Exhibit (d.18)
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
ING LIFE INSURANCE AND ANNUITY COMPANY
AND
X. X. XXXXXX XXXXXXX ASSET MANAGEMENT (LONDON) LTD.
INVESTMENT SUBADVISORY AGREEMENT, made as of the 16th day of December, 2002,
between ING Life Insurance and Annuity Company (the "Adviser"), an insurance
corporation organized and existing under the laws of the State of Connecticut,
and X.X. Xxxxxx Xxxxxxx Asset Management (London) Ltd. ("Subadviser"), a
corporation organized and existing under the laws of England.
WHEREAS, the Adviser has entered into an Investment Advisory Agreement dated as
of the 1st day of May, 2002 ("Advisory Agreement") with ING Partners, Inc.
("Company"), which is engaged in business as an open-end management investment
company registered under the Investment Company Act of 1940 ("1940 Act"); and
WHEREAS, the Company is and will continue to be a series fund having two or more
investment portfolios, each with its own assets, investment objectives, policies
and restrictions; and
WHEREAS, the Company shareholders are and will be (1) separate accounts
maintained by insurance companies for variable life insurance policies and
variable annuity contracts (the "Policies") under which income, gains, and
losses, whether or not realized, from assets allocated to such accounts are, in
accordance with the Policies, credited to or charged against such accounts
without regard to other income, gains, or losses of such insurance companies,
(2) qualified pension and retirement plans outside the separate account context,
and (3) the investment adviser of certain affiliated open-end management
investment companies registered under the 1940 Act or any of the Adviser's
affiliates; and
WHEREAS, the Subadviser is engaged principally in the business of rendering
investment advisory services and is registered as an investment adviser under
the Investment Advisers Act of 1940 ("Advisers Act"); and
WHEREAS, the Company's Board of Directors (the "Board") and the Adviser desire
to retain the Subadviser as subadviser for the ING JPMorgan Xxxxxxx
International Portfolio (the "Portfolio"), to furnish certain investment
advisory services to the Adviser and the Company and the Subadviser is willing
to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual promises herein set
forth, the parties hereto agree as follows:
1. APPOINTMENT. Adviser hereby appoints the Subadviser as its investment
Subadviser with respect to the Portfolio for the period and on the terms set
forth in this Agreement. The Subadviser accepts such appointment and agrees to
render the services herein set forth, for the compensation herein provided.
2. DUTIES OF THE SUBADVISER
A. INVESTMENT SUBADVISORY SERVICES. Subject to the supervision of the
Board and the Adviser, the Subadviser shall act as the investment Subadviser and
shall supervise and direct the investments of the Portfolio in accordance with
its investment objective, policies, and restrictions as provided in the
Company's Prospectus and Statement of Additional Information, as currently in
effect and as amended or supplemented from time to time (hereinafter referred to
as the "Prospectus"), and such other limitations as the Company may institute
and to which the Subadviser agrees. The Subadviser shall obtain and evaluate
such information relating to the economy, industries, businesses, securities
markets, and individual securities as it may deem necessary or useful in the
discharge of its obligations hereunder and shall formulate and implement a
continuing program for the management of the assets and resources of each
Portfolio in a manner consistent with each Portfolio's investment objective,
policies, and restrictions, and in compliance with the requirements applicable
to registered investment companies under applicable laws and those requirements
applicable to both regulated investment companies and segregated asset accounts
under Subchapters M and L of the Internal Revenue Code of 1986, as amended
("Code"). To implement its duties, the Subadviser is hereby authorized to:
(i) buy, sell, exchange, convert, lend, and otherwise trade in any stocks,
bonds, and other securities or assets on behalf of each Portfolio; and
(ii) place orders and negotiate the commissions (if any) for the execution
of transactions in securities or other assets with or through such
brokers, dealers, underwriters or issuers as the Subadviser may select.
B. SUBADVISER UNDERTAKINGS. In all matters relating to the performance of
this Agreement, the Subadviser shall act in conformity with the Company's
Articles of Incorporation, By-Laws, and current Prospectus and with the written
instructions and directions of the Board and the Adviser to which the Subadviser
has agreed. The Subadviser hereby agrees to:
(i) regularly (but no less frequently than quarterly) report to the Board
and the Adviser (in such form as the Adviser and Subadviser mutually
agree) with respect to the implementation of the investment program
and, in addition, provide such statistical information and special
reports concerning the Portfolio and/or important developments
materially affecting the investments held, or contemplated to be
purchased, by the Portfolio, as may reasonably be requested by the
Board or the Adviser and agreed to by the Subadviser, including
attendance at Board meetings, as reasonably requested, to present such
information and reports to the Board;
(ii) consult with the Company's pricing agent regarding the valuation of
securities that are not registered for public sale, not traded on any
securities markets, or otherwise may be deemed illiquid for purposes of
the 1940 Act and for which market quotations are not readily available;
(iii) Provide, subject to any obligations or undertakings reasonably
necessary to maintain the confidentiality of the Subadviser's
non-public information, any and all information, records and supporting
documentation about the composite of accounts and the funds the
Subadviser manages that have investment objectives, policies, and
strategies substantially similar to those employed by the Subadviser in
managing the Portfolio which may be reasonably necessary, under
applicable laws, to allow the Company or its agent to present
historical performance information concerning the Subadviser's
similarly managed accounts and funds, for inclusion in the Company's
Prospectus and any other reports and materials prepared by the Company
or its agent, in accordance with regulatory requirements or as
requested by applicable federal or state regulatory authorities.
(iv) establish appropriate personnel contacts with the Adviser and the
Company's Administrator in order to provide the Adviser and
Administrator with information as reasonably requested by the Adviser
or Administrator; and
(v) execute account documentation, agreements, contracts and other
documents as the Adviser shall be requested by brokers, dealers,
counterparties and other persons to execute in connection with the
Adviser's management of the assets of the Portfolio, provided that the
Subadviser receives the express agreement and consent of the Adviser
and/or the Board to execute such documentation, agreements, contracts
and other documents. In such respect, and only for this limited
purpose, the Subadviser shall act as the Adviser and/or the Portfolio's
agent and attorney-in-fact.
C. The Subadviser, at its expense, will furnish: (i) all necessary
investment and management facilities and investment personnel, including
salaries, expenses and fees of any personnel required for it to faithfully
perform its duties under this Agreement; and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment required for it to
faithfully and fully perform its duties and obligations under this Agreement.
D. The Subadviser shall not be responsible for any of the following
expenses of the Company or its Portfolio:
(i) Expenses of all audits by the Company's independent public accountants;
(ii) Expenses of the Company's transfer agent(s), registrar, dividend
disbursing agent(s), and shareholder recordkeeping services;
(iii) Expenses of the Company's custodial services, including recordkeeping
services provided by the custodian;
(iv) Expenses of obtaining quotations for calculating the value of the
Portfolio's net assets;
(v) Expenses of obtaining Portfolio activity reports;
(vi) Expenses of maintaining the Portfolio's tax records;
(vii) Salaries and other compensation of any of the Company's executive
officers and employees;
(viii) Taxes, if any, levied against the Company or any of its series;
(ix) Brokerage fees and commissions in connection with the purchase and sale
of portfolio securities for the Portfolio;
(x) Costs, including the interest expenses, of borrowing money for the
Portfolio;
(xi) Costs and/or fees incident to meetings of the Company's shareholders,
the preparation and mailings of prospectuses and reports of the Company
to its shareholders, the filing of reports and regulatory bodies, the
maintenance of the Company's existence, and the registration of shares
with federal and state securities or insurance authorities;
(xii) The Company's legal fees, including the legal fees related to the
registration and continued qualification of the Company's shares for
sale;
(xiii) Costs of printing stock certificates, if any, representing Shares of
the Fund;
(xiv) Directors' fees and expenses of directors of the Company;
(xv) The Company's or the Portfolio's pro rata portion of the fidelity bond
required by Section 17(g) of the 1940 Act, or other insurance premiums;
(xvi) The Company's association membership dues, if any;
(xvii) Extraordinary expenses of the Company as may arise, including expenses
incurred in connection with litigation, proceedings and other claims
and the legal obligations of the Company to indemnify its directors,
officers, employees, shareholders, distributors, and agents with
respect thereto; and
(xviii) The Company's organizational and offering expenses and, if
applicable, reimbursement (with interest) of underwriting discounts and
commissions.
E. The Subadviser will select brokers and dealers to effect all Portfolio
transactions subject to the conditions set forth herein. The Subadviser will
place all necessary orders with brokers, dealers, or issuers, and will negotiate
brokerage commissions if applicable. In placing orders for the purchase or sale
of investments for the Portfolio, in the name of the Portfolio or its nominees,
the Subadviser shall use its best efforts to obtain for the Portfolio the most
favorable price and best execution available, considering all of the
circumstances, and shall maintain records adequate to demonstrate compliance
with this requirement. Subject to the foregoing, the Subadviser is directed at
all times to seek to execute brokerage transactions for the Portfolio in
accordance with such policies or practices as may be established by the Board
and the Adviser and described in the current Prospectus as amended from time to
time.
Subject to the appropriate policies and procedures approved by the
Adviser and the Board, the Subadviser may, to the extent authorized by Section
28(e) of the Securities Exchange Act of 1934, cause the Portfolio to pay a
broker or dealer that provides brokerage or research services to the Subadviser,
an amount of commission for effecting a portfolio transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if the Subadviser determines, in good faith, that such amount
of commission is reasonable in relationship to the value of such brokerage or
research services provided viewed in terms of that particular transaction or the
Subadviser's overall responsibilities to the Portfolio or its other advisory
clients. To the extent authorized by said Section 28(e) and the appropriate
policies and procedures approved by Adviser and the Board, 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 such action. In addition,
subject to seeking the best execution available, the Subadviser may also
consider sales of shares of the Portfolio as a factor in the selection of
brokers and dealers.
F. On occasions when the Subadviser deems the purchase or sale of a
security to be in the best interest of a Portfolio as well as other clients of
the Subadviser or any of its affiliates, the Subadviser to the extent permitted
by applicable laws and regulations, and subject to the Adviser's approval of the
Subadviser's trade aggregation and allocation procedures as outlined in the
Subadviser's Form ADV, Part II, may, but shall be under no obligation to,
aggregate the orders for securities to be purchased or sold. In such event,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Subadviser in the manner the
Subadviser considers to be the most equitable and consistent with its fiduciary
obligations to the Portfolio and to its other clients. The Adviser recognizes
that, in some cases, the Subadviser's allocation procedure may limit the size of
the position that may be acquired or sold for the Portfolio and that not
aggregating trades for the Portfolio with trades for other clients of the
Subadviser and its affiliates could adversely affect the price paid or received
by the Portfolio.
G. With respect to the provision of services by the Subadviser hereunder,
the Subadviser will maintain all accounts, books and records with respect to
each Portfolio as are required of an investment adviser of a registered
investment company pursuant to the 1940 Act and the Advisers Act and the rules
under both statutes.
H. The Subadviser and the Adviser acknowledge that the Subadviser is not
the compliance agent for the Portfolio, and does not have access to all of the
Company's books and records necessary to perform certain compliance testing.
However, to the extent that the Subadviser has agreed to perform the services
specified in this Agreement, the Subadviser shall perform compliance testing
with respect to the Portfolio based upon information in its possession and upon
information and written instructions received from the Adviser or the
Administrator and shall not be held in breach of this Agreement so long as it
performs in accordance with such information and instructions. The Adviser or
Administrator shall promptly provide the Subadviser with copies of the Company's
Articles of Incorporation, By-Laws, current Prospectus and any written policies
or procedures adopted by the Board applicable to the Portfolio and any
amendments or revisions thereto.
I. Unless the Adviser gives the Subadviser written instructions to the
contrary, the Subadviser shall use its good faith judgment in a manner which it
reasonably believes best serves the interests of a Portfolio's shareholders to
vote or abstain from voting all proxies solicited by or with respect to the
issuers of securities in which assets of the Portfolio may be invested. The
Adviser shall furnish the Subadviser with any further documents, materials or
information that the Subadviser may reasonably request to enable it to perform
its duties pursuant to this Agreement.
J. Subadviser hereby authorizes Adviser during the term of this Agreement
to use Subadviser's or any of its affiliates' names and any applicable
trademarks or logos supplied to the Company by the Subadviser in the Company's
Prospectus, as well as in any advertisement or sales literature used by the
Adviser or its agents to promote the Company and/or to provide information to
shareholders of the Portfolio.
During the term of this Agreement, the Adviser shall furnish to the
Subadviser at its principal office all prospectuses, proxy statements, reports
to shareholders, sales literature, or other material prepared for distribution
to shareholders of the Company or the public, which refer to the Subadviser or
its clients in any way, prior to the use thereof, and the Adviser shall not use
any such materials if the Subadviser reasonably objects within five business
days (or such other time as may be mutually agreed) after receipt thereof. The
Adviser shall ensure that materials prepared by employees or agents of the
Adviser or its affiliates that refer to the Subadviser or its clients in any way
are consistent with the prospectus and those materials previously approved by
the Subadviser.
3. COMPENSATION OF SUBADVISER. The Adviser will pay the Subadviser, with
respect to each Portfolio, the compensation specified in Appendix A to this
Agreement. t. Payments shall be made to the Subadviser on the second day of each
month. Compensation for any partial period shall be pro-rated based on the
length of the period.
4. LIABILITY OF SUBADVISER. Neither the Subadviser nor any of its
directors, officers, employees or agents shall be liable to the Adviser or the
Company for any loss or expense suffered by the Adviser or the Company resulting
from its acts or omissions as Subadviser to the Portfolio, except for losses or
expenses to the Adviser or the Company resulting from willful misconduct, bad
faith, or gross negligence in the performance of, or from reckless disregard of,
the Subadviser's duties under this Agreement. Neither the Subadviser nor any of
its agents shall be liable to the Adviser or the Company for any loss or expense
suffered as a consequence of any action or inaction of other service providers
to the Company in failing to observe the instructions of the Adviser, provided
such action or inaction of such other service providers to the Company is not a
result of the willful misconduct, bad faith or gross negligence in the
performance of, or from reckless disregard of, the duties of the Subadviser
under this Agreement.
5. INDEMNIFICATION.
A. The Adviser agrees to indemnify and hold harmless the Subadviser from
and against any and all claims, losses, liabilities or damages (including
reasonable attorneys' fees and other related expenses),("Losses") howsoever
arising, from or in connection with this Agreement or the performance by the
Subadviser of its duties hereunder; provided, however, that nothing contained
herein shall require that the Subadviser be indemnified for Losses resulting
from willful misconduct, bad faith, or gross negligence in the performance of,
or from reckless disregard of, the Subadviser's duties under this Agreement.
B. The Subadviser agrees to indemnify and hold harmless the Adviser from
and against any and all Losses resulting from the Subadviser's willful
misconduct, bad faith, or gross negligence in the performance of, or from
reckless disregard of, the Subadviser's duties under this Agreement.
6. NON-EXCLUSIVITY. The services of the Subadviser to the Portfolio and
the Company are not to be deemed to be exclusive, and the Subadviser shall be
free to render investment advisory or other services to others (including other
investment companies) and to engage in other activities. It is understood and
agreed that the directors, officers, and employees of the Subadviser are not
prohibited from engaging in any other business activity or from rendering
services to any other person, or from serving as partners, officers, directors,
trustees, or employees of any other firm or corporation, including other
investment companies.
7. ADVISER OVERSIGHT AND COOPERATION WITH REGULATORS. The Adviser and
Subadviser shall cooperate with each other in providing records, reports and
other materials to regulatory and administrative bodies having proper
jurisdiction over the Company, the Adviser and the Subadviser, in connection
with the services provided pursuant to this Agreement; provided, however, that
this agreement to cooperate does not apply to the provision of information,
reports and other materials which either the Subadviser or Adviser reasonably
believes the regulatory or administrative body does not have the authority to
request or which is privileged or confidential information of the Subadviser or
Adviser.
8. RECORDS. The records relating to the services provided under this
Agreement required to be established and maintained by an investment adviser
under applicable law or those required by the Adviser or the Board of Directors
for the Subadviser to prepare and provide shall be the property of the Company
and shall be under its control; however, the Company shall permit the Subadviser
to retain such records (either in original or in duplicate form) as it shall
reasonably require. In the event of the termination of this Agreement, such
records shall promptly be returned to the Company by the Subadviser free from
any claim or retention of rights therein; provided however, that the Subadviser
may retain copies thereof. Each party to this Agreement shall keep confidential
any nonpublic information concerning the other party's (or any Subadviser's)
duties hereunder and shall disclose such information only if the non-disclosing
party has authorized such disclosure or if such disclosure is expressly required
or requested by applicable federal or state regulatory authorities. Nonpublic
information shall not include information a party to this Agreement can clearly
establish was (a) known to the party prior to this Agreement; (b) rightfully
acquired by the party from third parties whom the party reasonably believes are
not under an obligation of confidentiality to the other party to this Agreement;
(c) placed in public domain without fault of the party or its affiliates; or (d)
independently developed by the party without reference or reliance upon the
nonpublic information.
9. DURATION OF AGREEMENT. This Agreement shall become effective with
respect to the Portfolio on the later of the date of its execution or the date
of the commencement of operations of the Portfolio. This Agreement will continue
in effect for a period of more than two years from the date of its execution
only so long as such continuance is specifically approved at least annually by
the Board, provided that in such event such continuance shall also be approved
by the vote of a majority of the Directors who are not "interested persons" (as
defined in the 1940 Act) ("Independent Directors") of any party to this
Agreement cast in person at a meeting called for the purpose of voting on such
approval.
10. REPRESENTATIONS OF SUBADVISER. The Subadviser represents, warrants, and
agrees as follows:
A. The Subadviser: (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this Agreement
remains in effect; (ii) is not prohibited by the 1940 Act or the Advisers Act
from performing the services contemplated by this Agreement; (iii) has met, and
will continue to meet for so long as this Agreement remains in effect, any other
applicable federal or state requirements, or the applicable requirements of any
regulatory or industry self-regulatory organization, necessary to be met in
order to perform the services contemplated by this Agreement; (iv) has the
authority to enter into and perform the services contemplated by this Agreement;
and (v) will immediately notify the Adviser of the occurrence of any event that
would disqualify the Subadviser from serving as an investment adviser of an
investment company pursuant to Section 9(a) of the 1940 Act or otherwise.
B. The Subadviser has adopted a written code of ethics complying with
the requirements of Rule 17j-1 under the 1940 Act and, if it has not already
done so, will provide the Adviser and the Company with a copy of such code of
ethics, together with evidence of its adoption.
C. The Subadviser has provided the Adviser and the Company with a copy
of its Form ADV as most recently filed with the SEC and hereafter will furnish a
copy of its annual amendment to the Adviser.
11. PROVISION OF CERTAIN INFORMATION BY SUBADVISER. The Subadviser will
promptly notify the Adviser in writing of the occurrence of any of the following
events:
A. The Subadviser fails to be registered as an investment adviser under
the Advisers Act or under the laws of any jurisdiction in which the Subadviser
is required to be registered as an investment adviser in order to perform its
obligations under this Agreement;
B. The Subadviser is served or otherwise receives notice of any action,
suit, proceeding, inquiry, or investigation, at law or in equity, before or by
any court, public board, or body, involving the affairs of the Company;
C. The portfolio manager of a Portfolio changes or there is otherwise a
"change in control" (as that phrase is interpreted under the 1940 Act and the
Advisers Act) or management of the Subadviser.
12. PROVISION OF CERTAIN INFORMATION BY THE ADVISER. The Adviser will
promptly notify the Subadviser in writing of the occurrence of any of the
following events:
A. The Adviser fails to be registered as an investment adviser under
the Advisers Act or under the laws of any jurisdiction in which the Adviser is
required to be registered as an investment adviser in order to perform its
obligations under this Agreement;
B. The 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 the Company;
C. A controlling stockholder of the Adviser changes or there is
otherwise an actual change in control or management of the Adviser.
13. TERMINATION OF AGREEMENT. Notwithstanding the foregoing, this
Agreement may be terminated at any time with respect to a Portfolio, without the
payment of any penalty, by vote of the Board or by a vote of a majority of the
outstanding voting securities of such Portfolio on 60 days prior written notice
to the Subadviser. This Agreement may also be terminated by the Adviser: (i) on
at least 120 days prior written notice to the Subadviser, without the payment of
any penalty; (ii) upon material breach by the Subadviser of any of the
representations and warranties, if such breach shall not have been cured within
a 20-day period after notice of such breach; or (iii) if the Subadviser becomes
unable to discharge its duties and obligations under this Agreement. The
Subadviser may terminate this Agreement at any time, without the payment of any
penalty, on at least 90 days prior notice to the Adviser. This Agreement shall
terminate automatically in the event of its assignment or upon termination of
the Advisory Agreement between the Company and the Adviser.
14. AMENDMENT OF AGREEMENT. No provision of this Agreement may be changed,
waived, discharged, or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge,
or termination is sought, and no material amendment of this Agreement shall be
effective until approved by vote of a majority of the Independent Directors cast
in person at a meeting called for the purpose of such approval.
15. MISCELLANEOUS.
A. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Maryland, without giving effect to the conflicts of
laws principles thereof, and with the 1940 Act. To the extent that the
applicable laws of the State of Maryland conflict with the applicable provisions
of the 1940 Act, the latter shall control.
B. CAPTIONS. The Captions contained 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.
C. ENTIRE AGREEMENT. This Agreement represents the entire agreement and
understanding of the parties hereto and shall supersede any prior agreements
between the parties concerning management of the Portfolio and all such prior
agreements shall be deemed terminated upon the effectiveness of this Agreement.
D. INTERPRETATION. Nothing herein contained shall be deemed to require
the Company or the Subadviser to take any action contrary to its Articles of
Incorporation, By-Laws, or any applicable statutory or regulatory requirement to
which it is subject or by which it is bound, or to relieve or deprive the Board
of its responsibility for and control of the conduct of the affairs of the
Company.
E. DEFINITIONS. Any question of interpretation of any term or provision
of this Agreement having a counterpart in or otherwise derived from a term or
provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretations thereof, if any, by the United
States courts or, in the absence of any controlling decision of any such court,
by rules, releases or orders of the SEC validly issued pursuant to the Act. As
used in this Agreement, the terms "majority of the outstanding voting
securities," "affiliated person," "interested person," "assignment," "broker,"
"investment adviser," "net assets," "sale," "sell," and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemptions
as may be granted by the SEC by any rule, release or order. Where the effect of
a requirement of the federal securities laws reflected in any provision of this
Agreement is made less restrictive by a rule, release, or order of the SEC,
whether of special or general application, such provision shall be deemed to
incorporate the effect of such rule, release, or order.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized signatories as of the date and year first
above written.
ING LIFE INSURANCE AND ANNUITY COMPANY
By: /s/ Xxxxx Xxxxxxxxx
----------------------
Name: Xxxxx Xxxxxxxxx
Title: Vice President
X.X. XXXXXX XXXXXXX ASSET MANAGEMENT (LONDON) LTD.
By: /s/ Xxxxx Xxxxx
----------------------
Name: Xxxxx Xxxxx
Title: Vice President
APPENDIX A
FEE SCHEDULE
For the services provided by X.X. Xxxxxx Xxxxxxx Asset Management (London) Ltd.
("Subadviser") to the following series of ING Partners, Inc., pursuant to the
attached Investment Sub-Advisory Agreement, the Adviser will pay the Subadviser
a fee, computed daily and payable monthly, based on the average daily net assets
of the series at the following annual rates of the average daily net assets of
the series:
SERIES RATE
ING JPMorgan Xxxxxxx .60% on the first $100 million in assets
International Portfolio .40% on the next $200 million in assets
.35% on the next $200 million in assets
.30% on all assets over $500 million
If the Adviser or any of its affiliates appoints the Subadviser or any of its
affiliates to manage another portfolio(s) following the Subadviser's "EAFE PLUS"
investment strategy ("New Portfolio") after January 1, 2003, the assets of the
New Portfolio will be aggregated with the assets of the Series in calculating
the Subadviser's fee at the above stated rate.
