SUB-ADVISORY AGREEMENT
AMONG
WT MUTUAL FUND,
XXXXXX SQUARE MANAGEMENT CORPORATION AND
WILMINGTON TRUST INVESTMENT MANAGEMENT, LLC
THIS SUB-ADVISORY AGREEMENT is made as of the 1st day
of November 2005, among WT Mutual Fund, a Delaware business
trust (the "Fund"), Xxxxxx Square Management Corporation (the
"Adviser"), a corporation organized under the laws of the state
of Delaware and Wilmington Trust Investment Management, LLC, a
limited liability company organized under the laws of the state
of Delaware (the "Sub-Adviser").
WHEREAS, the Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company, and offers for sale distinct
series of shares of beneficial interest each corresponding to a
distinct portfolio; and
WHEREAS, the Adviser acts as the investment adviser
for the Portfolios pursuant to the terms of an Investment
Advisory Agreement between the Fund and the Adviser under which
the Adviser is responsible for the coordination of investment of
each Portfolio's assets in portfolio securities; and
WHEREAS, the Adviser is authorized under the
Investment Advisory Agreement to delegate its investment
responsibilities to one or more persons or companies;
WHEREAS, the Adviser and the Fund desires to make
available the services, information, advice, assistance and
facilities of the Sub-Adviser on behalf of each of the
Portfolios of the Fund, and to have the Sub-Adviser provide or
perform for the Portfolios various research, statistical and
investment services; and
WHEREAS, the Sub-Adviser is willing to furnish such
services for the Adviser and the Fund with respect to each of
the Portfolios listed on Schedule A to this Agreement on the
terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and
mutual covenants herein contained, the Fund, the Adviser and the
Sub-Adviser agree as follows:
1. Appointment of Sub-Adviser. The Adviser and the Fund hereby
appoint and employ the Sub-Adviser as a discretionary portfolio
manager, on the terms and conditions set forth herein, of those
assets of the Portfolio which the Adviser determines to assign
to the Sub-Adviser (those assets being referred to as the
"Portfolio Account"). The Adviser may, from time to time, make
additions to and withdrawals, including cash and cash
equivalents, from the Portfolio Account.
2. Acceptance of Appointment. The Sub-Adviser accepts its
appointment as a discretionary portfolio manager and agrees to
use its professional judgment to make investment decisions for
the Portfolio with respect to the investments of the Portfolio
Account and to implement such decisions on a timely basis in
accordance with the provisions of this Agreement.
3. Delivery of Documents. The Adviser has furnished the Sub-
Adviser with copies properly certified or authenticated of each
of the following and will promptly provide the Sub-Adviser with
copies properly certified or authenticated of any amendment or
supplement thereto:
A. The Portfolio's Investment Advisory Agreement;
B. The Fund's most recent effective registration statement and
financial statements as filed with the Securities and Exchange
Commission;
C. The Fund's Agreement and Declaration of Trust and By-Laws;
and
D. Any policies, procedures or instructions adopted or
approved by the Fund's Board of
Trustees relating to obligations and services provided by the
Sub-Adviser.
4. Portfolio Management Services of the Sub-Adviser. The Sub-
Adviser is hereby employed and authorized to select portfolio
securities for investment by the Portfolio, to purchase and to
sell securities for the Portfolio Account, and upon making any
purchase or sale decision, to place orders for the execution of
such portfolio transactions in accordance with Sections 6 and 7
hereof and Schedule B hereto (as amended from time to time). In
providing portfolio management services to the Portfolio
Account, the Sub-Adviser shall be subject to and shall conform
to such investment restrictions as are set forth in the 1940 Act
and the rules thereunder, the Internal Revenue Code, applicable
state securities laws, applicable statutes and regulations of
foreign jurisdictions, the supervision and control of the Board
of Trustees of the Fund, such specific instructions as the Board
of Trustees may adopt and communicate to the Sub-Adviser, the
investment objective, policies and restrictions of the Fund
applicable to the Portfolio furnished pursuant to Section 5 of
this Agreement, the provisions of Schedule B and Schedule C
hereto and other instructions communicated to the Sub-Adviser by
the Adviser. The Sub-Adviser is not authorized by the Fund to
take any action, including the purchase or sale of securities
for the Portfolio Account, 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 C hereto (as amended
from time to time). At the Fund's reasonable request, the Sub-
Adviser will consult with the Fund or with the Adviser with
respect to any decision made by it with respect to the
investments of the Portfolio Account.
5. Investment Objective, Policies and Restrictions. The Fund
will provide the Sub-Adviser with the statement of investment
objective, policies and restrictions applicable to the Portfolio
as contained in the Portfolio's Prospectus and Statement of
Additional Information, all amendments or supplements to the
Prospectus and Statement of Additional Information, and any
instructions adopted by the Board of Trustees supplemental
thereto. The Fund agrees, on an ongoing basis, to notify the
Sub-Adviser in writing of each change in the fundamental and
non-fundamental investment policies of the Portfolio and will
provide the Sub-Adviser with such further information concerning
the investment objective, policies, restrictions and such other
information applicable thereto as the Sub-Adviser may from time
to time reasonably request for performance of its obligations
under this Agreement. The Fund retains the right, on written
notice to the Sub-Adviser or the Adviser, to modify any such
objective, policies or restrictions in accordance with
applicable laws, at any time.
6. Transaction Procedures. All transactions will be consummated
by payment to or delivery by the custodian designated by the
Fund (the "Custodian"), or such depositories or agents as may be
designated by the Custodian in writing, of all cash and/or
securities due to or from the Portfolio Account, and the Sub-
Adviser shall not have possession or custody thereof. The Sub-
Adviser shall advise the Custodian and confirm in writing to the
Fund and to the administrator designated by the Fund or any
other designated agent of the Fund, all investment orders for
the Portfolio Account placed by it with brokers and dealers at
the time and in the manner set forth in Schedule C hereto (as
amended from time to time). The Fund and 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. The Fund shall be responsible for all
custodial arrangements and the payment of all custodial charges
and fees, and, upon giving proper instructions to the Custodian,
the Sub-Adviser shall have no responsibility or liability with
respect to custodial arrangements or the acts, omissions or
other conduct of the Custodian, except that it shall be the
responsibility of the Sub-Adviser to take appropriate action if
the Custodian fails to confirm in writing proper execution of
the instructions.
7. Allocation of Brokerage. The Adviser shall have authority and
discretion to select brokers and dealers (including brokers that
may be affiliates of the Adviser or Sub-Adviser) to execute
portfolio transactions initiated by the Sub-Adviser, subject to
conformance with the policies and procedures disclosed in the
Fund's Prospectus and Statement of Additional Information and
the policies and procedures adopted by the Fund's Board of
Trustees. The Adviser will advise the Sub-Adviser of such
selection in writing. The Adviser also may delegate to the Sub-
Adviser the authority set forth in this Section 7 to select
brokers and dealers (including brokers that may be affiliates of
the Adviser or Sub-Adviser) to execute portfolio transactions
initiated by the Sub-Adviser by providing written notice of such
delegation to the Sub-Adviser and receiving written confirmation
from the Sub-Adviser accepting such delegation.
A. In executing portfolio transactions, the Adviser will give
primary consideration to securing best execution. Consistent
with this policy, the Adviser may consider the financial
responsibility, research and investment information and other
services provided by brokers or dealers who may effect or be a
party to any such transaction or other transactions to which
other clients of the Adviser or Sub-Adviser may be a party.
Therefore, the Adviser, not the Sub-Adviser, will be responsible
for securing best execution on portfolio transactions initiated
by the Sub-Adviser.
B. In retaining the discretion to select brokers and dealers,
the Adviser acknowledges that the price the Portfolio Account
pays or receives for a security may be different from the price
paid or received by Sub-Adviser's other clients who utilize
different brokers than the Portfolio Account.
C. The Adviser agrees that it will not execute any portfolio
transactions for the Portfolio Account with a broker or dealer
which is (i) an affiliated person of the Fund, including the
Adviser or any Sub-Adviser for any Portfolio of the Fund; or
(ii) a principal underwriter of the Fund's shares, unless such
transactions are executed in accordance with Rule 17e-1 of the
1940 Act and the Fund's Rule 17e-1 procedures, as adopted in
accordance with Rule 17e-1.
D. In the event the Adviser delegates the authority to the
Sub-Adviser to select brokers and dealers to execute
transactions on behalf of the Portfolio:
1. the Sub-Adviser agrees that it will not execute any
portfolio transactions for the Portfolio Account with a broker
or dealer which is (i) an affiliated person of the Fund, the
Adviser or any sub-adviser for any Portfolio of the Fund; (ii) a
principal underwriter of the Fund's shares; or (iii) an
affiliated person of such an affiliated person or principal
underwriter, unless such transactions are (x) exempt under Rules
10f-3(b) or 17a-10, (y) executed in accordance with Rule 17e-1
of the 1940 Act and the Fund's Rule 17e-1 procedures, as adopted
in accordance with Rule 17e-1 or (z) executed in accordance with
Rule 10f-3(c) of the 1940 and the Fund's Rule 10f-3(c)
procedures, as adopted in accordance with Rule 10f-3. The
Adviser agrees that it will provide the Sub-Adviser with a list
of such affiliated brokers and dealers; and
2. the Sub-Adviser acknowledges and agrees that in
connection with the exemptions provided under Rules 10f-3(b),
12d3-1, and 17a-10 under the 1940 Act, the Sub-Adviser (i) will
not consult with any other sub-adviser of the Portfolio, which
is advising the Portfolio, concerning the Sub-Adviser or its
affiliated persons' transactions with the Portfolio in
securities or other assets of the Portfolio, and (ii) will be
limited to providing investment advice with respect to the
Portfolio Account.
8. Reports to the Sub-Adviser. The Fund will provide the Sub-
Adviser with such periodic reports concerning the status of the
Portfolio Account as the Sub-Adviser may reasonably request.
9. Fees for Services. For the services to be furnished
hereunder, the Sub-Adviser shall receive sub-advisory fees as
provided in a separate fee letter, provided that such sub-
advisory fee shall not exceed the amount of the Adviser's fees
listed in the current prospectus of each Portfolio. These fees
may be paid by the Adviser or directly by a Portfolio. If the
sub-advisory fee is paid directly by a Portfolio, the
compensation paid to the Adviser with respect to that Portfolio
under its investment advisory agreement with the Fund will be
reduced by the amount paid to the Sub-Adviser. The fee shall be
payable monthly as soon as practicable after the last day of
each month.
10. Other Investment Activities of the Sub-Adviser. The Fund
acknowledges that the Sub-Adviser or one or more of its
affiliated persons 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 affiliated persons or any of its or their
directors, officers, agents or employees may buy, sell or trade
in any securities for its or their own respective accounts
("Affiliated Accounts"). Subject to the provisions of Section
7(b) hereof, the Fund agrees that the Sub-Adviser or its
affiliated persons may give 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
Portfolio Account, 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 Portfolio Account over a period of time on
a fair and equitable basis relative to the Affiliated Accounts,
taking into account the investment objective and policies of the
Portfolio and any specific investment restrictions applicable
thereto. The Fund 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 Portfolio Account may have an interest
from time to time, whether in transactions which involve the
Portfolio Account or otherwise. The Sub-Adviser shall have no
obligation to acquire for the Portfolio 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 Portfolio
Account or otherwise.
11. Certificate of Authority. The Fund, the Adviser and the
Sub-Adviser shall furnish to each other from time to time
certified copies of the resolutions of their Boards of
Trustees/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 Fund, a Portfolio Account,
the Adviser and/or the Sub-Adviser.
12. Limitation of Liability. The Sub-Adviser shall not be
liable 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 the
Fund or the Adviser, provided, however, that such acts or
omissions shall not have resulted from the Sub-Adviser's willful
misfeasance, bad faith, gross negligence or a reckless disregard
of duty. Nothing in this Section 13 shall be construed in a
manner inconsistent with Section 17(i) of the 1940 Act.
13. Confidentiality. Subject to the duty of the Sub-Adviser,
the Adviser and the Fund to comply with applicable law,
including any demand of any regulatory or taxing authority
having jurisdiction, the parties hereto shall treat as
confidential all material non-public information pertaining to
the Portfolio Account and the actions of the Sub-Adviser, the
Adviser and the Fund in respect thereof.
14. Assignment. This Agreement shall terminate automatically
in the event of its assignment. The Sub-Adviser shall notify
the Fund and the Adviser in writing sufficiently in advance of
any proposed change of control within the meaning of the 1940
Act to enable the Fund and the Adviser to take the steps
necessary to enter into a new contract with the Sub-Adviser.
15. Representations, Warranties and Agreements of the Fund.
The Fund represents, warrants and agrees that:
A. The Sub-Adviser has been duly appointed by the Board of
Trustees of the Fund to provide investment services to the
Portfolio Account as contemplated hereby.
B. The Fund 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 investment of the
Portfolio Account and such other information as is necessary for
the Sub-Adviser to carry out its obligations under this
Agreement.
C. The Fund is currently in compliance and shall at all times
continue to comply with the requirements imposed upon the Fund
by applicable law and regulations.
16. Representations, Warranties and Agreements of the
Adviser. The Adviser represents, warrants and agrees that:
A. The Adviser has been duly authorized by the Board of
Trustees of the Fund to delegate to the Sub-Adviser the
provision of investment services to the Portfolio Account as
contemplated hereby.
B. The Adviser is currently in compliance and shall at all
times continue to comply with the requirements imposed upon the
Adviser by applicable law and regulations.
17. Representations. Warranties and Agreements of the Sub-
Adviser. The Sub-Adviser represents, warrants and agrees that:
A. The Sub-Adviser is registered as an "investment adviser"
under the Investment Advisers Act of 1940 ("Advisers Act") or is
a "bank" as defined in Section 202(a)(2) of the Advisers Act.
B. The Sub-Adviser will maintain, keep current and preserve on
behalf of the Fund, in the manner required or permitted by the
1940 Act, the records identified in Schedule C. The Sub-Adviser
agrees that such records (unless otherwise indicated on Schedule
C) are the property of the Fund, and will be surrendered to the
Fund promptly upon request. The Sub-Adviser agrees to keep
confidential all records of the Fund and information relating to
the Fund, unless the release of such records or information is
otherwise consented to in writing by the Fund or the Adviser.
The Fund and the Adviser agree that such consent shall not be
unreasonably withheld and may not be withheld where the Sub-
Adviser may be exposed to civil or criminal contempt proceedings
or when required to divulge such information or records to duly
constituted authorities.
C. The Sub-Adviser will complete such reports concerning
purchases or sales of securities on behalf of the Portfolio
Account as the Adviser or the Fund may from time to time require
to ensure compliance with the 1940 Act, the Internal Revenue
Code, applicable state securities laws and applicable statutes
and regulations of foreign jurisdictions.
D. The Sub-Adviser has adopted a written code of ethics
complying with the requirements of Rule 17j-1 under the 1940 Act
and Section 204A of the Advisers Act and has provided the Fund
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 or general partner of the Sub-
Adviser shall certify to the Fund that the Sub-Adviser has
complied with the requirements of Rule 17j-1 and Section 204A
during the previous year and that there has been no material
violation of the Sub-Adviser's code of ethics or, if such a
material violation has occurred, that appropriate action was
taken in response to such violation. Upon the written request of
the Fund, the Sub-Adviser shall permit the Fund, its employees
or its agents to examine the reports required to be made to the
Sub-Adviser by Rule 17j-1(d)(1).
E. 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 Fund and the Adviser.
F. The Sub-Adviser will immediately notify the Fund 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 of the 1940 Act or
otherwise. The Sub-Adviser will also immediately notify the
Fund and the Adviser if it is served or otherwise receives
notice of any action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court,
public board or body, involving the affairs of the Portfolio.
18. Amendment. This Agreement may be amended at any time,
but only by written agreement among the Sub-Adviser, the Adviser
and the Fund, which amendment, other than amendments to
Schedules A and B, is subject to the approval of the Board of
Trustees and, to the extent required by the 1940 Act, the
shareholders of the Portfolio in the manner required by the 1940
Act and the rules thereunder, subject to any applicable orders
of exemption issued by the Securities and Exhange Commission.
19. Effective Date; Term. This Agreement shall become
effective on the date first written above and shall remain in
force for a period of time of one year from such date, and from
year to year 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
Fund, 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 Portfolio. The aforesaid
requirement that this Agreement may be continued "annually"
shall be construed in a manner consistent with the 1940 Act and
the rules and regulations thereunder.
20. Termination.
A. This Agreement may be terminated by the Fund (by a vote of
the Board of Trustees of the Fund or by a vote of a majority of
the outstanding voting securities of the Portfolio), without the
payment of any penalty, immediately upon written notice to the
other parties hereto, in the event of a material breach of any
provision thereof by the party so notified or otherwise by the
Fund, upon sixty (60) days' written notice to the other parties
hereto, but any such termination shall not affect the status,
obligations or liabilities of any party hereto to the others.
Any fees due to the Sub-Adviser will be prorated to date of
termination.
B. This Agreement may also be terminated by the Adviser or the
Sub-Adviser, without the payment of any penalty immediately upon
written notice to the other parties hereto, in the event of a
material breach of any provision thereof by the party so
notified if such breach shall not have been cured within a 20-
day period after notice of such breach or otherwise by the
Adviser or the Sub-Adviser upon sixty (60) days' written notice
to the other parties hereto, but any such termination shall not
affect the status, obligations or liabilities of any party
hereto to the others. Any fees due to the Sub-Adviser will be
prorated to date of termination.
21. Definitions. As used in this Agreement, the terms
"affiliated person," "assignment," "control," "interested
person," "principal underwriter" and "vote of a majority of the
outstanding voting securities" shall have the meanings set forth
in the 1940 Act and the rules and regulations thereunder,
subject to any applicable orders of exemption issued by the
Securities and Exchange Commission.
22. Notice. Any notice under this Agreement shall be given
in writing addressed and delivered or mailed, postage prepaid,
to the other parties to this Agreement at their principal place
of business.
23. 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.
24. Governing 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 Delaware.
25. Entire Agreement. This Agreement and the Schedules
attached hereto embodies the entire agreement and understanding
between the parties.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed, as of the day and year first written above.
WT MUTUAL FUND,
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Xxxxx: President and Chief Executive Officer
WT INVESTMENT MANAGEMENT, LLC
By: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Vice President
XXXXXX SQUARE MANAGEMENT CORPORATION
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
SCHEDULE A
PORTFOLIOS/FUND
Wilmington Broad Market Bond
Wilmington International Strategic Allocation
Wilmington Large Cap Core
Wilmington Large Cap Growth
Wilmington Large Cap Strategic Allocation
Wilmington Large Cap Value
Wilmington Mid Cap Strategic Allocation
Wilmington Municipal Bond
Wilmington Premier Money Market
Wilmington Prime Money Market
Wilmington Real Estate Strategic Allocation
Wilmington Short/ Intermediate Bond
Wilmington Short-Term Income
Wilmington Small Cap Core
Wilmington Small Cap Strategic Allocation
Wilmington Tax-Exempt
Wilmington U.S. Government
Dated: November 1, 2005
SCHEDULE B
OPERATING PROCEDURES
From time to time the Adviser shall issue written Operating
Procedures which shall govern reporting of transactions and
other matters so as to facilitate (i) the monitoring of the
Fund's compliance with the restrictions and limitations
applicable to the operations of a registered investment company
and (ii) the preparation of reports to the Board of Trustees,
regulatory authorities and shareholders.
SUBSTANTIVE LIMITATIONS
A. The Sub-Adviser will manage the Portfolio Account as if the
Portfolio Account were a registered investment company
subject to the investment objective, policies and
limitations applicable to the Portfolio stated in the
Fund's Prospectus and Statement of Additional Information,
as from time to time in effect, included in the Fund's
registration statement or a supplement thereto under the
Securities Act of 1933 and the Investment Company Act of
1940 (the "1940 Act"), as each may be amended from time to
time; provided, however, that if a more stringent
restriction or limitation than any of the foregoing is
stated in Section B of this Schedule, the more stringent
restriction or limitation shall apply to the Portfolio
Account.
B. The Sub-Adviser shall not, without the written approval of
the Adviser, on behalf of the Portfolio Account:
1. purchase securities of any issuer if such purchase
would cause more than 10 % of the voting securities of
such issuer to be held in the Portfolio Account (1940
Act 5(b)(1); IRC 851(b)(4)(a)(ii));
2. purchase securities if such purchase would cause:
a. more than 3% of the outstanding voting stock of
any other investment company to be held in the
Portfolio Account (1940 Act 12(d)(1)(A)(i)),
b. securities issued by any other investment company
having an aggregate value in excess of 5% of the
value of the total assets in the Portfolio
Account to be held in the Portfolio Account (1940
Act 12(d)(1)(A)(ii)),
c. securities issued by all other investment
companies (other than Treasury Stock) having an
aggregate value in excess of 10% of the value of
the total assets of the Portfolio Account to be
held in the Portfolio Account (1940 Act
12(d)(1)(A)(iii)),
d. more than 10% of the outstanding voting stock of
any registered closed-end investment company to
be held in the Portfolio Account, and by any
other investment company having as its investment
adviser any of the Sub-Advisers, the Adviser, or
any other investment adviser to the Fund (1940
Act 12(d)(1)(C));
3. purchase securities of any insurance company if such
purchase would cause more than 10% of the outstanding
voting securities of any insurance company to be held
in the Portfolio Account (1940 Act 12(d)(2)); or
4. purchase securities of or any interest in any person
who is a broker, a dealer, is engaged in the business
of underwriting, is an investment adviser to an
investment company or is a registered investment
adviser under the Investment Advisers Act of 1940
unless
a. such purchase is of a security of any issuer
that, in its most recent fiscal year, derived 15%
or less of its gross revenues from securities-
related activities (1940 Act Rule 12d3-l(a)), or
b. despite the fact that such purchase is of any
security of any issuer that derived more than 15%
of its gross revenues from securities-related
activities:
(1) immediately after the purchase of any equity
security, the Portfolio Account would not own
more than 5% of outstanding securities of
that class of the issuer's equity securities
(1940 Act Rule 12d3-1(b)(1));
(2) immediately after the purchase of any debt
security, the Portfolio Account would not own
more than 10% of the outstanding principal
amount of the issuer's debt securities (1940
Act Rule 12d3-1(b)(2)); and
(3) immediately after the purchase, not more than
5% of the value of the Portfolio Account's
total assets would be invested in the
issuer's securities (1940 Act Rule 12d3-
1(b)(3)).
C. The Sub-Adviser will manage the Portfolio Account so
that no more than 10% of the gross income of the Portfolio
Account is derived from any source other than dividends,
interest, payments with respect to securities loans (as
defined in IRC 512(a)(5)), and gains from the sale or
other disposition of stock or securities (as defined in the
1940 Act 2(a)(36)) or foreign currencies, or other income
(including, but not limited to, gains from options,
futures, or forward contracts) derived with respect to the
Portfolio's business of investing in such stock,
securities, or currencies (IRC 851(b)(2)).
Dated: November 1, 2005
SCHEDULE C
RECORD KEEPING REQUIREMENTS
Records To Be Maintained by the Sub-Adviser:
A. (Rule 31a-l(b)(5) and (6)). A record of each brokerage
order, and all other portfolio purchases and sales, given
by the Sub-Adviser on behalf of the Portfolio Account for,
or in connection with, the purchase or sale of securities,
whether executed or unexecuted. Such records shall include:
1. the name of the broker;
2. the terms and conditions of the order and of any
modification or cancellation thereof;
3. the time of entry or cancellation;
4. the price at which executed;
5. the time of receipt of a report of execution; and
6. the name of the person who placed the order on behalf
of the Portfolio Account.
B. (Rule 31a-l(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 (e.g.
execution ability, execution and research) 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:
1. shall include the consideration given to:
a. the sale of shares of the Fund by brokers or dealers;
b. the supplying of services or benefits by brokers
or dealers to:
(1) the Fund,
(2) the Adviser,
(3) the Sub-Adviser, and
(4) any person other than the foregoing; and
c. any other consideration other than the technical
qualifications of the brokers and dealers as such;
2. shall show the nature of the services or benefits made
available;
3. 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; and
4. shall show the name of the person responsible for
making the determination of such allocation and such
division of brokerage commissions or other compensation.
C. (Rule 31a-l(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.
D. (Rule 31a-1(f)). Such accounts, books and other documents
as are required to be maintained by registered investment
advisers by rule 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 Portfolio Account.
Dated: November 1, 2005
