PORTFOLIO MANAGEMENT AGREEMENT
For The Institutional International Equity Portfolio
AGREEMENT made this 30th day of June, 2008, between Capital Guardian Trust
Company, a corporation organized under the laws of California ("Portfolio
Manager"), and The ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Trust, a Delaware statutory trust ("Trust").
WHEREAS, the Trust is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended
("Investment Company Act") which offers several series of shares of beneficial
interests ("shares") representing interests in separate investment portfolios;
and
WHEREAS, the Trust desires to retain the Portfolio Manager to provide a
continuous program of investment management to that portion of The
International Equity Portfolio of the Trust ("Portfolio") that may, from time
to time be allocated to it by, or under the supervision of, the Trust's Board
of Trustees, and Portfolio Manager is willing, in accordance with the terms and
conditions hereof, to provide such services to the Trust;
NOW THEREFORE, in consideration of the promises and covenants set forth herein
and intending to be legally bound hereby, it is agreed between the parties as
follows:
1. Appointment of Portfolio Manager. The Trust hereby retains Portfolio Manager
to provide the investment services set forth herein and Portfolio Manager
agrees to accept such appointment. In carrying out its responsibilities under
this Agreement, the Portfolio Manager shall at all times act in accordance with
the investment objectives, policies and restrictions applicable to the
Portfolio as set forth in the then current Registration Statement of the Trust
delivered by the Trust to the Portfolio Manager, applicable provisions of the
Investment Company Act and the rules and regulations promulgated under the
Investment Company Act and other applicable federal securities laws.
2. Duties of Portfolio Manager. (a) Portfolio Manager shall provide a
continuous program of investment management for that portion of the assets of
the Portfolio ("Account") that may, from time to time be allocated to it by, or
under the supervision of, the Trust's Board of Trustees, as indicated in
writing by an authorized officer of the Trust. It is understood that the
Account may consist of all, a portion of or none of the assets of the
Portfolio, and that the Board of Trustees and/or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & Co., Inc.,
the Trust's investment adviser, has the right to allocate and reallocate such
assets to the Account at any time, and from time to time, upon such notice to
the Portfolio Manager as may be reasonably necessary, in the view of the Trust,
to ensure orderly management of the Account or the Portfolio. The Portfolio
Manager's responsibility for providing portfolio management services to the
Portfolio shall be limited to the Account.
(b) Subject to the general supervision of the Trust's Board of Trustees,
Portfolio Manager shall have sole investment discretion with respect to the
Account, including investment research, selection of the securities to be
purchased and sold and the portion of the Account, if any, that shall be held
uninvested, and the selection of brokers and dealers through which securities
transactions in the Account shall be executed. The Portfolio Manager shall not
consult with any other portfolio manager of the Portfolio concerning
transactions for the Portfolio in securities or other assets. Specifically, and
without limiting the generality of the foregoing, Portfolio Manager agrees that
it will:
(i) advise the Portfolio's designated custodian bank and administrator or
accounting agent on each business day of each purchase and sale, as the case
may be, made on behalf of the Account, specifying the name and quantity of the
security purchased or sold, the unit and aggregate purchase or sale price,
commission paid, the market on which the transaction was effected, the trade
date, the settlement date, the identity of the effecting broker or dealer
and/or such other information, and in such manner, as may from time to time be
reasonably requested by the Trust;
(ii) maintain all applicable books and records with respect to the
securities transactions of the Account. Specifically, Portfolio Manager agrees
to maintain with respect to the Account those records
required to be maintained under Rule 31a-1(b)(1), (b)(5) and (b)(6) under the
Investment Company Act with respect to transactions in the Account including,
without limitation, records which reflect securities purchased or sold in the
Account, showing for each such transaction, the name and quantity of
securities, the unit and aggregate purchase or sale price, commission paid, the
market on which the transaction was effected, the trade date, the settlement
date, and the identity of the effecting broker or dealer. Portfolio Manager
will preserve such records in the manner and for the periods prescribed by Rule
31a-2 under the Investment Company Act. Portfolio Manager acknowledges and
agrees that all records it maintains for the Trust are the property of the
Trust, and Portfolio Manager will surrender promptly to the Trust any such
records upon the Trust's request. The Trust agrees, however, that Portfolio
Manager may retain copies of those records that are required to be maintained
by Portfolio Manager under federal or state regulations to which it may be
subject or are reasonably necessary for purposes of conducting its business;
(iii) provide, in a timely manner, such information as may be reasonably
requested by the Trust or its designated agents in connection with, among other
things, the daily computation of the Portfolio's net asset value and net
income, preparation of proxy statements or amendments to the Trust's
registration statement and monitoring investments made in the Account to ensure
compliance with the various limitations on investments applicable to the
Portfolio and to ensure that the Portfolio will continue to qualify for the
special tax treatment accorded to regulated investment companies under
Subchapter M of the Internal Revenue Code of 1986, as amended ("Code"); and
(iv) render regular reports to the Trust concerning the performance of
Portfolio Manager of its responsibilities under this Agreement. In particular,
Portfolio Manager agrees that it will, at the reasonable request of the Board
of Trustees, attend meetings of the Board or its validly constituted committees
and will, in addition, make its officers and employees available to meet with
the officers and employees of the Trust at least quarterly and at other times
upon reasonable notice, to review the investments and investment program of the
Account.
3. Portfolio Transaction and Brokerage. In placing orders for portfolio
securities with brokers and dealers, Portfolio Manager shall use its best
efforts to execute securities transactions on behalf of the Account in such a
manner that the total cost or proceeds in each transaction is the most
favorable under the circumstances. Portfolio Manager may, however, in its
discretion, direct orders to brokers that provide to Portfolio Manager
research, analysis, advice and similar services, and Portfolio Manager may
cause the Account to pay to those brokers a higher commission than may be
charged by other brokers for similar transactions, provided that Portfolio
Manager determines in good faith that such commission is reasonable in terms
either of the particular transaction or of the overall responsibility of the
Portfolio Manager to the Account and any other accounts with respect to which
Portfolio Manager exercises investment discretion, and provided further that
the extent and continuation of any such practice is subject to review by the
Trust's Board of Trustees. Portfolio Manager shall not execute any portfolio
transactions for the Trust with a broker or dealer which is an "affiliated
person" of the Trust or Portfolio Manager, including any other investment
advisory organization that may, from time to time act as a portfolio manager
for the Portfolio or any of the Trust's other Portfolios, except as permitted
under the Investment Company Act and rules promulgated thereunder. The Trust
shall provide a list of such affiliated brokers and dealers to Portfolio
Manager and will promptly advise Portfolio Manager of any changes in such list.
4. Expenses and Compensation. Except for expenses specifically assumed or
agreed to be paid by the Portfolio Manager under this Agreement, the Portfolio
Manager shall not be liable for any expenses of the Portfolio or the Trust,
including, without limitation: (i) interest and taxes; (ii) brokerage
commissions and other costs in connection with the purchase and sale of
securities or other investment instruments with respect to the Portfolio; and
(iii) custodian fees and expenses. For its services under this Agreement,
Portfolio Manager shall be entitled to receive a fee as set forth in Appendix A
to this Agreement.
5. Limitation of Liability and Indemnification. (a) Portfolio Manager shall not
be liable for any error of judgment or mistake of law or for any loss suffered
by the Portfolio or the Trust in connection with the matters to which this
Agreement relates including, without limitation, losses that may be sustained
in connection with the purchase, holding, redemption or sale of any security or
other investment by the Trust on behalf of the Portfolio, except a loss
resulting from willful misfeasance, bad faith or gross negligence on
the part of Portfolio Manager in the performance of its duties or from reckless
disregard by it of its duties under this Agreement.
(b) Notwithstanding the foregoing, Portfolio Manager expressly agrees that the
Trust may rely upon: (i) the Portfolio Manager's current Form ADV; and
(ii) information provided, in writing, by Portfolio Manager to the Trust in
accordance with Section 9 of this Agreement or otherwise to the extent such
information was provided by Portfolio Manager for the purpose of inclusion in
SEC Filings, as hereinafter defined, provided that a copy of each SEC Filing is
provided to Portfolio Manager: (i) at least 10 business days prior to the date
on which it will become effective, in the case of a registration statement;
(ii) at least 10 business days prior to the date upon which it is filed with
the SEC in the case of the Trust's semi-annual-report on Form N-SAR or any
shareholder report or proxy statement; or (iii) at least 10 business days prior
to first use, in the case of any other SEC Filing. For purposes of this
Section 5, "SEC Filings" means the Trust's registration statement and
amendments thereto and any periodic reports relating to the Trust and its
Portfolios that are required by law to be furnished to shareholders of the
Trust and/or filed with the Securities and Exchange Commission.
(c) Portfolio Manager agrees to indemnify and hold harmless the Trust and each
of its Trustees, officers, employees and control persons from any claims,
liabilities and reasonable expenses, including reasonable attorneys' fees
(collectively, "Losses"), to the extent that such Losses arise out of any
untrue statement of a material fact contained in an SEC Filing or the omission
to state therein a material fact necessary to make the statements therein, in
light of the circumstances under which they are made, not materially
misleading, if such statement or omission was made in reliance upon the
Portfolio Manager's current Form ADV or written information furnished by the
Portfolio Manager for the purpose of inclusion in such SEC Filings or other
appropriate SEC Filings; provided that a copy of each SEC Filing was provided
to Portfolio Manager: (i) at least 10 business days prior to the date on which
it will become effective, in the case of a registration statement; (ii) at
least 10 business days prior to the date upon which it is filed with the SEC in
the case of the Trust's semi-annual-report on Form N-SAR or any shareholder
report or proxy statement; or (iii) at least 10 business days prior to first
use, in the case of any other SEC Filing.
(d) In the event that a legal proceeding is commenced against the Trust on the
basis of claims for which the Portfolio Manager would, if such claims were to
prevail, be required to indemnify the Trust pursuant to Section 5(c) above,
Portfolio Manager will, at its expense, provide such assistance as the Trust
may reasonably request in preparing the defense of the such claims (including
by way of example making Portfolio Manager's personnel available for interview
by counsel for the Trust, but specifically not including retention or payment
of counsel to defend such claims on behalf of the Trust); provided that the
Portfolio Manager will not be required to pay any Losses of the Trust except to
the extent it may be required to do so under Section 5(c) above.
(e) The indemnification obligations set forth in Section 5 (c) shall not apply
unless: (i) the statement or omission in question accurately reflects
information provided to the Trust in writing by the Portfolio Manager; (ii) the
statement or omission in question was made in an SEC Filing in reliance upon
written information provided to the Trust by the Portfolio Manager specifically
for use in such SEC Filing; (iii) the Portfolio Manager was afforded the
opportunity to review the statement (or the omission was identified to it) in
connection with the 10 business day review requirement set forth in
Section 5(b) above; and (iv) upon receipt by the Trust of any notice of the
commencement of any action or the assertion of any claim to which the
indemnification obligations set forth in Section 5(c) may apply, the Trust
notifies the Portfolio Manager, within 30 days and in writing, of such receipt
and provides to Portfolio Manager the opportunity to participate in the defense
and/or settlement of any such action or claim. Further, Portfolio Manager will
not be required to indemnify any person under this Section 5 to the extent that
Portfolio Manager relied upon statements or information furnished to the
Portfolio Manager, in writing, by any officer, employee or Trustee of the
Trust, or by the Trust's custodian, administrator or accounting agent or any
other agent of the Trust, in preparing written information provided to the
Trust and upon which the Trust relied in preparing the SEC Filing(s) in
question.
(f) The Portfolio Manager shall not be liable for: (i) any acts of any other
portfolio manager to the Portfolio or the Trust with respect to the portion of
the assets of the Portfolio or the Trust not managed by
the Portfolio Manager; and (ii) acts of the Portfolio Manager which result from
acts of the Trust, including, but not limited to, a failure of the Trust to
provide accurate and current information with respect to the investment
objectives, policies, or restrictions applicable to the Portfolio, actions of
the Trustees, or any records maintained by Trust or any other portfolio manager
to the Portfolio. The Trust agrees that, to the extent the Portfolio Manager
complies with the investment objectives, policies, and restrictions applicable
to the Portfolio as provided to the Portfolio Manager by the Trust, and with
laws, rules, and regulations applicable to the Portfolio (including, without
limitation, any requirements relating to the qualification of the Account as a
regulated investment company under Subchapter M of the Code) in the management
of the assets of the Portfolio specifically committed to management by the
Portfolio Manager, without regard to any other assets or investments of the
Portfolio, Portfolio Manager will be conclusively presumed for all purposes to
have met its obligations under this Agreement to act in accordance with the
investment objectives, polices, and restrictions applicable to the Portfolio
and with laws, rules, and regulations applicable to the Portfolio, it being the
intention that for this purpose the assets committed to management by the
Portfolio Manager shall be considered a separate and discrete investment
portfolio from any other assets of the Portfolio; without limiting the
generality of the foregoing, the Portfolio Manager will have no obligation to
inquire into, or to take into account, any other investments of the Portfolio
in making investment decisions under this Agreement. In no event shall the
Portfolio Manager or any officer, director, employee, or agent or the Portfolio
Manager have any liability arising from the conduct of the Trust and any other
portfolio manager with respect to the portion of the Portfolio's assets not
allocated to the Portfolio Manager.
6. Permissible Interest. Subject to and in accordance with the Trust's
Declaration of Trust and Bylaws and corresponding governing documents of
Portfolio Manager, Trustees, officers, agents and shareholders of the Trust may
have an interest in the Portfolio Manager as officers, directors, agents and/or
shareholders or otherwise. Portfolio Manager may have similar interests in the
Trust. The effect of any such interrelationships shall be governed by said
governing documents and the provisions of the Investment Company Act.
7. Duration, Termination and Amendments. This Agreement shall become effective
as of the date first written above and shall continue in effect thereafter for
two years. This Agreement shall continue in effect from year to year thereafter
for so long as its continuance is specifically approved, at least annually, by:
(i) a majority of the Board of Trustees or the vote of the holders of a
majority of the Portfolio's outstanding voting securities; and (ii) the
affirmative vote, cast in person at a meeting called for the purpose of voting
on such continuance, of a majority of those members of the Board of Trustees
("Independent Trustees") who are not "interested persons" of the Trust or any
investment adviser to the Trust.
This Agreement may be terminated by the Trust or by Portfolio Manager at any
time and without penalty upon sixty days written notice to the other party,
which notice may be waived by the party entitled to it. This Agreement may not
be amended except by an instrument in writing and signed by the party to be
bound thereby provided that if the Investment Company Act requires that such
amendment be approved by the vote of the Board, the Independent Trustees and/or
the holders of the Trust's or the Portfolio's outstanding shareholders, such
approval must be obtained before any such amendment may become effective. This
Agreement shall terminate upon its assignment. For purposes of this Agreement,
the terms "majority of the outstanding voting securities," "assignment" and
"interested person" shall have the meanings set forth in the Investment Company
Act.
8. Confidentiality; Use of Name. Portfolio Manager and the Trust acknowledge
and agree that during the term of this Agreement the parties may have access to
certain information that is proprietary to the Trust or Portfolio Manager,
respectively (or to their affiliates and/or service providers). The parties
agree that their respective officers and employees shall treat all such
proprietary information as confidential and will not use or disclose
information contained in, or derived from such material for any purpose other
than in connection with the carrying out of their responsibilities under this
Agreement and the management of the Trust's assets, provided, however, that
this shall not apply in the case of: (i) information that is publicly
available; and (ii) disclosures required by law or requested by any regulatory
authority that may have jurisdiction over Portfolio Manager or the Trust, as
the case may be, in which case such party shall request such confidential
treatment of such information as may be reasonably available. In addition, each
party shall use its reasonable efforts to ensure that its agents or affiliates
who may gain access to such proprietary information shall be made aware of the
proprietary nature and shall likewise treat such materials as confidential.
It is acknowledged and agreed that the names "▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇," "▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ Chief Investment Officers" (which is a registered trademark of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ & Co., Inc. ("HCCI")), and any derivative of either, as well as any
logo that is now or shall later become associated with either name ("Marks")
are valuable property of HCCI and that the use of the Marks, or any one of
them, by the Trust or its agents is subject to the license granted to the Trust
by HCCI. Portfolio Manager agrees that it will not use any ▇▇▇▇ without the
prior written consent of the Trust. Portfolio Manager consents to use of its
name, performance data, biographical data and other pertinent data, and the
CapGuardian Marks (as defined below), by the Trust for use in marketing and
sales literature, provided that any such marketing and sales literature shall
not be used by the Trust without the prior written consent of Portfolio
Manager, which consent shall not be unreasonably withheld. The Trust shall have
full responsibility for the compliance by any such marketing and sales
literature with all applicable laws, rules, and regulations, and Portfolio
Manager will have no responsibility or liability therefor.
It is acknowledged and agreed that the name "Capital Guardian Trust Company"
and any portion or derivative thereof, as well as any logo or trade or service
marks that are now or shall later become associated with the name ("CapGuardian
Marks"), are valuable property of the Portfolio Manager and that the use of the
CapGuardian Marks by the Trust or its agents is permitted only so long as this
Agreement is in place.
The provisions of this Section 8 shall survive termination of this Agreement.
9. Representation, Warranties and Agreements of Portfolio Manager. Portfolio
Manager represents and warrants that:
(a) It is registered as an investment adviser under the Investment Advisers Act
of 1940, as amended ("Investment Advisers Act"), it will maintain such
registration in full force and effect and will promptly report to the Trust the
commencement of any formal proceeding that could render the Portfolio Manager
ineligible to serve as an investment adviser to a registered investment company
under Section 9 of the Investment Company Act.
(b) Portfolio Manager understands that the Trust is subject to various
regulations under the Investment Company Act which require that the Board
review and approve various procedures adopted by portfolio managers and may
also require disclosure regarding the Board's consideration of these matters in
various documents required to be filed with the SEC. Portfolio Manager
represents that it will, upon reasonable request of the Trust, provide to the
Trust information regarding all such matters including, but not limited to,
codes of ethics required by Rule 17j-1 under the Investment Company Act and
compliance procedures required by Rule 206(4)-7 under the Investment Advisers
Act, as well as certifications that, as contemplated under Rule 38a-1 under the
Investment Company Act, Portfolio Manager has implemented a compliance program
that is reasonably designed to prevent violations of the federal securities
laws by the Portfolio with respect to those services provided pursuant to this
Agreement. Portfolio Manager acknowledges that the Trust may, in response to
regulations or recommendations issued by the SEC or other regulatory agencies,
from time to time, request additional information regarding the personal
securities trading of its directors, partners, officers and employees and the
policies of Portfolio Manager with regard to such trading. Portfolio Manager
agrees that it make reasonable efforts to respond to the Trust's reasonable
requests in this area.
(c) Upon request of the Trust, Portfolio Manager shall promptly supply the
Trust with any information concerning Portfolio Manager and its stockholders,
employees and affiliates that the Trust may reasonably require in connection
with the preparation of its registration statements, proxy materials, reports
and other documents required, under applicable state or Federal laws, to be
filed with state or Federal agencies and/or provided to shareholders of the
Trust.
10. Status of Portfolio Manager. The Trust and Portfolio Manager acknowledge
and agree that the relationship between Portfolio Manager and the Trust is that
of an independent contractor and under no circumstances shall any employee of
Portfolio Manager be deemed an employee of the Trust or any other organization
that the Trust may, from time to time, engage to provide services to the Trust,
its Portfolios or its shareholders. The parties also acknowledge and agree that
nothing in this Agreement shall be construed to restrict the right of Portfolio
Manager or its affiliates to perform investment management or other services to
any person or entity, including without limitation, other investment companies
and persons who may retain Portfolio Manager to provide investment management
services and the performance of such services shall not be deemed to violate or
give rise to any duty or obligations to the Trust.
11. Counterparts and Notice. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original. Any notice
required to be given under this Agreement shall be deemed given when received,
in writing addressed and delivered, by certified mail, by hand or via overnight
delivery service as follows:
If to the Trust:
▇▇▇▇▇▇ ▇. ▇▇▇▇, Vice President and Treasurer
The ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Trust
Five Tower Bridge, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Portfolio Manager:
Capital Guardian Trust Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
12. Miscellaneous. The captions in this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect. 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. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and shall be governed by the law of the
State of Delaware provided that nothing herein shall be construed as
inconsistent with the Investment Company Act or the Investment Advisers Act.
The Trust acknowledges receipt of Part II of Portfolio Manager's Form ADV,
copies of which have been provided to the Trust's Board of Trustees.
Portfolio Manager is hereby expressly put on notice of the limitations of
shareholder and Trustee liability set forth in the Declaration of Trust of the
Trust and agrees that obligations assumed by the Trust pursuant to this
Agreement shall be limited in all cases to the assets of the Portfolio.
Portfolio Manager further agrees that it will not seek satisfaction of any such
obligations from the shareholders or any individual shareholder of the Trust,
or from the Trustees of the Trust or any individual Trustee of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized as of the day and year
first written above.
ATTEST: Capital Guardian Trust Company
illegible By: /s/ ▇▇▇▇▇ ▇▇▇▇
ATTEST: The ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Trust
(on behalf of The Institutional International
Equity Portfolio)
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
Appendix A
(a) To compensate Portfolio Manager for its services under this Agreement, the
Portfolio shall pay to the Portfolio Manager a fee, which fee shall be
payable quarterly in arrears in accordance with the following schedule:
Minimum Annual Fee (based upon an account size of $50 million) $312,500
at an Annual Fee Rate of 0.70% on the first $25 million
at an Annual Fee Rate of 0.55% on the next $25 million
at an Annual Fee Rate of 0.425% on the next $200 million
at an Annual Fee Rate of 0.375% on the balance
(b) When the total aggregated fees exceed $3 million, before discounts (as set
forth in section (c), below), fee break points are to be eliminated and the
portfolio will pay its fee at an annual rate of 0.375% on all assets in the
Account.
(c) The following fee discounts will be applied based upon the total
(annualized) aggregated fees, which include all fees from separate
accounts, pooled investment vehicles, and funds with internally charged
fees managed by Capital Group companies, except for investments in American
Funds' mutual funds. The resulting discount percentage will be applied to
each account's fees (excluding fees related to investments in funds with
internally charged fees):
Fees from $1.25 million to $4 million 5% discount
Fees from $4 million to $8 million 7.5% discount
Fees from $8 million to $12 million 10% discount
Fees over $12 million 12.5% discount
(d) For purposes of this Agreement:
(i) Fee aggregation will apply to all accounts managed by Capital Group
companies except for emerging markets equity investments and
investments in funds with internally charged fees ("Eligible
Accounts"). In order to achieve the benefit of fee aggregation, the
combined actual fees must exceed the total of the minimum fee
applicable to each of the client's Eligible Accounts.
(ii) For additional separately managed accounts with different investment
guidelines; each account will be charged on the first $10 million at
the initial breakpoint rate for the
appropriate mandate. The first additional account within a new
country will be charged on the first $25 million at the initial
breakpoint rate for the appropriate mandate.
(iii) "Average Quarterly Net Assets" shall mean the average of the average
daily net asset values of the Account as of the last business day of
each of the three months in the calendar quarter. It is understood
that the average daily net asset value of the Account shall be
calculated in accordance with the policies of the Trust as set forth
in the Trust's prospectus as it may be amended from time to time and
that income accruals and receivables shall be included in making such
calculation.
(iv) The fee payable to Portfolio Manager by the Portfolio shall be paid
and billed in arrears based on the Average Quarterly Net Assets
during the preceding calendar quarter. The fee payable shall be
calculated by applying the annual rates, as set forth in the fee
schedule above, to the Average Quarterly Net Assets, and dividing by
four; and the benefit from fee aggregation for clients with multiple
accounts will be calculated by comparing the total aggregated fees to
total unaggregated fees for all Eligible Accounts. The resulting
percentage discount will be applied to each Eligible Account's
unaggregated fees.