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Our subsidiaries providing discretionary investment management services for our sponsoredinvestment products and sub-advised accounts either perform or obtain investment research and determinewhich securities the sponsored investment products or sub-advised accounts will purchase, hold or sellunder the supervision and oversight of the funds’ boards of directors or trustees, if applicable. In addition,these subsidiaries take all appropriate steps to implement such decisions, including arranging for theselection of brokers and dealers and the execution and settlement of trades in accordance with detailedcriteria set forth in the management agreement for each account, internal policies, and applicable law andpractice. Our subsidiaries conducting non-discretionary investment management services performinvestment research for our clients and recommend which securities the clients will purchase, hold or sell.In such cases, the subsidiaries may or may not perform trading activities for the products.The funds themselves do not have direct employees. Through our subsidiaries, we provide and pay thesalaries of personnel who serve as officers of our funds, including the administrative personnel necessary toconduct such funds’ day-to-day business operations. Our subsidiaries either provide or arrange for theprovision of: office space, telephone, office equipment and supplies; trading desk facilities (unless thesefacilities are provided by another subsidiary); authorization of expenditures and approval of bills forpayment; preparation of annual and semi-annual reports to fund shareholders, notices of dividends, capitalgains distributions and tax credits, and other regulatory reports; the daily pricing of fund investmentportfolios, including collecting quotations from pricing services; accounting services, including preparingand supervising publication of daily net asset value quotations, periodic earnings reports and other financialdata; services to ensure compliance with securities regulations, including recordkeeping requirements;preparation and filing of tax reports; the maintenance of accounting systems and controls; and otheradministrative services. In some cases our subsidiaries are compensated, based on a percentage of assetsunder management, under separate administration agreements with the funds. In other cases, our investmentmanagement subsidiary compensates our subsidiaries from fees received from our funds and clients. Thefunds generally pay their own expenses, such as external legal, custody and independent audit fees,regulatory registration fees, and other related expenses. The funds also share in board and shareholdermeeting and reporting costs.For the most part, the investment management agreements for our U.S. Funds must be renewed eachyear (after an initial two-year term), and must be specifically approved at least annually by a vote of eachfund’s board of directors or trustees as a whole and separately by the directors/trustees that are notinterested persons of such fund under the Investment Company Act of 1940 (the “Investment CompanyAct”), or by a vote of the holders of a majority of such fund’s outstanding voting securities.Under the majority of investment management agreements, the funds pay us a monthly fee in arrearsbased upon a fund’s average daily net assets. Annual fee rates under the various global investmentmanagement agreements generally range from 0.15% to a maximum of 2.50% and are often reduced as netassets exceed various threshold levels.We use a “master/feeder” fund structure in certain situations. This structure allows an investment adviserto manage a single portfolio of securities at the “master fund” level and have multiple “feeder funds” thatinvest all of their respective assets into the master fund. Individual and institutional shareholders invest in the“feeder funds”, which can offer a variety of service and distribution options. A management fee typically ischarged at the master fund level and administrative and shareholder servicing fees are charged at the feederfund level, although with certain funds, all fees may be charged at the feeder fund level.Each U.S. investment management agreement between certain of our subsidiaries and each U.S. Fundautomatically terminates in the event of its “assignment”, as defined in the Investment Company Act. Inaddition, either party may terminate the agreement without penalty after written notice ranging from 30 to7