AMENDED AND RESTATED AMERICAN BEACON FUNDS INVESTMENT ADVISORY AGREEMENT
Exhibit (d)(2)(Q)
AGREEMENT dated the 6th day of March, 2009 and amended and restated this 20th day of
January 2011, by and between American Beacon Advisors, Inc., a Delaware Corporation (the
“Manager”), and Xxxxxxx Capital Management, Inc. (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-IA
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 records concerning
the Adviser’s activities which the Trust is required to maintain, and to render regular 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 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 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. (With respect to any of the Portfolio assets allocated for management by the Adviser, the
Adviser can request that the Manager make the investment
2) decisions with respect to that portion of assets which the Adviser deems should be invested
in short-term money market instruments. The Manager agrees to provide this service.) 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).) 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.
3) 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. 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.
4) Voting Rights. The Trust will exercise voting rights on any assets held in the
Portfolios.
5) 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 shall be calculated 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: (1) that the blended fee in basis points charged to the Manager will not
exceed the blended fee in basis points charged to an account of the same or smaller size for whom
the Adviser provides comparable investment advisory services; and (2) that the actual annual dollar
fee paid by any other client of the same or larger size for whom the Adviser provides comparable
investment advisory services 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. The parties agree that the assets of related accounts may be aggregated for purposes of
calculating fees and that this provision excludes (a) client relationships existing, or which were
under consideration, discussion or negotiation prior to July 10, 2008, when the Adviser’s new fee
schedule came into effect, and (b) any performance-based
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fees, charitable discounts and any wrap accounts, “separately managed accounts” (SMAs) or
similar accounts of brokerage or advisory firms’ clients.
6) 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.
7) 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,
certified copies of their financial statements, and such other information with regard to their
affairs as each may reasonably request.
8) 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.
9) 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 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.
10) 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.
11) 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.
12) 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
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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 at 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.
13) 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.
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 Capital Management, Inc. | American Beacon Advisors, Inc. | |||||||||
By
|
/s/ Xxxxx X. Xxxxxxx | By | /s/ Xxxx X. Needles, Jr. | |||||||
| Xxxxx X. Xxxxxxx | Xxxx X. Needles, Jr. | |||||||||
| President and CEO | ||||||||||
Its
|
CEO | |||||||||
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Schedule A
to the
American Beacon Funds
Investment Advisory Agreement
between
American Beacon Advisors, Inc.
to the
American Beacon Funds
Investment Advisory Agreement
between
American Beacon Advisors, Inc.
and
Xxxxxxx Capital Management, Inc.
Xxxxxxx Capital Management, Inc.
American Beacon Advisors, Inc. (“Manager”) shall pay compensation to Xxxxxxx Capital
Management, Inc. (“Adviser”) pursuant to Section 4 of the Investment Advisory Agreement between
said parties for rendering investment management services with respect to the Large Cap Growth Fund
in accordance with the following annual percentage rates for all Trust assets under Adviser’s
management:
| Asset under Management | Per Annum Fee | |||
First $50 million |
0.55 | % | ||
Next $50 million |
0.50 | % | ||
Next $150 million |
0.45 | % | ||
Next $250 million |
0.40 | % | ||
Next $500 million |
0.35 | % | ||
Assets over $1 billion |
0.30 | % | ||
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 March 6, 2009 and restated on January 20, 2011
| Xxxxxxx Capital Management, Inc. | American Beacon Advisors, Inc. | |||||||||
By: |
/s/ Xxxxx X. Xxxxxxx | By: | /s/ Xxxx X. Needles, Jr. | |||||||
Name:
|
Xxxxx X. Xxxxxxx | Xxxx X. Needles, Jr. | ||||||||
Title:
|
CEO | President and CEO | ||||||||
