SUB-ADVISORY AGREEMENT
MONTAG & XXXXXXXX, INC.
THIS SUB-ADVISORY AGREEMENT is made as of the 18th day of
October, 2007, 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 Montag & Xxxxxxxx, Inc., a
corporation organized under the laws of the state of Georgia (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 public sale distinct series of shares of beneficial
interest; and
WHEREAS, the Wilmington Multi-Manager Large-Cap Fund (the
"PORTFOLIO") is a series of the Fund; and
WHEREAS, the Adviser acts as the investment adviser for the
Portfolio 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 the 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;
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 A 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 A and Schedule B 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 B 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 B hereto (as amended from time to time). The
Fund and the Sub-Adviser shall issue to the Custodian such instructions as may
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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
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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. PROXIES. The Sub-Adviser will vote all proxies solicited by or with respect
to issuers of securities in which assets of the Portfolio Account may be
invested from time to time. At the request of the Sub-Adviser, the Adviser shall
provide the Sub-Adviser with its recommendations as to the voting of such
proxies.
9. 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.
10. FEES FOR SERVICES. For the services to be provided hereunder, the Fund shall
pay the Sub-Adviser out of the assets of the Portfolio a sub-advisory fee
calculated at the annual rates listed on the attached Schedule C. The fee shall
be payable monthly as soon as practicable after the last day of each month based
on the Portfolio Account's average daily net assets.
11. 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.
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12. 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.
13. 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.
14. 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.
15. 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.
16. 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.
17. 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.
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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.
18. 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 B. The Sub-Adviser agrees that such
records (unless otherwise indicated on Schedule B) 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.
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19. 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 Exchange Commission.
20. EFFECTIVE DATE; TERM. This Agreement shall become effective on the date
first written above and shall remain in force for a period of 150 days from such
date or until the Trustees approve a new sub-advisory agreement with the
Sub-Adviser, if earlier.
21. 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.
22. 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.
23. 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.
24. 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.
25. 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.
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26. ENTIRE AGREEMENT. This Agreement and the Schedules attached hereto embodies
the entire agreement and understanding between the parties.
[SIGNATURE PAGE FOLLOWS]
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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,
on behalf of the Wilmington Multi-Manager
Large-Cap Fund
By: /s/
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President and Secretary
MONTAG & XXXXXXXX, INC.
By: /s/
Name: Xxxxx X. Xxxxx
Title: Executive Vice President
XXXXXX SQUARE MANAGEMENT CORPORATION
By: /s/
Name: Xxxxxxx X. Xxxxxx, Xx.
Title: Vice President
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SCHEDULE A
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 Actss.5(b)(1); IRC
ss.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 Actss.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
Actss.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 Actss.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 ss.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 Actss.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 ss.512(a)(5)), and gains from the
sale or other disposition of stock or securities (as defined in the
1940 Act ss.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 ss.851(b)(2)).
Dated: October 18, 2007
SCHEDULE B
RECORD KEEPING REQUIREMENTS
RECORDS TO BE MAINTAINED BY THE SUB-ADVISER:
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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;
B-1
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: October 18, 2007
B-2
SCHEDULE C
FEE SCHEDULE
For the services to be provided to the Portfolio pursuant to
the attached Sub-Advisory Agreement, the Fund shall pay the Sub-Adviser out of
the assets of the Portfolio an annual fee in accordance with the following
formula:
65 basis points (0.65%) on the first $10 million;
50 basis points (0.50%) on the next $10 million;
35 basis points (0.35%) on the next $50 million; and
25 basis points (0.25%) on amounts greater than $70 million.
The fee shall be payable monthly as soon as practicable after
the last day of each month based on the Portfolio Account's average daily net
assets.
Dated: October 18, 2007
C-1
