EXHIBIT (d)(12)
LAUDUS TRUST
MANAGEMENT CONTRACT
Management Contract executed as of May 1, 2006, between LAUDUS TRUST, a
Massachusetts business trust (the "Trust"), on behalf of the Laudus Xxxxxxxxx
International Discovery Fund (the "Fund"), and XXXXXXX XXXXXX INVESTMENT
MANAGEMENT, INC., a Delaware corporation (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is agreed as
follows:
1. SERVICES TO BE RENDERED BY MANAGER TO THE TRUST.
(a) Subject always to the control of the trustees of the Trust (the
"Trustees") and to such policies as the Trustees may determine, the Manager
will, at its expense, (i) furnish continuously an investment program for the
Fund and will make investment decisions on behalf of the Fund and place all
orders for the purchase and sale of its portfolio securities, and (ii) furnish
all necessary office space and equipment, provide bookkeeping and clerical
services required to perform its duties in clause (i) above and pay all
salaries, fees and expenses of the Trustees and officers of the Trust who are
affiliated persons of the Manager. In the performance of its duties, the Manager
will comply with the provisions of the Second Amended and Restated Agreement and
Declaration of Trust and By-laws of the Trust, each as amended from time to
time, and the Fund's stated investment objectives, policies and restrictions.
(b) In the selection of brokers, dealers or futures commissions merchants
(collectively, "brokers") and the placing of orders for the purchase and sale of
portfolio investments for the Fund, the Manager shall seek to obtain 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 described below. In using its best efforts to obtain for the Fund
the most favorable price and execution available, the Manager, bearing in mind
the Fund's best interests at all times, shall consider all factors it deems
relevant, including, by way of illustration, the price, the size of the
transaction, the nature of the market for the security, the amount of the
commission, the timing of the transaction taking into account 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, the
Manager shall not be deemed to have acted unlawfully or to have breached any
duty created by this Contract or otherwise solely by reason of its having caused
the Trust to pay, on behalf of the Fund, a broker that provides brokerage and
research services to the Manager or any affiliated person of the Manager an
amount of commission for effecting a portfolio investment transaction in excess
of the amount of commission another broker
would have charged for effecting that transaction, if the Manager determines in
good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such broker, viewed in
terms of either that particular transaction or the Manager's overall
responsibilities with respect to the Fund and to other clients of the Manager
and any affiliated person of the Manager as to which the Manager or any
affiliated person of the Manager exercises investment discretion.
(c) Notwithstanding Section 1(a) above and subject to the provisions of the
Second Amended and Restated Agreement and Declaration of Trust of the Trust, and
all amendments thereto, and the Investment Company Act of 1940, as amended (the
"1940 Act"), the Manager, at its expense, may select and contract with an
investment sub-adviser (the "Subadviser") for the Fund to perform, subject to
the supervision of the Manager, some or all of the services for which it is
responsible pursuant to paragraphs (a) and (b) of this Section 1 (including, but
not limited to, the selection of brokers). The Manager will compensate the
Subadviser for its services to the Fund.
(d) The Manager shall not be obligated to pay any expenses of or for the Trust
or of or for the Fund not expressly assumed by the Manager pursuant to this
Section 1 other than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, partner, director, officer or
employee of, or be otherwise interested in, the Manager, and in any person
controlling, controlled by or under common control with the Manager, and that
the Manager and any person controlling, controlled by or under common control
with the Manager may have an interest in the Trust. It is also understood that
the Manager and persons controlling, controlled by or under common control with
the Manager have and may have advisory, management service, distribution or
other contracts with other organizations and persons, and may have other
interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Fund will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses borne by
the Manager pursuant to Section 1, a fee, computed and paid monthly at the
annual rate (based on the number of days elapsed through the end of the month)
of 1.00% of the Fund's net assets up to $1 billion and 0.95% of the Fund's net
assets over $1 billion, each as of the last business day of the month. Such fee
shall be payable for each month within five (5) business days after the end of
such month.
In the event that the expenses of the Fund exceed any expense limitation
which the Manager may, by written notice to the Trust, voluntarily declare to be
effective with respect to the Fund, subject to such terms and conditions as the
Manager may prescribe in
such notice, the compensation due the Manager shall be reduced, and, if
necessary, the Manager shall bear the Fund's expenses to the extent required by
such expense limitation. If the Manager shall serve for less than the whole of a
month, the foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment (as defined in the 1940 Act); and this
Contract shall not be materially amended unless such amendment is approved by
the affirmative vote of a majority of the outstanding shares of the Fund, and by
the vote, cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the Trustees who are not interested persons of the
Trust or of the Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall continue in effect until May 1, 2008 and thereafter
for successive annual periods, provided that such continuance is specifically
approved at least annually (a) by the affirmative vote of a majority of the
outstanding shares of the Fund or by the Trust's Board of Trustees, and (b) by
the vote of a majority of the Trust's trustees who are not parties to this
agreement or "interested persons" (as defined in the 0000 Xxx) of any such
party, cast in person at a meeting called for the purpose of voting on such
approval, or (c) as otherwise permitted by the 1940 Act or the rules and
regulations thereunder. This Contract may be terminated at any time by a vote of
a majority of the Fund's outstanding voting securities or by a vote of a
majority of the Trust's entire Board of Trustees on 60 days' written notice to
the Manager or by the Manager on 60 days' written notice to the Trust. Unless
terminated automatically as set forth in Section 4, this Agreement may only be
terminated in accordance with the provisions of this Section 5.
If the continuance of this Contract is submitted to the shareholders of
the Fund for their approval and such shareholders fail to approve such
continuance of this Contract as provided herein, the Manager may continue to
serve hereunder in a manner consistent with the 1940 Act and the rules and
regulations thereunder.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority of
the outstanding shares" of the Fund means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of the
shares of the Fund present (in person or by proxy) and entitled to vote at such
meeting, if the holders of more than 50% of the outstanding shares of the Fund
entitled to vote at such meeting are present in person or by proxy, or (b) of
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their respective
meanings defined in the 1940 Act and the rules and regulations thereunder,
subject, however, to such exemptions as may be granted by the Securities and
Exchange Commission under said Act; the term "specifically approve at least
annually" shall be construed in a manner consistent with the 1940 Act and the
rules and regulations thereunder; and the term "brokerage and research services"
shall have the meaning given in the 1934 Act and the rules and regulations
thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, to
the Fund or to any shareholder, officer, director or Trustee thereof, for any
act or omission in the course of, or connected with, rendering services
hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Second Amended and Restated Agreement and Declaration of
Trust of the Trust an all amendments thereto are on file with the Secretary of
State of The Commonwealth of Massachusetts, and notice is hereby given that this
instrument is executed on behalf of the Trustees as Trustees and not
individually and that the obligations of this instrument are not binding upon
any of the Trustees or shareholders individually but are binding only upon the
assets and property of the Fund.
IN WITNESS WHEREOF, LAUDUS TRUST and XXXXXXX XXXXXX INVESTMENT MANAGEMENT, INC.
have each caused this instrument to be signed in duplicate on its behalf by its
duly authorized representative, all as of the day and year first above written.
XXXXXXX XXXXXX INVESTMENT MANAGEMENT, INC.
By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
Title: President & CEO
LAUDUS TRUST
By: /s/ Xxxxxx Xxxx
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Name: Xxxxxx Xxxx
Title: Vice President, Chief Financial Officer and Treasurer
