Exhibit (d)(3)
FORM OF
MONEY MANAGER AGREEMENT
Effective Date: May 1, 2000
Termination Date: Two years
after Effective Date
Fund and Account:
Approximately 90% of the
High Yield Bond fund
Financial Management Advisors, Inc.
0000 Xxxxxx xx xxx Xxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Re: Accessor Funds, Inc. Money Manager Agreement
Ladies and Gentlemen:
Accessor Funds, Inc., a Maryland corporation ("Accessor Funds"), is an
open-end management investment company of the series type registered as an
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and subject to the rules and regulations promulgated thereunder.
Accessor Funds issues shares in separate diversified portfolios, each with a
different investment objective and policies.
Accessor Capital Management L P, a Washington limited partnership (the
"Manager") acts as the manager and administrator of Accessor Funds pursuant to
the terms of a Management Agreement, and is an "investment adviser" as that term
is defined in Section 2(a)(20) of the 1940 Act, to Accessor Funds. The Manager
is responsible for the day-to-day management and administration of Accessor
Funds and for the coordination of investments of each portfolio's assets;
however, specific portfolio purchases and sales for each portfolio's investment
portfolio, or a portion thereof, are to be made by the portfolio management
organizations recommended and selected by the Manager, subject to the approval
of the Board of Directors of Accessor Funds (the "Board").
1. Appointment as a Money Manager. The Manager and Accessor Funds hereby
appoint and employ Financial Management Advisors, Inc., a ______________
corporation (the "Money Manager"), as a discretionary money manager to Accessor
Funds' High Yield Bond Fund (the "Fund"), on the terms and conditions set forth
herein. The Manager determines from time to time that portion of the assets of
the Fund that are to be assigned to the Money Manager (the "Account"). The
Account and those assets of the Fund managed by the Manager or another money
manager as determined by the Manager are referred to as the "Fund".
2. Acceptance of Appointment; Standard of Performance. The Money Manager
accepts the appointment as a discretionary money manager and agrees to use its
best professional judgment to make and implement investment decisions for the
Fund with respect to the investments of the Account in accordance with the
provisions of this Agreement.
3. Fund Management Services of the Money Manager. The Money Manager is
hereby employed and authorized to select portfolio securities for investment by
the Fund, to determine to purchase and sell securities for the Account, 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 and Exhibit
A attached hereto and incorporated by this reference herein (as it may be
amended in writing by the parties from time to time). In providing portfolio
management services to the Account, the Money Manager shall be subject to such
investment restrictions as are set forth in the 1940 Act and rules thereunder,
the supervision and control of the Board, such specific instructions as the
Board may adopt and communicate to the Money Manager, the investment objectives,
policies and restrictions of the Fund furnished pursuant to paragraph 4, and
instructions from the Manager; and the Money Manager shall maintain on behalf of
the Fund the records listed in Exhibit B attached hereto and incorporated by
this reference herein (as it may be amended in writing by the parties from time
to time). At the Fund's or the Manager's reasonable request (as communicated by
the Board or the officers of such entities), the Money Manager will consult with
the officers of Accessor Funds or the Manager, as the case may be, with respect
to any decision made by it with respect to the investments of the Account.
4. Investment Objectives, Policies and Restrictions. The Fund shall
provide the Money Manager with a statement of the investment objectives and
policies of Accessor Funds and any specific investment restrictions applicable
thereto as established by Accessor Funds, including those set forth in its
Prospectus as amended from time to time. Accessor Funds retains the right, on
reasonable prior written notice to the Money Manager from Accessor Funds or the
Manager, to modify any such objectives, policies or restrictions in any manner
at any time. The Money Manager shall have no duty to investigate any
instructions received from Accessor Funds, the Manager, or both, and, absent
manifest error, such instructions shall be presumed reasonable.
5. Transaction Procedures. All transactions will be consummated by
payment to or delivery by Accessor Funds' custodian (the "Custodian"), or such
depositary or agents as may be designated by the Custodian, as custodian for the
Fund, of all cash and/or securities due to or from the Account, and the Money
Manager shall not have possession or custody thereof or any responsibility or
liability with respect thereto. The Money Manager shall advise the Custodian in
writing or by electronic transmission or facsimile of all investment orders for
the Fund placed by it with broker/dealers at the time and in the manner and as
set forth in Exhibit A hereto. Accessor Funds shall issue to the Custodian such
instructions as may be appropriate in connection with the settlement of any
transaction initiated by the Money Manager. Accessor Funds shall be responsible
for all custodial arrangements and the payment of all custodial charges and fees
and, upon the Money Manager giving proper instructions to the Custodian, the
Money Manager shall have no responsibility or liability with respect to
custodial arrangements or the acts, omissions or other conduct of the Custodian.
6. Allocation of Brokerage. The Money Manager shall have authority and
discretion to select brokers/dealers to execute portfolio transactions initiated
by the Money Manager, and for the selection of the markets on/in which the
transaction will be executed.
A. In doing so, the Money Manager's primary objective shall be to
select a broker/dealer that can be expected to obtain the best net price
and execution for Accessor Funds. However, this responsibility shall not be
deemed to obligate the Money Manager to solicit competitive bids for each
transaction; and the Money Manager shall have no obligation to seek the
lowest available commission cost to Accessor Funds, so long as Money
Manager believes in good faith, based upon its knowledge of the
capabilities of the firm selected, that the broker or dealer can be
expected to obtain the best price on a particular transaction and that the
commission cost is reasonable in relation to the total quality and
reliability of the brokerage and research services made available by the
broker/dealer to the Money Manager viewed in terms of either that
particular transaction or of the Money Manager's overall responsibilities
with respect to its clients, including Accessor Funds, as to which the
Money Manager exercises investment discretion, notwithstanding that
Accessor Funds may not be the direct or exclusive beneficiary of any such
services or that another broker/dealer may be willing to charge Accessor
Funds a lower commission on the particular transaction.
B. Accessor Funds shall retain the right to request that transactions
involving the Account that give rise to brokerage commissions in an annual
amount of up to 50% of the Money Manager's executed brokerage commissions,
shall be executed by broker/dealers which provide brokerage or research
services to Accessor Funds or its Manager, or as to which an ongoing
relationship will be of value to Accessor Funds with respect to the Fund,
which services and relationship may, but need not, be of direct benefit to
the Fund so long as (i) the Money Manager believes in good faith, based
upon its knowledge of the capabilities of the firm selected, that the
broker/dealer can be expected to obtain the best price on a particular
transaction and (ii) Accessor Funds determines that the commission cost is
reasonable in relation to the total quality and reliability of the
brokerage and research services made available to Accessor Funds, or to the
Manager for the benefit of its clients for which it exercises investment
discretion, notwithstanding that the Fund may not be the direct or
exclusive beneficiary of any such service or that another broker/dealer may
be willing to charge Accessor Funds a lower commission on the particular
transaction. The Money Manager may reject any request for directed
brokerage that does not appear to it to be reasonable.
C. Accessor Funds agrees that it will provide the Money Manager with a
list of broker/dealers which are "affiliated persons" of Accessor Funds and
its other money managers. Upon receipt of such list, the Money Manager
agrees that it will not execute any portfolio transactions with a
broker/dealer which is an "affiliated person" (as defined in the 0000 Xxx)
of Accessor Funds or of any money manager for Accessor Funds unless it is
in accordance with the procedures of Accessor Funds.
D. As used in this paragraph 6, "brokerage and research services"
shall be those services described in Section 28(e)(3) of the Securities
Exchange Act of 1934, as amended.
7. Proxies. Unless the Manager gives written instructions to the
contrary, the Money Manager shall vote all proxies solicited by or with respect
to the issuers of securities in which assets of the Account may be invested. The
Money Manager shall use its best good faith judgment to vote such proxies in a
manner which best serves the interests of the Fund's shareholders.
8. Reports to the Money Manager. Accessor Funds and the Manager shall
furnish or otherwise make available to the Money Manager such information
relating to the business affairs of the Fund, including periodic reports
concerning the Fund, as the Money Manager at any time, or from time to time, may
reasonably request in order to discharge its obligations hereunder.
9. Fees for Services.
A. The compensation of the Money Manager for its services under this
Agreement shall be calculated and paid by Accessor Funds in accordance with
Exhibit C attached hereto and incorporated by this reference herein. The
Money Manager acknowledges that any such fee is payable solely out of
assets of the Fund's Account.
B. The Money Manager acknowledges that the index against which the
Money Manager's performance is based (the "benchmark index"), as set forth
on Exhibit D, attached hereto and incorporated herein by reference as may
be amended from time to time, may be changed by the Board, including a
majority of the directors who are not parties to this Agreement (as defined
in the 0000 Xxx) or interested persons of any such party, upon at least one
quarter's prior notice. The Money Manager acknowledges that a change in the
benchmark index may alter the subsequent return of the index measure, but
performance prior to the change in the benchmark index will continue to be
based on the former benchmark index.
10. Other Investment Activities of the Money Manager. Accessor Funds
acknowledges that the Money Manager, 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 (the "Affiliated
Accounts"). Subject to the provisions of paragraph 2 hereof, Accessor Funds
agrees that the Money Manager and its affiliates may give advice, exercise
investment responsibility and take other action with respect to the Affiliated
Accounts which may differ from the advice given or the timing or nature of
action taken with respect to the Account, provided that the Money Manager acts
in good faith, and provided further that it is the Money Manager's policy to
allocate, within its reasonable discretion, investment opportunities to the
Account 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.
Accessor Funds 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 Account may have an interest from time to
time, whether in transactions which may involve the Account or otherwise. The
Money Manager shall have no obligation to acquire for the Account a position in
any investment which any Affiliated Account may acquire, and the Fund shall have
no first refusal, co-investment or other rights in respect of any such
investment, either for the Account or otherwise.
11. Certificate of Authority. Each of Accessor Funds, the Manager and the
Money Manager shall furnish to the others from time to time certified copies of
the resolutions of its Board of Directors, Board of Trustees, Managing Partner
or executive committee, as the case may be, evidencing the authority of its
officers and employees who are authorized to act on behalf of it.
12. Limitation of Liability. The Money Manager shall not be liable for, and
shall be indemnified by the Fund for any action taken, omitted or suffered to be
taken by it in its reasonable judgment, in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement, or in accordance with (or in the absence of) specific directions
or instructions from Accessor Funds or the Manager; provided, however, that such
acts or omissions shall not have resulted from the Money Manager's willful
misfeasance, bad faith or gross negligence, violation of applicable law, or
reckless disregard of its duty or of its obligations hereunder. The rights and
obligations that are provided for in this Paragraph 12 shall survive the
cancellation, expiration or termination of this Agreement.
13. Confidentiality. Subject to the right of each money manager and
Accessor Funds to comply with applicable law, including any demand or request of
any regulatory or taxing authority having jurisdiction over it, the parties
hereto shall treat as confidential all information pertaining to the Fund and
the actions of each money manager, the Manager and Accessor Funds in respect
thereof, other than any such information which is or hereafter becomes
ascertainable from public or published information or trade sources. The rights
and obligations that are provided for in this Paragraph 13 shall survive the
cancellation, expiration or termination of this Agreement.
14. Use of the Money Manager's Name. Accessor Funds and the Manager agree
to furnish the Money Manager at its principal office prior to use thereof copies
of all prospectuses, proxy statements, reports to stockholders, sales
literature, or other material prepared for distribution to stockholders of the
Fund or the public that refer in any way to the Money Manager, and not to use
such material if the Money Manager reasonably objects in writing within three
business days (or such other time as may be mutually agreed) after receipt
thereof. In the event of termination of this Agreement, the Fund and the Manager
will continue to furnish to the Money Manager copies of any of the
above-mentioned materials that refer in any way to the Money Manager, and will
not use such material if the Money Manager reasonably objects in writing within
three business days (or such other time as may be mutually agreed) after receipt
thereof.
15. Assignment. No assignment, as that term is defined in Section 2(a)(4)
of the 1940 Act, of this Agreement shall be made by the Money Manager, and this
Agreement shall terminate automatically in the event that it is assigned. The
Money Manager shall notify the Manager and Accessor Funds in writing
sufficiently in advance of any proposed change of control, as defined in Section
2(a)(9) of the 1940 Act, to enable the Manager and Accessor Funds to consider
whether an assignment, as that term is defined in Section 2(a)(4) of the 1940
Act, will occur, and to take the steps necessary to enter into a new money
manager agreement with the Money Manager.
16. Representations, Warranties and Agreements of the Investment Company.
The Fund represents, warrants and agrees that:
A. The Money Manager has been duly appointed by the Board to provide
investment services to the Account as contemplated hereby.
B. Accessor Funds will deliver to the Money Manager a true and
complete copy of its current prospectus as effective from time to time,
such other documents or instruments governing the investments of Fund, and
such other information as is necessary for the Money Manager to carry out
its obligations under this Agreement.
C. The organization of Accessor Funds and the conduct of the business
of the Fund as contemplated by this Agreement, materially complies, and
shall at all times materially comply, with the requirements imposed upon
Accessor Funds by applicable law.
17. Representations, Warranties and Agreements of Manager. Manager
represents, warrants and agrees that:
A. The Manager acts as an "investment adviser," as that term is
defined in Section 2(a)(20) of the 1940 Act, pursuant to a Management
Agreement with the Fund.
B. The appointment of the Money Manager by the Manager to provide the
investment services as contemplated hereby has been approved by the Board.
C. The Manager is registered as an "investment adviser" under the
Investment Advisers Act of 1940, as amended (the "Advisers Act").
D. The Manager has received and reviewed Money Manager's Form ADV,
Part II, more than 48 hours prior to entering into this Agreement.
18. Representations, Warranties and Agreements of Money Manager. The Money
Manager represents, warrants and agrees that:
A. The Money Manager is registered as an "investment adviser" under
the Advisers Act; or it is a "bank" as defined in Section 202(a)(2) of the
Advisers Act or an "insurance company" as defined in Section 202(a)(12) of
the Advisers Act and is exempt from registration thereunder.
B. The Money Manager will maintain, keep current and preserve on
behalf of the Fund, the records identified in Exhibit B, in the manner
required by such Exhibit. The Money Manager agrees that such records (other
than those required by No. 4 of Exhibit B) are the property of the Fund and
will be surrendered to the Fund promptly upon request.
C. The Money Manager will adopt or has adopted a written code of
ethics complying with the requirements of Rule 17j-1 under the 1940 Act,
will provide to the Fund a copy of the code of ethics and evidence of its
adoption, and will make such reports to the Fund as required by Rule 17j-1
under the 1940 Act. The Money Manager has policies and procedures
sufficient to enable the Money Manager to detect and prevent the misuse of
material, nonpublic information by the Money Manager or any person
associated with the Money Manager, in compliance with the Xxxxxxx Xxxxxxx
and Securities Fraud Enforcement Act of 1988.
D. The Money Manager will notify Accessor Funds of any changes in the
general partner(s) of its partnership or in the case of a corporation in
the ownership of more than five percent of its voting securities, within a
reasonable time after such change.
19. Amendment. This Agreement may be amended at any time, but only by
written agreement among the Money Manager, the Manager and the Fund, which
amendment, other than amendments to Exhibits A and B, must be approved by the
Board in the manner required by the 1940 Act.
20. Effective Date; Term. This Agreement shall become effective for the
Fund on the effective date set forth on page 1 of this Agreement, and shall
continue in effect until the termination date set forth on page 1 of this
Agreement. Thereafter, the Agreement shall continue in effect for successive
annual periods only so long as its continuance has been specifically approved at
least annually (a) by a vote of a majority of the Board or (b) by a vote of a
majority of the outstanding voting securities (as defined in the 0000 Xxx) of
the Fund for which the Money Manager acts as money manager, and in either case
by a majority of the directors who are not parties to the Agreement or
interested persons of any parties to the Agreement (other than as directors of
the Fund) cast in person at a meeting called for purposes of voting on the
Agreement.
21. Termination. This Agreement may be terminated, without the payment of
any penalty, by the Board, the Manager, the Money Manager or by the vote of a
majority of the outstanding voting securities (as that term is defined in the
0000 Xxx) of the Fund for which the Money Manager acts as money manager, upon 60
days' prior written notice to the other parties hereto. Any such termination
shall not affect the status, obligations or liabilities of any party hereto to
any of the other parties that accrued prior to such termination.
22. Applicable Law. To the extent that state law shall not have been
preempted by the provisions of any laws 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 Washington.
ACCESSOR FUNDS, INC.
BY:
J. Xxxxxxx Xxxxxxx, III
President and Principal Executive Officer
DATE:
ACCESSOR CAPITAL MANAGEMENT LP
By Bennington Management Associates, Inc.
Its Managing General Partner
BY:
J. Xxxxxxx Xxxxxxx, III
President
DATE:
Accepted and agreed to:
FINANCIAL MANAGEMENT ADVISORS, INC.
BY:
Name:
Title
DATE:
EXHIBITS: A. Operational Procedures (including Schedules 1, 2 and 3).
B. Recordkeeping Requirements.
C. Fee Schedule.
D. Benchmark Index.
EXHIBIT A
OPERATIONAL PROCEDURES
The Money Manager (the "MM") shall abide by certain rules and procedures
in order to minimize operational problems. The MM will be required to have
various records and files (as required by regulatory agencies) at its offices.
The MM will have to maintain a certain flow of information to Fifth Third Bank
("Fifth Third") the Fund's accounting agent and the custodian bank.
The MM will be required to furnish Fifth Third with daily information as
to executed trades. Fifth Third should receive this data no later than the
morning following the day of the trade. The necessary information should be
transmitted via facsimile machine or electronic transmission to Fifth Third.
Upon receipt of brokers' confirmations, the MM or Fifth Third will be required
to notify the other party if any differences exist. The reporting of trades by
the MM to Fifth Third must include the following:
o Name of the Portfolio of the Fund as to which trade relates
o Whether Purchase or Sale
o Security name
o Number of shares or principal amount
o Price per share or bond
o Commission rate per share or bond, or if a net trade
o Executing broker
o Trade date
o Settlement date
o If security is not eligible for DTC (Purchase only)
When opening accounts with brokers for the Fund, the account should be a
cash account. No margin accounts are to be maintained. The broker should be
advised to use Fifth Third's ID system number to facilitate the receipt of
information by Fifth Third. If this procedure is followed, DK problems will be
held down to a minimum and additional costs of security trades will not become
an important factor in doing business. Delivery and receipt instructions are
attached as Schedule 1.
The MM will also be required to submit to Fifth Third a daily trade
authorization form signed by two authorized individuals prior to settlement
date. A list of authorized persons with specimen signatures must be sent to
Fifth Third (see Schedule 2). The authorization will contain information on
which Fifth Third and Fifth Third can rely to either accept delivery or deliver
out of the account securities as per each trade by the MM. A preprinted form
will be supplied to the MM by the Fund, or the MM may use an equivalent form
acceptable to Fifth Third and the Fund.
SCHEDULE 1 TO EXHIBIT A
FIFTH THIRD BANK
DELIVERY INSTRUCTIONS FOR
THE ACCESSOR FUNDS, INC. - HIGH YIELD BOND FUND
I. DTC ELIGIBLE SECURITIES
II. FEDERAL RESERVE WIRE TRANSFERS
III. FEDERAL RESERVE ELIGIBLE SECURITIES: REPURCHASE AGREEMENTS:
------------------------------------ ----------------------
IV. PTC ELIGIBLE SECURITIES (i.e. GNMAs)
V. PHYSICAL/INELIGIBLE
PHYSICAL NEW YORK
Bank of New York
One Wall Street - Securities Department
3rd Floor - "Window A"
Xxx Xxxx, XX 00000
FFC: Fifth Third Bank - A/C #135500
EUROCLEAR
(Payment due 1 day prior to settlement date)
Euroclear #97816
A/C The Bank of New York
Ref: Fifth Third Bank
A/C #135500
SCHEDULE 2 TO EXHIBIT A
Example of Authorized Signature Letter
(To Be Typed on Your Letterhead)
[DATE]
Fifth Third, Inc.
Fifth Third Center
00 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Accessor Funds, Inc. - High Yield Corporate Bond Fund
Re: Persons Authorized to Execute Trades For High Yield Bond Fund
The following individuals are authorized to execute and report trade
instructions on behalf of the Fund. Should there be any changes to the list of
authorized persons, we will notify you immediately of those changes.
NAME SIGNATURE
Sincerely yours,
[Money Manager]
EXHIBIT B
RECORDS TO BE MAINTAINED BY MONEY MANAGER
*1. A record of each brokerage order, and all other portfolio purchases and
sales, given by the Money Manager or on behalf of Accessor Funds 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 report of execution, and
F. The name of the person who placed the order on behalf of Accessor
Funds (Rule 31a-1(b)(5) and (6) of the 1940 Act).
*2. 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
brokers or dealers was made, and the division of brokerage commissions or
other compensation on such purchase and sale orders. The record:
A. Shall include the consideration given to:
(i) The sale of shares of the Accessor Funds.
(ii) The supplying of services or benefits by brokers or dealers to:
(a) Accessor Funds,
(b) The Manager (Accessor Capital Management),
(c) Yourself (i.e., the Money Manager), and
(d) Any person other than the foregoing.
(iii)Any other considerations 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 identities of the persons responsible for making the determination
of such allocation and such division of brokerage commissions or other
compensation (Rule 31a-1(b)(9) of the 1940 Act).
*3. 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 (Rule 31a-1(b)(10) of the 0000
Xxx) and such other information as is appropriate to support the
authorization.**
*4. Such accounts, books and other documents as are required to be maintained
by registered investment advisers by rule adopted under Section 204 of the
Advisers Act, to the extent such records are necessary or appropriate to
record the Money Manager's transactions with Accessor Funds. (Rule 31a-1(f)
of the 1940 Act).
5. All accounts, books, records or other documents that are required to be
maintained pursuant to the 1940 Act, the Advisers Act, or any rule or
regulation thereunder, need only be retained by the Money Manager as
required under such laws, rule or regulations. Any other account, book,
record or other document that is required to be maintained by the Money
Manager pursuant to this Exhibit B need only be maintained for five years
after the date of its creation.
* Maintained as property of the Fund pursuant to Rule 31a-3(a) of the 1940
Act.
** Such information might include: the current Form 10-K, annual and quarterly
reports, press releases, reports by analysts and from brokerage firms
(including their recommendations, i.e., buy, sell, hold), and any internal
reports or portfolio manager reviews.
EXHIBIT C
MONEY MANAGER FEE
The following compensation of the Money Manager for its services under the
Agreement shall be calculated and paid by Accessor Funds (except that no such
fees shall be paid to the Manager as to Accounts for which it acts as money
manager).
Fees will be calculated and paid after the end of each calendar quarter
at one-fourth of an annual percentage rate as described in the following
paragraph and in the table below applied to the average daily net assets of the
Account. The net assets of the Account are determined by including receivables
and deducting payables. Expenses beyond the control of the Money Manager
including, but not limited to, fees payable to Accessor Fund's Custodian,
Accounting Agent and Transfer Agent, fees of accountants, legal fees and
expenses allocable to the Fund are not included as payables of the Account, but
expenses within the control of the Money Manager including, but not limited to,
brokerage commissions, are included in determining the net assets of the
Account.
For the first five complete calendar quarters of investment operations for the
Account, Accessor Funds will pay the Money Manager on a quarterly basis at the
following annual fee rates, applied to the average daily net assets of the
Account.
Basic Fee Portfolio Management Fee Total
--------- ------------------------ -----
0.07% 0.08% 0.15%
Commencing with the sixth calendar quarter of investment operations for
the Account, Accessor Funds will pay the Money Manager based on the schedule
below as applied to the average daily net assets.
Average Annual Performance Total
Differential vs. Benchmark Annual Annual
Basic Fee Index Performance Fee Fee
--------- ----- --------------- ---
0.07% <=-1.00% 0.00% 0.07%
>-1.00% and <=-0.50% 0.04% 0.11%
>-0.50% and <= 0.50% 0.08% 0.15%
>0.50% and <=1.00% 0.12% 0.19%
>1.00% and <= 1.50% 0.16% 0.23%
>1.50% and <= 2.00% 0.20% 0.27%
>2.00% 0.22% 0.29%
The Account's performance differential versus the benchmark index is
recalculated at the end of each calendar quarter based on the Account's
performance during all calendar quarters since commencement of investment
operations through the next preceding calendar quarter, so that the performance
fee, although measured on an average annual rate of return basis, covers all
prior quarters except that of the immediately preceding quarter. Commencing with
the 14th calendar quarter of investment operations, the Account's average annual
performance differential will be recalculated based on the Account's performance
during the preceding 12 calendar quarters (other than the immediately preceding
quarter) on a rolling basis.
For purposes of calculating the performance of the benchmark index,
Accessor Funds, Manager and Money Manager agree to accept the calculation
provided by the publisher of the index or another mutually acceptable source.
For purposes of calculating the performance differential versus the benchmark
index, the investment performance of the Account for any period, expressed as a
percentage of its net asset value per share at the beginning of such period, is
equal to the sum of: (i) the change in the net asset value per share of the
Account during such period; (ii) the value of the Account's cash distributions
per share accumulated to the end of such period; and (iii) the value of capital
gains taxes per share paid or payable on undistributed realized long-term
capital gains accumulated to the end of such period. For this purpose, the value
of distributions per share of realized capital gains, or dividends per share
paid from investment income and of capital gains taxes per share paid or payable
on undistributed realized long-term capital gains shall be treated as reinvested
in shares of the Account at the net asset value per share in effect at the close
of business on the record date for the payment of such distributions and
dividends and the date on which provision is made for such taxes, after giving
effect to such distributions, dividends and taxes. The investment record of the
benchmark index for any period shall mean the sum of: (i) the change in the
level of the index during such period; and (ii) the value, computed consistently
with the index, of cash distributions made by companies whose securities
comprise the index accumulated to the end of such period; expressed as a
percentage of the index level at the beginning of such period. For this purpose
cash distributions on the securities which comprise the index shall be treated
as reinvested in the index at least as frequently as the end of each calendar
quarter following the payment of the dividend.
Accessor Funds and Manager acknowledge that the use of a performance fee
may result in a higher degree of risk with respect to the Account than the use
of base fees.
Exhibit D
BENCHMARK INDEX
May 1, 2000
Fund Index
High Yield Bond Fund Xxxxxx Brothers High Yield Index
