EXHIBIT 99.(d)(32)
INVESTMENT SUBADVISORY AGREEMENT
This Investment Subadvisory Agreement is made as of
July 16, 2002, by and between VANTAGEPOINT INVESTMENT ADVISERS, LLC, a Delaware
limited liability company (hereafter "Client"), and SOUTHEASTERN ASSET
MANAGEMENT INC., 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxx 00000
(hereafter "Subadviser"), and THE VANTAGEPOINT FUNDS, a Delaware business trust,
and is effective as of July 17, 2002 (the "Effective Date").
WHEREAS, The Vantagepoint Funds (the "Funds") is a Delaware
Business Trust registered as an open-end management investment company under the
Investment Company Act of 1940 (the "1940 Act");
WHEREAS, Client is party to an Investment Adviser Agreement
with the Funds for management of the investment operations of the Funds
including the establishment and operation of investment portfolios for the Funds
and the entering into of contracts with sub-advisers to assist in managing the
investment of the Funds property;
WHEREAS, Client and Subadviser wish to enter into a
sub-advisory agreement pursuant to which Subadviser will provide such assistance
to Client.
AGREEMENTS:
In consideration of the performance by the Subadviser as
Investment Subadviser of certain assets held by the Funds, the Client has
authorized the Subadviser to manage the securities and other assets as follows:
1. ACCOUNT
The account with respect to which the Subadviser shall perform
its services shall consist of those assets of the VANTAGEPOINT AGGRESSIVE
OPPORTUNITIES FUND (the "Fund") which the Client determines to assign to an
account with the Subadviser, together with all income earned by those assets and
all realized and unrealized capital appreciation related to those assets
(hereafter "Account"). From time to time, the Client may, upon notice to the
Subadviser, make additions to the Account and may, upon notice to the
Subadviser, make withdrawals from the Account. To the extent that such
withdrawals shall reduce the assets of the account to zero, the Subadviser shall
not be entitled to any fees as set forth hereunder for the period of time for
which no assets are held in the Account, notwithstanding any termination
provisions set forth in the agreement. Subadviser shall manage the assets of the
Fund held in the Account in accordance with the Investment Adviser Guidelines
and the Fund's Statement of Investment Policies, which have been provided to the
Subadviser and which may be changed from time to time by Client, on advance
written notice to the
Subadviser.
2. APPOINTMENT STATUS, POWERS OF CLIENT AND SUBADVISER
(a) Responsibility of Client. Client has primary and
overall responsibility for the Fund's investment management and compliance with
all applicable laws, regulations, rules or requirements of any governmental or
self-regulatory organizations, as well as all internal policies established by
Client's or the Funds' boards of directors or trustees. Such duties include but
are not limited to the overall responsibility for the investment management of
the portfolio of securities, the functions of fund accounting, preparation and
filing of tax returns, transfer agent and shareholder servicing, daily pricing
of the portfolio, retention and supervision of a custodian for the assets,
required federal and state registrations, preparation, filing, and distributions
of all financial reports, compliance with any expense limitation requirements,
and the performance or supervision of all other administrative or operational
functions. Except as specifically delegated to Subadviser under the provisions
of this Agreement, Subadviser shall have no responsibility for any
administrative or operational functions of the Fund or for the Fund's compliance
with any applicable laws, regulations, rules or internal policies. Subadviser
shall carry out its responsibilities under this Agreement in compliance with
applicable laws and rules.
(b) Purchase and Sale. Client hereby appoints Subadviser
to manage the Account on the terms and conditions set forth in this Agreement.
Subject to the restrictions set forth in this Agreement, and acting always in
conformity with the Investment Policies provided in Paragraph 4, as well as the
Investment Adviser Guidelines and the Fund's Statement of Investment Policies,
Subadviser shall supervise and direct investment of the Account. Client hereby
grants the Subadviser complete, unlimited and unrestricted discretion and
authority to select portfolio securities with respect to the Account including
the power to acquire (by purchase, exchange, subscription or otherwise), to hold
and dispose (by sale, exchange or otherwise). The Subadviser will review with
Client, upon the request of the Client, any transactions it makes with respect
to the investment of the Account.
(c) Limitation on Authority. Except as expressly
authorized herein or hereafter from time to time, Subadviser shall for all
purposes be deemed an independent contractor and shall have no authority to act
for or to represent the Client or the Funds in any way or otherwise to be an
agent of the Client or the Funds. The activities of Client and Subadviser in
managing the assets of the VANTAGEPOINT AGGRESSIVE OPPORTUNITIES FUND shall in
all instances be conducted subject to the supervision and direction of the Board
of Directors of The Vantagepoint Funds.
(d) Voting. Unless otherwise instructed by Client,
Subadviser shall have discretion to take any action or render any advice with
respect to the voting of
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shares or the execution of proxies solicited from time to time by, or with
respect to, the issuers of securities held in the Account. Subadviser will
report annually to Client regarding such voting.
(e) Key Personnel. Subadviser agrees that the following
key personnel have primary responsibility with respect to the investment
management of the Account. If the(se) individual(s) is unable to devote
sufficient time to maintain primary responsibility of the Account, the
Subadviser must give Client written advance notice, or prompt notice within
three (3) business days, of the name of the person designated by the Subadviser
to replace or supplement the individual(s). In addition, the Subadviser will
give Client written notice of the replacement of any employee of the Subadviser
who has direct supervisory responsibility for the key personnel or who has
responsibility for setting investment policy as soon as reasonably practicable.
Key Personnel: O. Xxxxx Xxxxxxx, Xxxxxx Xxxxx and Xxxxxx XxXxxxxxx
3. ACCEPTANCE OF APPOINTMENT
Subadviser accepts the appointment as an investment Subadviser
and agrees to use its best efforts and professional judgment to make timely
investment transactions for the Client with respect to the investments of the
Account, and to provide the other services required of the Subadviser under the
provisions of this Agreement.
4. INVESTMENT POLICIES
Investment Objectives. Subject to the supervision of the
Fund's Board of Directors and the Client, the Subadviser shall direct the
investments of the Account in accordance with the written investment objectives,
policies, procedures, and restrictions provided by Client, as set forth in the
specific statement of Investment Adviser Guidelines or other policies and
procedures of the Fund or the Client, which have been provided to the
Subadviser, as restated or modified from time to time by the Client in written
notice to the Subadviser. The Client retains the right, on written notice to the
Subadviser, to modify any such objectives, guidelines, policies or procedures,
restrictions, and liquidity requirements in any manner at any time as may be
allowed pursuant to the 1940 Act.
5. CUSTODY, DELIVERY, RECEIPT OF SECURITIES
(a) Custody Responsibilities. The Client shall designate
one or more custodians to hold the Account. The Custodian, as designated by the
Client will be responsible for the custody, receipt and delivery of securities
and other assets of the Funds (including the Account), and the Subadviser shall
have no authority, responsibility or obligation with respect to the custody,
receipt or delivery of securities or other assets of the Funds (including the
Account). In the event that any cash or
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securities of the Funds are delivered to the Subadviser, it will promptly
deliver the same over to the Custodian, in the name of the Funds.
(b) Securities Transactions. Unless otherwise required by
local custom, all securities transactions for the Account will be consummated by
payment to or delivery by the Funds of cash or securities due to or from the
Account. The Subadviser will make all reasonable efforts to notify the Custodian
of all orders to brokers for the Account by 9:00 am EST on the day following the
trade date and will affirm the trade within the close of business one (1)
business day after the trade date (T+1).
(c) Tri-Party Agreement. The Subadviser is authorized to
enter into Tri-Party Repurchase Agreements and sign the standard PSA tri-party
agreement (the "Tri-Party Agreement") on behalf of the Client and the
subcustodian thereunder is authorized to act as a subcustodian for the Account's
assets involved in any tri-party repurchase agreement pursuant to such Tri-Party
Agreement.
6. RECORD KEEPING AND REPORTING
(a) Records. Subadviser will maintain proper and complete
records relating to the furnishing of services under this Agreement, including
records with respect to the acquisition, holding and disposition of securities
for Client in accordance with applicable law and rules and such reasonable
instructions as shall be provided to Subadviser by Client from time to time. All
records maintained pursuant to this Agreement shall be subject to examination by
Client and by persons authorized by it during normal business hours upon
reasonable notice. Except as expressly authorized in this Agreement or as
required by applicable law, regulation or order of court or as directed by other
party in writing, Subadviser and Client shall keep confidential the records and
other information obtained by reason of this Agreement. Upon termination of this
Agreement, Subadviser shall promptly, upon demand, return to Client all records
Client reasonably believes are necessary in order to discharge its
responsibilities to the Funds. Subadviser shall be entitled to retain originals
or copies of records pursuant to the requirements of applicable laws or
regulations.
(b) Quarterly Valuation Reports. Subadviser shall use its
best efforts to provide to the Client within ten (10) business days after the
end of each calendar quarter a statement of the fair market value of the Account
as of the close of such quarter together with an itemized list of the assets in
the Account, as that information is reported on Subadviser's record keeping
system.
(c) Notifications. The Custodian shall provide Subadviser
with daily reports of the Account's portfolio holdings. Subadviser agrees to
review the reports and notify Client and the Custodian as promptly as
practicable of any material error in these reports that Subadviser identifies,
including any material discrepancy between the information contained in the
Custodian's report and other information known to
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Subadviser. For purposes of this paragraph, a "material discrepancy," in the
case of the price of security, shall be (i) for a security that represents 2.5%
or more of the value of the total assets of the Account, a difference of 3 % or
more and (ii) for a security that represents less than 2.5% of the value of the
total assets of the Account, a difference of 5% or more. In addition, Subadviser
shall make reasonable efforts to notify Client, as promptly as practicable under
the circumstances, of any significant market or other event known to Subadviser
and that in Subadviser's sole judgment would require fair valuation of a
security held in the Account (under existing interpretations of the Securities
and Exchange Commission and its staff) instead of reliance on market prices for
purposes of calculating the Fund's net asset value per share. Nothing in
paragraph (c) or (e) of this Section 6 shall cause Subadviser to be responsible
or liable for ensuring the accuracy or completeness of the daily portfolio
holdings reports prepared by the Custodian or for Client's pricing
determinations with respect to the Fund's portfolio securities. Notices under
this paragraph shall be sent to Client or the Custodian by facsimile or
electronic mail at the addresses provided by Client to Subadviser for that
purpose from time to time.
(d) Reconciliations. Subadviser shall reconcile security
and cash positions, and market values on a monthly basis to the Custodian's
records and report discrepancies to the Client by ten (10) business days after
the end of the month, or within three (3) days of receipt of the custodial
statement, whichever comes later.
(e) Loss Reimbursement. Subadviser shall reimburse the
Account for any material error to the Fund's net asset value caused by
Subadviser's breach of its standard of care set forth in Section 12(a) that is a
direct cause of a delay in the accurate daily pricing of the Fund(s), provided
such loss was not the result of action or inaction of other service providers to
the Client or the Fund.
(f) Reports. Subadviser shall furnish Client and the
Board of Directors of The Vantagepoint Funds such periodic and special reports
and non-proprietary or non-confidential information as shall be reasonably
necessary to evaluate the terms of any subadvisory agreement between Client and
Subadviser with respect to the assets of the VANTAGEPOINT AGGRESSIVE
OPPORTUNITIES FUND.
(g) Other Reports on Request. Subadviser shall provide to
Client promptly upon reasonable request any information available in the records
maintained by Subadviser relating to the Account.
(h) Review of Materials. During the term of this
Agreement, the Client shall furnish to the Subadviser at its principal office
all prospectuses, statements of additional information, proxy statements,
reports to shareholders, advertising and sales literature or other material
prepared for distribution to Fund shareholders or the public, which refer to the
Subadviser or its clients in any way, prior to the use thereof, and the Client
shall not use any such materials if the Subadviser reasonably objects in writing
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within ten (10) business days (or such other time as may be mutually agreed)
after receipt thereof. The Client shall ensure that materials prepared by
employees or agents of the Client or its affiliates that refer to the Subadviser
or its clients in any way are consistent with those materials previously
approved by the Subadviser as referenced in the preceding sentence.
7. PURCHASE AND SALE OF SECURITIES
(a) Selection of Brokers. Except to the extent otherwise
instructed in writing by Client in acting on behalf of the Fund, (it being
understood that Client, acting on behalf of the Fund, may, in its absolute
discretion and consistent with the requirements of the 1940 Act and applicable
federal securities laws, direct portfolio transactions for which Subadviser is
responsible to any broker that Client may see fit), Subadviser shall place all
orders for the purchase and sale of securities on behalf of the Client with
brokers or dealers selected by Subadviser, but not with a person affiliated with
Subadviser, as the term "affiliated person" is defined in the Investment Company
Act of 1940 (hereafter an "Affiliate"), unless the transaction is in compliance
with Rules 17e-1 or 10f-3 under the 1940 Act, or other applicable rules, and the
Fund's policies and procedures thereunder, copies of which shall be provided to
Subadviser.
(b) Best Execution. In placing such orders, the
Subadviser will give primary consideration to obtaining the most favorable price
and efficient execution reasonably available under the circumstances and in
accordance with applicable law. In evaluating the terms available for executing
particular transactions for the Account and in selecting brokers and dealers to
execute such transactions, the Subadviser may consider, in addition to
commission cost and execution capabilities, the financial stability and
reputation of brokers and dealers and the brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of 1934,
as amended) provided by brokers and dealers. Subadviser is authorized to pay a
broker or dealer who provides such brokerage and research services a commission
for executing a transaction which is in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction if
Subadviser determines in good faith that such commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer in discharging responsibilities with respect to the Account or
to other client accounts as to which it exercises investment discretion.
(c) Bunching Orders. Client agrees that Subadviser may
aggregate sales and purchase orders for the Account with similar orders being
made simultaneously for other accounts managed by Subadviser, if in Subadviser's
reasonable judgment such aggregation shall result in an overall economic benefit
or more efficient execution to the Account taking into consideration the
advantageous selling or purchase price, brokerage commission and other expenses.
Client acknowledges that the determination of such economic benefit to the Fund
by
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Subadviser represents Subadviser's evaluation that the Account is benefited by
relatively better purchase or sales prices, lower commission expenses and
beneficial timing of transactions or a combination of these and other factors.
In such event, allocation of the securities so purchased or sold, as well as
expenses incurred in the transaction, will be made by the Subadviser in a manner
the Subadviser considers to be most equitable and consistent with its fiduciary
obligations to the Fund and to its other clients.
8. INVESTMENT FEES
(a) Fee Schedule. The compensation of the Subadviser for
its services under this Agreement shall be calculated and paid by the Client
from the assets of the Account in accordance with SCHEDULE A hereto.
(b) For purposes of this section 8 and Schedule A, all
payments due to Subadviser shall be solely made from the assets of the
VANTAGEPOINT AGGRESSIVE OPPORTUNITIES FUND, a portfolio of the Vantagepoint
Funds.
(c) Pro Rata Fee. If the Subadviser should serve for less
than the whole of any calendar quarter, its compensation shall be determined as
provided above on the basis of the ending market value of the Account in the
month in which the termination occurs and shall be payable on a pro rata basis
for the period of the calendar quarter for which it has served as Subadviser
hereunder. In no event shall the Subadviser receive payment for any period of
time during which there were no assets in the Account.
9. BEST EFFORTS; NON-EXCLUSIVITY OF SERVICES
The Subadviser shall devote its best efforts and such time as
it deems necessary to provide prompt and expert service to the Client. The
services of Subadviser to be provided to Client hereunder are not to be deemed
exclusive and Subadviser shall be free to provide similar services for its own
account and the accounts of other persons and to receive compensation for such
services. Client acknowledges that Subadviser and its members, Affiliates and
employees, and Subadviser's other clients may at any time, have, acquire,
increase, decrease, or dispose of positions in the same investments which are at
the same time being held, acquired for or disposed of under this Agreement for
the Fund. Subadviser shall have no obligation to acquire or dispose of a
position in any investment pursuant to this Agreement simply because Subadviser,
its directors, members, Affiliates or employees invest in such a position for
its or their own accounts or for the account of another client.
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10. XXXXXXX XXXXXXX POLICIES AND CODE OF ETHICS
Subadviser hereby represents that it has adopted policies that
meet the requirements of Rule 17j-1 under the Investment Company Act of 1940.
Copies of such policies shall be delivered to the Client, and any violation of
such policies by personnel of the Subadviser who are "access persons" with
respect to the Account shall be reported to the Client. In addition, any issues
arising under such policies shall be reported to Client.
11. INSURANCE
At all times during the term of this Agreement, Client and
Subadviser shall each maintain, at its own cost and expense, professional
liability insurance for errors, omissions, and negligent acts, in an amount and
with such terms as are standard in the financial services industry for an
investment adviser managing the amount of aggregate assets managed by Client or
Subadviser
12. LIABILITY
(a) In the absence of any gross negligence,
malfeasance, or willful violation of this Agreement, Subadviser shall not be
liable to Client for honest mistakes of judgment or for action or inaction taken
in good faith for a purpose that the Subadviser reasonably believes to be in the
best interests of the Client or the Fund. However, neither this provision nor
any other provision of this Agreement shall constitute a waiver or limitation of
any rights, which Client may have under federal or state securities laws.
(b) Client shall indemnify Subadviser against any
liability, damages, or expenses arising out of the negligence, malfeasance or
violation of any applicable law, regulation, or internal policy for which Client
has the primary responsibility of compliance and the responsibility for which
has not been specifically delegated to Subadviser.
13. TERM
This Agreement shall be in effect for an initial term of two
years beginning on the Effective Date. This Agreement may be renewed thereafter
for successive one-year periods if such renewal is approved annually by the
majority of the Fund's Board of Directors, provided that in such event,
continuance shall also be approved by a vote of those members of the Funds'
Board of Directors who are not "interested persons" as that term is defined in
the Investment Company Act of 1940.
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14. TERMINATION
This Agreement may be terminated by any party hereto, without
the payment of any penalty, immediately upon notice to the other in the event of
a material breach of any provision thereof by the party so notified if such
breach shall not have been cured within a twenty (20) day period after notice of
such breach, or otherwise by Subadviser upon sixty (60) days' written notice to
the Client and the Funds or by Client or the Funds upon 30 days' written notice
to Subadviser, except that this Agreement shall automatically terminate in the
event of its assignment, as provided in Paragraph 19, at the discretion of the
Client in the event of Subadviser's change in control as provided in Paragraph
19, upon the termination of the Funds, or upon termination of Client's advisory
agreement with the Funds. Any termination in accordance with the terms of this
Agreement shall not cause the payment of any penalty. Any such termination shall
not affect the status, obligations or liabilities of any party hereto to the
other.
15. REPRESENTATIONS
(a) Subadviser hereby confirms to Client that Subadviser
is registered as an investment adviser under the Investment Advisers Act of
1940, that it has full power and authority to enter into and perform fully the
terms of this Agreement and that the execution of this Agreement on behalf of
Subadviser has been duly authorized and, upon execution and delivery, this
Agreement will be binding upon Subadviser in accordance with its terms.
(b) Client hereby confirms to Subadviser that it is
registered as an investment adviser under the Investment Advisers Act of 1940,
that it has full power and authority to enter into this Agreement and that the
execution of this Agreement on behalf of Client has been fully authorized and,
upon execution and delivery, this Agreement will be binding upon Client in
accordance with its terms.
(c) Subadviser hereby acknowledges that The Vantagepoint
Funds is registered as an open-end investment company under the 1940 Act and is
subject to taxation as a regulated investment company under Subchapter M and the
regulations promulgated thereunder of the Internal Revenue Code.
16. NOTICES
Notices or other notifications given or sent under or pursuant
to this Agreement shall be in writing and be deemed to have been given or sent
if delivered to the party at its address listed below in person or by telex or
telecopy receipt of which is confirmed or by mail or by registered mail, return
receipt requested. The addresses of the parties are:
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CLIENT AND FUNDS:
Vantagepoint Investment Advisers, LLC
Attention: Xxxx Xxxxxxxxx, Legal Department
c/o ICMA Retirement Corporation
000 Xxxxx Xxxxxxx Xxxxxx, XX, Xxx. 000
Xxxxxxxxxx, X.X. 00000-0000
SUBADVISER:
Southeastern Asset Management, Inc.
Attention: Xxxxxx X. XxXxxxxxx
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Each party may change its address by giving notice as herein required.
17. SOLE INSTRUMENT
This instrument constitutes the sole and only agreement of the
parties to it relating to its object and correctly sets forth the rights,
duties, and obligations of each party to the other as of its date. Any prior
agreements, promises, negotiations or representations not expressly set forth in
this Agreement are of no force or effect.
18. WAIVER OR MODIFICATION
No waiver or modification of this Agreement shall be effective
unless reduced to a written document signed by the party to be charged. No
failure to exercise and no delay in exercising, on the part of any party hereto,
of any right, remedy, power or privilege hereunder, shall operate as a waiver
thereof. Only the Chief Executive Officer, has authority on behalf of Client to
modify or waive any of the provisions of the Agreement. It is understood that
certain material amendments may require approval of the Funds' shareholders.
19. ASSIGNMENT AND CHANGE IN CONTROL
This Agreement shall automatically terminate in the event of
its assignment as defined in the Investment Company Act of 1940. Subadviser
agrees to provide immediate written notice in the event of a change in control.
Such a change in control will entitle, but not require, the Client to terminate
the Agreement immediately or upon notice.
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20. COUNTERPARTS
This Agreement may be executed in counterparts each of which
shall be deemed to be an original and all of which, taken together, shall be
deemed to constitute one and the same instrument.
21. CHOICE OF LAW
This Agreement shall be governed by, and the rights of the
parties arising hereunder construed in accordance with, the laws of the State of
Delaware without reference to principles of conflict of laws and the 1940 Act.
To the extent that the applicable laws of the State of Delaware conflict with
the applicable provisions of the 1940 Act, the latter shall control.
22. CONFIDENTIAL INFORMATION
Any information or recommendations supplied by either party to
this agreement which are not otherwise in the public domain or previously known
to the other party in connection with the performance of obligations hereunder,
are to be regarded as confidential and for use only by the party to which said
information has been communicated, the Custodian or such persons the Client may
designate in connection with the Account. Nothing in this Agreement shall be
construed to prevent Subadviser from giving other entities investment advice
about, or trading on their behalf, in the securities of the Client. However,
each party will maintain the strictest confidence with respect to any financial
or other information relating to the other party and not publicly disclosed
which it obtains in its capacity hereunder.
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IN WITNESS WHEREOF, THE PARTIES HERETO EXECUTE THIS AGREEMENT ON July 16, 2002
and make it effective on the date set forth.
CLIENT SUBADVISER
Vantagepoint SOUTHEASTERN ASSET MANAGEMENT, INC.
Investment Advisers, LLC
by: by:
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
------------------------ ------------------------
(signature) (signature)
[ILLEGIBLE]
________________________ ------------------------
Xxxxxx Xxxxxx, President (name, title)
Date: Date: 7/16/2002
FUNDS
The Vantagepoint Funds
by:
/s/ [ILLEGIBLE]
------------------------
Xxxxxx Xxxxxx, President
Date:
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SCHEDULE A
VANTAGEPOINT INVESTMENT ADVISERS, LLC
VANTAGEPOINT AGGRESSIVE OPPORTUNITES FUND
FEE SCHEDULE
FOR
SOUTHEASTERN ASSET MANAGEMENT, INC.
SPECIAL SITUATIONS, WORLDWIDE
The Subadviser's quarterly fee shall be calculated based on the average daily
net assets value of the assets under management as provided by the Custodian,
based on the following annual rate. Account will be over $100 million by July
31, 2002.
First $100 million 0.875 percent
Over $100 million 0.750 percent
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