Exhibit No. EX-99.d.3
GAM FUNDS, INC.
December 14, 2004
GAM USA Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Amended and Restated Investment Advisory Agreement
Dear Sirs:
The undersigned, GAM Funds, Inc., a Maryland corporation (the "Fund"), is
an open-end diversified series investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"). This Amended and
Restated Investment Advisory Agreement (the "Agreement") confirms your
engagement as investment adviser to the GAM American Focus Fund (to be renamed
"`GAM American Focus Equity" effective February 28, 2005) series of the Fund's
shares (as such fund may be renamed from time to time, "GAM American Focus
fund") on the terms and subject to the conditions set forth herein. This
Agreement amends and restates in its entirety the Investment Advisory Agreement,
dated April 25, 2001, between you and the Fund.
SECTION 1. Investment Management Services
A. General
You shall (i) conduct and maintain a continuous review of GAM American
Focus Fund's portfolio of securities and investments; and (ii) make all
decisions regarding purchases and sales of securities and other investments on
behalf of GAM American Focus Fund (the "Advisory Services").
In performing the Advisory Services, you shall be guided by the investment
objectives, policies and restrictions of GAM American Focus Fund as set forth in
the Prospectus and the Statement of Additional Information filed by the Fund
with the U.S. Securities and Exchange Commission, as such may be amended from
time to time (the "Disclosure Documents'), and in accordance with such other
policies or limitations adopted by the Board of Directors of the Fund and the
provisions of the 1940 Act and the rules promulgated thereunder. We agree to
supply you with all such relevant documents and to notify you of any relevant
changes in the investment objectives, policies and restrictions of GAM American
Focus Fund.
In acting under this Agreement, you shall be an independent contractor and
shall not be an agent of the Fund.
B. Selection and Recommendations of Brokers
You shall be responsible for the selection of members of securities
exchanges, brokers and dealers for the execution of the portfolio transactions
of GAM American Focus Fund, and, when applicable, negotiating commissions in
connection therewith. All such selections shall be made in accordance with the
Fund's policies and restrictions regarding brokerage allocation set forth in the
Disclosure Documents.
You may, in making such brokerage selections and in negotiating
commissions, take into account any services or facilities provided by a broker.
You are authorized to select or recommend a member of a securities exchange or
any other securities broker or dealer that charges an amount of commission for
effecting a securities transaction in excess of the amount of commission another
member of an exchange, broker or dealer would have charged for effecting that
transaction if you determine in good faith that such amount of commission is
reasonable in relation to the value of the brokerage and research services (as
such services are defined in Section 28(e) of the Securities Exchange Act of
1934, as amended (the "1934 Act")) provided by such member, broker or dealer,
viewed in terms of either that particular transaction or your overall
responsibility with respect to the accounts as to which you exercise investment
discretion (as that term is defined in Section 3(a)(35) of the 1934 Act).
C. Reports and Summaries
You shall maintain a continuous record of all the investments and
securities that comprise the portfolio of GAM American Focus Fund, and shall
furnish to the Fund or its designee such summaries of GAM American Focus Fund's
portfolio and such other reports, evaluations, analyses and opinions, including
statistical reports, relating to your services as investment adviser hereunder
as the Fund may reasonably request at any time or from time to time or as you
may deem helpful to the Fund. All such records shall be the property of the
Fund.
SECTION 2. Expenses
You shall assume and pay all of your own costs and expenses, including
those for furnishing such office space, office equipment, office personnel and
office services as you may require in the performance of your duties under this
Agreement.
The Fund shall bear all expenses of the organization, operations and
business of GAM American Focus Fund not expressly assumed or agreed to be paid
by you under this Agreement. In particular, but without limiting the generality
of the foregoing, the Fund shall pay all interest, taxes, governmental charges
or duties, fees, brokerage and commissions of every kind arising hereunder or in
connection herewith, expenses of issue, repurchase or redemption of GAM American
Focus Fund shares, expenses of registering, qualifying and pricing the GAM
American Focus Fund shares for sale, insurance, association membership dues, all
charges of custodians (including fees as custodian and for keeping books,
performing portfolio valuations and rendering other services to the Fund),
transfer agents, registrars, dividend disbursing agents, independent auditors
and legal counsel, expenses of preparing, printing and distributing all
prospectuses, proxy material, reports and notices to shareholders, all
distribution expenses under its Plan adopted in accordance with Rule 12b-l under
the 1940 Act, fees and out-of-pocket expenses of directors, all overhead
expenses of GAM American Focus Fund's operations, including office space, office
equipment, office personnel and office services and all other costs incident to
the corporate existence of GAM American Focus Fund.
SECTION 3. Use of Services of Others
You may (at your expense except as set forth in Section 2 hereof) employ,
retain or otherwise avail yourself of the services or facilities of other
persons or organizations for the purpose of providing you or GAM American Focus
Fund with such statistical or factual information, such advice regarding
economic factors and trends or such other information, advice or assistance as
you may deem necessary, appropriate or convenient for the discharge of your
obligations hereunder or otherwise helpful to GAM American Focus Fund.
SECTION 4. Management Fees
In consideration of your services hereunder to GAM American Focus Fund, you
shall be entitled to a management fee, payable quarterly, equal to 0.25%
(equivalent to an annual fee of 1.0%) of the average daily net assets of GAM
American Focus Fund during the quarter preceding each payment; provided,
however, effective January 1, 2005, the management fee, payable quarterly, for
GAM American Focus Fund shall be equal to: (i) 0.25% (equivalent to an annual
fee of 1.0%) of the average daily net assets up to and including $250 million
during the quarter preceding each payment; (ii) 0.2125% (equivalent to an annual
fee of 0.85%) of the average daily net assets greater than $250 million and up
to and including $750 million during the quarter preceding each payment; and
(iii) 0.1875% (equivalent to an annual fee of 0.75%) of the average daily net
assets greater than $750 million during the quarter preceding each payment. The
fee shall be accrued for each calendar day and the sum of the daily fee accruals
shall be paid quarterly to you on the first business day of the next succeeding
quarter. The daily fee accruals will be computed by multiplying the fraction of
one over the number of calendar days in the quarter by the applicable management
fee and multiplying this product by the net assets of GAM American Focus Fund as
determined in accordance with the Fund's Prospectus as of the close of business
on the previous business day on which the Fund was open for business.
SECTION 5. Limitation of Liability of Investment Adviser
You shall be liable for losses resulting from your own acts or omissions
caused by your willful misfeasance, bad faith or gross negligence in the
performance of your duties hereunder or your reckless disregard of your duties
under this Agreement, and nothing herein shall protect you against any such
liability to GAM American Focus Fund, the Fund or its shareholders. You shall
not be liable to GAM American Focus Fund, the Fund or to any shareholder thereof
for any claim or loss arising out of any investment or other act or omission, in
the performance of your duties under this Agreement or for any loss or damage
resulting from the imposition by any government of exchange control restrictions
that might affect the liquidity of the assets of GAM American Focus Fund
maintained with custodians or securities depositories in foreign countries or
from any political acts of any foreign governments to which such assets might be
exposed.
SECTION 6. Services to Other Clients and the Fund
Nothing contained in this Agreement shall be deemed to prohibit you or any
of your affiliated persons from acting, and being separately compensated for
acting, in one or more capacities on behalf of the Fund. We understand that you
may act as investment manager or in other capacities on behalf of other
investment companies and clients. While information and recommendations you
supply to GAM American Focus Fund and investments you make on behalf of GAM
American Focus Fund shall in your judgment be appropriate under the
circumstances in light of the investment objectives and policies of GAM American
Focus Fund, it is understood and agreed that they may be different from the
information and recommendations you or your affiliated persons supply to other
clients. You and your affiliated persons shall supply information,
recommendations and any other services, and shall allocate investment
opportunities among GAM American Focus Fund and any other client in an impartial
and fair manner in order to seek good results for all clients involved, but you
shall not be required to give preferential treatment to any one client,
including GAM American Focus Fund, as compared with the treatment given to any
other client. Whenever you shall act in multiple capacities on behalf of the
Fund, you shall maintain the appropriate separate accounts and records for each
such capacity. As used herein, the term "affiliated person" shall have the
meaning assigned to it in the 1940 Act.
On occasions when you deem the purchase or sale of a security to be in the
best interest of GAM American Focus Fund, one or more of the other series of the
Fund and/or other clients, you may, to the extent permitted by applicable law,
aggregate the securities to be so sold or purchased in order to obtain the best
execution or lower brokerage commissions, if any. You may also on occasion
purchase or sell a particular security for one or more customers in different
amounts. On either occasion, and to the extent permitted by applicable law and
regulations, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by you in the manner you
consider to be the most equitable and consistent with your fiduciary obligations
to GAM American Focus Fund and to such other clients.
SECTION 7. Reports and Information
The Fund shall furnish to you solely for your use such prospectuses, proxy
statements, reports and other information relating to the business and affairs
of the Fund as you may, at any time or from time to time, reasonably require in
order to discharge your duties under this Agreement.
SECTION 8. Term of Agreement
This Agreement shall be effective on December 14, 2004. This Agreement
shall continue in effect for consecutive terms of one year each ending on each
anniversary of such effective date, subject to approval annually by the Board of
Directors of the Fund or by vote of a majority of the outstanding shares of GAM
American Focus Fund (as defined in the 1940 Act) and also, in either event, by
the vote, cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the directors of the Fund who are not parties to this
Agreement or interested persons (as defined in the 1940 Act) of any such person.
SECTION 9. Termination of Agreement; Assignment
This Agreement may be terminated by either party hereto, without the
payment of any penalty, upon 60 days' prior notice in writing to the other
party; provided that, in the case of termination by the Fund, such action shall
have been authorized by resolution of a majority of the directors of the Fund in
office at the time or by vote of a majority of the outstanding shares of GAM
American Focus Fund (as defined in the 1940 Act).
This Agreement shall automatically terminate in the event of its assignment
(as defined in the 1940 Act).
Termination of this Agreement for any reason shall not affect rights of the
parties that have accrued prior to such termination.
SECTION 10. Applicable Provisions of Law
This Agreement shall be subject to all applicable provisions of law,
including, without limitation, the applicable provisions of the 1940 Act, and to
the extent that any provisions herein contained conflict with any such
applicable provisions of law, the latter shall control.
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If the above terms and conditions are acceptable to you, please so indicate
by signing and returning to us the enclosed copy of this Agreement, whereupon
this Agreement shall constitute a binding contract between us.
Very truly yours,
GAM FUNDS, INC.
By: /s/Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title:
By: /s/Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President- Admin
Accepted and Agreed:
GAM USA INC.
By: /s/Xxxxx X. Xxxxxxxxxxx
Name: Xxxxx X. Xxxxxxxxxxx
Title: Chief Operating Officer
By: /s/Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Secretary
