INVESTMENT SUB-ADVISORY AGREEMENT
AMONG XXXXX FARGO FUNDS TRUST,
XXXXX FARGO FUNDS MANAGEMENT, LLC AND
XXXXX CAPITAL MANAGEMENT INCORPORATED
This AGREEMENT is made as of this 1st day of March 2001, between Xxxxx
Fargo Funds Trust (the "Trust"), a business trust organized under the laws of
the State of Delaware with its principal place of business at 000 Xxxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Xxxxx Fargo Funds Management, LLC
(the "Adviser"), a limited liability company organized under the laws of the
State of Delaware with its principal place of business at 000 Xxxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, and Xxxxx Capital Management
Incorporated, a corporation organized under the laws of the State of California,
with its principal place of business at 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000 (the "Sub-Adviser").
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended, (the "1940 Act") as an open-end, series management investment
company; and
WHEREAS, the Trust and the Adviser desire that the Sub-Adviser perform
investment advisory services for each of the series of the Trust listed in
Appendix A hereto as it may be amended from time to time (each a "Fund" and
collectively the "Funds"), and the Sub-Adviser is willing to perform those
services on the terms and conditions set forth in this Agreement;
NOW THEREFORE, the Trust, the Adviser and Sub-Adviser agrees as follows:
SECTION 1. THE TRUST; DELIVERY OF DOCUMENTS. The Trust is engaged in the
business of investing and reinvesting its assets in securities of the type and
in accordance with the limitations specified in its Declaration of Trust, as
amended or supplemented from time to time, By-Laws (if any) and Registration
Statement filed with the Securities and Exchange Commission (the "Commission")
under the 1940 Act and the Securities Act of 1933 (the "Securities Act"),
including any representations made in the prospectus and statement of additional
information relating to the Funds contained therein and as may be supplemented
from time to time, all in such manner and to such extent as may from time to
time be authorized by the Trust's Board of Trustees (the "Board"). The Board is
authorized to issue any unissued shares in any number of additional classes or
series. The Trust has delivered copies of the documents listed in this Section
to the Sub-Adviser and will from time to time furnish the Sub-Adviser with any
amendments thereof.
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SECTION 2. APPOINTMENT OF SUB-ADVISER. Subject to the direction and
control of the Board, the Adviser manages the investment and reinvestment of the
assets of the Funds and provides for certain management and services as
specified in the Investment Advisory Agreement between the Trust and the Adviser
with respect to the Funds.
Subject to the direction and control of the Board, the Sub-Adviser shall
manage the investment and reinvestment of the assets of the Funds, and without
limiting the generality of the foregoing, shall provide the management and other
services specified below, all in such manner and to such extent as may be
directed from time to time by the Adviser.
SECTION 3. DUTIES OF THE SUB-ADVISER.
(a) The Sub-Adviser shall make decisions with respect to all purchases and
sales of securities and other investment assets for the Funds. To carry out such
decisions, the Sub-Adviser is hereby authorized, as agent and attorney-in-fact
for the Trust, for the account of, at the risk of and in the name of the Trust,
to place orders and issue instructions with respect to those transactions of the
Funds. In all purchases, sales and other transactions in securities for the
Funds, the Sub-Adviser is authorized to exercise full discretion and act for the
Trust in the same manner and with the same force and effect as the Trust might
or could do with respect to such purchases, sales or other transactions, as well
as with respect to all other things necessary or incidental to the furtherance
or conduct of such purchases, sales or other transactions.
(b) The Sub-Adviser will report to the Board at each regular meeting
thereof all material changes in the Funds since the prior report, and will also
keep the Board informed of important developments affecting the Trust, the Funds
and the Sub-Adviser, and on its own initiative will furnish the Board from time
to time with such information as the Sub-Adviser may believe appropriate,
whether concerning the individual companies whose securities are held by a Fund,
the industries in which they engage, or the economic, social or political
conditions prevailing in each country in which the Fund maintains investments.
The Sub-Adviser will also furnish the Board with such statistical and analytical
information with respect to securities in the Funds as the Sub-Adviser may
believe appropriate or as the Board reasonably may request. In making purchases
and sales of securities for the Funds, the Sub-Adviser will comply with the
policies set from time to time by the Board as well as the limitations imposed
by the Trust's Declaration of Trust, as amended from time to time, By-Laws (if
any), Registration Statement under the Act and the Securities Act, the
limitations in the Act and in the Internal Revenue Code of 1986, as amended
applicable to the Trust and the investment objectives, policies and restrictions
of the Funds.
(c) The Sub-Adviser may from time to time employ or associate with such
persons as the Sub-Adviser believes to be appropriate or necessary to assist in
the execution of the Sub-Adviser's duties hereunder, the cost of performance of
such duties to be borne and paid by the Sub-Adviser. No obligation may be
imposed on the Trust in any such respect.
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(d) The Sub-Adviser shall maintain records relating to portfolio
transactions and the placing and allocation of brokerage orders as are required
to be maintained by the Trust under the Act. The Sub-Adviser shall prepare and
maintain, or cause to be prepared and maintained, in such form, for such periods
and in such locations as may be required by applicable law, all documents and
records relating to the services provided by the Sub-Adviser pursuant to this
Agreement required to be prepared and maintained by the Trust pursuant to the
rules and regulations of any national, state, or local government entity with
jurisdiction over the Trust, including the Securities and Exchange Commission
and the Internal Revenue Service. The books and records pertaining to the Trust
which are in possession of the Sub-Adviser shall be the property of the Trust.
The Trust, or the Trust's authorized representatives (including the Adviser),
shall have access to such books and records at all times during the
Sub-Adviser's normal business hours. Upon the reasonable request of the Trust,
copies of any such books and records shall be provided promptly by the
Sub-Adviser to the Trust or the Trust's authorized representatives.
SECTION 4. CONTROL BY BOARD. As is the case with respect to the Adviser
under the Investment Advisory Agreement, any investment activities undertaken by
the Sub-Adviser pursuant to this Agreement, as well as any other activities
undertaken by the Sub-Adviser on behalf of the Funds, shall at all times be
subject to the direction and control the Trust's Board.
SECTION 5. COMPLIANCE WITH APPLICABLE REQUIREMENTS. In carrying out its
obligations under this Agreement, the Sub-Adviser shall at all times comply
with:
(a) all applicable provisions of the 1940 Act, and any rules and
regulations adopted thereunder;
(b) the provisions of the registration statement of the Trust, as it may
be amended or supplemented from time to time, under the Securities Act and the
1940 Act;
(c) the provisions of the Declaration of Trust of the Trust, as it may be
amended or supplemented from time to time;
(d) the provisions of any By-laws of the Trust, if adopted and as it may
be amended from time to time, or resolutions of the Board as may be adopted from
time to time;
(e) the provisions of the Internal Revenue Code of 1986, as amended,
applicable to the Trust or the Funds;
(f) any other applicable provisions of state or federal law; and
In addition, any code of ethics adopted by the Sub-Adviser must comply
with Rule 17j-1 under the 1940 Act, as it may be amended from time to time, and
any broadly accepted industry practices, if requested by the Trust or the
Adviser.
3
SECTION 6. BROKER-DEALER RELATIONSHIPS. The Sub-Adviser is responsible for
the purchase and sale of securities for the Funds, broker-dealer selection, and
negotiation of brokerage commission rates. The Sub-Adviser's primary
consideration in effecting a security transaction will be to obtain the best
price and execution. In selecting a broker-dealer to execute each particular
transaction for a Fund, the Sub-Adviser will take the following into
consideration: the best net price available, the reliability, integrity and
financial condition of the broker-dealer; the size of and difficulty in
executing the order; and the value of the expected contribution of the
broker-dealer to the Fund on a continuing basis. Accordingly, the price to the
Fund in any transaction may be less favorable than that available from another
broker-dealer if the difference is reasonably justified by other aspects of the
portfolio execution services offered. Subject to such policies as the Trust's
Board of Trustees may from time to time determine, the Sub-Adviser shall not be
deemed to have acted unlawfully or to have breached any duty created by this
Agreement or otherwise solely by reason of having caused a Fund to pay a broker
or dealer that provides brokerage and research services to the Sub-Adviser an
amount of commission for effecting a portfolio investment transaction in excess
of the amount of commission 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 services provided by such broker or dealer, viewed in
terms of either that particular transaction or the overall responsibilities of
the Sub-Adviser with respect to the Fund and to other clients of the
Sub-Adviser. The Sub-Adviser is further authorized to allocate the orders placed
by it on behalf of the Funds to brokers and dealers who also provide research or
statistical material, or other services to the Funds or to the Sub-Adviser. Such
allocation shall be in such amounts and proportions as the Sub-Adviser shall
determine and the Sub-Adviser will report on said allocations regularly to the
Board of Trustees of the Trust indicating the brokers to whom such allocations
have been made and the basis therefor.
SECTION 7. EXPENSES OF THE FUND. All of the ordinary business expenses
incurred in the operations of the Funds and the offering of their shares shall
be borne by the Funds unless specifically provided otherwise in this Agreement.
These expenses borne by the Trust include, but are not limited to, brokerage
commissions, taxes, legal, auditing or governmental fees, the cost of preparing
share certificates, custodian, transfer agent and shareholder service agent
costs, expense of issue, sale, redemption and repurchase of shares, expenses of
registering and qualifying shares for sale, expenses relating to trustees and
shareholder meetings, the cost of preparing and distributing reports and notices
to shareholders, the fees and other expenses incurred by the Funds in connection
with membership in investment company organizations and the cost of printing
copies of prospectuses and statements of additional information distributed to
the Funds' shareholders.
SECTION 8. COMPENSATION. As compensation for the sub-advisory services
provided under this Agreement, the Adviser shall pay the Sub-Adviser fees,
payable monthly, the annual rates indicated on Schedule A hereto, as such
Schedule may be amended or supplemented from time to time. It is understood that
the Adviser shall be
4
responsible for the Sub-Adviser's fee for its services hereunder, and the
Sub-Adviser agrees that it shall have no claim against the Trust or the Funds
with respect to compensation under this Agreement.
SECTION 9. STANDARD OF CARE. The Trust and Adviser shall expect of the
Sub-Adviser, and the Sub-Adviser will give the Trust and the Adviser the benefit
of, the Sub-Adviser's best judgment and efforts in rendering its services to the
Trust, and as an inducement to the Sub-Adviser's undertaking these services at
the compensation level specified, the Sub-Adviser shall not be liable hereunder
for any mistake in judgment. In the absence of willful misfeasance, bad faith,
negligence or reckless disregard of obligations or duties hereunder on the part
of the Sub-Adviser or any of its officers, directors, employees or agents, the
Sub-Adviser shall not be subject to liability to the Trust or to any
shareholders in the Trust for any act or omission in the course of, or connected
with, rendering services hereunder or for any losses that may be sustained in
the purchase, holding or sale of any security.
SECTION 10. NON-EXCLUSIVITY. The services of the Sub-Adviser to the
Adviser and the Trust are not to be deemed to be exclusive, and the Sub-Adviser
shall be free to render investment advisory and administrative or other services
to others (including other investment companies) and to engage in other
activities. It is understood and agreed that officers or directors of the
Sub-Adviser are not prohibited from engaging in any other business activity or
from rendering services to any other person, or from serving as partners,
officers, directors or trustees of any other firm or trust, including other
investment advisory companies.
SECTION 11. RECORDS. The Sub-Adviser shall, with respect to orders the
Sub-Adviser places for the purchase and sale of portfolio securities of the
Funds, maintain or arrange for the maintenance of the documents and records
required pursuant to Rule 31a-1 under the 1940 Act as well as trade tickets and
confirmations of portfolio trades and such other records as the Adviser or the
Funds' Administrator reasonably requests to be maintained. All such records
shall be maintained in a form acceptable to the Funds and in compliance with the
provisions of Rule 31a-1 or any successor rule. All such records will be the
property of the Funds, and will be available for inspection and use by the Funds
and their authorized representatives (including the Adviser). The Sub-Adviser
shall promptly, upon the Trust's request, surrender to the Funds those records
which are the property of the Trust or any Fund. The Sub-Adviser will promptly
notify the Funds' Administrator if it experiences any difficulty in maintaining
the records in an accurate and complete manner.
SECTION 12. TERM AND APPROVAL. This Agreement shall become effective with
respect to a Fund after it is approved in accordance with the express
requirements of the 1940 Act, and executed by the Trust, Adviser and Sub-Adviser
and shall thereafter continue from year to year, provided that the continuation
of the Agreement is approved in accordance with the requirements of the 1940
Act, which currently requires that the continuation be approved at least
annually:
5
(a) (i) by the Trust's Board of Trustees or (ii) by the vote of "a
majority of the outstanding voting securities" of the Fund (as defined in
Section 2(a)(42) of the 1940 Act), and
(b) by the affirmative vote of a majority of the Trust's Trustees who are
not parties to this Agreement or "interested persons" (as defined in the 0000
Xxx) of a party to this Agreement (other than as Trustees of the Trust), by
votes cast in person at a meeting specifically called for such purpose.
SECTION 13. TERMINATION. As required under the 1940 Act, this Agreement
may be terminated with respect to a Fund at any time, without the payment of any
penalty, by vote of the Trust's Board of Trustees or by vote of a majority of a
Fund's outstanding voting securities, or by the Adviser or Sub-Adviser, on sixty
(60) days written notice to the other party. The notice provided for herein may
be waived by the party entitled to receipt thereof. This Agreement shall
automatically terminate in the event of its assignment, the term "assignment"
for purposes of this paragraph having the meaning defined in Section 2(a)(4) of
the 1940 Act, as it may be interpreted by the Commission or its staff in
interpretive releases, or applied by the Commission staff in no-action letters,
issued under the 1940 Act.
SECTION 14. INDEMNIFICATION BY THE SUB-ADVISER. The Trust shall not be
responsible for, and the Sub-Adviser shall indemnify and hold the Trust or any
Fund of the Trust harmless from and against, any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liability arising out of or
attributable to the willful misfeasance, bad faith, negligent acts or reckless
disregard of obligations or duties of the Sub-Adviser or any of its officers,
directors, employees or agents.
SECTION 15. INDEMNIFICATION BY THE TRUST. In the absence of willful
misfeasance, bad faith, negligence or reckless disregard of duties hereunder on
the part of the Sub-Adviser or any of its officers, directors, employees or
agents, the Trust hereby agrees to indemnify and hold harmless the Sub-Adviser
against all claims, actions, suits or proceedings at law or in equity whether
brought by a private party or a governmental department, commission, board,
bureau, agency or instrumentality of any kind, arising from the advertising,
solicitation, sale, purchase or pledge of securities, whether of the Funds or
other securities, undertaken by the Funds, their officers, directors, employees
or affiliates, resulting from any violations of the securities laws, rules,
regulations, statutes and codes, whether federal or of any state, by the Funds,
their officers, directors, employees or affiliates. Federal and state securities
laws impose liabilities under certain circumstances on persons who act in good
faith, and nothing herein shall constitute a waiver or limitation of any rights
which a Fund may have and which may not be waived under any applicable federal
and state securities laws.
SECTION 16. NOTICES. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Trust
shall be 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx
0
Xxxxxxxxx, Xxxxxxxxxx 00000, Attention Xxxxxxx X. Xxxxx, and that of the Adviser
shall be 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxxxxx X. Xxxxx, and that of the Sub-Adviser shall be 000 Xxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: J. Xxxx Xxxxx.
SECTION 17. QUESTIONS OF INTERPRETATION. Any question of interpretation of
any term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act shall be resolved by reference
to such terms or provision of the 1940 Act and to interpretations thereof, if
any, by the United States Courts or in the absence of any controlling decision
of any such court, by rules, regulations or orders of the Commission, or
interpretations of the Commission or its staff, or Commission staff no-action
letters, issued pursuant to the 1940 Act. In addition, where the effect of a
requirement of the 1940 Act or the Advisers Act reflected in any provision of
this Agreement is revised by rule, regulation or order of the Commission, such
provision shall be deemed to incorporate the effect of such rule, regulation or
order. The duties and obligations of the parties under this Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware.
SECTION 18. AMENDMENT. This Agreement supersedes the sub-advisory
agreement among Xxxxx Fargo Funds Trust, Xxxxx Fargo Bank, N.A. and Xxxxx Fargo
Capital Management Incorporated dated November 8, 1999, as approved by the Board
of Trustees on March 26, 1999 as amended October 28, 1999, May 9, 2000 and July
25, 2000. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought. If shareholder approval of an amendment is required under the 1940 Act,
no such amendment shall become effective until approved by a vote of the
majority of the outstanding shares of the affected Funds. Otherwise, a written
amendment of this Agreement is effective upon the approval of the Board of
Trustees, the Adviser and the Sub-Adviser.
SECTION 19. XXXXX FARGO NAME. The Sub-Adviser and the Trust each agree
that the name "Xxxxx Fargo," which comprises a component of the Trust's name, is
a property right of the parent of the Adviser. The Trust agrees and consents
that: (i) it will use the words "Xxxxx Fargo" as a component of its corporate
name, the name of any series or class, or all of the above, and for no other
purpose; (ii) it will not grant to any third party the right to use the name
"Xxxxx Fargo" for any purpose; (iii) the Adviser or any corporate affiliate of
the Adviser may use or grant to others the right to use the words "Xxxxx Fargo,"
or any combination or abbreviation thereof, as all or a portion of a corporate
or business name or for any commercial purpose, other than a grant of such right
to another registered investment company not advised by the Adviser or one of
its affiliates; and (iv) in the event that the Adviser or an affiliate thereof
is no longer acting as investment adviser to any Fund or class of a Fund, the
Trust shall, upon request by the Adviser, promptly take such action as may be
necessary to change its corporate name to one not containing the words "Xxxxx
Fargo" and following such change, shall not use the words "Xxxxx Fargo," or any
combination thereof, as a part of its corporate name or for any other commercial
purpose, and shall use its best efforts to cause its trustees, officers
7
and shareholders to take any and all actions that the Adviser may request to
effect the foregoing and to reconvey to the Adviser any and all rights to such
words.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
written above.
XXXXX FARGO FUNDS TRUST
on behalf of the Funds
By:
----------------------------------------
C. Xxxxx Xxxxxxx
Secretary
XXXXX FARGO FUNDS MANAGEMENT, LLC
By:
----------------------------------------
Xxxxxx Xxxx
Vice President
XXXXX CAPITAL MANAGEMENT INCORPORATED
By:
----------------------------------------
J. Xxxx Xxxxx
Chief Operating Officer
8
APPENDIX A
XXXXX CAPITAL MANAGEMENT INCORPORATED
INVESTMENT SUB-ADVISORY AGREEMENT
XXXXX FARGO FUNDS TRUST
--------------------------------------------------------------------------------
FUNDS TRUST FUNDS
--------------------------------------------------------------------------------
Aggressive Allocation Fund
Asia Pacific Fund
Asset Allocation Fund
Balanced Fund
California Limited-Term Tax-Free Fund
California Tax-Free Fund
California Tax-Free Money Market Fund
California Tax-Free Money Market Trust
Capital Growth Fund
Cash Investment Money Market Fund
Colorado Tax-Free Fund
Common Stock Fund
Conservative Allocation Fund
Corporate Bond Fund
Discovery Fund
Diversified Bond Fund
Diversified Equity Fund
Diversified Small Cap Fund
Dividend Income Fund
Emerging Markets Focus Fund
Endeavor Large Cap Fund
Endeavor Select Fund
Enterprise Fund
Equity Income Fund
Equity Index Fund
Government Money Market Fund
Government Securities Fund
Growth Balanced Fund
Growth Equity Fund
Growth Fund
Heritage Money Market Fund
High Income Fund
High Yield Bond Fund
Income Plus Fund
Index Fund
Institutional Emerging Markets Fund
Intermediate Government Income Fund
Intermediate Tax-Free Fund
Large Cap Growth Fund
Liquidity Reserve Money Market Fund
Mid Cap Disciplined Fund
Mid Cap Growth Fund
Minnesota Money Market Fund
Minnesota Tax-Free Fund
--------------------------------------------------------------------------------
9
--------------------------------------------------------------------------------
FUNDS TRUST FUNDS
--------------------------------------------------------------------------------
Moderate Balanced Fund
Money Market Fund
Money Market Trust
Municipal Bond Fund
Municipal Money Market Fund
National Limited-Term Tax-Free Fund
National Tax-Free Fund
National Tax-Free Money Market Fund
National Tax-Free Money Market Trust
Nebraska Tax-Free Fund
Opportunity Fund
Overland Express Sweep Fund
Prime Investment Money Market Fund
Income Fund
Short Duration Government Bond Fund
Short-Term Bond Fund
Short-Term High Yield Bond Fund
Short-Term Municipal Bond Fund
Small Cap Disciplined Fund
Small Cap Growth Fund
Small Cap Value Fund
Small Mid/Cap Value Fund
Specialized Financial Services Fund
Strategic Income Fund
Strategic Small Cap Value Fund 1
Treasury Plus Money Market Fund
Ultra-Short Duration Bond Fund
Ultra Short-Term Income Fund
Ultra Short-Term Municipal Income Fund
U.S. Value Fund
WealthBuilder Conservative Allocation Portfolio
WealthBuilder Equity Portfolio
WealthBuilder Growth Allocation
WealthBuilder Growth Balanced Portfolio
WealthBuilder Moderate Balanced Portfolio
WealthBuilder Tactical Equity Portfolio
Wisconsin Tax-Free Fund
100% Treasury Money Market Fund
--------------------------------------------------------------------------------
Most recent annual approval by the Board of Trustees: April 4, 2005
Appendix A amended: February 8, 2006
----------
1 On February 8, 2006, the Board of Trustees approved the establishment of
Strategic Small Cap Value Fund, which is expected to commence operations
in 2006.
10
SCHEDULE A
XXXXX CAPITAL MANAGEMENT INCORPORATED
INVESTMENT SUB-ADVISORY AGREEMENT
FEE AGREEMENT
XXXXX FARGO FUNDS TRUST
This fee agreement is made as of the 28th day of July, 2003, by and
between Xxxxx Fargo Funds Management, LLC (the "Adviser") and Xxxxx Capital
Management Incorporated (the "Sub-Adviser"); and
WHEREAS, the parties and Xxxxx Fargo Funds Trust (the "Trust") have
entered into an Investment Sub-Advisory Agreement ("Sub-Advisory Agreement")
whereby the Sub-Adviser provides investment management advice to each series of
the Trust as listed in Schedule A to the Sub-Advisory Agreement (each a "Fund"
and collectively the "Funds").
WHEREAS, the Sub-Advisory Agreement provides that the fees to be paid to
the Sub-Adviser are to be as agreed upon in writing by the parties.
NOW THEREFORE, the parties agree that the fees to be paid to the
Sub-Adviser under the Sub-Advisory Agreement shall be calculated as follows on a
monthly basis by applying the annual rates described in Appendix A to Schedule A
for each Fund listed in Appendix A.
For the Diversified Bond Fund, Diversified Equity Fund, Diversified Small
Cap Fund, Equity Income Fund, Growth Balanced Fund, Growth Equity Fund, Index
Fund, Moderate Balanced Fund, Aggressive Allocation Fund and Conservative
Allocation Fund the parties agree that the fees to be paid to the Sub-Adviser
under the Sub-Advisory Agreement shall be calculated as follows on a monthly
basis by applying the following annual rates per Fund for the assets formerly
invested in the following Portfolios:
----------------------------------------------------------------
NAME OF PORTFOLIO SUB-ADVISORY FEE RATE
----------------------------------------------------------------
Equity Income Portfolio 0-100M 0.35
100-200M 0.30
200-500M 0.20
>500M 0.15
----------------------------------------------------------------
Index Portfolio 0-100M 0.05
100-200M 0.03
>200M 0.02
----------------------------------------------------------------
Small Cap Index Portfolio 0-100M 0.05
100-200M 0.03
>200M 0.02
----------------------------------------------------------------
Provided, that no fee shall be payable hereunder with respect to any of the
Funds listed above during any period in which the Fund invests all (or
substantially all) of its investment assets in a registered, open-end,
management investment company, or
11
separate series thereof, in accordance with and reliance upon Section
12(d)(1)(E) or 12(d)(1)(G) under the Act.
However, the Sub-Adviser shall receive a fee as described in Appendix A to
Schedule A of the assets of the Growth Balanced Fund, Moderate Balanced Fund,
Aggressive Allocation Fund and Conservative Allocation Fund and from each
WealthBuilder Portfolio for providing services with respect to which Master
Trust Portfolios (or, in the case of the WealthBuilder Portfolios, other
unaffiliated funds) these Funds will invest in and the percentage to allocate to
each Master Portfolio or unaffiliated fund in reliance on Section 12(d)(1)(G)
under the Act, the rules thereunder, or order issued by the Commission exempting
the Fund from the provisions of Section 12(d)(1)(A) under the Act (a "Fund of
Funds structure").
The net assets under management against which the foregoing fees are to be
applied are the net assets as of the first business day of the month. If this
fee agreement becomes effective subsequent to the first day of a month or shall
terminate before the last day of a month, compensation for that part of the
month this agreement is in effect shall be subject to a pro rata adjustment
based on the number of days elapsed in the current month as a percentage of the
total number of days in such month. If the determination of the net asset value
is suspended as of the first business day of the month, the net asset value for
the last day prior to such suspension shall for this purpose be deemed to be the
net asset value on the first business day of the month.
12
APPENDIX A TO SCHEDULE A
XXXXX CAPITAL MANAGEMENT INCORPORATED
INVESTMENT SUB-ADVISORY AGREEMENT
FEE AGREEMENT
XXXXX FARGO FUNDS TRUST
------------------------------------------------------------------------------
FUNDS TRUST FUNDS FEE AS % OF AVG.
DAILY NET ASSETS
------------------------------------------------------------------------------
Aggressive Allocation Fund 0-250M 0.10
>250M 0.05
------------------------------------------------------------------------------
Asia Pacific Fund 0-100M 0.65
100M-200M 0.55
>200M 0.45
------------------------------------------------------------------------------
Asset Allocation Fund 0-100M 0.15
100-200M 0.125
>200M 0.10
------------------------------------------------------------------------------
Balanced Fund 0-100M 0.25
100-200M 0.20
>200M 0.15
------------------------------------------------------------------------------
California Limited-Term Tax-Free Fund 0-100M 0.15
100M-300M 0.10
>300M 0.05
------------------------------------------------------------------------------
California Tax-Free Fund 0-100M 0.20
100-300M 0.175
300-500M 0.15
>500M 0.10
------------------------------------------------------------------------------
California Tax-Free Money Market Fund 0-1B 0.05
1-3B 0.03
3-6B 0.02
>6B 0.01
------------------------------------------------------------------------------
California Tax-Free Money Market Trust 0-1B 0.00
>1B 0.00
------------------------------------------------------------------------------
Capital Growth Fund 0-100M 0.35
100-200M 0.30
200-500M 0.20
>500M 0.15
------------------------------------------------------------------------------
Cash Investment Money Market Fund 0-1B 0.05
1-3B 0.03
3-6B 0.02
>6B 0.01
------------------------------------------------------------------------------
Colorado Tax-Free Fund 0-100M 0.20
100-300M 0.175
300-500M 0.15
>500M 0.10
------------------------------------------------------------------------------
Common Stock Fund 0-100M 0.45
100-200M 0.40
>200M 0.30
------------------------------------------------------------------------------
Conservative Allocation Fund 0-250M 0.10
>250M 0.05
------------------------------------------------------------------------------
Corporate Bond Fund 0-100M 0.20
100-300M 0.175
------------------------------------------------------------------------------
13
------------------------------------------------------------------------------
FUNDS TRUST FUNDS FEE AS % OF AVG.
DAILY NET ASSETS
------------------------------------------------------------------------------
300-500M 0.15
>500M 0.10
------------------------------------------------------------------------------
Discovery Fund 0-100M 0.45
100-200M 0.40
>200M 0.35
------------------------------------------------------------------------------
Dividend Income Fund 0-100M 0.35
100-200M 0.30
200-500M 0.20
>500M 0.15
------------------------------------------------------------------------------
Emerging Markets Focus Fund 0-100M 0.65
100-200M 0.55
>200M 0.45
------------------------------------------------------------------------------
Endeavor Large Cap Fund 0-100M 0.35
100-200M 0.30
200-500M 0.20
>500M 0.15
------------------------------------------------------------------------------
Endeavor Select Fund 0-100M 0.35
100-200M 0.30
200-500M 0.20
>500M 0.15
------------------------------------------------------------------------------
Enterprise Fund 0-100M 0.45
100-200M 0.40
>200M 0.30
------------------------------------------------------------------------------
Equity Index Fund 0-100M 0.05
100-200M 0.03
>200M 0.02
------------------------------------------------------------------------------
Government Money Market Fund 0-1B 0.05
1-3B 0.03
3-6B 0.02
>6B 0.01
------------------------------------------------------------------------------
Government Securities Fund 0-100M 0.20
100-300M 0.175
300-500M 0.15
>500M 0.10
------------------------------------------------------------------------------
Growth Balanced Fund 0-250M 0.10
>250M 0.05
------------------------------------------------------------------------------
Growth Fund 0-100M 0.35
100-200M 0.30
200-500M 0.20
>500M 0.15
------------------------------------------------------------------------------
Heritage Money Market Fund 0-1B 0.05
1-3B 0.03
3-6B 0.02
>6B 0.01
------------------------------------------------------------------------------
High Income Fund 0-100M 0.35
100-300M 0.30
300-500M 0.25
>500M 0.20
------------------------------------------------------------------------------
High Yield Bond Fund 0-100M 0.35
100-300M 0.30
300-500M 0.25
>500M 0.20
------------------------------------------------------------------------------
14
------------------------------------------------------------------------------
FUNDS TRUST FUNDS FEE AS % OF AVG.
DAILY NET ASSETS
------------------------------------------------------------------------------
Income Plus Fund 0-100M 0.20
100-300M 0.175
300-500M 0.15
>500M 0.10
------------------------------------------------------------------------------
Institutional Emerging Markets Fund 0-100M 0.65
100-200M 0.55
>200M 0.45
------------------------------------------------------------------------------
Intermediate Government Income Fund 0-100M 0.20
100-300M 0.175
300-500M 0.15
>500M 0.10
------------------------------------------------------------------------------
Intermediate Tax-Free Fund 0-100M 0.20
100-300M 0.175
300-500M 0.15
>500M 0.10
------------------------------------------------------------------------------
Large Cap Growth Fund 0-100M 0.35
100-200M 0.30
200-500M 0.20
>500M 0.15
------------------------------------------------------------------------------
Liquidity Reserve Money Market Fund 0-1B 0.05
1-3B 0.03
3-6B 0.02
>6B 0.01
------------------------------------------------------------------------------
Mid Cap Disciplined Fund 0-100M 0.45
100-200M 0.40
>200M 0.30
------------------------------------------------------------------------------
Mid Cap Growth Fund 0-100M 0.45
100-200M 0.40
>200M 0.30
------------------------------------------------------------------------------
Minnesota Money Market Fund 0-1B 0.05
1-3B 0.03
3-6B 0.02
>6B 0.01
------------------------------------------------------------------------------
Minnesota Tax-Free Fund 0-100M 0.20
100-300M 0.175
300-500M 0.15
>500M 0.10
------------------------------------------------------------------------------
Moderate Balanced Fund 0-250M 0.10
>250M 0.05
------------------------------------------------------------------------------
Money Market Fund 0-1B 0.05
1-3B 0.03
3-6B 0.02
>6B 0.01
------------------------------------------------------------------------------
Money Market Trust 0.00
------------------------------------------------------------------------------
Municipal Bond Fund 0-100M 0.20
100-300M 0.175
300-500M 0.15
>500M 0.10
------------------------------------------------------------------------------
Municipal Money Market Fund 0-1B 0.05
1-3B 0.03
3-6B 0.02
>6B 0.01
------------------------------------------------------------------------------
15
------------------------------------------------------------------------------
FUNDS TRUST FUNDS FEE AS % OF AVG.
DAILY NET ASSETS
------------------------------------------------------------------------------
National Limited-Term Tax-Free Fund 0-100M 0.15
100-300M 0.10
>300M 0.05
------------------------------------------------------------------------------
National Tax-Free Fund 0-100M 0.20
100-300M 0.175
300-500M 0.15
>500M 0.10
------------------------------------------------------------------------------
National Tax-Free Money Market Fund 0-1B 0.05
1-3B 0.03
3-6B 0.02
>6B 0.01
------------------------------------------------------------------------------
National Tax-Free Money Market Trust 0.00
------------------------------------------------------------------------------
Nebraska Tax-Free Fund 0-100M 0.20
100-300M 0.175
300-500M 0.15
>500M 0.10
------------------------------------------------------------------------------
Opportunity Fund 0-100M 0.45
100-200M 0.40
>200M 0.30
------------------------------------------------------------------------------
Overland Express Sweep Fund 0-1B 0.05
1-3B 0.03
3-6B 0.02
>6B 0.01
------------------------------------------------------------------------------
Prime Investment Money Market Fund 0-1B 0.05
1-3B 0.03
3-6B 0.02
>6B 0.01
------------------------------------------------------------------------------
Short Duration Government Bond Fund 0-100M 0.15
100-300M 0.10
>300M 0.05
------------------------------------------------------------------------------
Short-Term Bond Fund 0-100M 0.15
100M-300M 0.10
>300M 0.05
------------------------------------------------------------------------------
Short-Term High Yield Bond Fund 0-100M 0.35
100-300M 0.30
300-500M 0.25
>500M 0.20
------------------------------------------------------------------------------
Short-Term Municipal Bond Fund 0-100M 0.15
100M-300M 0.10
>300M 0.05
------------------------------------------------------------------------------
Small Cap Disciplined Fund 0-100M 0.55
100-200M 0.50
>200M 0.40
------------------------------------------------------------------------------
Small Cap Growth Fund 0-100M 0.55
100-200M 0.50
>200M 0.40
------------------------------------------------------------------------------
Small Cap Value Fund 0-100M 0.55
100-200M 0.50
>200M 0.40
------------------------------------------------------------------------------
Small Mid/Cap Value Fund 0-100M 0.45
100-200M 0.40
>200M 0.35
------------------------------------------------------------------------------
16
------------------------------------------------------------------------------
FUNDS TRUST FUNDS FEE AS % OF AVG.
DAILY NET ASSETS
------------------------------------------------------------------------------
Specialized Financial Services Fund 0-100M 0.45
100-200M 0.40
>200M 0.30
------------------------------------------------------------------------------
Strategic Income Fund 0-100M 0.35
100-300M 0.30
300-500M 0.25
>500M 0.20
------------------------------------------------------------------------------
Strategic Small Cap Value Fund(1) 0-200M 0.45
>200M 0.40
------------------------------------------------------------------------------
Treasury Plus Money Market Fund 0-1B 0.05
1-3B 0.03
3-6B 0.02
>6B 0.01
------------------------------------------------------------------------------
Ultra-Short Duration Bond Fund 0-100M 0.15
100M-300M 0.10
>300M 0.05
------------------------------------------------------------------------------
Ultra Short-Term Income Fund 0-100M 0.15
100-300M 0.10
>300M 0.05
------------------------------------------------------------------------------
Ultra Short-Term Municipal Income Fund 0-100M 0.15
100-300M 0.10
>300M 0.05
------------------------------------------------------------------------------
U.S. Value Fund 0-100M 0.35
100-200M 0.30
200-500M 0.20
>500M 0.15
------------------------------------------------------------------------------
WealthBuilder Conservative Allocation Portfolio 0.15
------------------------------------------------------------------------------
WealthBuilder Equity Portfolio 0.15
------------------------------------------------------------------------------
WealthBuilder Growth Allocation Portfolio 0.15
------------------------------------------------------------------------------
WealthBuilder Growth Balanced Portfolio 0.15
------------------------------------------------------------------------------
WealthBuilder Moderate Balanced Portfolio 0.15
------------------------------------------------------------------------------
WealthBuilder Tactical Equity Portfolio 0.15
------------------------------------------------------------------------------
Wisconsin Tax-Free Fund 0-100M 0.20
100-300M 0.175
300-500M 0.15
>500M 0.10
------------------------------------------------------------------------------
100% Treasury Money Market Fund 0-1B 0.05
1-3B 0.03
3-6B 0.02
>6B 0.01
------------------------------------------------------------------------------
----------
1 On February 8, 2006, the Board of Trustees approved the establishment of
Strategic Small Cap Value Fund, which is expected to commence operations
in 2006.
17
The foregoing fee schedule is agreed to as of February 8, 2006 and shall
remain in effect until changed in writing by the parties.
XXXXX FARGO FUNDS MANAGEMENT, LLC
By:
----------------------------------------
Xxxxxx Xxxx
Senior Vice President
XXXXX CAPITAL MANAGEMENT INCORPORATED
By:
----------------------------------------
Xxxxx X'Xxxxx
Chief Financial Officer
18
