SUB-ADVISORY AGREEMENT
ARTIO GLOBAL MANAGEMENT LLC
THIS SUB-ADVISORY AGREEMENT is made as of the 3rd day of
December, 2009, among WT Mutual Fund, a Delaware statutory trust (the "Fund"),
Xxxxxx Square Management Corporation (the "Adviser"), a corporation organized
under the laws of the state of Delaware and Artio Global Management LLC, a
corporation 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 public sale distinct series of shares of
beneficial interest; and
WHEREAS, the Wilmington Multi-Manager International 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 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 Sub-Adviser shall have authority and discretion
to select brokers and dealers (including brokers that may be affiliates of the
Sub-Adviser to the extent permitted by Section 7(c) hereof) to execute
portfolio transactions initiated by the Sub-Adviser, and for the selection of
the markets on or in which the transactions will be executed, subject to the
following and 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.
a. In executing portfolio transactions, the Sub-Adviser will give
primary consideration to securing the best price and execution. Consistent with
this policy, the Sub-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 Sub-Adviser may be a party. It is
understood that neither the Fund, the Adviser nor the Sub-Adviser has adopted a
formula for allocation of the Fund's investment transaction business. It is
also understood that it is desirable for the Fund that the Sub-Adviser have
access to supplemental investment and market research and security and economic
analyses provided by certain brokers who may execute brokerage transactions at
a higher commission to the Fund than may result when allocating brokerage to
other brokers on the basis of seeking the lowest commission. Therefore, the
Sub-Adviser is authorized to place orders for the purchase and sale of
securities for the Portfolio with certain such brokers, subject to review by
the Fund's Board of Trustees from time to time with respect to the extent and
continuation of this practice. It is understood that the services provided by
such brokers may be useful to the Sub-Adviser in connection
A-2
with its services to other clients of the Sub-Adviser. The Sub-Adviser is also
authorized to place orders with certain brokers for services deemed by the
Adviser to be beneficial for the Fund; and the Sub-Adviser shall follow the
directions of the Adviser or the Fund in this regard.
b. On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interest of the Portfolio Account as well as other
clients of the Sub-Adviser, the Sub-Adviser, to the extent permitted by
applicable laws and regulations, may, but shall be under no obligation to,
aggregate the securities to be sold or purchased in order to obtain the best
price and execution. In such event, allocation of the securities so purchased
or sold, as well as expenses incurred in the transaction, will be made by the
Sub-Adviser in the manner it considers to be the most equitable and consistent
with its fiduciary obligations to the Fund in respect of the Portfolios and to
such other clients.
c. 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, including the Adviser or any sub-adviser for any
Portfolios 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 brokers and
dealers.
d. 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
Portfolios, which is advising the Portfolios, concerning the Sub-Adviser or its
affiliated persons' transactions with the Portfolios in securities or other
assets of the Portfolios, and (ii) will be limited to providing investment
advice with respect to the Portfolio Account.
e. The Adviser shall render regular reports to the Fund of the total
brokerage business placed and the manner in which the allocation has been
accomplished.
8. PROXIES. The Sub-Adviser will vote all proxies solicited by or with respect
to issuers of securities in which assets of the Series Account may be invested
from time to time. For avoidance of doubt, in exercising the voting rights
associated with such proxies, the Sub-Adviser, in its discretion, may vote
affirmatively or negatively or abstain from voting on matters that are being
solicited by such proxies. At the request of the Sub-Adviser, the Adviser shall
provide the Sub-Adviser with its recommendations as to the voting of such
proxies or whether the Sub-Adviser should abstain from voting 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 Portfolio
shall pay the Sub-Adviser 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,
A-3
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.
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.
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.
A-4
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.
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 two years 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.
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.
A-5
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.
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.
26. ENTIRE AGREEMENT. This Agreement and the Schedules attached hereto embodies
the entire agreement and understanding between the parties.
[Signature Page Follows]
A-6
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 International Fund
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President & Secretary
ARTIO GLOBAL MANAGEMENT LLC
By: /s/ X.X. Xxxxxxxx
-----------------
Name: X.X. Xxxxxxxx
Title: C.O.O.
XXXXXX SQUARE MANAGEMENT CORPORATION
By: /s/ Xxxx X. Xxxxxx
------------------
Name: Xxxx X. Xxxxxx
Title: President
A-7
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 Act [section]5(b)(1); IRC
[section]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
[section]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 [section]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 [section]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
[section]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
[section]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 [section]512(a)(5)), and gains from the sale or other
disposition of stock or securities (as defined in the 1940 Act
[section]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 [section]851(b)(2)).
Dated: December 3, 2009
SCHEDULE B
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: December 3, 2009
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 an annual fee paid
monthly as follows:
The amount paid monthly shall be equal to (a) the applicable annual fee
multiplied by the average daily net asset value of the Sub-Adviser's Portfolio
Account for the month (b) multiplied by the number of days in the month and
divided by the number of days in the year.
If the average daily net asset value of the Sub-Adviser's Portfolio Account for
the month is less than $125 million, the applicable annual fee is 0.50% on
average daily net assets. If the average daily net asset value of the
Sub-Adviser's Portfolio Account for the month is $125 million or more, the
applicable annual fee is 0.45% on the first $100 million of average daily net
assets and 0.40% on average daily net assets in excess of $100 million.
Such fee shall be payable in arrears within 15 business days following the end
of each month.
Dated: December 3, 2009
