Exhibit (d)(45)
SUBADVISORY AGREEMENT
AGREEMENT made as of the 1st day of May, 2001, between Zurich Xxxxxxx
Investments, Inc., a Delaware corporation (hereinafter called the "Manager"),
and Xxxxx Selected Advisors, L.P., a limited partnership organized under the
laws of Colorado (hereinafter called the "Subadviser").
WITNESSETH:
WHEREAS, Xxxxxxx Variable Series II (the Trust") is a Massachusetts
business trust organized with one or more series of shares, and is registered as
an investment company under the Investment Company Act of 1940 (the "Investment
Company Act"); and
WHEREAS, the Board of Trustees of the Trust (the "Board" and its members,
the "Trustees") is authorized to issue the Trust's shares of beneficial interest
in separate series and has authorized SVS Venture Value Portfolio (the
"Series"); and
WHEREAS, the Manager acts as manager for the Series pursuant to an
Investment Management Agreement between the Manager and the Trust, on behalf of
the Series, dated May 1, 2001, and is responsible for the day-to-day management
and overall administration of the Series; and
WHEREAS, the Manager desires to utilize the services of the Subadviser to
provide subadvisory services with respect to the investment portfolio of the
Series; and
WHEREAS, the Subadviser is willing to perform such services on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
it is agreed as follows:
1. The Subadviser's Services. The Subadviser shall serve the Manager as
investment counsel with respect to the Series.
The Subadviser is hereby authorized and directed and hereby agrees, subject
to the stated investment policies and restrictions of the Series as set forth in
the current Prospectus and Statement of Additional Information of the Trust
relating to the Series (including amendments), and in accordance with the
Declaration of Trust and By-laws of the Trust, as both may be amended from time
to time, governing the offering of its shares and subject to such resolutions,
policies and procedures as from time to time may be adopted by the Board and
furnished to the Subadviser in writing, and in accordance with the instructions
and procedures of the Manager furnished to the Subadviser in writing, to
develop, recommend and implement such investment program and strategy for the
Series, to provide research and analysis relative to the investment program and
securities and other investments ("investments") of the Series, to determine
what investments should be purchased, sold and, if applicable, loaned by the
Series and to monitor on a continuing basis the performance of the investments
of the Series. In addition, the Subadviser shall place orders for the purchase
and sale of investments for the Series and, subject to the provisions of this
section, shall take reasonable steps to assure that those portfolio transactions
are effected subject to the best execution under the circumstances. The
Subadviser shall advise the custodian for the Series ("Custodian") and the
Manager on a prompt basis of each purchase
and sale of an investment specifying the name of the issuer, the CUSIP number
(if available), the description and amount (or number of shares) of the
investment purchased, the market price, commission and gross or net price, trade
date, settlement date and identity of the effecting broker or dealer. From time
to time as the Board or the Manager may reasonably request, the Subadviser shall
furnish to the Manager, the Trust's officers and to each of its Trustees reports
on portfolio transactions and reports on assets held in the Series, all in such
detail as the Trust or the Manager may reasonably request. The Subadviser shall
also inform the Manager, the Trust's officers and the Board on a current basis
of changes in investment strategy or tactics or any other developments
materially affecting the Series. The Subadviser shall make its officers and
employees available to meet with the Manager, the Trust's officers and the Board
at least quarterly on due notice and at such other times as may be mutually
agreeable, to review the investments and investment performance of the Series in
the light of the Series' investment objectives and policies and market
conditions.
It shall be the duty of the Subadviser to furnish to the Trustees such
information as may reasonably be requested in order for the Board to evaluate
this Agreement or any proposed amendments thereto for the purposes of casting a
vote pursuant to Section 9 hereof.
In the performance of its duties hereunder, the Subadviser is and shall be
an independent contractor and except as otherwise expressly provided herein or
otherwise authorized in writing, shall have no authority to act for or represent
the Trust, the Series or the Manager in any way or otherwise be deemed to be an
agent of the Trust, the Series or the Manager.
In furnishing the services under this Agreement, the Subadviser shall
comply with the requirements of the Investment Company Act and of the Investment
Advisers Act of 1940 ("Advisers Act") applicable to it, the regulations
promulgated thereunder, and all other applicable laws and regulations. The
Subadviser shall immediately notify the Manager and the Trust in the event that
the Subadviser: (1) becomes subject to a statutory disqualification that
prevents the Subadviser from serving as an investment adviser pursuant to this
Agreement; or (2) is or expects to become the subject of an administrative
proceeding or enforcement action by the Securities and Exchange Commission
("SEC") or other regulatory authority (including, without limitation, any
self-regulatory organization). The Subadviser shall immediately forward, upon
receipt, to the Manager any correspondence from the SEC or other regulatory
authority that relates to the Series.
The Subadviser's primary consideration in effecting a security transaction
shall be to obtain the best execution under the circumstances for the Series,
taking into account the factors specified in the Prospectus and Statement of
Additional Information of the Trust relating to the Series. Subject to such
policies as the Board may determine and consistent with Section 28(e) of the
Securities Exchange Act of 1934, the Subadviser shall not be deemed to have
acted unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of its having caused the Series to pay a
broker-dealer for effecting a portfolio investment transaction an amount of
commission in excess of the amount of commission another broker-dealer would
have charged for effecting that transaction, if the Subadviser determines in
good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such broker-dealer
viewed in terms of either that particular transaction or its overall
responsibilities with respect to accounts as to which it exercises investment
discretion. The Subadviser shall provide such reports as the Board or the
Manager may request with respect to the Series' brokerage and the manner in
which that brokerage was allocated.
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The Series' assets shall be maintained in the custody of the Custodian (who
shall be identified by the Manager in writing). The Subadviser shall not have
custody of any securities, cash or other assets of the Series and shall not be
liable for any loss resulting from any act or omission of the Custodian other
than acts or omissions arising in reliance on instructions of the Subadviser.
The Subadviser shall promptly notify the Manager if the Subadviser becomes an
affiliated person of the Custodian.
2. Delivery of Documents to the Subadviser. The Manager shall furnish to
the Subadviser copies of each of the following documents:
(a) The Declaration of Trust of the Trust as in effect on the date
hereof;
(b) The By-laws of the Trust in effect on the date hereof;
(c) The resolutions of the Board approving the engagement of the
Subadviser as subadviser for the Series and approving the form of
this agreement;
(d) The resolutions of the Board selecting the Manager as investment
manager to the Series and approving the form of the Investment
Management Agreement with the Trust, on behalf of the Series;
(e) The Investment Management Agreement with the Trust on behalf of
the Series;
(f) The Code of Ethics of the Trust and of the Manager as currently in
effect;
(g) Current copies of the Prospectus and Statement of Additional
Information of the Trust relating to the Series; and
(h) Resolutions, policies and procedures adopted by the Board in
respect of the management or operation of the Series.
The Manager shall furnish the Subadviser from time to time with copies,
properly certified or otherwise authenticated, of all amendments of or
supplements to the foregoing, if any. Such amendments or supplements as to Items
(a) though (h) above shall be provided within 30 days of the time such materials
became available to the Manager and, until so provided, the Subadviser may
continue to rely on those documents previously provided.
During the term of this Agreement, the Manager also shall furnish to
the Subadviser prior to use thereof copies of all Trust documents, proxy
statements, reports to shareholders, sales literature, or other material
prepared for distribution to shareholders of the Series 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 five business days (or such other time
period as may be mutually agreed) after receipt thereof. However, the Manager
and the Subadviser may mutually agree that certain of the above-mentioned
documents do not need to be furnished to the Subadviser prior to the document's
use.
In the event of termination of this Agreement, the Manager shall
continue to furnish to the Subadviser copies of any of the above-mentioned
materials that refer in any way to the Subadviser. The Manager shall furnish or
otherwise make available to the Subadviser such other
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information relating to the business affairs of the Trust as the Subadviser at
any time, or from time to time, reasonably requests in order to discharge its
obligations hereunder.
3. Delivery of Documents to the Manager. The Subadviser shall furnish the
Manager with copies of each of the following documents:
(a) The Subadviser's most recent balance sheet;
(b) Separate lists of persons whom the Subadviser wishes to have
authorized to give written and/or oral instructions to the
Custodian and the fund accounting agent of Trust assets for the
Series;
(c) The Code of Ethics of the Subadviser as currently in effect; and
(d) Any compliance policies, trading, commission and other
reports, confirmation of the Subadviser's insurance coverage (in
form and substance satisfactory to the Manager), and such other
management or operational documents as the Manager may reasonably
request in writing (on behalf of itself or the Board) in
assessing the Subadviser.
The Subadviser maintains a written Code of Ethics that complies with the
requirements of Rule 17j-1 under the Investment Company Act, as amended. The
Subadviser certifies that it has adopted procedures reasonably necessary to
prevent its "access persons," as such term is defined in Rule 17j-1, from
violating the Code of Ethics. The Subadviser shall notify the Board upon the
adoption of any material change to its Code of Ethics so that the Board,
including a majority of the Trustees who are not interested persons of the
Trust, may approve such change not later than six months after its adoption by
the Subadviser, as required by Rule 17j-1. The Subadviser also shall provide the
Trust with a copy of any amendments to its Code of Ethics that do not represent
a material change to such Code. Within 45 days of the end of each year while
this Agreement is in effect (or more frequently if required by Rule 17j-1 or as
the Trust may reasonably request), the Subadviser shall provide the Board with a
written report that, as required by Rule 17j-1: (1) describes any issue arising
under the Subadviser's Code of Ethics or procedures since the last report to the
Board, including, but not limited to, information about material violations of
the Code or procedures and sanctions imposed in response to the material
violations, and (2) certifies that the Subadviser has adopted procedures
reasonably necessary to prevent its access persons from violating its Code of
Ethics. Upon the written request of the Trust, the Subadviser shall permit the
Trust to examine the reports to be made by the Subadviser under Rule 17j-1(d)
and the records the Subadviser maintains pursuant to Rule 17j-1(f).
The Subadviser shall furnish the Manager from time to time with copies,
properly certified or otherwise authenticated, of all material amendments of or
supplements to the foregoing, if any. Additionally, the Subadviser shall provide
to the Manager such other documents relating to its services under this
Agreement as the Manager may reasonably request on a periodic basis. Such
amendments or supplements as to items (a) through (c) above shall be provided
within 30 days of the time such materials became available to the Subadviser.
The Subadviser shall promptly notify the Manager of any transaction or
other event that results in an "assignment" of this Agreement within the meaning
of the Investment Company Act. In addition, the Subadviser shall promptly
complete and return to the Manager or the Trust any compliance questionnaires or
other inquiries submitted to the Subadviser in writing.
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4. Other Agreements, etc. It is understood that any of the shareholders,
the Trustees, officers and employees of the Trust or the Series may be a
shareholder, director, officer or employee of, or be otherwise interested in,
the Subadviser, any interested person of the Subadviser, any organization in
which the Subadviser may have an interest or any organization which may have an
interest in the Subadviser, and that any such interested person or any such
organization may have an interest in the Trust or the Series. It is also
understood that the Subadviser, the Manager and the Trust may have advisory,
management, service or other contracts with other individuals or entities, and
may have other interests and businesses. On occasions when the Subadviser deems
the purchase or sale of an investment to be in the best interest of the Series,
as well as other clients of the Subadviser, the Subadviser, to the extent
permitted by applicable laws and regulations, may, but shall be under no
obligation to, aggregate the investments to be sold or purchased in order to
obtain best execution under the circumstances. In such event, allocation of the
investments so purchased or sold, as well as the expenses incurred in the
transactions, shall be made by the Subadviser in the manner the Subadviser
considers to be most equitable and consistent with its fiduciary obligations to
the Series and to such other clients. Nothing in this Agreement shall impose
upon the Subadviser any obligation to purchase or sell, or recommend for
purchase or sale, for the Series any investment which it or its officers,
directors, affiliates or employees may purchase or sell for the Subadviser or
such officer's, director's, affiliate's or employee's own accounts or for the
account of any of the Subadviser's clients, advisory or otherwise.
The Subadviser may give advice and take action with respect to other funds
or clients, or for its own account that may differ from the advice or the timing
or nature of action taken with respect to the Series.
Nothing in this Agreement shall be implied to prevent (1) the Manager from
engaging other subadvisers to provide investment advice and other services in
relation to other series of the Trust for which the Subadviser does not provide
such services, or to prevent the Manager from providing such services itself in
relation to such series; or (2) the Subadviser from providing investment advice
and other services to other funds or clients.
5. Fees, Expenses and Other Charges.
(a) For its services hereunder, the Subadviser shall be paid a
management fee by the Manager according to the fee schedule
attached hereto as Schedule A.
(b) The Subadviser, at its expense, shall furnish all necessary
investment facilities, including salaries of personnel required
for it to execute its duties under this Agreement.
6. Confidential Treatment. It is understood that any information or
recommendation supplied by the Subadviser in connection with the performance of
its obligations hereunder is to be regarded as confidential and for use only by
the Manager, the Trust or such persons as the Manager may designate in
connection with the Series. It is also understood that any information supplied
to the Subadviser in connection with the performance of its obligations
hereunder, particularly, but not limited to, any list of investments which, on a
temporary basis, may not be bought or sold for the Series, is to be regarded as
confidential and for use only by the Subadviser in connection with its
obligation to provide investment advice and other services to the Series.
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The Subadviser shall maintain and enforce adequate security procedures
with respect to all materials, records, documents and data relating to any of
its responsibilities pursuant to this Agreement including all means for the
effecting of investment transactions.
7. Representations and Covenants of the Parties. The Subadviser hereby
acknowledges that it is registered as an investment adviser under the Advisers
Act and that neither it nor any affiliated person of it, as such term is defined
in Section 2(a)(3) of the Investment Company Act ("affiliated person"), is
subject to any disqualification that would make the Subadviser unable to serve
as an investment adviser to a registered investment company under Section 9 of
the Investment Company Act. The Subadviser covenants that it will carry out
appropriate compliance procedures necessary to the operation of the Series as
the Subadviser and the Manager may agree. The Subadviser also covenants that it
will manage the Series in conformity with all applicable rules and regulations
of the SEC in all material respects and so that the Series will qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code
("Code") and will be adequately diversified for purposes of Section 817(h) of
the Code and the Treasury regulations thereunder.
8. Reports by the Subadviser and Records of the Series. The Subadviser
shall furnish the Manager monthly, quarterly and annual reports concerning the
transactions and performance of the Series, including information required to be
disclosed in the Trust's registration statement, in such form as may be mutually
agreed, to review the Series and discuss the management of it. If requested by
the Manager, the Subadviser shall also furnish the Manager quarterly compliance
certifications. The Subadviser shall permit its financial statements, books and
records with respect to the Series to be inspected and audited by the Trust, the
Manager or their agents at all reasonable times during normal business hours.
The Subadviser shall immediately notify and forward to both the Manager and
legal counsel for the Series any legal process served upon it on behalf of the
Manager or the Trust. The Subadviser shall promptly notify the Manager of any
changes in any information concerning the Subadviser of which the Subadviser
becomes aware that would be required to be disclosed in the Trust's registration
statement.
In compliance with the requirements of Rule 31a-3 under the Investment
Company Act, the Subadviser agrees that all records it maintains for the Trust
with respect to the Series are the property of the Trust and further agrees to
surrender promptly to the Trust or the Manager any such records upon the Trust's
or the Manager's request. However, the Subadviser may retain copies of such
records to comply with the recordkeeping requirements of the Investment Advisers
Act and Investment Company Act. The Subadviser further agrees to maintain for
the Trust the records the Trust is required to maintain under Rule 31a-1(b)
insofar as such records relate to the investment affairs of the Series. The
Subadviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the Investment Company Act the records it maintains for the Trust.
9. Continuance and Termination. This Agreement shall remain in full force
and effect through September 30, 2002, and is renewable annually thereafter by
specific approval of the Board or by the affirmative vote of a majority of the
outstanding voting securities of the Series. Any such renewal shall be approved
by the vote of a majority of the Trustees who are not interested persons under
the Investment Company Act, cast in person at a meeting called for the purpose
of voting on such renewal. This Agreement may be terminated without penalty at
any time by the Board, by vote of a majority of the outstanding voting
securities of the Series, or by the Manager or by the Subadviser upon 60 days'
written notice. This Agreement shall
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automatically terminate in the event of its assignment by either party to this
Agreement, as defined in the Investment Company Act, or upon termination of the
Manager's Investment Management Agreement with the Trust, on behalf of the
Series. In addition, the Manager or the Trust may terminate this Agreement upon
immediate notice if the Subadviser becomes statutorily disqualified from
performing its duties under this Agreement or otherwise is legally prohibited
from operating as an investment adviser.
10. Amendment. No provision of this Agreement may be changed, waived,
discharged or terminated orally, except by an instrument in writing signed by
the party against whom enforcement of the change, waiver, discharge or
termination is sought. No amendment of this Agreement shall be effective until
approved in a manner consistent with the Investment Company Act and rules and
regulations thereunder and any applicable SEC exemptive order therefrom, SEC
no-action letter or SEC interpretive guidance.
11. Voting Rights. The Manager shall be responsible for exercising any
voting rights of any investments of the Series.
12. Indemnification. The Subadviser agrees to indemnify and hold harmless
the Manager, any affiliated person of the Manager and each person, if any, who,
within the meaning of Section 15 of the Securities Act of 1933 (the "1933 Act"),
controls ("controlling person") the Manager, against any and all losses, claims
damages, liabilities or litigation (including reasonable legal and other
expenses), to which the Manager or such affiliated person or controlling person
may become subject under the 1933 Act, the Investment Company Act, the Advisers
Act, or under any other statute, at common law or otherwise, arising out of the
Subadviser's responsibilities as manager of the Series (1) to the extent of and
as a result of the willful misconduct, bad faith, or gross negligence by the
Subadviser, any of the Subadviser's employees or representatives or any
affiliate of or any person acting on behalf of the Subadviser; (2) as a result
of any untrue statement or alleged untrue statement of a material fact contained
in the Prospectus and Statement of Additional Information of the Trust relating
to the Series or any amendment thereof or any supplement thereto or the omission
or alleged 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 written information furnished by
the Subadviser to the Manager, the Trust or any affiliated person of the Manager
or the Trust expressly for use in the Trust's registration statement, or upon
verbal information confirmed by the Subadviser in writing expressly for use in
the Trust's registration statement; or (3) to the extent of, and as a result of,
the failure of the Subadviser to execute, or cause to be executed, portfolio
transactions according to the standards and requirements of the Investment
Company Act, the Advisers Act and the Securities Exchange Act of 1934.
In no case shall the Subadviser's indemnity in favor of the Manager or
any affiliated person or controlling person of the Manager, or any other
provision of this Agreement, be 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.
The Manager agrees to indemnify and hold harmless the Subadviser and
any affiliated person or controlling person of the Subadviser against any and
all losses, claims, damages, liabilities or litigation (including reasonable
legal and other expenses), to which the Subadviser or such affiliated person or
controlling person may become subject under the 1933 Act, the Investment Company
Act, the Advisers Act, or under any other statute, at common law or
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otherwise, arising out of the Manager's responsibilities as investment manager
of the Series (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 or alleged untrue statement
of a material fact contained in the Prospectus and Statement of Additional
Information of the Trust relating to the Series or any amendment thereof or any
supplement thereto or the omission or alleged 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 by the Trust
other than in reliance upon written information furnished by the Subadviser, or
any affiliated person of the Subadviser, expressly for use in the Trust's
registration statement or other than upon verbal information confirmed by the
Subadviser in writing expressly for use in the Trust's registration statement.
In no case shall the Manager's indemnity in favor of the Subadviser or
any affiliated person or controlling person of the Subadviser, or any other
provision of this Agreement, be 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.
13. Certain Definitions. For the purposes of this Agreement, the "vote of a
majority of the outstanding voting securities of the Series" means the
affirmative vote, at a duly called and held meeting of shareholders of the
Series, (1) of the holders of 67% or more of the shares of the Series present
(in person or by proxy) and entitled to vote at such meeting, if the holders of
more than 50% of the outstanding shares of the Series entitled to vote at such
meeting are present in person or by proxy; or (2) of the holders of more than
50% of the outstanding shares of the Series entitled to vote at such meeting,
whichever is less.
For the purposes of this Agreement, the terms "affiliated person,"
"interested person" and "assignment" shall have their respective meanings
defined in the Investment Company Act, and the term "controlling person" shall
have the meaning defined in the 1933 Act, subject, however, to such exemptions
as may be granted by the SEC under such Acts.
14. Notices. All notices or other communications required or permitted to
be given hereunder shall be in writing and shall be delivered or sent by
pre-paid first class letter post to the following addresses or to such other
address as the relevant addressee provides in writing to the others for the
delivery of such notices and communications, and shall be deemed to have been
given at the time of delivery.
If to the Manager: ZURICH XXXXXXX INVESTMENTS, INC.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
If to the Trust: XXXXXXX VARIABLE SERIES II
SVS Venture Value Portfolio
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Secretary
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If to the Subadviser: XXXXX SELECTED ADVISORS, L.P.
0000 X. Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxx, Chief
Operating Officer
15. Instructions. The Subadviser is authorized to honor and act on any
notice, instruction or confirmation given by the Trust or Manager in writing
signed or sent by one of the persons whose names, addresses and specimen
signatures shall be provided by the Trust or Manager from time to time.
16. Law. This Agreement is governed by and shall be construed in accordance
with the laws of the Commonwealth of Massachusetts in a manner not in conflict
with the provisions of the Investment Company Act.
17. Limitation of Liability of the Trust, Trustees, and Shareholders. It is
understood and expressly stipulated that none of the Trustees, officers, agents,
or shareholders of the Trust shall be personally liable hereunder. It is
understood and acknowledged that all persons dealing with the Series must look
solely to the property of the Series for the enforcement of any claims against
the Series as neither the Trustees, officers, agents or shareholders assume any
personal liability for obligations entered into on behalf of the Trust or the
Series. No series of the Trust shall be liable for the obligations of any other
series.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all such
counterparts shall constitute a single instrument.
IN WITNESS WHEREOF, the parties hereto have each caused this instrument to
be signed in duplicate on its behalf by the officer designated below thereunto
duly authorized.
ZURICH XXXXXXX INVESTMENTS, INC.
Attest: /s/ Xxxxxxx Xxxx By: /s/ Xxxx X. Xxxxxx
-------------------------- --------------------------------
Name: Xxxxxxx Xxxx Name: Xxxx X. Xxxxxx
Title: Vice President Title: Managing Director
XXXXX SELECTED ADVISORS, L.P.
Attest: /s/ Xxxxxxx Xxxx By: /s/ Xxxxxx Xxxx
-------------------------- --------------------------------
Name: Xxxxxxx Xxxx Name: Xxxxxx Xxxx
Title: Chief Operating Officer Title: Vice President, General Counsel
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Schedule A to the Subadvisory Agreement
for the SVS Venture Value Portfolio (the "Series"), a series of
Xxxxxxx Variable Series II (the "Trust"), made as of the 1st day of May, 2001
between Zurich Xxxxxxx Investments, Inc. (the "Manager")
and Xxxxx Selected Advisors, L.P. (the "Subadviser")
FEE SCHEDULE
As compensation for its services described herein, the Subadviser shall receive
from the Manager a monthly fee based on a percentage of the average daily net
assets of the Series calculated according to the following annualized fee
schedule:
Net Assets Annualized Rate
---------- ---------------
On the first $100 million 0.500%
On the next $400 million 0.450%
On amounts over $500 million 0.400%
The "average daily net assets" of the Series shall be calculated at such time or
times as the Board may determine in accordance with the provisions of the
Investment Company Act of 1940. The value of the net assets of the Series shall
always be determined pursuant to the applicable provisions of the Declaration of
Trust and the Registration Statement of the Trust. If the determination of net
asset value does not take place for any particular day, for the purposes of this
Schedule A, the net asset value shall be deemed to be the net asset value
determined as of the close of business on the last day on which such calculation
was made for the purpose of the foregoing computation. If the Series determines
the value of the net assets of its portfolio more than once on any day, then the
last such determination thereof on that day shall be deemed to be the sole
determination thereof on that day for the purposes of this Schedule A. Fees are
charged monthly in arrears based on one-twelfth of the annual fee rate. Fees
shall be prorated appropriately if the Subadviser does not perform services
pursuant to this Subadvisory Agreement for a full month.
