JOHN HANCOCK FUNDS II SUBADVISORY AGREEMENT
Exhibit 99.(d)(13)
XXXX XXXXXXX FUNDS II
AGREEMENT made this 14th day of December, 2017, between Xxxx Xxxxxxx Advisers, LLC, a Delaware limited liability company (the “Adviser”), and Redwood Investments, LLC (the “Subadviser’’). In consideration of the mutual covenants contained herein, the parties agree as follows:
I. |
APPOINTMENT OF SUBADVISER
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The Subadviser undertakes to act as the investment subadviser to and, subject to the supervision of the Trustees of Xxxx Xxxxxxx Funds II (the “Trust”) and the terms of this Agreement, to manage the investment and reinvestment of the assets of the series specified in Appendix A to this Agreement as it shall be amended by the Adviser and the Subadviser from time to time (the “Portfolios”). The Subadviser will be an independent contractor and will have no authority to act for or represent the Trust or Adviser in any way or otherwise be deemed an agent unless expressly authorized in this Agreement or in another writing by the Trust and Adviser.
2. |
SERVICES TO BE RENDERED BY THE SUBADVISER TO THE TRUST
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a. |
Subject always to the direction and control of the Trustees of the Trust, the Subadviser will manage the investments and determine the composition of the assets of the Portfolios in accordance with the Portfolios’ investment objectives, investment policies and limitations set forth in the Trust’s registration statement, as amended, or as subsequently amended in writing. In fulfilling its obligations to manage the investments and reinvestments of the assets of the Portfolios, the Subadviser will:
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i. |
obtain and evaluate pertinent economic, statistical, financial and other information affecting the economy generally and individual companies or industries the securities of which are included in the Portfolios or are under consideration for inclusion in the Portfolios;
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ii. |
formulate and implement a continuous investment program for each Portfolio consistent with the investment objectives and related investment policies and limitations for each such Portfolio as described in the Trust’s registration statement, as amended, or as subsequently amended in writing;
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iii. |
take whatever steps are necessary to implement these investment programs by the purchase and sale of securities (including the placing of orders for such purchases and sales), entering into derivative transactions and by managing all cash in the Portfolios;
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iv. |
manage required collateral levels in connection with the investment and reinvestment of the assets of the Portfolios. The Subadviser will provide instructions to the custodian for the Portfolios (the “Custodian”) to post collateral and to call for collateral from counterparties, as necessary, and will arrange for the transmission to the Custodian on a daily basis such confirmation, trade tickets, and other identifying information (including, but not limited to, Cusip, Sedol, or other numbers that identify the securities to be purchased or sold on behalf of the Portfolios) as may be reasonably necessary to enable the Custodian to perform its administrative and recordkeeping responsibilities with respect to each Portfolio. The Subadviser will provide reports with respect to its collateral management activities as requested by the Adviser;
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v. |
regularly report to the Trustees of the Trust with respect to the implementation of these investment programs; and
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vi. |
provide reasonable assistance with and make recommendations for the fair value of securities held by the Portfolios for which market quotations are not readily available or which may be identified for review from time to time by either the Trust or the Subadviser, it being understood that the determination of the fair value of securities held by the Portfolios shall ultimately be the responsibility of the Adviser.
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b. |
The Subadviser, at its expense, will furnish (i) all necessary investment and management facilities, including salaries of personnel required for it to execute its duties faithfully, and (ii) administrative facilities, including bookkeeping, clerical personnel and equipment necessary for the efficient conduct of the investment affairs of the Portfolios (excluding determination of net asset value and fund accounting services).
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c. |
The Subadviser will select brokers, dealers, futures commission merchants and other counterparties to effect all transactions for the Portfolios, including without limitation, with respect to transactions in securities, derivatives, foreign currency exchange, commodities and/or any other investments. The Subadviser will place all orders with brokers, dealers, counterparties or issuers, and will negotiate brokerage commissions, spreads and other financial and non-financial terms, as applicable. The Subadviser will always seek the most favorable price and best execution in the circumstances in all transactions, it being understood that in making assessments of price and execution, the Subadviser may take into account such factors as the Subadviser deems appropriate, including without limitation one or more of the following: the experience and skill of the securities traders employed by a broker or dealer, the broker’s or dealer’s financial responsibility and administrative efficiency, the size of the order, the nature of the market for the security, the timing of the transaction and the difficulty of execution. Subject to the foregoing, the Subadviser is directed at all times to seek to execute transactions for the Portfolios in accordance with its trading policies, as disclosed by the Subadviser to the Portfolio in writing from time to time, but in all cases subject to policies and practices established by the Portfolio and described in the Trust’s registration statement. Notwithstanding the foregoing, the Subadviser may pay a broker-dealer that provides research and brokerage services a higher spread or commission for a particular transaction than otherwise might have been charged by another broker-dealer to the extent permitted by Section 28(e) of the Securities Exchange Act of 1934 and by the Trust’s registration statement, if the Subadviser determines that the higher spread or commission is reasonable in relation to the value of the brokerage and research services that such broker-dealer provides, viewed in terms of either the particular transaction or the Subadviser’s overall responsibilities with respect to accounts managed by the Subadviser. The Subadviser may use for the benefit of the Subadviser’s other clients, or make available to companies affiliated with the Subadviser or to its directors for the benefit of its clients, any such brokerage and research services that the Subadviser obtains from brokers or dealers.
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d. |
On occasions when the Subadviser deems the purchase or sale of a security to be in the best interest of the Portfolios as well as other clients of the Subadviser, the Subadviser to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities to be purchased or sold to attempt to obtain a more favorable price or lower brokerage commissions and efficient execution. In such event, allocation of the securities so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Subadviser in the manner the Subadviser considers to be the most equitable and consistent with its fiduciary obligations to the Portfolios and to its other clients.
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e. |
The Subadviser will maintain all accounts, books and records with respect to the Portfolios as are required of an investment adviser of a registered investment company pursuant to the Investment Company Act of 1940, as amended (the “Investment Company Act”), and Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”), and the rules thereunder.
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f. |
The Subadviser shall vote proxies relating to the Portfolios’ investment securities in accordance with the Trust’s proxy voting policies and procedures, which provide that the Subadviser shall vote all proxies relating to securities held by the Portfolios and, subject to the Trust’s policies and procedures, shall use proxy voting policies and procedures adopted by the Subadviser in conformance with Rule 206(4)-6 under the Investment Advisers Act. Upon request, the Subadviser shall review its proxy voting activities on a periodic basis with the Trustees.
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g. |
The Subadviser shall act on behalf of the Trust with respect to any reorganizations, exchange offers and other voluntary corporate actions (each a “Corporate Action”) with respect to securities held by a Portfolio. Subject to any specific instructions provided in writing to the Subadviser by the Trust or the Adviser, the Subadviser shall use its good faith judgment in a manner which it reasonably believes best serves the interests of a Portfolio in taking or abstaining from taking action in connection with any such Corporate Action. The Subadviser’s obligations in the previous sentence are contingent upon its timely receipt of all relevant materials relating to such Corporate Action. Upon request, the Subadviser shall review on a periodic basis with the Trustees Corporate Actions taken with respect to securities held by a Portfolio.
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h. |
In making investment decisions, the Subadviser shall exercise its discretion upon the information from time to time available to it. The Subadviser shall act in compliance with all applicable laws, regulations and fiduciary duties relating to xxxxxxx xxxxxxx or insider dealing while in possession of material non-public or inside information.
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3. |
COMPENSATION OF SUBADVISER
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For the services provided to the Portfolios, the Adviser will pay the Subadviser with respect to each Portfolio the compensation specified in Appendix A to this Agreement payable monthly in arrears on the last business day of each month. The fee will be appropriately prorated to reflect any portion of a calendar month that this Agreement is not in effect between the parties. The Adviser is solely responsible for the payment of fees to the Subadviser, and the Subadviser agrees to seek payment of its fees solely from the Adviser. Neither the Trust nor the Portfolios shall have liability for the Subadviser’s fee hereunder.
4. |
LIABILITY OF SUBADVISER
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Neither the Subadviser nor any of its directors, officers or employees shall be liable to the Adviser or the Trust for any loss suffered by the Adviser or Portfolios resulting from its acts or omissions as Subadviser to the Portfolios, except for losses resulting from willful misfeasance, bad faith, or gross negligence in the performance of, or from the reckless disregard of, the duties of the Subadviser or any of its directors, officers or employees.
5. |
SUPPLEMENTAL ARRANGEMENTS
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The Subadviser may delegate to any other one or more companies that the Subadviser controls, is controlled by, or is under common control with, or to specified employees of any such companies, certain of the Subadviser’s duties under this Agreement, provided in each case the Subadviser will notify the Adviser in writing before entering into such arrangements, the Subadviser will supervise the activities of each such entity and employees thereof, that such delegation will not relieve the Subadviser of any of its duties or obligations under this Agreement and that any such arrangements are entered into in accordance with all applicable requirements of the Investment Company Act and U.S. Securities and Exchange Commission guidance thereunder. The Subadviser shall be responsible for any acts or omissions of such other persons.
6. |
REGULATION
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The Subadviser shall submit to all regulatory and administrative bodies having jurisdiction over the services provided pursuant to this Agreement any information, reports or other material which any such body by reason of this Agreement may request or require pursuant to applicable laws and regulations, unless advised against by reputable counsel for the purpose of avoiding the waiver of attorney-client privilege or other applicable privilege.
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7. |
DURATION AND TERMINATION OF AGREEMENT
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This Agreement shall become effective on the date first indicated above, subject to the condition that the Trust’s Board, including a majority of those Trustees who are not interested persons (as such term is defined in the Investment Company Act) of the Adviser or the Subadviser, shall have approved this Agreement in the manner required by the Investment Company Act. Unless terminated as provided herein, this Agreement shall remain in full force and effect through and including the second anniversary of the date first indicated above, and shall continue in full force and effect indefinitely thereafter, but only so long as such continuance is specifically approved at least annually by (a) the Board, or by the vote of a majority of the outstanding voting securities (as defined in the Investment Company Act) of each Portfolio, and (b) the vote of a majority of those Trustees who are not interested persons (as such term is defined in the Investment Company Act) of any such party to this Agreement cast in person at a meeting called for the purpose of voting on such approval. This Agreement may be terminated at any time, without the payment of any penalty, by the Trustees of the Trust, or, with respect to a Portfolio, by the vote of a majority of the outstanding voting securities of the Portfolio, on sixty days’ written notice to the Adviser and the Subadviser, or by the Adviser or Subadviser on sixty days’ written notice to the Portfolio and the other party. This Agreement will automatically terminate, without the payment of any penalty, in the event of its assignment (as defined in the Investment Company Act) or in the event the Advisory Agreement between the Adviser and the Trust terminates for any reason.
8. |
PROVISION OF CERTAIN INFORMATION BY SUBADVISER
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The Subadviser will promptly notify the Adviser in writing of the occurrence of any of the following events:
a. |
the Subadviser fails to be registered as an investment adviser under the Investment Advisers Act or under the laws of any jurisdiction in which the Subadviser is required to be registered as an investment adviser in order to perform its obligations under this Agreement;
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b. |
the Subadviser is served or otherwise receives notice of any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, involving the affairs of the Trust; and
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c. |
any change in actual control or senior management of the Subadviser or any change in the portfolio managers of a Portolio.
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9.
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USE OF NAME
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The Subadviser agrees not to use the names, or any derivatives of the names “Xxxx Xxxxxxx,” “Xxxx Xxxxxxx Advisers, LLC” or the names of any such entities’ affiliates without first obtaining the applicable entity’s express, written consent prior to the use of such name; provided, however, the Subadviser may identify the Adviser and any Portfolio by name in the Subadviser’s client list or in regulatory documents. Such list or documents may be used with third parties.
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Both parties acknowledge the pre-existing Xxxx Xxxxxxx Redwood Fund with an inception date of September 29, 2011 (“the Pre-Existing Fund”), and the Subadviser acknowledges and agrees that the Adviser may continue to market the Pre-Existing Fund as the Xxxx Xxxxxxx Redwood Fund or similar. Notwithstanding the foregoing, except with respect to any Portfolios covered under this Agreement (including with respect to any document required to be filed with any governmental agency or self-regulatory organization and customary marketing material). neither the Trust nor the Adviser will have any rights relating to the Subadviser’s name in connection with investment products, services or otherwise, and the Trust and the Adviser will make no use of such name without the express written consent of the Subadviser. In the event that the Subadviser notifies the Adviser in writing that any such information or material contains a material misstatement or omits any statement without which such information or material would be misleading, the Adviser shall use its best reasonable efforts to promptly cease the distribution of, or correct, such information or material.
Except with respect to the use of “Redwood’’ in the name of the Pre-Existing Fund, upon termination of this Agreement or upon the earlier request of the Subadviser, the Adviser shall use its best reasonable efforts to cause the Trust and the Fund to cease using the name “Redwood Investments” or “Redwood,” as applicable, as soon as is reasonably possible.
10. |
REPRESENTATION OF OTHER CLIENTS
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The services provided by the Subadviser under this Agreement are not to be deemed exclusive and the Subadviser shall be free to render similar services to others so long as its services hereunder are not impaired thereby. It is specifically understood that directors, officers and employees of the Subadviser and of any subsidiaries and affiliates may continue to engage in providing portfolio management services and advice to other investment advisory clients. In addition, the Adviser understands that the Subadviser may give advice and take action with respect to other clients in a manner that may differ from the timing or nature of action taken by the Subadviser with respect to a Portfolio. Nothing in this Agreement imposes upon the Subadviser any obligation to purchase or sell or to recommend for purchase or sale, with respect to a Portfolio, any security or other instrument which the Subadviser may purchase for any other client. For purposes of clarification, nothing in this Section 10 shall, in any way, alter or reduce the Subadviser’s fiduciary duties and obligations to the Portfolios or its covenants and obligations under any Agreement for Organizational and Promotional Costs or similar agreement, between the Adviser and the Subadviser, then in effect.
11. |
AMENDMENTS TO THE AGREEMENT
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This Agreement may be amended by the parties only if such amendment is specifically approved by the vote of a majority of the Trustees of the Trust who are not interested persons of any party to this Agreement cast in person at a meeting called for the purpose of voting on such approval. Any required shareholder approval shall be effective if a majority of the outstanding voting securities of the Portfolio vote to approve the amendment.
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12. |
ENTIRE AGREEMENT
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This Agreement contains the entire understanding and agreement of the parties.
13. |
HEADINGS
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The headings in the sections of this Agreement are inserted for convenience of reference only and shall not constitute a part hereof.
14. |
NOTICES
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All notices required to be given pursuant to this Agreement shall be delivered or mailed to the last known business address of the Trust or applicable xxxxx in person or by registered mail or a private mail or delivery service providing the sender with notice of receipt. Notice shall be deemed given on the date delivered or mailed in accordance with this paragraph.
15 . |
SEVERABILITY
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Should any portion of this Agreement for any reason be held to be void in law or in equity, the Agreement shall be construed, insofar as is possible, as if such portion had never been contained herein.
16. |
GOVERNING LAW
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The provisions of this Agreement shall be construed and interpreted in accordance with the laws of The Commonwealth of Massachusetts, or any of the applicable provisions of the Investment Company Act. To the extent that the laws of The Commonwealth of Massachusetts, or any of the provisions in this Agreement, conflict with applicable provisions of the Investment Company Act, the latter shall control.
17. |
LIMITATION OF LIABILITY
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The Agreement and Declaration of Trust of the Trust, a copy of which, together with all amendments thereto (the “Declaration”), is on file in the office of the Secretary of The Commonwealth of Massachusetts, provides that the name “Xxxx Xxxxxxx Funds II” refers to the Trustees under the Declaration collectively as Trustees, but not as individuals or personally; and no Trustee, shareholder, officer, employee or agent of the Trust shall be held to any personal liability, nor shall resort be had to their private property, for the satisfaction of any obligation or claim, in connection with the affairs of the Trust or any Portfolio thereof, but only the assets belonging to the Trust, or to the particular Portfolio with respect to which such obligation or claim arose, shall be liable.
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18. |
CONFIDENTIALITY
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a. All information of or pertaining to the Trust, the Adviser and any of its affiliates, whether stored on computer disk or as electronic media, to which the Subadviser is given access or otherwise obtains in the course of its provision of the services under this Agreement, including but not limited to the Portfolios’ holdings and shareholder information (which includes, without limitation, names, addresses, telephone numbers, account numbers, demographic, financial and transactional information), is referred to as “Confidential Information.”
b. The Subadviser shall hold all Confidential Information in confidence and shall not disclose any Confidential Information to any person, unless otherwise permitted hereunder and Subadviser shall not use any such Confidential Information for purposes other than in connection with the services provided under this Agreement.
c. The Subadviser agrees to treat the Portfolios’ holdings as confidential information in accordance with the Trust’s “Policies and Procedures Regarding Disclosure of Portfolio Holdings” as such policy may be amended from time to time, and to prohibit its employees from disclosing such Confidential Information or trading on the basis of such Confidential Information while in possession of any such Confidential Information.
d. The Adviser acknowledges and agrees that any information conveyed to the Adviser, the Trust or the Trust’s Board (whether in response to due diligence demands or otherwise) as to the Subadviser’s internal operations or investment strategies and analyses shall be considered Confidential Information, and shall not be disclosed to any person or used for any purpose unless permitted hereunder or as otherwise required to enable the Adviser to perform its duties in managing the Portfolios.
e. If any recipient (a “Receiving Party”) of Confidential Information of another party (a “Disclosing Party”) becomes legally compelled (by deposition, interrogatory, request for documents, subpoena, civil investigative demand or similar process) to disclose any Confidential Information of a Disclosing Party, the Receiving Party may disclose such Confidential Information to the extent legally required; provided, however, that the Receiving Party shall (i) first notify the Disclosing Party of such legal process, unless such notice is prohibited by statute. rule or court order, (ii) attempt to obtain the Disclosing Party’s consent to such disclosure, and (iii) in the event consent is not given, agree to permit a motion to quash, or other similar procedural step, to frustrate the production or publication of information. In making any disclosure under such legal process, the parties agree to use commercially reasonable efforts to preserve the confidential nature of such information. Nothing herein shall require Receiving Party to fail to honor a validly issued subpoena, court or administrative order, or other legal requirement on a timely basis.
f. The confidentiality provisions of this Section 18 will not apply to any information that either party hereto can show: (i) is or subsequently becomes publicly available without breach of any obligation owed to the other party; (ii) became known to either party from a source other than the other party, and without breach of an obligation of confidentiality owed to the other party; or (iii) is independently developed by either party without reference to the information required by this Agreement to be treated confidentially.
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19. |
CONSULTATION WITH SUBADVISERS TO OTHER TRUST PORTFOLIOS
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As required by Rule 17a-10 under the Investment Company Act, the Subadviser is prohibited from consulting with the entities listed below concerning transactions for a Portfolio in securities or other assets:
1. |
other subadvisers to a Portfolio;
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2. |
other subadvisers to a Trust portfolio; and
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3. |
other subadvisers to a portfolio under common control with a Portfolio.
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20. |
COMPLIANCE
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In managing the investments of and determining the composition of the assets of the Portfolios and in performing its other services and obligations hereunder, the Subadviser shall: (i) comply with the investment objectives, policies and restrictions of the Portfolios as set forth in the registration statement of the Trust, as from time to time amended or supplemented; (ii) comply with all policies, guidelines, instructions and procedures approved by the Board or the Adviser with respect to the Portfolios and furnished to the Subadviser; (iii) comply with all applicable requirements of the Investment Advisers Act, the Investment Company Act and the rules and regulations under each thereof, as the same may be amended from time to time; (iv) work collaboratively with the Adviser to cause the Portfolios to comply with (a) the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), for qualification as a regulated investment company (for so long as the Portfolios seek to qualify as a regulated investment company under the Code) and (b) the diversification requirements under Subchapter L of the Code; and (v) comply with all other applicable law, rules and regulations. In addition, the Subadviser shall maintain compliance procedures for the Portfolios that the Subadviser reasonably believes are adequate to ensure its and the Portfolios’ compliance with the foregoing. The Adviser shall promptly furnish to the Subadviser copies of all material amendments or supplements to the documents referred to in clauses (i) and (ii) above and shall provide the Subadviser with as much advance notice as is reasonably possible of any material change to any of such documents.
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Upon execution of this Agreement, the Subadviser shall provide the Adviser with the Subadviser’s written policies and procedures (“Compliance Policies”) as required by Rule 206(4)-7 under the Investment Advisers Act. Throughout the term of this Agreement, the Subadviser shall promptly submit to the Adviser: (i) any material changes to the Compliance Policies, (ii) notification of the commencement of a regulatory examination of the Subadviser by any relevant regulatory authority (except that, with respect to examinations in which the Subadviser has not been advised that it is the target of an investigation from such regulatory authority (e.g., sweep examinations) the Subadviser shall use its best reasonable efforts under the given circumstances to notify the Adviser as soon as possible) and documentation describing the results of any such examination and of any periodic testing of the Compliance Policies, (iii) documentation of any formal review of the Subadviser’s Compliance Policies and (iv) notification of any material compliance matter that relates to the services provided by the Subadviser to the Portfolios including, but not limited to, any material violation of the Compliance Policies or of the Subadviser’s code of ethics and/or related code, unless. with respect to each of the foregoing, advised against by reputable counsel for the purpose of avoiding the waiver of attorney-client privilege or other applicable privilege. Throughout the term of this Agreement, the Subadviser shall provide the Adviser with any certifications, information and access to personnel and resources (including those resources that will permit testing of the Compliance Policies by the Adviser) that the Adviser may reasonably request to enable the Portfolios to comply with Rule 38a-l under the Investment Company Act. The Subadviser also agrees to provide such other information relating to the Subadviser’s compliance program as may be reasonably requested by the Portfolios, the Portfolios’ Chief Compliance Officer, or his or her authorized representative.
(THE REMAINDER OF THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers as of the date first mentioned above.
XXXX XXXXXXX ADVISERS, LLC
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By:
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/s/ Xxx Xxxxxxx
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Name:
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Xxx Xxxxxxx
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Title:
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Senior Vice President and
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Chief Investment Officer
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REDWOOD INVESTMENTS, LLC
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By:
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/s/ Xxxxxxxx X. Silver
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Name:
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Xxxxxxxx X. Silver
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Title:
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Managing Partner
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APPENDIX A
The Subadviser shall serve as investment subadviser for the Portfolios of the Trust listed below. The Adviser will pay the Subadviser, as full compensation for all services provided under this Agreement with respect to each Portfolio, the fee computed separately for such Portfolio at an annual rate as follows (the “Subadviser Fee”):
Portfolio
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First $300
Million of
Aggregate Net
Assets*
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Next $300
Million of
Aggregate Net
Assets*
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Next $300
Million of
Aggregate Net
Assets*
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Excess over $900
Million of
Aggregate Net
Assets*
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Small Company Growth Fund
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x.xxx%
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x.xxx%
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x.xxx%
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x.xxx%
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* The term Aggregate Net Assets includes the net assets of a Portfolio managed by the Subadviser. It also includes the net assets of one or more other portfolios of the Trust or other portfolios managed by the Subadviser, as indicated below, but in each case only for the period during which the Subadviser for the Portfolio also serves as the subadviser for the other portfolio(s) and only with respect to the net assets of such other portfolio(s) that are managed by the Subadviser. For purposes of determining Aggregate Net Assets and calculating the Subadviser Fee, the net assets of the Portfolio and each other portfolio of the Trust are determined as of the close of business on the previous business day of the Trust, and the net assets of each portfolio of each other fund are determined as of the close of business on the previous business day of that fund.
Trust Portfolio(s)
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Other Portfolio(s)
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Small Company Growth Fund
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N/A
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The Subadviser Fee for a Portfolio shall be based on the applicable annual fee rate for the Portfolio which for each day shall be equal to (i) the sum of the amounts determined by applying the annual percentage rates in the table to the applicable portions of Aggregate Net Assets divided by (ii) Aggregate Net Assets (the “Applicable Annual Fee Rate’’). The Subadviser Fee for each Portfolio shall be accrued for each calendar day, and the sum of the daily fee accruals shall be paid monthly to the Subadviser within 30 calendar days of the end of each month. The daily fee accruals will be computed by multiplying the fraction of one over the number of calendar days in the year by the Applicable Annual Fee Rate, and multiplying this product by the Aggregate Net Assets of the Portfolio. The Adviser shall provide Subadviser with such information as Subadviser may reasonably request supporting the calculation of the fees paid to it hereunder. Fees shall be paid either by wire transfer or check, as directed by Subadviser.
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If, with respect to any Portfolio, this Agreement becomes effective or terminates, or if the manner of determining the Applicable Annual Fee Rate changes, before the end of any month, the fee (if any) for the period from the effective date to the end of such month or from the beginning of such month to the date of termination or from the beginning of such month to the date such change, as the case may be, shall be prorated according to the proportion which such period bears to the full month in which such effectiveness or termination or change occurs.
A-2