PRINCIPAL FUNDS, INC. AMENDED AND RESTATED SUB-ADVISORY AGREEMENT SMALLCAP GROWTH FUND II
PRINCIPAL FUNDS, INC. |
AMENDED AND RESTATED SUB-ADVISORY AGREEMENT |
SMALLCAP GROWTH FUND II |
AGREEMENT executed as of January 1, 2010, by and between PRINCIPAL MANAGEMENT | |
CORPORATION (hereinafter called "the Manager"), and ESSEX INVESTMENT MANAGEMENT COMPANY, | |
LLC. (hereinafter called "the Sub-Adviser"). | |
W I T N E S S E T H: | |
WHEREAS, the Manager is the manager and investment adviser to each Series of Principal Funds, Inc., | |
(the "Fund"), an open-end management investment company registered under the Investment Company Act of | |
1940, as amended (the "1940 Act"); and | |
WHEREAS, the Manager desires to retain the Sub-Adviser to furnish it with investment advisory services | |
with respect to assets allocated by the Manager for management by the Sub-Adviser for a portion of the portfolio | |
of the Partners SmallCap Growth Fund II series (hereinafter called the “Series”), which the Manager has agreed | |
to provide to the Fund, and the Sub-Adviser desires to furnish such services; and | |
WHEREAS, The Manager 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) | Management Agreement (the "Management Agreement") with the Fund; |
(b) | The Fund's registration statement and financial statements as filed with the Securities and Exchange |
Commission; | |
(c) | The Fund's Articles of Incorporation and By-laws; |
(d) | Policies, procedures or instructions adopted or approved by the Board of Directors of the Fund relating |
to obligations and services to be provided by the Sub-Adviser. | |
NOW, THEREFORE, in consideration of the premises and the terms and conditions hereinafter set forth, the | |
parties agree as follows: | |
1. | Appointment of Sub-Adviser |
In accordance with and subject to the Management Agreement, the Manager hereby appoints the Sub- | |
Adviser to act as the Manager’s agent and attorney-in-fact with respect to the investment and | |
reinvestment of assets in the Series with full power and authority to direct any custodian of the assets of | |
the Series to purchase, sell or exchange any stocks, bonds, or other securities or such other assets | |
which are acceptable to the Sub-Adviser (individually, "security" and collectively, "securities") and to | |
issue directly to a broker or dealer such orders for the purchase, sale or exchange of securities or other | |
property, as the Sub-Adviser may deem appropriate and without prior consultation with the Manager, | |
subject to the control and direction of the Manager and the Fund's Board of Directors, for the period and | |
on the terms hereinafter set forth. The Sub-Adviser accepts such appointment and agrees to furnish the | |
services hereinafter set forth for the compensation herein provided. The Sub-Adviser shall for all | |
purposes herein be deemed to be an independent contractor and shall, except as expressly provided or | |
authorized, have no authority to act for or represent the Fund or the Manager in any way or otherwise be | |
deemed an agent of the Fund or the Manager. |
2. | Obligations of and Services to be Provided by the Sub-Adviser | |
The Sub-Adviser will: | ||
(a) | Provide investment advisory services, including but not limited to research, advice and supervision | |
for the Series. | ||
(b) | Furnish to the Board of Directors of the Fund for approval (or any appropriate committee of such | |
Board), and revise from time to time as conditions require, a recommended investment program for | ||
the Series consistent with each Series investment objective and policies. | ||
(c) | Implement the approved investment program by placing orders for the purchase and sale of | |
securities without prior consultation with the Manager and without regard to the length of time the | ||
securities have been held, the resulting rate of portfolio turnover or any tax considerations, subject | ||
always to the provisions of the Fund's registration statement, Articles of Incorporation and Bylaws | ||
and the requirements of the 1940 Act, as each of the same shall be from time to time in effect. | ||
(d) | Advise and assist the officers of the Fund, as requested by the officers, in taking such steps as are | |
necessary or appropriate to carry out the decisions of its Board of Directors, and any appropriate | ||
committees of such Board, regarding the general conduct of the investment business of the Series. | ||
(e) | Maintain, in connection with the Sub-Adviser’s investment advisory services obligations, | |
compliance with the 1940 Act and the regulations adopted by the Securities and Exchange | ||
Commission thereunder and the Series’ investment strategies and restrictions as stated in the | ||
Fund’s prospectus and statement of additional information. | ||
(f) | Report to the Board of Directors of the Fund at such times and in such detail as the Board of | |
Directors may reasonably deem appropriate in order to enable it to determine that the investment | ||
policies, procedures and approved investment program of the Series are being observed. | ||
(g) | Upon request, provide assistance and recommendations for the determination of the fair value of | |
certain securities when reliable market quotations are not readily available for purposes of | ||
calculating net asset value in accordance with procedures and methods established by the Fund's | ||
Board of Directors. | ||
(h) | Furnish, at its own expense, (i) all necessary investment and management facilities, including | |
salaries of clerical and other personnel required for it to execute its duties faithfully, and (ii) | ||
administrative facilities, including bookkeeping, clerical personnel and equipment necessary for the | ||
efficient conduct of the investment advisory affairs of the Series. Except for expenses specifically | ||
assumed or agreed to be paid by the Sub-Adviser under this Agreement, the Sub-Adviser shall not | ||
be liable for any expenses of the Manager, the Fund or the Series including, without limitation, (i) | ||
interest and taxes, (ii) brokerage commissions and other costs in connection with the purchase or | ||
sale of securities or other investment instruments with respect to the Series, and (iii) custodian fees | ||
and expenses. | ||
(i) | Open accounts with broker-dealers and futures commission merchants (“broker-dealers”), select | |
broker-dealers to effect all transactions for the Series, place all necessary orders with broker- | ||
dealers or issuers (including affiliated broker-dealers), and negotiate commissions, if applicable. To | ||
the extent consistent with applicable law, purchase or sell orders for the Series may be aggregated | ||
with contemporaneous purchase or sell orders of other clients of the Sub-Adviser. In such event | ||
allocation of securities so sold or purchased, as well as the expenses incurred in the transaction, | ||
will be made by the Sub-Adviser in the manner the Sub-Adviser considers to be the most equitable | ||
and consistent with its fiduciary obligations to the Fund and to other clients. The Sub-Adviser will | ||
report on such allocations at the request of the Manager, the Fund or the Fund’s Board of Directors | ||
providing such information as the number of aggregated trades to which the Series was a party, the | ||
broker-dealers to whom such trades were directed and the basis for the allocation for the | ||
aggregated trades. The Sub-Adviser shall use its best efforts to obtain execution of transactions |
for the Series at prices which are advantageous to the Series and at commission rates that are | |
reasonable in relation to the benefits received. However, the Sub-Adviser may select brokers or | |
dealers on the basis that they provide brokerage, research or other services or products to the Sub- | |
Adviser. To the extent consistent with applicable law, the Sub-Adviser may pay a broker or dealer | |
an amount of commission for effecting a securities transaction in excess of the amount of | |
commission or dealer spread another broker or dealer would have charged for effecting that | |
transaction if the Sub-Adviser determines in good faith that such amount of commission is | |
reasonable in relation to the value of the brokerage and research products and/or services provided | |
by such broker or dealer. This determination, with respect to brokerage and research products | |
and/or services, may be viewed in terms of either that particular transaction or the overall | |
responsibilities which the Sub-Adviser and its affiliates have with respect to the Series as well as to | |
accounts over which they exercise investment discretion. Not all such services or products need be | |
used by the Sub-Adviser in managing the Series. In addition, joint repurchase or other accounts | |
may not be utilized by the Series except to the extent permitted under any exemptive order | |
obtained by the Sub-Adviser provided that all conditions of such order are complied with. | |
(j) | Maintain all accounts, books and records with respect to the Series as are required of an |
investment advisor of a registered investment company pursuant to the 1940 Act and Investment | |
Advisers Act of 1940 (the “Investment Advisers Act”), and the rules thereunder, and furnish the | |
Fund and the Manager with such periodic and special reports as the Fund or Manager may | |
reasonably request. In compliance with the requirements of Rule 31a-3 under the 1940 Act, the | |
Sub-Adviser hereby agrees that all records that it maintains for the Series are the property of the | |
Fund, agrees to preserve for the periods described by Rule 31a-2 under the 1940 Act any records | |
that it maintains for the Series and that are required to be maintained by Rule 31a-1 under the 1940 | |
Act, and further agrees to surrender promptly to the Fund any records that it maintains for a Series | |
upon request by the Fund or the Manager. The Sub-Adviser has no responsibility for the | |
maintenance of Fund records except insofar as is directly related to the services the Sub-Adviser | |
provides to a Series. | |
(k) | Observe and comply with Rule 17j-1 under the 1940 Act and the Sub-Adviser’s Code of Ethics |
adopted pursuant to that Rule as the same may be amended from time to time. The Manager | |
acknowledges receipt of a copy of Sub-Adviser’s current Code of Ethics. Sub-Adviser shall | |
promptly forward to the Manager a copy of any material amendment to the Sub-Adviser’s Code of | |
Ethics along with certification that the Sub-Adviser has implemented procedures for administering | |
the Sub-Adviser’s Code of Ethics. | |
(l) | From time to time as the Manager or the Fund may request, furnish the requesting party reports on |
portfolio transactions and reports on investments held by a Series, all in such detail as the Manager | |
or the Fund may reasonably request. The Sub-Adviser will make available its officers and | |
employees to meet with the Fund’s Board of Directors at the Fund’s principal place of business on | |
due notice to review the investments of a Series. | |
(m) | Provide such information as is customarily provided by a Sub-Adviser and may be required for the |
Fund or the Manager to comply with their respective obligations under applicable laws, including, | |
without limitation, the Internal Revenue Code of 1986, as amended (the “Code”), the 1940 Act, the | |
Investment Advisers Act, the Securities Act of 1933, as amended (the “Securities Act”), and any | |
state securities laws, and any rule or regulation thereunder. | |
(n) | Vote proxies received on behalf of the Series in a manner consistent with Sub-Adviser's proxy |
voting policies and procedures and provide a record of votes cast containing all of the voting | |
information required by Form N-PX in an electronic format to enable the Series to file Form N-PX | |
as required by SEC rule. | |
(o) | Respond to tender offers, rights offerings and other voluntary corporate action requests affecting |
securities held by the Fund and complete and file notices of claims in connection with class action | |
lawsuits concerning securities owned by the Fund. |
3. | Prohibited Conduct |
In providing the services described in this agreement, the Sub-Adviser will not consult with any other | |
investment advisory firm that provides investment sub-advisory services to the Fund or a fund that is | |
under common control with the Fund regarding transactions for the Fund in the securities or other assets | |
allocated to the Sub-Adviser pursuant to this Agreement, except as provided by Rule 12d-3-1 under the | |
1940 Act. | |
4. | Compensation |
As full compensation for all services rendered and obligations assumed by the Sub-Adviser hereunder | |
with respect to the Series, the Manager shall pay the compensation specified in Appendix A to this | |
Agreement. | |
5. | Liability of Sub-Adviser |
Neither the Sub-Adviser nor any of its directors, officers, employees, agents or affiliates shall be liable to | |
the Manager, the Fund or its shareholders for any loss suffered by the Manager or the Fund resulting | |
from any error of judgment made in the good faith exercise of the Sub-Adviser's investment discretion in | |
connection with selecting investments for a Series or as a result of the failure by the Manager or any of | |
its affiliates to comply with the terms of this Agreement and/or insurance laws and rules except for | |
losses resulting from willful misfeasance, bad faith or gross negligence of, or from reckless disregard of, | |
the duties of the Sub-Adviser or any of its directors, officers, employees, agents, or affiliates. The Sub- | |
Adviser shall not have any responsibilities with respect to any assets of the Fund other than the Series. | |
The Manager shall not be responsible for any loss incurred by reason of any act or omission of any | |
dealer or broker, or the Manager, or any custodian. | |
The Sub-Adviser shall be responsible only for managing the Series in good faith and in accordance with | |
the investment objectives, fundamental policies and restrictions, and shall have no responsibility | |
whatsoever for, and shall incur no liability on account of (i) selection or establishment of such investment | |
objectives, fundamental policies and restrictions (ii) advice on, or management of, any other assets for | |
Manager or the Fund, (iii) filing of any tax or information returns or forms, withholding or paying any | |
taxes, or seeking any exemption or refund for the Manager or the Fund, (iv) registration of the Fund or | |
Series with any government or agency, or (v) administration of the plans and trusts investing through the | |
Fund, (vi) overall Fund compliance with the requirements of the 1940 Act, which requirements are | |
outside of the Sub-Adviser’s control, and any requirements of Subchapter M of the Internal Revenue | |
Code of 1986, as amended, which are outside of the Sub-Adviser’s control and shall be indemnified and | |
held harmless by Manager for any loss in carrying out the terms and provisions of this Agreement, | |
including reasonable attorney’s fees, indemnification to the Fund, or any shareholder thereof and, | |
brokers and commission merchants, fines, taxes, penalties and interest. Sub-Adviser, however, shall be | |
liable for any liability, damages, or expenses of Manager or the Fund arising out of the negligence, | |
malfeasance or violation of applicable law by any of its employees in providing investment management | |
services under this Agreement; and, in such cases, the indemnification by Manager, referred to above, | |
shall be inapplicable, and the Sub-Adviser shall indemnify and hold harmless the Fund and Manager for | |
any loss arising therefrom. | |
6. | Supplemental Arrangements |
The Sub-Adviser may enter into arrangements with other persons affiliated with the Sub-Adviser or with | |
unaffiliated third parties to better enable the Sub-Adviser to fulfill its obligations under this Agreement for | |
the provision of certain personnel and facilities to the Sub-Adviser, subject to written notification to and | |
approval of the Manager and, where required by applicable law, the Board of Directors of the Fund. |
7. | Regulation |
The Sub-Adviser shall submit to all regulatory and administrative bodies having jurisdiction over the | |
services provided pursuant to this Agreement any information, reports or other material which any such | |
body may request or require pursuant to applicable laws and regulations. | |
8. | Manager’s Representations |
The Manager represents and warrants that (i) it is registered as an investment adviser under the | |
Investment Advisers Act and will continue to be so registered for so long as this Agreement remains in | |
effect; (ii) it is not prohibited by the 1940 Act or the Investment Advisers Act from performing the services | |
contemplated by this Agreement; (iii) it has met, and will continue to meet for so long as this Agreement | |
remains in effect, any 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; (iv) it has the authority to enter into and perform the services | |
contemplated by this Agreement, and (v) it will immediately notify the Sub-Adviser of the occurrence of | |
any event that would disqualify the Manager from serving as an investment advisor of an investment | |
company pursuant to Section 9(a) of the 1940 Act or otherwise. | |
9. | Duration and Termination of This Agreement |
This Agreement shall become effective as of the date of its execution and, unless otherwise terminated, | |
shall continue in effect thereafter from year to year provided that the continuance is specifically approved | |
at least annually either by the Board of Directors of the Fund or by a vote of a majority of the outstanding | |
voting securities of the Series and in either event by a vote of a majority of the Board of Directors of the | |
Fund who are not interested persons of the Manager, Principal Life Insurance Company, the Sub- | |
Adviser or the Fund cast in person at a meeting called for the purpose of voting on such approval. | |
If the shareholders of a Series fail to approve the Agreement or any continuance of the Agreement in | |
accordance with the requirements of the 1940 Act, the Sub-Adviser will continue to act as Sub-Adviser | |
with respect to the Series pending the required approval of the Agreement or its continuance or of any | |
contract with the Sub-Adviser or a different manager or Sub-Adviser or other definitive action; provided, | |
that the compensation received by the Sub-Adviser in respect to the Series during such period is in | |
compliance with Rule 15a-4 under the 1940 Act. | |
This Agreement may be terminated at any time without the payment of any penalty by the Board of | |
Directors of the Fund or by the Sub-Adviser, the Manager or by vote of a majority of the outstanding | |
voting securities of the Series on sixty days written notice. This Agreement shall automatically terminate | |
in the event of its assignment. In interpreting the provisions of this Section 9, the definitions contained in | |
Section 2(a) of the 1940 Act (particularly the definitions of "interested person," "assignment" and "voting | |
security") shall be applied. | |
10. Indemnification | |
(a) The Sub-Adviser agrees to indemnify and hold harmless the Manager, any affiliated person within | |
the meaning of Section 2(a)(3) of the 1940 Act (“affiliated person”) of the Manager and each | |
person, if any who, within the meaning of Section 15 of the Securities Act controls (“controlling | |
persons”) the Manager, against any and all losses, claims, damages, liabilities or litigation, | |
including reasonable legal expenses (collectively “Losses”) to which the Manager or such affiliated | |
person or controlling person of the Manager may become subject under the Securities Act, the | |
1940 Act, the Investment Advisers Act, under any other statute, law, rule or regulation at common | |
law or otherwise, arising out of the Sub-Adviser’s responsibilities hereunder (1) to the extent of and | |
as a result of the willful misconduct, bad faith, or gross negligence by the Sub-Adviser, any of the | |
Sub-Adviser’s employees or representatives or any affiliate of or any person acting on behalf of the | |
Sub-Adviser; or (2) as a result of any untrue statement of a material fact contained in the | |
Registration Statement, including any amendment thereof or any supplement thereto, or the | |
omission to state therein a material fact required to be stated therein or necessary to make the |
statement therein not misleading, if such a statement or omission was made in reliance upon and in | |
conformity with written information furnished by the Sub-Adviser to the Manager specifically for use | |
therein; provided, however, that in no case is the Sub-Adviser’s indemnity in favor of the Manager | |
or any affiliated person or controlling person of the Manager deemed to protect such person against | |
any liability to which any such person would otherwise be subject by reason of willful misconduct, | |
bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard | |
of its obligations and duties under this Agreement. | |
(b) | The Manager agrees to indemnify and hold harmless the Sub-Adviser, any affiliated person and |
any controlling person of the Sub-Adviser, if any, against any and all Losses to which the Sub- | |
Adviser or such affiliated person or controlling person of the Sub-Adviser may become subject | |
under the Securities Act, the 1940 Act, the Investment Advisers Act, under any other statute, law, | |
rule or regulation, at common law or otherwise, arising out of the Manager’s responsibilities as | |
investment manager of the Fund (1) to the extent of and as a result of the willful misconduct, bad | |
faith, or gross negligence by the Manager, any of the Manager’s employees or representatives or | |
any affiliate of or any person acting on behalf of the Manager, or (2) as a result of any untrue | |
statement of a material fact contained in the Registration Statement, including any amendment | |
thereof or any supplement thereto, or the omission to state therein a material fact required to be | |
stated therein or necessary to make the statement therein not misleading; provided, however, that | |
in no case is the Manager’s indemnity in favor of the Sub-Adviser or any affiliated person or | |
controlling person of the Sub-Adviser deemed to protect such person against any liability to which | |
any such person would otherwise be subject by reason of willful misconduct, bad faith or gross | |
negligence in the performance of its duties or by reason of its reckless disregard of its obligations | |
and duties under this Agreement. It is agreed that the Manager’s indemnification obligations under | |
this Section will extend to expenses and costs (including reasonable attorneys fees) incurred by the | |
Sub-Adviser as a result of any litigation brought by the Manager alleging the Sub-Adviser’s failure to | |
perform its obligations and duties in the manner required under this Agreement unless judgement is | |
rendered for the Manager. | |
11. Amendment of this Agreement | |
No material amendment of this Agreement shall be effective until approved, if required by the 1940 Act | |
or the rules, regulations, interpretations or orders issued thereunder, by vote of the holders of a majority | |
of the outstanding voting securities of the Series and by vote of a majority of the Board of Directors of | |
the Fund who are not interested persons of the Manager, the Sub-Adviser, Principal Life Insurance | |
Company or the Fund cast in person at a meeting called for the purpose of voting on such approval. | |
12. General Provisions | |
(a) | Each party agrees to perform such further acts and execute such further documents as are |
necessary to effectuate the purposes hereof. This Agreement shall be construed and enforced in | |
accordance with and governed by the laws of the State of Iowa. The captions in this Agreement are | |
included for convenience only and in no way define or delimit any of the provisions hereof or | |
otherwise affect their construction or effect. | |
(b) | Any notice under this Agreement shall be in writing, addressed and delivered or mailed postage pre- |
paid to the other party at such address as such other party may designate for the receipt of such | |
notices. Until further notice to the other party, it is agreed that the address of the Manager for this | |
purpose shall be the Principal Financial Group, Xxx Xxxxxx, Xxxx 00000-0000, and the address of | |
the Sub-Adviser shall be 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, XX., 00000. | |
(c) | The Sub-Adviser will promptly notify the Manager in writing of the occurrence of any of the following |
events: | |
(1) the Sub-Adviser fails to be registered as an investment adviser under the Investment Advisers | |
Act or under the laws of any jurisdiction in which the Sub-Adviser is required to be registered as | |
an investment advisor in order to perform its obligations under this Agreement. |
(2) the Sub-Adviser 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 a Series. | |
(d) | The Manager shall provide (or cause the Series custodian to provide) timely information to the Sub- |
Adviser regarding such matters as the composition of the assets of a Series, cash requirements and | |
cash available for investment in a Series, and all other reasonable information as may be necessary | |
for the Sub-Adviser to perform its duties and responsibilities hereunder. | |
(e) The Sub-Advisor agrees that neither it nor any of its affiliates will in any way refer directly or indirectly | |
to its relationship with the Fund, the Series, or the Manager or any of their respective affiliates in | |
offering, marketing or other promotional materials without the express written consent of the | |
Manager. | |
(f) The Sub-Advisor represents that it will not enter into any agreement, oral or written, or other | |
understanding under which the Fund directs or is expected to direct portfolio securities transactions, | |
or any remuneration, to a broker or dealer in consideration for the promotion or sale of Fund shares | |
or shares issued by any other registered investment company. Sub-advisor further represents that it | |
is contrary to the Sub-advisor’s policies to permit those who select brokers or dealers for execution | |
of fund portfolio securities transactions to take into account the broker or dealer’s promotion or sale | |
of Fund shares or shares issued by any other registered investment company. | |
(g) | This Agreement contains the entire understanding and agreement of the parties. |
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date first above written. |
PRINCIPAL MANAGEMENT CORPORATION |
/s/ Xxxxxxx X. Beer |
By _____________________________________ |
Xxxxxxx X. Beer, Executive Vice President |
ESSEX INVESTMENT MANAGEMENT COMPANY, LLC. |
/s/ Xxxxxxxxxxx X. XxXxxxxxx |
By _____________________________ |
Xxxxxxxxxxx X. XxXxxxxxx, Chief Executive Officer, |
Chief Compliance Officer and Managing Principal |
APPENDIX A |
The Sub-Adviser shall serve as investment Sub-Adviser for each Series of the Fund identified below. The |
Manager will pay the Sub-Adviser, as full compensation for all services provided under this Agreement, a fee |
computed at an annual rate as shown below (the "Sub-Adviser Fee"): |
Sub-Adviser Fee | ||
(as a percentage of Daily | ||
Net Assets Managed) | ||
Series | Assets Under Management | Annualized Fee |
SmallCap Growth Fund II | First $50 Million | 0.70% |
Next $50 Million | 0.60% | |
Next $50 Million | 0.55% | |
Over $150 Million | 0.50% |
In calculating the fee for the SmallCap Growth Fund II of Principal Funds, Inc., assets of any unregistered |
separate account of Principal Life Insurance Company and any investment company sponsored by Principal Life |
Insurance Company to which the Sub-Advisor provides investment advisory services and which have the same |
investment mandate as the SmallCap Growth Fund II, will be combined (together, the “Aggregated Assets”). |
The fee charged for the assets in the SmallCap Growth Fund II shall be determined by calculating a fee on the |
value of the Aggregated Assets and multiplying the aggregate fee by a fraction, the numerator of which is the |
amount of assets in the SmallCap Growth Fund II and the denominator of which is the amount of the Aggregated |
Assets. |
The Sub-Adviser Percentage Fee shall be accrued for each calendar day and the sum of the daily fee |
accruals shall be paid monthly to the Sub-Adviser. The daily fee accruals will be computed by multiplying the |
fraction of one over the number of calendar days in the year by the applicable annual rate described above and |
multiplying this product by the net assets of the Series, as determined in accordance with the Series’ Prospectus |
and Statement of Additional Information, allocated to the Sub-Adviser for management as of the close of |
business on the previous business day on which the Series was open for business. Cash and cash equivalents |
shall be included in the Series net assets calculation up to a maximum of 1.00% of the Series net assets. If the |
Manager requests the Sub-Advisor to raise cash in the Series portfolio in excess of 1.00% of the Series net |
assets for the purpose of funding redemptions from the Series, such amount requested shall be included in the |
Series net assets calculation. |
If this Agreement becomes effective or terminates before the end of any month, the fee (if any) for the period |
from the effective date to the end of such month or from the beginning of such month to the date of termination, |
as the case may be, shall be prorated according to the proportion which such period bears to the full month in |
which such effectiveness or termination occurs. |