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EXHIBIT 23(d)(2)
INVESTMENT CONSULTING AGREEMENT
THIS INVESTMENT CONSULTING AGREEMENT (the "Agreement") by and between
MARKET STREET INVESTMENT MANAGEMENT COMPANY, a Pennsylvania corporation
(the "Adviser"), and WILSHIRE ASSOCIATES INCORPORATED, a California
corporation (the "Advisory Consultant"), made as of the date that Market
Street Fund, Inc., a Maryland corporation, reorganizes and redomesticates
into Market Street Fund, a Delaware business trust and effective with
respect to a Portfolio of Market Street Fund as specified in this
Agreement.
The Adviser and Advisory Consultant agree as follows:
1. APPOINTMENT OF ADVISORY CONSULTANT. The Adviser hereby engages the Advisory
Consultant to provide non-discretionary investment advisory services, as
described herein, in connection with the Adviser's management of one or
more of the portfolios of MARKET STREET FUND (the "Fund") specified in an
appendix to this Agreement (each, a "Portfolio"), as this appendix may be
amended from time to time under this Agreement ("Appendix A"). Pursuant to
this Agreement and subject to the oversight and supervision by the Adviser
and the Fund's Board of Trustees (the "Board") and officers, the Advisory
Consultant shall, from time to time, assist the Adviser in developing
proposals for the Board as to establishing and revising the investment
objective(s), policies and restrictions of the Portfolios and identifying,
selecting and evaluating subadvisers to invest and reinvest the assets of
the Portfolios, or portions thereof.
2. ACCEPTANCE OF APPOINTMENT BY ADVISORY CONSULTANT. The Advisory Consultant
hereby accepts the engagement by the Adviser in the foregoing capacity and
agrees, at the Advisory Consultant's own expense, to render the services
set forth herein and to provide the office space, furnishings, equipment,
and personnel required by the Advisory Consultant to perform these services
on the terms and for the compensation provided in this Agreement.
3. SERVICES TO BE PROVIDED BY ADVISORY CONSULTANT. In particular, the Advisory
Consultant shall assist the Adviser by gathering data and performing the
quantitative analysis necessary to identify the styles and past performance
of potential new subadvisers for a Portfolio as well as performing similar
ongoing quantitative analysis of the performance of these subadvisers. The
Advisory Consultant also shall assist the Adviser in performing a
continuing quantitative and qualitative evaluation of the skills and
abilities of the other subadvisers in managing assets pursuant to a
particular management style. In this connection, the Advisory Consultant
shall provide the Adviser, and the Fund's Board and officers with any
reports and documentation as the Adviser, and the Fund's Board and officers
shall reasonably request regarding the Advisory Consultant's duties for the
Adviser. The Advisory Consultant shall not delegate any of the Advisory
Consultant's duties under this Agreement to any other advisory consultant
without the consent and approval of the Fund's Board and a majority of
those trustees who are not parties to this Agreement or
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"interested persons" of any party; provided, that, in the event the
Advisory Consultant is authorized to so delegate, the Advisory Consultant
shall retain overall responsibility for these delegated powers and
functions and any and all obligations and liabilities in connection
therewith.
4. COMPLIANCE BY ADVISORY CONSULTANT WITH PORTFOLIO POLICIES AND APPLICABLE
LAW. The Advisory Consultant shall carry out the Advisory Consultant's
responsibilities under this Agreement in compliance with: (a) a Portfolio's
investment objective, policies and restrictions, as set forth in the Fund's
current registration statement, as amended from time to time; (b) any
policies or directives as the Fund's Board from time to time may establish
or issue and communicate to the Adviser; and (c) applicable law and related
regulations. The Adviser shall promptly notify the Advisory Consultant in
writing of changes to (a) or (b) above and shall notify the Advisory
Consultant in writing of changes to (c) above promptly after the Adviser
becomes aware of these changes. The Advisory Consultant shall promptly
notify the Advisor in writing in the event that the Advisory Consultant
becomes aware that a Portfolio subadviser does not, or cannot, perform the
subadviser's responsibilities under the Portfolio subadviser's agreement
with the Adviser.
5. LIMITATIONS OF ADVISORY CONSULTANT'S DUTIES. The Advisory Consultant is not
responsible for implementing the investment objective(s) or policies of the
Portfolios. In particular, the Advisory Consultant is not responsible for
placing orders for the purchase or sale of securities or other investments
for a Portfolio with brokers or dealers. In this connection, the Advisory
Consultant is not authorized to give instructions to the Fund's custodian
as to deliveries of securities or other investments and payments of cash
for the account of the Portfolios.
6. NON-EXCLUSIVITY OF ADVISORY CONSULTANT'S SERVICES. The Advisory
Consultant's services under this Agreement are not exclusive. The Advisory
Consultant may provide the same or similar services to other clients. This
Agreement does not require the Advisory Consultant to give priority to a
Portfolio over other client accounts or portfolios. The Advisory Consultant
shall for all purposes herein be deemed to be an independent contractor and
shall, unless otherwise expressly provided or authorized, have no authority
to act for or represent the Adviser, Fund or a Portfolio or otherwise be
deemed an agent of the Adviser, Fund or Portfolios.
7. REGISTRATION OF ADVISORY CONSULTANT. The Advisory Consultant is registered
as an investment adviser with the U.S. Securities and Exchange Commission
under the Investment Advisers Act of 1940, as amended (the "Advisers Act").
The Advisory Consultant shall remain so registered throughout the term of
this Agreement and shall notify the Adviser immediately if the Advisory
Consultant ceases to be so registered as an investment adviser.
8. REPRESENTATIONS AND COVENANTS OF ADVISORY CONSULTANT. The Advisory
Consultant: (a) is duly organized and validly existing under California law
with the power to own and possess the Advisory Consultant's assets and
carry on the Advisory Consultant's business as this business is now being
conducted; (b) has the authority to enter into and perform the services and
other matters contemplated by this Agreement; (c) is not prohibited by the
Investment
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Company Act of 1940, as amended (the "1940 Act") or the Advisers Act from
performing the services and other matters contemplated by this Agreement;
(d) has met, and shall continue to seek to meet for the duration of this
Agreement, any other applicable federal or state requirements, or the
applicable requirements of any regulatory or industry self-regulatory
agency, necessary to be met in order to perform the services and other
matters contemplated by this Agreement; and (e) shall promptly notify the
Adviser of the occurrence of any event that would disqualify the Advisory
Consultant from serving as an investment adviser to an investment company
pursuant to Section 9(a) of the 1940 Act.
9. REPRESENTATIONS AND COVENANTS OF ADVISER. The Adviser: (a) is duly
organized and validly existing under Pennsylvania law with the power to own
and possess the Adviser's assets and carry on the Adviser's business as
this business is now being conducted; (b) has the authority to enter into
and perform the services and other matters contemplated by this Agreement;
(c) is not prohibited by the 1940 Act or the Advisers Act from performing
the services contemplated by this Agreement; (d) has met, and shall
continue to seek to meet for the duration of this Agreement, any other
applicable federal or state requirements, or the applicable requirements of
any regulatory or industry self-regulatory agency, necessary to be met in
order to perform the services and other matters contemplated by this
Agreement; and (e) shall promptly notify the Advisory Consultant of the
occurrence of any event that would disqualify the Adviser from serving as
an investment adviser to an investment company pursuant to Section 9(a) of
the 1940 Act. The Adviser represents that the Fund is (and during the term
of this Agreement, will remain) registered as an open-end management
investment company under the 1940 Act and that the Fund's shares
representing interests in the Portfolios are (and during the term of this
Agreement will remain) registered under the Securities Act of 1933 and
under any applicable state securities laws.
10. ADVISORY CONSULTANT CODE OF ETHICS. The Advisory Consultant certifies that
the Advisory Consultant has adopted a written code of ethics complying with
the requirements of Rule 17j-1 under the 1940 Act ("Rule 17-j"), and that
the Advisory Consultant has instituted procedures reasonably necessary to
prevent Access Persons from violating the Advisory Consultant's code of
ethics. The Advisory Consultant shall provide the Adviser and the Fund with
a copy of that code, together with evidence of the code's adoption. Within
twenty (20) days of the end of each calendar quarter during which this
Agreement remains in effect, the president or a vice president of the
Advisory Consultant shall certify to the Adviser or the Fund that the
Advisory Consultant has complied with the requirements of Rule 17j-1 during
the previous quarter and that there have been no violations of the Advisory
Consultant's code of ethics or, if a violation has occurred, that
appropriate action has been taken in response to the violation; provided,
that, no less frequently than annually, the appropriate officer of the
Advisory Consultant shall furnish a written report to the Adviser that
complies with the requirements of Rule 17j-1 with respect to these reports
regarding issues, material violations, and any related sanctions in
connection with the administration of the code of ethics, or as otherwise
required pursuant to Rule 17j-1. Upon written request of the Adviser or the
Fund, the Advisory Consultant shall permit representatives of the Adviser
or the Fund to examine the reports (or summaries of the reports) required
to be made to the Advisory Consultant by Rule 17j-1(d)(1) and other records
evidencing enforcement of the code of ethics.
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11. FEE PROVISIONS.
(a) FEE. For the services rendered, the facilities furnished, and the
expenses assumed by the Advisory Consultant, the Adviser shall pay the
Advisory Consultant quarterly fees, in arrears, based on the combined net
assets of all Portfolios on which the Advisory Consultant provides advice
to the Adviser, calculated daily at the annual rate specified in an
appendix to this Agreement, as may be amended from time to time under this
Agreement ("Appendix B"). The Advisory Consultant's fee shall be accrued
daily at 1/365th of the applicable annual rate set forth in Appendix B. For
the purpose of accruing compensation, the net assets of a Portfolio shall
be determined in the manner and on the dates set forth in the Fund's
current prospectus, and, on days on which the net assets are not so
determined, the net asset value computation to be used shall be as
determined on the immediately preceding day on which the net assets were
determined.
(b) SPECIAL FEE PROVISIONS. In the event of termination of this Agreement,
all compensation due through the date of termination will be calculated on
a pro-rated basis through the date of termination and paid within thirty
(30) business days of the date of termination. During any period when the
determination of net asset value is suspended, the net asset value of a
Portfolio as of the last business day prior to the suspension shall for
this purpose be deemed to be the net asset value at the close of each
succeeding business day until the Portfolio's net asset value is again
determined.
12. RECORDS.
(a) MAINTENANCE OF RECORDS. Advisory Consultant hereby undertakes and
agrees to maintain, in the form and for the period required by Rule 31a-2
under the 1940 Act ("Rule 31a-2"), all records relating to the Portfolios
for which the Advisory Consultant provides investment advisory services to
the Adviser under this Agreement concerning the Portfolio subadvisers that
are required to be maintained by the Fund pursuant to the requirements of
paragraphs (b)(11) and (f) of Rule 31 a-1 under the 1940 Act and any
additional records as the Adviser may be required to create and maintain in
connection with an order of the Securities and Exchange Commission
exempting the Adviser and the Fund from the otherwise applicable
shareholder approval requirements of Section 15(a) of the 1940 Act in
connection with the hiring of certain other Portfolio subadvisers.
(b) OWNERSHIP OF RECORDS. The Advisory Consultant agrees that all books and
records that the Advisory Consultant maintains for a Portfolio or the Fund
are the Fund's property and further agrees to surrender promptly to the
Adviser or the Fund any books, records, or information upon the Adviser's
or the Fund's request; provided, however, that the Advisory Consultant may
retain copies of the records. All the requested books and records shall be
made available, within five (5) business days of a written request, to the
Fund's accountants or auditors during regular business hours at the
Advisory Consultant's offices. The Adviser and the Fund or either of the
Adviser's or Fund's authorized representatives shall have the right to copy
any records in the possession of the Advisory Consultant that pertain
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to the Portfolio or the Fund. These books, records, information, or reports
shall be made available to properly authorized government representatives
consistent with state and federal law and/or regulations. In the event of
the termination of this Agreement, all these books, records, or other
information shall be returned to the Adviser or the Fund. The Advisory
Consultant agrees that the policies and procedures the Advisory Consultant
has established with respect to the Fund or a Portfolio, including, but not
limited to, all policies and procedures designed to ensure compliance with
federal and state regulations governing the Advisory Consultant/client
relationship regarding the Fund and the Portfolio, shall be made available
for inspection by the Adviser and the Fund or either of the Adviser's or
Fund's authorized representatives not less frequently than annually.
13. CONFIDENTIALITY.
(a) NON-DISCLOSURE BY ADVISORY CONSULTANT. The Advisory Consultant agrees
that the Advisory Consultant will not disclose or use any records or
confidential information obtained pursuant to this Agreement in any manner
whatsoever; except as authorized in this Agreement, or specifically by the
Adviser or the Fund, or if this disclosure or use is required by federal or
state regulatory authorities or by a court.
(b) NON-DISCLOSURE EXCEPTIONS. The Advisory Consultant may disclose the
investment performance of a Portfolio; provided, that the disclosure does
not reveal the identity of the Adviser, the Portfolio, or the Fund. The
Advisory Consultant may, however, disclose that the Adviser, the Fund and a
Portfolio are the Advisory Consultant's clients; provided, that the
disclosure does not reveal the investment performance or the composition of
a Portfolio.
14. LIMITATION OF LIABILITY OF ADVISORY CONSULTANT. In the absence of willful
misfeasance, bad faith, or gross negligence on the part of the Advisory
Consultant or the Advisory Consultant's officers, partners, directors, or
employees, or reckless disregard by the Advisory Consultant of the Advisory
Consultant's duties under this Agreement (together, "disabling conduct"),
the Advisory Consultant shall not be liable to the Adviser, Fund or
Portfolios, or to any shareholder of the Portfolios 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 or other investment, except to the extent specified in Section
36(b) of the 1940 Act concerning loss resulting from a breach of fiduciary
duty with respect to the receipt of compensation for services.
15. DOCUMENT DELIVERY AND REVIEW. The Adviser shall furnish the Subadviser with
copies of the Fund's prospectus and statement of additional information,
proxy statements, sales literature, or any other material prepared for
distribution to its shareholders, or the public that refer in any way to
the Subadviser, and shall not use such material if the Subadviser
reasonably objects in writing within three (3) business days or such other
time as may be agreed to by the parties in writing after receipt thereof,
as soon as practicable after such documents become available. The Adviser
shall ensure that materials prepared by employees or agents of the
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Adviser that refer to the Subadviser in any way are consistent with those
materials previously approved by the Subadviser, as referenced in the
preceding sentence. The Adviser shall furnish the Subadviser with any
further documents, materials, or information that the Subadviser may
reasonably request in writing to perform the Subadviser's duties pursuant
to this Agreement.
16. EFFECTIVENESS. This Agreement shall not become effective with respect to a
Portfolio until this Agreement is approved by the Fund's Board, including a
majority of trustees who are not parties to this Agreement or "interested
persons" of any party to this Agreement, and, to the extent required by
law, a majority of the outstanding shares of a Portfolio. Subject to
receipt of all necessary approvals, this Agreement shall be effective as of
the date, and for the term, provided in Appendix A with respect to a
Portfolio.
17. TERMINATION. This Agreement may be terminated with respect to a Portfolio
at any time without the payment of any penalty, by the Fund's Board, or by
vote of a majority of the outstanding shares of the Portfolio, on sixty
(60) days written notice to the Adviser and Advisory Consultant, or by the
Adviser or Advisory Consultant, on sixty (60) days written notice to the
other. This Agreement shall automatically terminate in the event of the
Agreement's assignment or in the event of the termination of the investment
advisory agreement between the Adviser and the Fund regarding the Adviser's
management of the affected Portfolio(s).
18. AMENDMENT. This Agreement may be amended with respect to a Portfolio in
writing by the parties only if the amendment is specifically approved by:
(a) a majority of those trustees who are not parties to this Agreement or
"interested persons" of any party cast in person at a meeting called for
the purpose of voting on the Agreement's approval; and (b) if required by
applicable law, the vote of a majority of the outstanding shares of each
affected Portfolio.
19. DEFINITIONS. The terms "assignment," "affiliated person," and "interested
person," when used in this Agreement, shall have the respective meanings
specified in Section 2(a) of the 1940 Act. The term "majority of the
outstanding shares" means the lesser of (a) sixty-seven percent (67%) or
more of the shares present at a meeting if more than fifty percent (50%) of
these shares are present or represented by proxy or (b) more than fifty
percent (50%) of the outstanding shares.
20. GOVERNING LAW. This Agreement shall be construed in accordance with
Pennsylvania law and applicable provisions of the Advisers Act and 1940
Act.
21. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
22. COUNTERPARTS. This Agreement may be executed in counterparts, all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
MARKET STREET INVESTMENT MANAGEMENT COMPANY
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: President
ATTEST:
By: /s/ Xxxxx Xxxxxxxxx
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WILSHIRE ASSOCIATES INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Senior Managing Director
ATTEST:
By: /s/ Xxx Xxxxxxx, Xx.
---------------------------
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APPENDIX A
TO THE INVESTMENT CONSULTING AGREEMENT BETWEEN MARKET STREET
INVESTMENT MANAGEMENT COMPANY AND
WILSHIRE ASSOCIATES INCORPORATED
PORTFOLIO(S) EFFECTIVE DATE AND TERM
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All Pro Broad Equity Portfolio The effective date of this Agreement with respect to this
All Pro Large Cap Growth Portfolio Portfolio shall be as of the close of business on the 26th
All Pro Large Cap Value Portfolio day of January, 2001. The term of this Agreement shall
All Pro Small Cap Growth Portfolio continue for two (2) years and shall thereafter continue in
All Pro Small Cap Value Portfolio effect from year to year so long as the Agreement's
Mid Cap Growth Portfolio continuance is specifically approved at least annually by:
Bond Portfolio (a) the Fund's Board, or by the vote of a majority of the
outstanding shares of the Portfolio, and (b) a majority of
those trustees who are not parties to this Agreement or
interested persons of any party cast in person at a meeting
called for the purpose of voting on the Agreement's approval.
Market Street Investment Management Company
By: /s/ Xxxxx X. Xxxxx Date: 1-22-01
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Name: Xxxxx X. Xxxxx
Title: President
Wilshire Associates Incorporated
By: /s/ Xxxxxxx X. Xxxxxxx Date: 1-23-01
----------------------------------- -------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Managing Director
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XXXXXXXX X
TO THE INVESTMENT SUBADVISORY AGREEMENT BETWEEN MARKET
STREET INVESTMENT MANAGEMENT COMPANY AND
WILSHIRE ASSOCIATES INCORPORATED
PORTFOLIO(S) FEE
------------ ---
All Pro Broad Equity Portfolio 0.05% on the combined average daily net assets,
All Pro Large Cap Growth Portfolio calculated as described in Section 11 of this
All Pro Large Cap Value Portfolio Agreement.
All Pro Small Cap Growth Portfolio
All Pro Small Cap Value Portfolio
Mid Cap Growth Portfolio
Bond Portfolio
Market Street Investment Management Company
By: /s/ Xxxxx X. Xxxxx Date: 1-22-01
-------------------- -------------
Name: Xxxxx X. Xxxxx
Title: President
Wilshire Associates Incorporated
By: /s/ Xxxxxxx X. Xxxxxxx Date: 1-23-01
------------------------------------- -------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Managing Director
