SUB-ADVISORY AGREEMENT
THIS AGREEMENT is made and entered into on this 28th day of December, 2000
between SECURITY MANAGEMENT COMPANY, LLC (the "Adviser"), a Kansas limited
liability company, registered under the Investment Advisers Act of 1940, as
amended (the "Investment Advisers Act"), and THE DREYFUS CORPORATION (the
"Subadviser"), a New York corporation registered under the Investment Advisers
Act.
WITNESSETH:
WHEREAS, SBL Fund and Security Growth and Income Fund, Kansas corporations,
are each registered with the Securities and Exchange Commission (the
"Commission") as open-end management investment companies under the Investment
Company Act of 1940, as amended (the "Investment Company Act");
WHEREAS, SBL Fund is authorized to issue shares of Series B, a separate
series of SBL Fund and Security Growth and Income Fund currently issues its
shares in a single series (Series B of SBL Fund and Security Growth and Income
Fund are referred to herein individually as a "Fund" and collectively as the
"Funds");
WHEREAS, each of the Funds has, pursuant to an Advisory Agreement with the
Adviser (the "Advisory Agreement"), retained the Adviser to act as investment
adviser for and to manage its assets;
WHEREAS, the Advisory Agreements permit the Adviser to delegate certain of
its duties to other investment advisers, subject to the requirements of the
Investment Company Act; and
WHEREAS, the Adviser desires to retain the Subadviser as subadviser to act as
investment adviser for and to manage the Funds' respective Investments (as
defined below) and the Subadviser desires to render such services.
NOW, THEREFORE, the Adviser and Subadviser do mutually agree and promise as
follows:
1. APPOINTMENT AS SUBADVISER. The Adviser hereby retains the Subadviser to
act as investment adviser for and to manage the assets of each Fund subject to
the supervision of the Adviser and the Board of Directors of such Fund and
subject to the terms of this Agreement; and the Subadviser hereby accepts such
employment. In such capacity, the Subadviser shall be responsible for such
Fund's Investments.
2. DUTIES OF SUBADVISER.
(a) INVESTMENTS. The Subadviser is hereby authorized and directed and
hereby agrees, subject to the stated investment policies and restrictions of
each Fund as set forth in such Fund's prospectus and statement of additional
information as currently in effect and as supplemented or amended from time
to time (collectively referred to hereinafter as the "Prospectus") and
subject to the written directions of the Adviser and such Fund's Board of
Directors to purchase, hold and sell investments for the account of such Fund
(hereinafter "Investments") and to monitor on a continuous basis the
performance of such Investments. The Subadviser shall give the Funds the
benefit of its best efforts in rendering its services as Subadviser. The
Subadviser may contract with or consult with such banks, other securities
firms, brokers or other parties, without additional expense to the Funds, as
it may deem appropriate regarding investment advice, research and statistical
data, clerical assistance or otherwise.
(b) BROKERAGE. The Subadviser is authorized, subject to the supervision of
the Adviser and the respective Fund's Board to establish and maintain
accounts on behalf of each Fund with, and place orders for the purchase and
sale of each Fund's Investments with or through, such persons, brokers or
dealers as Subadviser may select which may include, to the extent permitted
by the Adviser and the respective Fund's Board, brokers or dealers affiliated
with the Subadviser or Adviser, and negotiate commissions to be paid on such
transactions. The Subadviser agrees that in placing such orders for a Fund it
shall attempt to obtain best execution, provided that, the Subadviser may, on
behalf of such Fund, pay brokerage commissions to a broker which provides
brokerage and research services to the Subadviser in excess of the amount
another broker would have charged for effecting the transaction, provided (i)
the Subadviser determines in good faith that the amount is reasonable in
relation to the value of the brokerage and research services provided by the
executing broker in terms of the particular transaction or in terms of the
Subadviser's overall responsibilities with respect to such Fund and the
accounts as to which the Subadviser exercises investment discretion, (ii)
such payment is made in compliance with Section 28(e) of the Securities
Exchange Act of 1934, as amended, and any other applicable laws and
regulations, and (iii) in the opinion of the Subadviser, the total
commissions paid by such a Fund will be reasonable in relation to the
benefits to the Fund over the long term. In reaching such determination, the
Subadviser will not be required to place or attempt to place a specific
dollar value on the brokerage and/or research services provided or being
provided by such broker. It is recognized that the services provided by such
brokers may be useful to the Subadviser in connection with the Subadviser's
services to other clients. On occasions when the Subadviser deems the
purchase or sale of a security to be in the best interests of a Fund 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 securities to be sold or purchased in order to obtain the most
favorable price or lower brokerage commissions and efficient execution. In
such event, allocation of securities so sold or purchased, 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 Fund or Funds involved and to such other
clients. The Subadviser will report on such allocations at the request of the
Adviser, or the respective Fund's Board, providing such information as the
number of aggregated trades to which a Fund was a party, the broker(s) to
whom such trades were directed and the basis of the allocation for the
aggregated trades. Subject to the foregoing provisions of this subsection
2(b) and at the direction of the Adviser or a Fund, the Subadviser may also
consider sales of shares of such Fund as a factor in the selection of brokers
or dealers for the Fund's portfolio transactions.
(c) SECURITIES TRANSACTIONS. The Subadviser and any affiliated person of
the Subadviser will not purchase securities or other instruments from or sell
securities or other instruments to a Fund ("Principal Transactions");
PROVIDED, HOWEVER, the Subadviser may enter into a Principal Transaction with
a Fund if (i) the transaction is permissible under applicable laws and
regulations, including, without limitation, the Investment Company Act and
the Investment Advisers Act and the rules and regulations promulgated
thereunder, and (ii) the transaction or category of transactions receives the
express written approval of the Adviser.
The Subadviser agrees to observe and comply with Rule 17j-1 under the
Investment Company Act and its Code of Ethics, as the same may be amended
from time to time. The Subadviser agrees to provide the Adviser and the Funds
with a copy of such Code of Ethics.
(d) BOOKS AND RECORDS. The Subadviser will maintain all books and records
required to be maintained pursuant to the Investment Company Act and the
rules and regulations promulgated thereunder solely with respect to
transactions made by it on behalf of the Funds including, without limitation,
the books and records required by Subsections (b)(1), (5), (6), (7), (9),
(10) and (11) and Subsection (f) of Rule 31a-1 under the Investment Company
Act and shall timely furnish to the Adviser all information relating to the
Subadviser's services hereunder needed by the Adviser to keep such other
books and records of the Funds required by Rule 31a-1 under the Investment
Company Act. The Subadviser will also preserve all such books and records for
the periods prescribed in part (e) of Rule 31a-2 under the Investment Company
Act, and agrees that such books and records (other than those specified in
subsection (f) of Rule 31a-1) shall remain the sole property of the
respective Fund and shall be immediately surrendered to the Fund upon
request. The Subadviser further agrees that all books and records maintained
hereunder shall be made available to the respective Fund or the Adviser at
any time upon reasonable request and notice, including telecopy, during any
business day.
(e) INFORMATION CONCERNING INVESTMENTS AND SUBADVISER. From time to time
as the Adviser or a Fund may request, the Subadviser will furnish the
requesting party reports on portfolio transactions and reports on Investments
held in the portfolios, all in such detail as the Adviser or the Fund may
reasonably request. The Subadviser will make available its officers and
employees to meet with the Board of Directors of a Fund at the Fund's
principal place of business on due notice to review the Investments of the
Fund.
The Subadviser will also provide such information as is customarily
provided by a subadviser and may be required for each Fund or the Adviser to
comply with their respective obligations under applicable laws, including,
without limitation, the Internal Revenue Code of 1986, as amended (the
"Code"), the Investment Company Act, the Investment Advisers Act, the
Securities Act of 1933, as amended (the "Securities Act") and any state
securities laws, and any rule or regulation thereunder.
During the term of this Agreement, the Adviser agrees to furnish the
Subadviser at its principal office all registration statements, proxy
statements, reports to stockholders, sales literature or other materials
prepared for distribution to stockholders of each Fund, or to the public that
refer to the Subadviser for Subadviser's review and approval, which shall not
be unreasonably withheld or delayed. The Subadviser's right to object to such
materials is limited to the portions of such materials that expressly relate
to the Subadviser, its services and its clients. The Adviser agrees to use
its best efforts to ensure that before materials prepared by its employees or
agents or its affiliates that refer to the Subadviser or its clients are
submitted to the Subadviser for approval, those materials are consistent with
those materials previously approved by the Subadviser as referenced in this
paragraph. Sales literature may be furnished to the Subadviser by first class
or overnight mail, facsimile transmission equipment or hand delivery.
(f) CUSTODY ARRANGEMENTS. The Subadviser shall provide each Fund's
custodian, on each business day with information relating to all transactions
concerning the Fund's assets.
(g) COMPLIANCE WITH APPLICABLE LAWS AND GOVERNING DOCUMENTS. In all
matters relating to the performance of this Agreement, the Subadviser and its
directors, officers, partners, employees and interested persons shall act in
conformity with each Fund's Articles of Incorporation, By-Laws, and currently
effective registration statement and with the written instructions and
directions of each Fund's Board and the Adviser, and shall comply with the
requirements of the Investment Company Act, the Investment Advisers Act, the
Commodity Exchange Act (the "CEA"), the rules thereunder, and all other
applicable federal and state laws and regulations.
In carrying out its obligations under this Agreement, the Subadviser
shall ensure that each Fund complies with all applicable statutes and
regulations necessary to qualify such Fund as a Regulated Investment Company
under Subchapter M of the Code (or any successor provision) to the extent
that such compliance is dependent on the Investments of such Fund, and shall
notify the Adviser immediately upon having a reasonable basis for believing
that a Fund has ceased to so qualify or that it might not so qualify in the
future.
In carrying out its obligations under this Agreement, the Subadviser
shall invest the assets of Series B of SBL Fund in such a manner as to ensure
that the Series B complies, to the extent that such compliance is dependent
on the Investments of such Fund, with the diversification provisions of
Section 817(h) of the Code (or any successor provision) and the regulations
issued thereunder relating to the diversification requirements for variable
insurance contracts and any prospective amendments or other modifications to
Section 817 or regulations thereunder. Subadviser shall notify the Adviser
immediately upon having a reasonable basis for believing that Series B has
ceased to comply and will take all reasonable steps to adequately diversify
the Series B so as to achieve compliance within the grace period afforded by
Regulation 1.817-5.
The Adviser has furnished the Subadviser with copies of each of the
following documents and will furnish the Subadviser at its principal office
all future amendments and supplements to such documents, if any, as soon as
practicable after such documents become available: (i) the Articles of
Incorporation of each Fund, (ii) the By-Laws of each Fund, (iii) each Fund's
registration statement under the Investment Company Act and the Securities
Act of 1933, as amended, as filed with the Commission, (iv) each Fund's
Prospectus, and (v) any written instructions of the respective Fund's Board
and the Adviser.
(h) VOTING OF PROXIES. The Subadviser shall direct the custodian as to how
to vote such proxies as may be necessary or advisable in connection with any
matters submitted to a vote of shareholders of securities held by a Fund.
3. INDEPENDENT CONTRACTOR. In the performance of its duties hereunder, the
Subadviser is and shall be an independent contractor and unless otherwise
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent either Fund or the Adviser in any way or
otherwise be deemed an agent of either Fund or the Adviser.
4. COMPENSATION. The Adviser shall pay to the Subadviser, for the services
rendered hereunder, the fees set forth in Exhibit A to this Agreement.
5. EXPENSES. The Subadviser shall bear all expenses incurred by it in
connection with its services under this Agreement and will, from time to time,
at its sole expense employ or associate itself with such persons as it believes
to be particularly fitted to assist it in the execution of its duties hereunder.
However, the Subadviser shall not assign or delegate any of its investment
management duties under this Agreement without the approval of the Adviser and
the appropriate Fund's Board.
6. REPRESENTATIONS AND WARRANTIES OF SUBADVISER. The Subadviser represents
and warrants to the Adviser and the Funds as follows:
(a) The Subadviser is registered as an investment adviser under the
Investment Advisers Act;
(b) The Subadviser 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 Investment Company Act;
(c) The Subadviser has filed a notice of exemption pursuant to Rule 4.14
under the CEA with the Commodity Futures Trading Commission (the
"CFTC") and the National Futures Association;
(d) The Subadviser is authorized under the corporate laws of the State of
New York and under the Investment Company Act and the Investment
Advisers Act to serve as Subadviser to the Fund and to perform the
services described under this Agreement;
(e) The Subadviser is a corporation duly organized and validly existing
under the laws of the state of New York with the power to own and
possess its assets and carry on its business as it is now being
conducted;
(f) The execution, delivery and performance by the Subadviser of this
Agreement are within the Subadviser's powers and have been duly
authorized by all necessary corporate action by the Subadviser, and
no action by or in respect of, or filing with, any governmental body,
agency or official is required on the part of the Subadviser for the
execution, delivery and performance by the Subadviser of this
Agreement, and the execution, delivery and performance by the
Subadviser of this Agreement do not contravene or constitute a
default under (i) any provision of applicable law, rule or
regulation, (ii) the Subadviser's governing instruments, or (iii) any
agreement, judgment, injunction, order, decree or other instrument
binding upon the Subadviser;
(g) This Agreement is a valid and binding agreement of the Subadviser;
(h) The Form ADV of the Subadviser previously provided to the Adviser is
a true and complete copy of the form filed with the Commission and
the information contained therein is accurate and complete in all
material respects as of its filing date, and does not omit to state
any material fact necessary in order to make the statements made, in
light of the circumstances under which they were made, not
misleading;
7. NON-EXCLUSIVITY. The services of the Subadviser with respect to each Fund
are not deemed to be exclusive, and the Subadviser and its officers shall be
free to render investment advisory and administrative or other services to
others (including other investment companies) and to engage in other activities
so long as its duties hereunder are not impaired thereby.
8. REPRESENTATIONS AND WARRANTIES OF ADVISER. The Adviser represents and
warrants to the Subadviser as follows:
(a) The Adviser is registered as an investment adviser under the
Investment Advisers Act;
(b) The Adviser has filed a notice of exemption pursuant to Rule 4.14
under the CEA with the CFTC and the National Futures Association;
(c) The Adviser is a limited liability company duly organized and validly
existing under the laws of the State of Kansas with the power to own
and possess its assets and carry on its business as it is now being
conducted;
(d) The execution, delivery and performance by the Adviser of this
Agreement and the Advisory Agreement are within the Adviser's powers
and have been duly authorized by all necessary action on the part of
its members, and no action by or in respect of, or filing with, any
governmental body, agency or official is required on the part of the
Adviser for the execution, delivery and performance by the Adviser of
this Agreement, and the execution, delivery and performance by the
Adviser of this Agreement do not contravene or constitute a default
under (i) any provision of applicable law, rule or regulation, (ii)
the Adviser's governing instruments, or (iii) any agreement,
judgment, injunction, order, decree or other instrument binding upon
the Adviser;
(e) This Agreement and the Advisory Agreement are valid and binding
agreements of the Adviser;
(f) The Form ADV of the Adviser previously provided to the Subadviser is
a true and complete copy of the form filed with the Commission and
the information contained therein is accurate and complete in all
material respects as of its filing date and does not omit to state
any material fact necessary in order to make the statements made, in
light of the circumstances under which they were made, not
misleading;
(g) The Adviser acknowledges that it received a copy of the Subadviser's
Form ADV at least 48 hours prior to the execution of this Agreement.
9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; DUTY TO UPDATE INFORMATION.
All representations and warranties made by the Subadviser and the Adviser
pursuant to Sections 6 and 8 hereof shall survive for the duration of this
Agreement and the parties hereto shall promptly notify each other in writing
upon becoming aware that any of the foregoing representations and warranties are
no longer true.
10. LIABILITY AND INDEMNIFICATION.
(a) LIABILITY. In the absence of willful misfeasance, bad faith or gross
negligence on the part of the Subadviser or a breach of its duties hereunder,
neither the Subadviser, nor any affiliated person of the Subadviser, nor any
person who controls the Subadviser within the meaning of Section 15 of the
Securities Act, shall be subject to any liability to the Adviser, either
Fund, or any of either Fund's shareholders, and, in the absence of willful
misfeasance, bad faith or gross negligence on the part of the Adviser or a
breach of its duties hereunder, neither the Adviser, nor any affiliated
person of the Adviser, nor any person who controls the Adviser within the
meaning of Section 15 of the Securities Act, shall be subject to any
liability to the Subadviser, for any act or omission in the case of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of Investments; PROVIDED, HOWEVER,
that nothing herein shall relieve the Adviser and the Subadviser from any of
their respective obligations under applicable law, including, without
limitation, the federal and state securities laws and the CEA.
(b) INDEMNIFICATION. The Subadviser shall indemnify the Adviser and the
Funds, and their respective officers, directors, employees and any person who
controls the Adviser or the Funds within the meaning of Section 15 of the
Securities Act, for any liability and expenses, including attorneys' fees,
which may be sustained by the Adviser, or the Funds, as a result of the
Subadviser's willful misfeasance, bad faith, gross negligence, breach of its
duties hereunder or violation of applicable law, including, without
limitation, the federal and state securities laws or the CEA. The Adviser
shall indemnify the Subadviser and its officers, directors, employees and any
person who controls the Subadviser within the meaning of Section 15 of the
Securities Act, for any liability and expenses, including attorneys' fees,
which may be sustained as a result of the Adviser's, or the Funds' willful
misfeasance, bad faith, gross negligence, breach of its duties hereunder or
violation of applicable law, including, without limitation, the federal and
state securities laws or the CEA.
11. DURATION AND TERMINATION.
(a) DURATION. This Agreement shall become effective upon the date first
above written, provided that this Agreement shall not take effect with
respect to the Funds unless it has first been approved by a vote of a
majority of those directors of SBL Fund and Security Growth and Income Fund,
as applicable, who are not parties to this Agreement or interested persons of
any such party, cast in person at a meeting called for the purpose of voting
on such approval. This Agreement shall continue in effect for a period of two
years from the date hereof, subject thereafter to being continued in force
and effect from year to year with respect to each Fund if specifically
approved each year by the Board of Directors of the applicable Fund. In
addition to the foregoing, each renewal of this Agreement with respect to
each Fund must be approved by the vote of a majority of the applicable Fund's
directors who are not parties to this Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on
such approval. Prior to voting on the renewal of this Agreement, the Board of
Directors of the applicable Fund may request and evaluate, and the Subadviser
shall furnish, such information as may reasonably be necessary to enable the
Fund's Board of Directors to evaluate the terms of this Agreement.
(b) TERMINATION. Notwithstanding whatever may be provided herein to the
contrary, this Agreement may be terminated with respect to a Fund at any
time, without payment of any penalty:
(i) By vote of a majority of the Board of Directors of the applicable
Fund, or by vote of a majority of the outstanding voting securities of the
applicable Fund, or by the Adviser, in each case, upon sixty (60) days'
written notice to the Subadviser;
(ii) By the Adviser upon breach by the Subadviser of any representation
or warranty contained in Section 6 hereof, which shall not have been cured
within twenty (20) days of the Subadviser's receipt of written notice of
such breach;
(iii) By the Adviser immediately upon written notice to the Subadviser
if the Subadviser becomes unable to discharge its duties and obligations
under this Agreement; or
(iv) By the Subadviser upon 120 days written notice to the Adviser and
the applicable Fund.
This Agreement shall not be assigned (as such term is defined in the
Investment Company Act) without the prior written consent of the parties
hereto. This Agreement shall terminate automatically in the event of its
assignment without such consent or upon the termination of the Advisory
Agreement.
12. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Fund pursuant to the Advisory Agreements
and shall oversee and review the Subadviser's performance of its duties under
this Agreement.
13. AMENDMENT. This Agreement may be amended by mutual consent of the
parties, provided that the terms of each such amendment with respect to a Fund
shall be approved by the Board of Directors of the applicable Fund or by a vote
of a majority of the outstanding voting securities of the applicable Fund.
14. NOTICE. Any notice that is required to be given by the parties to each
other (or to a Fund) under the terms of this Agreement shall be in writing,
delivered, or mailed postpaid to the other party, or transmitted by facsimile
with acknowledgment of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to the Subadviser:
The Dreyfus Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
(b) If to the Adviser:
Security Management Company, LLC
000 XX Xxxxxxxx
Xxxxxx, Xxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx, President
Facsimile: (000) 000-0000
(c) Copy to:
Security Management Company, LLC
000 XX Xxxxxxxx
Xxxxxx, Xxxxxx 00000-0000
Attention: Xxx X. Xxx, Secretary
Facsimile: (000) 000-0000
(d) If to SBL Fund:
SBL Fund
000 XX Xxxxxxxx
Xxxxxx, Xxxxxx 00000-0000
Attention: Xxx X. Xxx, Secretary
Facsimile: (000) 000-0000
(e) If to Security Growth and Income Fund:
Security Growth and Income Fund
000 XX Xxxxxxxx
Xxxxxx, Xxxxxx 00000-0000
Attention: Xxx X. Xxx, Secretary
Facsimile: (000) 000-0000
15. GOVERNING LAW; JURISDICTION. Except as indicated in Section 19(b) of this
Agreement, this Agreement shall be governed by and construed in accordance with
the laws of the State of Kansas, without regard to its conflicts of law
provisions.
16. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
all of which shall together constitute one and the same instrument.
17. CAPTIONS. The captions herein are included for convenience of reference
only and shall be ignored in the construction or interpretation hereof.
18. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision or applicable law, the remainder of the Agreement
shall not be affected adversely and shall remain in full force and effect.
19. CERTAIN DEFINITIONS.
(a) "BUSINESS DAY." As used herein, business day means any customary
business day in the United States on which the New York Stock Exchange is
open.
(b) MISCELLANEOUS. 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 Investment Company Act shall be resolved by reference to
such term or provision of the Investment Company Act and to interpretations
thereof, if any, by the U.S. courts or, in the absence of any controlling
decisions of any such court, by rules, regulation or order of the Commission
validly issued pursuant to the Investment Company Act. Specifically, as used
herein, "investment company," "affiliated person," "interested person,"
"assignment," "broker," "dealer" and "affirmative vote of the majority of the
Fund's outstanding voting securities" shall all have such meaning as such
terms have in the Investment Company Act. The term "investment adviser" shall
have such meaning as such term has in the Investment Advisers Act and the
Investment Company Act, and in the event of a conflict between such Acts, the
most expansive definition shall control. In addition, where the effect of a
requirement of the Investment Company Act reflected in any provision of this
Agreement is relaxed by a rule, regulation or order of the Commission,
whether of special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first written above.
SECURITY MANAGEMENT COMPANY, LLC
By: XXXXX X. XXXXXXX
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
Attest: XXX X. XXX
------------------------------
Name: Xxx X. Xxx
Title: Secretary
THE DREYFUS CORPORATION
By: XXXXXXX XXXXXXX
------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Controller
Attest: XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Assistant Secretary
EXHIBIT A
Compensation
For all services rendered by the Subadviser hereunder to each Fund, Adviser
shall pay to Subadviser an annual fee (the "Subadvisory Fee") equal to an annual
rate of 0.25% (25 basis points) of the average daily net assets of such Fund.
Beginning as of January 1, 2003, the Subadvisory Fee shall be equal to an annual
rate of 0.30% (30 basis points) of the average daily net assets of each Fund as
of any business day that the aggregate net assets of the Funds do not exceed one
billion dollars and shall be equal to an annual rate of 0.25% (25 basis points)
of the average daily net assets of each Fund as of any business day that the
aggregate net assets of the Funds equal or exceed one billion dollars. For
purposes of calculating the compensation to be paid hereunder, the value of the
net assets of a Fund shall be computed in the same manner at the end of the
business day as the value of such net assets is computed in connection with the
determination of the net asset value of the Fund's shares as described in the
then current Prospectus for the Fund.
The Subadvisory Fee shall be accrued for each calendar day the Subadviser
renders subadvisory services hereunder and the sum of the daily fee accruals
shall be paid monthly to the Subadviser as soon as practicable following the
last day of each month, by wire transfer if so requested by the Subadviser, but
no later than ten (10) calendar days after the last day of each month.
