JOHN HANCOCK FUNDS II SUBADVISORY AGREEMENT
XXXX XXXXXXX FUNDS II
AGREEMENT made this 11th day of January, 2013, between Xxxx Xxxxxxx Investment Management
Services, LLC, a Delaware limited liability company (the “Adviser”), and Xxxxxx Investments, L.P.,
a Pennsylvania limited partnership (the “Subadviser”). In consideration of the mutual covenants
contained herein, the parties agree as follows:
| 1. | APPOINTMENT OF SUBADVISER |
The Subadviser undertakes to act as the investment subadviser to and, subject to the
supervision of the Trustees of Xxxx Xxxxxxx Funds II (the “Trust”) and the terms of this Agreement,
to manage the investment and reinvestment of the assets of the Portfolios specified in Appendix A
to this Agreement as it shall be amended by the Adviser and the Subadviser from time to time (the
“Portfolios”). The Subadviser will be an independent contractor and will have no authority to act
for or represent the Trust or Adviser in any way or otherwise be deemed an agent unless expressly
authorized in this Agreement or in another writing by the Trust and Adviser.
| 2. | SERVICES TO BE RENDERED BY THE SUBADVISER TO THE TRUST | |
| a. | Subject always to the direction and control of the Trustees of the Trust, the Subadviser will manage the investments and determine the composition of the assets of the Portfolios in accordance with the Portfolios’ investment objectives, investment policies and limitations set forth in the Trust’s registration statement, as amended, or as subsequently amended in writing. In fulfilling its obligations to manage the investments and reinvestments of the assets of the Portfolio, the Subadviser will: |
| i. | obtain and evaluate pertinent economic, statistical, financial and other information affecting the economy generally and individual companies or industries the securities of which are included in the Portfolio or are under consideration for inclusion in the Portfolio; | ||
| ii. | formulate and implement a continuous investment program for each Portfolio consistent with the investment objectives and related investment policies and limitations for each such Portfolio as described in the Trust’s registration statement, as amended, or as subsequently amended in writing; | ||
| iii. | take whatever steps are necessary to implement these investment programs by the purchase and sale of securities (including the placing of orders for such purchases and sales), entering into derivative transactions and by managing all cash in the Portfolio; |
| iv. | manage required collateral levels in connection with the investment and reinvestment of the assets of the Portfolios. The Sub-adviser will provide instructions to the custodian for the Portfolios (the “Custodian”) to post collateral and to call for collateral from counterparties, as necessary, and will arrange for the transmission to the Custodian on a daily basis such confirmation, trade tickets, and other identifying information (including, but not limited to, Cusip, Cedel, or other numbers that identify the securities to be purchased or sold on behalf of the Portfolio) as may be reasonably necessary to enable the Custodian to perform its administrative and recordkeeping responsibilities with respect to each Portfolio. The Subadviser will provide reports with respect to its collateral management activities as requested by the Adviser; | ||
| v. | regularly report to the Trustees of the Trust with respect to the implementation of these investment programs; and | ||
| vi. | provide assistance with and make recommendations for the fair value of securities held by the Portfolios for which market quotations are not readily available or which may be identified for review from time to time by either the Trust or the Subadviser. |
| b. | The Subadviser, at its expense, will furnish (i) all necessary investment and management facilities, including salaries of personnel required for it to execute its duties faithfully, and (ii) administrative facilities, including bookkeeping, clerical personnel and equipment necessary for the efficient conduct of the investment affairs of the Portfolios (excluding determination of net asset value and fund accounting services). | |
| c. | The Subadviser will select brokers, dealers, futures commission merchants and other counterparties to effect all transactions for the Portfolios, including without limitation, with respect to transactions in securities, derivatives, foreign currency exchange, commodities and/or any other investments. The Subadviser will place all orders with brokers, dealers, counterparties or issuers, and will negotiate brokerage commissions, spreads and other financial and non-financial terms, as applicable. The Subadviser will always seek the best possible price and execution in the circumstances in all transactions. Subject to the foregoing, the Subadviser is directed at all times to seek to execute transactions for the Portfolios in accordance with its trading policies, as disclosed by the Subadviser to the Fund from time to time, but in all cases subject to policies and practices established by the Fund and described in the Trust’s registration statement. Notwithstanding the foregoing, the Subadviser may pay a broker-dealer that provides research and brokerage services a higher spread or commission for a particular transaction than otherwise might have been charged by another broker-dealer to the extent permitted by Section 28(e) of the Securities Exchange Act of 1934 and by the Trust’s registration statement, if the Subadviser determines that the higher spread or commission is reasonable in relation to the value of the brokerage and research services that such broker-dealer provides, viewed in terms of either the particular transaction or the Subadviser’s overall responsibilities with respect to accounts managed by the Subadviser. The Subadviser may use for the benefit of the Subadviser’s other clients, or |
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| make available to companies affiliated with the Subadviser or to its directors for the benefit of its clients, any such brokerage and research services that the Subadviser obtains from brokers or dealers. | ||
| d. | The Subadviser will maintain all accounts, books and records with respect to the Portfolios as are required of an investment adviser of a registered investment company pursuant to the Investment Company Act of 1940, as amended (the “Investment Company Act”), and Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”), and the rules thereunder. | |
| e. | The Subadviser shall vote proxies relating to the Portfolios’ investment securities in accordance with the Trust’s proxy voting policies and procedures, which provide that the Subadviser shall vote all proxies relating to securities held by the Portfolios and, subject to the Trust’s policies and procedures, shall use proxy voting policies and procedures adopted by the Subadviser in conformance with Rule 206(4)-6 under the Investment Advisers Act. The Subadviser shall review its proxy voting activities on a periodic basis with the Trustees. | |
| f. | In making investment decisions, the Subadviser shall exercise its discretion upon the information from time to time available to it. The Subadviser shall act in compliance with all applicable laws, regulations and fiduciary duties relating to xxxxxxx xxxxxxx or insider dealing while in possession of material non-public or inside information. | |
| 3. | COMPENSATION OF SUBADVISER |
For the services provided to the Portfolios, the Adviser will pay the Subadviser with respect
to each Portfolio the compensation specified in Appendix A to this Agreement payable monthly in
arrears on the last business day of each month. The fee will be appropriately prorated to reflect
any portion of a calendar month that this Agreement is not in effect between the parties. The
Adviser is solely responsible for the payment of fees to the Subadviser, and the Subadviser agrees
to seek payment of its fees solely from the Adviser. Neither the Trust nor the Portfolios shall
have liability for Subadviser’s fee hereunder.
| 4. | LIABILITY OF SUBADVISER |
Neither the Subadviser nor any of its directors, officers or employees shall be liable to the
Adviser or the Trust for any loss suffered by the Adviser or Portfolios resulting from its acts or
omissions as Subadviser to the Portfolios, except for losses resulting from willful misfeasance,
bad faith, or gross negligence in the performance of, or from the reckless disregard of, the duties
of the Subadviser or any of its directors, officers or employees.
| 5. | SUPPLEMENTAL ARRANGEMENTS |
The Subadviser may enter into arrangements with other persons affiliated with the Subadviser
to better enable it to fulfill its obligations under this Agreement for the provision of
certain personnel and facilities to the Subadviser, provided that the Subadviser shall be
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responsible for any acts or omissions of such other persons and shall notify the Adviser in writing
before entering into such arrangements.
| 6. | REGULATION |
The Subadviser shall submit to all regulatory and administrative bodies having jurisdiction
over the services provided pursuant to this Agreement any information, reports or other material
which any such body by reason of this Agreement may request or require pursuant to applicable laws
and regulations.
| 7. | DURATION AND TERMINATION OF AGREEMENT |
This Agreement shall become effective on the date first indicated above, subject to the
condition that the Trust’s Board, including a majority of those Trustees who are not interested
persons (as such term is defined in the Investment Company Act) of the Adviser or the Subadviser,
and the holders of interests in the Portfolios, shall have approved this Agreement in the manner
required by the Investment Company Act. Unless terminated as provided herein, this Agreement shall
remain in full force and effect through and including the second anniversary of the date first
indicated above, and shall continue in full force and effect indefinitely thereafter, but only so
long as such continuance is specifically approved at least annually by (a) the Board, or by the
vote of a majority of the outstanding voting securities (as defined in the Investment Company Act)
of each Portfolio, and (b) the vote of a majority of those Trustees who are not interested persons
(as such term is defined in the Investment Company Act) of any such party to this Agreement cast in
person at a meeting called for the purpose of voting on such approval. This Agreement may be
terminated at any time, without the payment of any penalty, by the Trustees of the Trust, or, with
respect to a Portfolio, by the vote of a majority of the outstanding voting securities of the
Portfolio, on sixty days’ written notice to the Adviser and the Subadviser, or by the Adviser or
Subadviser on sixty days’ written notice to the Portfolio and the other party. This Agreement will
automatically terminate, without the payment of any penalty, in the event of its assignment (as
defined in the Investment Company Act) or in the event the Advisory Agreement between the Adviser
and the Trust terminates for any reason.
| 8. | PROVISION OF CERTAIN INFORMATION BY SUBADVISER |
The Subadviser will promptly notify the Adviser in writing of the occurrence of any of the
following events:
| a. | the Subadviser fails to be registered as an investment adviser under the Investment Advisers Act or under the laws of any jurisdiction in which the Subadviser is required to be registered as an investment adviser in order to perform its obligations under this Agreement; | |
| b. | the Subadviser is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, involving the affairs of the Fund; and |
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| c. | any change in actual control or management of the Subadviser or any change in the portfolio managers of the Fund. | |
| 9. | USE OF NAME |
The Subadviser agrees not to use the names, or any derivatives of the names “Xxxx Xxxxxxx,”
“Xxxx Xxxxxxx Investment Management Services, LLC” or the names of any such entities’ affiliates
without first obtaining the applicable entity’s express, written consent prior to the use of such
name.
| 10. | AMENDMENTS TO THE AGREEMENT |
This Agreement may be amended by the parties only if such amendment is specifically approved
by the vote of a majority of the Trustees of the Trust who are not interested persons of any party
to this Agreement cast in person at a meeting called for the purpose of voting on such approval.
Any required shareholder approval shall be effective if a majority of the outstanding voting
securities of the Fund vote to approve the amendment.
| 11. | ENTIRE AGREEMENT |
This Agreement contains the entire understanding and agreement of the parties.
| 12. | HEADINGS |
The headings in the sections of this Agreement are inserted for convenience of reference only
and shall not constitute a part hereof.
| 13. | NOTICES |
All notices required to be given pursuant to this Agreement shall be delivered or mailed to
the last known business address of the Trust or applicable party in person or by registered mail or
a private mail or delivery service providing the sender with notice of receipt. Notice shall be
deemed given on the date delivered or mailed in accordance with this paragraph.
| 14. | SEVERABILITY |
Should any portion of this Agreement for any reason be held to be void in law or in equity,
the Agreement shall be construed, insofar as is possible, as if such portion had never been
contained herein.
| 15. | GOVERNING LAW |
The provisions of this Agreement shall be construed and interpreted in accordance with the
laws of The Commonwealth of Massachusetts, or any of the applicable provisions of the Investment
Company Act. To the extent that the laws of The Commonwealth of Massachusetts,
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or any of the provisions in this Agreement, conflict with applicable provisions of the
Investment Company Act, the latter shall control.
| 16. | LIMITATION OF LIABILITY |
The Agreement and Declaration of Trust of the Trust, a copy of which, together with all
amendments thereto (the “Declaration”), is on file in the office of the Secretary of The
Commonwealth of Massachusetts, provides that the name “Xxxx Xxxxxxx Funds II” refers to the
Trustees under the Declaration collectively as Trustees, but not as individuals or personally; and
no Trustee, shareholder, officer, employee or agent of the Trust shall be held to any personal
liability, nor shall resort be had to their private property, for the satisfaction of any
obligation or claim, in connection with the affairs of the Trust or any portfolio thereof, but only
the assets belonging to the Trust, or to the particular portfolio with respect to which such
obligation or claim arose, shall be liable.
| 17. | CONFIDENTIALITY |
a. All information of or pertaining to the Trust, the Adviser and any of its affiliates, whether
stored on computer disk or as electronic media, to which the Subadviser is given access or
otherwise obtains in the course of its provision of the services under this Agreement, including
but not limited to the Portfolios’ holdings and shareholder information (which includes, without
limitation, names, addresses, telephone numbers, account numbers, demographic, financial and
transactional information), is referred to as “Confidential Information.”
b. Subadviser shall hold all Confidential Information in confidence and shall not disclose any
Confidential Information to any person, unless otherwise permitted hereunder and Subadviser shall
not use any such Confidential Information for purposes other than in connection with the services
provided under this Agreement.
c. The Subadviser agrees to treat the Portfolios’ holdings as confidential information in
accordance with the Trust’s “Policies and Procedures Regarding Disclosure of Portfolio Holdings” as
such Policy may be amended from time to time, and to prohibit its employees from disclosing or
trading while in possession of any such confidential information.
d. If Subadviser becomes legally compelled (by deposition, interrogatory, request for documents,
subpoena, civil investigative demand or similar process) to disclose any Confidential Information,
Subadviser may disclose such Confidential Information to the extent legally required; provided,
however, that Subadviser shall (i) first notify the Trust of such legal process, unless such notice
is prohibited by statute, rule or court order, (ii) attempt to obtain the Trust’s consent to such
disclosure, and (iii) in the event consent is not given, agree to permit a motion to quash, or
other similar procedural step, to frustrate the production or publication of information. In
making any disclosure under such legal process, the parties agree to use commercially reasonable
efforts to preserve the confidential nature of such information. Nothing herein shall require
Subadviser to fail to honor a validly issued subpoena, court or administrative order, or other
legal requirement on a timely basis.
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| 18. | CONSULTATION WITH SUBADVISERS TO OTHER FUND PORTFOLIOS |
As required by Rule 17a- 10 under the Investment Company Act, the Subadviser is prohibited
from consulting with the entities listed below concerning transactions for a Portfolio in
securities or other assets:
| 1. | other subadvisers to a Portfolio; | ||
| 2. | other subadvisers to a Trust portfolio; and | ||
| 3. | other subadvisers to a portfolio under common control with a Portfolio. |
| 19. | COMPLIANCE |
In managing the investments of and determining the composition of the assets of the Portfolio
and in performing its other services and obligations hereunder, the Subadviser shall: (i) comply
with the investment objectives, policies and restrictions of the Portfolio as set forth in the
registration statement of the Portfolio, as from time to time amended or supplemented; (ii) comply
with all policies, guidelines, instructions and procedures approved by the Board or the Adviser
with respect to the Portfolio and furnished to the Subadviser; (iii) comply with all applicable
requirements of the Investment Advisers Act, the Investment Company Act and the rules and
regulations under each thereof, as the same may be amended from time to time; (iv) cause the
Portfolio to comply with (a) the requirements of Subchapter M of the Internal Revenue Code of 1986,
as amended (the “Code”), for qualification as a regulated investment company (for so long as the
Portfolio seeks to qualify as a regulated investment company under the Code) and (b) the
diversification requirements under Subchapter L of the Code; and (v) comply with all other
applicable law, rules and regulations. In addition, the Subadviser shall maintain compliance
procedures for the Portfolio that the Subadviser reasonably believes are adequate to ensure its and
the Portfolio’s compliance with the foregoing.
Upon execution of this Agreement, the Subadviser shall provide the Adviser with the
Subadviser’s written policies and procedures (“Compliance Policies”) as required by Rule 206(4)-7
under the Investment Advisers Act. Throughout the term of this Agreement, the Subadviser shall
promptly submit to the Adviser: (i) any material changes to the Compliance Policies, (ii)
notification of the commencement of a regulatory examination of the Subadviser by any relevant
regulatory authority and documentation describing the results of any such examination and of any
periodic testing of the Compliance Policies, (iii) documentation of any formal review of the
Subadviser’s Compliance Policies and (iv) notification of any material compliance matter that
relates to the services provided by the Subadviser to the Portfolios including, but not limited to,
any material violation of the Compliance Policies or of the Subadviser’s code of ethics and/or
related code. Throughout the term of this Agreement, the Subadviser shall provide the Adviser with
any certifications, information and access to personnel and resources (including those resources
that will permit testing of the Compliance Policies by the Adviser) that the Adviser may reasonably
request to enable the Portfolios to comply with Rule 38a-1 under the Investment Company Act. The
Subadviser also agrees to provide such other information relating to the Subadviser’s compliance
program as may be reasonably
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requested by the Portfolios, the Portfolios’ Chief Compliance Officer, or his or her
authorized representative.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly
authorized officers as of the date first mentioned above.
| XXXX XXXXXXX INVESTMENT MANAGEMENT | ||||||
| SERVICES, LLC | ||||||
| By: | /s/ Xxx Xxxxxxx | |||||
| Name: | ||||||
| Title: | Senior Vice President | |||||
| XXXXXX INVESTMENTS, L.P. | ||||||
| By: | /s/ Xxxxxx X. Xxxxx, Xx | |||||
| Name: | ||||||
| Title: | Chief Operating Officer & Executive Managing Director |
|||||
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APPENDIX A
The Subadviser shall serve as investment subadviser for each Portfolio of the Trust listed
below. The Adviser will pay the Subadviser, as full compensation for all services provided under
this Agreement with respect to each Portfolio, the fee computed separately for such Portfolio at an
annual rate as follows (the “Subadviser Fee”):
| First $750 Million | Next $500 Million of | Excess over $1.25 | ||||
| of Aggregate Net | Aggregate Net | Billion of Aggregate | ||||
| Portfolio | Assets* | Assets* | Net Assets* | |||
International Growth Equity Fund |
XXX% | XXX% | XXX% |
| * | The term Aggregate Net Assets includes the net assets of a Portfolio managed by the Subadviser. It also includes the net assets of one or more other portfolios of the Trust or other portfolios managed by the Subadviser, as indicated below, but in each case only for the period during which the Subadviser for the Portfolio also serves as the subadviser for the other portfolio(s). For purposes of determining Aggregate Net Assets and calculating the Subadviser Fee, the net assets of the Portfolio and each other portfolio of the Trust are determined as of the close of business on the previous business day of the Trust, and the net assets of each portfolio of each other fund are determined as of the close of business on the previous business day of that fund. |
| Trust Portfolio(s) | Other Portfolio(s) | |
International Growth Equity Fund
|
XXX |
The Subadviser Fee for a Portfolio shall be based on the applicable annual fee rate for the
Portfolio which for each day shall be equal to (i) the sum of the amounts determined by applying
the annual percentage rates in the table to the applicable portions of Aggregate Net Assets divided
by (ii) Aggregate Net Assets (the “Applicable Annual Fee Rate”). The Subadviser Fee for each
Portfolio shall be accrued for each calendar day, and the sum of the daily fee accruals shall be
paid monthly to the Subadviser within 30 calendar days of the end of each month. The daily fee
accruals will be computed by multiplying the fraction of one over the number of calendar days in
the year by the Applicable Annual Fee Rate, and multiplying this product by the net assets of the
Portfolio. The Adviser shall provide Subadviser with such information as Subadviser may reasonably
request supporting the calculation of the fees paid to it hereunder. Fees shall be paid either by
wire transfer or check, as directed by Subadviser.
If, with respect to any Portfolio, this Agreement becomes effective or terminates, or if the
manner of determining the Applicable Annual Fee Rate changes, before the end
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of any month, the fee
(if any) for the period from the effective date to the end of such month or from the beginning of
such month to the date of termination or from the beginning of such month to the date such change,
as the case may be, shall be prorated
according to the proportion which such period bears to the full month in which such effectiveness
or termination or change occurs.
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