fp0001763_def14c.htm

SCHEDULE 14C INFORMATION

INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF THE

SECURITIES EXCHANGE ACT OF 1934

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WILSHIRE MUTUAL FUNDS, INC.

(Name of Registrant as Specified in Its Charter)

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IMPORTANT NEWS ABOUT WILSHIRE MUTUAL FUNDS, INC.

June 8, 2010

Dear Shareholder:

The Board of Directors of Wilshire Mutual Funds, Inc. (the “Company”) has approved a sub-advisory agreement between Wilshire Associates Incorporated (“Wilshire” or the “Adviser”) and Cornerstone Capital Management, Inc. (“Cornerstone”) pursuant to which Cornerstone will serve as a new sub-adviser to the Wilshire Large Company Growth Portfolio effective June 1, 2010, in addition to the current sub-advisers, Los Angeles Capital and Research and Victory Capital Management Inc. In conjunction with the hiring of Cornerstone as a sub-adviser, Wilshire terminated Payden & Rygel, Quest Investment Management and Sawgrass Asset Management, L.L.C. as sub-advisers to the Portfolio. Wilshire, the Company’s investment adviser, continues to oversee the sub-advisers.

The next few pages of this package feature more information about the new sub-adviser, including its investment processes and style. Please take a few moments to read them and call us at 1-888-200-6796 if you have any questions.

On behalf of the Board of Directors, I thank you for your continued investment in Wilshire Mutual Funds, Inc.

	Sincerely,


	/s/ Lawrence E. Davanzo
	Lawrence E. Davanzo
	President

WILSHIRE MUTUAL FUNDS, INC.

INFORMATION STATEMENT

TO INVESTMENT AND INSTITUTIONAL CLASS

SHAREHOLDERS OF THE

WILSHIRE LARGE COMPANY GROWTH PORTFOLIO

This document is an Information Statement and is being furnished to shareholders of the Wilshire Large Company Growth Portfolio (the “Portfolio”), a series of Wilshire Mutual Funds, Inc. (the “Company”), in lieu of a proxy statement pursuant to the terms of an exemptive order issued by the Securities and Exchange Commission (the “SEC”). Wilshire Associates Incorporated (“Wilshire” or the “Adviser”) serves as the investment adviser for the Company. The exemptive order permits Wilshire to employ additional sub-advisers, terminate sub-advisers, and modify sub-advisory agreements without prior approval of the Company’s shareholders.

Under the SEC order, if Wilshire retains a new sub-adviser or materially changes an existing sub-advisory agreement between Wilshire and a sub-adviser, shareholders of the affected funds of the Company are required to be provided an Information Statement explaining any changes and disclosing the aggregate fees paid to the sub-advisers as a result of those changes. A copy of the sub-advisory agreement with Cornerstone is attached to this Information Statement as Appendix A.

This Information Statement is being mailed on or about June 15, 2010 to the shareholders of the Portfolio of record as of June 1, 2010 (the “Record Date”). The Portfolio will bear the expenses incurred in connection with preparing and mailing this Information Statement. As of the Record Date, 6,556,347 shares of the Portfolio were issued and outstanding. Information on shareholders who owned beneficially 5% or more of the shares of the Portfolio as of the Record Date is set forth in Appendix B. To the knowledge of the Company, the executive officers and Directors of the Company as a group owned less than 1% of the outstanding shares of the Portfolio and of the Company as of the Record Date.

WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.

Appointment of New Sub-Adviser to the Wilshire Large Company Growth Portfolio

On May 21, 2010, the Board of Directors of the Company approved a sub-advisory agreement between Wilshire and Cornerstone Capital Management, Inc. (“Cornerstone” or the “Sub-adviser”), pursuant to which Cornerstone will serve as a new sub-adviser to the Wilshire Large Company Growth Portfolio (the “Portfolio”) effective June 1, 2010, in addition to the current sub-advisers of Los Angeles Capital Management and Research and Victory Capital Management Inc. In conjunction with the hiring of Cornerstone as a sub-adviser, Wilshire terminated Payden & Rygel, Quest Investment Management and Sawgrass Asset Management, L.L.C. as sub-advisers to the Portfolio. Wilshire, the Company’s investment adviser, continues to oversee the sub-advisers.

At the meeting on May 21, 2010, in connection with the review of Wilshire’s proposed sub-advisory agreement with Cornerstone (the “Agreement”), the Board evaluated information provided by Wilshire and the Sub-adviser in accordance with Section 15(c) of the Investment Company Act of 1940, as amended (the “1940 Act”).

The information in this summary outlines the Board’s considerations associated with its approval of the Agreement. In connection with its deliberations, the Board considered such information and factors as it believed to be relevant. As described below, the Board considered the nature, extent and quality of the services to be provided by the Sub-adviser under the Agreement; comparative fees as provided by the Sub-adviser; the profits to be realized by the Sub-adviser; the extent to which the Sub-adviser would realize economies of scale as the Portfolio grows; and whether any fall-out benefits will be realized by the Sub-adviser.

In considering these matters, the Board was advised with respect to relevant legal standards by independent counsel. In addition, the Directors who are not “interested persons” of the Company as defined in the Investment Company Act of 1940 (the “Independent Directors”) discussed the approval of the Agreement with management and in private sessions with counsel at which no representatives of the Sub-adviser were present. As required by the 1940 Act, the approval was confirmed by the unanimous separate vote of the Independent Directors. In deciding to approve the Agreement, the Board did not identify any single factor as controlling and this summary does not describe all of the matters considered. However, the Board concluded that each of th e various factors referred to below favored such approval.

As noted above, the Board, including all the Independent Directors, considered the Agreement at the Board’s May 21, 2010 meeting. The Adviser sent a memorandum to the Sub-adviser requesting information regarding the Agreement to be provided to the Directors in advance of the meeting.

In response to the request for information, the Directors received information from the Sub-adviser describing: (i) the nature, extent and quality of services to be provided, (ii) the investment performance for products managed by the Sub-adviser that are similar to the Portfolio, (iii) the financial condition of the Sub-adviser, (iv) the extent to which economies of scale may be realized as the Portfolio grows, (v) whether fee levels reflect any possible

economies of scale for the benefit of Portfolio shareholders, (vi) comparisons of services rendered and amounts paid to comparable advisory clients, as applicable, and (vii) benefits to be realized by the Sub-adviser from its relationship with the Portfolio. The Independent Directors also received a memorandum from counsel describing their duties in connection with contract approval, and they were assisted in their review by independent legal counsel.

Prior to consideration by the Board, the Contract Review Committee met on May 20, 2010 to discuss the information provided. It also considered the assessment of performance made by the Investment Committee (which is comprised solely of Independent Directors), which also met on May 20, 2010 to review data on the Sub-adviser’s performance. Following its evaluation of all materials provided, the Contract Review Committee concluded that it was in the best interests of the Portfolio to approve the Agreement and recommended to the Board that the Agreement be approved. At its meeting on May 21, 2010, the Board considered the recommendation of the Contract Review Committee along with the other factors that the Board deemed relevant.

The Board considered the nature, extent and quality of services to be provided under the Agreement. The Board considered the reputation, qualifications and background of the Sub-adviser, the investment approach of the Sub-adviser, experience and skills of investment personnel to be responsible for the day-to-day management of the Portfolio, and the resources made available to such personnel. The Board also considered the Sub-adviser’s general legal compliance and the assessment of the Company’s chief compliance officer regarding the Sub-adviser’s compliance program. In addition, the Board considered the analysis provided by the Adviser, which concluded that the Sub-adviser would provide reasonable services and recommended that the Agreement be approved.

Based upon all relevant factors, the Board concluded that the investment performance for products managed by the Sub-adviser that are similar to the Portfolio met or exceeded acceptable levels of investment performance and, therefore, were satisfactory.

The Board also considered the Sub-adviser’s proposed sub-advisory fee. The Board considered the Adviser’s evaluation of the competitiveness of the sub-advisory fee based upon data supplied by the Sub-adviser about fees charged to other clients. The Board also considered that the sub-advisory fee rate was negotiated at arm’s length between the Adviser and the Sub-adviser, that the Adviser compensates the Sub-adviser from its own fee and that the aggregate advisory fee had previously been deemed reasonable by the Board.

Based upon all of the above, the Board determined that the sub-advisory fee for the Sub-adviser was reasonable.

In addition, the Board noted that the revenues to the Sub-adviser would be limited due to the size of the Portfolio. Accordingly, the Board concluded that they need not review estimated levels of profits to the Sub-adviser in order to conclude, as they did, that profitability to the Sub-adviser would not be unreasonable.

The Board considered whether there may be economies of scale with respect to the sub-advisory services to be provided to the Portfolio and whether the sub-advisory fee rate under the

Agreement is reasonable in relation to the asset size of the Portfolio. The Board concluded that the fee schedule for the Sub-adviser reflects an appropriate recognition of any economies of scale.

The Board also considered the character and amount of other incidental benefits to be received by the Sub-adviser, including the Sub-adviser’s soft dollar arrangements. The Board concluded that, taking into account the benefits arising from these practices, the fee to be charged under the Agreement is reasonable.

Based upon all of the information considered and the conclusions reached, the Board determined that the terms of the Agreement are fair and reasonable and that the approval of the Agreement is in the best interests of the Portfolio.

Cornerstone

Cornerstone is located at 7101 West 78th Street, Suite 201, Bloomington, Minnesota 55439. Andrew S. Wyatt and Thomas G. Kamp, CFA own a majority of Cornerstone and are deemed to control it. Mr. Wyatt is Chief Executive Officer and a director of Cornerstone. Mr. Kamp is President, Chief Investment Officer and Portfolio Manager of Cornerstone and the portfolio manager of the Portfolio. As of December 31, 2009, Cornerstone managed approximately $1.4 billion in assets.

Cornerstone’s investment philosophy is premised on successfully identifying a “perception gap”, which it believes exists when consensus expectations fail to recognize the true earnings power of a given company. Cornerstone focuses broadly on companies with over $1 billion in market capitalization, strong management with a proven track record, and a sustainable competitive advantage. Fundamentally, Cornerstone looks to invest in companies with strong organic revenue and operating earnings growth, financially conservative firms whose net income is confirmed by free cash flows, and strong, flexible balance sheets. A further distinguishing feature of Cornerstone’s process is a short-term contrarian approach employed within the context of long-term fundamentals, where it will actively buy and sell around short-term price movement of a company as long as there are no changes to its long-term fundamental expectations. The strategy will typically hold around 35 to 55 securities.

Thomas G. Kamp, CFA, is responsible for managing Cornerstone’s portion of the Portfolio. Mr. Kamp is the President, Chief Investment Officer and Portfolio Manager of Cornerstone. He earned an MBA with a specialization in Accounting from Northwestern University and a BSME with a minor in Applied Mathematics from Southern Methodist University. Mr. Kamp has served as Portfolio Manager since 2010.

Aggregate Fees

Wilshire’s annual advisory fee for the Portfolio is 0.75%. For the fiscal year ended December 31, 2009, the Company paid Wilshire $1.49 million in fund level advisory fees for the Portfolio.

For the fiscal year ended December 31, 2009, the aggregate sub-advisory fees paid by Wilshire to all sub-advisers with respect to the Portfolio totaled $567,500. These aggregate sub-advisory fees represented 0.28% of the average net assets of the Portfolio for the fiscal year ended December 31, 2009.

For the fiscal year ended December 31, 2009, the aggregate sub-advisory fees that would have been paid by Wilshire if the Agreement was in effect with respect to the Portfolio were $591,000. The percentage difference between the amounts actually paid by Wilshire and the amounts that would have been paid by Wilshire under the Agreement is 0.01% for the Portfolio.

All sub-advisory fees are paid by Wilshire and not the Company. The fees paid by Wilshire to each sub-adviser depend on the fee rates negotiated by Wilshire and on the percentage of the Portfolio’s assets allocated to the Sub-adviser by Wilshire. Because Wilshire pays the Sub-adviser’s fees out of its own fees received from the Company, there is no “duplication” of advisory fees paid.

Terms of Agreement

The Agreement with Cornerstone will continue in effect until June 1, 2012, unless sooner terminated as provided in certain provisions contained in the Agreement. The Agreement will continue in effect from year to year thereafter so long as it is specifically approved for the Portfolio at least annually in the manner required by the 1940 Act.

The Agreement will automatically terminate in the event of its assignment (as defined in the 1940 Act) and may be terminated at any time without payment of any penalty by Wilshire or the Sub-adviser on sixty days’ prior written notice to the other party. The Agreement may also be terminated by the Portfolio by action of the Board or by a vote of a majority of the outstanding voting securities of the Portfolio (as defined by the 1940 Act) on sixty days’ written notice to the Sub-adviser by the Portfolio. The Agreement will automatically terminate with respect to the Portfolio if the Investment Advisory Agreement between Wilshire and the Portfolio is terminated, assigned or not renewed.

Additional Disclosure Regarding the Sub-adviser

The names and principal occupations of the principal executive officers and each director of Cornerstone, all located at 7101 West 78th Street, Suite 201, Bloomington, Minnesota 55439, are listed below:

NAME	TITLE/PRINCIPAL OCCUPATION
Andrew S. Wyatt	Chief Executive Officer, Director and Chair of Cornerstone’s Investment Policy Committee (1993 – present)
Thomas G. Kamp	President and Chief Investment Officer (2006 – present)
Thomas C. Berkowitz	Senior Vice President of Cornerstone (2006 – present)

Cornerstone also serves as the sponsor of, and provides investment management services to, the Keystone Mutual Funds, which currently offers its shares in one series, the Keystone Large Cap Growth Fund. The Keystone Large Cap Growth Fund has a similar investment objective to that of the Portfolio. The Keystone Large Cap Growth Fund pays Cornerstone an investment management fee of 0.70%. Cornerstone has entered into an Expense Limitation Agreement which requires Cornerstone to reduce its fees and /or absorb expenses of the Large Cap Growth Fund to ensure that the Fund’s total annual operating expenses for the Fund’s Class A, Class C and Class I shares do not exceed 1.50%, 2.20% and 1.20%, respectively, of the Fund’s average net assets, excluding front-end or co ntingent deferred loads, taxes, leverage interest, brokerage commissions, expenses incurred in connection with any merger or reorganization or extraordinary expenses, until October 31, 2010.

Distributor and Administrator

Pursuant to an Underwriting Agreement, SEI Investments Distribution Co., One Freedom Valley Drive, Oaks, Pennsylvania 19456, is the distributor for the continuous offering of shares of the Company and acts as agent of the Company in the sale of its shares. SEI Investments Global Funds Services (the “Administrator”), One Freedom Valley Drive, Oaks, Pennsylvania 19456, an affiliate of the Distributor, is the administrator for the Company. SEI Investments Management Corporation, a wholly owned subsidiary of SEI Investments Company, is the owner of all beneficial interests in the Administrator.

Other Information

THE COMPANY WILL FURNISH, WITHOUT CHARGE, A COPY OF THE MOST RECENT ANNUAL REPORT AND SEMI-ANNUAL REPORT TO SHAREHOLDERS OF THE PORTFOLIO UPON REQUEST. REQUESTS FOR SUCH REPORTS SHOULD BE DIRECTED TO WILSHIRE MUTUAL FUNDS, INC. C/O DST SYSTEMS, INC. 333 W. 11TH STREET, KANSAS CITY, MO 64105, OR BY CALLING 1-888-200-6796.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF THIS INFORMATION STATEMENT:

The Information Statement is available at: www.wilshirefunds.com

APPENDIX A

INVESTMENT SUB-ADVISORY AGREEMENT

This Investment Sub-Advisory Agreement (“Agreement”) is made as of the 23rd day of March, 2010 by and between Wilshire Associates Incorporated, a California corporation (“Adviser”), and Cornerstone Capital Management, Inc., a registered investment adviser (“Sub-Adviser”).

Whereas Adviser is the investment adviser of the Wilshire Mutual Funds, Inc. (the “Fund”), an open-end diversified, management investment company registered under the Investment Company Act of 1940, as amended (“1940 Act”), currently consisting of six separate series or portfolios (collectively, the “Fund Portfolios”) including the Large Company Growth Portfolio, the Large Company Value Portfolio, the Small Company Growth Portfolio, the Small Company Value Portfolio, the Wilshire 5000 Index Fund and the Wilshire Large Cap Core 130/30 Fund;

Whereas Adviser desires to retain Sub-Adviser to furnish investment advisory services for the Fund Portfolio(s) as described in Exhibit 1 – Fund Portfolio Listing, as may be amended from time to time, and Sub-Adviser wishes to provide such services, upon the terms and conditions set forth herein;

Now Therefore, in consideration of the mutual covenants herein contained, the parties agree as follows:

1. Appointment. Adviser hereby appoints Sub-Adviser to provide certain sub-investment advisory services to each Fund Portfolio for the period and on the terms set forth in this Agreement. Sub-Adviser hereby accepts such appointment and agrees to furnish the services set forth for the compensation herein provided.

2. Sub-Adviser Services. Subject always to the supervision of the Fund’s Board of Directors and Adviser, Sub-Adviser will furnish an investment program in respect of, and make investment decisions for, such portion of the assets of each Fund Portfolio as Adviser shall from time to time designate (each a “Portfolio Segment”) and place all orders for the purchase and sale of securities on behalf of each Portfolio Segment. In the performance of its duties, Sub-Adviser will satisfy its fiduciary duties to the Fund and each Fund Portfolio and will monitor a Portfolio Segment’s investments, and will comply with the provisions of the Fund’s Articles of Incorporation and By-laws, as amended from time to time, and the stated investment objectives, policies and restrictions of each Fund Portfolio as set forth in the prospectus and Statement of Additional Information for each Fund Portfolio, as amended from time to time, as well as any other objectives, policies or limitations as may be provided by Adviser to Sub-Adviser in writing from time to time.

Sub-Adviser will provide reports at least quarterly to the Board of Directors and to Adviser. Sub-Adviser will make its officers and employees available to Adviser and the Board of Directors from time to time at reasonable times to review investment policies of each Fund Portfolio with

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respect to each Portfolio Segment and to consult with Adviser regarding the investment affairs of each Portfolio Segment.

Sub-Adviser agrees that it:

(a) will use the same skill and care in providing such services as it uses in providing services to fiduciary accounts for which it has investment responsibilities;

(b) will conform with all applicable provisions of the 1940 Act and rules and regulations of the Securities and Exchange Commission in all material respects and in addition will conduct its activities under this Agreement in accordance with any applicable laws and regulations of any governmental authority pertaining to its investment advisory activities, including all portfolio diversification requirements necessary for each Portfolio Segment to comply with subchapter M of the Internal Revenue Code as if each were a regulated investment company thereunder;

(c) to the extent authorized by Adviser in writing, and to the extent permitted by law, will execute purchases and sales of portfolio securities and other investments for each Portfolio Segment through brokers or dealers designated by management of the Fund to Adviser for the purpose of providing direct benefits to the Fund, provided that Sub-Adviser determines that such brokers or dealers will provide best execution in view of all appropriate factors, and is hereby authorized as the agent of the Fund to give instructions to the Fund’s custodian as to deliveries of securities or other investments and payments of cash of each Portfolio Segment to such brokers or dealers for the account of the relevant Fund Portfolio. Adviser and the Fund understand that the brokerage commissions or transaction costs in such transactions may be higher than those which the Sub-Adviser could obtain from another broker or dealer, in order to obtain such benefits for the Fund;

(d) is authorized to and will select all other brokers or dealers that will execute the purchases and sales of portfolio securities for each Portfolio Segment and is hereby authorized as the agent of the Fund to give instructions to the Fund’s custodian as to deliveries of securities or other investments and payments of cash of each Portfolio Segment for the account of each Fund Portfolio. In making such selection, Sub-Adviser is directed to use its best efforts to obtain best execution, which includes most favorable net results and execution of a Portfolio Segment’s orders, taking into account all appropriate factors, including price, dealer spread or commission, size and difficulty of the transaction and research or other services provided. With respect to t ransactions under sub-paragraph (c) or this sub-paragraph (d), it is understood that Sub-Adviser will not be deemed to have acted unlawfully, or to have breached a fiduciary duty to the Fund or in respect of any Fund Portfolio, or be in breach of any obligation owing to the Fund or in respect of any Fund Portfolio under this Agreement, or otherwise, solely by reason of its having caused a Fund Portfolio to pay a member of a securities exchange, a broker or a dealer a commission for effecting a securities transaction of a Fund Portfolio in excess of the amount of commission another member of an exchange, broker or dealer would have charged if Sub-Adviser determined in good faith that the commission paid was reasonable in relation to the brokerage and research services provided by such member, broker, or dealer, viewed in terms of that particular transaction or Sub-Adviser’s overall

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responsibilities with respect to its accounts, including the Fund, as to which it exercises investment discretion. The Adviser may, from time to time, engage other sub-advisers to advise portions of a Fund Portfolio other than the Portfolio Segment. The Sub-Adviser agrees that it will not consult with any other sub-adviser engaged by the Adviser with respect to transactions in securities or other assets concerning a Fund Portfolio, except to the extent permitted by certain exemptive rules under the 1940 Act that permit certain transactions with a sub-adviser or its affiliates.

(e) is authorized to consider for investment by each Portfolio Segment securities that may also be appropriate for other funds and/or clients served by Sub-Adviser. To assure fair treatment of each Portfolio Segment and all other clients of Sub-Adviser in situations in which two or more clients’ accounts participate simultaneously in a buy or sell program involving the same security, such transactions will be allocated among each Portfolio Segment and other clients in a manner deemed equitable by Sub-Adviser. Sub-Adviser is authorized to aggregate purchase and sale orders for securities held (or to be held) in each Portfolio Segment with similar orders being made on the same day for other client accounts or portfolios managed by Sub-Adviser. Wh en an order is so aggregated, the actual prices applicable to the aggregated transaction will be averaged and each Portfolio Segment and each other account or portfolio participating in the aggregated transaction will be treated as having purchased or sold its portion of the securities at such average price, and all transaction costs incurred in effecting the aggregated transaction will be shared on a pro-rata basis among the accounts or portfolios (including each Portfolio Segment) participating in the transaction. Adviser and the Fund understand that Sub-Adviser may not be able to aggregate transactions through brokers or dealers designated by Adviser with transactions through brokers or dealers selected by Sub-Adviser, in which event the prices paid or received by each Portfolio Segment will not be so averaged and may be higher or lower than those paid or received by other accounts or portfolios of Sub-Adviser;

(f) will report regularly to Adviser and to the Board of Directors and will make appropriate persons available for the purpose of reviewing with representatives of Adviser and the Board of Directors on a regular basis at reasonable times the management of each Portfolio Segment, including without limitation, review of the general investment strategies of each Portfolio Segment, the performance of each Portfolio Segment in relation to standard industry indices, interest rate considerations and general conditions affecting the marketplace, and will provide various other reports from time to time as reasonably requested by Adviser;

(g) will prepare such books and records with respect to each Portfolio Segment’s securities transactions as requested by Adviser and will furnish Adviser and the Fund’s Board of Directors such periodic and special reports as the Board or Adviser may reasonably request;

(h) will vote all proxies with respect to securities in each Portfolio Segment;

(i) shall have the authority, at its discretion, to file proof of claim forms in connection with any litigation or other proceeding based upon the Sub-Adviser’s records

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regarding any security held in the Portfolio Segment unless otherwise limited herein. In determining whether to file proof of claim forms, Sub-Adviser will use reasonable discretion; and

(j) will act upon reasonable instructions from Adviser which, in the reasonable determination of Sub-Adviser, are not inconsistent with Sub-Adviser’s fiduciary duties under this Agreement.

3. Expenses. During the term of this Agreement, Sub-Adviser will provide the office space, furnishings, equipment and personnel required to perform its activities under this Agreement, and will pay all customary management expenses incurred by it in connection with its activities under this Agreement, which shall not include the cost of securities (including brokerage commissions, if any) purchased for each Portfolio Segment. Sub-Adviser agrees to bear any Portfolio expenses caused by future changes at Sub-Adviser, such expenses including but not limited to preparing, printing, and mailing to Portfolio shareholders of information statements or stickers to or complete prospectuses or statements of additional information.

4. Compensation. For the services provided and the expenses assumed under this Agreement, Adviser will pay Sub-Adviser, and Sub-Adviser agrees to accept as full compensation therefore, a sub-advisory fee computed and paid as set forth in Exhibit 2 - Fee Schedule.

5. Other Services. Sub-Adviser will for all purposes herein be deemed to be an independent contractor and will, unless otherwise expressly provided or authorized, have no authority to act for or represent Adviser, the Fund or a Fund Portfolio or otherwise be deemed an agent of Adviser, the Fund or a Fund Portfolio. Adviser understands and has advised the Fund’s Board of Directors that Sub-Adviser may act as an investment adviser or sub-investment adviser to other investment companies and other advisory clients. Sub-Adviser understands that during the term of this Agreement Adviser may retain one or more other sub-advisers with respect to any portion of the assets of a Fund Portfolio other than each Portfolio Segment.

6. Affiliated Broker. Sub-Adviser or an affiliated person of Sub-Adviser may act as broker for each Fund Portfolio in connection with the purchase or sale of securities or other investments for each Portfolio Segment, subject to: (a) the requirement that Sub-Adviser seek to obtain best execution as set forth above; (b) the provisions of the Investment Advisers Act of 1940, as amended (the “Advisers Act”); (c) the provisions of the Securities Exchange Act of 1934, as amended; and (d) other applicable provisions of law. Subject to the requirements of applicable law and any procedures adopted by the Fund’s Board of Di rectors, Sub-Adviser or its affiliated persons may receive brokerage commissions, fees or other remuneration from the Fund Portfolio or the Fund for such services in addition to Sub-Adviser’s fees for services under this Agreement.

7. Representations of Sub-Adviser. Sub-Adviser is registered with the Securities and Exchange Commission under the Advisers Act. Sub-Adviser shall remain so registered throughout the term of this Agreement and shall notify Adviser immediately if Sub-Adviser ceases to be so registered as an investment adviser. Sub-Adviser: (a) is duly organized and validly existing under the laws of the state of its organization with the power to own and possess

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its assets and carry on its business as it is now being conducted, (b) has the authority to enter into and perform the services contemplated by this Agreement, (c) is not prohibited by the 1940 Act or the Advisers Act from performing the services contemplated by this Agreement, (d) has met, and will continue to seek to meet for the duration of this Agreement, any other applicable federal or state requirements, and the applicable requirements of any regulatory or industry self-regulatory agency, necessary to be met in order to perform its services under this Agreement, (e) will promptly notify Adviser of the occurrence of any event that would disqualify it from serving as an investment adviser to an investment company pursuant to Section 9(a) of the 1940 Act, and (f) will notify Adviser of any change in con trol of the Sub-Adviser within a reasonable time after such change.

8. Books and Records. Sub-Adviser will maintain, in the form and for the period required by Rule 31a-2 under the 1940 Act, all records relating to each Portfolio Segment’s investments that are required to be maintained by the Fund pursuant to the requirements of paragraphs (b)(5), (b)(6), (b)(7), (b)(9), (b)(10) and (f) of Rule 31a-1 under the 1940 Act. Sub-Adviser agrees that all books and records which it maintains for each Fund Portfolio or the Fund are the property of the Fund and further agrees to surrender promptly to the Adviser or the Fund any such books, records or information upon the Adviser’s or the Fund’s request (provide d, however, that Sub-Adviser may retain copies of such records). All such books and records shall be made available, within five business days of a written request, to the Fund’s accountants or auditors during regular business hours at Sub-Adviser’s offices. Adviser and the Fund or either of their authorized representatives shall have the right to copy any records in the possession of Sub-Adviser which pertain to each Fund Portfolio or the Fund. Such books, records, information or reports shall be made available to properly authorized government representatives consistent with state and federal law and/or regulations. In the event of the termination of this Agreement, all such books, records or other information shall be returned to Adviser or the Fund (provided, however, that Sub-Adviser may retain copies of such records as required by law).

Sub-Adviser agrees that it will not disclose or use any records or confidential information obtained pursuant to this Agreement in any manner whatsoever except as authorized in this Agreement or in writing by Adviser or the Fund, or if such disclosure is required by federal or state regulatory authorities. Sub-Adviser may disclose the investment performance of each Portfolio Segment, provided that such disclosure does not reveal the identity of Adviser, each Fund Portfolio or the Fund or the composition of each Portfolio Segment. Sub-Adviser may, disclose that Adviser, the Fund and each Fund Portfolio are its clients; provided, however, that Sub-Adviser will not advertise or market its relationship with Adviser or the Fund or issue press releases regarding such relationships without the express written prior conse nt of Adviser. Notwithstanding the foregoing, Sub-Adviser may disclose (i) the investment performance of each Portfolio Segment to Fund officers and [directors/trustees] and other service providers of the Fund, and (ii) any investment performance that is public information to any person.

9. Code of Ethics. Sub-Adviser has adopted a written code of ethics complying with the requirements of Rule 17j-1 under the 1940 Act and will provide Adviser and the Fund with a copy of such code. Within 35 days of the end of each calendar quarter during which this Agreement remains in effect, the chief compliance officer of Sub-Adviser shall certify to Adviser or the Fund that Sub-Adviser has complied with the requirements of Rule 17j-1 during the previous quarter and that there have been no violations of Sub-Adviser’s code of ethics or, if any

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violation has occurred that is material to the Fund, the nature of such violation and of the action taken in response to such violation.

10. Limitation of Liability. Neither Sub-Adviser nor any of its partners, officers, stockholders, agents or employees shall have any liability to Adviser, the Fund or any shareholder of the Fund for any error of judgment, mistake of law, or loss arising out of any investment, or for any other act or omission in the performance by Sub-Adviser of its duties hereunder, except for liability resulting from willful misfeasance, bad faith, or negligence on Sub-Adviser’s part in the performance of its duties or from reckless disregard by it of its obligations and duties under this Agreement, except to the extent otherwise provided in Section 36(b) of the 1940 Act concerni ng loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services.

Sub-Adviser agrees to indemnify and defend Adviser, its officers, directors, employees and any person who controls Adviser for any loss or expense (including reasonable attorneys’ fees) arising out of or in connection with any claim, demand, action, suit or proceeding relating to any actual or alleged material misstatement or omission in the Fund’s registration statement, any proxy statement, or any communication to current or prospective investors in each Fund Portfolio, made by Sub-Adviser and provided to Adviser or the Fund by Sub-Adviser.

11. Term and Termination. This Agreement shall become effective with respect to each Portfolio Segment on June 1, 2010 and shall remain in full force until June 1, 2012, unless sooner terminated as hereinafter provided. This Agreement shall continue in force from year to year thereafter with respect to each Fund Portfolio, but only as long as such continuance is specifically approved for each Fund Portfolio at least annually in the manner required by the 1940 Act and the rules and regulations thereunder; provided, however, that if the continuation of this Agreement is not approved for a Fund Portfolio, Sub-Adviser may continue to serve in such capacity for such Fu nd Portfolio in the manner and to the extent permitted by the 1940 Act and the rules and regulations thereunder.

This Agreement shall terminate as follows:

(a) This Agreement shall automatically terminate in the event of its assignment (as defined in the 1940 Act) and may be terminated with respect to any Fund Portfolio at any time without the payment of any penalty by Adviser or by Sub-Adviser on sixty days written notice to the other party. This Agreement may also be terminated by the Fund with respect to any Fund Portfolio by action of the Board of Directors or by a vote of a majority of the outstanding voting securities of such Fund Portfolio (as defined in the 1940 Act) on sixty days written notice to Sub-Adviser by the Fund.

(b) This Agreement may be terminated with respect to any Fund Portfolios at any time without payment of any penalty by Adviser, the Board of Directors or a vote of majority of the outstanding voting securities of such Fund Portfolio in the event that Sub-Adviser or any officer or director of Sub-Adviser has taken any action which results in a material breach of the covenants of Sub-Adviser under this Agreement.

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(c) This Agreement shall automatically terminate with respect to a Fund Portfolio in the event the Investment Management Agreement between Adviser and the Fund with respect to that Fund Portfolio is terminated, assigned or not renewed.

Termination of this Agreement shall not affect the right of Sub-Adviser to receive payments of any unpaid balance of the compensation described in Section 4 earned prior to such termination.

12. Notice. Any notice under this Agreement by a party shall be in writing, addressed and delivered, mailed postage prepaid, or sent by facsimile transmission with confirmation of receipt, to the other party at such address as such other party may designate for the receipt of such notice.

13. Limitations on Liability. The obligations of the Fund entered into in the name or on behalf thereof by any of its directors, representatives or agents are made not individually but only in such capacities and are not binding upon any of the directors, officers, or shareholders of the Fund individually but are binding upon only the assets and property of the Fund, and persons dealing with the Fund must look solely to the assets of the Fund and those assets belonging to each Fund Portfolio for the enforcement of any claims.

14. Adviser Responsibility. Adviser will provide Sub-Adviser with copies of the Fund’s Articles of Incorporation, By-laws, prospectus, and Statement of Additional Information and any amendment thereto, and any objectives, policies or limitations not appearing therein as they may be relevant to Sub-Adviser’s performance under this Agreement; provided, however, that no changes or modifications to the foregoing shall be binding on Sub-Adviser until it is notified thereof.

15. Arbitration of Disputes. Any claim or controversy arising out of or relating to this Agreement which is not settled by agreement of the parties shall be settled by arbitration in Santa Monica, California before a panel of three arbitrators in accordance with the commercial arbitration rules of the American Arbitration Association then in effect. The parties agree that such arbitration shall be the exclusive remedy hereunder, and each party expressly waives any right it may have to seek redress in any other forum. Any arbitrator acting hereunder shall be empowered to assess no remedy other than payment of fees and out-of-pocket damages. Ea ch party shall bear its own expenses of arbitration, and the expenses of the arbitrators and of a transcript of any arbitration proceeding shall be divided equally between the parties. Any decision and award of the arbitrators shall be binding upon the parties, and judgment thereon may be entered in the Superior Court of the State of California or any other court having jurisdiction. If litigation is commenced to enforce any such award, the prevailing party will be entitled to recover reasonable attorneys’ fees and costs.

16. Miscellaneous. This Agreement sets forth the entire understanding of the parties with respect to the subject matter hereof and may be amended only by written consent of both parties. The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. If any provision of this Agreement is held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement will not be affected thereby. This Agreement will be binding upon and shall inure to the benefit of the parties and their respective s uccessors.

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17. Applicable Law. This Agreement shall be construed in accordance with applicable federal law and the laws of the state of California.

Adviser and Sub-Adviser have caused this Agreement to be executed as of the date and year first above written.

WILSHIRE ASSOCIATES INCORPORATED		Cornerstone Capital Management, Inc.

By:	/s/ Lawrence E. Davanzo	By:	/s/ Andrew S. Wyatt

Title:	President	Title:	CEO

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EXHIBIT 1

FUND PORTFOLIO LISTING

Wilshire Large Company Growth Fund

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EXHIBIT 2

FEE SCHEDULE

Adviser shall pay Sub-Adviser, promptly after receipt by Adviser of its advisory fee from the Fund with respect to each Fund Portfolio each calendar month during the term of this Agreement, a fee based on the average daily net assets of each Portfolio Segment, at the following annual rates:

All Assets: ___%

Sub-Adviser’s fee shall be accrued daily at 1/365th of the annual rate set forth above. For the purpose of accruing compensation, the net assets of each Portfolio Segment will be determined in the manner and on the dates set forth in the current prospectus of the Fund with respect to each Fund Portfolio and, on days on which the net assets are not so determined, the net asset value computation to be used will be as determined on the immediately preceding day on which the net assets were determined. Upon the termination of this Agreement, all compensation due through the date of termination will be calculated on a pro-rata basis through the date of termination and paid within thirty business days of the date of termination.

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APPENDIX B

The following table sets forth, as of June 1, 2010, the holders of the capital stock of the Portfolio known by the Portfolio to own, control or hold with power to vote 5% or more of its outstanding securities

WILSHIRE LARGE COMPANY GROWTH PORTFOLIO

Investment Class

Shareholders	Percentage Owned
Charles Schwab & Co. Attn: Mutual Funds Reinvest Account 101 Montgomery St. San Francisco, CA 94104-4151	62.17%
Horace Mann Life Insurance Company Separate Account Attn: Kris Cervellone 1 Horace Mann Plaza Springfield, IL 62715-0002	16.14%

WILSHIRE LARGE COMPANY GROWTH PORTFOLIO

Institutional Class

Shareholders	Percentage Owned
Horace Mann Life Insurance Company Separate Account Attn: Kris Cervellone 1 Horace Mann Plaza Springfield, IL 62715-0002	26.28%
Charles Schwab & Co. Attn: Mutual Funds Reinvest Account 101 Montgomery St. San Francisco, CA 94104-4151	11.03%

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