An investment adviser registered with the Securities and
Exchange Commission may only charge a performance fee with respect
to "qualified clients." Under Rule 205-3 of the
Investment Advisers Act of 1940, a qualified client currently
includes a client who (i) has at least $750,000 under management
with the adviser or (ii) has a net worth of more than $1.5 million.
On July 12, 2011, the SEC issued an order (the "Order")
raising the dollar thresholds set forth above, such that a
performance fee may only be charged if the client (i) has at least
$1,000,000 under management of the investment adviser or (ii) has a
net worth of more than $2,000,000. These tests are measured at the
time the client contract is entered into. This change becomes
effective as of September 19, 2011. Certain states including
Massachusetts also follow the SEC's performance fee eligibility
test with respect to advisers located in the state, and it is
likely they will adjust their standards to match
