▇▇▇▇ ▇▇▇▇▇▇▇ FUNDS II
SUBADVISORY AGREEMENT
AGREEMENT made this __ day of ______, 2005, between ▇▇▇▇ ▇▇▇▇▇▇▇ Investment
Management Services, LLC, a Delaware limited liability company (the "Adviser"),
and ▇▇▇▇▇▇▇▇▇ Global Advisors Limited, a Bahamian corporation (the
"Subadviser"). In consideration of the mutual covenants contained herein, the
parties agree as follows:
1. APPOINTMENT OF SUBADVISER
The Subadviser undertakes to act as investment subadviser to, and, subject
to the supervision of the Trustees of ▇▇▇▇ ▇▇▇▇▇▇▇ Funds II (the "Trust") and
the terms of this Agreement, to manage the investment and reinvestment of the
assets of the Portfolios specified in Appendix A to this Agreement as it shall
be amended by the Adviser and the Subadviser from time to time (the
"Portfolios"). The Subadviser will be an independent contractor and will have no
authority to act for or represent the Trust or Adviser in any way except as
expressly authorized in this Agreement or another writing by the Trust and
Adviser.
2. SERVICES TO BE RENDERED BY THE SUBADVISER TO THE TRUST
a. Subject always to the direction and control of the Trustees of the Trust,
the Subadviser will manage the investments and determine the composition of
the assets of the Portfolios in accordance with the Portfolios'
registration statement, as amended. Prior to the effective date of this
Agreement, Adviser shall provide Subadviser with a current copy of the
Trust's Registration Statement. Thereafter, Adviser shall promptly notify
the Subadviser in writing of any changes to such Registration Statement
that relate to the Subadviser or the Portfolios. In fulfilling its
obligations to manage the investments and reinvestments of the assets of
the Portfolios, the Subadviser will:
i. obtain and evaluate pertinent economic, statistical, financial and
other information affecting the economy generally and individual
companies or industries the securities of which are included in the
Portfolios or are under consideration for inclusion in the Portfolios;
ii. formulate and implement a continuous investment program for each
Portfolio consistent with the investment objectives and related
investment policies for each such Portfolio as described in the
Trust's registration statement, as amended;
iii. take whatever steps are necessary to implement these investment
programs by the purchase and sale of securities including the placing
of orders for such purchases and sales;
iv. periodically report to the Trustees of the Trust and the Adviser with
respect to the implementation of these investment programs; and
v. provide assistance to the Trust's Custodian regarding the fair value
of securities held by the Portfolios for which market quotations are
not readily available.
vi. purchase, sell, exchange or convert foreign currency in the spot or
forward markets as necessary to facilitate transactions in
international securities for the Portfolios.
b. The Subadviser, at its expense, will furnish (i) all necessary investment
and management facilities, including salaries of personnel required for it
to execute its duties faithfully, and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment necessary for the
efficient conduct of the investment affairs of the Portfolios (excluding
determination of net asset value, proxy voting services and shareholder
accounting services).
c. The Subadviser will select brokers and dealers to effect all transactions
subject to the following conditions: The Subadviser will place all
necessary orders with brokers, dealers, or issuers, and will negotiate
brokerage commissions if applicable. The Subadviser is directed at all
times to seek to execute brokerage transactions for the Portfolios in
accordance with such policies or practices as may be established by the
Trustees and described in the Trust's registration statement as amended.
The Subadviser may pay a broker-dealer which provides research and
brokerage services a higher spread or commission for a particular
transaction than otherwise might have been charged by another
broker-dealer, if the Subadviser determines that the higher spread or
commission is reasonable in relation to the value of the brokerage and
research services that such broker-dealer provides, viewed in terms of
either the particular transaction or the Subadviser's overall
responsibilities with respect to accounts managed by the Subadviser. The
Subadviser may use for the benefit of the Subadviser's other clients, or
make available to companies affiliated with the Subadviser or to its
directors for the benefit of its clients, any such brokerage and research
services that the Subadviser obtains from brokers or dealers.
d. On occasions when the Subadviser deems the purchase or sale of a security
to be in the best interest of the Portfolio 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 purchased or sold to attempt to obtain a more 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 Subadviser in the
manner the Subadviser considers to be the most equitable and consistent
with its fiduciary obligations to the Portfolio and to its other clients.
e. The Subadviser will maintain all accounts, books and records with respect
to the Portfolios as are required of an investment adviser of a registered
investment company pursuant to the Investment Company Act of 1940 (the
"Investment Company Act") and Investment Advisers Act of 1940 (the
"Investment Advisers Act") and the rules thereunder.
f. Subadviser shall not be expected or required to take any action other than
the rendering of investment-related advice with respect to lawsuits
involving securities presently or formerly held in the Portfolios, or the
issuers thereof, including actions involving bankruptcy. In that
connection, the Adviser is solely responsible for filing proofs of claim on
behalf of the Portfolio in class-action suits, or bankruptcy proceedings,
and the
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Subadviser shall have no obligation in connection therewith. Should
Subadviser desire to undertake litigation against an issuer on behalf of a
Portfolio, the Subadvisr shall obtain the prior written consent of the
Adviser to undertake such litigation. If the Adviser consents to such
litigation, the Adviser agrees to pay the portion of any reasonable legal
fees associated with the action (and the Adviser may then receive
reimbursement from the Portfolio for payment of such legal fees) or the
Portfolio will forfeit any claim to any assets the Subadviser may recover
on behalf of the Portfolio up to the amount of such legal fees owed by the
Adviser to the Subadviser. If the Adviser does not consent to such
litigation, the Adviser agrees to hold Subadviser harmless for excluding
the Portfolio from such action and agrees to indemnify the Subadviser
against any claims the Portfolio may have against the Subadviser resulting
from the Portfolio's exclusion.
In the case of class action suits involving issuers held in the Portfolios,
Subadviser may include information about a Portfolio for purposes of
participating in any settlement with the prior written permission of the
Adviser which will not be unreasonably withheld.
g. The Trust's proxy voting policies and procedures provide that a Subadviser
shall vote proxies relating to securities held by a Portfolio. The
Subadviser shall use commercially reasonable efforts to vote all proxies
solicited by or with respect to issuers of securities in which the
Portfolio is invested, in accordance with the voting policies and
procedures adopted by the Subadviser in conformance with Rule 206-(4)-6
under the Investment Advisers Act. The Subadviser shall review its proxy
voting activities on a periodic basis with the Trustees.
3. COMPENSATION OF SUBADVISER
The Adviser will pay the Subadviser with respect to each Portfolio the
compensation specified in Appendix A to this Agreement.
4. LIABILITY OF SUBADVISER
Neither the Subadviser nor any of its directors, officers or employees
shall be liable to the Adviser or the Trust for any error of judgment or mistake
of law or for any loss suffered by the Adviser or Trust in connection with the
matters to which this Agreement relates except for losses resulting from willful
misfeasance, bad faith or gross negligence in the performance of, or from the
reckless disregard of, the duties of the Subadviser or any of its directors.
5. CONFLICTS OF INTEREST
It is understood that trustees, officers, agents and shareholders of the
Trust are or may be interested in the Subadviser as trustees, officers,
directors or otherwise; that employees, agents, officers and directors of the
Subadviser are or may be interested in the Trust as trustees, officers,
shareholders or otherwise; that the Subadviser may be interested in the Trust;
and that the existence of any such dual interest shall not affect the validity
hereof or of any transactions hereunder except as otherwise provided in the
Agreement and Declaration of Trust of the Trust and the governing agreement of
the Subadviser, respectively, or by specific provision of applicable law.
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6. REGULATION
The Subadviser shall submit to all regulatory and administrative bodies
having jurisdiction over the services provided pursuant to this Agreement any
information, reports or other material which any such body by reason of this
Agreement may request or require pursuant to applicable laws and regulations.
Nothing herein shall be deemed a waiver of Subadviser's right to assert claims
of privilege, or other legal rights, in connection with any such request or
demand by such regulatory or administrative body.
7. DURATION AND TERMINATION OF AGREEMENT
This Agreement shall become effective with respect to each Portfolio on the
later of (i) its execution and (ii) the date of the meeting of the Board of
Trustees of the Trust, at which meeting this Agreement is approved as described
below. The Agreement will continue in effect for a period more than two years
from the date of its execution only so long as such continuance is specifically
approved at least annually either by the Trustees of the Trust or by a majority
of the outstanding voting securities of each of the Portfolios, provided that in
either event such continuance shall also be approved by the vote of a majority
of the Trustees of the Trust who are not interested persons (as defined in the
Investment Company Act) of any party to this Agreement cast in person at a
meeting called for the purpose of voting on such approval. Any required
shareholder approval of the Agreement or of any continuance of the Agreement
shall be effective with respect to any Portfolio if a majority of the
outstanding voting securities of the series (as defined in Rule 18f-2(h) under
the Investment Company Act) of shares of that Portfolio votes to approve the
Agreement or its continuance, notwithstanding that the Agreement or its
continuance may not have been approved by a majority of the outstanding voting
securities of (a) any other Portfolio affected by the Agreement or (b) all the
portfolios of the Trust.
If any required shareholder approval of this Agreement or any continuance
of the Agreement is not obtained, the Subadviser will continue to act as
investment subadviser with respect to such Portfolio pending the required
approval of the Agreement or its continuance or of a new contract with the
Subadviser or a different adviser or subadviser or other definitive action;
provided, that the compensation received by the Subadviser in respect of such
Portfolio during such period is in compliance with Rule 15a-4 under the
Investment Company Act.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Trustees of the Trust, by the vote of a majority of the
outstanding voting securities of the Trust, or with respect to any Portfolio by
the vote of a majority of the outstanding voting securities of such Portfolio,
on sixty days' written notice to the Adviser and the Subadviser, or by the
Adviser or Subadviser on sixty days' written notice to the Trust and the other
party. This Agreement will automatically terminate, without the payment of any
penalty, in the event of its assignment (as defined in the Investment Company
Act) or in the event the Advisory Agreement between the Adviser and the Trust
terminates for any reason.
8. PROVISION OF CERTAIN INFORMATION BY SUBADVISER
The Subadviser will promptly notify the Adviser in writing of the
occurrence of any of the following events:
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a. the Subadviser fails to be registered as an investment adviser under the
Investment Advisers Act or under the laws of any jurisdiction in which the
Subadviser is required to be registered as an investment adviser in order
to perform its obligations under this Agreement;
b. the Subadviser is served or otherwise receives notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by any
court, public board or body, involving the affairs of the Trust; and
c. any material change in actual control or management of the Subadviser or
the portfolio manager of any Portfolio.
9. SERVICES TO OTHER CLIENTS
The Adviser understand, and has advised the Trust's Board of Trustees, that
the Subadviser now acts, or may in the future act, as an investment adviser to
fiduciary and other managed accounts and as investment adviser or subadviser to
other investment companies. Further, the Adviser understands, and has advised
the Trust's Board of Trustees that the Subadviser and its affiliates may give
advice and take action for its accounts, including investment companies, which
differs from advice given on the timing or nature of action taken for the
Portfolio. The Subadviser is not obligated to initiate transactions for a
Portfolio in any security which the Subadviser, its partners, affiliates or
employees may purchase or sell for their own accounts or other clients.
10. AMENDMENTS TO THE AGREEMENT
This Agreement may be amended by the parties only if such amendment is
specifically approved by the vote of a majority of the Trustees of the Trust and
by the vote of a majority of the 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. Any required shareholder approval shall
be effective with respect to any Portfolio if a majority of the outstanding
voting securities of that Portfolio vote to approve the amendment,
notwithstanding that the amendment may not have been approved by a majority of
the outstanding voting securities of (a) any other Portfolio affected by the
amendment or (b) all the portfolios of the Trust.
11. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement of the
parties.
12. HEADINGS
The headings in the sections of this Agreement are inserted for convenience
of reference only and shall not constitute a part hereof.
13. NOTICES
All notices required to be given pursuant to this Agreement shall be
delivered or mailed to the last known business address of the Trust or
applicable party in person or by registered mail or a private mail or delivery
service providing the sender with notice of receipt. Notice shall be deemed
given on the date delivered or mailed in accordance with this paragraph.
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14. SEVERABILITY
Should any portion of this Agreement for any reason be held to be void in
law or in equity, the Agreement shall be construed, insofar as is possible, as
if such portion had never been contained herein.
15. GOVERNING LAW
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of The Commonwealth of Massachusetts, or any of the
applicable provisions of the Investment Company Act. To the extent that the laws
of The Commonwealth of Massachusetts, or any of the provisions in this
Agreement, conflict with applicable provisions of the Investment Company Act,
the latter shall control.
16. LIMITATION OF LIABILITY
The Agreement and Declaration of Trust, a copy of which, together with all
amendments thereto (the "Declaration"), is on file in the office of the
Secretary of The Commonwealth of Massachusetts, provides that the name " ▇▇▇▇
▇▇▇▇▇▇▇ Funds II" refers to the Trustees under the Declaration collectively as
Trustees, but not as individuals or personally; and no Trustee, shareholder,
officer, employee or agent of the Trust shall be held to any personal liability,
nor shall resort be had to their private property, for the satisfaction of any
obligation or claim, in connection with the affairs of the Trust or any
portfolio thereof, but only the assets belonging to the Trust, or to the
particular Portfolio with respect to which such obligation or claim arose, shall
be liable.
17. CONSULTATION WITH SUBADVISERS TO OTHER TRUST PORTFOLIOS
As required by Rule 17a-10 under the Investment Company Act of 1940, the
Subadviser is prohibited from consulting with the entities listed below
concerning transactions for a Portfolio in securities or other assets:
1. other subadvisers to a Portfolio
2. other subadvisers to a Trust portfolio
3. other subadvisers to a portfolio under common control with the
Portfolio
18. CONFIDENTIALITY OF TRUST PORTFOLIO HOLDINGS
The Subadviser agrees to treat Trust portfolio holdings as confidential
information in accordance with the Trust's "Policy Regarding Disclosure of
Portfolio Holdings, Amended and Restated Effective December 15, 2004", a copy of
which is attached hereto as Appendix C, and to prohibit its employees from
trading on any such confidential information.
19. COMPLIANCE
The Subadviser agrees to comply with the terms and provisions of the Rule
206(4)-7 Certification, a copy of which is attached hereto as Appendix B.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers as of the date first
mentioned above.
▇▇▇▇ ▇▇▇▇▇▇▇ INVESTMENT MANAGEMENT
SERVICES, LLC
By: ▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance Company
(U.S.A.), Managing Member
By:
------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
Chairman
▇▇▇▇▇▇▇▇▇ GLOBAL ADVISORS LIMITED
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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APPENDIX A
The Subadviser shall serve as investment subadviser for each Portfolio of
the Trust listed below. The Adviser will pay the Subadviser, as full
compensation for all services provided under this Agreement with respect to each
Portfolio, the fee computed separately for such Portfolio at an annual rate as
follows (the "Subadviser Fee"):
BETWEEN
$150 MILLION
FIRST AND EXCESS OVER
$150 MILLION $300 MILLION OF $300 MILLION
OF AGGREGATE NET AGGREGATE NET OF AGGREGATE NET
PORTFOLIO ASSETS* ASSETS* ASSETS*
--------- ---------------- --------------- ----------------
Global Fund 0.500% 0.450% 0.350%
* The term Aggregate Net Assets includes the net assets of a Portfolio of the
Trust. It also includes with respect to each Portfolio the net assets of
one or more other portfolios as indicated below, but in each case only for
the period during which the Subadviser for the Portfolio also serves as the
subadviser for the other portfolio(s). For purposes of determining
Aggregate Net Assets and calculating the Subadviser Fee, the net assets of
the Portfolio and each other portfolio of the Trust are determined as of
the close of business on the previous business day of the Trust, and the
net assets of each portfolio of each other fund are determined as of the
close of business on the previous business day of that fund.
TRUST PORTFOLIO(S) OTHER PORTFOLIO(S)
------------------ ------------------
Global Fund -- Global Equity Trust, a series of ▇▇▇▇ ▇▇▇▇▇▇▇ Trust
International Value Fund, a series of ▇▇▇▇ ▇▇▇▇▇▇▇
Funds II, and
International Value Trust, a series of ▇▇▇▇ ▇▇▇▇▇▇▇
Trust
The Subadviser Fee for a Portfolio shall be based on the applicable annual
fee rate for the Portfolio which for each day shall be equal to (i) the sum of
the amounts determined by applying the annual percentage rates in the table to
the applicable portions of Aggregate Net Assets divided by (ii) Aggregate Net
Assets (the "Applicable Annual Fee Rate"). The Subadviser Fee for each Portfolio
shall be accrued for each calendar day, and the sum of the daily fee accruals
shall be paid monthly to the Subadviser within 30 calendar days of the end of
each month. The daily fee accruals will be computed by multiplying the fraction
of one over the number of calendar days in the year by the Applicable Annual Fee
Rate, and multiplying this product by the net assets of the Portfolio. The
Adviser shall provide Subadviser with such information as Subadviser may
reasonably request supporting the calculation of the fees paid to it hereunder.
Fees shall be paid either by wire transfer or check, as directed by Subadviser.
If, with respect to any Portfolio, this Agreement becomes effective or
terminates, or if the manner of determining the Applicable Annual Fee Rate
changes, before the end of any month,
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the fee (if any) for the period from the effective date to the end of such month
or from the beginning of such month to the date of termination or from the
beginning of such month to the date such change, as the case may be, shall be
prorated according to the proportion which such period bears to the full month
in which such effectiveness or termination or change occurs.
▇-▇
▇▇▇▇▇▇▇▇ ▇
RULE 206(4)-7 CERTIFICATION FOR ▇▇▇▇ ▇▇▇▇▇▇▇ FUNDS II
Franklin Advisers, Inc. (the "Subadviser") act as investment subadviser
with respect to the following series: Emerging Small Company Fund of ▇▇▇▇
▇▇▇▇▇▇▇ Funds II (the "Trust). The newly adopted Rule 38a-1 under the Investment
Company Act of 1940 ("Rule 38a-1") requires the Trust to determine that the
Subadviser has adequate policies and procedures relating to the services
Subadviser provides to the Trust for compliance with the federal securities laws
and approve such policies and procedures on behalf of the Trust. Rule 206(4)-7
of the Investment Advisers Act of 1940 (the "Act") requires registered
investment advisers, including subadvisers to registered investment companies,
to adopt policies and procedures reasonably designed to ensure compliance by the
adviser or subadviser with the requirements of the Act and the regulations
thereunder. In addition, it is the policy of ▇▇▇▇ ▇▇▇▇▇▇▇ Investment Management
Services, LLC (the "Adviser"), the investment adviser to the Trust, to conduct
oversight review of each subadviser's policies and procedures relating to
services Subadviser provides to the Trust as part of its duties and
responsibilities to the Trust under Rule 38a-1.
In order to permit the Trust and the Adviser to conduct such oversight
review, the Subadviser certifies to the Trust and the Adviser the following:
1. The Subadviser will provide the Trust and the Adviser with its written
compliance policies and procedures as required by Rule 206(4)-7 under the
Act ("Rule 206(4)-7 policies and procedures") to the extent they relate to
the services provided by it to the Trust to assist the Board of Trustees of
the Trust in meeting its obligations under the Federal securities laws. The
Subadviser's Rule 206(4)-7 policies and procedures shall be reasonably
designed to prevent violation of the Act and the rules of the Securities
and Exchange Commission adopted under the Act.
2. The Subadviser will quarterly provide the Trust's and the Adviser's Chief
Compliance Officer(s) with (i) any material changes that have been made to
the Subadviser's Rule 206(4)-7 policies and procedures that impact the
services it provides to the Trust, and (ii) upon the request of the Trust,
or the Adviser's Chief Compliance Officers(s), notification of the
commencement of any regulatory examinations of the Subadviser and a summary
of the results of any such examination, or of any periodic testing of the
Rule 206(4)-7 plicies and procedures, but only to the extent such results
materially relate to the services the Subadviser provides to the Trust.
3. The Subadviser agrees to make a good faith effort to cooperate with the
Trust and the Adviser in the annual review of the Trust's Rule 38a-1
policies and procedures conducted by the Chief Compliance Officer(s) of the
Trust and the Adviser to determine the adequacy of the Subadviser's
206(4)-7 policies and procedures to the extent they relate to services
provided by the Subadviser to the Trust and the effectiveness of their
implementation (the "Annual Review"). The Subadviser also agrees to make a
good faith effort to cooperate with the Trust and the Adviser in interim
reviews made at reasonable periodic intervals of the Trust's Rule 38a-1
policies and procedures to determine the
B-1
adequacy and the effectiveness of the Subadviser's 206(4)-7 policies and
procedures to the extent they relate to services provided by the Subadviser
to the Trust and their implementation in response to significant compliance
events, changes in business arrangements, and/or regulatory developments
("Interim Review"). Such cooperation includes, without limitation,
furnishing such certifications, subcertifications, and documentation as the
Trust's or the Adviser's Chief Compliance Officer shall reasonably request
from time to time and considering implementing changes to the Subadviser's
206(4)-7 policies and procedures satisfactory to the Subadviser and the
Trust's and the Adviser's Chief Compliance Officer, provided Subadviser, in
its sole discretion, determines such changes feasible.
4. The Subadviser will provide the Trust and the Adviser with reasonable
access to the Subadviser's compliance personnel and shall make a good faith
effort to cooperate with the Trust's and the Adviser's Chief Compliance
Officer(s) in carrying out the Trust and the Adviser obligations under Rule
38a-1 to oversee the Trust's compliance program.
5. The Subadviser will promptly notify Trust and the Adviser in the event that
a Material Compliance Matter, as defined under Rule 38a-1, occurs with
respect to the Subadviser's Rule 206(4)-7 policies and procedures to the
extent they relate to the services provided by it to the Trust and will
reasonably cooperate with the Trust and the Adviser in providing the Trust
and the Adviser with periodic and special reports in the event any Material
Compliance Matter occurs. A "Material Compliance Matter" has the same
meaning as the term defined in Rule 38a-1, and includes any compliance
matters that involves: (1) a violation of the Federal Securities Laws by
the Subadviser (or its officers, directors, employees, or agents); (2) a
violation of the Subadviser's Rule 206(4)-7 policies and procedures to the
extent they relate to services provided by it to the Trust; or (3) a
weakness in the design or implementation of the Subadviser's Rule 206(4)-7
policies and procedures that materially impact the services provided by the
Subadviser to the Trust.
6. The Subadviser (and anyone acting under the direction of the Subadviser)
will refrain from, directly or indirectly, taking any action to coerce,
manipulate, knowingly mislead, or fraudulently influence the Trust's or the
Adviser's Chief Compliance Officer(s) in the performance of her or his
responsibilities under Rule 38a-1.
7. Any summaries, descriptions, or other materials ("materials") that the
Subadviser provides to the Trust or the Adviser pursuant to this
Certificate is solely for the use of the Trust and the Adviser. Such
materials shall be regarded as confidential and shall not be disclosed to
third persons, except as may be required by law. This confidentiality
provision shall survive the termination of this Cerficate.
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Certified this ___ day of ________, 2005.
▇▇▇▇▇▇▇▇▇ GLOBAL ADVISORS LIMITED
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
The undersigned hereby agree to the confidentiality provisions set forth in
section 7.
▇▇▇▇ ▇▇▇▇▇▇▇ INVESTMENT MANAGEMENT
SERVICES, LLC
By: ▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance
Company (U.S.A.), its managing
member
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇ FUNDS II,
On behalf of
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
B-3
APPENDIX C
POLICY REGARDING DISCLOSURE OF PORTFOLIO HOLDINGS
EFFECTIVE ___________, 2005
It is the policy of ▇▇▇▇ ▇▇▇▇▇▇▇ Funds II (the "Trust") to provide
Nonpublic Information regarding Trust portfolio holdings to Nonaffiliated
Persons of the Trust only in the limited circumstances noted below. It is also
the policy of the Trust only to provide Nonpublic Information regarding
portfolio holdings to any person, including Affiliated Persons, on a "need to
know" basis (i.e., the person receiving the information must have a legitimate
business purpose for obtaining the information prior to it being publicly
available). The Trust considers Nonpublic Information regarding Trust portfolio
holdings to be confidential and the intent of this policy is to guard against
selective disclosure of such information in a manner that would not be in the
best interests of Trust shareholders.
Nonpublic Information. Portfolio holdings are considered Nonpublic Information
until such holdings are posted on a publicly available website which is
disclosed in the Trust prospectus or until filed with the SEC via ▇▇▇▇▇ on
either Form N-CSR or Form N-Q.
"Affiliated Persons" are persons affiliated with: (a) the Trust, (b) the Trust's
investment adviser or principal underwriter or any affiliate of either entity,
(c) the investment adviser's ultimate parent, Manulife Financial Corporation
("MFC") or any affiliate thereof, (d) in the case of a particular Trust
portfolio, the subadviser to the portfolio, or any affiliate of the subadviser,
(e) the Trust's custodian and (f) the Trust's certified public accountants.
"Nonaffiliated Persons" is any person who is not an Affiliated Person.
DISCLOSURE OF PORTFOLIO HOLDINGS TO NONAFFILIATED PERSONS
Subject to the pre-approval of the Trust's Chief Compliance Officer, the
Trust or its adviser or principal underwriter or any of its subadvisers (or any
of their affiliates) may provide Nonpublic Information regarding Trust portfolio
holdings to Nonaffiliated Persons in the circumstances listed below.
1. Rating Organizations
Nonpublic Information regarding Trust portfolio holdings may be provided to
ratings organizations, such as Morningstar and Lipper, for the purpose of
reviewing the portfolio, the adviser or subadviser if such entity agrees to keep
such information confidential and to prohibit its employees from trading on such
information.
2. Vestek (▇▇▇▇▇▇▇▇ Financial)
Nonpublic Information regarding Trust portfolio holdings may be provided to
Vestek (▇▇▇▇▇▇▇▇ Financial) or other entities for the purpose of compiling
reports and preparing data for use by the Trust or any Affiliated Person if such
entity agrees to keep such information confidential and to prohibit its
employees from trading on such information.
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3. Proxy Voting Services
Nonpublic Information regarding Trust portfolio holdings may be provided to
proxy voting services for the purpose of voting proxies relating to Trust
portfolio holdings if such entity agrees to keep such information confidential
and to prohibit its employees from trading on such information.
4. Computer Software
Nonpublic Information regarding Trust portfolio holdings may be provided to
entities providing computer software to the Trust (for example, for the purpose
of generating Trust compliance reports or reports relating to proxy voting) if
such entity agrees to keep such information confidential and to prohibit its
employees from trading on such information.
5. Courts and Regulators
Nonpublic Information regarding Trust portfolio holdings may be provided to
any court or regulator with jurisdiction over the Trust, the Trust's adviser or
principal underwriter, MFC or any subadviser to a Trust portfolio (or any of
their affiliates) if such information is requested by such court or regulator.
6. Other Persons
Nonpublic Information regarding Trust portfolio holdings may be provided to
other persons or entities if approved by the Chief Compliance Officer of the
Trust or his or her designee (collectively, the "CCO"). In determining whether
to approve such disclosure the CCO shall consider: (a) the purpose of providing
such information, (b) the procedures that will be used to ensure that such
information remains confidential and is not traded upon and (c) whether such
disclosure is in the best interest of the shareholders of the Trust. In the case
of a conflict between (a) the interests of the shareholders of the Trust, on the
one hand, and (b) the interests of any affiliated person of the Trust, the
Trust's investment adviser (including any subadviser), the Trust's principal
underwriter or any of their affiliated persons, on the other, the procedures set
forth under "Resolution of Conflicts of Interest" below shall be followed.
The CCO shall report to the Board of Trustees whenever additional
disclosures of portfolio holdings are approved. This report shall be at the
board meeting following such approval.
DISCLOSURE OF PORTFOLIO HOLDINGS TO AFFILIATED PERSONS
The CCO must pre-approve the provision of any Nonpublic Information
regarding portfolio holdings to any Affiliated Persons (other than those listed
in Appendix A) and report such approval to the Board of Trustees at the board
meeting following such approval. The persons listed in Appendix A have been
exempt from such pre-approval. In the case of persons listed in Section II, III
and IV of Appendix A, their employers shall provide the CCO reasonable
assurances that Nonpublic Information will be kept confidential and that such
employees are prohibited from trading on such information.
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In determining whether to approve such disclosure of Nonpublic Information
regarding portfolio holdings to any Affiliated Persons the CCO shall consider:
(a) the purpose of providing such information, (b) the procedures that will be
used to ensure that such information remains confidential and is not traded upon
and (c) whether such disclosure is in the best interest of the shareholders of
the Trust. In the case of a conflict between (a) the interests of the
shareholders of the Trust, on the one hand, and (b) the interests of any
affiliated person of the Trust, the Trust's investment adviser (including any
subadviser), the Trust's principal underwriter or any of their affiliated
persons, on the other, the procedures set forth under "Resolution of Conflicts
of Interest" below shall be followed.
RESOLUTION OF CONFLICTS OF INTEREST
If the Trust or its adviser or principal underwriter or any of its
subadviser (or any of their affiliates) desire to provide Nonpublic Information
regarding Trust portfolio holdings to a Nonaffiliated Person and the CCO
believes there is a potential conflict between (a) the interests of the
shareholders of the Trust, on the one hand, and (b) the interests of any
affiliated person of the Trust, the Trust's investment adviser (including any
subadviser), the Trust's principal underwriter or any of their affiliated
persons, on the other, the CCO shall refer the conflict to the Board of Trustees
of the Trust who shall only permit such disclosure of the Nonpublic Information
if in their reasonable business judgment they conclude such disclosure will be
in the best interests of Trust shareholders.
POSTING OF TRUST PORTFOLIO HOLDINGS ON A WEBSITE
If the Trust desires to post on its website Trust portfolio holdings that
have not yet been disclosed in a publicly available filing with the SEC that is
required to include such information (e.g., a Form N-CSR or a Form N-Q), then
the Trust shall disclose the following in its prospectus:
1. the nature of the information that will be available, including both
the date as of which the information will be current (e.g.
quarter-end) and the scope of the information (e.g., complete
portfolio holdings, the portfolio's largest 10 holdings);
2. the date when the information will first become available and the
period for which the information will remain available, which shall
end no earlier than the date on which the Trust files its Form N-CSR
or Form N-Q with the SEC for the period that includes the date as of
which the website information is current; and
3. the location of the website where either the information or a
prominent hyperlink (or series of prominent hyperlinks) to the
information will be available.
CHANGES TO POLICY
Any material changes to this policy must be approved by the Trust's Board
of Trustees.
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REPORTS TO THE TRUST'S BOARD OF TRUSTEES
The CCO shall report any material issues that may arise under this policy
to the Trust's Board of Trustees no later than the Board meeting following the
arising of the issue.
APPLICABILITY OF POLICY TO THE TRUST'S ADVISER AND SUBADVISERS
This policy shall apply to the Trust's Adviser and each of its subadvisers.
Appendix A
I. Employees* of The Manufacturers Life Insurance Company (U.S.A.) or The
Manufacturers Life Insurance Company of New York who are subject to the
Code of Ethics of the Trust, the Trust's investment adviser, Manufacturers
Securities Services LLC or the Trust's principal underwriter, Manulife
Financial Securities LLC.
II. Employees* of a Subadviser or any Affiliate of a Subadviser who provide
services to the Trust.
III. Employees* of the Trust's custodian who provide services to the Trust.
IV. Employees* and partners of the Trust's certified public accounting firm who
provide services to the Trust.
* Includes temporary employees
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