SUB-ADVISORY AGREEMENT
----------------------
Xxxxxx Capital Management Limited
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Ladies and Gentlemen:
Xxxx Family of Funds (the "Trust"), an Ohio business trust, is a
diversified open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "Act"), and is subject to the
rules and regulations promulgated thereunder. The Trust's shares of beneficial
interest are divided into separate series or funds. Each such share of a fund
represents an undivided interest in the assets, subject to the liabilities,
allocated to that fund. Each fund has separate investment objectives and
policies. The International Value Fund (the "Fund") has been established as a
series of the Trust.
X.X. Xxxx & Associates, Inc. (the "Adviser") acts as the investment adviser
for the Fund pursuant to the terms of an Advisory Agreement. The Adviser is
responsible for the coordination of investment of the Fund's assets in portfolio
securities. However, specific portfolio purchases and sales for the investment
portfolio of the Fund are to be made by advisory organizations recommended by
the Adviser and approved by the Board of Trustees of the Trust.
1. APPOINTMENT AS SUB-ADVISER. The Trust being duly authorized hereby
appoints and employs Xxxxxx Capital Management Limited (the "Sub-Adviser") as
the discretionary portfolio manager of the Fund, on the terms and conditions set
forth herein.
2. ACCEPTANCE OF APPOINTMENT; Standard of Performance. The Sub-Adviser
accepts the appointment as the discretionary portfolio manager and agrees that
in the performance of its duties under this Agreement, it shall at all times use
all reasonable efforts to conform to, and act in accordance with, any
requirements imposed by (i) the provisions of the Act, and of any rules or
regulations in force thereunder; (ii) any other applicable provision of law;
(iii) the provisions of the Declaration of Trust and Bylaws of the Trust, as
such documents are amended from time to time; (iv) the investment objectives,
policies and restrictions applicable to the Fund as set forth in the Trust's
Registration Statement on Form N-1A and (v) any policies and determinations of
the Board of Trustees of the Trust with respect to the Fund.
3. PORTFOLIO MANAGEMENT SERVICES OF SUB-ADVISER. The Sub-Adviser is
hereby employed and authorized to select portfolio securities for investment by
the Fund, to purchase and sell securities of the Fund, and upon making any
purchase or sale decision, to place orders for the execution of such portfolio
transactions in accordance with paragraphs 5 and 6 hereof. In providing
portfolio management services to the Fund, the
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Sub-Adviser shall be subject to such investment restrictions as are set forth in
the Act and the rules thereunder, the Internal Revenue Code of 1986, applicable
state securities laws, the supervision and control of the Board of Trustees of
the Trust, such specific instructions as the Board of Trustees may adopt and
communicate to the Sub-Adviser, the investment objectives, policies and
restrictions of the Fund furnished pursuant to paragraph 4, the provisions of
Schedule A hereto and general instructions from the Adviser. The Sub-Adviser is
not authorized by the Fund to take any action, including the purchase or sale of
securities for the Fund, in contravention of any restriction, limitation,
objective, policy or instruction described in the previous sentence. The
Sub-Adviser shall maintain on behalf of the Fund the records listed in Schedule
A hereto (as amended from time to time). At the Trust's reasonable request, the
Sub-Adviser will consult with the Adviser with respect to any decision made by
it with respect to the investments of the Fund.
4. INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS. The Trust will
provide the Sub-Adviser with the statement of investment objectives, policies
and restrictions applicable to the Fund as contained in the Fund's registration
statements under the Act and the Securities Act of 1933, and any instructions
adopted by the Board of Trustees supplemental thereto. The Trust will provide
the Sub-Adviser with such further information concerning the investment
objectives, policies and restrictions applicable thereto as the Sub-Adviser may
from time to time
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reasonably request. The Trust retains the right, on written notice to the
Sub-Adviser from the Trust or the Adviser, to modify any such objectives,
policies or restrictions in any manner at any time.
5. ALLOCATION OF BROKERAGE. The Sub-Adviser shall have the authority and
discretion to select brokers and dealers to execute portfolio transactions
initiated by the Sub-Adviser, and for the selection of the markets on or in
which the transactions will be executed.
A. In doing so, the Sub-Adviser will give primary consideration to
securing the best execution, taking into account such factors as price
(including the applicable brokerage commission or dealer spread), the execution
capability, financial responsibility and responsiveness of the broker or dealer
and the brokerage and research services provided by the broker or dealer.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc., and subject to seeking most favorable price and
efficient execution, the Sub-Adviser may (i) pay commissions to brokers or
dealers other than its affiliates which are higher than might be charged by
another qualified broker to obtain brokerage and/or research services considered
by the Sub-Adviser to be useful or desirable in the performance of its duties
hereunder and for the investment management of other advisory accounts over
which it or its affiliates exercise investment discretion and (ii) consider
sales by brokers or dealers (other than its affiliates) of shares of
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the Fund as a factor in its selection of brokers and dealers for the Fund's
portfolio transactions. It is understood that neither the Trust, the Adviser nor
the Sub-Adviser have adopted a formula for allocation of the Fund's investment
transaction business. It is also understood that it is desirable for the Fund
that the Sub-Adviser have access to supplemental investment and market research
and security and economic analyses provided by certain brokers who may execute
brokerage transactions at a higher commission to the Fund than may result when
allocating brokerage to other brokers on the basis of seeking the lowest
commission. Therefore, the Sub-Adviser is authorized to place orders for the
purchase and sale of securities for the Fund with such certain brokers, subject
to review by the Trust's Board of Trustees from time to time with respect to the
extent and continuation of this practice, provided that the Sub-Adviser
determines in good faith that the amount of the commission is reasonable in
relation to the value of the brokerage and research services provided by the
executing broker or dealer. The determination may be viewed in terms of either a
particular transaction or the Sub-Adviser's overall responsibilities with
respect to the Fund and to the other accounts over which it exercises investment
discretion. It is understood that although the information may be useful to the
Trust and the Sub-Adviser, it is not possible to place a dollar value on such
information.
On occasions when the Sub-Adviser deems the purchase or sale of a security
to be in the best interest of the Fund as well as other clients, the
Sub-Adviser, to the extent permitted by
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applicable laws and regulations, may, but shall be under no obligation to,
aggregate the securities to be sold or purchased in order to obtain the most
favorable price or lower brokerage commissions and efficient execution. In such
event, allocation of the securities so purchased or sold, as well as expenses
incurred in the transaction, will be made by the Sub-Adviser in the manner it
considers to be the most equitable and consistent with its fiduciary obligations
to the Fund with respect to the Fund and to such other clients.
For each fiscal quarter of the Fund, the Sub-Adviser shall prepare and
render reports to the Adviser and the Trust's Board of Trustees of the total
brokerage business placed and the manner in which the allocation has been
accomplished. Such reports shall set forth at a minimum the information required
to be maintained by Rule 31a-1(b)(9) under the Act.
B. The Sub-Adviser agrees that it will not execute any portfolio
transactions for the Fund's account with a broker or dealer which is an
"affiliated person" (as defined in the Act) of the Trust, the Adviser, the
Sub-Adviser or any portfolio manager of the Trust without the prior written
approval of the Adviser. The Adviser agrees that it will provide the Sub-Adviser
with a list of brokers and dealers which are "affiliated persons" of the Trust,
the Adviser or the Sub-Adviser.
6. TRANSACTION PROCEDURES. All transactions will be consummated by
payment to or delivery by the Fund's custodian (the "Custodian"), or such
depositories or agents as may be designated by the Custodian in writing, as
custodian for the
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Fund, of all cash and/or securities due to or from the Fund, and the Sub-Adviser
shall not have possession or custody thereof. The Sub-Adviser shall advise the
Custodian and confirm in writing to the Trust and to the Adviser all investment
orders for the Fund placed by it with brokers and dealers. The Sub-Adviser shall
issue to the Custodian such instructions as may be appropriate in connection
with the settlement of any transaction initiated by the Sub-Adviser. Provided
that the Sub-Adviser is able to identify the relevant transactions, it shall be
the responsibility of the Sub-Adviser to take reasonable appropriate action if
the Custodian fails to properly execute the instructions.
7. PROXIES. The Sub-Adviser will vote all proxies solicited by or with
respect to the issuers of securities in which assets of the Fund may be invested
from time to time.
8. REPORTS TO THE SUB-ADVISER. The Trust will provide the Sub-Adviser
with such periodic reports concerning the status of the Fund as the Sub-Adviser
may reasonably request.
9. FEES FOR SERVICES. For the services provided to the Fund, the Adviser
shall pay the Sub-Adviser a fee equal to the annual rate of .50% of the average
value of the Fund's daily net assets.
The Sub-Adviser's fees shall be payable quarterly in arrears within thirty
days following the end of each quarter. Pursuant to the provisions of the
Advisory Agreement between the Trust and the Adviser, the Adviser is solely
responsible for the payment of
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fees to the Sub-Adviser, and the Sub-Adviser agrees to seek payment of the
Sub-Adviser's fees solely from the Adviser. The Sub-Adviser agrees to pay the
compensation of any persons rendering any services to the Fund who are officers,
directors or employees of the Sub-Adviser.
10. NON-EXCLUSIVE ADVISORY SERVICES. Nothing in this Agreement shall
prevent the Sub-Adviser or any director, officer, employee or other affiliate
thereof from acting as investment adviser for any other person, firm or
corporation, or from engaging in any other lawful activity and shall not in any
way limit or restrict the Sub-Adviser or any of its directors, officers,
employees or agents from buying, selling or trading any securities for its or
their own accounts or for the accounts of others for whom it or they may be
acting, other than to the extent such activity is otherwise limited by the
Trust's Code of Ethics.
11. OTHER INVESTMENT ACTIVITIES OF THE SUB-ADVISER. The Trust acknowledges
that the Sub-Adviser or one or more of its affiliates may have investment
responsibilities or render investment advice to or perform other investment
advisory services for other individuals or entities and that the Sub-Adviser,
its affiliates or any of its or their directors, officers, agents or employees
may buy, sell or trade in any securities for its or their respective accounts
("Affiliated Accounts"). Subject to the provisions of paragraph 2 hereof, the
Trust agrees that the Sub-Adviser or its affiliates may give
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advice or exercise investment responsibility and take such other action with
respect to other Affiliated Accounts which may differ from the advice given or
the timing or nature of action taken with respect to the Fund, provided that the
Sub-Adviser acts in good faith, and provided further, that it is the
Sub-Adviser's policy to allocate, within its reasonable discretion, investment
opportunities to the Fund over a period of time on a fair and equitable basis
relative to the Affiliated Accounts, taking into account the investment
objectives and policies of the Fund and any specific investment restrictions
applicable thereto. The Trust acknowledges that one or more of the Affiliated
Accounts may at any time hold, acquire, increase, decrease, dispose of or
otherwise deal with positions in investments in which the Fund may have an
interest from time to time, whether in transactions which involve the Fund or
otherwise. The Sub-Adviser shall have no obligation to acquire for the Fund a
position in any investment which any Affiliated Account may acquire, and the
Trust shall have no first refusal, co-investment or other rights in respect of
any such investment, either for the Fund or otherwise.
12. CERTIFICATE OF AUTHORITY. The Trust, the Adviser and the Sub-Adviser
shall furnish to each other from time to time certified copies of the
resolutions of their Board of Trustees or Board of Directors or executive
committees, as the case may be, evidencing the authority of officers and
employees who are authorized to act on behalf of the Trust, the Fund, the
Adviser and/or the Sub-Adviser.
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13. LIMITATION OF LIABILITY. The Sub-Adviser shall give the Fund the
benefit of its best judgment and effort in rendering services hereunder, but
neither the Sub-Adviser nor any of its officers, directors, employees, agents or
controlling persons shall be liable for any act or omission or for any loss
sustained by the Fund in connection with the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of its reckless
disregard of its obligations and duties under this Agreement; provided, however,
that the foregoing shall not constitute a waiver of any rights which the Trust
may have which may not be waived under applicable law.
In addition, the Sub-Adviser did not prepare and is not responsible for any
part of the Trust's registration statement on Form N-1A or any amendment or
supplement thereto other than the description of the Sub-Adviser provided to the
Trust by the Sub-Adviser.
14. CONFIDENTIALITY. Each of the parties shall maintain in strict
confidentiality any information or documentation it may obtain regarding any of
the other parties to this Agreement, including but not limited to their business
activities or financial condition, with the exception of reports or disclosures
required to be made or other actions required to be taken under applicable laws
and regulations or the order of a regulator or court of competent jurisdiction.
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15. INDEMNITY AND LIABILITY.
A. The Trust and the Adviser (for the purposes of this subparagraph
15.A., each of the foregoing being an "indemnitor"), severally and not jointly,
will indemnify and hold the Sub-Adviser and its respective officers, directors,
partners, agents, controlling persons and employees (for the purposes of this
subparagraph 15.A., each of the foregoing being an "indemnitee") harmless from
and against all losses, claims, liabilities and expenses of any kind (including
reasonable attorneys' fees and expenses) and amounts paid in satisfaction of
judgments, in compromise or as fines or penalties resulting from any inaccuracy
of any representation made by the indemnitor herein (including any supplement
hereto) or arising out of or with respect to actions taken by the Sub-Adviser;
provided, however, that (1) no indemnitee shall be indemnified hereunder against
any liability to the Trust or its shareholders or any expense of such indemnitee
arising by reason of (i) willful misfeasance, (ii) bad faith, (iii) gross
negligence, (iv) reckless disregard of the duties involved in the conduct of his
position (the conduct referred to in such clauses (i) through (iv) being
sometimes referred to herein as "disabling conduct"), (2) as to any matter
disposed of by settlement or a compromise payment by such indemnitee, pursuant
to a consent decree or otherwise, no indemnification either for said payment or
for any other expenses shall be provided unless there has been a determination
that such settlement or compromise is in the best
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interests of the Trust and that such indemnitee appears to have acted in good
faith in the reasonable belief that his action was in the best interests of the
Trust and did not involve disabling conduct by such indemnitee and (3) with
respect to any action, suit or other proceeding voluntarily prosecuted by an
indemnitee as plaintiff, indemnification shall be mandatory only if the
prosecution of such action, suit or other proceeding by such indemnitee was
authorized by a majority of the full Board of the Trust.
B. The Sub-Adviser (for purposes of this subparagraph B, the
"indemnitor") will indemnify and hold the Trust and the Adviser and each of
their respective officers, directors, trustees, partners, agents, controlling
persons and employees (for purposes of this subparagraph 15.B., an "indemnitee")
harmless from and against all losses, claims, liabilities and expenses of any
kind (including reasonable attorneys' fees and expenses) and amounts paid in
satisfaction of judgments, in compromise or as fines or penalties resulting from
any inaccuracy of any representation made by the indemnitor herein (including
any supplement hereto) or arising by reason of willful misfeasance, bad faith,
or gross negligence, of the Sub-Adviser or its officers, directors, partners,
agents, controlling persons and employees, or reckless disregard of the duties
of any such person pursuant to this Agreement.
C. The indemnitor shall make advance payments in connection with the
expenses of defending any action with respect to which indemnification might be
sought hereunder if the
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indemnitor receives a written affirmation of the indemnitee's good faith belief
that the standard of conduct necessary for indemnification has been met and a
written undertaking to reimburse the indemnitor unless it is subsequently
determined that he is entitled to such indemnification and if the directors or
trustees, as the case may be, of the indemnitor determine that the facts then
known to them would not preclude indemnification. In addition, at least one of
the following conditions must be met: (A) the indemnitee shall provide a
security for his undertaking; (B) the indemnitor shall be insured against losses
arising by reason of any lawful advances, or (C) a majority of a quorum of
directors or trustees, as the case may be, of the indemnitor who are neither
"interested persons" of the indemnitor (as defined in Section 2(a)(19) of the
Act) nor parties to the proceeding ("Disinterested Non-Party Directors") or an
independent legal counsel in a written opinion, shall determine, based on a
review of readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the indemnitee ultimately will be found
entitled to indemnification.
All determinations with respect to indemnification hereunder shall be made
(1) by a final decision on the merits by a court or other body before whom the
proceeding was brought that such indemnitee is not liable by reason of disabling
conduct, or (2) in the absence of such a decision, by (i) a majority vote of a
quorum of the Disinterested Non-party Directors of the
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indemnitor, or (ii) if such a quorum is not obtainable or even, if obtainable,
if a majority vote of such quorum so directs, independent legal counsel in a
written opinion.
Notwithstanding the foregoing, the indemnitor shall not be obligated to
provide any such indemnification to the extent such provision would waive any
right which the indemnitor cannot lawfully waive. The rights accruing to any
indemnitee under these provisions shall not exclude any other right to which he
may be lawfully entitled.
16. ASSIGNMENT. No assignment of this Agreement shall be made by the
Sub-Adviser, and this Agreement shall terminate automatically in the event of
such assignment. The Sub-Adviser shall notify the Trust in writing sufficiently
in advance of any proposed change of control, as defined in Section 2(a)(9) of
the Act, as will enable the Trust to consider whether an assignment will occur,
and to take the steps necessary to enter into a new contract with the
Sub-Adviser.
17. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE TRUST. The Trust
represents, warrants and agrees that:
A. It is a business trust duly organized and existing in good standing
under the laws of the State of Ohio.
B. It is empowered under applicable laws and by its Declaration of
Trust and Bylaws to enter into and perform this Agreement.
C. All corporate proceedings required by the Declaration of Trust and
Bylaws have been taken to authorize it to enter into and perform this Agreement.
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D. It is an open-end, management investment company registered under
the Act.
E. Performance of the Trust's obligations under this Agreement will
not violate any law, regulation, agreement or the Trust's registration
statement, as amended.
F. The Trust will deliver to the Sub-Adviser a true and complete copy
of its then current prospectus and statement of additional information as
effective from time to time and such other documents or instruments governing
the investments of the Fund and such other information as is necessary for the
Sub-Adviser to carry out its obligations under this Agreement.
G. The Trust is currently in compliance and shall at all times comply
with the requirements imposed upon the Fund by applicable laws and regulations.
18. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE SUB-ADVISER. The
Sub-Adviser represents, warrants and agrees that:
A. It is a corporation duly and legally organized and existing in good
standing.
B. It is empowered under applicable laws to enter into and perform
this Agreement.
C. All corporate proceedings have been taken to authorize it to enter
into and perform this Agreement.
D. The Sub-Adviser is registered as an "investment adviser" under the
Investment Advisers Act of 1940.
E. The Sub-Adviser will maintain, keep current and preserve on behalf
of the Fund, in the manner and for the time periods required or permitted by the
Act, the records identified
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in Schedule A. The Sub-Adviser agrees that such records (unless otherwise
indicated on Schedule A) are the property of the Trust, and will be surrendered
to the Trust promptly upon request.
F. The Sub-Adviser will complete such reports concerning purchases or
sales of securities on behalf of the Fund as the Adviser or the Trust may from
time to time require to ensure compliance with the Act, the Internal Revenue
Code of 1986 and applicable state securities laws.
G. The Sub-Adviser will adopt a written code of ethics complying with
the requirements of Rule 17j-1 under the Act and will provide the Trust with a
copy of the code of ethics and evidence of its adoption. Within forty-five (45)
days of the end of the last calendar quarter of each year while this Agreement
is in effect, the President or a Vice President of the Sub-Adviser shall certify
to the Trust that the Sub-Adviser has complied with the requirements of Rule
17j-1 during the previous year and that there has been no violation of the
Sub-Adviser's code of ethics or, if such a violation has occurred, that
appropriate action was taken in response to such violation. Upon the written
request of the Trust, the Sub-Adviser shall submit to the Trust the reports
required to be made to the Sub-Adviser by Rule 17j-1(c)(1).
H. The Sub-Adviser will promptly after filing with the Securities and
Exchange Commission an amendment to its Form ADV furnish a copy of such
amendment to the Trust and to the Adviser.
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I. Upon request of the Trust, the Sub-Adviser will provide assistance
to the Custodian in the collection of income due or payable to the Fund. With
respect to income from foreign sources, the Sub-Adviser will undertake any
reasonable procedural steps required to reduce, eliminate or reclaim non-U.S.
withholding taxes under the terms of applicable United States income tax
treaties.
J. The Sub-Adviser will immediately notify the Trust and the Adviser
of the occurrence of any event which would disqualify the Sub-Adviser from
serving as an investment adviser of an investment company pursuant to Section
9(a) of the Act or otherwise.
K. Performance of the Sub-Adviser's obligations under this Agreement
will not violate any law, regulation, agreement or the Trust's registration
statement, as amended.
19. AMENDMENT. This Agreement may be amended at any time, but only by
written agreement between the Sub-Adviser, the Adviser and the Trust, which
amendment, other than amendments to Schedule A, is subject to the approval of
the Board of Trustees and the shareholders of the Fund in the manner required by
the Act and the rules thereunder, subject to any applicable exemptive order of
the Securities and Exchange Commission modifying the provisions of the Act with
respect to approval of amendments to this Agreement.
20. EFFECTIVE DATE; TERM. This Agreement shall become effective on the date
of its execution and shall remain in full force and effect until April 1, 1999,
and from year to year
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thereafter but only so long as such continuance is specifically approved at
least annually by the vote of a majority of the Trustees who are not interested
persons of the Trust, the Adviser or the Sub-Adviser, cast in person at a
meeting called for the purpose of voting on such approval, and by a vote of the
Board of Trustees or of a majority of the outstanding voting securities of the
Fund. The aforesaid requirement that this Agreement may be continued "annually"
shall be construed in a manner consistent with the Act and the rules and
regulations thereunder.
21. TERMINATION. This Agreement may be terminated by either party hereto,
without the payment of any penalty, immediately upon written notice to the other
in the event of a breach of any provision thereof by the party so notified, or
otherwise upon sixty (60) days' written notice to the other.
22. SHAREHOLDER LIABILITY. The Sub-Adviser is hereby expressly put on
notice of the limitation of shareholder liability as set forth in the
Declaration of Trust of the Trust and agrees that obligations assumed by the
Trust pursuant to this Agreement shall be limited in all cases to the Fund and
its assets. The Sub-Adviser agrees that it shall not seek satisfaction of any
such obligations from the shareholders or any individual shareholder of the
Fund, nor from the Trustees or any individual Trustee of the Trust.
23. DEFINITIONS. As used in paragraphs 16 and 20 of this Agreement, the
terms "assignment," interested person" and "vote of a majority of the
outstanding voting securities" shall have the meanings set forth in the Act and
the rules and regulations thereunder.
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24. Applicable Law. To the extent that state law is not preempted by the
provisions of any law of the United States heretofore or hereafter enacted, as
the same may be amended from time to time, this Agreement shall be administered,
construed and enforced according to the laws of the State of Ohio.
X.X. XXXX & ASSOCIATES, INC. XXXX FAMILY OF FUNDS
By: /s/ Xxxxxx X. Xxxx By: /s/ Xxxxx X. Xxxxx
------------------------------- --------------------------------
Title: President Title: President
Date: October 1, 1997 Date: October 1, 1997
ACCEPTANCE
----------
The foregoing Agreement is hereby accepted.
XXXXXX CAPITAL MANAGEMENT LIMITED
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Title: Director
-----------------------------
Date: October 1, 1997
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SCHEDULE A
RECORDS TO BE MAINTAINED BY THE SUB-ADVISER
-------------------------------------------
1. (Rule 31a-1(b)(5) and (6)) A record of each brokerage order, and all other
portfolio purchases or sales, given by the Sub-Adviser on behalf of the
Fund for, or in connection with, the purchase or sale of securities,
whether executed or unexecuted. Such records shall include:
A. The name of the broker;
B. The terms and conditions of the order and of any modification or
cancellation thereof;
C. The time of entry or cancellation;
D. The price at which executed;
E. The time of receipt of a report of execution; and
F. The name of the person who placed the order on behalf of the Fund.
2. (Rule 31a-1(b)(9)) A record for each fiscal quarter, completed within ten
(10) days after the end of the quarter, showing specifically the basis or
bases upon which the allocation of orders for the purchase and sale of
portfolio securities to named brokers or dealers was effected, and the
division of brokerage commissions or other compensation on such purchase
and sale orders. Such record:
A. Shall include the consideration given to:
(i) The sale of shares of the Fund by brokers or dealers.
(ii) The supplying of services or benefits by brokers or dealers to:
(a) The Trust;
(b) the Adviser;
(c) the Sub-Adviser;
(d) any other portfolio adviser of the Trust; and
(e) any person affiliated with the foregoing persons.
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(iii)Any other consideration other than the technical qualifications
of the brokers and dealers as such.
B. Shall show the nature of the services or benefits made available.
C. Shall describe in detail the application of any general or specific
formula or other determinant used in arriving at such allocation of
purchase and sale orders and such division of brokerage commissions or
other compensation.
D. The name of the person responsible for making the determination of
such allocation and such division of brokerage commissions or other
compensation.
3. (Rule 31a-1(b)(10)) A record in the form of an appropriate memorandum
identifying the person or persons, committees or groups authorizing the
purchase or sale of portfolio securities. Where an authorization is made by
a committee or group, a record shall be kept of the names of its members
who participate in the authorization. There shall be retained as part of
this record: any memorandum, recommendation or instruction supporting or
authorizing the purchase or sale of portfolio securities and such other
information as is appropriate to support the authorization.*
4. (Rule 31a-1(f)) Such accounts, books and other documents as are required to
be maintained by registered investment advisers by rules adopted under
Section 204 of the Investment Advisers Act of 1940, to the extent such
records are necessary or appropriate to record the Sub-Adviser's
transactions with respect to the Fund.
-----------------------------
* Such information might include: the current Form 10-K, annual and
quarterly reports, press releases, reports by analysts and from brokerage firms
(including their recommendation; i.e., buy, sell, hold) or any internal reports
or portfolio adviser reviews.
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