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EXHIBIT 23(d)(6)
INVESTMENT SUBADVISORY AGREEMENT
THIS INVESTMENT SUBADVISORY AGREEMENT (the "Agreement"), by and between
MARKET STREET INVESTMENT MANAGEMENT COMPANY (formerly "Providentmutual
Investment Management Company"), a Pennsylvania corporation (the "Adviser"), and
GEEWAX, TERKER & COMPANY, a Pennsylvania partnership (the "Subadviser"), made as
of the date that Market Street Fund, Inc., a Maryland corporation, reorganizes
and redomesticates into Market Street Fund, a Delaware business trust and
effective with respect to a Portfolio of Market Street Fund as specified in this
Agreement.
The Adviser and Subadviser agree as follows:
1. APPOINTMENT OF SUBADVISER. The Adviser hereby engages the services of the
Subadviser in connection with the Adviser's management of one or more of the
portfolios of MARKET STREET FUND (the "Fund") specified in an appendix to this
Agreement (each, a "Portfolio"), as this appendix may be amended from time to
time under this Agreement ("Appendix A"). Pursuant to this Agreement and subject
to the oversight and supervision by the Adviser and the Fund's Board of Trustees
(the "Board") and officers, the Subadviser shall manage the investment and
reinvestment of all or a portion of a Portfolio's assets (collectively, the
"Portfolio Segment") that the Adviser shall, from time to time, direct and that
the Subadviser shall accept.
2. ACCEPTANCE OF APPOINTMENT BY SUBADVISER. The Subadviser hereby accepts the
engagement by the Adviser in the foregoing capacity and agrees, at the
Subadviser's own expense, to render the services set forth herein and to provide
the office space, furnishings, equipment, and personnel required by the
Subadviser to perform these services on the terms and for the compensation
provided in this Agreement.
3. SERVICES TO BE PROVIDED BY SUBADVISER. In particular, the Subadviser shall
furnish continuously an investment program for the Portfolio Segment and shall
determine from time to time in the Subadviser's discretion the securities and
other investments to be purchased or sold or exchanged and what portions of the
Portfolio Segment shall be held in various securities, cash, or other
investments. In this connection, the Subadviser shall provide the Adviser and
the Fund's Board and officers, with any reports and documentation as the Adviser
and the Fund's Board and officers shall reasonably request regarding the
Subadviser's management of the Portfolio Segment assets. The Subadviser shall
not delegate any of the Subadviser's duties under this Agreement to any other
subadviser without the consent and approval of the Fund's Board and a majority
of those trustees who are not parties to this Agreement or "interested persons"
of any party; provided, that, in the event the Subadviser is authorized to so
delegate, the Subadviser shall retain overall responsibility for these delegated
powers and functions and any and all obligations and liabilities in connection
therewith.
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4. COMPLIANCE BY SUBADVISER WITH PORTFOLIO POLICIES AND APPLICABLE LAW. The
Subadviser shall carry out the Subadviser's responsibilities under this
Agreement in compliance with: (a) a Portfolio's investment objective, policies,
and restrictions, as set forth in the Fund's current registration statement, as
amended from time to time; (b) any policies or directives as the Fund's Board
may from time to time establish or issue and communicate to the Adviser in
writing; and (c) applicable law and related regulations. The Adviser shall
promptly notify the Subadviser in writing of changes to (a) or (b) above and
shall notify the Subadviser in writing of changes to (c) above promptly after
the Adviser becomes aware of these changes.
5. SUBADVISER'S DUTIES REGARDING PORTFOLIO TRANSACTIONS.
(a) PLACEMENT OF ORDERS. The Subadviser shall take all actions the
Subadviser considers necessary to implement the investment policies of a
Portfolio, and, in particular, to place all orders for the purchase or
sale of securities or other investments for the Portfolio Segment with
brokers or dealers the Subadviser selects, and, to that end, the
Subadviser is authorized as the Fund's agent to give instructions to the
Fund's custodian as to deliveries of securities or other investments and
payments of cash for the Portfolio's account. In connection with the
selection of brokers or dealers and the placement of purchase and sale
orders, the Subadviser is directed at all times to seek to obtain best
execution and price within the policy guidelines determined by the Fund's
Board and set forth in the Fund's current registration statement.
(b) SELECTION OF BROKERS AND DEALERS. To the extent permitted by the
policy guidelines set forth in the Fund's current registration statement,
in the selection of brokers and dealers to execute portfolio transactions,
the Subadviser is authorized to consider not only the available prices and
rates of brokerage commissions, but also other relevant factors, which may
include, without limitation: the execution capabilities of the brokers and
dealers; the research, custody, and other services provided by the brokers
and dealers that the Subadviser believes will enhance the Subadviser's
general portfolio management capabilities; the size of the transaction;
the difficulty of execution; the operational facilities of these brokers
and dealers; the risk to this broker or dealer of positioning a block of
securities; and the overall quality of brokerage and research services
provided by these brokers and dealers. In connection with the foregoing,
the Subadviser is specifically authorized to pay those brokers and dealers
who provide brokerage and research services to the Subadviser, a higher
commission than that charged by other brokers and dealers if the
Subadviser determines in good faith that the amount of the commission is
reasonable in relation to the value of these services in terms of either
the particular transaction or in terms of the Subadviser's overall
responsibilities with respect to the Portfolio Segment and to any other
client accounts or portfolios that the Subadviser advises. The execution
of these transactions shall not be considered to represent an unlawful
breach of any duty created by this Agreement or otherwise.
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(c) SOFT DOLLAR ARRANGEMENTS. On an ongoing basis, but not less often than
annually, the Subadviser shall identify and provide a written description
to the Adviser and Fund of all "soft dollar" arrangements that the
Subadviser maintains with respect to a Portfolio Segment or with brokers
or dealers that execute transactions for the Portfolio Segment. Prior to
the commencement of the active management of a Portfolio Segment, and
periodically thereafter, but not less often than annually, the Subadviser
shall provide the Adviser and Fund with a written description of all
arrangements with third parties and other individuals, entities, brokers,
or money management firms that have or may receive or share in the payment
of fees for services in connection with securing or continuing this
Agreement.
(d) AGGREGATED TRANSACTIONS. The Subadviser also is authorized to
aggregate purchase and sale orders for securities held (or to be held) in
a Portfolio Segment with similar orders being made on the same day for
other client accounts or portfolios that the Subadviser manages. When an
order is so aggregated: (a) the actual prices applicable to the aggregated
transaction will be averaged, and the Portfolio Segment and each other
account or portfolio participating in the aggregated transaction shall be
treated as having purchased or sold the Portfolio's portion of the
securities at this average price; and (b) all transaction costs incurred
in effecting the aggregated transaction shall be shared on a pro-rata
basis among the accounts or portfolios (including the Portfolio Segment)
participating in the transaction. When recommending or effecting a
transaction in a particular security or investment for more than one
client account or portfolio (including the Portfolio Segment), the
Subadviser may allocate the recommendations or transactions among all
accounts and portfolios for whom the recommendation is made or transaction
is effected on a basis that the Subadviser considers equitable. The
Adviser recognizes that in some cases this procedure may adversely affect
the size of the position obtainable for a Portfolio Segment.
6. NON-EXCLUSIVITY OF SUBADVISER'S SERVICES. The Subadviser's services under
this Agreement are not exclusive. The Subadviser may provide the same or similar
services to other clients. The Adviser acknowledges that, except when
transactions for multiple clients are aggregated, transactions in a specific
security or other investment may not be recommended or executed at the same time
or price for all client accounts or portfolios (including the Portfolio Segment)
for which that security or investment is recommended or executed. This Agreement
does not require the Subadviser to give priority to a Portfolio Segment over
other client accounts or portfolios. The Subadviser shall for all purposes
herein be deemed to be an independent contractor and shall, unless otherwise
expressly provided or authorized, have no authority to act for or represent the
Adviser, the Fund, or a Portfolio or otherwise be deemed an agent of the
Adviser, the Fund, or the Portfolio.
7. DELEGATION OF PROXY VOTING RIGHTS. The Adviser delegates the Adviser's
discretionary authority to exercise voting rights with respect to the securities
and other investments in a Portfolio Segment to the Subadviser. The Subadviser
shall exercise these voting rights unless and until the Adviser revokes this
delegation in writing. The Adviser may revoke this delegation
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at any time without cause. The Subadviser shall maintain and preserve a record,
in an easily accessible place for a period of not less than three (3) years, of
the Subadviser's voting procedures, and of the Subadviser's actual votes, and
the Subadviser shall supply this record to the Adviser, or any authorized
representative of the Adviser, upon the written request of the Adviser or the
Adviser's authorized representative, as appropriate.
8. AFFILIATED BROKERS. The Subadviser or any of the Subadviser's affiliates
may act as broker in connection with the purchase or sale of securities or other
investments for a Portfolio Segment, subject to: (a) the requirement that the
Subadviser seek to obtain best execution and price within the policy guidelines
determined by the Fund's Board and set forth in the Fund's current registration
statement; (b) the provisions of the Investment Advisers Act of 1940, as amended
(the "Advisers Act"); (c) the provisions of the Securities Exchange Act of 1934,
as amended, including, but not limited to, Section 11(a) thereof; and (d) other
applicable provisions of law. These brokerage services are not within the scope
of the duties of the Subadviser under this Agreement. Subject to the
requirements of applicable law and any procedures adopted by Fund's Board, the
Subadviser or the Subadviser's affiliate may receive brokerage commissions,
fees, or other remuneration from a Portfolio or the Fund for these services in
addition to the Subadviser's fees for services under this Agreement.
9. CUSTODY. Nothing in this Agreement shall require the Subadviser to
take or receive physical possession of cash, securities, or other
investments of a Portfolio Segment.
10. REGISTRATION OF SUBADVISER. The Subadviser is registered as an
investment adviser with the U.S. Securities and Exchange Commission under
the Advisers Act. The Subadviser shall remain so registered throughout
the term of this Agreement and shall notify the Adviser immediately if the
Subadviser ceases to be so registered as an investment adviser.
11. REPRESENTATIONS AND COVENANTS OF SUBADVISER.
(a) The Subadviser: (a) is duly organized and validly existing under
Pennsylvania law with the power to own and possess the Subadviser's assets
and carry on the Subadviser's business as this business is now being
conducted; (b) has the authority to enter into and perform the services
contemplated by this Agreement; (c) is not prohibited by the Investment
Company Act of 1940, as amended (the "1940 Act"), or the Advisers Act from
performing the services contemplated by this Agreement; (d) has met, and
shall continue to seek to meet for the duration of this Agreement, any
other applicable federal or state requirements, or the applicable
requirements of any regulatory or industry self-regulatory agency,
necessary to be met in order to perform the services contemplated by this
Agreement; and (e) shall promptly notify the Adviser of the occurrence of
any event that would disqualify the Subadviser from serving as an
investment adviser to an investment company pursuant to Section 9(a) of
the 1940 Act.
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(b) The Subadviser shall manage the amounts in a Portfolio in
accordance with the prospectus and statement of additional information,
with respect to the Portfolio, and in compliance with Section 817(h) of
the United States Internal Revenue Code of 1986, as amended (the "Code"),
to the extent applicable, and United States Treasury Regulation Section
1.817-5; furthermore, the Subadviser will promptly inform the Adviser and
Fund if any information in the prospectus or statement of additional
information, with respect to the Portfolio, or if any action relating to
the Subadviser or the Subadviser's services to the Portfolio is (or will
become) inaccurate, incomplete, or no longer compliant with Code Section
817(h) or Section 1.817-5, supra.
12. REPRESENTATIONS AND COVENANTS OF ADVISER. The Adviser: (a) is duly organized
and validly existing under Pennsylvania law with the power to own and possess
the Adviser's assets and carry on the Adviser's business as this business is now
being conducted; (b) has the authority to enter into and perform the services
and other matters contemplated by this Agreement; (c) is not prohibited by the
1940 Act or the Advisers Act from performing the services contemplated by this
Agreement; (d) has met, and shall continue to seek to meet for the duration of
this Agreement, any other applicable federal or state requirements, or the
applicable requirements of any regulatory or industry self-regulatory agency,
necessary to be met by the Adviser in order to perform the services and other
matters contemplated by this Agreement; and (e) shall promptly notify the
Subadviser of the occurrence of any event that would disqualify the Adviser from
serving as an investment adviser to an investment company pursuant to Section
9(a) of the 1940 Act. The Adviser represents that the Fund is (and during the
term of this Agreement, will remain) registered as an open-end management
investment company under the 1940 Act and that the Fund's shares representing an
interest in the Portfolio are (and during the term of this Agreement will
remain) registered under the Securities Act of 1933 and under any applicable
state securities laws.
13. SUBADVISER CODE OF ETHICS. The Subadviser certifies that the Subadviser has
adopted a written code of ethics complying with the requirements of Rule 17j-1
under the 1940 Act and that the Subadviser has instituted procedures reasonably
necessary to prevent Access Persons from violating the Subadviser's code of
ethics. The Subadviser will provide the Adviser and the Fund with a copy of that
code, together with evidence of the code's adoption. Within twenty (20) days of
the end of each calendar quarter during which this Agreement remains in effect,
the president or a vice president of the Subadviser shall certify to the Adviser
or the Fund that the Subadviser has complied with the requirements of Rule 17j-1
during the previous quarter and that there have been no violations of the
Subadviser's code of ethics or, if a violation has occurred, that appropriate
action has been taken in response to the violation; provided, that, no less
frequently than annually, the appropriate officer of the Subadviser shall
furnish a written report to the Adviser that complies with the requirements of
Rule 17j-1 with respect to these reports regarding issues, material violations,
and any related sanctions in connection with the administration of the code of
ethics, or as otherwise required pursuant to Rule 17j-1. Upon written request of
the Adviser or the Fund, the Subadviser shall permit representatives of the
Adviser or the Fund to examine the reports (or summaries of the reports)
required to be made to the Subadviser by Rule 17j-1(d)(1) and other records
evidencing enforcement of the code of ethics.
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14. FEE PROVISIONS.
(a) FEE. For the services rendered, the facilities furnished, and the
expenses assumed by the Subadviser, the Adviser shall pay the Subadviser
quarterly fees, in arrears, based on the combined net assets of all
Portfolio Segments managed by the Subadviser, calculated daily at the
annual rate specified in an appendix to this Agreement, as this appendix
may be amended from time to time under this Agreement ("Appendix B"). The
Subadviser's fee shall be accrued daily at 1/365th of the applicable
annual rate set forth in Appendix B. For the purpose of accruing
compensation, the net assets of a Portfolio Segment shall be determined in
the manner and on the dates set forth in the Fund's current prospectus,
and, on days on which the net assets are not so determined, the net asset
value computation to be used shall be as determined on the immediately
preceding day on which the net assets were determined.
(b) SPECIAL FEE PROVISIONS. In the event of termination of this Agreement,
all compensation due through the date of termination will be calculated on
a pro-rated basis through the date of termination and paid within thirty
(30) business days of the date of termination. During any period when the
determination of net asset value is suspended, the net asset value of a
Portfolio as of the last business day prior to the suspension shall for
this purpose be deemed to be the net asset value at the close of each
succeeding business day until the Portfolio's net asset value is again
determined.
15. RECORDS.
(a) MAINTENANCE OF RECORDS. The Subadviser hereby undertakes and agrees to
maintain, in the form and for the period required by Rule 31a-2 under the
1940 Act, all records relating to a Portfolio Segment's investments that
are required to be maintained by the Fund pursuant to the requirements of
paragraphs (b)(5), (b)(6), (b)(7), (b)(9), (b)(10), and (f) of Rule 31a-1
under the 1940 Act.
(b) OWNERSHIP OF RECORDS. The Subadviser agrees that all books and records
which the Subadviser maintains for a Portfolio or the Fund are the Fund's
property and further agrees to surrender promptly to the Adviser or the
Fund any books, records, or information upon the Adviser's or the Fund's
request; provided, however, that the Subadviser may retain copies of the
records. All the requested books and records shall be made available,
within five (5) business days of a written request, to the Fund's
accountants or auditors during regular business hours at the Subadviser's
offices. The Adviser and the Fund or either of the Adviser's or Fund's
authorized representatives shall have the right to copy any records in the
possession of the Subadviser that pertain to a Portfolio or the Fund.
These books, records, information, or reports shall be made available to
properly
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authorized government representatives consistent with state and federal
law and/or regulations. In the event of the termination of this Agreement,
all these books, records, or other information shall be returned to the
Adviser or the Fund. The Subadviser agrees that the policies and
procedures the Subadviser has established for managing a Portfolio
Segment, including, but not limited to, all policies and procedures
designed to ensure compliance with federal and state regulations governing
the Subadviser/client relationship and management and operation of a
Portfolio, shall be made available for inspection by the Adviser and the
Fund or either of their authorized representatives not less frequently
than annually.
16. CONFIDENTIALITY.
(a) NON-DISCLOSURE BY SUBADVISER. The Subadviser agrees that the
Subadviser will not disclose or use any records or confidential
information obtained pursuant to this Agreement in any manner whatsoever,
except as authorized in this Agreement or specifically by the Adviser or
the Fund, or if this disclosure or use is required by federal or state
regulatory authorities or by a court.
(b) NON-DISCLOSURE EXCEPTIONS. The Subadviser may disclose the investment
performance of a Portfolio and the Portfolio Segment; provided, that the
disclosure does not reveal the identity of the Adviser, the Portfolio, or
the Fund. The Subadviser may, however, disclose that the Adviser, the Fund
and a Portfolio are the Subadviser's clients; provided, that the
disclosure does not reveal the investment performance or the composition
of a Portfolio Segment.
17. LIMITATION OF LIABILITY OF SUBADVISER. In the absence of willful
misfeasance, bad faith, or gross negligence on the part of the Subadviser or the
Subadviser's directors, officers, or employees, or reckless disregard by the
Subadviser of the Subadviser's duties under this Agreement (together, "disabling
conduct"), the Subadviser shall not be liable to the Adviser, a Portfolio, or
the Fund, or to any shareholder of the Portfolio for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding, or sale of any security or other
investment, except to the extent otherwise provided in Section 36(b) of the 1940
Act concerning loss resulting from a breach of fiduciary duty with respect to
the receipt of compensation for services.
18. SUBADVISER TO INDEMNIFY ADVISER. The Subadviser agrees to indemnify and
defend the Adviser, the Adviser's directors, officers, employees, and any person
who controls the Adviser for any loss or expense (including attorney's fees)
arising out of any claim, demand, action, suit, or proceeding arising out of any
actual or alleged material misstatement or omission in the Fund's registration
statement, any proxy statement, or communication to current or prospective
investors in the Portfolio relating to disclosure about the Subadviser in
writing provided to the Adviser or the Fund by the Subadviser.
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19. ADVISER TO INDEMNIFY SUBADVISER. The Adviser agrees to indemnify and defend
the Subadviser, the Subadviser's directors, officers, partners, employees, and
any person who controls the Subadviser for any loss or expense (including
attorney's fees) arising out of any claim, demand, action, suit, or proceeding
arising out of any actual or alleged material misstatement or omission in the
Fund's registration statement, any proxy statement, or other communication to
current or prospective investors in a Portfolio (other than a misstatement or
omission relating to disclosure about the Subadviser provided to the Adviser or
the Fund by the Subadviser).
20. DOCUMENT DELIVERY AND REVIEW. The Adviser shall furnish the Subadviser with
copies of the Fund's prospectus and statement of additional information, proxy
statements, sales literature, or any other material prepared for distribution to
its shareholders, or the public that refer in any way to the Subadviser, and
shall not use such material if the Subadviser reasonably objects in writing
within three (3) business days or such other time as may be agreed to by the
parties in writing after receipt thereof, as soon as practicable after such
documents become available. The Adviser shall ensure that materials prepared by
employees or agents of the Adviser that refer to the Subadviser in any way are
consistent with those materials previously approved by the Subadviser, as
referenced in the preceding sentence. The Adviser shall furnish the Subadviser
with any further documents, materials, or information that the Subadviser may
reasonably request in writing to perform the Subadviser's duties pursuant to
this Agreement.
21. EFFECTIVENESS. This Agreement shall not become effective with respect to a
Portfolio until this Agreement is approved by the Fund's Board, including a
majority of trustees who are not parties to this Agreement or "interested
persons" of any party to the Agreement, and, to the extent required by law, a
majority of the outstanding shares of the Portfolio. Subject to receipt of all
necessary approvals, this Agreement shall be effective as of the date, and for
the term, provided in Appendix A with respect to a Portfolio.
22. TERMINATION. This Agreement may be terminated with respect to a Portfolio at
any time without the payment of any penalty, by the Fund's Board, or by vote of
a majority of the outstanding shares of the Portfolio, on sixty (60) days
written notice to the Adviser and Subadviser, or by the Adviser or Subadviser,
on sixty (60) days written notice to the other. This Agreement shall
automatically terminate in the event of this Agreement's assignment or in the
event of the termination of the investment advisory agreement between the
Adviser and the Fund regarding the Adviser's management of the affected
Portfolio.
23. AMENDMENT. This Agreement may be amended with respect to a Portfolio in
writing by the parties only if the amendment is specifically approved by: (a) a
majority of those trustees who are not parties to this Agreement or "interested
persons" of any party cast in person at a meeting called for the purpose of
voting on the Agreement's approval; and (b) if required by applicable law, the
vote of a majority of outstanding shares of the affected Portfolio.
24. DEFINITIONS. The terms "assignment," "affiliated person," and "interested
person," when used in this Agreement, shall have the respective meanings
specified in Section 2(a) of the 1940 Act. The term "majority of the outstanding
shares" means the lesser of (a) sixty-seven percent (67%) or more of the shares
present at a meeting if more than fifty percent (50%) of these shares
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are present or represented by proxy or (b) more than fifty percent (50%) of the
outstanding shares.
25. GOVERNING LAW. This Agreement shall be construed in accordance with
Pennsylvania law and applicable provisions of the Advisers Act and 1940 Act.
26. 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.
27. COUNTERPARTS. This Agreement may be executed in counterparts, all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
Market Street Investment Management Company
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
ATTEST:
/s/ Xxxxx Xxxxxxxxx
------------------------
Geewax, Terker & Company
By: /s/ Xxxx Xxxxxx
-----------------------------------------
Name: Xxxx Xxxxxx
Title: President
ATTEST:
/s/ Xxxxx Xxxxxxx
------------------------
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APPENDIX A
TO THE INVESTMENT SUBADVISORY AGREEMENT BETWEEN MARKET STREET INVESTMENT
MANAGEMENT COMPANY AND
GEEWAX, TERKER & COMPANY
PORTFOLIO(S) EFFECTIVE DATE AND TERM
----------- -----------------------
All Pro Large Cap Growth Portfolio The effective date of this Agreement with
respect to this Portfolio shall be as of
the 26th day of January, 2001. The term
of this Agreement shall continue for two
(2) years and shall thereafter continue
in effect from year to year so long as
the Agreement's continuance is
specifically approved at least annually
by: (a) the Trust's Board of Trustees,
or by the vote of a majority of the
outstanding shares of the Portfolio, and
(b) a majority of those trustees who are
not parties to this Agreement or
interested persons of any party cast in
person at a meeting called for the
purpose of voting on the Agreement's
approval.
Market Street Investment Management Company
By: /s/ Xxxxx X. Xxxxx Date: 1-22-01
----------------------- -------
Name: Xxxxx X. Xxxxx
Title: President
Geewax, Terker & Company
By: /s/ Xxxx Xxxxxx Date: 1-22-01
------------------------ -------
Name: Xxxx Xxxxxx
Title: President
X-0
00
XXXXXXXX X
TO THE INVESTMENT SUBADVISORY AGREEMENT BETWEEN MARKET STREET INVESTMENT
MANAGEMENT COMPANY AND
GEEWAX, TERKER & COMPANY
PORTFOLIO(S) FEE
----------- ---
All Pro Large Cap Growth Portfolio 0.30% of the combined
average daily net assets,
calculated as described in
Section 14 of this
Agreement.
Market Street Investment Management Company
By: /s/ Xxxxx X. Xxxxx Date: 1-22-01
----------------------- -------
Name: Xxxxx X. Xxxxx
Title: President
Geewax, Terker & Company
By: /s/ Xxxx Xxxxxx Date: 1-22-01
------------------------ -------
Name: Xxxx Xxxxxx
Title: President
