LIBERTY ALL-STAR EQUITY FUND
PORTFOLIO MANAGEMENT AGREEMENT
MATRIX ASSET ADVISERS, INC.
December 18, 2006
Re: Portfolio Management Agreement
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Ladies and Gentlemen:
Liberty All-Star Equity Fund (the "Fund") is a diversified closed-end
investment company registered under the Investment Company Act of 1940, as
amended (the "Act"), and is subject to the rules and regulations promulgated
thereunder.
ALPS Advisers, Inc. (the "Fund Manager") evaluates and recommends portfolio
managers for the assets of the Fund, and the Fund Manager or an affiliate of the
Fund Manager is responsible for the day-to-day Fund administration of the Fund.
1. EMPLOYMENT AS A PORTFOLIO MANAGER. The Fund, being duly authorized, hereby
employs Matrix Asset Advisers, Inc. ("Portfolio Manager") as a discretionary
portfolio manager, on the terms and conditions set forth herein, of that portion
of the Fund's assets which the Fund Manager determines to assign to the
Portfolio Manager (those assets being referred to as the "Portfolio Manager
Account"). The Fund Manager may, from time to time, allocate and reallocate the
Fund's assets among the Portfolio Manager and the other portfolio managers of
the Fund's assets. The Portfolio Manager will be an independent contractor and
will have no authority to act for or represent the Fund or the Fund Manager in
any way or otherwise be deemed to be an agent of the Fund or the Fund Manager
except as expressly authorized in this Agreement or in another writing by the
Fund Manager and the Portfolio Manager. The Portfolio Manager's
responsibilities for providing portfolio management services to the Fund shall
be limited to the Portfolio Manager Account.
2. ACCEPTANCE OF EMPLOYMENT; STANDARD OF PERFORMANCE. The Portfolio Manager
accepts its employment as a discretionary portfolio manager and agrees to use
its best professional judgment to make timely investment decisions for the
Portfolio Manager Account in accordance with the provisions of this Agreement.
3. PORTFOLIO MANAGEMENT SERVICES OF PORTFOLIO MANAGER.
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A. In providing portfolio management services to the Portfolio Manager
Account, the Portfolio Manager shall be subject to the Fund's Declaration of
Trust and By-Laws, as amended from time to time, investment objectives,
policies and restrictions of the Fund as set forth in its Prospectus and
Statement of Additional Information, as the same may be modified from time to
time (together, the "Prospectus"), the investment objectives, policies and
restrictions of the Fund as determined from time to time by the Board of
Trustees, and the investment and other restrictions set forth in the Act and
the rules and regulations thereunder, to the supervision and control of the
Board of Trustees of the Fund, and to instructions from the Fund Manager. The
Portfolio Manager shall not, without the prior approval of the Fund or the
Fund Manager, effect any transactions that would cause the Portfolio Manager
Account, treated as a separate fund, to be out of compliance with any of such
restrictions or policies. The Portfolio Manager shall not consult with any
other portfolio manager of the Fund concerning transactions for the Fund in
securities or other assets.
B. As part of the services it will provide hereunder, the Portfolio
Manager will:
(i) formulate and implement a continuous investment program for the
Portfolio Manager Account;
(ii) take whatever steps are necessary to implement the investment
program for the Portfolio Manager Account by arranging for the
purchase and sale of securities and other investments;
(iii) keep the Fund Manager and the Board of Trustees of the Fund fully
informed in writing on an ongoing basis, as agreed by the Fund
Manager and the Portfolio Manager, of all material facts concerning
the investment and reinvestment of the assets in the Portfolio
Manager Account, the Portfolio Manager and its key investment
personnel and operations; make regular and periodic special written
reports of such additional information concerning the same as may
reasonably be requested from time to time by the Fund Manager or the
Trustees of the Fund; attend meetings with the Fund Manager and/or
Trustees, as reasonably requested, to discuss the foregoing and such
other matters as may be requested by the Fund Manager or Trustees;
(iv) in accordance with procedures and methods established by the
Trustees of the Fund, which may be amended from time to time,
provide assistance in determining the fair value of all securities
and other investments/assets in the Portfolio Manager Account, as
necessary, and use reasonable efforts to arrange for the provision
of valuation information or a price(s) from a party(ies) independent
of the Portfolio Manager for each security or other investment/asset
in the Portfolio Manager Account for which market prices are not
readily available; and
(v) cooperate with and provide reasonable assistance to the Fund
Manager, the Fund's administrator, custodian, transfer agent and
pricing agents and all other agents and representatives of the Fund
and the Fund Manager; keep all such persons fully informed as to
such matters as they may reasonably deem necessary to the
performance of their obligations to the Fund and the Fund Manager;
provide prompt responses to reasonable requests made by such
persons; and maintain any appropriate interfaces with each so as to
promote the efficient exchange of information.
4. TRANSACTION PROCEDURES. All portfolio transactions for the Portfolio
Manager Account will be consummated by payment to or delivery by the custodian
of the Fund (the "Custodian"), or such depositories or agents as may be
designated by the Custodian in writing, as custodian for the Fund, of all cash
and/or securities due to or from the Portfolio Manager Account, and the
Portfolio Manager shall not have possession or custody thereof or any
responsibility or liability with respect to such custody. The Portfolio Manager
shall advise and confirm in writing to the Custodian all investment orders for
the Portfolio Manager Account placed by it with brokers and dealers at the time
and in the manner set forth in Schedule A hereto (as amended from time to time
by the Fund Manager). The Fund shall issue to the Custodian such instructions as
may be appropriate in connection with the settlement of any transaction
initiated by the Portfolio Manager. The Fund shall be responsible for all
custodial arrangements and the payment of all custodial charges and fees, and,
upon giving proper instructions to the Custodian, the Portfolio Manager shall
have no responsibility or liability with respect to custodial arrangements or
the acts, omissions or other conduct of the Custodian.
5. ALLOCATION OF BROKERAGE. The Portfolio Manager shall have authority and
discretion to select brokers and dealers to execute portfolio transactions
initiated by the Portfolio Manager for the Portfolio Manager Account, and to
select the markets on or in which the transaction will be executed.
A. In doing so, the Portfolio Manager's primary responsibility shall be
to seek to obtain best net price and execution for the Fund. However, this
responsibility shall not obligate the Portfolio Manager to solicit
competitive bids for each transaction or to seek the lowest available
commission cost to the Fund, so long as the Portfolio Manager reasonably
believes that the broker or dealer selected by it can be expected to obtain a
"best execution" market price on the particular transaction and determines in
good faith that the commission cost is reasonable in relation to the value of
the brokerage and research services (as defined in Section 28(e)(3) of the
Securities Exchange Act of 1934) provided by such broker or dealer to the
Portfolio Manager viewed in terms of either that particular transaction or of
the Portfolio Manager's overall responsibilities with respect to its clients,
including the Fund, as to which the Portfolio Manager exercises investment
discretion, notwithstanding that the Fund may not be the direct or exclusive
beneficiary of any such services or that another broker may be willing to
charge the Fund a lower commission on the particular transaction.
B. Subject to the requirements of paragraph A above, the Fund Manager
shall have the right to request that transactions giving rise to brokerage
commissions, in an amount to be agreed upon by the Fund Manager and the
Portfolio Manager, shall be executed by brokers and dealers that provide
brokerage or research services to the Fund Manager, or as to which an on-
going relationship will be of value to the Fund in the management of its
assets, which services and relationship may, but need not, be of direct
benefit to the Portfolio Manager Account. Notwithstanding any other provision
of this Agreement, the Portfolio Manager shall not be responsible under
paragraph A above with respect to transactions executed through any such
broker or dealer.
C. The Portfolio Manager shall not execute any portfolio transactions
for the Portfolio Manager Account with a broker or dealer which is an
"affiliated person" (as defined in the Act) of the Fund, the Portfolio
Manager or any other portfolio manager of the Fund without the prior written
approval of the Fund. The Fund Manager will provide the Portfolio Manager
with a list of brokers and dealers which are "affiliated persons" of the Fund
or its portfolio managers.
6. PROXIES. The Fund Manager will vote all proxies solicited by or with
respect to the issuers of securities in which assets of the Portfolio Manager
Account may be invested from time to time in accordance with such policies as
shall be determined by the Fund Manager, and reviewed and approved by the Board
of Trustees. Upon the written request of the Fund Manager, the Portfolio
Manager will vote all proxies solicited by or with respect to the issuers of
securities in which assets of the Portfolio Manager Account may be invested from
time to time in accordance with such policies as shall be determined by the Fund
Manager, and reviewed and approved by the Board of Trustees.
7. FEES FOR SERVICES. The compensation of the Portfolio Manager for its
services under this Agreement shall be calculated and paid by the Fund Manager
in accordance with the attached Schedule C. Pursuant to the Fund Management
Agreement between the Fund and the Fund Manager, the Fund Manager is solely
responsible for the payment of fees to the Portfolio Manager, and the Portfolio
Manager agrees to seek payment of its fees solely from the Fund Manager.
8. OTHER INVESTMENT ACTIVITIES OF PORTFOLIO MANAGER. The Fund acknowledges
that the Portfolio Manager or one or more of its affiliates has investment
responsibilities, renders investment advice to and performs other investment
advisory services for other individuals or entities ("Client Accounts"), and
that the Portfolio Manager, 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 Fund agrees that the Portfolio Manager or its
affiliates may give advice or exercise investment responsibility and take such
other action with respect to other Client Accounts and Affiliated Accounts which
may differ from the advice given or the timing or nature of action taken with
respect to the Portfolio Manager Account, provided that the Portfolio Manager
acts in good faith, and provided further, that it is the Portfolio Manager's
policy to allocate, within its reasonable discretion, investment opportunities
to the Portfolio Manager Account over a period of time on a fair and equitable
basis relative to the Client Accounts and the Affiliated Accounts, taking into
account the cash position and the investment objectives and policies of the Fund
and any specific investment restrictions applicable thereto. The Fund
acknowledges that one or more Client Accounts and Affiliated Accounts may at any
time hold, acquire, increase, decrease, dispose of or otherwise deal with
positions in investments in which the Portfolio Manager Account may have an
interest from time to time, whether in transactions which involve the Portfolio
Manager Account or otherwise. The Portfolio Manager shall have no obligation to
acquire for the Portfolio Manager Account a position in any investment which any
Client Account or Affiliated Account may acquire, and the Fund shall have no
first refusal, co-investment or other rights in respect of any such investment,
either for the Portfolio Manager Account or otherwise.
9. LIMITATION OF LIABILITY. The Portfolio Manager shall not be liable for any
action taken, omitted or suffered to be taken by it in its reasonable judgment,
in good faith and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement, or in
accordance with (or in the absence of) specific directions or instructions from
the Fund, provided, however, that such acts or omissions shall not have resulted
from the Portfolio Manager's willful misfeasance, bad faith or gross negligence,
a violation of the standard of care established by and applicable to the
Portfolio Manager in its actions under this Agreement or breach of its duty or
of its obligations hereunder (provided, however, that the foregoing shall not be
construed to protect the Portfolio Manager from liability in violation of
Section 17(i) of the Act).
10. CONFIDENTIALITY. Subject to the duty of the Portfolio Manager, the Fund
Manager and the Fund 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 Manager
Account and the actions of the Portfolio Manager and the Fund in respect
thereof.
11. ASSIGNMENT. This Agreement shall terminate automatically in the event of
its assignment, as that term is defined in Section 2(a)(4) of the Act. The
Portfolio Manager shall notify the Fund 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 Fund to consider whether an assignment as defined in Section
2(a)(4) of the Act will occur, and whether to take the steps necessary to enter
into a new contract with the Portfolio Manager.
12. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE FUND. The Fund
represents, warrants and agrees that:
A. The Portfolio Manager has been duly appointed to provide investment
services to the Portfolio Manager Account as contemplated hereby.
B. The Fund will deliver to the Portfolio Manager a true and complete copy
of its then current Prospectus as effective from time to time and such other
documents governing the investment of the Portfolio Manager Account and such
other information as is necessary for the Portfolio Manager to carry out its
obligations under this Agreement.
13. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE PORTFOLIO MANAGER. The
Portfolio Manager represents, warrants and agrees that:
A. It is registered as an "investment adviser" under the Investment
Advisers Act of 1940, as amended ("Advisers Act") and will continue to be so
registered for as long as this Agreement remains in effect.
B. It will maintain, keep current and preserve on behalf of the Fund, in
the manner required or permitted by the Act and the rules and regulations
thereunder, the records required to be so kept by an investment adviser of
the Fund in accordance with applicable law, including without limitation
those identified in Schedule B (as Schedule B may be amended from time to
time by the Fund Manager). The Portfolio Manager agrees that such records are
the property of the Fund, and will be surrendered to the Fund promptly upon
request.
C. It has adopted a written code of ethics complying with the requirements
of Rule 204A-1 under the Advisers Act and Rule 17j-1 under the Act and will
provide the Fund Manager and the Board of Trustees with a copy of its code of
ethics and evidence of its adoption. Within 45 days of the end of each year
while this Agreement is in effect, or at any other time requested by the Fund
Manager, an officer, director or general partner of the Portfolio Manager
shall certify to the Fund that the Portfolio Manager has complied with the
requirements of Rule 17j-1 and Rule 204A-1 during the previous year and that
there has been no material violation of its code of ethics or, if such a
violation has occurred, that appropriate action was taken in response to such
violation. It will promptly notify the Fund Manager of any material change
to its code of ethics or material violation of its code of ethics.
D. Upon request, the Portfolio Manager will promptly supply the Fund with
any information concerning the Portfolio Manager and its stockholders,
partners, employees and affiliates that the Fund may reasonably request in
connection with the preparation of its registration statement (as amended
from time to time), prospectus and statement of additional information (as
supplemented and modified from time to time), proxy material, reports and
other documents required to be filed under the Act, the Securities Act of
1933, or other applicable securities laws.
E. Reference is hereby made to the Declaration of Trust dated August 20,
1986 establishing the Fund, a copy of which has been filed with the Secretary
of the Commonwealth of Massachusetts and elsewhere as required by law, and to
any and all amendments thereto so filed or hereafter filed. The name Liberty
All-Star Equity Fund refers to the Board of Trustees under said Declaration
of Trust, as Trustees and not to the Trustees personally, and no Trustee,
shareholder, officer, agent or employee of the Fund shall be held to any
personal liability hereunder or in connection with the affairs of the Fund,
but only the trust estate under said Declaration of Trust is liable under
this Agreement. Without limiting the generality of the foregoing, neither the
Portfolio Manager nor any of its officers, directors, partners, shareholders,
agents or employees shall, under any circumstances, have recourse or cause or
willingly permit recourse to be had directly or indirectly to any personal,
statutory, or other liability of any shareholder, Trustee, officer, agent or
employee of the Fund or of any successor of the Fund, whether such liability
now exists or is hereafter incurred for claims against the trust estate, but
shall look for payment solely to said trust estate, or the assets of such
successor of the Fund.
F. The Portfolio Manager shall maintain and implement compliance
procedures that are reasonably designed to ensure its compliance with Rule
206(4)-7 of the Advisers Act and to prevent violations of the Federal
Securities Laws (as defined in Rule 38a-1 under the Act).
G.The Portfolio Manager will: (i) on the cover page of each Form 13F that
the Portfolio Manager files with the Securities and Exchange Commission (the
"SEC"), check the "13F Combination Report" box and on the Form 13F Summary
Page identify "ALPS Advisers, Inc." as another manager for which the
Portfolio Manager is filing the Form 13F report; (ii) within 60 days after
the end of each calendar year, provide the Fund Manager with a certification
that the Portfolio Manager's Form 13F was filed with the SEC on a timely
basis and included all of the securities required to be reported by the SEC;
(iii) within 60 days after the end of each calendar year, provide to the Fund
Manager a copy of each Form 13F, or amendment to a Form 13F filed by it
during the prior four quarters; and (iv) promptly notify the Fund Manager in
the event the Portfolio Manager determines that it has failed to comply with
Section 13(f) in a material respect, or receives a comment letter from the
SEC raising a question with respect to compliance.
H. The Portfolio Manager has adopted written compliance policies and
procedures reasonably designed to prevent violations of the Advisers Act and
the rules promulgated thereunder and the Portfolio Manager agrees to provide:
(a) from time to time, a copy and/or summary of such compliance policies and
procedures and an accompanying certification certifying that the Portfolio
Manager's compliance policies and procedures comply with the Advisers Act;
(b) a report of the annual review determining the adequacy and effectiveness
of the Portfolio Manager's compliance policies and procedures; and (c) the
name of the Portfolio Manager's Chief Compliance Officer to act as a liaison
for compliance matters that may arise between the Fund and the Portfolio
Manager.
I. The Portfolio Manager will notify the Fund and the Fund Manager of any
assignment of this Agreement or change of control of the Portfolio Manager,
as applicable, and any changes in the key personnel who are either the
portfolio manager(s) of the Portfolio Manager Account or senior management of
the Portfolio Manager, in each case prior to or promptly after, such change.
The Portfolio Manager agrees to bear all reasonable expenses of the Fund, if
any, arising out of an assignment or change in control.
J. The Portfolio Manager agrees to maintain an appropriate level of errors
and omissions or professional liability insurance coverage.
14. AMENDMENT. This Agreement may be amended at any time, but only by written
agreement among the Portfolio Manager, the Fund Manager and the Fund, which
amendment, other than amendments to Schedules A, B and C, is subject to the
approval of the Board of Trustees and the shareholders of the Fund as and to the
extent required by the Act, the rules thereunder or exemptive relief granted by
the SEC, provided that Schedules A and B may be amended by the Fund Manager
without the written agreement of the Fund or the Portfolio Manager.
15. EFFECTIVE DATE; TERM. This Agreement shall become effective on the date
first above written, provided that this Agreement shall not take effect unless
it has first been approved: (1) by a vote of a majority of the Trustees who are
not "interested persons" (as defined in the Act) of any party to this Agreement
("Independent Trustees"), cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of "a majority of the outstanding
voting securities" (as defined in the Act) of the Fund. This Agreement shall
continue for two years from the date of this Agreement and from year to year
thereafter provided such continuance is specifically approved at least annually
by (i) the Fund's Board of Trustees or (ii) a vote of a majority of the
outstanding voting securities of the Fund, provided that in either event such
continuance is also approved by a majority of the Independent Trustees, by vote
cast in person at a meeting called for the purpose of voting on such approval.
If the SEC issues an order to the Fund and the Fund Manager for an exemption
from Section 15(a) of the Act, then, in accordance with the application of the
Fund and the Fund Manager, the continuance of this Agreement after initial
approval by the Trustees as set forth above, shall be subject to approval by a
majority of the outstanding voting securities of the Fund at the regularly
scheduled annual meeting of the Fund's shareholders next following the date of
this Agreement.
16. TERMINATION. This Agreement may be terminated at any time by any party,
without penalty, immediately upon written notice to the other parties in the
event of a breach of any provision thereof by a party so notified, or otherwise
upon not less than thirty (30) days' written notice to the Portfolio Manager in
the case of termination by the Fund or the Fund Manager, or ninety (90) days'
written notice to the Fund and the Fund Manager in the case of termination by
the Portfolio Manager, but any such termination shall not affect the status,
obligations or liabilities of any party hereto to the other parties.
17. 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 Commonwealth of
Massachusetts.
18. SEVERABILITY; COUNTERPARTS. If any term or condition of this Agreement
shall be invalid or unenforceable to any extent or in any application, then the
remainder of this Agreement, and such term or condition except to such extent or
in such application, shall not be affected thereby, and each and every term and
condition of this Agreement shall be valid and enforced to the fullest extent
and in the broadest application permitted by law. This Agreement may be
executed in counterparts, each of which will be deemed an original and all of
which together will be deemed to be one and the same agreement.
19. USE OF NAME. The Portfolio Manager agrees and acknowledges that the Fund
Manager is the sole owner of the names and marks "Liberty All-Star" and "All-
Star", and that all use of any designation comprised in whole or in part of
these names and marks shall inure to the benefit of the Fund Manager. Except as
used to identify the Fund to third parties as a client, the use by the Portfolio
Manager on its own behalf of such marks in any advertisement or sales literature
or other materials promoting the Portfolio Manager shall be with the prior
written consent of the Fund Manager. The Portfolio Manager shall not, without
the consent of the Fund Manager, make representations regarding the Fund or the
Fund Manager in any disclosure document, advertisement or sales literature or
other materials promoting the Portfolio Manager. Consent by the Fund Manager
shall not be unreasonably withheld. Upon termination of this Agreement for any
reason, the Portfolio Manager shall cease any and all use of these marks as soon
as reasonably practicable.
LIBERTY ALL-STAR EQUITY FUND
By: /s/ Xxxxxxx X. Xxxxxxxxxx, Xx.
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Name: Xxxxxxx X. Xxxxxxxxxx, Xx.
Title: President
ALPS ADVISERS, INC.
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: President
ACCEPTED:
MATRIX ASSET ADVISERS, INC.
By: /s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
Title: Sr. Managing Director
SCHEDULES:
A. Operational Procedures
B. Records To Be Maintained By The Portfolio Manager
C. Portfolio Manager Fee
LIBERTY ALL-STAR GROWTH FUND
PORTFOLIO MANAGEMENT AGREEMENT
SCHEDULE B
RECORDS TO BE MAINTAINED BY THE PORTFOLIO MANAGER
1. (Rule 31a-1(b)(5) and (6)) A record of each brokerage order, and all other
portfolio purchases and sales, given by the Portfolio Manager on behalf of
the Fund 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 modifications 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 Fund.
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 Fund by brokers or dealers.
(ii) The supplying of services or benefits by brokers or dealers to:
(a) The Fund;
(b) The Fund Manager;
(c) The Portfolio Manager; and
(d) Any person other than the foregoing.
(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. (Rule 31a-1(b)(10)) A record in the form of an appropriate memorandum
identifying the person or persons, committees or groups authorizing the
purchase or sale of portfolio securities. Where an authorization is made by
a committee or group, a record shall be kept of the names of its members
who participate in the authorization. There shall be retained as part of
this record: any memorandum, recommendation or instruction supporting or
authorizing the purchase or sale of portfolio securities and such other
information as is appropriate to support the authorization.(1)
4. (Rule 31a-1(f)) Such accounts, books and other documents as are required to
be maintained by registered investment advisers by rule adopted under
Section 204 of the Investment Advisers Act of 1940, to the extent such
records are necessary or appropriate to record the Portfolio Manager's
transactions with the Fund.
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(1) Such information might include: the current Form 10-K, annual and quarterly
reports, press releases, reports by analysts and from brokerage firms
(including their recommendation: i.e., buy, sell, hold) or any internal
reports or portfolio manager reviews.
LIBERTY ALL-STAR GROWTH FUND
PORTFOLIO MANAGEMENT AGREEMENT
SCHEDULE C
PORTFOLIO MANAGER FEE
For services provided to the Portfolio Manager Account, the Fund Manager
will pay to the Portfolio Manager, on or before the 10th day of each calendar
month, a fee calculated and accrued daily and payable monthly by the Fund
Manager for the previous calendar month at the annual rate of: 0.40% of the
amount obtained by multiplying the Portfolio Manager's Percentage (as
hereinafter defined) times the Average Total Fund Net Assets (as hereinafter
defined) up to $400 million; 0.36% of the amount obtained by multiplying the
Portfolio Manager's Percentage times the Average Total Fund Net Assets exceeding
$400 million up to and including $800 million; 0.324% of the amount obtained by
multiplying the Portfolio Manager's Percentage times the Average Total Fund Net
Assets exceeding $800 million up to and including $1.2 billion; 0.292% of the
amount obtained by multiplying the Portfolio Manager's Percentage times the
Average Total Fund Net Assets exceeding $1.2 billion.
"Portfolio Manager's Percentage" means the percentage obtained by dividing
(i) the average daily net asset values of the Portfolio Manager Account during
the preceding calendar month, by (ii) the Average Total Fund Net Assets.
"Average Total Fund Net Assets" means the average daily net asset values
of the Fund as a whole during the preceding calendar month.
The fee shall be pro-rated for any month during which this Agreement is in
effect for only a portion of the month.
April 2, 2007
Matrix Asset Advisors, Inc.
Attn: Legal Department
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
RE: Portfolio Management Agreement with Liberty All-Star Equity Fund
Dear Matrix:
In a recent audit of the Liberty All-Star Equity Fund (the "Fund") records, it
was discovered that Appendix B and C to the Portfolio Management Agreement
between Matrix Asset Advisors, Inc., ALPS Advisers, Inc., and the Fund was
mislabeled as Liberty All-Star Growth Fund, Inc.
Therefore, please accept the attached replacement pages with the correct
heading. The body of the pages did not change.
Additionally, please note that ALPS Advisers, Inc., and the Funds main address
has changed from 0000 Xxxxxxxx, Xxxxx 0000, Xxxxxx XX 00000 to 0000 Xxxxxxxx,
Xxxxx 0000, Xxxxxx, XX 00000.
Should you have any questions regarding these matters, please feel free to
contact me or my paralegal Xxxxxxxxx Xxxxxx at 303.623.2577.
Sincerely,
/s/ Xxxx X. Xxxxx
-----------------
Xxxx X. Xxxxx
Chief Legal Officer
ALPS Advisers, Inc.
Enclosures
LIBERTY ALL-STAR EQUITY FUND
PORTFOLIO MANAGEMENT AGREEMENT
SCHEDULE B
RECORDS TO BE MAINTAINED BY THE PORTFOLIO MANAGER
1. (Rule 31a-1(b)(5) and (6)) A record of each brokerage order, and all other
portfolio purchases and sales, given by the Portfolio Manager on behalf of
the Fund 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 modifications 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 Fund.
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 Fund by brokers or dealers.
(ii) The supplying of services or benefits by brokers or dealers to:
(a) The Fund;
(b) The Fund Manager;
(c) The Portfolio Manager; and
(d) Any person other than the foregoing.
(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. (Rule 31a-1(b)(10)) A record in the form of an appropriate memorandum
identifying the person or persons, committees or groups authorizing the
purchase or sale of portfolio securities. Where an authorization is made by
a committee or group, a record shall be kept of the names of its members
who participate in the authorization. There shall be retained as part of
this record: any memorandum, recommendation or instruction supporting or
authorizing the purchase or sale of portfolio securities and such other
information as is appropriate to support the authorization.(1)
4. (Rule 31a-1(f)) Such accounts, books and other documents as are required to
be maintained by registered investment advisers by rule adopted under
Section 204 of the Investment Advisers Act of 1940, to the extent such
records are necessary or appropriate to record the Portfolio Manager's
transactions with the Fund.
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(1) Such information might include: the current Form 10-K, annual and quarterly
reports, press releases, reports by analysts and from brokerage firms
(including their recommendation: i.e., buy, sell, hold) or any internal
reports or portfolio manager reviews.
LIBERTY ALL-STAR EQUITY FUND
PORTFOLIO MANAGEMENT AGREEMENT
SCHEDULE C
PORTFOLIO MANAGER FEE
For services provided to the Portfolio Manager Account, the Fund Manager
will pay to the Portfolio Manager, on or before the 10th day of each calendar
month, a fee calculated and accrued daily and payable monthly by the Fund
Manager for the previous calendar month at the annual rate of: 0.40% of the
amount obtained by multiplying the Portfolio Manager's Percentage (as
hereinafter defined) times the Average Total Fund Net Assets (as hereinafter
defined) up to $400 million; 0.36% of the amount obtained by multiplying the
Portfolio Manager's Percentage times the Average Total Fund Net Assets exceeding
$400 million up to and including $800 million; 0.324% of the amount obtained by
multiplying the Portfolio Manager's Percentage times the Average Total Fund Net
Assets exceeding $800 million up to and including $1.2 billion; 0.292% of the
amount obtained by multiplying the Portfolio Manager's Percentage times the
Average Total Fund Net Assets exceeding $1.2 billion.
"Portfolio Manager's Percentage" means the percentage obtained by dividing
(i) the average daily net asset values of the Portfolio Manager Account during
the preceding calendar month, by (ii) the Average Total Fund Net Assets.
"Average Total Fund Net Assets" means the average daily net asset values
of the Fund as a whole during the preceding calendar month.
The fee shall be pro-rated for any month during which this Agreement is in
effect for only a portion of the month.
