EXHIBIT (d)(3)
INTERIM
INVESTMENT CONSULTING AGREEMENT
THIS INTERIM INVESTMENT CONSULTING AGREEMENT (the "Agreement") by and
between GARTMORE MUTUAL FUND CAPITAL TRUST, a Delaware business trust (the
"Adviser"), and WILSHIRE ASSOCIATES INCORPORATED, a California corporation (the
"Advisory Consultant"), made as of _________________, 2002, and effective with
respect to series portfolios of Market Street Fund (said portfolios hereinafter
referred to collectively as the "Portfolios," and each a "Portfolio") (said
Market Street Fund hereinafter referred to as the "Fund"), as specified in this
Agreement.
WITNESSETH:
WHEREAS, the Fund is registered with the Securities and Exchange
Commission (the "SEC") as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund previously had retained Market Street Investment
Management Company ("MSIM") as the Fund's adviser pursuant to a previous
investment advisory agreement between the Fund and MSIM, dated January 26, 2001
(hereinafter, the "Previous Investment Advisory Agreement"); and
WHEREAS, MSIM, pursuant to MSIM's delegated authority under the
Previous Investment Advisory Agreement, previously had retained the Advisory
Consultant to provide non-discretionary investment advisory services in
connection with the Adviser's management of the Portfolios specified in this
Agreement, pursuant to a previous investment consulting agreement between MSIM
and the Advisory Consultant, dated January 26, 2001 (hereinafter, the "Previous
Investment Consulting Agreement"); and
WHEREAS, the Board of Trustees of the Fund, on September 20, 2002,
terminated each of the Previous Investment Advisory Agreement and the Previous
Investment Consulting Agreement, effective as of ___________________, 2002; and
WHEREAS, the Board of Trustees of the Fund, on September 20, 2002, duly
approved an "Interim Investment Advisory Agreement," dated as of
_______________, 2002, pursuant to Rule 15a-4 under the 1940 Act, and pursuant
to which interim agreement the Adviser has been retained to act as investment
adviser for the Portfolios of the Fund (said Interim Investment Advisory
Agreement hereinafter referred to as the "Advisory Agreement"); and
WHEREAS, the Advisory Agreement permits the Adviser to delegate certain
of the Adviser's duties under the Advisory Agreement to other investment
advisers, subject to the requirements of the 1940 Act; and
WHEREAS, the Adviser desires to retain the Advisory Consultant to
assist the Adviser in developing proposals for the Board as to establishing and
revising the investment objective(s), policies, and restrictions of the
Portfolios, as specified in this Agreement, and as to identifying, selecting,
and evaluating subadvisers to invest and reinvest the assets of the Portfolios,
or
portions thereof, as specified in this Agreement, and the Advisory Consultant is
willing to render these services subject to the terms and conditions set forth
in this Agreement; and
WHEREAS, the Board of Trustees of the Fund, on September 20, 2002, duly
approved this Interim Investment Consulting Agreement in compliance with Rule
15a-4 under the 1940 Act.
NOW, THEREFORE, the Adviser and the Advisory Consultant do mutually
agree and promise 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 "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
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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 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.
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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 17j-1"), 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.
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
4
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 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
5
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 Advisory
Consultant 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
Advisory Consultant, and shall not use such material if the Advisory Consultant
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 Adviser that refer to the
Advisory Consultant in any way are consistent with those materials previously
approved by the Advisory Consultant, as referenced in the preceding sentence.
The Adviser shall furnish the Advisory Consultant with any further documents,
materials, or information that the Advisory Consultant may reasonably request in
writing to perform the Advisory Consultant's duties pursuant to this Agreement.
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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). In accordance with Rule 15a-4 under the 1940 Act,
this Agreement, unless sooner terminated, shall continue until the earlier of:
(i) the date on which the Fund's Board of Trustees (including a majority of the
Trustees which are not "interested persons" of the Trust (as that term is
defined in the 1940 Act)) and a "majority" (as that term is defined in the 0000
Xxx) of the Fund's outstanding voting securities have approved a new investment
consulting agreement in regard to the affected Portfolios; and (ii)
______________, 2003.
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.
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22. COUNTERPARTS. This Agreement may be executed in counterparts, all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
GARTMORE MUTUAL FUND CAPITAL TRUST
By: ______________________________
Name: _____________
Title: ______________
ATTEST:
By: ____________________________________
WILSHIRE ASSOCIATES INCORPORATED
By: ______________________________
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Managing Director
ATTEST:
By:
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APPENDIX A
TO THE INTERIM INVESTMENT CONSULTING AGREEMENT BETWEEN
GARTMORE MUTUAL FUND CAPITAL TRUST
AND WILSHIRE ASSOCIATES INCORPORATED
PORTFOLIO(S) EFFECTIVE DATE AND TERM
------------ -----------------------
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 ___
All Pro Large Cap Value Portfolio day of _____________, 2002. Subject to Section 17 of this
All Pro Small Cap Growth Portfolio Agreement, and in accordance with Rule 15a-4 under the 1940
All Pro Small Cap Value Portfolio Act, the term of this Agreement shall continue for two (2)
Bond Portfolio years and shall thereafter continue in effect from year to
year so long as the Agreement's continuance is specifically
approved at least annually by: (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.
GARTMORE MUTUAL FUND CAPITAL TRUST
By: ______________________________ Date: _____________
Name: _____________
Title: _____________
WILSHIRE ASSOCIATES INCORPORATED
By: ______________________________ Date: _____________
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Managing Director
X-0
XXXXXXXX X
TO THE INTERIM INVESTMENT SUBADVISORY AGREEMENT BETWEEN
GARTMORE MUTUAL FUND CAPITAL TRUST
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
Bond Portfolio
GARTMORE MUTUAL FUND CAPITAL TRUST
By: ______________________________ Date: _____________
Name: _____________
Title: _____________
WILSHIRE ASSOCIATES INCORPORATED
By: ______________________________ Date: _____________
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Managing Director
B-1
