FORWARD FUNDS AMENDED AND RESTATED INVESTMENT MANAGEMENT AGREEMENT
Exhibit 77 Q1(e)(1)
AMENDED AND RESTATED
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, effective as of May 1, 2005 and amended and restated as of January 8, 2008, March 5, 2008 and December 15, 2011, between Forward Management, LLC (“Forward Management” or the “Investment Advisor”) and Forward Funds (the “Trust”) on behalf of the series of the Trust listed on Exhibits A and B (the “Funds”).
WHEREAS, each of the parties hereto entered into substantially similar Investment Management Agreements, one of which was effective as of May 1, 2005 with respect to certain series of the Trust, and one of which was effective as of July 1, 2005, and amended effective as of September 7, 2006, with respect to certain other series of the Trust (the “Original Agreements”) and the parties hereto wish to combine the Original Agreements;
In performing its investment management services to the Funds under the terms of this Agreement, the Investment Advisor will provide the Funds with ongoing investment guidance and policy direction.
The Investment Advisor further agrees that, in performing its duties hereunder, it will:
(a) comply with the 1940 Act and all rules and regulations thereunder, the Advisers Act, the Internal Revenue Code of 1986, as amended (the “Code”) and all other applicable federal and state laws and regulations, and with any applicable procedures adopted by the Board of Trustees;
(b) use reasonable efforts to manage the Portfolios so that the Funds will qualify, and continue to qualify, as regulated investment companies under Subchapter M of the Code and regulations issued thereunder;
(c) place orders pursuant to its investment determinations for the Funds in accordance with applicable policies expressed in the Funds’ Prospectus and/or Statement of Additional Information, established through written guidelines determined by the Trust and provided to the Investment Advisor, and in accordance with applicable legal requirements;
(d) furnish to the Trust whatever statistical information the Trust may reasonably request with respect to the Portfolios. In addition, the Investment Advisor will keep the Trust and the Trustees informed of developments materially affecting the Portfolios and shall, on the Investment Advisor’s own initiative, furnish to the Trust from time to time whatever information the Investment Advisor believes appropriate for this purpose;
(e) make available to the Trust’s administrator (the “Administrator”), and the Trust, promptly upon their request, such copies of its investment records and ledgers with respect to the Portfolios as may be required to assist the Administrator and the Trust in their compliance with applicable laws and regulations. The Investment Advisor will furnish the Trustees with such periodic and special reports regarding the Funds as they may reasonably request;
(f) meet quarterly with the Trust’s Board of Trustees to explain its investment management activities, and any reports related to the Portfolios as may reasonably be requested by the Trust;
(g) immediately notify the Trust in the event that the Investment Advisor or any of its affiliates: (1) becomes aware that it is subject to a statutory disqualification that prevents the Investment Advisor from serving as investment adviser pursuant to this Agreement; or (2) becomes aware that it is the subject of an administrative proceeding or enforcement action by the SEC or other regulatory authority. The Investment Advisor further agrees to notify the Trust immediately of any material fact known to the Investment Advisor respecting or relating to the Investment Advisor that is not contained in the Registration Statement regarding the Funds, or any amendment or supplement thereto, but that is required to be disclosed therein, and of any statement contained therein that becomes untrue in any material respect; and
(h) in making investment decisions for the Portfolios, use no material non-public information that may be in its possession or in the possession of any of its affiliates, nor will the Investment Advisor seek to obtain any such information.
4. The Investment Advisor is responsible for decisions to buy and sell securities and other investments for the Fund, broker-dealer selection, and negotiation of brokerage commission rates. The Investment Advisor’s primary consideration in effecting a security transaction will be to obtain the best execution for the Fund, taking into account the factors specified in the Registration Statement, or other factors that may be specified by the Board. The price to a Fund in any transaction may be less favorable than that available from another broker-dealer if the difference is reasonably justified, in the judgment of the Investment Advisor in the exercise of its fiduciary obligations to the Fund, by other aspects of the portfolio execution services offered. Subject to such policies as the Board may determine and consistent with Section 28(e) of the Securities Exchange Act of 1934, as amended (the “1934 Act”) or other applicable law, the Investment Advisor 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 the Fund to pay a broker-dealer for effecting a portfolio investment transaction in excess of the amount of commission another broker-dealer would have charged for effecting that transaction, if the Investment Advisor 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-dealer, viewed in terms of either that particular transaction or the Investment Advisor’s overall responsibilities with respect to the Fund and to its other clients as to which it exercises investment discretion. To the extent consistent with these standards and in accordance with Section 11(a) of the 1934 Act and Rule 11a2-2(T) thereunder and Section 17(e) of the 1940 Act and Rule 17e-1 thereunder, the Investment Advisor is further authorized to allocate the orders placed by it on behalf of the Fund to the Investment Advisor if it is registered as a broker-dealer with the Securities and Exchange Commission (“SEC”), to an affiliated broker-dealer, or to such brokers and dealers who also provide research or statistical material or other services to the Fund, the Investment Advisor or an affiliate of the Investment Advisor. Such allocation shall be in such amounts and proportions as the Investment Advisor shall determine consistent with the above standards, and the Investment Advisor will report on said allocation regularly to the Board if and as required under applicable law or regulation, indicating the broker-dealers to which such allocations have been made and the basis therefor.
(a) Advisory fees shall be computed and accrued daily and paid monthly based on the average daily net asset value of shares of the Funds as determined according to the manner provided in the then-current prospectus of the Funds.
(b) Performance fees, if any, shall be computed and accrued daily and paid monthly based on the performance of the Funds as defined and determined according to the manner provided in the then-current prospectus of the Funds.
(c) The Investment Advisor shall be responsible for compensating any investment sub-advisers employed by the Funds listed on Exhibit A.
Notwithstanding anything herein to the contrary, the Investment Advisor may, if requested: (a) furnish to the Funds the services of its employees and agents in the management and conduct of the corporate business and affairs of the Funds, provided that the Investment Advisor may be compensated for providing such services as agreed to between the Investment Advisor and the Trust from time to time pursuant to a support services or similar agreement; (b) provide the services of its officers or employees as officers or administrative executives of the Funds (including but not limited to the Chief Compliance Officer of the Funds and any compliance staff) and the services of any Trustees of the Trust who are “interested persons” of the Trust or its affiliates, as that term is defined in the 1940 Act, subject in each case to their individual consent to serve and to applicable legal limitations, provided that, other than with respect to the services specified in Section 2 of this Agreement, the Investment Advisor may be compensated for providing such services as agreed to between the Investment Advisor and the Trust from time to time pursuant to a support services or similar agreement; and (c) provide office space, secretarial and clerical services and wire and telephone services, and monitor and review Trust contracted services and expenditures pursuant to the distribution plans of the Funds, provided that the Investment Advisor may be compensated for providing such services as agreed to between the Investment Advisor and the Trust from time to time pursuant to a support services or similar agreement.
If to the Trust:
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
If to the Investment Advisor:
Forward Management, LLC
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
16. Use of Names. It is understood that the names “Forward Funds” and “Forward Management,” or any derivative thereof or logo associated with those names are the valuable property of the Investment Advisor and its affiliates, and that the Fund and/or the Fund have the right to use such names (or derivatives or logos) only so long as this Agreement shall continue with respect to such Fund and/or Fund. Upon termination of this Agreement, the Fund (or Fund) shall forthwith cease to use such names (or derivatives or logos) and, in the case of the Fund, shall promptly amend its Declaration of Trust to change its name (if such name is included therein) and remove Forward Funds logos.
(a) This Agreement shall be governed by the laws of the State of California, provided that nothing herein shall be construed in a manner inconsistent with the 1940 Act, the Advisers Act, or rules or orders of the SEC thereunder.
(b) Concurrently with the execution of this Agreement, the Investment Advisor is delivering to the Trust a copy of Part II of its Form ADV, as revised, on file with the Securities and Exchange Commission. The Trust hereby acknowledges receipt of such copy.
(c) The captions of this Agreement are included for convenience only and in no way define or limit any of the provisions hereof or otherwise affect their construction or effect.
(d) If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected hereby and, to this extent, the provisions of this Agreement shall be deemed to be severable.
(e) Nothing herein shall be construed as constituting the Investment Advisor as an agent of the Trust or the Funds.
By:
/s/ J. Xxxx Xxxx, Jr.
Name: J. Xxxx Xxxx, Jr.
Title: President
FORWARD MANAGEMENT, LLC
By:
/s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Secretary
EXHIBIT A TO INVESTMENT MANAGEMENT AGREEMENT | |
Fund | Advisory Fee |
Forward Banking and Finance Fund | 1.00% up to and including $100 million 0.90% over $100 million |
Forward Commodity Long/Short Strategy Fund | 1.00% |
Forward Credit Analysis Long/Short Fund | 1.50% |
Forward EM Corporate Debt Fund | 0.70% up to and including $500 million 0.64% over $500 million up to and including $1 billion 0.58% over $1 billion up to and including $5 billion 0.52% over $5 billion |
Forward Emerging Markets Fund | 1.25% up to and including $500 million |
Forward Endurance Long/Short Fund | 1.50% |
Forward Floating NAV Short Duration Fund | 0.35% |
Forward Focus Fund | 0.75% |
Forward Global Credit Long/Short Fund | 1.50% |
Forward Global Infrastructure Fund | 0.90% |
Forward Growth Fund | 0.75% up to and including $250 million |
Forward International Dividend Fund | 0.85% up to and including $250 million |
Forward International Real Estate Fund | 1.00% |
Forward International Small Companies Fund | 1.00% up to and including $1 billion |
Forward Large Cap Dividend Fund | 0.80% up to and including $500 million 0.725% over $500 million up to and including $1 billion 0.675% over $1 billion |
Forward Real Estate Fund | 0.85% up to and including $100 million |
Forward Real Estate Long/Short Fund | 1.00% |
Forward Select EM Dividend Fund | 1.10% |
Forward Select Income Fund | 1.00% |
Forward Small Cap Equity Fund | 0.85% |
Forward Tactical Enhanced Fund | 1.75% up to and including $1 billion 1.65% over $1 billion |
Forward Tactical Growth Fund | 1.15% up to and including $1 billion 1.05% over $1 billion |
Fund | Advisory Fee |
Forward Aggressive Growth Allocation Fund | 0.10% |
Forward Balanced Allocation Fund | 0.10% |
Forward CorePlus Fund | 0.45% |
Forward Extended MarketPlus Fund | 0.60% |
Forward Frontier Strategy Fund | 0.85% |
Forward Growth Allocation Fund | 0.10% |
Forward Growth & Income Allocation Fund | 0.10% |
Forward High Yield Bond Fund | 0.25% |
Forward Income Allocation Fund | 0.10% |
Forward Income & Growth Allocation Fund | 0.10% |
Forward Investment Grade Fixed Income Fund | 0.25% |
Forward International Equity Fund | 0.55% |
Forward Strategic Alternatives Fund | 0.70% |
Forward U.S. Government Money Fund | 0.08% |
Amended: December 1, 2009
Amended: December 11, 2009
Amended: May 1, 2010
Amended: September 20, 2010
Amended: January 20, 2011
Amended: April 19, 2011
Amended: May 1, 2011