UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14C
(RULE14c-101)
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
Of the Securities Exchange Act of 1934
(Amendment No. )
Check the appropriate box:
[ ] | Preliminary information statement. |
[ ] | Confidential, for use of the Commission only (as permitted by Rule14c-5(d)(2)). |
[X] | Definitive information statement. |
GREAT-WEST FUNDS, INC.
(Name of Registrant as Specified in its Charter)
Payment of filing fee (check the appropriate box):
[X] | No fee required. |
[ ] | Fee computed on table below per Exchange Act Rules14c-5(g) and0-11. |
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] | Fee paid previously with preliminary materials. |
[ ] | Check box if any part of the fee is offset as provided by Exchange Act Rule0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. |
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
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IMPORTANT NOTICE OF INTERNET AVAILABILITY OF INFORMATION STATEMENT
Regarding the Great-West International Value Fund (formerlythe Great-West MFS International Value Fund)
This notice presents only an overview of the more complete Information Statement that is available to you on the Internet relating to the Great-West International Value Fund (the “Fund”) (formerlythe Great-West MFS International Value Fund). We encourage you to access and review all of the important information contained in the Information Statement.
The Information Statement contains important information about asub-adviser change for the Fund. Effective April 27, 2018, LSV Asset Management (“LSV”) joined Massachusetts Financial Services Company (“MFS”) as asub-adviser to the Fund. At a meeting held on February 22, 2018, the Board of Directors of Great-West Funds, Inc., including a majority of the independent directors, considered and approved a newsub-advisory agreement adding LSV as asub-adviser to the Fund alongside MFS, and voted to change the name of the Fund to reflect the fact that MFS is no longer the solesub-adviser.
Great-West Capital Management, LLC (“GWCM”) is the investment adviser to Great-West Funds, Inc. (“Great-West Funds”), including the Fund. GWCM provides investment advisory, fund operations, and accounting services to Great-West Funds. GWCM at its expense may select and contract withsub-advisers to manage investments of one or more of the series of Great-West Funds.
Great-West Funds operates under amanager-of-managers structure under an order issued by the Securities and Exchange Commission. The current order generally permits GWCM to hiresub-advisers or materially amendsub-advisory agreements without shareholder approval. The Board of Directors of Great-West Funds must approve suchsub-advisory agreements, and Great-West Funds must provide specified information to shareholders within 90 days of the hiring of any newsub-adviser.
The addition of LSV as asub-adviser does not change the Fund’s fees and expenses because GWCM pays LSV’s fees from the management fees that the Fund already pays GWCM.
Instead of physically delivering the Information Statement, Great-West Funds has made the Information Statement available to you online atwww.greatwestfunds.com until October 24, 2018. A paper or email copy of this information statement may be obtained, without charge, by calling (866)831-7129.
NO SHAREHOLDER VOTE WILL BE TAKEN WITH RESPECT TO THE MATTER DESCRIBED IN THIS INFORMATION STATEMENT. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
If you have any questions, please contact us at (866)831-7129.
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Dear Shareholder,
The enclosed information statement contains important information about asub-adviser change for the Great-West International Value Fund (the “Fund”) (formerlythe Great-West MFS International Value Fund). Effective April 27, 2018, LSV Asset Management (“LSV”) joined Massachusetts Financial Services Company (“MFS”) as asub-adviser to the Fund.
Please read the enclosed information statement carefully because it describes the Fund’s investment management structure, thesub-advisory agreement with MFS, the newsub-advisory agreement with LSV, background information about LSV, factors that the Board of Directors of Great-West Funds, Inc. considered in approving thesub-advisory agreement with LSV, and other important information.
NO SHAREHOLDER VOTE WILL BE TAKEN WITH RESPECT TO THE MATTER DESCRIBED IN THIS INFORMATION STATEMENT. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
If you have any questions, please contact us at (866)831-7129.
Sincerely, |
Scott C. Sipple |
President & Chief Executive Officer |
Great-West Funds, Inc. |
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GREAT-WEST FUNDS, INC.
Great-West International Value Fund
Executive Offices & Mailing Address: | 8515 East Orchard Road Greenwood Village, Colorado 80111 |
INFORMATION STATEMENT
Important Notice Regarding the Availability of this Information Statement.
This information statement is available at www.greatwestfunds.com
The purpose of this information statement is to notify shareholders of the Great-West International Value Fund (the “Fund”) (formerly the Great-West MFS International Value Fund), that April 27, 2018, LSV Asset Management (“LSV”) joined Massachusetts Financial Services Company (“MFS”) as asub-adviser to the Fund.
Great-West Capital Management, LLC (“GWCM”), a Colorado limited liability company located at 8515 East Orchard Road, Greenwood Village, Colorado 80111, is the investment adviser to each series of Great-West Funds, Inc. (“Great-West Funds”), including the Fund. GWCM provides investment advisory, fund operations, and accounting services to Great-West Funds pursuant to an Amended and Restated Investment Advisory Agreement dated May 1, 2017, as amended (the “GWCM Investment Advisory Agreement”). The GWCM Investment Advisory Agreement provides that, subject to the requirements of the Investment Company Act of 1940, as amended (the “1940 Act”), and the rules and regulations thereunder, GWCM, at its expense, may select and contract withsub-advisers to manage investments of one or more of the series of Great-West Funds.
Great-West Funds operates under amanager-of-managers structure pursuant to an order issued by the Securities and Exchange Commission (“SEC”). The order generally permits GWCM to hiresub-advisers or materially amendsub-advisory agreements without shareholder approval, provided that the Board of Directors of Great-West Funds (the “Board”) must approve suchsub-advisory agreements, and Great-West Funds must provide specified information to shareholders within 90 days of hiring any newsub-adviser. This Information Statement is being made available to shareholders to fulfill such information requirement.
At a meeting held on February 22, 2018, the Board, including a majority of the independent directors, considered and approved a newsub-advisory agreement adding LSV as an additionalsub-adviser to the Fund, and voted to change the name of the Fund.
The addition of LSV assub-adviser does not change the Fund’s fees and expenses because GWCM pays LSV’s fees from the management fees that the Fund already pays GWCM.
The Important Notice of Internet Availability of Information Statement is being mailed on or about July 1, 2018. This information statement will be available atwww.greatwestfunds.com until October 24, 2018. A paper or email copy of this information statement may be obtained, without charge, by calling (866)831-7129.
Please read this information statement carefully because it contains important information.
NO SHAREHOLDER VOTE WILL BE TAKEN WITH RESPECT TO THE MATTER DESCRIBED IN THIS INFORMATION STATEMENT. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
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THE GWCM INVESTMENT ADVISORY AGREEMENT
Under the terms of the GWCM Investment Advisory Agreement, GWCM acts as investment adviser and, subject to the supervision of the Board, directs the investments of the Fund in accordance with its investment objectives, policies, and limitations.
GWCM has also contracted to perform, or supervise the performance of, Great-West Funds’ fund operations and accounting services in connection with the management of Great-West Funds, including the Fund, and all financial reporting for Great-West Funds. These services include coordinating all matters relating to the functions of the custodian, transfer agent, accountants, attorneys, and other parties performing services or operational functions for Great-West Funds; providing such administrative and clerical functions as are necessary to provide effective administration of Great-West Funds, including services in connection with certain reports and maintenance of certain books and records of Great-West Funds; providing Great-West Funds with adequate office space and related services necessary for its operations (excluding recordkeeping and other administrative services provided to shareholders of the Funds).
The GWCM Investment Advisory Agreement became effective on May 1, 2017. As approved, the GWCM Investment Advisory Agreement will remain in effect until April 30, 2019, and will thereafter continue in effect from year to year if approved annually by the Board, including the vote of a majority of the directors who are not parties to the GWCM Investment Advisory Agreement or interested persons of any such party, or by vote of a majority of the outstanding shares of the affected Fund. Any material amendment to the GWCM Investment Advisory Agreement will only become effective with respect to a particular series of Great-West Funds upon approval by vote of a majority of the outstanding voting securities of that series. The GWCM Investment Advisory Agreement is not assignable and may be terminated without penalty with respect to any series of Great-West Funds either by the Board or by vote of a majority of the outstanding voting securities of such series or by GWCM, each on 60 days’ notice to the other party.
For services provided under the GWCM Investment Advisory Agreement, the Fund pays GWCM a management fee calculated at the rate of 0.67% of the Fund’s average daily net assets.
During the fiscal year ended December 31, 2017, Great-West Funds paid GWCM $7,870,371.00 for its services to the Fund pursuant to the GWCM Investment Advisory Agreement.
GWCM is registered as an investment adviser under the Investment Advisers Act of 1940 (the “Advisers Act”). GWCM is a wholly-owned subsidiary of Great-West Life & Annuity Insurance Company (“GWL&A”), which is a wholly owned subsidiary of GWL&A Financial, Inc., a Delaware holding company. GWL&A Financial, Inc. is an indirectly owned subsidiary of Great-West Lifeco Inc., which is a Canadian financial services holding company with operations in Canada, the United States and Europe, and a member of the Power Financial Corporation group of companies. Power Financial Corporation is a majority-owned subsidiary of Power Corporation of Canada, a Canadian holding and management company. The Desmarais Family Residuary Trust, a trust established pursuant to the Last Will and Testament of the Honourable Paul G. Desmarais, directly and indirectly controls a majority of the voting shares of Power Corporation of Canada.
THESUB-ADVISORY AGREEMENT WITH MFS
Prior to the appointment of LSV as an additionalsub-adviser for the Fund, MFS served as the solesub-adviser for the Fund pursuant to asub-advisory agreement among GWCM, Great-West Funds on behalf of the Fund, and MFS, as amended, (the “MFSSub-Advisory Agreement”) since September 1, 2009.
The MFSSub-Advisory Agreement contemplates a multi-manager approach to thesub-advisory services to be provided to the Fund. Under this multi-manager approach, eachsub-adviser is responsible for the investment andre-investment of the portion of the Fund managed by the applicablesub-adviser (the “Fund Account”), and for making decisions to buy, sell or hold any particular security with respect to the Fund Account.
For services provided under the MFSSub-Advisory Agreement, GWCM pays MFS a fee of 0.40% of the average daily net asset value of MFS’s respective Fund Account.
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During the fiscal year ended December 31, 2017, GWCM paid MFS $4,774,338.00 for itssub-advisory services to the Fund pursuant to the MFSSub-Advisory Agreement.
THESUB-ADVISORY AGREEMENT WITH LSV
Thesub-advisory agreement among LSV, Great-West Funds on behalf of the Fund, and GWCM became effective on April 27, 2018 (the “LSVSub-Advisory Agreement”). The LSVSub-Advisory Agreement is effective for an initial period of two years, and will continue in effect from year to year thereafter if approved annually by the vote of a majority of the Board who are not interested persons of Great-West Funds, GWCM, or LSV, cast in person at a meeting called for the purpose of voting on such approval, and by a vote of the majority of the Board or of a majority of the outstanding voting securities of the Fund.
Similar to the MFSSub-Advisory Agreement, the LSVSub-Advisory Agreement contemplates a multi-manager approach to thesub-advisory services to be provided to the Fund. Under this multi-manager approach, eachsub-adviser is responsible for the investment andre-investment of its respective Fund Account, and for making decisions to buy, sell or hold any particular security with respect to the Fund Account. LSV bears all expenses in connection with the performance of its services, such as compensating and furnishing office space for its officers and employees connected with investment and economic research, trading and investment management of the Fund. GWCM, in turn, payssub-advisory fees to LSV for its services out of GWCM’s advisory fee. Accordingly, the Fund’s fees and expenses are not changed as a result of adding LSV assub-adviser because GWCM pays LSV’ssub-advisory fees from the management fees that the Fund pays GWCM.
LSV’ssub-advisory fee is computed daily and paid monthly at the annual rate of 0.40% on the first $1 billion of assets and 0.375% on all assets over $1 billion of the average daily net asset value of LSV’s respective Fund Account.
If the LSVSub-Advisory Agreement had been in place during the entire fiscal year ended December 31, 2017, GWCM estimates that it would have paid LSV $2,361,803.00 for itssub-advisory services for the Fund pursuant to the LSVSub-Advisory Agreement.
The LSVSub-Advisory Agreement may be terminated at any time, without payment of any penalty, by GWCM, by vote of the Board, by vote of a majority of the outstanding voting securities of the Fund, or by LSV, in each case on 60 days’ written notice. As required by the 1940 Act, the LSVSub-Advisory Agreement will automatically terminate, without payment of penalty, in the event of its assignment, as defined in the 1940 Act. It also will terminate in the event that the GWCM Investment Advisory Agreement is terminated for any reason.
The LSVSub-Advisory Agreement provides that LSV will hold harmless, indemnify and protect Great-West Funds and GWCM and their respective directors, officers, employees, agents, subsidiaries and affiliates from and against any and all damage, loss, liability and expense (including, without limitation, reasonable attorneys’ fees and expenses in connection with any action, suit or proceeding) incurred or suffered by Great-West Funds or GWCM as a result of (1) any breach of any representation or warranty, covenant or agreement made by LSV in the LSVSub-Advisory Agreement, or (2) the activities (or omissions by LSV to carry out its obligations) of LSV under the LSVSub-Advisory Agreement, including the activities (or such omissions) of LSV ’s directors, officers, employees, agents, subsidiaries, affiliates or any person or entity retained by LSV to perform or assist in the performance of its obligations under the LSVSub-Advisory Agreement.
The LSVSub-Advisory Agreement is attached to this Information Statement asAppendix A.
INFORMATION ABOUT LSV
LSV, registered as an investment adviser under the Advisers Act, is a Delaware general partnership with its principal business address at 155 North Wacker Drive, Suite 4600, Chicago, Illinois 60606. LSV’s general partners include officers and employees of LSV, who collectively own a majority of LSV, and SEI Funds, Inc., which owns 39% of LSV. SEI Funds Inc. is a wholly-owned subsidiary of SEI Investments Company with headquarters located at 1 Freedom Valley Drive, Oaks, PA 19456. As of December 31, 2017, LSV had approximately $118 billion in assets under management.
Except as otherwise specified herein, all information about LSV in this Information Statement has been provided by LSV.
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Principal Executive Officers of LSV
The table below lists the general partners of LSV with the five largest economic interests in the partnership, the general partners with significant management responsibilities relating to the Fund, as well as the general partners who serve as principal executive officers of LSV and their principal occupations. LSV does not have a Board of Directors. The address of each of the principal executive officers and general partners is 155 North Wacker Drive, Suite 4600, Chicago, Illinois 60606.
Name | Title | |
Josef Lakonishok, Ph.D. | Founding Partner, Chief Executive Officer , Chief Investment Officer & Portfolio Manager | |
Kevin Phelan, CFA | Partner & Chief Operating Officer | |
Josh O’Donnell | Partner, Chief Compliance Officer & Chief Legal Officer | |
Guy Lakonishok, CFA | Partner & Portfolio Manager | |
Puneet Mansharamani, CFA | Partner & Portfolio Manager | |
Greg Sleight | Partner & Portfolio Manager | |
Menno Vermeulen, CFA | Partner & Portfolio Manager | |
Robert Vishny | Partner | |
LSV Employee Group III, LLC | Partner |
There were no arrangements or understandings made in connection with the LSVSub-Advisory Agreement among Great-West Funds, GWCM and LSV with respect to the composition of the managers of GWCM or the Board or with respect to the selection or appointment of any person to any office with any such entity.
Other Funds with Similar Investment Objectives Managed by LSV
LSV serves as investment adviser to another investment company with similar investment objectives to the Fund. LSV has not waived, reduced or otherwise agreed to reduce its compensation under any applicable contract for this fund, except as otherwise specified below. Information about this fund appears in the following table:
Fund | Net Assets as of 3/31/2018 | Annual Advisory Fee Rate (as a % of average daily net assets) | ||
MercerNon-US Core Equity Fund | $409,000,000.00 | .40% |
BOARD REVIEW AND APPROVAL OF THE LSVSUB-ADVISORY AGREEMENT
At a meeting held on February 22, 2018, the Board, including a majority of the independent directors, considered and approved the LSVSub-Advisory Agreement adding LSV as a newsub-adviser to the Fund.
Pursuant to the LSVSub-Advisory Agreement, LSV, subject to general supervision and oversight by GWCM and the Board, is responsible for the investment andre-investment of the assets of LSV’s Fund Account, which includes making decisions to buy, sell, or hold any particular security.
In approving the LSVSub-Advisory Agreement, the Board considered such information as the Board deemed reasonably necessary to evaluate the terms of the LSVSub-Advisory Agreement. In its deliberations, the Board did not identify any single factor as being determinative. Rather, the Board’s approval was based on each director’s business judgment after consideration of the information as a whole. Individual directors may have weighed certain factors differently and assigned varying degrees of materiality to information considered by the Board.
Based upon its review of the LSVSub-Advisory Agreement and the information provided to it, the Board concluded that the LSVSub-Advisory Agreement was reasonable in light of the services to be performed, fees to be charged, and such other matters as the directors considered relevant in the exercise of their business judgment. The principal factors and conclusions that formed the basis for the directors’ determinations to approve the LSVSub-Advisory Agreement are discussed below.
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Nature, Extent, and Quality of Services
The Board considered the nature, extent, and quality of services to be provided to the Fund by LSV. Among other things, the Board considered LSV’s personnel, experience, resources, and performance track record of managing a strategy similar to that which will be used for the Fund, its ability to provide or obtain such services as may be necessary in managing, acquiring and disposing of investments on behalf of the Fund, and its ability to provide research and obtain and evaluate the economic, statistical, and financial data relevant to the investment policies of the Fund. The Board also reviewed the qualifications and background of the portfolio managers to be responsible for theday-to-day management of the Fund. In addition, the Board considered LSV’s reputation for management of its investment strategies, its overall financial condition, technical resources, operational capabilities, and compliance policies and procedures, as well as LSV’s practices regarding the selection and compensation of brokers and dealers for the execution of portfolio transactions and the procedures it uses for obtaining best execution of portfolio transactions. The Board concluded that it was satisfied with the nature, extent, and quality of the services to be provided to the Fund by LSV.
Investment Performance
The Board considered the investment performance of LSV as provided by GWCM. The Board reviewed performance information of similar strategies managed by LSV for the1-,3-,5-, and10-year periods ended December 31, 2017 as compared against the Fund’s benchmarks (the MSCI EAFE Index and the MSCI EAFE Value Index) and the Morningstar foreign large value peer group. The Board noted that LSV outperformed the Fund’s benchmarks and the Morningstar foreign large value peer group over all such periods. The Board concluded that it was satisfied with the investment performance of LSV.
Costs and Profitability
The Board considered the costs of services to be provided by LSV. With respect to the costs of services, the Board considered the structure and level of thesub-advisory fees payable by GWCM to LSV. In evaluating thesub-advisory fees, the Board considered information regarding the fees charged by LSV to separate accounts and other products managed by LSV in the same investment style as the Fund and noted that, where the fee charged to GWCM was higher than that charged to other clients, the Board determined that the fee proposed to be charged to GWCM for the Fund was reasonable.
The Board also considered the overall financial soundness of LSV and the profits estimated to be realized by LSV. The Board reviewed the financial statements and profitability information from LSV. Based on the information provided, the Board concluded that the costs of the services to be provided and the profits estimated to be realized by LSV were not unreasonable in relation to the nature, extent and quality of the services to be provided.
Economies of Scale
In evaluating economies of scale, the Board considered, among other things, the level ofsub-advisory fees payable by GWCM and whether those fees include breakpoints and the current level of Fund assets that will be allocated to LSV. Based on the information provided, the Board concluded that thesub-advisory fee schedule reflects an appropriate recognition of economies of scale.
Other Factors
The Board considered ancillary benefits to be derived by LSV from its relationship with the Fund as part of the total mix of information evaluated by the Board. The Board concluded that the Fund’s proposedsub-advisory fee was reasonable, taking into account any ancillary benefits to be derived by LSV.
Conclusion
Based upon all of the information considered and the conclusions reached, the Board determined that the terms of the LSVSub-Advisory Agreement are reasonable and that the approval of the LSVSub-Advisory Agreement is in the best interests of the Fund.
OTHER INFORMATION
Great-West Funds sells Fund shares to insurance company separate accounts for certain variable annuity contracts and variable life insurance policies, to individual retirement account custodians or trustees, to plan sponsors of qualified retirement plans, to college savings programs, and to asset allocation funds that are series of Great-West Funds.
The separate accounts of GWL&A and Great-West Life & Annuity Insurance Company of New York (“GWL&A of NY”) are referred to as the “Series Accounts.” Shares of the Fund may be sold to various Series Accounts of
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GWL&A and GWL&A of NY, which are registered with the SEC as a unit investment trust under the 1940 Act. In addition, shares of the Fund may be sold to various Series Accounts of GWL&A and GWL&A of NY that are not registered with the SEC. Shares of the Fund are sold to the registered and unregistered Series Accounts to fund certain variable annuity contracts and variable life insurance policies. On April 2, 2018, the directors and officers of the Fund, as a group, beneficially owned less than 1% of the outstanding shares of the Fund.
Shareholders with an ownership interest of 5% or greater in the Fund as of April 2, 2018 were:
Great-West International Value Fund – Investor Class Shares | ||||
Record Owner | Address | Percentage | ||
Future Funds II Series Account | 8515 E. Orchard Road, Greenwood Village, CO 80111 | 39.56% | ||
GWLACOLI-VUL 7 Series Accounts | 8515 E. Orchard Road, Greenwood Village, CO 80111 | 12.72% | ||
Future Funds Series Account | 8515 E. Orchard Road, Greenwood Village, CO 80111 | 10.75% |
Great-West International Value Fund – Institutional Class Shares | ||||
Record Owner | Address | Percentage | ||
Great-West Aggressive Profile II Fund | 8515 E. Orchard Road, Greenwood Village, CO 80111 | 11.24% | ||
Great-West Moderate Profile II Fund | 8515 E. Orchard Road, Greenwood Village, CO 80111 | 10.72% | ||
Great-West Lifetime 2035 Fund | 8515 E. Orchard Road, Greenwood Village, CO 80111 | 8.19% | ||
Great-West Moderately Aggressive Profile II Fund | 8515 E. Orchard Road, Greenwood Village, CO 80111 | 6.46% | ||
Great-West Lifetime 2025 Fund | 8515 E. Orchard Road, Greenwood Village, CO 80111 | 6.32% | ||
Great-West Lifetime 2045 Fund | 8515 E. Orchard Road, Greenwood Village, CO 80111 | 5.77% | ||
Great-West Moderate Profile II | 8515 E. Orchard Road, Greenwood Village, CO 80111 | 5.09% |
Great-West International Value Fund – Class L Shares | ||||
Record Owner | Address | Percentage | ||
Great West Ira Advantage | 8595 Explorer Drive, Colorado Springs, CO 80920 | 97.13% |
Principal Underwriter, Administrator, Custodian
GWFS Equities, Inc. (“GWFS”), a wholly owned subsidiary of GWL&A, is the principal underwriter for Great-West Funds. GWCM has contracted with GWL&A to provide recordkeeping and administrative services for Great-West Funds. GWFS and GWL&A are located at 8515 E. Orchard Road, Greenwood Village, Colorado 80111. The Bank of New York Mellon serves as the Fund’s custodian.
Annual and Semi-Annual Reports
Upon request, Great-West Funds will furnish, without charge, a copy of the most recent Annual Report and the most recent Semi-Annual Report to the shareholders of the Fund. Requests should be directed to: Secretary, 8525 East Orchard Road, 2T3, Greenwood Village, Colorado 80111. The Annual and Semi-Annual Reports of the Fund may also be requested by calling (866)831-7129 and may be found on Great-West Funds’ web site atwww.greatwestfunds.com.
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Appendix A – The LSVSub-Advisory Agreement
GREAT-WEST FUNDS, INC.
SUB-ADVISORY AGREEMENT
THISSUB-ADVISORY AGREEMENT (this “Agreement”) is made as of the 27th day of April, 2018, among Great-West Funds, Inc, a Maryland corporation (“Great-West Funds”) on behalf of the series of Great-West Funds listed in Schedule A to theSub-Advisory Agreement (the “Fund”), Great-West Capital Management, LLC, a Colorado limited liability company (the “Adviser”), and LSV Asset Management, a Delaware general partnership (the “Sub-Adviser”).
WHEREAS, Great-West Funds is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as anopen-end management investment company;
WHEREAS, the Fund is a series of Great-West Funds;
WHEREAS, the Adviser acts as the investment adviser for the Fund pursuant to the terms of an investment advisory agreement (the “Advisory Agreement”) between Great-West Funds and the Adviser under which the Adviser is responsible for the coordination of investment of the Fund’s assets in portfolio securities and for certain administrative services for the Fund; and
WHEREAS, the Adviser is authorized to delegate its investment responsibilities to one or more persons or companies;
NOW THEREFORE, in consideration of the promises and mutual covenants herein contained, Great-West Funds, the Adviser and theSub-Adviser agree as follows:
1. APPOINTMENT OFSUB-ADVISER. The Adviser and Great-West Funds hereby appoint and employ theSub-Adviser as a discretionary portfolio manager, on the terms and conditions set forth herein, of those assets of the Fund which the Adviser determines to assign to theSub-Adviser (those assets being referred to as the “Fund Account”). The Adviser may, from time to time, make additions to and withdrawals from the Fund Account.
2. ACCEPTANCE OF APPOINTMENT. TheSub-Adviser accepts its appointment as a discretionary portfolio manager and agrees to use its professional judgment to make investment decisions for the Fund with respect to the investments of the Fund Account and to implement such decisions on a timely basis in accordance with the provisions of this Agreement.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished theSub-Adviser with each of the following and will promptly provide theSub-Adviser with copies of any amendment or supplement thereto:
a. The Advisory Agreement;
b. Great-West Funds’ most recent effective registration statement as filed with the U.S. Securities and Exchange Commission (the “SEC”);
c. Great-West Funds’ Articles of Amendment and Restatement and Amended and RestatedBy-Laws; and
d. Any policies, procedures or instructions adopted or approved by Great-West Funds’ Board of Directors relating to obligations and services provided by theSub-Adviser.
4. PORTFOLIO MANAGEMENT SERVICES OF THESUB-ADVISER. TheSub-Adviser is hereby employed and authorized to select portfolio securities and other instruments for investment by the Fund, to purchase and to sell securities and other instruments for the Fund Account, and upon making any purchase or sale decision, to place orders for the execution of such portfolio transactions in accordance with Sections 6 and 7 hereof (as amended from time to time). In providing portfolio management services to the Fund Account, theSub-Adviser shall be subject to and shall conform to such investment restrictions as are set forth in the 1940 Act and the rules thereunder, the Internal Revenue Code, applicable state securities laws, applicable statutes and regulations of foreign jurisdictions, the supervision and control of the Board of Directors of Great-West Funds, such specific instructions as the Board of Directors may adopt and communicate to theSub-Adviser, the investment objective, policies and restrictions of Great-West Funds applicable to the Fund furnished pursuant to Section 5 of this Agreement and other instructions communicated to theSub-Adviser by the Adviser. In so doing, theSub-Adviser shall manage the Fund Account subject to the investment limitations of the 1940 Act as if the Fund Account were a separate registered investment company, unless otherwise instructed by the Adviser or Great-West Funds. TheSub-Adviser is not authorized by
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Great-West Funds or the Adviser to take any action, including the purchase or sale of securities for the Fund Account, in contravention of any restriction, limitation, policy or instruction described in the previous sentence. At Great-West Funds’ reasonable request, theSub-Adviser will consult with Great-West Funds or with the Adviser with respect to any decision made by it with respect to the investments of the Fund Account. The Adviser will provide all of the services described in the Advisory Agreement other than those services delegated to theSub-Adviser hereunder.
TheSub-Adviser will, no less frequently than annually, present to the Board of Directors of Great-West Funds in person and provide such materials as the Adviser or Great-West Funds reasonably requests. TheSub-Adviser will also cooperate in periodic compliance inspections of theSub-Adviser by the Adviser.
TheSub-Adviser is authorized on behalf of the Fund to (i) enter into agreements and execute any documents required to meet the obligations of the Fund with respect to any investments made for the Fund Account which shall include any market and/or industry standard documentation and the reasonable and customary representations contained therein; and (ii) acknowledge the receipt of brokers’ risk disclosure statements, electronic trading disclosure statements and similar disclosures. TheSub-Adviser shall not have the authority to cause Great-West Funds to deliver securities and other property, or pay cash to theSub-Adviser.
Further,Sub-Adviser shall maintain all accounts, books and records with respect to the Fund Account as are required of asub-advisor of a registered investment company pursuant to the 1940 Act and Investment Advisers Act of 1940, as amended (the “Advisers Act”), and the rules thereunder. In compliance with the requirements of Rule31a-3 under the 1940 Act, theSub-Adviser hereby agrees that all records that it maintains for the Fund are the property of the Fund and will promptly surrender them to designated officers of Great-West Funds any or all such records upon request, provided that theSub-Adviser can keep a copy of such records for its own records. TheSub-Adviser agrees to preserve for the periods described by Rule31a-2 under the 1940 Act any records that it maintains for the Fund and that are required to be maintained by Rule31a-1 under the 1940 Act. Any such records shall be made available, within five business days of the request, to the Fund’s accountants or auditors during regular business hours at theSub-Adviser’s offices upon written notice. In addition, theSub-Adviser will provide any materials reasonably related to the investmentsub-advisory services provided hereunder, as may be reasonably requested in writing by Great-West Funds or the Adviser or as may be required by any governmental agency or self-regulatory organization having jurisdiction thereof within such time as requested by any such governmental agency or self-regulatory organization.
5. INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS. Great-West Funds will provide theSub-Adviser with the statement of investment objective, policies and restrictions applicable to the Fund Account as contained in the Fund’s Prospectus and Statement of Additional Information, all amendments or supplements to the Prospectus and Statement of Additional Information, and any instructions adopted by the Board of Directors supplemental thereto. Great-West Funds and the Adviser agree, on an ongoing basis, to notify theSub-Adviser in advance in writing of each change in the fundamental andnon-fundamental investment policies of the Fund and will provide theSub-Adviser with such further information concerning the investment objective, policies, restrictions and such other information applicable thereto as theSub-Adviser may from time to time reasonably request for performance of its obligations under this Agreement. Great-West Funds retains the right, on prior written notice to theSub-Adviser or the Adviser, to modify any such objective, policies or restrictions in accordance with applicable laws, at any time.
6. TRANSACTION PROCEDURES. All transactions will be consummated by payment to or delivery by the custodian designated by Great-West Funds or the Adviser (the “Custodian”), or such depositories or agents as may be designated by the Custodian in writing, of all cash and/or securities due to or from the Fund Account, and theSub-Adviser shall not have possession or custody thereof. TheSub-Adviser shall advise the Custodian via standard trade communication methods of all executed orders for the Fund Account placed by it with brokers and dealers and provide details of such orders to the Adviser or any other designated agent of Great-West Funds. Great-West Funds shall issue to the Custodian such instructions as may be appropriate in connection with the settlement of any transaction initiated by theSub-Adviser. Great-West Funds or the Adviser shall be responsible for all custodial arrangements and the payment of all custodial charges and fees, and, theSub-Adviser shall have no responsibility or liability with respect to custodial arrangements or the acts, omissions or other conduct of the Custodian. The Custodian will provide reports of failed trades in the Fund Account to the Adviser and theSub-Adviser.
7. ALLOCATION OF BROKERAGE. TheSub-Adviser shall have authority and discretion to select brokers and dealers (including brokers that may be affiliates of theSub-Adviser to the extent permitted by Section 7(c) hereof) to execute portfolio transactions initiated by theSub-Adviser, and for the selection of the markets on or in which the transactions will be executed, subject to conformance with the policies and procedures disclosed in the Fund’s
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Prospectus and Statement of Additional Information and the policies and procedures adopted by Great-West Funds’ Board of Directors.
a. In executing portfolio transactions, theSub-Adviser will give primary consideration to securing best execution. Consistent with this policy, theSub-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 other clients of theSub-Adviser may be a party. It is understood that neither Great-West Funds, the Adviser nor theSub-Adviser has adopted a formula for allocation of the Fund’s investment transaction business. It is also understood that it may be desirable for the Fund that theSub-Adviser have access to supplemental investment and market research and security and economic analyses provided by certain brokers who may execute brokerage transactions at a higher commission to the Fund than may result when allocating brokerage to other brokers on the basis of seeking the lowest commission. Therefore, theSub-Adviser is authorized to place orders for the purchase and sale of securities for the Fund Account with certain brokers, subject to review by Great-West Funds’ Board of Directors 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 theSub-Adviser in connection with its services to other clients of theSub-Adviser. If, in the judgment of theSub-Adviser, the Fund would be benefited by supplemental investment and market research and security and economic analysis from other persons or entities outside of the context described above, theSub-Adviser is authorized to obtain, and pay at its own expense, for such information.
b. On occasions when theSub-Adviser deems the purchase or sale of a security to be in the best interest of the Fund Account as well as other clients of theSub-Adviser, theSub-Adviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities or other instruments to be sold or purchased in order to obtain best execution. In such event, allocations of the securities or other instruments so purchased or sold, as well as expenses incurred in the transactions, over time will be made by theSub-Adviser in the manner it considers to be equitable and consistent with its fiduciary obligations to Great-West Funds in respect of the Fund and to such other clients.
c. TheSub-Adviser agrees that it will not execute any portfolio transactions for the Fund Account with a broker or dealer which is (i) an affiliated person of Great-West Funds, the Adviser or anysub-adviser for any other series of Great-West Funds; (ii) a principal underwriter of Great-West Funds’ shares; or (iii) an affiliated person of such an affiliated person or principal underwriter, unless such transactions are (x) exempt under Rules10f-3(b) or17a-10, (y) executed in accordance with Rule17e-1 of the 1940 Act and Great-West Funds’ Rule17e-1 procedures, as adopted in accordance with Rule17e-1 or (z) executed in accordance with Rule10f-3(c) of the 1940 and Great-West Funds’ Rule10f-3(c) procedures, as adopted in accordance with Rule10f-3. The Adviser agrees that it will provide theSub-Adviser with a list of such affiliated brokers and dealers and that theSub-Adviser shall not be liable to the extent that it executes a portfolio transaction for the Fund Account with a person not listed on the current list then in theSub-Adviser’s possession.
d. TheSub-Adviser acknowledges and agrees that in connection with the exemptions provided under Rules10f-3(b),12d3-1, and17a-10 under the 1940 Act, theSub-Adviser (i) will not consult with any othersub-adviser of the Fund concerning theSub-Adviser’s or its affiliated persons’ transactions with the Fund in securities or other assets of the Fund, and (ii) will be limited to providing investment advice to the Fund with respect to the Fund Account.
8. PROXIES. TheSub-Adviser will vote all proxies solicited by or with respect to issuers of securities in which assets of the Fund Account may be invested from time to time in accordance with its proxy voting guidelines and policies in effect from time to time. At the request of theSub-Adviser, the Adviser shall provide theSub-Adviser with its recommendations as to the voting of such proxies.
9. REPORTS TO THESUB-ADVISER. Great-West Funds will provide theSub-Adviser with such periodic reports concerning the status of the Fund Account as theSub-Adviser may reasonably request.
10. FEES FOR SERVICES. The compensation of theSub-Adviser for its services under this Agreement shall be calculated and paid by the Adviser in accordance with the attached Schedule B. TheSub-Adviser shall be responsible for all of its expenses incurred performing the services delegated to it hereunder. As described in the Advisory Agreement, the Fund and/or Adviser are responsible for all other expenses incurred in the operation of the Fund and for all of its general administrative expenses. Notwithstanding the foregoing, theSub-Adviser shall be responsible for reimbursing the Fund for any liabilities incurred as a result of overdrafts caused by theSub-Adviser.
11. OTHER INVESTMENT ACTIVITIES OF THESUB-ADVISER. Great-West Funds acknowledges that theSub-Adviser or one or more of its affiliated persons may have investment responsibilities or render investment
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advice to or perform other investment advisory services for other individuals or entities and that theSub-Adviser, its affiliated persons or any of its or their directors, officers, members, agents or employees may buy, sell or trade in any securities for its or their own respective accounts (“Affiliated Accounts”). Subject to the provisions of Section 7(b) hereof, Great-West Funds agrees that theSub-Adviser or its affiliated persons may give advice or exercise investment responsibility and take such other action with respect to other Affiliated Accounts which may differ from the advice given or the timing or nature of action taken with respect to the Fund Account, provided that theSub-Adviser acts in good faith, and provided further, that it is theSub-Adviser’s policy to allocate, within its reasonable discretion, investment opportunities to the Fund Account over a period of time on a fair and equitable basis relative to the Affiliated Accounts, taking into account the investment objective and policies of the Fund Account and any specific investment restrictions applicable thereto. Great-West Funds acknowledges that one or more of the Affiliated Accounts may at any time hold, acquire, increase, decrease, dispose of or otherwise deal with positions in investments in which the Fund Account may have an interest from time to time, whether in transactions which involve the Fund Account or otherwise. TheSub-Adviser shall have no obligation to acquire for the Fund Account a position in any investment which any Affiliated Account may acquire, and the Fund shall have no first refusal,co-investment or other rights in respect of any such investment, either for the Fund Account or otherwise.
12. CERTIFICATE OF AUTHORITY. Great-West Funds, the Adviser and theSub-Adviser shall furnish to each other from time to time certified copies of the resolutions of their Boards of Trustees/Directors/Members or executive committees, as the case may be, evidencing the authority of officers and employees who are authorized to act on behalf of Great-West Funds, a Fund Account, the Adviser and/or theSub-Adviser.
13. INDEMNIFICATION AND LIMITATION OF LIABILITY.
a. TheSub-Adviser agrees and undertakes to hold harmless, indemnify and protect Great-West Funds and the Adviser and their directors, officers, employees, agents, subsidiaries and affiliates from and against any and all damage, loss, liability and expense (including without limitation reasonable attorneys’ fees and expenses in connection with any action, suit or proceeding) (each, a “Loss” and, collectively, the “Losses”) incurred or suffered by Great-West Funds or the Adviser as a result of (1) any breach of any representation or warranty, covenant or agreement made herein bySub-Adviser, or (2) the activities (or omissions by theSub-Adviser to carry out its obligations hereunder) of theSub-Adviser under this Agreement, including the activities (or such omissions) of theSub-Adviser’s directors, officers, employees, agents, subsidiaries, affiliates or any person or entity retained bySub-Adviser to perform or assist in the performance of its obligations hereunder, in each case, to the extent such activities (or omissions) constitute willful misfeasance, bad faith, or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations or duties under this Agreement; provided, however, that in no event isSub-Adviser’s indemnity in favor of Great-West Funds or the Adviser deemed to protect Great-West Funds or the Adviser against any liability to which Great-West Funds or the Adviser would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of their duties or by reason of their reckless disregard of its obligations or duties under this Agreement or the Advisory Agreement.
b. The Adviser agrees and undertakes to hold harmless, indemnify and protect theSub-Adviser from and against any and all Losses incurred or suffered bySub-Adviser as a result of (1) any breach of any representation or warranty, covenant or agreement made herein by the Adviser, or (2) the activities of the Adviser under this Agreement and the Advisory Agreement (or omissions by the Adviser to carry out its obligations hereunder or thereunder), including the activities (or such omissions) of the Adviser’s directors, officers, employees, agents, subsidiaries and affiliates to the extent such activities (or omissions) constitute willful misfeasance, bad faith, or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations or duties under this Agreement or the Advisory Agreement; provided, however, that in no event is the Adviser’s indemnity in favor of theSub-Adviser deemed to protect theSub-Adviser against any liability to which theSub-Adviser would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations or duties under this Agreement.
c. Great-West Funds and the Adviser, jointly and severally, agree to hold harmless theSub-Adviser, its directors and officers, and each person, if any, who controls theSub-Adviser within the meaning of either Section 15 of the Securities Act of 1933, as amended (the “1933 Act”) or Section 20 of the Securities Exchange Act of 1934, as amended (the “1934 Act”) from and against any and all Losses arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the registration statement for Great-West Funds, or any amendment or supplement thereto, or in any preliminary prospectus, any other communication with investors or any other submissions to governmental bodies or self-regulatory agencies filed or distributed on or subsequent to the date first above-written (such documents being herein referred to as “Disclosure Documents”) or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or
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necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or expenses arise out of or are based upon any such untrue statement or omission or allegation thereof based upon information furnished in writing to Great-West Funds or the Adviser by theSub-Adviser which Great-West Funds or the Adviser had informed theSub-Adviser was to be used, or which theSub-Adviser had acknowledged was to be used, in the particular Disclosure Document.
d. TheSub-Adviser agrees to indemnify and hold harmless Great-West Funds and the Adviser, their directors and officers, and each person, if any, who controls Great-West Funds or the Adviser within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act to the same extent as the foregoing indemnity from Great-West Funds and the Adviser to theSub-Adviser in subsection (c), but only with respect to information furnished in writing by theSub-Adviser which Great-West Funds or the Adviser had informed theSub-Adviser was to be used in the Disclosure Documents.
e. The party seeking indemnification hereunder (the “Indemnified Party”) agrees to give prompt written notice of any claims for indemnification (“Claims”) to the party against whom indemnity is sought (the “Indemnifying Party”), including any and all facts constituting the basis for such Claim.
f. In the event of any Claim for indemnification hereunder resulting from or in connection with any claim or legal proceeding by a third party (a “Third Party Assertion”), the Indemnified Party shall promptly give written notice thereof to the Indemnifying Party. In the event of any such Claim resulting from or in connection with a Third Party Assertion, the Indemnifying Party shall assume the defense thereof, provided, however, that the Indemnifying Party shall first have agreed in writing that it does not and will not contest its responsibility for indemnifying the Indemnified Party in respect of Claims attributable to such Third Party Assertion in accordance with the terms hereof. If an Indemnifying Party assumes the defense of any such Third Party Assertion, the Indemnifying Party shall be entitled to select counsel, which counsel shall be reasonably acceptable to the Indemnified Party, be obligated to pay the reasonable costs (including reasonable attorney’s fees and expenses) incurred by the Indemnified Party in defending such Third Party Assertion between the date of the commencement of such Third Party Assertion and the date of the Indemnifying Party’s assumption of such defense, and take all steps necessary in the defense thereof; provided, further, that the Indemnified Party may, at its own expense, participate in any such proceeding with the counsel of its choice without any right of control thereof.
g. So long as the Indemnifying Party is in good faith defending such Third Party Assertion, the Indemnified Party shall not compromise or settle such Third Party Assertion without the prior written consent of the Indemnifying Party and will cooperate with the Indemnifying Party and provide any information reasonably requested by the Indemnifying Party. If the Indemnifying Party does not assume the defense of any such Third Party Assertion, the Indemnified Party shall take such steps as are necessary in the defense thereof in such manner as it may deem appropriate, including, but not limited to, settling such Third Party Assertion on such terms as the Indemnified Party may deem appropriate and the Indemnifying Party will promptly indemnify the Indemnified Party in accordance with the provisions hereof; provided, however, that if the Indemnifying Party does not consent in writing to any such settlement, and such written consent is not unreasonably withheld by the Indemnifying Party, the Indemnified Party shall not be entitled to indemnification hereunder from such Indemnifying Party with respect to the Third Party Assertion settled. Failure of any party hereto to give notice as required hereunder will not affect or diminish the indemnification obligations of the party entitled to receive such notice, except to the extent that (and only to such extent) the failure to receive notice materially prejudiced the rights of such party.
h. In no event shall any party be liable to any other party for special, consequential, punitive, incidental, exemplary or similar damages or losses regardless of the grounds or nature of any claim asserted (including without limitation contract, statute, negligence, tort, strict liability or otherwise) and whether or not the party seeking the indemnification was advised of the possibility of the damage or loss asserted. Nothing in this Section 13 shall be construed in a manner inconsistent with Section 17(i) of the 1940 Act. TheSub-Adviser shall have no responsibility under this Agreement with respect to the management of assets of the Fund other than the Fund Account.
14. CONFIDENTIALITY. Subject to the duty of theSub-Adviser, the Adviser and Great-West Funds to comply with applicable law, including any demand or request of any regulatory or taxing authority having jurisdiction, the parties hereto shall treat as confidential all materialnon-public information pertaining to the Fund Account and the actions of theSub-Adviser, the Adviser and Great-West Funds in respect thereof.
15. ASSIGNMENT. This Agreement shall terminate automatically in the event of its assignment. TheSub-Adviser shall notify Great-West Funds and the Adviser in writing sufficiently in advance of any proposed change of control
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within the meaning of the 1940 Act to enable Great-West Funds and the Adviser to take the steps necessary to enter into a new contract with theSub-Adviser.
16. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF GREAT-WEST FUNDS. Great-West Funds represents, warrants and agrees that:
a. TheSub-Adviser has been duly appointed by the Board of Directors of Great-West Funds to provide investment services to the Fund Account as contemplated hereby.
b. Great-West Funds will deliver to theSub-Adviser a true and complete copy of the Fund’s then current Prospectus and Statement of Additional Information as effective from time to time and such other documents or instruments governing the investment of the Fund Account and such other information as is necessary for theSub-Adviser to carry out its obligations under this Agreement.
c. Great-West Funds is currently in material compliance and shall at all times continue to comply with the requirements imposed upon Great-West Funds by applicable law and regulations.
17. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE ADVISER. The Adviser represents, warrants and agrees that:
a. The Adviser has been duly authorized by the Board of Directors of Great-West Funds to delegate to theSub-Adviser the provision of investment services to the Fund Account as contemplated hereby.
b. The Adviser is registered as an ��investment adviser” under the Advisers Act.
c. The Adviser is currently in compliance and shall at all times continue to comply with the requirements imposed upon the Adviser by applicable law and regulations.
d. The Adviser represents and warrants to theSub-Adviser that the Disclosure Documents will fully comply with the provisions of the 1933 Act, the 1934 Act, the 1940 Act, and other applicable laws, and the Disclosure Documents at all such times will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, except that this representation and warranty does not apply to statements or omissions in the Disclosure Documents made in reliance upon information furnished to Great-West Funds or the Adviser in writing by theSub-Adviser which Great-West Funds or the Adviser had informed theSub-Adviser was to be used in the particular Disclosure Document. Great-West Funds and the Adviser will notify theSub-Adviser promptly of the happening of any event which in the judgment of Great-West Funds or the Adviser makes any statement made in the Disclosure Documents untrue in any material respect or requires the making of any changes in the Disclosure Documents in order to make the statements therein, in the light of circumstances under which they were made, not misleading in any material respect, except that Great-West Funds and the Adviser need not make such notification with respect to information in the Disclosure Documents based upon information furnished in writing to Great-West Funds or the Adviser by theSub-Adviser which Great-West Funds had informed theSub-Adviser was to be used in the particular Disclosure Document.
18. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THESUB-ADVISER. TheSub-Adviser represents, warrants and agrees that:
a. TheSub-Adviser is registered as an “investment adviser” under the Advisers Act.
b. TheSub-Adviser is currently in compliance and shall at all times continue to comply with the requirements imposed upon theSub-Adviser by applicable law and regulations.
c. TheSub-Adviser will maintain, keep current and preserve on behalf of Great-West Funds, in the manner required or permitted by the 1940 Act, the records identified in Section 4. TheSub-Adviser agrees that such records are the property of Great-West Funds, and will be surrendered to Great-West Funds promptly upon request provided, however, that theSub-Adviser may retain a copy of such records. Subject to the duty of theSub-Adviser to comply with applicable law, including any demand or request of any regulatory or taxing authority having jurisdiction, theSub-Adviser agrees to keep confidential all records of Great-West Funds and information relating to Great-West Funds, unless the release of such records or information is otherwise consented to in writing by Great-West Funds or the Adviser.
d. TheSub-Adviser will complete such reports concerning purchases or sales of securities on behalf of the Fund Account as the Adviser or Great-West Funds may from time to time reasonably require to assure compliance with the 1940 Act, the Internal Revenue Code, applicable state securities laws and applicable statutes and regulations of foreign jurisdictions.
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e. TheSub-Adviser has adopted a written code of ethics complying in all material respects with the requirements of Rule17j-1 under the 1940 Act and Rule 204A-1under the Advisers Act and has provided Great-West Funds with a copy of the code of ethics. Within forty-five (45) days of the end of the last calendar quarter of each year while this Agreement is in effect, an officer of theSub-Adviser shall certify to Great-West Funds that theSub-Adviser has complied in all material respects with the requirements ofRule 17j-1 andRule 204A-1 during the previous year and that there has been no material violation of theSub-Adviser’s code of ethics or, if such a material violation has occurred, that appropriate action was taken in response to such violation. TheSub-Adviser will provide a summary of violations, if any, ofSub-Adviser’s code of ethics from time to time in such form as determined by theSub-Adviser. TheSub-Adviser has adopted a compliance program in compliance with Rule206(4)-7 of the Advisers Act. TheSub-Adviser will provide Great-West Funds or the Adviser with copies of its compliance policies and procedures applicable to its compliance with Rule206(4)-7 under the Advisers Act (“Compliance Program”) upon request and will provide a summary of material findings, if any, regarding the ofSub-Adviser’s Compliance Program upon request.
f. Great-West Funds and the Adviser acknowledge they have received, at least 48 hours prior to the execution of this Agreement, a copy of Part 2 of theSub-Adviser’s Form ADV, as amended. TheSub-Adviser will furnish a copy of its Form ADV to the Adviser at least annually and promptly after filing with the SEC any amendment thereto which reflects any material changes with respect to the Fund.
g. TheSub-Adviser will promptly notify Great-West Funds and the Adviser of the occurrence of any event which would disqualify theSub-Adviser from serving as an investment adviser of an investment company pursuant to Section 9 of the 1940 Act or otherwise. To the extent not prohibited by applicable law or an applicable regulatory authority, theSub-Adviser will also promptly notify Great-West Funds and the Adviser if it 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, directly involving the affairs of the Fund.
h. TheSub-Adviser represents and warrants to Great-West Funds and the Adviser that the information furnished in writing by it which Great-West Funds or the Adviser has informed it is to be used in a particular Disclosure Document, as defined above, will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading as required by the provisions of the 1933 Act, the 1934 Act, the 1940 Act, each as amended, and other applicable laws. TheSub-Adviser will notify Great-West Funds and the Adviser promptly of the happening of any event which in the judgment of theSub-Adviser makes any statement made in any Disclosure Documents untrue in any material respect or requires the making of any changes in the Disclosure Documents in order to make the statements therein, in the light of circumstances under which they were made, not misleading in any material respect, except that theSub-Adviser need only make such notification with respect to information in the Disclosure Documents based upon information furnished in writing to Great-West Funds or the Adviser by theSub-Adviser which Great-West Funds or the Adviser had informed theSub-Adviser was to be used in the particular Disclosure Document.
i. TheSub-Adviser will cooperate with Great-West Funds and the Adviser in connection with the registration or qualification of units of the Fund for offer and sale under the securities or Blue Sky laws of such jurisdictions as they may request and will cooperate with the preparation of the Disclosure Documents. Great-West Funds or the Adviser will provide theSub-Adviser with copies of applicable updates to the registration statement or supplements thereto at least ten days prior to distribution to investors or submission to governmental bodies or self-regulatory organizations and will incorporate its reasonable comments relating to the description of, or services to be provided by, theSub-Adviser or its affiliates, or relating to the description of the investment objectives and policies of the Fund.
19. AMENDMENT.This Agreement may be amended at any time, but only by written agreement among theSub-Adviser, the Adviser and Great-West Funds, which amendment is subject to the approval of the Board of Directors, including by a majority of the Board of Directors who are not interested persons of Great-West Funds, the Adviser or theSub-Adviser, cast in person at a meeting called for the purpose of voting on such approval and, to the extent required by the 1940 Act, the shareholders of the Fund in the manner required by the 1940 Act and the rules thereunder, subject to any applicable orders of exemption issued by the SEC.
20. EFFECTIVE DATE; TERM. This Agreement shall become effective on the date first written above and shall remain in force for a period of time of two years from such date, and from year to year thereafter but only so long as such continuance is specifically approved at least annually by the vote of a majority of the Board of Directors who are not interested persons of Great-West Funds, the Adviser or theSub-Adviser, cast in person at a meeting called for the purpose of voting on such approval, and by a vote of the majority of the Board of Directors or of a majority of the outstanding voting securities of the Fund. The aforesaid requirement that this Agreement may be continued
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“annually” shall be construed in a manner consistent with the 1940 Act and the rules and regulations thereunder. In connection with such approvals, theSub-Adviser shall furnish the Board of Directors with such information as may be reasonably necessary for it to evaluate theSub-Adviser’s performance hereunder.
21. TERMINATION.
a. This Agreement may be terminated by Great-West Funds (by a vote of the Board of Directors of Great-West Funds or by a vote of a majority of the outstanding voting securities of the Fund), without the payment of any penalty, immediately upon written notice to the other parties hereto, in the event of a material breach of any provision thereof by the party so notified or otherwise by Great-West Funds, upon sixty (60) days’ written notice to the other parties hereto, but any such termination shall not affect the status, obligations or liabilities of any party hereto to the others incurred prior to the date of such termination.
b. This Agreement may also be terminated by the Adviser or theSub-Adviser, without the payment of any penalty immediately upon written notice to the other parties hereto, in the event of a material breach of any provision thereof by the party so notified if such breach shall not have been cured within a20-day period after notice of such breach or otherwise by the Adviser or theSub-Adviser upon sixty (60) days’ written notice to the other parties hereto, but any such termination shall not affect the status, obligations or liabilities of any party hereto to the others incurred prior to the date of such termination.
c. This Agreement will terminate automatically upon termination of the Advisory Agreement.
22. DEFINITIONS. As used in this Agreement, the terms “affiliated person,” “assignment,” “control,” “interested person,” “principal underwriter” and “vote of a majority of the outstanding voting securities” shall have the meanings set forth in the 1940 Act and the rules and regulations thereunder, subject to any applicable orders of exemption issued by the SEC.
23. NOTICE. Any notice under this Agreement shall be given in writing and sent via electronic mail or addressed and delivered or mailed, postage prepaid, to the other parties to this Agreement at their principal place of business.
24. SEVERABILITY. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the unenforceable provision shall be construed as nearly as possible to reflect the original intent of the parties and the remainder of this Agreement shall not be affected thereby.
25. GOVERNING LAW. To the extent that state law is not preempted by the provisions of any law of the United States heretofore or hereafter enacted, as the same may be amended from time to time, this Agreement shall be administered, construed and enforced according to the laws of the State of Delaware.
26. ENTIRE AGREEMENT. This Agreement and the Schedules attached hereto embodies the entire agreement and understanding between the parties.
27. COUNTERPARTS. This Agreement may be executed in any number of counterparts, and by separate parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.
28. WAIVER. The failure of any part to insist on strict performance of any of the terms and conditions herein shall not be deemed a waiver of any rights or remedies that such party may have and shall not be deemed a waiver of any subsequent default of the terms and conditions hereof.
29. NO THIRD PARTY BENEFICIARIES. The terms, representations, warranties and agreements of the parties set forth in this Agreement are not intended for, nor shall they be for the benefit of or enforceable by, any person or entity that is not a party to this Agreement.
30. SURVIVAL. Sections 13 and 14 shall survive the termination or expiration of this Agreement.
31. INDEPENDENT CONTRACTOR; NO AGENCY. TheSub-Adviser shall for all purposes herein be deemed to be an independent contractor and shall, unless otherwise expressly provided or authorized by this Agreement or otherwise, have no authority to act for or represent Great-West Funds, the Adviser or the Fund in any way or otherwise be deemed an agent of any of them. This Agreement will not be construed to create or imply any partnership, agency or joint venture.
32. FORCE MAJEURE. No party shall be liable for any delay or failure to perform its obligations hereunder if such delay or failure is caused by an unforeseeable event beyond the reasonable control of such party.
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33. USE OFSUB-ADVISER NAME. During the term of this Agreement, theSub-Adviser grants to the Adviser and Great-West Funds anon-exclusive,non-transferable andnon-assignable license to use the name “LSV Asset Management.” Neither the Great-West Funds nor the Adviser shall use theSub-Adviser’s name, marks or logos in promotional or sales related materials prepared by or on behalf of the Adviser or the Fund (“Marketing Material”), without prior review and approval by theSub-Adviser, which may not be unreasonably withheld or delayed. Provided that, onceSub-Adviser approves Marketing Material, subsequent versions of the Marketing Material will be deemed approved by theSub-Adviser unless the Marketing Material contains material changes. In the event that this Agreement shall be terminated for any reason, and in the event a new or successor agreement with theSub-Adviser is not concluded, the Adviser and Great-West Funds understand that they must promptly take all steps necessary to delete the name “LSV Asset Management” from the Fund’s name and cease any and all use of the name “LSV Asset Management.”
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed, as of the day and year first written above.
GREAT-WEST FUNDS, INC., on behalf of the Funds listed on Schedule A | ||
By: | /s/ Scott C. Sipple | |
Name: Scott C. Sipple | ||
Title: President & Chief Executive Officer | ||
GREAT-WEST CAPITAL MANAGEMENT, LLC | ||
By: | /s/ Mary C. Maiers | |
Name: Mary C. Maiers | ||
Title: Chief Financial Officer & Treasurer | ||
LSV ASSET MANAGEMENT | ||
By: | /s/ Josh O’Donnell | |
Name: Josh O’Donnell | ||
Title: CCO/CLO |
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SCHEDULE A
Great-West International Value Fund
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SCHEDULE B
FEE SCHEDULE
For the services to be provided to the Fund pursuant to this Agreement, the Adviser shall pay theSub-Adviser an annual fee calculated as follows:
Fund | Fee | |
Great-West International Value Fund | 0.40% on the first $1 billion of Fund Account assets and 0.375% on all Fund Account assets over $1 billion |
The fee shall be calculated and paid monthly in arrears based on the average daily market value of the investments in the Fund Account. Payment will be made on or about the 15th day of each month.
Fees shall be prorated on a daily basis when the Fund Account is managed by theSub-Adviser for a portion of any month.
The Fund Account is comprised of all funds and assets, including cash, cash accruals, additions, substitutions and alterations which are allocated to theSub-Adviser.
Except for the management fee described herein, no other compensation or fees shall be payable to theSub-Adviser hereunder.
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