INVESTMENT SUB-ADVISORY AGREEMENT
OLD MUTUAL DISCOVER VALUE FUND
AGREEMENT made as of this 19th day of November, 2007 by
and among Old Mutual Capital, Inc. (the "Adviser"), Thomson,
Xxxxxxxxx & Xxxxxx, Inc. (the "Sub-Adviser"), and Old Mutual Funds II,
a Delaware statutory trust (the "Trust").
WHEREAS, the Trust is registered as an open-end management
investment company under the Investment Company Act of 1940, as
amended (the "1940 Act");
WHEREAS, pursuant to an Agreement between the Adviser and
the Trust dated November 19, 2007, the Adviser acts as investment
manager to the Old Mutual Discover Value Fund (the "Fund"); and
WHEREAS, the Adviser and the Trust each desire to retain the
Sub-Adviser to provide investment advisory services to the Trust in
connection with the management of that portion of the assets of the Fund
that are allocated by the Adviser to the Sub-Adviser in a designated
custodial account established at the Fund's custodian (each such portion, a
"Portfolio"), which may constitute some or all of the assets of a Fund, and
the Sub-Adviser is willing to render such investment advisory services.
NOW, THEREFORE, intending to be legally bound, the
parties hereto agree as follows:
1. (a) Subject to supervision and oversight by the Adviser and
the Trust's Board of Trustees, the Sub-Adviser shall manage (i) the
investment operations of the Portfolio, and (ii) the composition of such
assets, including the purchase, retention and disposition thereof, in
accordance with the Portfolio's investment objectives, policies and
restrictions as stated in such Portfolio's Prospectus(es) (such
Prospectus(es) and Statement(s) of Additional Information as currently
in effect and as amended or supplemented from time to time, being
herein called the "Prospectus"), and subject to the following
understandings:
(1) The Sub-Adviser shall provide supervision of the
Portfolio's investments and determine from time to time what
investments and securities will be purchased, retained or sold by such
Portfolio and what portion of such assets will be invested or held
uninvested in cash.
(2) In the performance of its duties and obligations
under this Agreement, the Sub-Adviser shall act in conformity with the
Trust's Prospectus and with the instructions and directions of the
Adviser and of the Board of Trustees and will conform and comply with
the requirements of the 1940 Act, the Investment Advisers Act of 1940,
as amended, and all other applicable federal and state laws and
regulations, as each is amended from time to time.
(3) The Sub-Adviser shall determine the securities to
be purchased or sold with respect to the Portfolio and will place orders
with or through such persons, brokers or dealers to carry out the policy
with respect to brokerage set forth in such Portfolio's Registration
Statement (as defined herein) and Prospectus or as the Board of Trustees
or the Adviser may direct from time to time, in conformity with federal
securities laws. In providing the Portfolio with investment supervision,
the Sub-Adviser will give primary consideration to securing the most
favorable price and efficient execution. Within the framework of this
policy, the Sub-Adviser may consider the financial responsibility,
research and investment information and other services provided by
brokers or dealers who may effect or be a party to any such transaction
or other transactions to which the Sub-Adviser's other clients may be a
party. It is understood that it is desirable for the Portfolio that the Sub-
Adviser have access to (i) supplemental investment and market research
and (ii) security and economic analysis provided by brokers who may
execute brokerage transactions at a higher cost to the Portfolio than may
result when allocating brokerage to other brokers on the basis of seeking
the most favorable price and efficient execution. Therefore, the Sub-
Adviser is authorized to place orders for the purchase and sale of
securities on behalf of the Portfolio with brokers, subject to review by
the Trust's Board of Trustees from time to time with respect to the
extent and continuation of this practice. It is understood that the services
provided by such brokers may be useful to the Sub-Adviser in
connection with the Sub-Adviser's services to other clients.
On occasions when the Sub-Adviser deems the
purchase or sale of a security to be in the best interest of the Portfolio as
well as other clients of the Sub-Adviser, the Sub-Adviser, to the extent
permitted by applicable laws and regulations, may, but shall be under no
obligation to, aggregate the securities to be so purchased or sold in order
to obtain the most favorable price or lower brokerage commissions and
efficient execution. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the transaction,
will be made by the Sub-Adviser in the manner it considers to be the
most equitable and consistent with its fiduciary obligations to the
Portfolio in question and to such other clients.
(4) The Sub-Adviser at its expense will make
available to the Trustees of the Portfolio and the Adviser at reasonable
times its portfolio managers and other appropriate personnel, either in
person or, at the mutual convenience of the Adviser and the Sub-
Adviser, by telephone, in order to review the investment policies,
performance and other investment related information regarding the
Portfolio and to consult with the Trustees of the Portfolio and Adviser
regarding the Portfolio's investment affairs, including economic,
statistical and investment matters related to the Sub-Adviser's duties
hereunder, and will provide periodic reports to the Adviser relating to
the investment strategies it employs. The Sub-Adviser and its personnel
shall also cooperate fully with counsel and auditors for, and the Chief
Compliance Officers of, the Adviser and the Trust.
(5) In accordance with procedures adopted by the
Trustees of the Portfolio, as amended from time to time, the Sub-Adviser
is responsible for assisting in the fair valuation of all Portfolio
securities.
The Sub-Adviser will use its reasonable efforts to provide, based upon
its own expertise, and to arrange with parties independent of the Sub-
Adviser such as broker-dealers for the provision of, valuation
information or prices for securities for which prices are deemed by the
Adviser or Trust's administrator not to be readily available in the
ordinary course of business from an automated pricing service. In
addition, the Sub-Adviser will assist the Portfolio and its agents in
determining whether prices obtained for valuation purposes accurately
reflect market price information relating to the assets of the Portfolio at
such times as the Adviser shall reasonably request, including but not
limited to, the hours after the close of a securities market and prior to the
daily determination of the Portfolio's net asset value per share.
(6) The Sub-Adviser at its expense will provide the
Adviser and/or the Trust's Chief Compliance Officer with such
compliance reports relating to its duties under this Agreement as may be
requested from time to time. Notwithstanding the foregoing, the Sub-
Adviser will promptly report to the Adviser any material violations of
the federal securities laws (as defined in Rule 38a-1 of the 0000 Xxx) that
it is or should be aware of or of any material violation of the Sub-
Adviser's compliance policies and procedures that pertain to the
Portfolio, as well as any change in portfolio manager(s) of the Portfolio.
(7) Unless otherwise directed by the Adviser or the
Trust's Board of Trustees, the Sub-Adviser will vote all proxies received
in accordance with the Trust's proxy voting policy or, if the Sub-Adviser
has a proxy voting policy approved by the Trust's Board of Trustees, the
Sub-Adviser's proxy voting policy. The Adviser shall instruct the
Portfolio's custodian to forward or cause to be forwarded to the Sub-
Adviser all relevant proxy solicitation materials. The Sub-Adviser shall
maintain and shall forward to the Portfolio or its designated agent such
proxy voting information as is necessary for the Portfolio to timely file
proxy voting results in accordance with Rule 30b1-4 of the 0000 Xxx.
(8) The Sub-Adviser represents and warrants that it
has adopted a code of ethics meeting the requirements of Rule 17j-1
under the 1940 Act and the requirements of Rule 204A-1 under the
Investment Advisers Act of 1940 and has provided the Adviser and the
Trustees of the Fund a copy of such code of ethics, together with
evidence of its adoption, and will promptly provide copies of any
changes thereto, together with evidence of their adoption. Upon request
of the Adviser, but in any event no less frequently than annually, the
Sub-Adviser will supply the Adviser a written report that (A) describes
any issues arising under the code of ethics or procedures since the Sub-
Adviser's last report, including but not limited to material violations of
the code of ethics or procedures and sanctions imposed in response to
the material violations; and (B) certifies that the procedures contained in
the Sub-Adviser's code of ethics are reasonably designed to prevent
"access persons" from violating the code of ethics.
(9) The Sub-Adviser will review draft reports to
shareholders and other documents provided or available to it and provide
comments on a timely basis. In addition, the Sub-Adviser and each
officer and portfolio manager thereof designated by the Adviser will
provide on a timely basis such certifications or sub-certifications as the
Adviser may reasonably request in order to support and facilitate
certifications required to be provided by the Trust's Principal Executive
Officer and Principal Accounting Officer.
(10) The Sub-Adviser shall maintain all books and
records with respect to the Portfolio's portfolio transactions required by
subparagraphs (b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of
Rule 31a-1 under the 1940 Act and shall render to the Trust's Board of
Trustees such periodic and special reports as the Trust's Board of
Trustees may reasonably request.
(11) The Sub-Adviser shall provide the Portfolio's
custodian on each business day with information relating to all
transactions concerning the assets of the Portfolio and shall provide the
Adviser with such information upon request of the Adviser.
(12) (a) The investment management services
provided by the Sub-Adviser under this Agreement are not to be deemed
exclusive and the Sub-Adviser shall be free to render similar services to
others, as long as such services do not impair the services rendered to the
Adviser or the Trust.
(b) Services to be furnished by the Sub-
Adviser under this Agreement may be furnished through the medium of
any of the Sub-Adviser's officers or employees.
(c) The Sub-Adviser shall keep the Portfolio's
books and records required to be maintained by the Sub-Adviser
pursuant to paragraph 1(a) of this Agreement and shall timely furnish to
the Adviser all information relating to the Sub-Adviser's services under
this Agreement needed by the Adviser to keep the other books and
records of the Portfolio required by Rule 31a-1 under the 1940 Act. The
Sub-Adviser agrees that all records that it maintains on behalf of the
Portfolio are property of the Portfolio and the Sub-Adviser will
surrender promptly to the Portfolio any of such records upon the
Portfolio's request; provided, however, that the Sub-Adviser may retain
a copy of such records. The Sub-Adviser further agrees to preserve for
the periods prescribed by Rule 31a-2 under the 1940 Act any such
records as are required to be maintained by it pursuant to paragraph 1(a)
of this Agreement.
2. The Adviser shall continue to have responsibility for all services to be
provided to the Portfolio pursuant to the Advisory Agreement and shall
oversee and review the Sub-Adviser's performance of its duties under this
Agreement.
3. The Adviser has delivered to the Sub-Adviser copies of each of the
following documents and will deliver to it all future amendments and
supplements, if any:
(a) Certified resolutions of the Trust's Board of Trustees
authorizing the appointment of the Sub-Adviser and approving the form
of this Agreement;
(b) Registration Statement under the 1940 Act and the
Securities Act of 1933, as amended on Form N-1A (the "Registration
Statement"), as filed with the Securities and Exchange Commission (the
"Commission") relating to the Portfolio and shares of the Portfolio's
beneficial shares, and all amendments thereto; and
(c) Prospectus(es) of the Portfolio.
4. For the services to be provided by the Sub-Adviser pursuant to
this Agreement for the Portfolio, the Adviser will pay to the Sub-Adviser
as full compensation therefore, a fee at an annual rate of 0.65% of the
Portfolio's average daily net assets. This fee will be paid to the Sub-
Adviser from the Adviser's advisory fee for the Fund. This fee will be
computed daily and paid to the Sub-Adviser monthly.
5. The Sub-Adviser shall not be liable for any error of judgment or
for any loss suffered by the Portfolio or the Adviser in connection with
performance of its obligations under this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services (in which case any award of damages shall be
limited to the period and the amount set forth in Section 36(b)(3) of the
1940 Act), or a loss resulting from willful misfeasance, bad faith or gross
negligence on the Sub-Adviser's part in the performance of its duties or
from reckless disregard of its obligations and duties under this
Agreement, except as may otherwise be provided under provisions of
applicable state law which cannot be waived or modified hereby.
6. This Agreement shall continue for an initial period ending
December 31, 2008, and thereafter shall continue automatically for
successive annual periods, provided such continuance is specifically
approved at least annually in conformance with the 1940 Act, provided,
however, that this Agreement may be terminated (a) by the Portfolio at
any time, without the payment of any penalty, by the vote of a majority of
Trustees of the Trust or by the vote of a majority of the outstanding
voting securities of the Portfolio, (b) by the Adviser at any time, without
the payment of any penalty, on not more than 60 days' nor less than 30
days' written notice to the other parties, or (c) by the Sub-Adviser at any
time, without the payment of any penalty, on 90 days' written notice to
the other parties. This Agreement shall terminate automatically and
immediately in the event of its assignment. As used in this Section 6, the
terms "assignment" and "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the 1940 Act
and the rules and regulations thereunder, subject to such exceptions as
may be granted by the Commission under the 1940 Act.
7. Nothing in this Agreement shall limit or restrict the right of any of
the Sub-Adviser's partners, officers, or employees to engage in any other
business or to devote his or her time and attention in part to the
management or other aspects of any business, whether of a similar or
dissimilar nature, nor limit or restrict the Sub-Adviser's right to engage in
any other business or to render services of any kind to any other
corporation, firm, individual or association.
8. During the term of this Agreement, the Adviser agrees to furnish
the Sub-Adviser at its principal office all prospectuses, proxy statements,
reports to shareholders, sales literature or other materials prepared for
distribution to shareholders of the Portfolio, the Trust or the public that
refers to the Sub-Adviser or its clients in any way prior to use thereof and
not to use material if the Sub-Adviser reasonably objects in writing within
five business days (or such other period as may be mutually agreed upon)
after receipt thereof. The Sub-Adviser's right to object to such materials
is limited to the portions of such materials that expressly relate to the
Sub-Adviser, its services and its clients. The Adviser agrees to use its
reasonable best efforts to ensure that materials prepared by its employees
or agents or its affiliates that refer to the Sub-Adviser or its clients in any
way are consistent with those materials previously approved by the Sub-
Adviser as referenced in the first sentence of this paragraph. Sales
literature may be furnished to the Sub-Adviser by first-class mail,
electronic mail or overnight delivery service, facsimile transmission
equipment or hand delivery.
9. No Trustee or Shareholder of the Trust shall be personally liable
for any debts, liabilities, obligations or expenses incurred by, or
contracted for under this Agreement.
10. No provisions of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Agreement
shall be effective until approved by the vote of the majority of the
outstanding voting securities of the Portfolio.
11. This Agreement shall be governed by the laws of the state of
Delaware; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
12. This Agreement embodies the entire agreement and understanding
among the parties hereto, and supersedes all prior agreements and
understandings relating to this Agreement's subject matter. This
Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original; all such counterparts shall,
together, constitute only one instrument.
13. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
14. Any notice, advice or report to be given pursuant to this
Agreement shall be delivered or mailed:
To the Adviser at: To the Sub-Adviser at:
Old Mutual Capital, Inc. Thomson, Xxxxxxxxx & Xxxxxx, Inc.
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000 Xxxx 00 Xxxx, Xxxxx Xxx
Xxxxxx, XX 00000 5th Floor
Attention: General Counsel Xxxxxx Xxxxx, XX 00000
Attention: President
To the Trust or the Portfolio at:
Old Mutual Funds II
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: General Counsel
15. Where the effect of a requirement of the 1940 Act
reflected in any provision of this
Agreement is altered by a rule, regulation or order of the
Commission, whether of special or
general application, such provision shall be deemed to
incorporate the effect of such rule,
regulation or order.
16. As required by certain exemptive rules under the 1940
Act, Analytic is prohibited from
consulting with the entities listed below concerning transactions
for the Fund in securities or
other assets:
1. other subadvisers to the Fund
2. other subadvisers to a Trust portfolio
3. other subadvisers to a portfolio under
common control with the Fund
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed
by their officers designated below as of the day and year first
written above.
OLD MUTUAL CAPITAL, INC.
OLD MUTUAL FUNDS II
By:
/s/ Xxxx X. Xxxxx
By:
/s/ Xxxxxx X. Xxxxx
Name:
Xxxx X. Xxxxx
Name:
Xxxxxx X. Xxxxx
Title:
Chief Financial Officer
Title:
Treasurer
THOMSON, XXXXXXXXX &
XXXXXX, INC.
By:
/s/ Xxxxxxxxx X. Xxxxxxx
Name:
Xxxxxxxxx X. Xxxxxxx
Title:
President
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