EXHIBIT NO. EX-99 (d)(4)(e)
PROPOSED SUBADVISORY AGREEMENT
THIS AGREEMENT is made and entered into on this ___ day of ______,
2004, among Gartmore Mutual Funds, an Ohio business trust (the "Trust"),
Gartmore Mutual Fund Capital Trust (the "Adviser"), a Delaware business trust
registered under the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), and Gartmore Global Partners, a Delaware general partnership (the
"Subadviser"), also registered under the Advisers Act.
W I T N E S S E T H :
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 (the "1940 Act");
WHEREAS, the Adviser has, pursuant to an Advisory Agreement with the
Trust dated as of August 30, 2000 (the "Advisory Agreement") as subsequently
amended, been retained to act as investment adviser for certain of the series of
the Trust which are listed on Exhibit A to this Agreement (each, a "Fund");
WHEREAS, the Subadviser is regulated by the Securities and Exchange
Commission as an investment adviser under the Advisers Act and is also regulated
by the Investment Management Regulatory Organisation Limited ("IMRO") of the
United Kingdom in the conduct of its investment business and is a member of
IMRO;
WHEREAS, the Advisory Agreement permits the Adviser to delegate certain
of its duties under the Advisory Agreement to other investment advisers, subject
to the requirements of the 1940 Act; and
WHEREAS, the Adviser desires to retain Subadviser to assist it in the
provision of a continuous investment program for that portion of the Trust's
assets which the Adviser will assign to the Subadviser (the "Subadviser
Assets"), and Subadviser is willing to render such services subject to the terms
and conditions set forth in this Agreement.
NOW, THEREFORE, the parties do mutually agree and promise as follows:
1. Appointment as Subadviser. The Adviser hereby retains the Subadviser
to act as investment adviser for and to manage the Subadviser Assets subject to
the supervision of the Adviser and the Board of Trustees of the Trust and
subject to the terms of this Agreement; and the Subadviser hereby accepts such
employment. In such capacity, the Subadviser shall be responsible for the
investment management of the Subadviser Assets. It is recognized that the
Subadviser and certain of its affiliates now act, and that from time to time
hereafter may act, as investment adviser to one or more other investment
companies and to fiduciary or other managed accounts and that the Adviser and
the Trust have no objection to such activities.
2. Duties of Subadviser.
(a) Investments. The Subadviser is hereby authorized and
directed and hereby agrees, subject to the stated investment policies
and restrictions of the Fund as set forth in the Fund's 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
Adviser and the Trust's Board of Trustees, to purchase, hold and sell
investments for the Subadviser Assets and to monitor on a continuous
basis the performance of the Subadviser Assets. In providing these
services, the Subadviser will conduct a continual program of
investment, evaluation and, if appropriate, sale and reinvestment of
the Subadviser Assets.
The Adviser agrees to provide the Subadviser with such
assistance as may be reasonably requested by the Subadviser in
connection with the Subadviser's activities under this Agreement,
including, without limitation, information concerning a Fund, their
funds available, or to become available, for investment and generally
as to the conditions of a Fund's or Trust's affairs. In particular, but
without prejudice to the generality of the foregoing, the Adviser shall
authorize and instruct the Trust's custodian to provide such
information to the Subadviser as it may reasonably require, and to act
upon the Subadviser's instructions given in the proper performance by
the Subadviser of this Agreement.
(b) Compliance with Applicable Laws and Governing Documents.
In the performance of its duties and obligations under this Agreement,
the Subadviser shall act in conformity with the Trust's Declaration of
Trust and By-Laws and the Prospectus and with the instructions and
directions received in writing from the Adviser or 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"), and
all other applicable federal and state laws and regulations.
Notwithstanding the foregoing, the Adviser shall remain responsible for
ensuring each Fund's overall compliance with the 1940 Act and the Code
and the Subadviser is only obligated to comply with this subsection (b)
with respect to the Subadviser Assets. The Adviser will provide the
Subadviser with a copy of the minutes of the meetings of the Board of
Trustees of the Trust to the extent they may affect a Fund or the
duties of the Subadviser, and with copies of any financial statements
or reports made by the Fund to its shareholders, and any further
materials or information which the Subadviser may reasonably request to
enable it to perform its functions under this Agreement.
Notwithstanding the foregoing, the Adviser acknowledges that the
Subadviser may also be subject to requirements by IMRO, and will comply
with such requirements to the extent they are not inconsistent with
applicable federal and state laws and regulations in the United States.
At a minimum, the Subadviser must comply with the laws of the United
States, but may also choose to comply with more stringent IMRO
requirements if the Subadviser deems necessary.
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The Adviser will also provide the Subadviser with reasonable
advance notice of any change in a Fund's investment objectives,
policies and restrictions as stated in the Prospectus, and the
Subadviser shall, in the performance of its duties and obligations
under this Agreement, manage the Subadviser Assets consistent with such
changes, provided the Subadviser has received prompt notice of the
effectiveness of such changes from the Trust or the Adviser. In
addition to such notice, the Adviser shall provide to the Subadviser a
copy of a modified Prospectus reflecting such changes. The Adviser
acknowledges and agrees that the Prospectus will at all times be in
compliance with all disclosure requirements under all applicable
federal and state laws and regulations relating to the Trust or the
Fund, including, without limitation, the 1940 Act, and the rules and
regulations thereunder, and that the Subadviser shall have no liability
in connection therewith, except as to the accuracy of material
information furnished by the Subadviser to the Trust or to the Adviser
specifically for inclusion in the Prospectus. The Subadviser hereby
agrees to provide to the Adviser in a timely manner following the
Adviser's written request such information relating to the Subadviser
and its relationship to, and actions for, the Trust as may be required
to be contained in the Prospectus or in the Trust's Registration
Statement on Form N-1A.
(c) Voting of Proxies. The Adviser hereby delegates to the
Subadviser the Adviser's discretionary authority to exercise voting
rights with respect to the securities and other investments in the
Subadviser Assets and authorizes the Subadviser to delegate further
such discretionary authority to a designee identified in a notice given
to the Trust and the Adviser. The Subadviser, including without
limitation its designee, shall have the power to vote, either in person
or by proxy, all securities in which the Subadviser Assets may be
invested from time to time, and shall not be required to seek or take
instructions from, the Adviser, the Fund or the Trust or take any
action with respect thereto. If both the Subadviser and another entity
managing assets of the Fund have invested the Fund's assets in the same
security, the Subadviser and such other entity will each have the power
to vote its pro rata share of the Fund's security.
The Subadviser will establish a written procedure for proxy
voting in compliance with current applicable rules and regulations,
including but not limited to Rule 30b1-4 under the 1940 Act. The
Subadviser will provide the Adviser or its designee, a copy of such
procedure and establish a process for the timely distribution of the
Subadviser's voting record with respect to the Fund's securities and
other information necessary for the Fund to complete information
required by Form N-1A under the 1940 Act and the Securities Act of
1933, as amended (the "Securities Act"), Form N-PX under the 1940 Act,
and Form N-CSR under the Xxxxxxxx-Xxxxx Act of 2002, respectively.
(d) Agent. Subject to any other written instructions of the
Adviser or the Trust, the Subadviser is hereby appointed the Adviser's
and the Trust's agent and attorney-in-fact for the limited purposes of
managing the Subadviser Assets, and executing account documentation,
agreements, contracts and other documents as the Subadviser shall enter
into with brokers, dealers, counterparties and other persons in
connection with its management of the Subadviser Assets. The Subadviser
agrees to provide the Adviser and the Trust with copies of any such
agreements executed on behalf of the Adviser or the Trust.
(e) Brokerage. The Subadviser is authorized, subject to the
supervision of the Adviser and the Trust's Board of Trustees, to
establish and maintain accounts on behalf of each Fund with, and place
orders for the purchase and sale of the Subadviser Assets with or
through, such persons, brokers (including, to the extent permitted by
applicable law, any broker affiliated with the Subadviser) or dealers
("brokers") as the Subadviser may elect and negotiate commissions to be
paid on such transactions. The Subadviser, however, is not required to
obtain the consent of the Adviser or the Trust's Board of Trustees
prior to establishing any such brokerage account. The Subadviser shall
place all orders for the purchase and sale of portfolio investments for
a Fund's account with brokers selected by the Subadviser. In the
selection of such brokers and the placing of such orders, the
Subadviser shall seek to obtain for the Fund the most favorable price
and execution available, except to the extent it may be permitted to
pay higher brokerage commissions for brokerage and research services,
as provided below. In using its reasonable efforts to obtain for the
Fund the most favorable price and execution available, the Subadviser,
bearing in mind the best interests of each Fund at all times, shall
consider all factors it deems relevant, including price, the size of
the transaction, the breadth and nature of the market for the security,
the difficulty of the execution, 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,
or as may be mutually agreed to by the Adviser and the Subadviser, the
Subadviser 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) to the Subadviser 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 Subadviser
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 responsibility of the Subadviser with
respect to the accounts as to which it exercises investment discretion.
Notwithstanding the foregoing, the Adviser acknowledges that the
Subadviser may also be subject to requirements by IMRO, and will comply
with such requirements to the extent they are not inconsistent with
applicable federal and state laws and regulations in the United States.
At a minimum, the Subadviser must comply with the laws of the United
States, but may also choose to comply with more stringent IMRO
requirements if the Subadviser deems necessary.
It is recognized that the services provided by such brokers
may be useful to the Subadviser in connection with the Subadviser's
services to other clients. On occasions when the Subadviser deems the
purchase or sale of a security to be in the best interests of a Fund as
well as other clients of the Subadviser, the Subadviser, 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
such event, allocation of securities so sold or purchased, as well as
the expenses incurred in the transaction, will be made by the
Subadviser in the manner the Subadviser considers to be the most
equitable and consistent
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with its fiduciary obligations to each Fund and to such other clients.
It is recognized that in some cases, this procedure may adversely
affect the price paid or received by the Fund or the size of the
position obtainable for, or disposed of by, the Fund.
(f) Securities Transactions. The Subadviser and any affiliated
person of the Subadviser will not purchase securities or other
instruments from or sell securities or other instrument to the Fund;
provided, however, the Subadviser or any affiliated person of the
Subadviser may purchase securities or other instruments from or sell
securities or other instruments to the Fund if such transaction is
permissible under applicable laws and regulations, including, without
limitation, the 1940 Act and the Advisers Act and the rules and
regulations promulgated thereunder.
The Subadviser, on its own behalf and with respect to its
Access Persons (as defined in subsection (e) of Rule 17j-1 under the
1940 Act), agrees to observe and comply with Rule 17j-1 and its Code of
Ethics (which shall comply in all material respects with Rule 17j-1),
as the same may be amended from time to time. On at least an annual
basis, the Subadviser will comply with the reporting requirements of
Rule 17j-1, which may include either (i) certifying to the Adviser that
the Subadviser and its Access Persons have complied with the
Subadviser's Code of Ethics with respect to the Subadviser Assets or
(ii) identifying any violations which have occurred with respect to the
Subadviser Assets. The Subadviser will have also submitted its Code of
Ethics for its initial approval by the Board of Trustees no later than
the date of execution of this agreement and subsequently within six
months of any material change thereto.
(g) Books and Records. The Subadviser shall maintain separate
detailed records of all matters pertaining to the Subadviser Assets
(the "Fund's Records"), including, without limitation, brokerage and
other records of all securities transactions. The Subadviser
acknowledges that the Fund's Records are property of the Trust;
however, nothing in this clause shall be interpreted to provide the
Adviser or the Trust with any property right in any software used by
the Subadviser to maintain such records. The Fund's Records (relating
to the Subadviser Assets) shall be available to the Adviser at any time
upon reasonable request during normal business hours and shall be
available for telecopying without delay to the Adviser during any day
that the relevant Fund is open for business. The Trust acknowledges
that the Subadviser may be obligated under applicable law and
regulation to maintain copies of the Fund's Records for certain periods
prescribed by such law and regulation and that it will permit the
Subadviser to maintain such records as may be so required both during
the term of this Agreement and thereafter.
(h) Information Concerning Subadviser Assets and Subadviser.
From time to time as the Adviser or the Trust may request, the
Subadviser will furnish the requesting party reports on portfolio
transactions and reports on Subadviser Assets held in the portfolio,
all in such detail as the Adviser or the Trust may reasonably request.
The Subadviser will also inform the Adviser in a timely manner of
material changes in portfolio management team(s) responsible for
Subadviser Assets, any changes in the ownership or management of the
Subadviser, or of material changes in the control of the Subadviser.
Upon reasonable
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request, the Subadviser will make available its officers and employees
to meet with the Trust's Board of Trustees to review the Subadviser
Assets.
The Subadviser will also provide such information or perform
such additional acts as are customarily performed by a subadviser, and
as may be reasonably requested from time to time, and may be required
for the Trust or the Adviser to comply with their respective
obligations under applicable laws, including without limitation, the
Code, the 1940 Act, the Advisers Act, and the Securities Act of 1933,
as amended (the "Securities Act"), and any rule or regulation
thereunder.
(i) Custody Arrangements. The Subadviser shall on each
business day provide the Adviser and the Trust's custodian such
information as the Adviser and the Trust's custodian may reasonably
request relating to all transactions concerning the Fund Investments.
(j) Historical Performance Information. To the extent agreed
upon by the parties, the Subadviser will provide the Trust with
historical performance information on similarly managed investment
companies or for other accounts to be included in the Prospectus or for
any other uses permitted by applicable law. The Trust and the Adviser
both acknowledge that the Subadviser may be bound by applicable law and
regulation which may restrict its ability to disclose details such
information, and this Agreement shall not be construed as requiring the
Subadviser to disclose any such information where such disclosure would
result in the Subadviser being in breach of such applicable law or
regulation.
3. Independent Contractor. In the performance of its duties hereunder,
the Subadviser is and shall be an independent contractor and unless otherwise
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent the Fund, the Trust or the Adviser in any way
or otherwise be deemed an agent of the Fund, the Trust or the Adviser.
4. Expenses. During the term of this Agreement, Subadviser 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, including any tax arising
on any transaction, if any) purchased for a Fund. The Subadviser 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 Subadviser shall not be responsible for the Trust's, the Fund's
or Adviser's expenses, which shall include, but not be limited to,
organizational and offering expenses (which include out-of-pocket expenses, but
not overhead or employee costs of the Subadviser); expenses for legal,
accounting and auditing services; taxes and governmental fees; dues and expenses
incurred in connection with membership in investment company organizations;
costs of printing and distributing shareholder reports, proxy materials,
prospectuses, stock certificates and distribution of dividends; charges of the
Fund's custodians and sub-custodians, administrators and sub-administrators,
registrars, transfer agents, dividend disbursing agents and dividend
reinvestment plan agents; payment for portfolio pricing services to a pricing
agent, if any; registration and filing fees of the Securities and Exchange
Commission (the "SEC"); expenses of registering or qualifying securities of the
Fund for sale in the various states; freight and other charges in connection
with the shipment of the Fund's portfolio securities; fees and expenses
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of non-interested Trustees; salaries of shareholder relations personnel; costs
of shareholders meetings; insurance; interest; brokerage costs; and litigation
and other extraordinary or non-recurring expenses. The Trust or the Adviser, as
the case may be, shall reimburse the Subadviser for any expenses of the Funds or
the Adviser as may be reasonably incurred by such Subadviser on behalf of the
Funds or the Adviser. The Subadviser shall keep and supply to the Trust and the
Adviser reasonable records of all such expenses.
5. Compensation. For the services provided and the expenses assumed
with respect to a Fund and the Subadviser Assets pursuant to this Agreement, the
Subadviser will be entitled to the fee listed for each Fund on Exhibit A. Such
fees will be computed daily and payable no later than the seventh (7th) business
day following the end of each month, from the Adviser or the Trust, calculated
at an annual rate based on the Subadviser Assets' average daily net assets.
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 of that Fund as
described in a 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.
6. Representations and Warranties of Subadviser. The Subadviser
represents and warrants to the Adviser and the Trust as follows:
(a) The Subadviser is registered as an investment adviser
under the Advisers Act;
(b) The Subadviser has filed a notice of exemption pursuant to
Section 4.14 under the Commodity Exchange Act (the "CEA") with the
Commodity Futures Trading Commission (the "CFTC") and the National
Futures Association ("NFA"), or is not required to file such exemption;
(c) The Subadviser is a partnership duly organized and validly
existing 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;
(d) The execution, delivery and performance by the Subadviser
of this Agreement are within the Subadviser's powers and have been duly
authorized by all necessary action by the Subadvisers board of
directors or shareholders and no action by or in respect of, or filing
with, any governmental body, agency or official is required on the part
of the Subadviser for the execution, delivery and performance by the
Subadviser of this Agreement, and the execution, delivery and
performance by the Subadviser of this Agreement do not contravene or
constitute a default under (i) any provision of applicable law, rule or
regulation, (ii) the Subadviser's governing instruments, or (iii) any
agreement, judgment, injunction, order, decree or other instrument
binding upon the Subadviser; and
(e) The Form ADV of the Subadviser previously provided to the
Adviser is a true and complete copy of the form as currently filed with
the SEC and the information contained therein is accurate and complete
in all material respects and does not omit to state any
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material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading.
7. Representations and Warranties of Adviser. The Adviser represents
and warrants to the Subadviser as follows:
(a) The Adviser is registered as an investment adviser under
the Advisers Act;
(b) The Adviser has filed a notice of exemption pursuant to
Section 4.14 under the CEA with the CFTC and the National Futures
Association or is exempt from doing so;
(c) The Adviser is a business trust duly organized and validly
existing 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;
(d) The execution, delivery and performance by the Adviser of
this Agreement, the appointment of the Subadviser and the delegation to
the Subadviser of the duties and powers delegated to it under this
Agreement, are within the Adviser's powers and have been duly
authorized by all necessary action on the part of its shareholders or
managing unitholder, 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;
(e) The Form ADV of the Adviser previously provided to the
Subadviser is a true and complete copy of the form filed with the SEC
and the information contained therein 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;
(f) The Adviser acknowledges that it received a copy of the
Subadviser's Form ADV prior to the execution of this Agreement; and
(g) The Adviser and the Trust have duly entered into the
Advisory Agreement pursuant to which the Trust authorized the Adviser
to enter into this Agreement.
8. Representations and Warranties of the Trust. The Trust represents
and warrants to the Adviser and the Subadviser as follows:
(a) The Trust is a business trust duly organized and validly
existing under the laws of the State of Ohio with the power to own and
possess its assets and carry on its business as it is now being
conducted;
(b) The Trust is registered as an investment company under the
1940 Act and the Fund's shares are registered under the Securities Act;
and
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(c) The execution, delivery and performance by the Trust of
this Agreement are within the Trust's powers and have been duly
authorized by all necessary action on the part of the Trust and its
Board of 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 Trust for the execution, delivery and performance by the Adviser of
this Agreement, and the execution, delivery and performance by the
Trust of this Agreement do not contravene or constitute a default under
(i) any provision of applicable law, rule or regulation, (ii) the
Trust's governing instruments, or (iii) any agreement, judgment,
injunction, order, decree or other instrument binding upon the Trust.
9. Survival of Representations and Warranties; Duty to Update
Information. All representations and warranties made by the Subadviser, the
Adviser and the Trust pursuant to Sections 6, 7 and 8, respectively, 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.
10. Liability and Indemnification.
(a) Liability. The Subadviser shall exercise its best judgment
in rendering the services in accordance with the terms of this
Agreement. In the absence of wilful misfeasance, bad faith or gross
negligence on the part of the Subadviser or a reckless disregard of its
duties hereunder, the Subadviser, each of its affiliates and all
respective partners, officers, directors and employees ("Affiliates")
and each person, if any, who within the meaning of the Securities Act
controls the Subadviser ("Controlling Persons") shall not be liable for
any error of judgment or mistake of law and shall not be subject to any
expenses or liability to the Adviser, the Trust or a Fund or any of a
Fund's shareholders, in connection with the matters to which this
Agreement relates. In the absence of wilful misfeasance, bad faith or
gross negligence on the part of the Adviser or a reckless disregard of
its duties hereunder, the Adviser, any of its Affiliates and each of
the Adviser's Controlling Persons, if any, shall not be subject to any
liability to the Subadviser, 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 Subadviser Assets;
provided, however, that nothing herein shall relieve the Adviser and
the Subadviser from any of their obligations under applicable law,
including, without limitation, the federal and state securities laws
and the CEA.
(b) Indemnification. The Subadviser shall indemnify the
Adviser, the Trust and the Fund, and their respective Affiliates and
Controlling Persons for any liability and expenses, including
reasonable attorneys' fees, which the Adviser, the Trust and the Fund
and their respective Affiliates and Controlling Persons may sustain as
a result of the Subadviser's wilful 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 or the CEA. Notwithstanding any other provision in this
Agreement, the Subadviser will indemnify the Adviser, the Trust and the
Fund, and their respective Affiliates and Controlling Persons for any
liability and expenses, including
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reasonable attorneys' fees, to which they may be subjected as a result
of their reliance upon and use of the historical performance
calculations provided by the Subadviser concerning the Subadviser's
composite account data or historical performance information on
similarly managed investment companies or accounts, except that the
Adviser, the Trust and the Fund, and their respective Affiliates and
Controlling Persons shall not be indemnified for a loss or expense
resulting from their negligence, willful misconduct or the violation of
the 1940 Act or federal or state securities laws in using such numbers,
or for their failure to conduct reasonable due diligence with respect
to such information.
The Adviser shall indemnify the Subadviser, its Affiliates and
its Controlling Persons, for any liability and expenses, including
reasonable attorneys' fees, which may be sustained as a result of the
Adviser's wilful 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 or
the CEA, or as a result of any negligence, willful misconduct or the
violation of the 1940 Act or federal or state securities laws on the
part of the Adviser in the reliance upon and/or use of any historical
performance calculations provided by the Subadviser concerning the
Subadviser's composite account data or historical performance
information or similarly managed investment companies.
11. Duration and Termination.
(a) Duration. This Agreement begins effective as of the date
referenced above, after which point the assets of the Fund(s) shall be
transferred to the management of the Subadviser under the terms of this
Agreement. Unless sooner terminated, this Agreement shall continue
until _________, 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 such continuance is specifically
approved at least annually by the Trust's Board of Trustees or vote of
the lesser of (a) 67% of the shares of the Funds represented at a
meeting if holders of more than 50% of the outstanding shares of the
Funds are present in person or by proxy or (b) more than 50% of the
outstanding shares of the Funds; provided 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:
(i) By vote of a majority of the Trust's Board of
Trustees, or by vote of a majority of the outstanding voting
securities of the Fund, or by the Adviser, in each case, upon
at least 60 days' written notice to the Subadviser;
(ii) By any party hereto immediately upon written
notice to the other parties in the event of a breach of any
provision of this Agreement by either of the other parties; or
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(iii) By the Subadviser upon at least 60 days'
written notice to the Adviser and the Trust.
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 or upon the termination of the Advisory Agreement. Upon
termination of this Agreement, the Trust will immediately discontinue
the use of the historical performance information provided by the
Subadviser provided under Section 2(j) hereof.
Termination will be without prejudice to the settlement of any
outstanding fees and the completion of transactions already initiated.
If on termination any money is due or will or may become due in the
future as a result of a commitment entered into by the Subadviser ("an
outstanding amount") then the Subadviser may at its discretion sell
such of the Subadviser Assets as it may in its discretion select in
order to realize funds sufficient to cover any outstanding amount (but
only to the extent that insufficient funds are otherwise available for
the purpose). The Subadviser may also cancel, close out, terminate or
reverse any transaction or enter into any other transaction or do
anything which has the effect of reducing or eliminating any
outstanding amount or of reducing or eliminating any liability under
any contracts, positions or commitments undertaken under this
Agreement.
12. Duties of the Adviser.
(a) Responsibility for other services. The Adviser shall
continue to have responsibility for all services to be provided to the
Trust pursuant to the Advisory Agreement and shall oversee and review
the Subadviser's performance of its duties under this Agreement.
Nothing contained in this Agreement shall obligate the Adviser to
provide any funding or other support for the purpose of directly or
indirectly promoting investments in the Trust.
(b) Delivery of documents. The Adviser will provide the
Subadviser with copies of each of the following:
(i) The Trust's Certificate of Trust and
Declaration of Trust;
(ii) The most recent Prospectus and Statement of
Additional Information relating to the Trust;
(iii) The Trust's Bylaws; and
(iv) The Trust's Code of Ethics.
The Adviser will notify the Subadviser as soon as it becomes
aware of any change in the above documents, and supply a copy of the
amended document or documents. The Subadviser shall not be liable
either for the breach of any provision or otherwise under this
Agreement, where such breach or other liability relates to a failure to
comply with the above
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documents, in circumstances where the Subadviser was not aware at the
relevant time of the amendment of the relevant document or documents
and, if not for such amendment, such breach or other liability would
not have occurred.
13. Reference to Subadviser. Neither the Adviser nor any Affiliate or
agent of it shall make reference to or use the name of Subadviser or any of its
Affiliates, or any of their clients, except references concerning the identity
of and services provided by the Subadviser to the Fund, which references shall
not differ in substance from those included in the Prospectus and this
Agreement, in any advertising or promotional materials without the prior
approval of Subadviser, which approval shall not be unreasonably withheld or
delayed. The Adviser hereby agrees to make all reasonable efforts to cause the
Fund and any Affiliate thereof to satisfy the foregoing obligation.
14. Amendment. This Agreement may be amended by mutual written consent
of the parties, provided that the terms of any material amendment shall be
approved by: a) the Trust's Board of Trustees or by a vote of a majority of the
outstanding voting securities of the Funds (as required by the 0000 Xxx) and b)
the vote of a majority of those 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, if such approval is required by
applicable law.
15. Confidentiality. Subject to the duties of the Adviser, the Trust
and the Subadviser to comply with applicable law, including any demand of any
regulatory or taxing authority having jurisdiction, the parties hereto shall
treat as confidential and shall not disclose any and all information pertaining
to the Fund and the actions of the Subadviser, the Adviser and the Fund in
respect thereof; except to the extent:
(a). Authorized. The Adviser or the Trust has authorized such
disclosure;
(b) Court or Regulatory Authority. Disclosure of such
information is expressly required or requested by a court or other
tribunal of competent jurisdiction or applicable federal or state
regulatory authorities;
(c) Publicly Known Without Breach. Such information becomes
known to the general public without a breach of this Agreement or a
similar confidential disclosure agreement regarding such information;
(d) Already Known. Such information already was known by the
party prior to the date hereof;
(e) Received From Third Party. Such information was or is
hereafter rightfully received by the party from a third party
(expressly excluding the Fund's custodian, prime broker and
administrator) without restriction on its disclosure and without breach
of this Agreement or of a similar confidential disclosure agreement
regarding them; or
(f) Independently Developed. The party independently developed
such information.
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16. 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 parties, 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 Subadviser:
Gartmore Global Partners
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention:
Facsimile:
(b) If to the Adviser:
Gartmore Mutual Fund Capital Trust
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attention: Legal Department
Facsimile: (000) 000-0000
(c) If to the Trust:
Gartmore Mutual Funds
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attention: Legal Department
Facsimile: (000) 000-0000
16. Jurisdiction. This Agreement shall be governed by and construed to
be consistent with the Advisory Agreement and in accordance with substantive
laws of the State of Ohio 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.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, all of which shall
together constitute one and the same instrument.
18. Certain Definitions. For the purposes of this Agreement and except
as otherwise provided herein, "interested person," "affiliated person," and
"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.
19. Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
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20. 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.
21. Trust and its Trustees. The Trust is a business trust organized
under Chapter 1746, Ohio Revised Code and under a Declaration of Trust dated as
of October 30, 1997, to which reference is hereby made and a copy of which is on
file at the office of the Secretary of State of Ohio, and to any and all
amendments thereto so filed or hereafter filed. The obligations of the Trust
entered into in the name or on behalf thereof by any of Gartmore Mutual Fund
Trustees, officers, employees or agents are not made individually, but only in
their capacities with respect to the Trust. Such obligations are not binding
upon any of the Trustees, shareholders, officers, or employees of the Trust
personally, but bind only the assets of the Trust, as set forth in Section
1746.13(A), Ohio Revised Code. All persons dealing with any series of Shares of
the Trust must look solely to the assets of the Trust belonging to such series
for the enforcement of any claims against the Trust.
22. Agent Not Principal. The Subadviser shall enter into transaction
under this Agreement as agent on behalf of the Adviser or Trust and not as
principal.
23. Soft Commissions. The subadviser may effect transactions under the
Agreement with or through the agency of a person who provides services under a
Soft Commission Agreement, as defined in the rules of IMRO, and will report such
transactions to the Adviser upon request. All such transactions must comply with
applicable federal and state regulations in the United States and any mutually
agreed upon policies and procedures.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first written above.
TRUST
Gartmore Mutual Funds
By:_________________________________
Name:
Title:
ADVISER
Gartmore Mutual Fund Capital Trust
By:_________________________________
Name:
Title:
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SUBADVISER
Gartmore Global Partners
By:_________________________________
Name:
Title:
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EXHIBIT A
SUBADVISORY AGREEMENT
DATED JUNE __, 2004 AMONG
GARTMORE MUTUAL FUND CAPITAL TRUST,
GARTMORE MUTUAL FUNDS
AND GARTMORE GLOBAL PARTNERS
EFFECTIVE JUNE __, 2004
Funds of the Trust Advisory Fees Effective Date
------------------ ------------- --------------
Gartmore China Opportunities Fund(1) .625% on assets up to $500 million June __, 2004
.600% on assets of $500 million
and more but less than $2 billion
.575% on assets of $2 billion and more
Gartmore Global Natural Resources 0.45% on assets up to $500 million June __, 2004
Fund(1) 0.425% on assets of $500 million
and more but less than $2 billion
0.40% on assets of $2 million and more
(1)Performance Fees for the Gartmore China Opportunities Fund and the Gartmore
Global Natural Resources Fund.
The base subadvisory fee for each of 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
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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.
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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.
Benchmark Index:
1. Gartmore China Opportunities Fund MSCI Xxxxx Xxx Index
2. Gartmore Global Natural Resources Fund _______________Index
ADVISER TRUST
GARTMORE MUTUAL FUND CAPITAL TRUST GARTMORE MUTUAL FUNDS
By: ________________________________ By:______________________________
Title: _______________________________ Title: __________________________
SUBADVISER
GARTMORE GLOBAL PARTNERS
By:________________________________
Title:_______________________________
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