost of stock certificates representing
shares of the Trust, (10) all expenses of shareholders' and Trustees' meetings
and of preparing, printing and distributing prospectuses and reports to
shareholders, (11) charges and expenses of legal counsel for the Trust in
connection with legal matters relating to the Trust, including without
limitation, legal services rendered in connection with the Trust's existence,
financial structure and relations with its shareholders, (12) insurance and
bonding premiums, (13) association membership dues, (14) bookkeeping and the
costs of calculating the net asset value of shares of the Trust's Funds, and
(15) expenses relating to the issuance, registration and qualification of the
Trust's shares.
4. Compensation. For the services provided and the expenses
assumed with respect to a Fund pursuant to this Agreement, the Adviser will be
entitled to the fee listed for each Fund on Exhibit A. Such fees will be
computed daily and payable monthly at an annual rate based on a Fund's average
daily net assets.
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The method of determining net assets of a Fund for purposes hereof shall
be the same as the method of determining net assets for purposes of establishing
the offering and redemption price of the Shares as described in each Fund's
Prospectus. If this Agreement shall be effective for only a portion of a month,
the aforesaid fee shall be prorated for the portion of such month during which
this Agreement is in effect.
Notwithstanding any other provision of this Agreement, the Adviser may
from time to time agree not to impose all or a portion of its fee otherwise
payable hereunder (in advance of the time such fee or portion thereof would
otherwise accrue). Any such fee reduction may be discontinued or modified by the
Adviser at any time.
5. Representations and Warranties of Adviser. The Adviser
represents and warrants to the Trust as follows:
(a) The Adviser is registered as an investment adviser
under the Advisers Act;
(b) The Adviser is a business trust duly organized,
validly existing and in good standing under the laws
of the State of Delaware with the power to own and
possess its assets and carry on its business as it is
now being conducted;
(c) The execution, delivery and performance by the Adviser
of this Agreement are within the Adviser's powers and
have been duly authorized by all necessary action on
the part of its shareholders and/or trustees, and no
action by or in respect of, or filing with, any
governmental body, agency or official is required on
the part of the Adviser for the execution, delivery
and performance by the Adviser of this Agreement, and
the execution, delivery and performance by the Adviser
of this Agreement do not contravene or constitute a
default under (i) any provision of applicable law,
rule or regulation, (ii) the Adviser's governing
instruments, or (iii) any agreement, judgment,
injunction, order, decree or other instrument binding
upon the Adviser;
(d) The Form ADV of the Adviser provided to the Trust is a
true and complete copy of the form, including that
part or parts of the Form ADV filed with the SEC, that
part or parts maintained in the records of the
Adviser, and/or that part or parts provided or offered
to clients, in each case as required under the
Advisers Act and rules thereunder, and the information
contained in such Form ADV is accurate and complete in
all material respects and does not omit to state any
material fact necessary in order to make the
statements made, in light of the circumstances under
which they were made, not misleading.
6. Survival of Representations and Warranties; Duty to Update
Information. All representations and warranties made by the Adviser pursuant to
Section 5 shall survive for the duration of this Agreement and the parties
hereto shall promptly notify each other in writing upon becoming aware that any
of the foregoing representations and warranties are no longer true.
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7. Liability and Indemnification.
(a) Liability. In the absence of willful misfeasance, bad faith
or gross negligence on the part of the Adviser or a reckless disregard
of its duties hereunder, the Adviser shall not be subject to any
liability to a Fund or the Trust, for any act or omission in the case
of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of Fund assets;
provided, however, that nothing herein shall relieve the Adviser from
any of its obligations under applicable law, including, without
limitation, the federal and state securities laws.
(b) Indemnification. The Adviser shall indemnify the Trust and
its officers and trustees, for any liability and expenses, including
attorneys fees, which may be sustained as a result of the Adviser's
willful misfeasance, bad faith, gross negligence, reckless disregard of
its duties hereunder or violation of applicable law, including, without
limitation, the federal and state securities laws.
8. Duration and Termination.
(a) Duration. Unless sooner terminated, this Agreement shall
continue until [ January 1, 2006 ] with respect to any Fund covered by
the Agreement initially and for an initial two-year period for any Fund
subsequently added to the Agreement and thereafter shall continue
automatically for successive annual periods; provided that such
continuance is specifically approved at least annually by the Trust's
Board of Trustees or the vote of the lesser of (a) 67% of the shares of
a Fund represented at a meeting if holders of more than 50% of the
outstanding shares of the Fund are present in person or by proxy or (b)
more than 50% of the outstanding shares of the Fund; provided further
that in either event its continuance also is approved by a majority of
the Trust's 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.
(b) Termination. Notwithstanding whatever may be provided
herein to the contrary, this Agreement may be terminated at any time,
without payment of any penalty by vote of a majority of the Trust's
Board of Trustees, or, with respect to a Fund, by "vote of a majority of
the outstanding voting securities" (as defined in the 0000 Xxx) of that
Fund, or by the Adviser, in each case, not less than sixty (60) days'
written notice to the other party.
This Agreement shall not be assigned (as such term is defined in the
0000 Xxx) and shall terminate automatically in the event of its assignment.
9. Services Not Exclusive. The services furnished by the Adviser
hereunder are not to be deemed exclusive, and the Adviser shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby. It is understood that the action taken by the Adviser
under this Agreement may differ from the advice given or the timing or nature of
action taken with respect to other clients of the Adviser, and that a
transaction in a specific security may not be accomplished for all clients of
the Adviser at the same time or at the same price.
10. Amendment. This Agreement may be amended by mutual consent of the
parties, provided that the terms of each such amendment shall be in writing and
approved by the Trust's Board of trustees or by a vote of a majority of the
outstanding voting securities of a Fund (as required by the 1940 Act).
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11. Confidentiality. Subject to the duties of the Adviser and the Trust
to comply with applicable law, including any demand of any regulatory or taxing
authority having jurisdiction, the parties hereto shall treat as confidential
all information pertaining to a Fund and the Trust and the actions of the
Adviser and the Funds in respect thereof.
12. Notice. Any notice that is required to be given by the parties to
each other under the terms of this Agreement shall be in writing, delivered, or
mailed postpaid to the other party, or transmitted by facsimile with
acknowledgment of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to the Adviser:
Gartmore Global Asset Management Trust
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 Attention:
Legal Department.
Facsimile: (000) 000-0000
(b) If to the Trust:
Gartmore Mutual Funds
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 Attention:
Legal Department.
Facsimile: (000) 000-0000
13. Jurisdiction. This Agreement shall be governed by and construed to
be in accordance with substantive laws of the State of Delaware without
reference to choice of law principles thereof and in accordance with the 1940
Act. In the case of any conflict, the 1940 Act shall control.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which shall
together constitute one and the same instrument.
15. Certain Definitions. For the purposes of this Agreement, "interested
person," "affiliated person," "assignment" shall have their respective meanings
as set forth in the 1940 Act, subject, however, to such exemptions as may be
granted by the SEC.
16. Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
17. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision or applicable law, the remainder of the
Agreement shall not be affected adversely and shall remain in full force and
effect.
18. Gartmore Mutual Funds and its Trustees. The terms "Gartmore Mutual
Funds" and the "Trustees of Gartmore Mutual Funds" refer respectively to the
Trust created and the Trustees, as trustees but not individually or personally,
acting from time to time under an Agreement and Declaration of Trust made and
dated as of September 30, 2004, as has been or may be amended from time to time,
and to which reference is hereby made.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first written above.
ADVISER:
GARTMORE GLOBAL ASSET MANAGEMENT TRUST
By: Name:
Title:
TRUST:
GARMTORE MUTUAL FUNDS
By: Name:
Title:
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EXHIBIT A
INVESTMENT ADVISORY AGREEMENT BETWEEN
GARTMORE MUTUAL FUNDS
AND
GARTMORE GLOBAL ASSET MANAGEMENT TRUST
(FORMERLY VILLANOVA GLOBAL ASSET MANAGEMENT TRUST)
EFFECTIVE FEBRUARY 28, 2005
FUNDS OF THE TRUST ADVISORY FEES EFFECTIVE DATE
------------------ ------------- --------------
Gartmore Emerging Markets Fund(1) 1.05% on assets up to $500 million August 30, 2000
1.00% on assets of $500 million and
more but less than $2 billion
0.95% for assets of $2 billion and more
Gartmore International Growth Fund(1) 0.90% on assets up to $500 million August 30, 2000
0.85% on assets of $500 million and
more but less than $2 billion
0.80% for assets of $2 billion and more
Gartmore Worldwide Leaders Fund(1) 0.90% on assets up to $500 million August 30, 2000
(formerly Gartmore Global Leaders Fund) 0.85% on assets of $500 million and
more but less than $2 billion
0.80% for assets of $2 billion and more
Gartmore European Leaders Fund 1.00% of the Fund's average Not Seeded
(formerly Gartmore European Growth Fund) daily net assets
Gartmore OTC Fund 1.00% of the Fund's average Not Seeded
daily net assets
Gartmore Asia Pacific Leaders Fund 1.00% of the Fund's average Not Seeded
daily net assets
Gartmore Global Financial Services Fund(1) 0.90% on assets up to $500 million December 18, 2001
0.85% on assets of $500 million and
more but less than $2 billion
0.80% for assets of $2 billion and more
Gartmore Global Utilities Fund(1) 0.70% on assets up to $500 million December 18, 2001
0.65% on assets of $500 million and
more but less than $2 billion
0.60% for assets of $2 billion or more
--------------------
(1.) Performance Fees for the Gartmore Global Financial Services Fund;
Gartmore Global Utilities Fund; Gartmore International Growth Fund;
Gartmore Emerging Markets Fund; and Gartmore Worldwide Leaders Fund.
EXHIBIT A
INVESTMENT ADVISORY AGREEMENT BETWEEN
GARTMORE MUTUAL FUNDS
AND
GARTMORE GLOBAL ASSET MANAGEMENT TRUST
(FORMERLY VILLANOVA GLOBAL ASSET MANAGEMENT TRUST)
EFFECTIVE FEBRUARY 28, 2005
PAGE 2
The base advisory fee for these Funds as set forth above is adjusted each
quarter beginning one year after implementation of the Performance Fee,
depending upon a Fund's investment performance for the 12 months preceding the
end of that month relative to the investment performance of each respective
Fund's benchmark as listed below. The base fee is either increased or decreased
proportionately by the following amounts at each breakpoint, based upon whether
a Fund has out-performed or under-performed its respective benchmark (using the
performance of each such Fund's Class A Shares to measure), by more or less than
a maximum of 500 basis points over the preceding rolling 12 month period as
follows:
+/- 100 bps under/outperformance 2bps
+/- 200 bps under/outperformance 4bps
+/- 300 bps under/outperformance 6bps
+/- 400 bps under/outperformance 8bps
+/- 500 bps or more under/outperformance 10bps
The investment performance of each Fund will be the sum of: (1) the
change in each Fund's value during such period; (2) the value of the Fund's cash
distributions (from net income and realized net gains) having an ex-dividend
date during such calculation period; and (3) the value of any capital gains
taxes paid or accrued during such calculation period for undistributed realized
long-term capital gains from the Fund. For this purpose, the value of
distributions per share of realized capital gains, of dividends per share paid
from investment income and of capital gains taxes per share reinvested in the
Fund will be the Fund's value in effect at the close of business on the record
date for the payment of such distributions and the date on which provision is
made for such taxes, after giving effect to such distribution, dividends and
taxes.
Benchmark Index Performance:
----------------------------
The performance of each respective benchmark Index for a calculation
period, expressed as a percentage of each Index, at the beginning of such period
will be the sum of: (1) the change in the level of the Index during such period;
and (2) the value, as calculated consistent with the Index, of cash
distributions having an ex-dividend date during such period made by those
companies whose securities comprise the Index. For this purpose, cash
distributions on the securities that comprise the Index will be treated as if
they were reinvested in the Index at least as frequently as the end of each
calendar quarter following payment of the dividend.
EXHIBIT A
INVESTMENT ADVISORY AGREEMENT BETWEEN
GARTMORE MUTUAL FUNDS
AND
GARTMORE GLOBAL ASSET MANAGEMENT TRUST
(FORMERLY VILLANOVA GLOBAL ASSET MANAGEMENT TRUST)
EFFECTIVE FEBRUARY 28, 2005
PAGE 3
Benchmark Indices:
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1. Gartmore Global Financial Services Fund MSCI World Financial Index
2. Gartmore Global Utilities Fund 60% MSCI World Telecom Index/40% MSCI
World Utilities Index
3. Gartmore International Growth Fund MSCI All Country World Free X U.S.
Index
4. Gartmore Emerging Markets Fund MSCI Emerging Markets Index
5. Gartmore Worldwide Leaders Fund MSCI World Index
ADVISER
GARTMORE GLOBAL ASSET MANAGEMENT TRUST
(formerly Villanova Global Asset Management Trust)
By:
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Name:
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Title:
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TRUST
GARTMORE MUTUAL FUNDS
By:
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Name:
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Title:
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