SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ___)
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary proxy statement.
[ ] Confidential, for use of the Commission onlyOnly (as permitted by Rule
14a-6(e)(2))
[ ] Definitive proxy statement.Proxy Statement.
[ ] Definitive additional materials.Additional Materials.
[ ] Soliciting material under rule 14a-12
Loomis Sayles FundsMaterial Pursuant to Section 240.14a-12
LOOMIS SAYLES FUNDS II
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(Name of Registrant as Specified in Its Charter)
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[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
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(1) Amount previously paid:Previously Paid:
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October 29, 2004
Dear Shareholder:
The enclosed proxy statement provides detailed information about two important
proposals for CDC IXIS International Equity Fund (the "Fund," formerly known as
the Loomis Sayles International Equity Fund). The Fund will hold a special
meeting of shareholders on January 6, 2005 at 2:00 p.m. Eastern time, at the
offices of CDC IXIS Asset Management Advisers, L.P. ("IXIS Advisers"), 399
Boylston Street, 10th floor, Boston, Massachusetts 02116. A formal Notice of
Special Meeting of Shareholders is enclosed, followed by a proxy statement that
explains in more detail the proposals to be considered. We've summarized some
important facts below. Reading this letter completely may make your review of
the proxy statement easier.
Q What am I being asked to vote You are being asked to vote FOR the
for? following proposals:
(1) Approval of a new advisory agreement
for the Fund with IXIS Advisers.
(2) Approval of a new subadvisory
agreement for the Fund with Hansberger
Global Investors, Inc. ("Hansberger").
NO CHANGE IN THE TOTAL ADVISORY FEE RATE
IS BEING PROPOSED.
Q Why am I being asked to vote In late August 2004, Loomis, Sayles &
on new agreements? Company, L.P., the former investment
adviser to the Fund, informed the Board
of Trustees that it had made the
strategic decision to exit the
international equity investment
business. The Board of Trustees decided
to terminate the Fund's investment
advisory agreement with Loomis Sayles
and to approve an interim advisory
agreement with IXIS Advisers and an
interim subadvisory agreement with
Hansberger. Under this new arrangement,
effective August 26, 2004, Hansberger
would manage the assets of the Fund
subject to the supervision of IXIS
Advisers.
The interim advisory and subadvisory
agreements continue in effect for a
maximum of 150 days. In order for IXIS
Advisers and Hansberger to continue
serving as adviser and subadviser,
respectively, beyond the expiration of
the interim agreements, shareholders of
the Fund must approve new advisory and
subadvisory agreements. The Board of
Trustees has approved the new agreements
and unanimously recommends that
shareholders approve the new agreements.
Q Who is Hansberger? Hansberger was formed in 1994 and is a
wholly-owned subsidiary of Hansberger
Group, Inc. The firm specializes in
global investing, managing separate
portfolios and institutional mutual
funds. As of September 30, 2004,
Hansberger managed approximately $4.6
billion in assets. Hansberger is an
affiliated investment manager of CDC
IXIS Asset Management North America,
L.P. the parent company of IXIS
Advisers, and currently subadvises other
CDC Nvest Funds under the supervision of
IXIS Advisers.
Q Who will bear the costs of this The expenses related to the meeting and
meeting? the solicitation of proxies will be
borne by IXIS Advisers and its
affiliates, and not by the Fund.
REMEMBER - YOUR VOTE COUNTS
Your vote is extremely important, regardless of the number of shares you own.
Please vote your shares whether or not you plan to attend the meeting. Voting
promptly is also essential. If we do not receive enough votes, we will have to
re-solicit shareholders. Alamo Direct, a professional proxy solicitation firm,
has been retained to assist shareholders in the voting process. As the date of
the meeting approaches, if we have not yet received your vote, you may receive a
telephone call from Alamo Direct reminding you to exercise your right to vote.
VOTE ON THE INTERNET OR BY TOLL-FREE TELEPHONE - IT'S YOUR CHOICE
You may vote simply by returning the enclosed proxy card. A self-addressed,
postage-paid envelope has been enclosed for your convenience. You may also vote
via the Internet or by calling the toll-free number from a touch-tone telephone.
Please see your proxy card for more information and voting instructions. If you
do vote electronically, you do not need to mail your proxy card. However, if you
want to change your vote, you may do so using the proxy card, telephone, or
Internet.
Thank you for your cooperation in voting on these important proposals. Please
take a few moments to review the details of the proposals. If you have any
questions regarding the prospectus/proxy statement, please call your financial
advisor, or call CDC Nvest Funds at 800-225-5478.
Sincerely,
John T. Hailer
President
LS48-1004
LOOMIS SAYLES FUNDS II
(the "Trust")
ONE FINANCIAL CENTER
BOSTON,399 Boylston Street
Boston, MA 02111
LOOMIS SAYLES INVESTMENT GRADE BOND FUND02116
CDC IXIS International Equity Fund
(formerly, Loomis Sayles International Equity Fund)
(the "Fund")
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
AUGUST 5, 2004January 6, 2005
A special meeting (the "Meeting") of the shareholders of the Fund will
be held at 2:00 p.m. on August 5, 2004January 6, 2005 at the offices of the Fund's administrator,
CDC IXIS Asset
Management Services, Inc.Advisers, L.P., at 399 Boylston Street, 10th floor, Boston,
Massachusetts 02116 for the following purposes:
1. To approveconsider the approval of a Distribution Agreementnew advisory agreement for the Fund
between CDC IXIS Asset Management Advisers, L.P. and the Trust, on
behalf of the Class J SharesFund.
2. To consider the approval of a new subadvisory agreement for the Fund
among CDC IXIS Asset Management Advisers, L.P., Hansberger Global
Investors, Inc. and the Trust, on behalf of the Fund, and Loomis Sayles Distributors, L.P. for the
period from November 1, 2003 through April 23, 2004, as well as the release
of escrowed fees payable thereunder;
2. To approve a Service and Distribution Plan (the "Rule 12b-1 Plan") relating
to Class J shares of the Fund, as well as the release of escrowed fees
payable thereunder; andFund.
3. To transact such other business as may properly come before the
Meeting or any adjournments thereof.adjourned session.
Shareholders of record at the close of business on June 30,October 29, 2004 are
entitled to notice of and to vote at the Meeting and any adjourned session.
By order of the Board of Trustees,
JOHN E. PELLETIER,COLEEN DOWNS DINNEEN, Secretary
June 30,October 29, 2004
PLEASE RESPOND. YOUR VOTE IS IMPORTANT. PLEASE VOTE YOUR SHARES ON THE BOARD OF TRUSTEES OF THE FUND HAS
APPROVED AND RECOMMENDS THAT YOU VOTE IN FAVOR OF THE PROPOSALS. PLEASEINTERNET
OR BY TELEPHONE OR COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD. THIS WILL ENSURE THAT
YOUR VOTE IS COUNTED, EVEN IFCARD,
WHETHER OR NOT YOU CANNOTPLAN TO ATTEND THE MEETING IN PERSON.MEETING.
LOOMIS SAYLES FUNDS II
(the "Trust")
ONE FINANCIAL CENTER399 BOYLSTON STREET
BOSTON, MA 0211102116
CDC IXIS INTERNATIONAL EQUITY FUND
(FORMERLY, LOOMIS SAYLES INVESTMENT GRADE BOND FUNDINTERNATIONAL EQUITY FUND)
(the "International Equity Fund" or the "Fund")
PROXY STATEMENT
The Trusteestrustees of the Trust (the "Trustees") are soliciting proxies from
Class Jthe shareholders of the Fund in connection with a special meeting (the
"Meeting") of shareholders of the Fund. The Meeting has been called to be held
at 2:00 p.m. on August 5, 2004January 6, 2005 at the offices of the Fund's administrator, CDC IXIS Asset Management
Services, Inc.Advisers, L.P.* ("IXIS Advisers"), 399 Boylston Street, 10th floor, Boston,
Massachusetts 02116. The Meeting notice, this Proxy Statement and proxy card are
being sent to Class J shareholders of record as of June 30,October 29, 2004 (the "Record Date")
beginning on or about June 30,October 29, 2004. Please read this Proxy Statement and
keep it for future reference. THE FUND HAS PREVIOUSLY SENT ITS ANNUAL REPORT DATED SEPTEMBERThe Fund has previously sent its semi-annual
report dated March 31, 2004 and its annual report dated September 30, 2003 AND ITS SEMI-ANNUAL REPORT DATED MARCH 31, 2004 TO ITS SHAREHOLDERS.to
its shareholders. A COPY OF THE FUND'S MOST RECENT ANNUAL REPORT AND SEMI-ANNUAL REPORT MAY BE
OBTAINED WITHOUT CHARGE BY WRITING TO LOOMIS SAYLES FUNDS, P.O. BOX 219594,
KANSAS CITY, MISSOURI 61421-9594 OR BY CALLINGcopy of the Fund's most recent annual report and semi-annual
report may be obtained without charge by writing to CDC IXIS Asset Management
Distributors, L.P.* ("IXIS Distributors") at the same address set forth
above or by calling (800) 633-3330. IN ADDITION, THE
FUND'S MOST RECENT ANNUAL REPORT AND SEMI-ANNUAL REPORT ARE AVAILABLE ON ITS
WEBSITE AT WWW.CDCNVESTFUNDS.COM. (CLICK ON "FUND INFORMATION" AND THEN ON
"FINANCIAL REPORTS.225-5478. In addition, the Fund's most recent annual
report and semi-annual report are available on its website at
www.cdcnvestfunds.com. (Click on "Fund Information" and then on "Financial
Reports.")
The only items of business that the Trustees expect will come before the
Meeting are (1) approval of a Distribution Agreementnew advisory agreement between the Trust, on
behalf of the Class J sharesFund, and IXIS Advisers and (2) approval of a new subadvisory
agreement among IXIS Advisers, Hansberger Global Investors, Inc.
("Hansberger") and the Trust, on behalf of the Fund.
* Please note that, effective November 1, 2004, CDC IXIS Asset Management
Advisers, L.P. will be changing its name to IXIS Asset Management
Advisors, L.P. and CDC IXIS Asset Management Distributors, L.P. will be
changing its name to IXIS Asset Management Distributors, L.P. These are
name changes only and will not effect the management or operations of
these entities.
OVERVIEW AND RELATED INFORMATION FOR PROPOSALS 1 AND 2
At a meeting held on August 20, 2004, the Trustees of the Trust approved
the termination of the investment advisory agreement between the Trust, on
behalf of the Fund, and Loomis, Sayles Distributors,& Company, L.P. (the "Distribution Agreement"("Loomis Sayles"),
effective as of the close of business on August 25, 2004. The sole reason for
the period from November 1, 2003 through
April 23, 2004,termination was Loomis Sayles' strategic decision to exit the international
equity investment business. At the same meeting, the Trustees approved a
proposal to replace Loomis Sayles with IXIS Advisers, as investment adviser
to the Fund, and Hansberger, as subadviser to the release of escrowed fees payable thereunder; and (2)
approval of a Service and Distribution Plan (the "Rule 12b-1 Plan") relating to
Class J SharesFund. Under this arrangement,
Hansberger would manage the assets of the Fund subject to the supervision of
IXIS Advisers.
The Trustees approved IXIS Advisers to serve as an interim adviser and
Hansberger to serve as an interim subadviser until the release of escrowed fees payable thereunder.
1
OVERVIEW OF THE PROPOSALS
The proposals seekrequired approval ofby
shareholders could be obtained. Specifically, the Distribution Agreement and Rule 12b-1
Plan (each as defined below) for the Class J Shares of the Loomis Sayles
Investment Grade Bond FundTrustees approved (1) an
interim advisory agreement with IXIS Advisers (the "Fund""Interim Advisory
Agreement"), (2) a new advisory agreement with IXIS Advisers whose effectiveness
would be contingent upon shareholder approval (the "New Advisory Agreement"),
(3) an interim subadvisory agreement with Hansberger (the "Interim Subadvisory
Agreement"), and the release from escrow(4) a new subadvisory agreement with Hansberger whose
effectiveness would be contingent upon shareholder approval (the "New
Subadvisory Agreement"). The Interim Advisory and Subadvisory Agreements were
effective August 26, 2004 and have a maximum duration of certain
payments made under the Distribution Agreement150 days. The New
Advisory and Rule 12b-1 Plan. The
approvals are being sought because, although neither the officers nor Trustees
of the Trust intended for the Distribution Agreement and Rule 12b-1 Plan to
expire on October 31, 2003, the records of the Fund are unclear as to whether
the Distribution Agreement and Rule 12b-1 Plan were renewed for the period
beginning November 1, 2003.
A VOTE FOR THE PROPOSALS:
o WILL NOT CHANGE THE FEES AND EXPENSES AS DESCRIBED IN THE FUND'S PROSPECTUS
o WILL NOT CHANGE THE FUND'S NET ASSET VALUE (NAV)
o WILL NOT CHANGE THE INVESTMENT STRATEGY OR MANAGEMENT OF THE FUND
This proxy solicitationSubadvisory Agreements will not result in any additional costs to fund
shareholders or brokers, as the costs of presenting these proposals will be
borne entirely by Loomis Sayles Distributors, L.P. (the "U.S. Distributor") and
its affiliates.
On June 12, 2003, the Board of Trustees of the Trust met to consider
distribution arrangements for proposed new share classes for several Loomis
Sayles Funds, including the Fund. The written materials sent to the Board, which
explain the proposals to be considered at the Board meeting, expressly noted
that, although the new classes would be distributed by CDC IXIS Asset Management
Distributors, L.P., the Class J shares of the Fund would continue to be
distributed by the U.S. Distributor under the terms of the existing
distribution agreement (the "Distribution Agreement") with the U.S. Distributor.
The Board materials also noted that the fees payable under the existing
distribution and service plan (the "Rule 12b-1 Plan") and front-end sales
charges paid to the U.S. Distributor for the sale of Class J shares would remain
unchanged. Based on these materials, it was clear that there were no
expectations of any changes to the existing distribution arrangements for the
Class J shares of the Fund. However, due to an administrative oversight, the
formal records of the Fund are unclear as to whether the Distribution Agreement
and Rule 12b-1 Plan were renewed. If it were determined that the Distribution
Agreement and Rule 12b-1 Plan were not renewed, each would have expired on
October 31, 2003.
Given the lack of clarity regarding the renewal, the Board of Trustees, at
meetings on April 23, 2004 and on June 4, 2004, concluded that it should seek
shareholder approval for the continuance of the Distribution Agreement and Rule
12b-1 Plan so as to remove any doubt regarding the validity of these
arrangements. Specifically, the Board voted: (i) to approve the Distribution
Agreement, and the release of escrowed fees payable thereunder, for the period
from November 1, 2003 through April 23, 2004, subject to shareholder approval;
(ii) to recommend thattake effect until shareholders
approve the Distribution Agreement, and the
release of escrowed fees payable thereunder, for the period from November 1,
2003 through April 23, 2004; (iii) to approve the Rule 12b-1 Plan, and the
release of escrowed fees payable thereunder, for the period beginning November
1, 2003, subject to shareholder approval; and (iv) to recommend that
shareholders approve the Rule 12b-1 Plan, and the release of escrowed fees
payable thereunder, for the period beginning November 1, 2003. An affirmative
vote by shareholders at the Meeting in favor of each proposal will ratify the
U.S. Distributor's
2
intention, and the Board's understanding, that the Distribution Agreement and
Rule 12b-1 Plan would continue beyond October 31, 2003. Pending shareholder
approval of these proposals, the U.S. Distributor will place in escrow the
portion of the sales charges payable under the Distribution Agreement retained
by the U.S. Distributor for the period from November 1, 2003 through April 23,
2004, and the Distribution Fees (as defined below under "Proposal 2: Approval of
a Rule 12b-1 Plan; Description of the Rule 12b-1 Plan") payable under the Rule
12b-1 Plan for the period beginning November 1, 2003 and ending on the date of
shareholder approval (or rejection) of proposal 2.
The U.S. Distributor and the Board of Trustees recognize that this proxy
statement would not be necessary if the record more clearly reflected their
mutual belief that the Distribution Agreement and Rule 12b-1 Plan would not
expire on October 31, 2003. Although itproposals.
This meeting is regrettable that shareholders may be
inconvenienced by this proxy statement, the U.S. Distributor and the Board of
Trustees believe that, in light of the unclear record, it is prudentbeing held to seek shareholder approval of these distribution arrangements. The U.S. Distributorthe New
Advisory and Subadvisory Agreements. No change in the Board of Trustees note that, at all times during the relevant period,
the prospectus for Class J sharestotal advisory fee rate of
the Fund clearly indicated that Class J
shareholders would bear the sales charges and Distribution Fees payable under
the Distribution Agreement and Rule 12b-1 Plan.is being proposed.
THE TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS OF
THE FUND VOTE TO APPROVE THE NEW ADVISORY AGREEMENT AND THE NEW SUBADVISORY
AGREEMENT FOR THE FUND.
I. PROPOSAL 1: APPROVAL OF A DISTRIBUTIONNEW ADVISORY AGREEMENT
PREVIOUS ADVISORY AGREEMENT
Until August 26, 2004, Loomis Sayles served as the investment adviser of
the Fund pursuant to an advisory agreement dated October 30, 2000 (the "Previous
Advisory Agreement"). The Trustees initially approved the Previous Advisory
Agreement at a meeting held on August 7, 2000 and most recently approved its
continuance on June 4, 2004 for another one-year term commencing July 1, 2004.
The Fund's shareholders approved the Fund's Previous Advisory Agreement at a
meeting held on October 5, 2000. The Fund's shareholders were asked to approve
the Previous Advisory Agreement at such time because the advisory agreement then
in effect would be terminating upon the acquisition of Loomis Sayles' then
parent company, Nvest Companies, L.P. (now known as CDC IXIS Asset Management
North America, L.P. ("IXIS North America")), by CDC IXIS Asset Management ("IXIS
AM"). That acquisition was consummated on October 30, 2000.
2
INTERIM AND NEW ADVISORY AGREEMENTS
As noted above, the Board of Trustees, at a meeting held on August 20, 2004,
approved the termination of the Trust, including a majorityPrevious Advisory Agreement, effective as of the
close of business on August 25, 2004, due to Loomis Sayles' decision to exit the
international equity investment business. At that same meeting, the Trustees
who are not interested personsapproved the Interim Advisory Agreement with IXIS Advisers, to be effective
August 26, 2004 and to continue for a period of the U.S. Distributor150 days or the Trust
(the "Independent Trustees"), is recommending that the Class Juntil shareholders
of the Fund approve the DistributionNew Advisory Agreement, whichever occurs first. The
Trustees also approved the New Advisory Agreement with IXIS Advisers, which,
if approved by shareholders of the Fund, will enable IXIS Advisers to
continue serving as adviser of the Fund following the expiration of the Interim
Advisory Agreement.
The terms of the New Advisory Agreement are identical to those of the
Interim Advisory Agreement (except for the effective dates) but different from
those of the Previous Advisory Agreement. Below is a summary of the material
differences:
. Under the Interim and New Advisory Agreements, IXIS Advisers, and
not Loomis Sayles, is the releaseinvestment adviser of escrowedthe Fund;
. Unlike the Previous Advisory Agreement, the Interim and New Advisory
Agreements contain a provision which prohibits the adviser from
disclosing or using the non-public personal information of the Fund's
customers or consumers except to carry out the purposes of the
Agreements, in accordance with Regulation S-P; and
. Unlike the Previous Advisory Agreement, the Interim and New Advisory
Agreements allow the adviser to delegate portfolio management services
(defined to mean managing the investment and reinvestment of the assets
of the Fund, subject to the supervision and control of the Trustees) and
administrative services (defined to mean furnishing or paying the
expenses of the Fund for office space, facilities and equipment,
services of executive and other personnel necessary for managing the
affairs of the Fund and certain other administrative and general
management services) to other parties.*
* As noted above, IXIS Advisers has delegated its responsibilities with
respect to portfolio management services of the Fund to Hansberger,
pursuant to the Interim and New Subadvisory Agreements that were approved
by the Trustees on August 20, 2004 (see "Proposal 2: Approval of a New
Subadvisory Agreement").
No change in the total advisory fee rate of the Fund is being proposed.
The annualized fee rate payable by the Fund to IXIS Advisers under the Interim
and New Advisory Agreements is 0.75% of the Fund's average daily net assets,
which is the same rate that was payable to Loomis Sayles under the Previous
Advisory Agreement. For more information regarding the Interim and New Advisory
Agreements, please see "Description of the New Advisory Agreement" below.
The New Advisory Agreement is subject to shareholder approval. However,
the Interim Advisory Agreement went into effect on August 26, 2004, pursuant to
Rule 15a-4 under the Investment Company Act of 1940 (the "1940 Act"), which,
under certain conditions, allows such agreements to take effect and continue for
up to 150 days without
3
receiving prior shareholder approval as long as the total advisory fees payable
thereunder fordo not exceed the period from November 1, 2003 through April 23, 2004.total advisory fees payable under the prior
arrangement. If the Class J shareholders of the Fund approve the proposal,New Advisory Agreement on
January 6, 2005, the DistributionInterim Advisory Agreement will be consideredwould terminate and IXIS
Advisers would begin serving as adviser to the Fund under the New Advisory
Agreement effective for the above-mentioned period. On April
23,January 7, 2005.
BOARD OF TRUSTEES' CONSIDERATION OF THE NEW ADVISORY AGREEMENT
At a meeting held on September 21, 2004, the Board approved a new Distribution Agreement (the "New Distribution
Agreement") withTrustees, including the
U.S. Distributor effective April 23, 2004 through June 30,
2004, and on June 4, 2004, the Board approved the continuance of the New
Distribution Agreement for another one-year period commencing July 1, 2004. The
terms of the Distribution Agreement being submitted for shareholder approvalTrustees who are the same as the terms of the Distribution Agreement approved by the Board on
April 23, 2004 and which is currently in effect.
EVALUATION BY THE BOARD OF TRUSTEES
At its June 4, 2004 meeting, the Board of Trusteesnot "interested persons" of the Trust, including
the Independent Trustees,IXIS Advisers or
Hansberger (the "Independent Trustees"), voted unanimously to recommend that
Class Jshareholders of the Fund vote to approve the Fund's New Advisory Agreement. The
Trustees had approved the New Advisory Agreement (subject to shareholder
approval), as well as the Interim Advisory Agreement, on August 20, 2004. In
connection with that approval and with its recommendation that the shareholders
of the Fund approve the DistributionFund's New Advisory Agreement, for the period from November 1, 2003
through April 23, 2004 and the releaseTrustees considered a
wide range of escrowed fees payable thereunder.
Shareholder approval is not required for the New Distribution Agreement and
sales charges payable under the New Distribution Agreement have not been and
will not be escrowed. In connection with its reviewinformation of the Agreement,type they regularly consider when determining
whether to continue a Fund's advisory agreement as in effect from year to year
and whether to approve a new adviser. In considering the Interim and New
Advisory Agreements (collectively, the "Advisory Agreements"), the Trustees did
not identify any single factor as determinative. Matters considered by the Board
requestedincluded:
. the results and reviewed, withfinancial condition of IXIS Advisers;
. the assistancenature, quality and extent of counselthe portfolio management services
furnished by IXIS Advisers;
. whether the portfolio management services to be provided pursuant to the
Independent
Trustees, materials furnished byAdvisory Agreements would be provided on terms and conditions similar to
those of the U.S. Distributor. These materials included
financial statements as well as other written information regarding the U.S.
Distributor and its personnel, operations, financial condition and
profitability. The Board also
3
considered comparative fee information concerning other investment companies
distributed in Japan. The Board concluded that the U.S. Distributor has the
resources, staff, knowledge and commitment to carry out its distribution
obligations and has adequate compliance procedures in place with respect to
sales practices.
DESCRIPTION OF DISTRIBUTION AGREEMENT
The following paragraphs briefly describePrevious Advisory Agreement;
. the terms of the Distribution
Agreement, whichAdvisory Agreements;
. IXIS Advisers' ability to retain and attract capable personnel to serve
the Fund;
. the recent investment performance of the Fund;
. the advisory fees and other expenses that would be paid by the Fund
under the Advisory Agreements as compared to those of similar funds
managed by other investment advisers; and
. the potential efficiencies to be gained from having IXIS Advisers serve
as the investment adviser for most CDC Nvest Funds (including the Fund)
At a meeting held on June 4, 2004, the Trustees approved the
continuation of IXIS Advisers' advisory agreements (which are on substantially
the same terms as those of the new Distribution Agreement.Advisory Agreements) with the above-mentioned CDC Nvest
Funds for another one-year term commencing July 1, 2004.
DESCRIPTION OF THE NEW ADVISORY AGREEMENT
For a complete understanding of the Distributionproposed New Advisory Agreement,
please refer to the form of DistributionNew Advisory Agreement provided as Appendix A. The
U.S. Distributor serves asnext several paragraphs briefly summarize some important provisions contained in
the general distributorInterim and New Advisory Agreements (which are identical to each other
except for their effective dates).
4
Each Advisory Agreement essentially provides that IXIS Advisers will
provide to the Fund both (1) portfolio management services (defined to mean
managing the investment and reinvestment of Class J sharesthe assets of the Fund, pursuantsubject to
an Amendedthe supervision and Restated Distribution Agreement initially
dated December 7, 1999. Undercontrol of the Distribution Agreement,Trustees), and (2) administrative services
(defined to mean furnishing or paying the U.S. Distributor
has the right to purchase Class J sharesexpenses of the Fund fromfor office space,
facilities and equipment, services of executive and other personnel necessary
for managing the Trust at their net
asset value and to sell such Class J shares to the public against orders
therefor at the net asset value of the shares plus any applicable sales charge
as set forth in the current prospectus of the Fund. The U.S. Distributor shall
use reasonable efforts to sell Class J sharesaffairs of the Fund but is not obligatedand certain other administrative and
general management services).
Each Advisory Agreement allows IXIS Advisers to selldelegate any specific numberand all of
shares.
For its responsibilities thereunder with respect to the provision of portfolio
management services to one or more subadvisers, pursuant to a written agreement
with each subadviser that meets the requirements of Section 15 of the 1940 Act
applicable to contracts for services as general distributorinvestment adviser of a registered
investment company. Any subadviser may be affiliated with IXIS Advisers. Each
Advisory Agreement also allows IXIS Advisers to delegate any or all of its
responsibilities thereunder with respect to the Class J sharesprovision of the Fund,
the U.S. Distributor receives a distribution fee at the rate set forth in the
Rule 12b-1 Plan (discussed below) and is entitledadministrative
services to retain the sales charges
collected on the salesone or more other parties selected by IXIS Advisers, which also may
include affiliates of Class J shares of the Fund. For the fiscal year ended
September 30, 2003, the U.S. Distributor received $1,196,863 in underwriting
commissions in conjunction with the sale of Class J shares of the Fund.IXIS Advisers.
The U.S.
Distributor bears the cost of making information about the Fund available
through advertising and other means and the cost of printing and mailing the
prospectus to persons other than shareholders. The Fund pays the cost of
registering and qualifying the Class J shares under state and federal securities
laws and distributing its prospectus to existing shareholders.
The DistributionNew Advisory Agreement like the New Distribution Agreement, statesprovides that it is towill continue in effect for
successive one-year periods, providedan initial period of two years and, after that, each such continuanceit will continue in effect from
year to year as long as the continuation is specifically approved at least annually (i) by
the vote of a majority of
the entire Board of Trustees and (ii) by the vote of a majority of the
Independent Trustees, in each case cast in person at a meeting called for that
purpose. The Distribution Agreement may be terminated at any time with respect
to the Fund on 60 days' written notice to the U.S. Distributor without payment
of any penalty by vote of a majority of the Trust's Board of Trustees or by vote of a majority of the outstanding voting securities of
the Fund's Class J shares.
The Distribution Agreement also states that it may be terminated by the U.S.
Distributor on 90 days' written notice to the Trust. The Distribution Agreement
was replaced by the New Distribution Agreement on April 23, 2004.
Pending shareholder vote on the Distribution Agreement, the U.S.
Distributor will hold in escrow the amounts of the sales charges retained by the
U.S. Distributor for sales of the Class J shares during the period from November
1, 2003 through April 23, 2004, which total approximately $514,619. Upon
shareholder approval, these escrowed sales charges will be released to the U.S.
Distributor. If shareholders do not approve the proposal, sales charges escrowed
for the period from November 1, 2003 through April 23, 2004 will be returned to
shareholders who purchased shares during that period. However, as noted
4
above, sales charges payable under the New Distribution Agreement have not been
and will not be escrowed and will continue to be paid to the U.S. Distributor
whether or not the proposal is approved.
THE TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMEND THAT THE CLASS J SHAREHOLDERS OF
THE FUND VOTE TO APPROVE THE DISTRIBUTION AGREEMENT AND THE RELEASE OF ESCROWED
FEES PAYABLE THEREUNDER.
II. PROPOSAL 2: APPROVAL OF A RULE 12B-1 PLAN
As noted above, the Board of Trustees of the Trust, including a majority of
the Independent Trustees, also is recommending that Class J shareholders of the
Fund, approve the Rule 12b-1 Plan and the release of escrowed fees payable
thereunder. If the Class J shareholders of the Fund approve the proposal, the
Rule 12b-1 Plan will be effective for the period beginning November 1, 2003. No
changes in the terms of the Rule 12b-1 Plan from the Plan in effect on October
31, 2003 are being proposed.
EVALUATION BY THE BOARD OF TRUSTEES
At its June 4, 2004 meeting, the Board of Trustees of the Trust, including
the Independent Trustees, voted to approve the Rule 12b-1 Plan for the period
beginning November 1, 2003 and the release of escrowed fees payable thereunder,
subject to shareholder approval. In addition, at that meeting, the Trustees,
including the Independent Trustees, voted to approve the continuance of the Rule
12b-1 Plan for the one-year period beginning July 1, 2004, subject to the
approval by shareholders of the Rule 12b-1 Plan for the period beginning
November 1, 2003. Finally, the Trustees also voted to recommend that the Class J
shareholders of the Fund approve the Rule 12b-1 Plan and the release of escrowed
fees payable thereunder. In connection with its review of the Rule 12b-1 Plan,
the Board requested and reviewed, with the assistance of its own legal counsel,
materials furnished by the U.S. Distributor. These materials included
information about how the distribution and service fees charged under the Rule
12b-1 Plan create an incentive for financial intermediaries and
Japanese-licensed securities companies to promote the sale of Class J shares and
help retain shareholders in the Fund. The Board considered other factors as
well, including the merits of possible alternative plans; the interrelationship
between the Rule 12b-1 Plan and the activities of other persons, including
whether any payments by the Fund are made to such other persons as to constitute
the indirect financing of the distribution of Fund shares; the possible benefits
of the Rule 12b-1 Plan to any other person relative to those expected to inure
to the Fund; the effect of the Rule 12b-1 Plan on existing shareholders; and
whether the Rule 12b-1 Plan has produced the anticipated benefits for the Fund
and its Class J shareholders. Based on its consideration of these factors, among
others, the Board concluded that the Rule 12b-1 Plan is reasonably likely to
benefit fund shareholders and that the amounts paid under the Rule 12b-1 Plan
are reasonable in light of the distribution services that are performed.
5
DESCRIPTION OF THE RULE 12B-1 PLAN
The following paragraphs briefly describe the terms of the Rule 12b-1 Plan.
For a complete understanding of the Rule 12b-1 Plan, please refer to the form of
Rule 12b-1 Plan provided as Appendix B.
The Trust has adopted a service and distribution plan under Rule 12b-1 of
the Investment Company Act of 1940, as amended, that allows the Fund to pay the
U.S. Distributor, for its services as general distributor of the Class J shares
of the Fund, a monthly service fee at an annual rate not to exceed 0.25% of the
Fund's average net assets attributable to Class J shares and a monthly
distribution fee (the "Distribution Fee") at an annual rate not to exceed 0.50%
of the Fund's average net assets attributable to Class J shares. For the fiscal
year ended September 30, 2003, the Fund paid the U.S. Distributor $661,138 in
service fees and $1,322,275 in Distribution Fees (which collectively represented
0.75% of the average net assets of the Fund).
The U.S. Distributor may pay all or any portion of the service fee to
securities dealers or other organizations (including affiliates of the
Distributor) as service fees pursuant to agreements with such organizations for
providing personal services to investors in the Class J shares of the Fund
and/or the maintenance of shareholder accounts. The U.S. Distributor may pay all
or any portion of the Distribution Fee to securities dealers or other
organizations (including affiliates of the U.S. Distributor) as commissions,
asset-based sales charges or other compensation with respect to the sale of
Class J shares of the Fund, and may retain all or any portion of the
Distribution Fee as compensation for the U.S. Distributor's services as
principal underwriter of the Class J shares.
The Rule 12b-1 Plan is to continue in effect for successive one-year
periods, provided that each such continuance is specifically approved (i) by the
vote of a majority of the entire Board of Trustees and (ii) by the vote of a majority of the Independent Trustees,Trustees. (The
Interim Advisory Agreement provides that it will continue in each case cast in person at a meeting
calledeffect for that purpose. The Board has approved the continuance of the Rule
12b-1 Plan for the one-year period beginning July 1, 2004, although such
continuance is contingent upon shareholder approval of this proposal. The Rule
12b-1 Planup to
150 days).
Each Advisory Agreement may be terminated at any time with respect to the Fund on 60 days'
written notice to the U.S. Distributorwithout penalty by vote of a majority of the Independent
Trustees or by vote of a majority of the outstanding voting securities of the
Fund, on sixty days' written notice to IXIS Advisers, or by IXIS Advisers upon
ninety days' written notice to the Trust, and each Advisory Agreement provides
that it will terminate automatically in the event of its "assignment" as defined
in the 1940 Act.
Each Advisory Agreement provides that IXIS Advisers will not be liable
to the Fund or its shareholders except for liability arising from IXIS Adviser's
willful misfeasance, bad faith, gross negligence or reckless disregard of its
obligations or duties under such Advisory Agreement.
Under the Previous Advisory Agreement, the annual advisory fee rate
payable by the Fund to Loomis Sayles and the aggregate fee paid to Loomis Sayles
for the Fund's Class J shares. The Board of Trustees reviews quarterly written reports
of costs incurredmost recent fiscal year were as follows:
ADVISORY FEE RATE PAYABLE AGGREGATE FEE PAID FOR
(AS A PERCENTAGE OF AVERAGE THE FISCAL YEAR
FUND DAILY NET ASSETS) ENDED 9/30/04*
- ---- ----------------- --------------
International 0.75% $535,777(unaudited)
Equity Fund
* Includes aggregate fees paid to IXIS Advisers for the period August 26, 2004
through September 30, 2004.
5
Under the New Advisory Agreement, the total annual advisory fee rate
payable by the Fund to IXIS Advisers will remain the same. If the New
Advisory Agreement had been in place during the previous fiscal year, the
aggregate fee paid to IXIS Advisers by the Fund would have been the same as
the aggregate fee paid to Loomis Sayles under the Rule 12b-1 Plan.
Pending shareholder approval ofPrevious Advisory Agreement,
as noted above.
IXIS Advisers also currently serves as adviser to the Rule 12b-1 Plan, the U.S. Distributor
will hold in escrow the Distribution Fees paid by the Class J shareholders ofHansberger
International Fund, which has a similar investment goal and policies as the
Fund, for compensation at the period from November 1, 2003 until such time as shareholders
approveannual fee rate set forth in the proposal. Upon shareholder approval, these escrowed Distribution
Fees, which for the period from November 1, 2003 through May 31, 2004 total
approximately $1,013,317, will be released to the U.S. Distributor. If
shareholders do not approve the proposal, the escrowed Distribution Fees will be
paid to the Fund, the Rule 12b-1 Plan will be deemed to have terminated on
October 31, 2003 and the Fund no longer will be making payments under the Rule
12b-1 Plan. If the Fund is unable to make payments under the Rule 12b-1 Plan, it
is possible that brokers that currently are supported by those payments may no
longer
6
continue to provide the same level of shareholder services to Class J
shareholders.table below.
ADVISORY FEE RATE PAYABLE
(as a percentage of average daily net TOTAL NET ASSETS OF THE FUND
FUND assets) AS OF 9/30/04
- ---- ------- -------------
Hansberger International 0.80% of the first $200 million $ 126,361,033
Fund 0.75% of such assets in excess of
$200 million
THE TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMEND THAT THE CLASS J SHAREHOLDERS OF
THE FUND VOTE TO APPROVE THE RULE 12B-1 PLANNEW ADVISORY AGREEMENT FOR THE FUND.
II. PROPOSAL 2: APPROVAL OF A NEW SUBADVISORY AGREEMENT
INTERIM AND NEW SUBADVISORY AGREEMENTS
As noted above, the Trustees, at a meeting held on August 20, 2004,
approved the Interim Subadvisory Agreement among the Trust, on behalf of the
Fund, IXIS Advisers and Hansberger, to be effective August 26, 2004 and to
continue for a period of 150 days or until shareholders of the Fund approve the
New Subadvisory Agreement, whichever occurs first. The Interim Subadvisory
Agreement was approved pursuant to Rule 15a-4 under the 1940 Act, which, under
certain conditions, allows such agreements to take effect and to continue for up
to 150 days without receiving prior shareholder approval as long as the total
advisory fees payable do not exceed the total advisory fees payable under the
prior arrangement. The Trustees also approved the New Subadvisory Agreement with
Hansberger, which, if approved by shareholders of the Fund, will enable
Hansberger to continue serving as subadviser of the Fund following the
expiration of the Interim Subadvisory Agreement. If shareholders of the Fund
approve the New Subadvisory Agreement (as well as the New Advisory Agreement) on
January 6, 2005, the Interim Subadvisory Agreement would terminate and
Hansberger would begin serving as subadviser to the Fund under the New
Subadvisory Agreement effective January 7, 2005.
BOARD OF TRUSTEES' CONSIDERATION OF THE RELEASENEW SUBADVISORY AGREEMENT
At a meeting held on September 21, 2004, the Trustees, including the
Independent Trustees, voted unanimously to recommend that shareholders of the
Fund vote to approve the Funds' New Subadvisory Agreement. The Trustees had
approved the New Subadvisory Agreement (subject to shareholder approval), as
well as the Interim Subadvisory Agreement, on August 20, 2004. In connection
with that approval, and with its recommendation that the shareholders of the
Fund approve the New Subadvisory Agreement, the Trustees considered a wide range
of information of the type they regularly consider when determining whether to
continue a Fund's subadvisory agreement as in effect from year to year and
whether to approve a new subadviser. In considering the Interim and New
Subadvisory Agreements (collectively, the "Subadvisory Agreements"), the
Trustees did not identify any single factor as determinative. Matters considered
by the Board included:
. the results and financial condition of Hansberger;
6
. the number, education and experience of Hansberger's investment
personnel (including particularly those personnel with responsibilities
for providing services to the Fund) and Hansberger's use of technology,
external research and trading cost measurement tools;
. the procedures employed by Hansberger to determine the value of the
Fund's assets; the resources devoted to, and the record of compliance
with, restrictions and policies on personal securities transactions;
. the terms of the Subadvisory Agreements;
. the subadvisory fee rate payable to Hansberger;
. the total expense ratio of the Fund;
. Hansberger's practices regarding the selection and compensation of
brokers and dealers that execute portfolio transactions for the Fund,
and the brokers' and dealers' provision of brokerage and research
services to Hansberger (see Appendix C for more information about these
matters).
Hansberger currently subadvises other CDC Nvest Funds. At a meeting on
June 4, 2004, the Trustees approved the continuation of Hansberger's subadvisory
agreements (which are on substantially the same terms as the Subadvisory
Agreements) with the above-mentioned CDC Nvest Funds for another one-year term
commencing July 1, 2004.
HANSBERGER AS SUBADVISER OF ESCROWED FEESTHE CDC IXIS INTERNATIONAL EQUITY FUND
Hansberger was formed in 1994 and is a wholly-owned subsidiary of
Hansberger Group, Inc. Hansberger managed approximately $4.6 billion in assets
as of September 30, 2004 and specializes in global investing, managing separate
portfolios and institutional mutual funds. Hansberger is an affiliated money
manager of IXIS North America because of IXIS North America's interest in
Hansberger Group, Inc., Hansberger's parent company.
Since becoming interim subadviser of the Fund, Hansberger has been
managing the Fund according to the Fund's current investment goal and
strategies. However, Hansberger follows a different investment process than did
Loomis Sayles. In general, Hansberger seeks companies with the following
characteristics, although not all of the companies will have these attributes:
. High secular growth
. Superior profitability
. Medium to large capitalizations, although there are no
limitations on the size of the companies in which the Fund may
invest
In making investment decisions, Hansberger generally employs the following
methods:
. Securities are selected on the basis of fundamental
company-by-company analysis.
. In choosing equity instruments, Hansberger typically will focus
on the market price of a company's securities relative to its
evaluation of the company's long-term earnings and cash flow
potential.
. In addition, a company's valuation measures, including but not
limited to price-to-earnings ratio, will customarily be
considered.
. Hansberger seeks to control portfolio risk through top down
geographic and sector allocation.
7
Hansberger generally sells a security if its price target is met, the company's
fundamentals change, or if the portfolio is fully invested and a better
investment opportunity arises.
Thomas R.H. Tibbles, Barry A. Lockhart, Trevor Graham, and Patrick H.
Tan co-manage the Fund's portfolio under the Interim Subadvisory Agreement and
would continue to be the co-portfolio managers under the New Subadvisory
Agreement. Mr. Tibbles is Chief Investment Officer - Growth Team & Managing
Director - Canada of Hansberger, holds the designation of Chartered Financial
Analyst and has over 17 years of investment management experience. Mr. Lockhart
is Senior Vice President - Research of Hansberger, holds the designation of
Chartered Financial Analyst and has over 15 years of investment management
experience. Mr. Graham is Vice President - Research of Hansberger, holds the
designation of Chartered Financial Analyst and has over 8 years of investment
management experience. Mr. Tan is a Research Analyst of Hansberger and has over
6 years of investment-related experience.
Hansberger also currently serves as subadviser or adviser to other funds
which have similar investment objectives and policies as the Fund, for
compensation at the annual fee rates set forth in the table below.
ADVISORY/SUBADVISORY FEE TOTAL NET ASSETS
RATE PAYABLE THEREUNDER.(AS A PERCENTAGE OF THE FUNDS
FUND OF AVERAGE DAILY NET ASSETS) AS OF 9/30/04
- ---- ---------------------------- -------------
Hansberger International 0.45% of the first $200 million $126,361,033
Fund 0.40% of such assets in
excess of $200 million*
Hansberger Institutional 0.75%** $ 38,084,069
Series - International
Growth Fund
Forward Hansberger 0.50% $ 21,045,801
International Growth Fund
Pacific Capital 0.60% on the first $75 million $ 61,884,953
International Stock Fund 0.35% of such assets in excess
of $75 million
* Prior to August 1, 2003, the portfolio of this Fund was divided into
four different segments managed by three different subadvisers:
Hansberger, Harris Associates L.P. (which managed two segments) and
Loomis Sayles. The advisory fee rate payable to Hansberger for
subadvising its segment of the Fund was 0.55% of the first $50 million
of the segment's average daily net assets, 0.50% of the next $50 million
of the segment's average daily net assets and 0.35% of the segment's
average daily net assets in excess of $100 million. On August 1, 2003,
Hansberger replaced Harris Associates as subadviser to one segment of
the Fund. The advisory fee rates payable to Hansberger were the same as
the rates payable to Hansberger prior to August 1, 2003. On March 1,
2004, Hansberger became the sole subadviser to the Fund. The current
advisory fee rate payable to Hansberger is set forth in the table above.
** Hansberger has voluntarily agreed to reduce advisory fees payable to it
and to reimburse the Fund if the annual operating expenses, expressed as
a percentage of average daily net assets, exceed 1.00%. Hansberger may
revise or discontinue this voluntary fee waiver and reimbursement at any
time.
The subadvisory fee rates payable by the Fund to Hansberger under the
Interim and New Subadvisory Agreements is set forth in the table below.
ADVISORY/SUBADVISORY FEE RATE PAYABLE
FUND (AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- ---- ---------------------------------------------
Hansberger International Fund 0.45% of the first $200 million
0.40% of such assets in excess of $200
million
8
It is important to note that, at its September 21, 2004 meeting, the
Trustees approved certain changes to the goal, investment strategies, benchmark
and name of the Fund effective as of February 1, 2005 (assuming shareholder
approval of the New Advisory and Subadvisory Agreements). These changes, which
are described below, do not require shareholder approval:
CURRENT CHANGES EFFECTIVE AS OF FEBRUARY 1, 2005
- --------------------------------------------------- -------------------------------------------------------
FUND NAME: NEW FUND NAME:
- --------------------------------------------------- -------------------------------------------------------
CDC IXIS International Equity Fund Hansberger Foreign Growth Fund
INVESTMENT GOAL: NEW INVESTMENT GOAL:
- --------------------------------------------------- -------------------------------------------------------
The Fund seeks high total investment The Fund seeks high
return through a combination of long-term total return.
capital appreciation and current
income.
INVESTMENT STRATEGY: NEW INVESTMENT STRATEGY:
- --------------------------------------------------- -------------------------------------------------------
Under normal market conditions, the Fund invests at Under normal market conditions, the Fund will invest at
least 80% of its assets in equity securities. In least 80% of its assets in foreign equity securities,
accordance with applicable Securities and Exchange which it defines as securities of companies organized
Commission requirements, the Fund will notify or headquartered outside of the United States. In
shareholders prior to any change to such policy accordance with applicable Securities and Exchange
taking effect. The Fund invests primarily in Commission requirements, the Fund will notify
common stocks or other equity securities issued by shareholders prior to any change to such policy taking
companies headquartered or organized outside the effect. The Fund will invest in at least three
United States. The Fund generally focuses on different countries and expects to be invested in more
stocks of larger companies, but the Fund may invest than three countries, including countries considered to
in securities issued by companies of any size and be emerging markets.
in securities of issuers located in countries with
emerging markets.
BENCHMARK: NEW BENCHMARK:
- --------------------------------------------------- -------------------------------------------------------
Morgan Stanley Capital International Europe, Morgan Stanley All Country World Ex U.S. Index (which
Australasia and Far East Index (which represents represents the performance of developed and emerging
the performance of developed markets, excluding the markets, excluding the United States)
United States and Canada)
If the New Advisory Agreement and New Subadvisory Agreement are not
approved at the shareholder meeting, IXIS Advisers and Hansberger no longer will
serve as the Fund's investment adviser and subadviser, respectively. In that
case, the Trustees will take such action as they deem appropriate under the
circumstances.
DESCRIPTION OF THE NEW SUBADVISORY AGREEMENT
For a complete understanding of the proposed New Subadvisory Agreement,
please refer to the form of New Subadvisory Agreement provided as Appendix B.
The next several paragraphs briefly summarize some important provisions
contained in the Interim and New Subadvisory Agreements (which are identical
except for their effective dates).
Each Subadvisory Agreement essentially provides that Hansberger, under
the supervision of IXIS Advisers, will (1) manage the investment and
reinvestment of the assets of the Fund, and have the authority on behalf of the
Fund to vote and shall vote all proxies and exercise all other rights of the
Fund as a security holder of companies in which the Fund from time to time
invests, (2) select brokers and dealers to carry out portfolio transactions for
the Fund and (3) furnish IXIS Advisers monthly, quarterly and annual reports
concerning portfolio transactions and performance of the Fund, and provide IXIS
Advisers with such other information and reports as may reasonably be requested
by IXIS Advisers from time to time, including without limitation all material
requested by or required to be delivered to the Trustees of the Trust.
9
As full compensation for all services rendered, facilities furnished and
expenses borne by Hansberger, the Subadvisory Agreements provide that Hansberger
shall be paid at the annual rate of 0.45% of the first $200 million of average
daily net assets and 0.40% of average daily net assets in excess of $200
million. Such compensation is payable by the Trust (though, under the Advisory
Agreements, the Trust's payment obligations to IXIS Advisers are reduced to the
extent of the fees payable under the Subadvisory Agreements).
The New Subadvisory Agreement provides that it will continue in effect
for an initial period of two years and, after that, it will continue in effect
from year to year as long as the continuation is approved at least annually (i)
by the Trustees or by vote of a majority of the outstanding voting securities of
the Fund, and (ii) by vote of a majority of the Independent Trustees. (The
Interim Subadvisory Agreement provides that it will continue in effect for 150
days).
Each Subadvisory Agreement may be terminated without penalty (i) by vote
of the Trustees or by vote of a majority of the outstanding voting securities of
the Fund, on sixty days' written notice to Hansberger, (ii) by IXIS Advisers, on
ninety days' written notice to Hansberger, or (iii) by Hansberger, upon ninety
days' written notice to IXIS Advisers and the Trust, and each Subadvisory
Agreement provides that it will terminate automatically in the event of its
"assignment" as defined in the 1940 Act or upon the termination of the Advisory
Agreement.
Each Subadvisory Agreement provides that Hansberger will not be liable
to IXIS Advisers, the Trust, the Fund or its shareholders, except for
liability arising from Hansberger's willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations or duties under such
Subadvisory Agreement. In addition, each Subadvisory Agreement provides that
IXIS Advisers shall indemnify Hansberger for liability arising from any claim or
demand by any past or present shareholder of the Fund that is not based upon the
obligations of Hansberger under the Agreement.
RESTRUCTURING COSTS
Subsequent to the transition from Loomis Sayles on August 26, 2004,
Hansberger reviewed the existing portfolio holdings of the Fund and determined
what holdings it expected to sell and what securities it expected to purchase in
order to conform the Fund's portfolio to Hansberger's judgment as to stock
selection. Based on this review, Hansberger sold a significant percentage of the
Fund's portfolio securities, and reinvested the sale proceeds in other
securities. The restructuring was [substantially] completed prior to October 29,
2004. In addition to brokerage commission costs, the transactions involved
additional costs to the Fund resulting from the impact of the transactions on
the prices received and paid by the Fund for the securities being bought and
sold. The Fund [will bear/has borne] the costs of any portfolio transactions
that resulted from the restructuring. Such transactions also may cause the Fund
to realize capital gains or losses.
THE TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS OF
THE FUND VOTE TO APPROVE THE NEW SUBADVISORY AGREEMENT FOR THE FUND.
10
III. OTHER INFORMATION
ADVISER, PRINCIPAL UNDERWRITER AND ADMINISTRATOR.
Loomis, Sayles & Company, L.P.Principal Underwriter and Administrator. IXIS Distributors is the investment adviser to the Fund.
Loomis Sayles Distributors, L.P. is theFund's
principal underwriter for the Class J
shares of the Fund. CDC IXIS Asset Management Distributors, L.P. ("CDC IXIS
Distributors"), an affiliate of Loomis, Sayles & Company, L.P., is the principal
underwriter for the Fund's other classes of shares.underwriter. CDC IXIS Asset Management Services, Inc. ("CDC IXIS
Services"), an affiliate of Loomis, Sayles & Company,
L.P. and Loomis Sayles Distributors, L.P., is the Fund's administrator and also
serves as the transfer and shareholder servicing agent forand the Fund's
other
share classes.administrator. The address of Loomis, Sayles & Company, L.P. and Loomis Sayles
Distributors, L.P. is One Financial Center, Boston, Massachusetts 02111. The
address of CDC IXIS Distributors and CDC IXIS Services is 399
Boylston Street, Boston, Massachusetts 02116. Because they hold positions with the U.S. Distributor and/or its
affiliates, certain of the Fund's Trustees may be deemed to have a material
direct or indirect interest in the subject matter of the Proposals. These
Trustees are (i) Mr. Peter S. Voss, who is Director of CDC IXIS Services, an
affiliate of the U.S. Distributor; Director ofPlease note that, effective
November 1, 2004, CDC IXIS Asset Management Distribution Corporation ("CDC IXIS Distribution Corporation"), an affiliate of
the U.S. Distributor; Director and Chairman of CDCServices, Inc. will be changing its
name to IXIS Asset Management Associates, Inc., an affiliate of the U.S. Distributor; Director of Loomis,
Sayles & Company, Inc., an affiliate of the U.S. Distributor;Services Company.
Outstanding Shares and Director and
Member of the Executive Board of CDC IXIS Asset Management, the parent company
of the U.S. Distributor; (ii) Mr. Robert J. Blanding, who is President,
Chairman, Director and Chief Executive Officer of Loomis, Sayles & Company,
L.P.; and (iii) Mr. John T. Hailer, who is Director and Executive Vice President
of CDC IXIS Distribution Corporation and President and Chief Executive Officer
of CDC IXIS Distributors. The Board currently consists of three interested
Trustees (listed above) and eight Independent Trustees.
OUTSTANDING SHARES AND SIGNIFICANT SHAREHOLDERS.
Class J shareholdersSignificant Shareholders. Shareholders of record
at the close of business on June 30,October 29, 2004 are entitled to notice of and to
vote at the Meeting and any adjourned session. Appendix CD to this Proxy
Statement lists for the Fund the total number of shares of Class J outstanding as of
June 10, 2004.October 7, 2004 for each class of the Fund's shares. It also identifies holders,
as of June 10,October 7, 2004, of more than 5% of Class Jany class of shares of the Fund, and
contains information about the shareholdings in the Fund of the Trustees and the
executive officers of the Fund as of June 10,October 7, 2004.
7
INFORMATION ABOUT THE OWNERSHIP OF THE DISTRIBUTORADVISER AND THE DISTRIBUTOR. Loomis Sayles Distributors, L.P., the U.S. Distributor,SUBADVISER
The Adviser. IXIS Advisers, formed in 1995, is a limited partnership
organized under the laws of the State of Delaware. Its sole general partner, Loomis, Sayles & Company, Inc.CDC
IXIS Asset Management Distribution Corporation ("IXIS Distribution
Corporation"), is a wholly owned subsidiary of CDC IXIS Asset Management
Holdings, Inc.LLC ("CDC IXIS Holdings"), which in turn is a wholly owned subsidiary of
CDC IXIS Asset ManagementNorth America. IXIS Distribution Corporation is also the sole general
partner of IXIS Distributors, which is the principal underwriter for the Fund,
and the sole shareholder of IXIS Services, the Fund's transfer and shareholder
servicing agent and administrator. IXIS North America L.P. ("CDCowns the entire limited
partnership interest in each of IXIS North America"). CDCAdvisers and IXIS Distributors. IXIS North
America is a part of an international Asset Management Group based in Paris,
France. The Asset Management Group is ultimately owned principally, directly and
indirectly, by three large affiliated French financial services firms:entities: the
Caisse des Depots et Consignations ("CDC");, a public sector financial
institution created by the French government in 1816; the Caisse Nationale des
Caisses d'Epargne, a financial institution owned by CDC and by affiliated French
savings banks known as the Caisses d'Epargne; and by CNP Assurances, a leadinglarge
French life insurance company. The registered office of CDC is 56, rue de Lille, 75007 Paris, France.
The registered address of Caisse Nationale des Caisses d'Epargne is 5, rue
Masseran, 75007 Paris, France. The registered address of CNP Assurances is 4,
place Raoul Dautry, 75015 Paris, France.
TheIXIS North America has 15 principal subsidiarysubsidiaries
or affiliated asset management firms of CDC
IXIS North Americathat collectively had approximately $148$161 billion in
assets under management or administration as of December 31, 2003.at June 30, 2004.
The principal executive officer of Loomis SaylesIXIS Advisers and IXIS Distributors L.P.
is John F. Gallagher. Mr. Gallagher alsoT. Hailer, who is the President and a DirectorTrustee of the Trust and the Headwhose
principal occupation is his position as President and Chief Executive Officer of
Sales & Marketing
at Loomis, Sayles & Company, L.P.IXIS Distributors. The address of Loomis, Sayles & Company, Inc.IXIS Advisers, IXIS Distributors, IXIS
Distribution Corporation, IXIS Holdings, IXIS North America and Mr. Gallagher is One Financial Center, Boston, Massachusetts 02111. The
address of CDC IXIS Holdings and CDC IXIS North AmericaHailer is
399 Boylston Street, Boston, Massachusetts 02116.
The Subadviser. Hansberger is a wholly owned subsidiary of Hansberger
Group, Inc., which is controlled by Mr. Thomas L. Hansberger. IXIS North America
also holds an equity interest in Hansberger Group, Inc. The principal executive
officer of Hansberger is Mr. Hansberger, who is Chairman, Director, Chief
Executive Officer and Treasurer of Hansberger. Mr. Hansberger's principal
occupation is his position with Hansberger. The address of Hansberger and of Mr.
Hansberger is 515 East Olas Boulevard, Suite 1300, Fort Lauderdale, Florida
33301. As of November 30, 2004, Hansberger's new address will be 401 East Las
Olas Boulevard, Suite 1700, Fort Lauderdale, Florida 33301.
11
INFORMATION ABOUT PROXIES AND THE CONDUCT OF THE MEETING
SOLICITATION OF PROXIES. NoneSolicitation of the costs of the Meeting, including the
costs of soliciting proxies, if any, will be borne by the Fund. All such costs
will be paid by the U.S. Distributor and its affiliates.Proxies. Proxies will be solicited primarily by mailing
this Proxy Statement and its enclosures, but proxies may also be solicited
through further mailings, telephone calls, personal interviews or e-mails by
officers of the Fund or by employees or agents of the U.S. DistributorIXIS Advisers, Hansberger, or CDC
IXIS North America and its affiliated companies,
and by Japanese securities dealerscompanies. In addition, Alamo Direct
Mail Services, Inc. has been engaged to assist in Japan that promote the salesolicitation of Class J
sharesproxies,
at an estimated cost of approximately $4,000.
Costs of Solicitation. The costs of the Fund.
VOTING PROCESS.Meeting, including the costs of
soliciting proxies, will be paid by IXIS Advisers and its affiliates.
Voting Process. You can vote in any one of the following four ways:
. By Internet - Use the Internet to vote by (i) completingvisiting
https://vote.proxy-direct.com or www.cdcnvestfunds.com.
. By telephone - Use a touch-tone telephone to call toll-free
1-866-241-6192, which is available 24 hours a day.
. By mail - Complete and returningreturn the enclosed proxy card; or (ii) castingcard.
. In person - Vote your voteshares in person at the Meeting.
Shareholders who owned Class JFund shares of the Fund on the Record Date are entitled to
vote at the Meeting. Class J Shareholders are entitled to cast one vote for each share,
and a proportionate fractional vote for each fractional share, owned on the
Record Date. If you choose to vote by mail, and you are an individual account
owner, please sign exactly as your name appears on the proxy insert. Either
owner of a joint account may sign the proxy insert, but the signer's name must
exactly match the name that appears on the card. Shares represented by duly
executed and timely proxies will be voted as instructed on the proxy. If no
instructions are given, the proxy will be voted in favor of the 8
relevant
proposal. If you mail the enclosed proxy and no choice is indicated for a
proposal listed in the attached Notice of Meeting, your proxy will be voted in
favor of that proposal. Votes made through use of the Internet or by telephone
must have an indicated choice in order to be accepted. At any time before it has
been voted, your proxy may be revoked in one of the following ways: (i) by
sending a signed, written letter of revocation to the Secretary of the Trust,
(ii) by properly executing a later-dated proxy (by any of the methods of voting
described above), or (iii) by attending the Meeting, requesting return of any
previously delivered proxy and voting in person.
TABULATION OF PROXIES.Tabulation of Proxies. Votes cast in person or by proxy at the Meeting
will be counted by persons appointed by the Fund as tellers for the Meeting (the
"Tellers"). Forty percent (40%) of the Class J shares of the Fund outstanding on the
Record Date, present in person or represented by proxy, constitutes a quorum for
the transaction of business by the shareholders of the Fund at the Meeting.
However, as indicated below under "Required Vote" the approval of Proposals 1
and 2 will require that more than 50% of the shares of the Fund be present at
the Meeting or represented by proxy. In determining whether a quorum is present,
the Tellers will count shares represented by proxies that reflect abstentions,
and "broker non-votes," as shares that are present and entitled to vote. Since
these shares will be counted as present, but not as voting in favor of any
proposal, these shares will have the same effect as if they cast votes against
the proposal. "Broker non-votes" are proxies for shares held by brokers or
nominees as to which (i) the broker or nominee does not have discretionary
voting power and (ii) the broker or nominee has not received
12
instructions from the beneficial owner or other person who is entitled to
instruct how the shares will be voted. REQUIRED VOTE.With respect to Fund shares held in
individual retirement accounts (including Traditional, Rollover, SEP, SAR-SEP,
Roth and SIMPLE IRAs) for which State Street Bank and Trust Company (the "IRA
Custodian") serves as the custodian ("CDC Nvest IRAs"), the IRA Custodian will
vote those shares for which it has received voting instructions from
shareholders in accordance with such instructions. If no voting instructions are
received by the IRA Custodian, the IRA Custodian will vote the shares (including
abstentions) for a shareholder in the same proportion as other CDC Nvest IRA
shareholders have voted. The Tellers will count shares represented by proxies
representing Fund shares held in CDC Nvest IRAs as shares that are present and
entitled to vote.
Required Vote. The vote required to approve each proposal is the lesser
of (1) 67% of the Class J shares of the Fund that are present at the Meeting, if the
holders of more than 50% of the Class J shares of the Fund outstanding as of the Record
Date are present or represented by proxy at the Meeting, or (2) more than 50% of
the Class J shares of the Fund outstanding on the Record Date. If the required voteNew Advisory
Agreement is approved by shareholders but the New Subadvisory Agreement is not,
obtainedthe New Advisory Agreement will take effect and IXIS Advisers will consider such
actions as are necessary to provide for any proposal,the portfolio management of the Fund. If
only the New Subadvisory Agreement is approved or if neither New Agreement is
approved, then neither New Agreement will take effect and the Trustees will
consider what other actionssuch alternatives as are believed to takebe in the Fund's best interests,
which might include the liquidation of the Fund.
ADJOURNMENTS; OTHER BUSINESS.Adjournments; Other Business. In the event that a quorum is not present
for purposes of acting on a proposal, or if sufficient votes in favor of a
proposal are not received by the time of the Meeting, the persons named as
proxies may propose that the Meeting be adjourned one or more times to permit
further solicitation of proxies. The persons named as proxies will vote in favor
of any such adjournment all proxies that they are entitled to vote in favor of
any proposal that has not yet then been adopted. They will vote against any such
adjournment any proxy that directs them to vote against each proposal that has
not yet then been adopted. They will not vote any proxy that directs them to
abstain from voting on a proposal.
The adjournment of a Meeting will not affect
any proposals approved prior to the adjournment.
The Meeting has been called to transact any business that properly comes
before it. The only business that management of the Fund intends to present or
knows that others will present are Proposals 1the approvals of the New Advisory Agreement
and 2, described above.New Subadvisory Agreement for the Fund. If any other matters properly come
before the Meeting, and on all matters incidental to the conduct of the Meeting,
the persons named as proxies intend to vote the proxies in accordance with their
judgment, unless the Secretary of the Trust has previously received written
contrary instructions from the shareholder entitled to vote the shares.
SHAREHOLDER PROPOSALS AT FUTURE MEETINGS.Shareholder Proposals at Future Meetings. The Trust does not hold annual
or other regular meetings of shareholders. Shareholder proposals to be presented
at any future meeting of shareholders of the Fund must be received by the Fund
in writing a reasonable amount of time before the Trust solicits proxies for
that 9
meeting, in order to be considered for inclusion in the proxy materials for
that meeting.
[REMAINDERCERTAIN PAYMENTS TO AFFILIATES
In addition to advisory fees payable to IXIS Advisers, the Fund
compensates IXIS Distributors and IXIS Services, affiliates of IXIS North
America, for providing various services to the Fund and its shareholders. For
the fiscal year ended September 30, 2004, payments by the Fund to IXIS
Distributors for service and distribution (Rule 12b-1 fees)
13
for Classes A, B and C shares amounted to $20,596.24. In addition, IXIS
Distributors received $[ ] in sales charges (including any contingent deferred
sales charges on Classes A, B and C shares) from the Fund's shareholders for the
fiscal year ended September 30, 2004. For the fiscal year ended September 30,
2004, these payments by the Fund to IXIS Services for transfer agency services
amounted to $47,561.08. In addition, IXIS Services received $[ ] from the Fund
for administrative services for the fiscal year ending September 30, 2004. These
arrangements are not affected in any way by the New Advisory or Subadvisory
Agreements. All amounts stated above are unaudited.
14
CERTAIN TRUSTEES AND OFFICERS OF PAGE INTENTIONALLY LEFT BLANK]
10THE TRUST
John T. Hailer, a Trustee of the Trust, and the following persons who
are officers of the Trust, are also directors, officers or employees of IXIS
Distribution Corporation, IXIS Advisers, IXIS Distributors or IXIS Services
(collectively, the "IXIS Advisers Affiliates"): John E. Pelletier, Coleen Downs
Dinneen, Kristin S. Vigneaux and Nicholas H. Palmerino.
The transactions may result in greater revenues or lesser expenses, in
the aggregate, to the parent company of the IXIS Advisers Affiliates, IXIS
North America. Because Messrs. Hailer and Robert J. Blanding, Trustees of the
Trust, are also directors, officers or employees of IXIS North America or
its subsidiaries, they may also be considered to have an interest in the
transactions. Because Messrs. Pelletier and Palmerino and Mses. Dinneen and
Vigneaux, officers of the Trust, are also directors, officers or employees of
the IXIS Advisers Affiliates, they may also be considered to have an interest in
the transactions.
15
APPENDIX A
AMENDED AND RESTATED
DISTRIBUTIONCDC IXIS INTERNATIONAL EQUITY FUND
ADVISORY AGREEMENT
AGREEMENT made this 7ththe ___ day of December 1999__________, 20__, by and between LOOMIS SAYLES
FUNDS,Loomis
Sayles Funds II, a Massachusetts business trust (the "Trust""Fund"), with respect to
its CDC IXIS International Equity Fund series (the "Series"), and LOOMIS SAYLES
DISTRIBUTORS,IXIS Asset
Management Advisors, L.P., a Delaware limited partnership (the "Distributor""Manager").
WITNESSETH:
InWHEREAS, the Fund and the Manager wish to enter into an agreement
setting forth the terms upon which the Manager (or certain other parties acting
pursuant to delegation from the Manager) will perform certain services for the
Series;
NOW, THEREFORE, in consideration of the premises and covenants
hereinafter contained, the Trust and the Distributorparties agree as follows:
1. DISTRIBUTOR.(a) The TrustFund hereby appointsemploys the Distributor as general
distributor of shares of beneficial interest of each series ("Series")Manager to furnish the Fund
with Portfolio Management Services (as defined in Section 2 hereof) and
Administrative Services (as defined in Section 3 hereof), subject to the
authority of the Trust ("Series shares"Manager to delegate any or all of its responsibilities
hereunder to other parties as provided in Sections 1(b) and (c) hereof.
The Manager hereby accepts such employment and agrees, at its own
expense, to furnish such services (either directly or pursuant to
delegation to other parties as permitted by Sections 1(b) and (c)
hereof) and to assume the obligations herein set forth, for the
compensation herein provided; provided, however, that the Manager shall
have no obligation to pay the fees of any Sub-Adviser (as defined in
Section 1(b) hereof), to the extent that the Fund has agreed, under any
contract to which the Fund and the Sub-Adviser are parties (a
"Sub-Advisory Agreement") duringto pay such fees. The Manager shall, unless
otherwise expressly provided or authorized, have no authority to act for
or represent the termFund in any way or otherwise be deemed an agent of this Agreement.the
Fund.
(b) The Trust reservesManager may delegate any or all of its
responsibilities hereunder with respect to the right,provision of Portfolio
Management Services (and assumption of related expenses) to one or more
other parties (each such party, a "Sub-Adviser"), pursuant in each case
to a written agreement with such Sub-Adviser that meets the requirements
of Section 15 of the Investment Company Act of 1940 and the rules
thereunder (the "1940 Act") applicable to contracts for service as
investment adviser of a registered investment company (including without
limitation the requirements for approval by the trustees of the Fund and
the shareholders of the Series), subject, however, to refuse atsuch exemptions as
may be granted by the Securities and Exchange Commission. Any
Sub-Adviser may (but need not) be affiliated with the Manager. If
different Sub-Advisers are engaged to provide Portfolio Management
Services with respect to different segments of the portfolio of the
Series, the Manager shall determine, in the manner described in the
A-1
prospectus of the Series from time to time in effect, what portion of
the assets belonging to the Series shall be managed by each Sub-Adviser.
(c) The Manager may delegate any time or timesall of its
responsibilities hereunder with respect to sell anythe provision of
Administrative Services to one or more other parties (each such party,
an "Administrator") selected by the Manager. Any Administrator may (but
need not) be affiliated with the Manager.
2. As used in this Agreement, "Portfolio Management Services" means
management of the investment and reinvestment of the assets belonging to the
Series, shares
hereunderconsisting specifically of the following:
(a) obtaining and evaluating such economic, statistical and
financial data and information and undertaking such additional
investment research as shall be necessary or advisable for any reason deemed adequatethe
management of the investment and reinvestment of the assets belonging to
the Series in accordance with the Series' investment objectives and
policies;
(b) taking such steps as are necessary to implement the
investment policies of the Series by purchasing and selling of
securities, including the placing of orders for such purchase and sale;
and
(c) regularly reporting to the Board of Trustees of the Trust.
2. SALE AND PAYMENT. Under this agreement, the following provisions shall
applyFund
with respect to the saleimplementation of and payment for Series shares:
(a) The Distributor shall have the right, as principal, to purchase Series
shares frominvestment policies of the
Trust at their net asset value and to sell such sharesSeries.
3. As used in this Agreement, "Administrative Services" means the
provision to the public against orders ThereforeFund, by or at such net asset value,
together with, in the caseexpense of the Series sharesManager, of the Loomis Sayles
Managed Bond Fund, Class J shares of the Loomis Sayles Investment
Grade Bond Fund, and Class A shares of the Loomis Sayles Aggressive
Growth Fund and the Loomis Sayles Global Technology Fund, the
applicable sales charge,following:
(a) office space in such place or places as set forth in the current prospectus (es)
of the Trust relating to the Series shares of such Series.
(b) Prior to the time of delivery of any shares by the Trust to, or on the
order of, the Distributor, the Distributor shall pay or cause to be
paid to the Trust or to its order an amount in Boston or New York
clearing house funds equal to the applicable net asset value of such
shares.
3. FEE. For its services as general distributor of the Series shares, the
Trust shall pay to the Distributor on behalf of the Series a distribution
fee at the rate and upon the terms and conditions set forth in the
Distribution Plan(s) attached as Exhibit A hereto, and as amended from time
to time. The Distribution Fee shall be accrued daily and paid monthly to
the Distributor as soon as practicable after the end of the calendar month
in which it accrues, but in any event within five business days following
the last day of the month. In addition, the Distributor shall, in the case
of Series shares of the Loomis Sayles Managed Bond Fund, Class J shares of
the Loomis Sayles Investment Grade Bond Fund, and Class A shares of the
Loomis Sayles Aggressive Growth Fund and the Loomis Sayles Global
Technology Fund, be entitled to retain any applicable sales charge, as set
forth in the current prospectus (es) of the Trust relating to Series shares
of such Series.
11
4. PUBLIC OFFERING PRICE. The public offering price shall be the net asset
value of Series shares, together with, in the case of the Loomis Sayles
Managed Bond Fund, Class J shares of the Loomis Sayles Investment Grade
Bond Fund, and Class A shares of the Loomis Sayles Aggressive Growth Fund
and the Loomis Sayles Global Technology Fund, the applicable sales charge,
as set forth in the current prospectus (es) of the Trust relating to the
Series shares of such Series. The net asset value of Series shares shall be
determined in accordance with the provisions of the agreement and
declaration of trust and by-laws of the Trust and the current prospectus
(es) of the Trust relating to the Series shares.
5. TRUST ISSUANCE OF SERIES SHARES. The delivery of Series shares shall be
made promptly by a credit to a shareholder's open account for the relevant
Series. The Trust reserves the right (a) to issue Series shares at any time
directly to the shareholders of the Series as a stock dividend or stock
split, (b) to issue to such shareholders Series shares, or rights to
subscribe to Series shares, as all or part of any dividend that may be distributed to shareholders of the Series or as all or part of any optional
or alternative dividend that may be distributed to shareholders of the
Series, and (c) to sell Series shares in accordance with any current
applicable prospectus of the Trust relating to the Series shares.
6. REPURCHASE. The Distributor shall act as agent for the Trust in connection
with the repurchase of Series shares by the Trust to the extent andagreed
upon
the terms and conditions set forth in the current applicable prospectus
(es) of the Trust relating to the Series shares, and the Trust agrees to
reimburse the Distributor, from time to time upon demand, for any
reasonable expenses incurred in connection with such repurchases of shares.
7. UNDERTAKING REGARDING SALES. The Distributor shall use reasonable efforts
to sell Series shares but does not agree hereby to sell any specific number
of Series shares and shall be free to act as distributor of the shares of
other investment companies. Series shares will be sold by the Distributor
only against orders therefor. The Distributor shall not purchase Series
shares from anyone except in accordance with Sections 2 and 6 and shall not
take "long" or "short" positions in Series shares contrary to the agreement
and declaration of trust or by-laws of the Trust.
8. COMPLIANCE. The Distributor shall conform to the Conduct Rules of the
National Association of Securities Dealers, Inc. ("NASD")Fund and the sale of
securities laws of any jurisdiction in which it sells, directly or
indirectly, any Series shares. The Distributor agrees to make timely
filings, withManager, and all necessary
office supplies, facilities and equipment;
(b) necessary executive and other personnel for managing the
Securities and Exchange Commission (the "SEC") in
Washington, D.C., the NASD and such other regulatory authorities as may be
required, of any sales literature relating to the Series and intended for
distribution to prospective investors. The Distributor also agrees to
furnish to the Trust sufficient copies of any agreements or plans it
intends to use in connection with any sales of Series shares in adequate
time for the Trust to file and clear them with the proper authorities
before they are put in use (which the Trust agrees to use its best efforts
to do as expeditiously as reasonably possible), and not to use them until
so filed and cleared.
12
9. REGISTRATION AND QUALIFICATION OF SERIES SHARES. The Trust agrees to
execute such papers and to do such acts and things as shall from time to
time be reasonably requested by the Distributor for the purpose of
qualifying and maintaining qualificationaffairs of the Series shares(exclusive of those related to and to be performed
under contract for sale
undercustodial, transfer, dividend and plan agency
services by the so-called Blue Sky Lawsentity or entities selected to perform such services and
exclusive of any state or for maintaining the
registrationmanagerial functions described in Section 4);
(c) compensation, if any, of trustees of the Trust and of the Series shares under the federal
Investment Company Act of 1940 (the "1940 Act") and the federal Securities
Act of 1933, to the end that there will be available for sale from time to
time such number of Series shares as the Distributor may reasonably be
expected to sell. The Trust shall advise the Distributor promptly of (a)
any action of the SEC or any authorities of any state or territory, of
which it may be advised, affecting registration or qualification of the
Trust or the Series shares, or rights to offer Series shares for sale, and
(b) the happening of any event, which makes untrue any statement or which
requires the making of any change in the Trust's registration statement or
its prospectus relating to the Series shares in order to make the
statements therein not misleading.
10. DISTRIBUTOR INDEPENDENT CONTRACTOR. The Distributor shall be an independent
contractor and neither the Distributor nor any of itsFund who are
directors, officers or employees as such is or shall be an employee of the Trust. The Distributor is
responsible for its own conductManager, any Sub-Adviser or any
Administrator or of any affiliated person (other than a registered
investment company) of the Manager, any Sub-Adviser or any
Administrator; and
(d) supervision and oversight of the employment, controlPortfolio Management
Services provided by each Sub-Adviser, and conductoversight of all matters
relating to compliance by the Fund with applicable laws and with the
Series' investment policies, restrictions and guidelines, if the Manager
has delegated to one or more Sub-Advisers any or all of its
agents and employees and for injuryresponsibilities hereunder with respect to such agents or employeesthe provision of Portfolio
Management Services.
A-2
4. Nothing in section 3 hereof shall require the Manager to bear,
or to others through its agents or employees. The Distributor assumes full
responsibility for its agents and employees under applicable statutes and
agrees to pay all employer taxes thereunder.
11. EXPENSES PAID BY DISTRIBUTOR. Whilereimburse the Distributor continues to act as
agentFund for:
(a) any of the Trust to obtain subscriptions for and to sell Series shares,
the Distributor shall pay the following:
(a) all expensescosts of printing (exclusiveand mailing the items
referred to in sub-section (n) of typesetting) and distributingthis section 4;
(b) any prospectus for use in offering Series shares for sale, and all
other copies of any such prospectus used by the Distributor, and
(b) all other expenses of advertising andcosts of preparing, printing and distributing
allsales literature;
(c) compensation of trustees of the Fund who are not
directors, officers or employees of the Manager, any Sub-Adviser or any
Administrator or of any affiliated person (other than a registered
investment company) of the Manager, any Sub-Adviser or any
Administrator;
(d) registration, filing and other literature or material for usefees in connection with
offeringrequirements of regulatory authorities;
(e) the charges and expenses of any entity appointed by the
Fund for custodial, paying agent, shareholder servicing and plan agent
services;
(f) charges and expenses of independent accountants retained
by the Fund;
(g) charges and expenses of any transfer agents and
registrars appointed by the Fund;
(h) brokers' commissions and issue and transfer taxes
chargeable to the Fund in connection with securities transactions to
which the Fund is a party;
(i) taxes and fees payable by the Fund to federal, state or
other governmental agencies;
(j) any cost of certificates representing shares of the
Fund;
(k) legal fees and expenses in connection with the affairs
of the Fund, including registering and qualifying its shares with
Federal and State regulatory authorities;
(l) expenses of meetings of shareholders and trustees of the
Fund;
(m) interest, including interest on borrowings by the Fund;
(n) the costs of services, including services of counsel,
required in connection with the preparation of the Fund's registration
statements and prospectuses, including amendments and revisions thereto,
annual, semiannual and other periodic reports of the Fund, and notices
and proxy solicitation material furnished to shareholders of the Fund or
regulatory authorities; and
(o) the Fund's expenses of bookkeeping, accounting, auditing
and financial reporting, including related clerical expenses.
A-3
5. All activities undertaken by the Manager or any Sub-Adviser or
Administrator pursuant to this Agreement shall at all times be subject to the
supervision and control of the Board of Trustees of the Fund, any duly
constituted committee thereof or any officer of the Fund acting pursuant to like
authority.
6. The services to be provided by the Manager and any Sub-Adviser
or Administrator hereunder are not to be deemed exclusive and the Manager and
any Sub-Adviser or Administrator shall be free to render similar services to
others, so long as its services hereunder are not impaired thereby.
7. As full compensation for all services rendered, facilities
furnished and expenses borne by the Manager hereunder, the Fund shall pay the
Manager compensation in an amount equal to (x) the annual rate of 0.75% (or such
lesser amount as the Manager may from time to time agree to receive) minus (y)
any fees payable by the Fund, with respect to the period in question, to any one
or more Sub-Advisers pursuant to any Sub-Advisory Agreements in effect with
respect to such period. Such compensation shall be payable monthly in arrears or
at such other intervals, not less frequently than quarterly, as the Board of
Trustees of the Fund may from time to time determine and specify in writing to
the Manager. The Manager hereby acknowledges that the Fund's obligation to pay
such compensation is binding only on the assets and property belonging to the
Series.
8. If the total of all ordinary business expenses of the Fund as a
whole (including investment advisory fees but excluding interest, taxes,
portfolio brokerage commissions, distribution-related expenses and extraordinary
expenses) for any fiscal year exceeds the lowest applicable percentage of
average net assets or income limitations prescribed by any state in which shares
of the Series sharesare qualified for sale.
12. INTERESTS IN AND OF DISTRIBUTOR.sale, the Manager shall pay such excess. Solely
for purposes of applying such limitations in accordance with the foregoing
sentence, the Series and the Fund shall each be deemed to be a separate fund
subject to such limitations. Should the applicable state limitation provisions
fail to specify how the average net assets of the Fund or belonging to the
Series are to be calculated, that figure shall be calculated by reference to the
average daily net assets of the Fund or the Series, as the case may be.
9. It is understood that any of the shareholders, trustees,
officers, employees and agents of the TrustFund may be a shareholder, director,
officer, employee or agent of, or be otherwise interested in, the Distributor,Manager, any
affiliated person of the Distributor,Manager, any organization in which the DistributorManager may have
an interest or any organization which may have an interest in the Distributor;Manager; that
the Distributor,Manager, any such affiliated person or any such organization may have an
interest in the Trust;Fund; and that the existence of any such dual interest shall not
affect the validity hereof or of any transactiontransactions hereunder except as otherwise
provided in the agreementAgreement and declarationDeclaration of trust or by- lawsTrust of the Trust, inFund, the limited partnership
agreement of the DistributorManager or by
specific provisionprovisions of applicable law.
13
13. EFFECTIVE DATE AND TERMINATION.10. This Agreement shall become effective as of the date of its
execution, and
(a) Unlessunless otherwise terminated, this Agreement shall
continue in effect with respectfor two years from the date of execution, and from
year to the shares of a Seriesyear thereafter so long as such continuationcontinuance is specifically
approved at least annually (i) by the Board of Trustees of the TrustFund or
by the vote of a majority of the votes which may be
cast by shareholdersoutstanding voting securities of the
Series, and (ii) by
aA-4
vote of a majority of the Board of Trusteestrustees of the TrustFund who are not interested
persons of the DistributorFund or the Trust,Manager, cast in person at a meeting called
for the purpose of voting on, such approval.approval;
(b) Thisthis Agreement may at any time be terminated on sixty
days' written notice to the DistributorManager either by vote of the Board of
Trustees of the Fund or by vote of a majority of the Trust's Board of
Trustees then in office or by the vote of a majorityoutstanding voting
securities of the votes
which may be cast by shareholders of the Series.Series;
(c) Thisthis Agreement shall automatically terminate in the
event of its assignment.assignment;
(d) Thisthis Agreement may be terminated by the DistributorManager on
ninety days' written notice to the Trust.Fund;
Termination of this Agreement pursuant to this sectionSection 10 shall be
without the payment of any penalty.
14. DEFINITIONS. For purposes of this Agreement, the following definitions
shall apply:
(a) The "vote of a majority of the votes which may be cast by shareholders
of the Series" means (1) 67% or more of the votes of the Series
present (in person or by proxy) and entitled to vote at such meeting,
if the holders of more than 50% of the outstanding shares of the
Series entitled to vote at such meeting are present; or (2) the vote
of the holders of more than 50% of the outstanding shares of the
Series entitled to vote at such meeting, whichever is less.
(b) The terms "affiliated person," "interested person" and "assignment"
shall have their respective meanings as defined in the 1940 Act
subject, however, to such exemptions as may be granted by the SEC
under the 1940 Act.
15. AMENDMENT.11. This Agreement may be amended at any time by mutual consent of
the parties, provided that such consent on the part of the SeriesFund shall behave been
approved (i) by the Board of Trustees of the Trust or by vote of a majority of the votes which may be cast by shareholdersoutstanding voting securities of the
Series and (ii) by a vote of a majority of the Board of Trusteestrustees of the TrustFund who are not
interested persons of the DistributorFund or the TrustManager, cast in person at a meeting
called for the purpose of voting on such approval.
14
16. APPLICABLE LAW AND LIABILITIES. This12. For the purpose of this Agreement, the terms "vote of a majority
of the outstanding voting securities," "interested person," "affiliated person"
and "assignment" shall have their respective meanings defined in the 1940 Act,
subject, however, to such exemptions as may be governedgranted by the Securities and
construedExchange Commission under the 1940 Act. References in this Agreement to any
assets, property or liabilities "belonging to" the Series shall have the meaning
defined in the Fund's Agreement and Declaration of Trust as amended from time to
time.
13. In the absence of willful misfeasance, bad faith or gross
negligence on the part of the Manager, or reckless disregard of its obligations
and duties hereunder, the Manager shall not be subject to any liability to the
Fund, to any shareholder of the Fund or to any other person, firm or
organization, for any act or omission in the course of, or connected with,
rendering services hereunder.
14. In accordance with the laws of The Commonwealth of Massachusetts.
All sales hereunder are to be made, and titleRegulation S-P, if non-public personal
information regarding either party's customers or consumers is disclosed to the
Series shares shall
pass,other party in Boston, Massachusetts.
17. LIMITED RECOURSE. The Distributor hereby acknowledgesconnection with this Agreement, the party receiving such
information will not disclose or use that information other than as necessary to
carry out the Trust's
obligations hereunder are binding only on the assets and property belonging
to the Trust.purposes of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
A-5
LOOMIS SAYLES FUNDS II
on behalf of its CDC IXIS International Equity Fund series
By: ________________________________
Daniel J. Fuss
President
LOOMIS SAYLES DISTRIBUTORS,Name:
Title:
IXIS ASSET MANAGEMENT ADVISORS, L.P.
By: Loomis Sayles Distributors, Incorporated,By IXIS Asset Management Distribution Corporation, its general partner
By: ________________________________
Lauren B. Pitalis
PresidentName:
Title:
A-6
NOTICE
A copy of the Agreement and Declaration of Trust establishing Loomis
Sayles Funds II (the "Trust") is on file with the Secretary of The Commonwealth
of Massachusetts, and notice is hereby given that this Agreement is executed
with respect to the Trust's CDC IXIS International Equity Fund series (the
"Series") on behalf of the Trust by officers of the Trust as officers and not
individually and that the obligations of or arising out of this Agreement are
not binding upon any of the trustees, officers or shareholders of the Trust individually but
are binding only upon the assets and property ofbelonging to the Trust.
15Series.
A-7
APPENDIX B
LOOMIS SAYLES INVESTMENT GRADE BONDCDC IXIS INTERNATIONAL EQUITY FUND
CLASS J SERVICE AND DISTRIBUTION PLAN
This Plan (the "Plan"SUB-ADVISORY AGREEMENT
(HANSBERGER GLOBAL INVESTORS, INC.)
constitutes the ServiceSub-Advisory Agreement (this "Agreement") entered into as of ___ day of
______________, 20__, by and Distribution Plan relating to
the Class J shares ofamong Loomis Sayles Investment Grade Bond Fund (the "Series"), a
series of Loomis Sayles Funds II, a Massachusetts
business trust (the "Trust"), with respect to its CDC IXIS International Equity
Fund series (the "Series"), IXIS Asset Management Advisors, L.P., a Delaware
limited partnership (the "Manager"), and Hansberger Global Investors, Inc., a
Delaware limited partnership (the "Sub-Adviser").
SectionWHEREAS, the Manager has entered into an Advisory Agreement dated
_________, 20__ (the "Advisory Agreement") with the Trust, relating to the
provision of portfolio management and administrative services to the Series;
WHEREAS, the Advisory Agreement provides that the Manager may delegate
any or all of its portfolio management responsibilities under the Advisory
Agreement to one or more sub-advisers;
WHEREAS, the Manager and the Trustees of the Trust desire to retain the
Sub-Adviser to render portfolio management services in the manner and on the
terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, the Trust, the Manager and the Sub-Adviser agree as
follows:
1. Sub-Advisory Services.
a. The Trust,Sub-Adviser shall, subject to the supervision of the
Manager and of any administrator appointed by the Manager (the
"Administrator"), manage the investment and reinvestment of the assets
of the Series, and have the authority on behalf of the Series will pay to Loomis Sayles
Distributors, L.P., a Delaware limited partnership which acts as the Principal
Distributorvote
and shall vote all proxies and exercise all other rights of the Series' shares, or such other entitySeries
as shalla security holder of companies in which the Series from time to time
actinvests. The Sub-Adviser shall manage the Series in conformity with (1)
the investment objective, policies and restrictions of the Series set
forth in the Trust's prospectus and statement of additional information
relating to the Series, (2) any additional policies or guidelines
established by the Manager or by the Trust's trustees that have been
furnished in writing to the Sub-Adviser and (3) the provisions of the
Internal Revenue Code as amended (the "Code") applicable to "regulated
investment companies" (as defined in Section 851 of the Code), all as
from time to time in effect (collectively, the "Policies"), and with all
applicable provisions of law, including without limitation all
applicable provisions of the Investment Company Act of 1940 as amended
(the "1940 Act") and the rules and regulations thereunder. Subject to
the foregoing, the Sub-Adviser is authorized, in its discretion and
without prior consultation with the Manager, to buy, sell, lend and
otherwise trade in any stocks, bonds and other securities and investment
instruments on behalf of the Series,
B-1
without regard to the length of time the securities have been held and
the resulting rate of portfolio turnover or any tax considerations; and
the majority or the whole of the Series may be invested in such
proportions of stocks, bonds, other securities or investment
instruments, or cash, as the Principal DistributorSub-Adviser shall determine.
b. The Sub-Adviser shall furnish the Manager and the
Administrator monthly, quarterly and annual reports concerning portfolio
transactions and performance of the Series in such form as may be
mutually agreed upon, and agrees to review the Series and discuss the
management of it. The Sub-Adviser shall permit all books and records
with respect to the Series to be inspected and audited by the Manager
and the Administrator at all reasonable times during normal business
hours, upon reasonable notice. The Sub-Adviser shall also provide the
Manager with such other information and reports as may reasonably be
requested by the Manager from time to time, including without limitation
all material requested by or required to be delivered to the Trustees of
the Trust.
c. The Sub-Adviser shall provide to the Manager a copy of
the Sub-Adviser's Form ADV as filed with the Securities and Exchange
Commission and a list of the persons whom the Sub-Adviser wishes to have
authorized to give written and/or oral instructions to custodians of
assets of the Series.
2. Obligations of the Manager.
a. The Manager shall provide (or cause the Series'
Custodian (as defined in Section 3 hereof) to provide) timely
information to the Sub-Adviser regarding such matters as the composition
of assets of the Series, cash requirements and cash available for
investment in the Series, and all other information as may be reasonably
necessary for the Sub-Adviser to perform its responsibilities hereunder.
b. The Manager has furnished the Sub-Adviser a copy of the
prospectus and statement of additional information of the Series and
agrees during the continuance of this Agreement to furnish the
Sub-Adviser copies of any revisions or supplements thereto at, or, if
practicable, before the time the revisions or supplements become
effective. The Manager agrees to furnish the Sub-Adviser with minutes of
meetings of the trustees of the Trust applicable to the Series to the
extent they may affect the duties of the Sub-Adviser, and with copies of
any financial statements or reports made by the Series to its
shareholders, and any further materials or information which the
Sub-Adviser may reasonably request to enable it to perform its functions
under this Agreement.
3. Custodian. The Manager shall provide the Sub-Adviser with a copy
of the Series' sharesagreement with the custodian designated to hold the assets of the
Series (the "Distributor""Custodian") and any modifications thereto (the "Custody
Agreement"), copies of such modifications to be provided to the Sub-Adviser a
fee (the "Service Fee"reasonable time in advance of the effectiveness of such modifications. The
assets of the Series shall be maintained in the custody of the Custodian
identified in, and in accordance with the terms and conditions of, the Custody
Agreement (or any sub-custodian properly appointed as provided in the Custody
Agreement). The Sub-Adviser shall have no liability for the acts or omissions of
the Custodian, unless such act or omission is taken solely in reliance upon
instruction given to the Custodian by a representative of the Sub-Adviser
properly authorized to give such instruction under the Custody Agreement. Any
assets added to the Series shall be delivered directly to the Custodian.
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4. Proprietary Rights. The Manager agrees and acknowledges that the
Sub-Adviser is the sole owner of the name "Hansberger Global Investors, Inc."
and that all use of any designation consisting in whole or part of "Hansberger
Global Investors, Inc." under this Agreement shall inure to the benefit of the
Sub-Adviser. The Manager on its own behalf and on behalf of the Series agrees
not to use any such designation in any advertisement or sales literature or
other materials promoting the Series, except with the prior written consent of
the Sub-Adviser. Without the prior written consent of the Sub-Adviser, the
Manager shall not, and the Manager shall use its best efforts to cause the
Series not to, make representations regarding the Sub-Adviser in any disclosure
document, advertisement or sales literature or other materials relating to the
Series. Upon termination of this Agreement for any reason, the Manager shall
cease, and the Manager shall use its best efforts to cause the Series to cease,
all use of any such designation as soon as reasonably practicable.
5. Expenses. Except for expenses specifically assumed or agreed to
be paid by the Sub-Adviser pursuant hereto, the Sub-Adviser shall not be liable
for any organizational, operational or business expenses of the Manager or the
Trust including, without limitation, (a) interest and taxes, (b) brokerage
commissions and other costs in connection with the purchase or sale of
securities or other investment instruments with respect to the Series, and (c)
custodian fees and expenses. Any reimbursement of advisory fees required by any
expense limitation provision of any law shall be the sole responsibility of the
Manager. The Manager and the Sub-Adviser shall not be considered as partners or
participants in a joint venture. The Sub-Adviser will pay its own expenses
incurred in furnishing the services to be provided by it pursuant to this
Agreement. Neither the Sub-Adviser nor any affiliated person thereof shall be
entitled to any compensation from the Manager or the Trust with respect to
service by any affiliated person of the Sub-Adviser as an officer or trustee of
the Trust (other than the compensation to the Sub-Adviser payable by the Manager
pursuant to Section 7 hereof).
6. Purchase and Sale of Assets. The Sub-Adviser shall place all
orders for the purchase and sale of securities for the Series with brokers or
dealers selected by the Sub-Adviser, which may include brokers or dealers
affiliated with the Sub-Adviser, provided such orders comply with Rule 17e-1
under the 1940 Act in all respects. To the extent consistent with applicable
law, purchase or sell orders for the Series may be aggregated with
contemporaneous purchase or sell orders of other clients of the Sub-Adviser. The
Sub-Adviser shall use its best efforts to obtain execution of transactions for
the Series at prices which are advantageous to the Series and at commission
rates that are reasonable in relation to the benefits received. However, the
Sub-Adviser may select brokers or dealers on the basis that they provide
brokerage, research or other services or products to the Series and/or other
accounts serviced by the Sub-Adviser. To the extent consistent with applicable
law, the Sub-Adviser may pay a broker or dealer an amount of commission for
effecting a securities transaction in excess of the amount of commission or
dealer spread another broker or dealer would have charged for effecting that
transaction if the Sub-Adviser determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
products and/or services provided by such broker or dealer. This determination,
with respect to brokerage and research services or products, may be viewed in
terms of either that particular transaction or the overall responsibilities
which the Sub-Adviser and its affiliates have with respect to the Series or to
accounts over which they exercise investment discretion. Not all such services
or products need be used by the Sub-Adviser in managing the Series.
B-3
To the extent permitted by applicable law, and in all instances subject
to the foregoing policy of best execution, the Sub-Adviser may allocate
brokerage transactions to broker-dealers (including affiliates of IXIS Asset
Management Distributors, L.P.) that have entered into arrangements in which the
broker-dealer allocates a portion of the commissions paid by a fund toward the
reduction of that fund's expenses, subject to the policy of best execution.
7. Compensation of the Sub-Adviser. As full compensation
for all services rendered, facilities furnished and expenses borne by the
Sub-Adviser hereunder, the Sub-Adviser shall be paid at anthe annual rate not to exceed 0.25%of 0.45%
of the first $200 million of the average daily net assets of the Series and
0.40% of the Series' average daily net assets attributable to Class J shares. Subject toin excess of $200 million (or such
limit
and subject tolesser amount as the provisions of Section 7 hereof, the Service Fee shall be as
approvedSub-Adviser may from time to time agree to receive). Such
compensation shall be paid by (a) the Trustees of the Trust (except to the extent that the Trust,
the Sub-Adviser and (b)the Independent Trustees of the Trust. The Service FeeManager otherwise agree in writing from time to time).
Such compensation shall be accrued daily and
paidpayable monthly in arrears or at such other
intervals, not less frequently than quarterly, as the Trustees shall determine. The
Distributor may pay all or any portion ofManager is paid by the
Service Fee to securities dealers
or other organizations (including, but not limited to, any affiliate of the
Distributor) as service feesSeries pursuant to agreements with such organizations for
providing personal services to investors in shares of the Series and/orAdvisory Agreement.
8. Non-Exclusivity. The Manager and the
maintenance of shareholder accounts. All payments under this Section 1 are
intended to qualify as "service fees" as defined in the Conduct Rules of the
National Association of Securities Dealers, Inc. (the "NASD Rules").
Section 2. The Trust on behalf of the
Series will pay toagree that the Distributor,
a fee (the "Distribution Fee") at an annual rateservices of the Sub-Adviser are not to exceed 0.50% ofbe deemed exclusive
and that the Series' average daily net assets attributableSub-Adviser and its affiliates are free to Class J shares. Subjectact as investment
manager and provide other services to such
limitvarious investment companies and subject toother
managed accounts, except as the provisions of Section 7 hereof,Sub-Adviser and the Distribution Fee
shall be as approvedManager or the Administrator
may otherwise agree from time to time in writing before or after the date
hereof. This Agreement shall not in any way limit or restrict the Sub-Adviser or
any of its directors, officers, employees or agents from buying, selling or
trading any securities or other investment instruments for its or their own
account or for the account of others for whom it or they may be acting, provided
that such activities do not adversely affect or otherwise impair the performance
by (a) the TrusteesSub-Adviser of its duties and obligations under this Agreement. The
Manager and the Trust recognize and (b)agree that the Independent TrusteesSub-Adviser may provide
advice to or take action with respect to other clients, which advice or action,
including the timing and nature of the Trust. The Distribution Fee shallsuch action, may differ from or be accrued
daily and paid monthlyidentical
to advice given or at such other intervals, as the Trustees shall
determine. The Distributor may pay all or any portion of the Distribution Fee to
securities dealers or other organizations (including, but not limited to, any
affiliate of the Distributor) as commissions, asset-based sales charges or other
compensationaction taken with respect to the sale of sharesSeries. The Sub-Adviser
shall for all purposes hereof be deemed to be an independent contractor and
shall, unless otherwise provided or authorized, have no authority to act for or
represent the Trust or the Manager in any way or otherwise be deemed an agent of
the Series andor the Manager.
9. Liability. Except as may retain
allotherwise be provided by the 1940 Act
or other federal securities laws, neither the Sub-Adviser nor any of its
officers, directors, partners, employees or agents (the "Indemnified Parties")
shall be subject to any liability to the Manager, the Trust, the Series or any
portionshareholder of the Distribution Fee as compensationSeries for any error of judgment, any mistake of law or any
loss arising out of any investment or other act or omission in the Distributor's
services as principal underwritercourse of,
connected with, or arising out of any service to be rendered under this
Agreement, except by reason of willful misfeasance, bad faith or gross
negligence in the performance of the sharesSub-Adviser's duties or by reason of
reckless disregard by the Sub-Adviser of its obligations and duties hereunder.
The Manager shall hold harmless and indemnify the Sub-Adviser for any loss,
liability, cost, damage or expense (including reasonable attorneys fees and
costs) arising from any claim or demand by any past or present shareholder of
the Series. All paymentsSeries that is not based upon the obligations of the Sub-Adviser under this
Section 2 are intended to qualifyAgreement.
B-4
The Manager acknowledges and agrees that the Sub-Adviser makes no
representation or warranty, expressed or implied, that any level of performance
or investment results will be achieved by the Series or that the Series will
perform comparably with any standard or index, including other clients of the
Sub-Adviser, whether public or private.
10. Effective Date and Termination. This Agreement shall become
effective as "asset-based sales charges" as
defined inof the NASD Rules.
Section 3. This Plandate of its execution, and
a. unless otherwise terminated, this Agreement shall
continue in effect for a periodtwo years from the date of more than oneexecution, and from
year after February 1, 1999 onlyto year thereafter so long as such continuance is specifically
approved at least annually (i) by votesthe Board of the majority (or whatever other
percentage may, from time to time, be required by Section 12(b) of the
Investment Company Act of 1940 (the "Act") or the rules and regulations there
under) of both (a) the Trustees of the Trust and (b) the Independent Trusteesor
by vote of a majority of the outstanding voting securities of the
Series, and (ii) by vote of a majority of the trustees of the Trust who
are not interested persons of the Trust, the Manager or the Sub-Adviser,
cast in person at a meeting called for the purpose of voting on such
approval;
b. this Plan or such agreement.
16
Section 4. Any person authorized to direct the disposition of monies paid
or payable by the Trust pursuant to this Plan orAgreement may at any related agreement shall
providetime be terminated on sixty
days' written notice to the Sub-Adviser either by vote of the Board of
Trustees of the Trust and the Trustees shall review, at least
quarterly, a written report of the amounts so expended and the purposes for
which such expenditures were made.
Section 5. This Plan may be terminated at any time by vote of a majority of
the Independent Trustees, or by vote of a majority of the outstanding sharesvoting
securities of the Series.
Section 6. All agreements with any person relating to implementationSeries;
c. this Agreement shall automatically terminate in the
event of its assignment or upon the termination of the Advisory
Agreement; and
d. this Plan shall be in writing, and any agreement related to this Plan shall
provide:
A. That such agreementAgreement may be terminated by the Sub-Adviser on
ninety days' written notice to the Manager and the Trust, or by the
Manager on ninety days' written notice to the Sub-Adviser.
Termination of this Agreement pursuant to this Section 10 shall be
without the payment of any penalty.
11. Amendment. This Agreement may be amended at any time without payment of
any penalty, by vote of a majoritymutual
consent of the Independent Trustees orManager and the Sub-Adviser, provided that, if required by law,
such amendment shall also have been approved by vote of a majority of the
outstanding sharesvoting securities of the Series on not
more than 60 days' written notice to any other party to the agreement;
and B. That such agreement shall terminate automatically in the event of its
assignment.
Section 7. This Plan may not be amended to increase materially the amount
of expenses permitted pursuant to Section 1 hereof without approval by a vote of
at least a majority of the
outstanding shares of the Series, and all material
amendments of this Plan shall be approved in the manner provided for
continuation of this Plan in Section 2.
Section 8. As used in this Plan, (a) the term "Independent Trustees" shall
mean those Trusteestrustees of the Trust who are not interested persons of the Trust, and have no directthe Manager
or indirect financial interestthe Sub-Adviser, cast in person at a meeting called for the operationpurpose of voting
on such approval.
12. Certain Definitions. For the purpose of this Plan
or any agreements related to it, and (b)Agreement, the
terms "assignment" and "interested
person" shall have the respective meanings specified in the Act and the rules
and regulations thereunder, and the term "majority"vote of a majority of the outstanding shares ofvoting securities," "interested
person," "affiliated person" and "assignment" shall have their respective
meanings defined in the Series" shall mean the lesser of the 67% or the 50% voting requirements
specified in clauses (A) and (B), respectively, of the third sentence of Section
2(a)(42) of the1940 Act, all subject, however, to such exemptions as may be
granted by the Securities and Exchange Commission.
17Commission under the 1940 Act.
B-5
13. General.
a. The Sub-Adviser may perform its services through any
employee, officer or agent of the Sub-Adviser, and the Manager shall not
be entitled to the advice, recommendation or judgment of any specific
person; provided, however, that the persons identified in the prospectus
of the Series shall perform the day-to-day portfolio management duties
described therein until the Sub-Adviser notifies the Manager that one or
more other employees, officers or agents of the Sub-Adviser, identified
in such notice, shall assume such duties as of a specific date.
b. If any term or provision of this Agreement or the
application thereof to any person or circumstances is held to be invalid
or unenforceable to any extent, the remainder of this Agreement or the
application of such provision to other persons or circumstances shall
not be affected thereby and shall be enforced to the fullest extent
permitted by law.
c. In accordance with Regulation S-P, if non-public
personal information regarding either party's customers or consumers is
disclosed to the other party in connection with this Agreement, the
party receiving such information will not disclose or use that
information other than as necessary to carry out the purposes of this
Agreement.
d. This Agreement shall be governed by and interpreted in
accordance with the laws of the Commonwealth of Massachusetts.
B-6
IXIS Asset Management Advisors, L.P.
By IXIS Asset Management Distribution Corporation, its general partner
By: ________________________________
Name:
Title:
Hansberger Global Investors, Inc.
By: ________________________________
Name:
Title:
LOOMIS SAYLES FUNDS II,
on behalf of its CDC IXIS International Equity Fund series
By: ________________________________
Name:
Title:
B-7
NOTICE
A copy of the Agreement and Declaration of Trust establishing Loomis
Sayles Funds II (the "Trust") is on file with the Secretary of The Commonwealth
of Massachusetts, and notice is hereby given that this Agreement is executed
with respect to the Trust's CDC IXIS International Equity Fund series (the
"Series") on behalf of the Trust by officers of the Trust as officers and not
individually and that the obligations of or arising out of this Agreement are
not binding upon any of the trustees, officers or shareholders individually but
are binding only upon the assets and property belonging to the Series.
B-8
APPENDIX C
Subject to policies established by the Board of Trustees, Hansberger is
responsible for decisions to buy and sell securities for the Fund and for the
placement of the Fund's investment business and the negotiation of the
commissions to be paid on such transactions. It is the policy of Hansberger to
seek the best execution at the best security price available with respect to
each transaction, in light of the overall quality of brokerage and research
services provided to Hansberger or the Fund. In over-the-counter transactions,
orders are placed directly with a principal market maker unless it is believed
that better price and execution can be obtained using a broker. In determining
the abilities of a broker or dealer to obtain best execution, Hansberger
considers relevant factors including, but not limited to: the ability and
willingness of the broker or dealer to facilitate the Fund's portfolio
transactions by participating therein for its own account; speed, efficiency and
confidentiality; familiarity with the market for a particular security; and the
reputation and perceived soundness of the broker. The best price to the Fund
means the best net price without regard to the mix between purchase or sale
price and commissions, if any.
In selecting broker-dealers and in negotiating commissions, Hansberger
considers a variety of factors, including best price and execution, the full
range of brokerage services provided by the broker, as well as its capital
strength and stability, and the quality of research and research services
provided by the broker.
Subject to best execution, Hansberger may cause the Fund to pay a broker
greater commissions than another broker might charge for providing the same
brokerage and research services. Hansberger believes it is important to its
investment decision-making process to have access to independent research.
Higher commissions will not be paid by the Fund unless Hansberger determines in
good faith that such payment is reasonable in relation to the value of the
brokerage or research services provided by such broker or dealer, viewed in
terms of that particular transaction or Hansberger's overall responsibilities
with respect to the accounts over which it exercises investment discretion.
Generally, research services provided by brokers may include information
on the economy, industries, groups of securities, individual companies,
statistical information, accounting and tax law interpretations, political
developments, legal developments affecting portfolio securities, technical
market action, pricing and appraisal services, credit analysis, risk measurement
analysis, performance analysis, and analysis of corporate responsibility issues.
Such research services are primarily in the form of written reports, telephone
contacts, and personal meetings with security analysts. In addition, such
research services may be provided in the form of access to various
computer-generated data, computer hardware and software, and meetings arranged
with corporate and industry spokespersons, economists, academicians, and
government representatives. In some cases, research services are generated by
third parties but are provided to Hansberger by or through brokers. Such brokers
may pay for all or a portion of computer hardware and software costs relating to
the pricing of securities.
Where Hansberger itself receives both administrative benefits and
research and brokerage services from the services provided by brokers, it makes
a good faith allocation between the administrative benefits and the research and
brokerage services, and will pay for any administrative benefits with cash. In
making good faith allocations of costs between
C-1
administrative benefits and research and brokerage services, a conflict of
interest may exist by reason of Hansberger's allocation of the costs of such
benefits and services between those that primarily benefit Hansberger and those
that primarily benefit the Fund and other advisory clients.
Twice a year, Hansberger, through a committee of its securities
analysts, will consider the amount and nature of research and research services
provided by brokers, as well as the extent to which such services are relied
upon, and attempt to allocate a portion of the brokerage business of its Fund
and other advisory clients on the basis of that consideration. In addition,
brokers may suggest a level of business they would like to receive in order to
continue to provide such services. The actual brokerage business received by a
broker may be more or less than the suggested allocations, depending upon
Hansberger's evaluation of all applicable considerations, including but not
limited to Hansberger's best execution undertaking.
Hansberger may direct the purchase of securities on behalf of the Fund
and other advisory clients in secondary market transactions, in public offerings
directly from an underwriter, or in privately negotiated transactions with an
issuer. When Hansberger believes the circumstances so warrant, securities
purchased in public offerings may be resold shortly after acquisition in the
immediate aftermarket for the security in order to take advantage of price
appreciation from the public offering price or for other reasons. Short-term
trading of securities acquired in public offerings, or otherwise, may result in
higher portfolio turnover and associated brokerage expenses.
Commissions paid in connection with certain non-U.S. stock transactions
may be higher than negotiated commissions on U.S. stock transactions. Non-U.S.
stock exchanges and brokers may be subject to less government supervision and
regulation than U.S. exchanges and brokers. In addition, non-U.S. security
settlements may in some instances be subject to delays and related
administrative uncertainties.
C-2
APPENDIX D
OUTSTANDING SHARES
As of June 10,October 7, 2004, the total number of Class J shares outstanding for each class of
the Fund outstanding
was approximately ______________.413,153.86 for Class A; 81,817.30 for Class B;
4,639.08 for Class C; and 4,466,092.16 for Class Y. The total number of shares
outstanding as of this date was approximately 4,965,702.39.
SIGNIFICANT SHAREHOLDERS
As of June 10,October 7, 2004, the following persons owned of record or beneficially
more than 5% of the Class Jnoted class of shares of the Fund:
- --------- -------------------------------------- --------------- ---------------------
Class Name and Shares Percentage of
Address of Outstanding Shares
Owner* Owned of Class Owned
- --------- -------------------------------------- --------------- ---------------------
Y Charles Schwab & Co., Inc. 1,589,959.237 35.64%
- ---------------------------------------------------- ----------------------- ---------------------------
NAME AND PERCENTAGE OF
ADDRESS OF SHARES OUTSTANDING SHARES
OWNER* OWNED OF CLASS OWNED--------- -------------------------------------- --------------- ---------------------
Attn: Mutual Fund Department
- ---------------------------------------------------- ----------------------- ------------------------------------ -------------------------------------- --------------- ---------------------
101 Montgomery Street
- ---------------------------------------------------- ----------------------- ------------------------------------ -------------------------------------- --------------- ---------------------
San Francisco, California 94104-4122
- ---------------------------------------------------- ----------------------- ---------------------------
- ---------------------------------------------------- ----------------------- ---------------------------
- ---------------------------------------------------- ----------------------- ---------------------------
- ---------------------------------------------------- ----------------------- ---------------------------
- ---------------------------------------------------- ----------------------- ---------------------------
- ---------------------------------------------------- ----------------------- ---------------------------
- ---------------------------------------------------- ----------------------- ---------------------------
- ---------------------------------------------------- ----------------------- ---------------------------
- ---------------------------------------------------- ----------------------- ---------------------------
- ---------------------------------------------------- ----------------------- ---------------------------
- ---------------------------------------------------- ----------------------- ---------------------------
- ---------------------------------------------------- ----------------------- ---------------------------
- ---------------------------------------------------- ----------------------- ------------------------------------ -------------------------------------- --------------- ---------------------
*Such* Such ownership may be beneficially held by individuals or entities other than
the owner listed.
To the extent that any listed shareholder beneficially owns
more than 25% of the Fund, it may be deemed to "control" the Fund within the
meaning of the Investment Company Act of 1940, as amended.
As of June 10,October 7, 2004, the Trustees and the executive officers of the Trust, as
a group and individually, owned less than 1% of the Class Jany class of shares of the Fund.
C-1
Loomis Sayles Investment Grade Bond FundD-1
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD TODAY
Your Proxy Vote is important!
And now you can Vote your Proxy on the
PHONE or the INTERNET.
It saves Time! Telephone and Internet
voting is instantaneous - Class J Shares
(The "Fund")24 hours a
day.
It's Easy! Just follow these simple
steps:
1. Read your proxy statement
and have it at hand.
2. Call toll-free 1-866-241-6192
or go to website:
https://vote.proxy-direct.com
3. Follow the recorded or on-screen
directions.
4. Do not mail your Proxy Card
when you vote by phone or
Internet.
Please detach at perforation before mailing.
PROXY CARD CDC IXIS INTERNATIONAL EQUITY FUND PROXY CARD
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 5, 2004JANUARY 6, 2005
The undersigned shareholder hereby appoints each of John E. Pelletier, Russell Kane and Coleen Downs
Dinneen Russell Kane and Nicholas H. Palmerino aseach of them separately, proxies of the
undersigned, with full power of substitution to
each, and hereby authorizes them to represent and to vote, as designated on the
undersigned and
votereverse side, at the Special Meeting of Shareholders of the Loomis Sayles Investment
Grade BondCDC IXIS International
Equity Fund - Class J Shares to be held(the "Fund"), on August 5, 2004January 6, 2005 at 2:00 p.m. Eastern time at the offices of the Fund's administrator, CDC IXIS Asset
Management Services, Inc., at 399 Boylston Street, Boston, Massachusetts 02116,Time, and at any
adjournments thereof, all of the shares of the Fund that the undersigned would
be entitled to vote if personally present.
Your vote acknowledges receipt
of the Notice of Special Meeting and the accompanying Proxy Statement.
PLEASE VOTE YOUR PROXY TODAY BY COMPLETING, SIGNING, DATING AND RETURNING THIS
PROXY CARD. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED INVIA THE MANNER
DIRECTED HEREIN BYTELEPHONE: 1-866-241-6192
VOTE VIA THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR THE PROPOSALS.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting. THE TRUSTEES RECOMMEND A VOTE FOR
PROPOSALS 1 AND 2.
Vote on Proposals (check appropriate boxes below)
1. Approval of a Distribution Agreement between the Trust, on behalf of the
Class J Shares of the Fund, and Loomis Sayles Distributors, L.P. for the
period from November 1, 2003 through April 23, 2004, as well as the release
of escrowed fees payable thereunder.
FOR AGAINST ABSTAIN
2. Approval of a Service and Distribution Plan relating to Class J shares of
the Fund, as well as the release of escrowed fees payable thereunder.
FOR AGAINST ABSTAININTERNET:
https://vote.proxy-direct.com
999 99999 999 999
Note: Please sign exactly as your name
appears on this proxy card. All joint
owners should sign. When signing as
executor, administrator, attorney,
trustee or guardian or as custodian for
a minor, please give full title as such.
If a corporation, please sign in full
corporate name and indicate the signer's
office. If a partner, sign in the
partnership name.
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Signature
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Signature of joint owner, if any
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Date Signature Date
(Joint Owners)CIE_14649
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD TODAY
Please detach at perforation before mailing.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR EACH PROPOSAL.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting and any adjournments thereof. The
Trustees recommend a vote FOR each proposal.
PLEASE MARK YOUR VOTES AS IN THIS SAMPLE. EXAMPLE:
FOR AGAINST ABSTAIN
1. To approve a new advisory agreement
for CDC IXIS International Equity
Fund between Loomis Sayles Funds II and
CDC IXIS Asset Management Advisers, L.P. [ ] [ ] [ ]
2.
To approve a new subadvisory agreement
for CDC IXIS International Equity
Fund among Loomis Sayles Funds II,
CDC IXIS Asset Management Advisers,
L.P. and Hansberger Global Investors,
Inc. [ ] [ ] [ ]
CIE_14649
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE.