SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT, dated as of May 1, 2004, between Xxxxx Asset
Management, Inc. (the "Adviser"), and Padco Advisors, Inc. d/b/a Rydex
Investments (the "Sub Adviser").
WHEREAS, Access Variable Insurance Trust, an Ohio business trust (the
"Trust") is an open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, Access Fund Management LLC (the "Manager") has been acting as
an investment adviser to several series of the Trust, including the Xxxxx S&P
REIT Index Portfolio (the "Portfolio");
WHEREAS, the Manager has retained the Adviser pursuant to a
Sub-Advisory Agreement dated as of May 1, 2003, to render investment advisory
services to the Portfolio and the Adviser is willing to render such services;
and
WHEREAS, the Adviser desires to retain the Sub-Advisor to render
investment advisory services to the Portfolio, and the Sub-Adviser is willing to
render such services.
NOW, THEREFORE, in consideration of the premises and mutual agreements
hereinafter set forth, the parties hereto agree as follows:
1. Appointment as Sub-Adviser. The Adviser hereby appoints the
Sub-Adviser as the discretionary portfolio manager of the Portfolio, on the
terms and conditions set forth herein.
2. Acceptance of Appointment; Standard of Performance. The Sub-Adviser
accepts the appointment as the discretionary portfolio manager and agrees to
make reasonable investment decisions for the Portfolio in accordance with the
provisions of this agreement. The Sub-Adviser accepts such appointment and
agrees to render the services herein set forth, for the compensation herein
provided. The Sub-Adviser shall for all purposes herein be deemed to be an
independent contractor of the Manager, Adviser and the Trust and shall, unless
otherwise expressly provided herein or authorized by the Adviser or the Board of
Trustees of the Trust from time to time, have no authority to act for or
represent the Adviser or the Trust in any way or otherwise be deemed an agent of
the Adviser or the Trust.
3. Portfolio Management Services of Sub-Adviser. Subject to the general
supervision of the Trust's Board of Trustees (the "Board"), the Manager, and the
Adviser, the Sub-Adviser shall, employing its discretion, manage the investment
operations of the Portfolio and the composition of the portfolio of securities
and investments (including cash) belonging to the Portfolio, including the
purchase, retention and disposition thereof, in accordance with the Portfolio's
investment objective, policies and restrictions as stated in the Portfolio's
then-current Prospectus and Statement of Additional Information (together, the
"Prospectus") and subject to the following understandings:
(a) The Sub-Adviser shall furnish a continuous investment program for the
Portfolio and determine from time to time what investments or
securities will be purchased, retained or sold by the Portfolio and
what portion of the assets belonging to the Portfolio will be invested
or held uninvested as cash;
(b) The Sub-Adviser, in the performance of its duties and obligations under
this Agreement for the Portfolio, shall act in conformity with the
Trust's Declaration of Trust, its By-Laws and the Portfolio's
Prospectus and with the reasonable instructions and directions of the
Trust's Board of Trustees and the Sub-Adviser, and will conform to and
comply with the requirements of the 1940 Act and all other applicable
federal and state laws and regulations;
(c) The Sub-Adviser shall determine the securities to be purchased or sold
by the Portfolio and will place portfolio transactions pursuant to its
determinations either directly with the issuer or with any broker
and/or dealer in such securities, subject to Section 5 below;
(d) The Sub-Adviser shall render to the Sub-Adviser and the Trust's Board
of Trustees such periodic and special reports as the Sub-Adviser or the
Board may reasonably request;
(e) The Sub-Adviser shall provide the Trust's custodian on each business
day with information about Portfolio securities transactions, and with
such other information relating to the Trust as may be required under
the terms of the then-current custody agreement between the Trust and
the custodian;
(f) The Sub-Adviser agrees to respond promptly to reasonable requests from
the Adviser or the Portfolio's fund accountant for assistance in
obtaining price sources for securities held by the Portfolio or
determining a price when a price source is not available and to
promptly notify the Portfolio's fund accountant if the Sub-Adviser
becomes aware of facts or circumstances which indicate to the
Sub-Adviser that the last available sale price does not reflect the
current market value of a security; and
(g) The Sub-Adviser agrees to maintain adequate compliance procedures to
ensure its compliance with the 1940 Act, the Investment Advisers Act of
1940, as amended, and other applicable federal and state regulations;
and
(h) The Sub-Adviser shall maintain on behalf of the Portfolio the records
listed in Schedule A hereto (as amended from time to time). At the
Trust's reasonable request, the Sub-Adviser will consult with the
Adviser with respect to any decision made by it with respect to the
investments of the Portfolio.
4. Investment Objectives, Policies And Restrictions. The Trust will
provide the Sub-Adviser with the statement of investment objectives, policies
and restrictions applicable to the Portfolio as contained in the Portfolio's
registration statement under the Act and the Securities Act of 1933, and any
instructions adopted by the Board of Trustees supplemental thereto. The Trust
will provide the Sub-Adviser with such further information concerning the
investment objectives, policies and restrictions applicable thereto as the
Sub-Adviser may from time to time reasonably request. The Trust retains the
right on (60) days prior written notice to the Sub-Adviser from the Trust or the
Adviser, to modify any such objectives, policies or restrictions in any manner.
5. Allocation Of Brokerage. The Sub-Adviser shall have the authority
and discretion to select brokers and dealers to execute portfolio transactions
initiated by the Sub-Adviser and to select the markets on or in which the
transactions will be executed.
A. In doing so, the Sub-Adviser will give primary
consideration to securing the best execution, taking into account such factors
as price (including the applicable brokerage commission or dealer spread), the
execution capability, financial responsibility and responsiveness of the broker
or dealer and the brokerage and research services provided by the broker or
dealer. Consistent with this policy, the Sub-Adviser may select brokers or
dealers who also provide brokerage and research services (as those terms are
defined in Section 28 (e) of the Securities Exchange Act of 1934) to the other
accounts over which it exercises investment discretion. It is understood that it
is desirable for the Portfolio that the Sub-Adviser have access to supplemental
investment and market research and security and economic analyses provided by
certain brokers who may execute brokerage transactions at a higher commission to
the Portfolio than may result when allocating brokerage to other brokers on the
basis of seeking the lowest commission. Therefore, the Sub-Adviser is authorized
to place orders for the purchase and sale of securities for the Portfolio with
such certain brokers, subject to review by the Trust's Board of Trustees from
time to time with respect to the extent and continuation of this practice,
provided that the Sub-Adviser determines in good faith that the amount of the
commission is reasonable in relation to the value of the brokerage and research
services provided by the executing broker and dealer. The determination may be
viewed in terms of either a particular transaction or the Sub-Adviser's overall
responsibilities with respect to the Portfolio and to the other accounts over
which it exercises investment discretion. It is understood that although the
information may be useful to the Trust and the Sub-Adviser, it is not possible
to place a dollar value on such information. Consistent with the Conduct Rules
of the National Association of Securities Dealers, Inc., and subject to seeking
best execution, the Sub-Adviser may give consideration to sales of shares of the
Portfolio as a factor in its selection of brokers and dealers to execute
portfolio transactions of the Portfolio.
On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interest of the Portfolio as well as other clients,
the Sub-Adviser, 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 the securities
so purchased or sold, as well as expenses incurred in the transaction, will be
made by the Sub-Adviser in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Trust and to such other
clients.
For each fiscal quarter of the Trust, the Sub-Adviser shall prepare and
render reports to the Adviser and the Trust's Board of Trustees of the total
brokerage business placed and the manner in which the allocation has been
accomplished. Such reports shall set forth at a minimum the information required
to be maintained by Rule 31a-1(b) (9) under the Act.
B. The Sub-Adviser agrees that it will not execute any
portfolio transactions for the Portfolio's account with a broker or dealer which
is an "affiliated person" (as defined in the Act) of the Trust, the Manager, the
Adviser, the Sub-Adviser or any portfolio manager of the Trust without the prior
written approval of the Trust. The Trust agrees that it will provide the
Sub-Adviser with a list of brokers and dealers which are "affiliated persons" of
the Trust and the Manager, and the Adviser agrees that it will provide the
Sub-Adviser with a list of brokers and dealers which are "affiliated persons" of
the Adviser.
6. Transaction Procedures. All transactions will be consummated by
payment to or delivery by the Portfolio's custodian (the "Custodian"), or such
depositories or agents as may be designated by the Custodian in writing, as
custodian for the Portfolio, of all cash and/or securities due to or from the
Portfolio, and the Sub-Adviser shall not have possession or custody thereof. The
Sub-Adviser shall advise the Custodian and confirm in writing to the Trust all
investment orders for the Portfolio placed by it with brokers and dealers. The
Sub-Adviser shall issue to the Custodian such instructions as may be appropriate
in connection with the settlement of any transaction initiated by the
Sub-Adviser. It shall be the responsibility of the Sub-Adviser to take
appropriate action if the Custodian fails to confirm in writing proper execution
of the instructions.
7. Proxies. The Sub-Adviser will vote all proxies solicited by or with
respect to the issuers of securities in which assets of the Portfolio may be
invested from time to time. Such proxies will be voted in a manner deemed by the
Sub-Adviser, in good faith, to be in the best interests of the Portfolio. On or
before July 1, 2003, the Sub-Adviser shall deliver to the Trust a copy of the
Sub-Adviser's proxy voting policy.
8. Reports to the Sub-Adviser. The Trust will provide the Sub-Adviser
with such periodic reports concerning the status of the Portfolio as the
Sub-Adviser may reasonably request.
9. Fees For Services.
(a) For the services provided to the Portfolio, the Adviser
(not the Portfolio) shall pay the Sub-Adviser a monthly fee calculated as
provided in paragraph (b) below. Pursuant to the provisions of the Advisory
Agreement between the Manager and the Adviser, the Adviser is solely responsible
for the payment of fees to the Sub-Adviser, and the Sub-Adviser agrees to seek
payment of the Sub-Adviser's fees solely from the Adviser. The Sub-Adviser
agrees to pay the compensation of any persons rendering any services to the
Portfolio who are officers, directors or employees of the Sub-Adviser.
(b) The Sub-Adviser's fee (the "Fee") shall be determined as
follows:
(i) The Adviser shall calculate a total quarterly fee
(the "Total Quarterly Fee") equal to an annualized rate of .20% of the value of
the Aggregated Portfolio's average daily net assets up to $100,000,000, .15% of
such assets from $100,000,000 to $500,000,000 and .10% of such assets in excess
of $500,000,000. For the purposes of the preceding sentence, "Aggregated
Portfolios" shall mean the value of the Portfolio plus the value of Xxxxx S&P
REIT Index Fund, a series of the Xxxxx Family of Real Estate Funds that is also
sub-advised by the Sub-Adviser (the "Xxxxx Fund").
(ii) The Adviser acknowledges that, pursuant to the
terms of that certain
Sub-Advisory Agreement by and between the Adviser and the Sub-Adviser dated May
1, 2001 related to the Xxxxx Fund, the Adviser pays the Sub-Adviser a fee (the
"Xxxxx Fee") calculated in accordance with Section 9 thereof.
(iii) The Sub-Adviser's Fee under this Agreement
shall be equal to the Total
Quarterly Fee minus the Xxxxx Fee for the same period; provided, however, that
the Fee shall not be less than $0.
10. Other Investment Activities of the Sub-Adviser. The Trust
acknowledges that the Sub-Adviser or one or more of its affiliates may have
investment responsibilities or render investment advice to or perform other
investment advisory services for other individuals or entities and that the
Sub-Adviser, its affiliates or any of its or their directors, officers, agents
or employees may buy, sell or trade in any securities for its or their
respective accounts ("Affiliated Accounts"). Subject to the provisions of
paragraph 2 hereof, the Trust agrees that the Sub-Adviser or its affiliates may
give advice or exercise investment responsibility and take such other action
with respect to other Affiliated Accounts which may differ from the timing or
nature of action taken with respect to the Portfolio, provided that the
Sub-Adviser acts in good faith, and provided further, that it is the
Sub-Adviser's policy to allocate, within its reasonable discretion, investment
opportunities to the Portfolio over a period of time on a fair and equitable
basis relative to the Affiliated Accounts, taking into account the investment
objectives and policies of the Portfolio and any specific investment
restrictions applicable thereto. The Trust acknowledges that one or more of the
Affiliated Accounts may at the time hold, acquire, increase, decrease, dispose
of or otherwise deal with positions in investments in which the Portfolio may
have an interest from time to time, whether in transactions which involve the
Portfolio or otherwise. The Sub-Adviser shall have no obligation to acquire for
the Portfolio a position in any investment which any Affiliated Account may
acquire, and the Trust shall have no first refusal, co-investment or other
rights in respect of any such investment, either for the Portfolio or otherwise.
11. Certificate of Authority. The Trust, the Adviser and the
Sub-Adviser shall furnish to each other from time to time certified copies of
the resolutions of their Board of Trustees or Board of Directors or executive
committees, as the case may be, evidencing the authority of officers and
employees who are authorized to act on behalf of the Trust, the Portfolio, the
Adviser and/or the Sub-Adviser.
12. Indemnification.
A. Neither the Sub-Adviser nor its shareholders, members,
officers, directors, employees, agents, control persons or affiliates of any
thereof, shall be liable to the Adviser for any error of judgment or mistake of
law or for any loss suffered by the Portfolio, the Manager or the Adviser in
connection with the matters to which this Agreement relates except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services (in which case any award of damages shall be limited
to the period and the amount set forth in Section 36(b)(3) of the 0000 Xxx) or a
loss resulting from willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement. Any person, even though also a
director, officer, employee, shareholder, member or agent of the Sub-Adviser,
who may be or become an officer, director, or trustee of the Trust, shall be
deemed, when rendering services to the Trust or acting on any business of the
Trust (other than services or business in connection with the Sub-Adviser's
duties hereunder), to be rendering such services to or acting solely for the
Trust and not as a director, officer, employee, shareholder, member or agent of
the Sub-Adviser, or one under the Sub-Adviser's control or direction, even
though paid by the Sub-Adviser.
B. The Adviser will indemnify the Sub-Adviser and its
directors, officers, employees and agents ("Sub-Adviser Parties") against and
hold the Sub-Adviser Parties harmless from any and all losses, claims, damages,
liabilities or expenses (including reasonable counsel fees and expenses) arising
from any claim, demand, action, or suit which results from any claim, demand,
action or suit which results from the Adviser Parties' (as such term is defined
in paragraph "B" below) willful misfeasance, bad faith, gross negligence or
reckless disregard of the Adviser's obligations and duties under this Agreement.
B. The Sub-Adviser will indemnify the Adviser and each of its
directors, trustees, officers, members, employees and agents ("Adviser Parties")
against and hold the Adviser Parties harmless from any and all losses, claims,
damages, liabilities or expenses (including reasonable counsel fees and
expenses) arising from any claim, demand, action or suit which results from the
Sub-Adviser Parties' willful misfeasance, bad faith, gross negligence or
reckless disregard of the Sub-Adviser's obligations and duties under this
Agreement.
C. The obligations of the parties under this paragraph shall
survive the termination of this Agreement. Nothing in this paragraph 12 shall be
construed in a manner inconsistent with Sections 17(h) and (i) of the Act.
13. Confidentiality. Subject to the duty of the Sub-Adviser and the
Adviser to comply with applicable law, including any demand of any regulatory or
taxing authority having jurisdiction, the parties hereto shall treat as
confidential all information pertaining to the Portfolio and the actions of the
Sub-Adviser in respect thereof.
14. Assignment. No assignment of this Agreement shall be made by the
Sub-Adviser, and this Agreement shall terminate automatically in the event of
such assignment. The Sub-Adviser shall notify the Trust and the Adviser in
writing sufficiently in advance of any proposed change of control, as defined in
Section 2 (a) (9) of the Act, as will enable the Trust and the Adviser to
consider whether an assignment will occur, and to take the steps necessary to
enter into a new contract with the Sub-Adviser.
15. Representations, Warranties And Agreements of the Trust. The Trust
represents, warrants and agrees that:
A. The Sub-Adviser has been duly appointed by the Board of
Trustees of the Trust and the Shareholders of the Portfolio o provide investment
services to the Portfolio as contemplated hereby.
B. The Trust will deliver to the Sub-Adviser a true and
complete copy of its then current prospectus and statement of additional
information as effective from time to time and such other documents or
instruments governing the investments of the Portfolio and such other
information as is necessary for the Sub-Adviser to carry out its obligations
under this Agreement.
C. The Trust is currently in compliance and shall at all times
comply with the requirements imposed upon the Trust by applicable laws and
regulations.
16. Representations, Warranties and Agreements of the Sub-Adviser. The
Sub-Adviser represents, warrants and agrees that:
A. The Sub-Adviser is registered as an "investment adviser"
under the Investment Advisers Act of 1940.
B. The Sub-Adviser will maintain, keep current and preserve on
behalf of the Trust, in the manner and for the time periods required or
permitted by the Act, the records identified in Schedule A. The Sub-Adviser
agrees that such records are the property of the Trust, and will be surrendered
to the Trust promptly upon request.
C. The Sub-Adviser will complete such reports concerning
purchases or sales of securities on behalf of the Portfolio as the Adviser or
the Trust may from time to time require to ensure compliance with the Act, the
Internal Revenue Code of 1986 and applicable state securities laws.
D. The Sub-Adviser has adopted a written code of ethics
complying with the requirements of Rule 17j-1 under the Act and will provide the
Trust with a copy of the code of ethics and evidence of its adoption. Within
forty-five (45) days of the end of the last calendar quarter of each year while
this Agreement is in effect, the President or a Vice President of the
Sub-Adviser shall certify to the Trust that the Sub-Adviser has complied with
the requirements of Rule 17j-1 during the previous year and that there has been
no violation of the Sub-Adviser's code of ethics or, if such a violation has
occurred, that appropriate action was taken in response to such violation. Upon
the written request of the Trust, the Sub-Adviser shall submit to the Trust the
reports required to be made to the Sub-Adviser by Rule 17j-1 (c) (1).
E. The Sub-Adviser will immediately notify the Trust and the
Adviser of the occurrence of any event which would disqualify the Sub-Adviser
from serving as an investment adviser of an investment company pursuant to
Section 9(a) of the Act or otherwise.
17. Amendment. This Agreement may be amended at any time, but only by
written agreement between the Sub-Adviser, the Adviser and the Trust, which
amendment, other than amendments to Schedule A, is subject to the approval of
the Board of Trustees and the shareholders of the Portfolio in the manner
required by the Act and the rules thereunder, subject to any applicable
exemptive order of the Securities and Exchange Commission modifying the
provisions of the Act with respect to approval of amendments to this Agreement.
18. Effective Date; Term. This Agreement shall become effective on the
date of its execution and shall remain in full force and effect for two (2)
years from the date hereof, and from year to year thereafter but only so long as
such continuance is specifically approved at least annually by the vote of a
majority of the Trustees who are not interested persons of the Trust, the
Adviser or the Sub-Adviser, cast in person at a meeting called for the purpose
of voting on such approval, and by a vote of the Board of Trustees or of a
majority of the outstanding voting securities of the Portfolio. The aforesaid
requirement that this Agreement may be continued "annually" shall be construed
in a manner consistent with the Act and the rules and regulations thereunder.
19. Termination. This Agreement may be terminated by any party hereto,
without the payment of any penalty, immediately upon written notice to the other
in the event of a breach of any provision thereof by the party so notified, or
otherwise upon sixty (60) days' written notice to the other, but any such
termination shall not affect the status, obligations or liabilities of any party
hereto to the other. In the event that in connection with the termination of
this Agreement, a successor to any of Sub-Adviser's duties or responsibilities
under this Agreement is designated by written notice to Sub-Adviser, Sub-Adviser
shall promptly transfer all records maintained by Sub-Adviser under this
Agreement and shall cooperate in the transfer of such duties and
responsibilities, including providing for assistance from Sub-Adviser's
cognizant personnel in the establishment of books, records and other data by
such successor.
20. Shareholder Liability. The Sub-Adviser is hereby expressly put on
notice of the limitation of shareholder liability as 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. The Sub-Adviser agrees that it shall not seek satisfaction of any
such obligations from the shareholders or any individual shareholder of the
Portfolio, nor from the Trustees or any individual Trustee of the Trust.
21. Use of Names. The Sub-Adviser acknowledges that all rights to the
name "Access" belong to the Manager, and that the Trust is being granted a
limited license to use such words in its Portfolio name or in any class name.
The Sub-Adviser further acknowledges that all rights to the name "Xxxxx" belong
to the Adviser, and that the Trust is being granted a limited license to use
such words in its Portfolio name or in any class name.
22. Definitions. As used in paragraphs 14 and 18 of this Agreement, the
terms "assignment," interested person" and "vote of a majority of the
outstanding voting securities" shall have the meanings set forth in the Act and
the rules and regulations thereunder.
23. Applicable Law. To the extent that state law is not preempted by
the provisions of any law of the United States heretofore or hereafter enacted,
as the same may be amended from time to time, this Agreement shall be
administered, construed and enforced according to the laws of the State of
Georgia. The parties agree that any appropriate state court located in Xxxxxx
County, Georgia or any Federal Court located in Atlanta, Georgia shall have
exclusive jurisdiction of any case or controversy arising under or in connection
with this Agreement and shall be in a proper forum in which to adjudicate such
case or controversy. The parties hereto consent to the jurisdiction of such
courts.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date and year first above
written.
XXXXX ASSET MANAGEMENT, INC. PADCO ADVISORS, INC.
d/b/a RYDEX INVESTMENTS
By /s/ Xxx Xxxxx By /s/ Xxxx X. Xxxxxxxxxxx
-------------------------------- -----------------------
Name: Xxx Xxxxx Name: Xxxx X. Xxxxxxxxxxx
Title: President Title: President
ACKNOWLEDGED AS TO SECTIONS 5(B), 8, 10, 11, 15 and 21:
Access Variable Insurance Trust
By /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: President
SCHEDULE A
RECORDS TO BE MAINTAINED BY THE SUB-ADVISER
1. Rule 31a-1 (b) (5) and (6). A record of each brokerage order, and
all other portfolio purchases or sales, given by the Sub-Adviser on behalf of
the Portfolio for, or in connection with, the purchase or sale of securities,
whether executed or unexecuted. Such records shall include:
A. The name of the broker;
B. The terms and conditions of the order and of any
modification or cancellation thereof;
C. The time of entry or cancellation;
D. The price at which executed;
E. The time of receipt of a report of execution; and
F. The name of the person who placed the order on behalf of
the Portfolio.
2. Rule 31a-1 (b) (9). A record for each fiscal quarter, completed
within ten
(10) days after the end of the quarter, showing specifically the basis or bases
upon which the allocation of orders for the purchase and sale of portfolio
securities to named brokers or dealers was effected, and the division of
brokerage commissions or other compensation on such purchase and sale orders.
Such record:
A. Shall include the consideration given to:
(i) The sale of shares of the Portfolio by brokers or
dealers.
(ii) The supplying of services or benefits by brokers
or dealers to:
(a) The Trust;
(b) the Manager;
(c) the Adviser;
(d) the Sub-Adviser;
(e) any other portfolio adviser of the
Trust; and
(f) any person affiliated with the foregoing
persons.
(iii) Any other consideration other than the
technical qualifications of the brokers and dealers as such.
B. Shall show the nature of the services or benefits made
available.
C. Shall describe in detail the application of any general or
specific formula or other determinant used in arriving at such allocation of
purchase and sale orders and such division of brokerage commissions or other
compensation.
D. The name of the person responsible for making the
determination of such allocation and such division of brokerage commissions or
other compensation.
3. Other Records. Such other accounts, books and other documents as are
required to be maintained by registered investment companies by Rule 31a-1 under
the Act or by registered investment advisers by rules adopted under Section 204
of the Investment Advisers Act of 1940, to the extent such records are necessary
or appropriate to record the Sub-Adviser's transactions with respect to the
Portfolio. Beginning July 1, 2003, the Sub-Adviser shall maintain records
regarding proxy voting on behalf of the Portfolio in order that the Portfolio
may complete the annual Form N-PX filing.
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