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EXHIBIT 5(n)
SUB-ADVISORY AGREEMENT
(CONNING MONEY MARKET PORTFOLIO)
AGREEMENT made as of ______ __, 1998 between Mississippi Valley
Advisors Inc., a Missouri corporation (the "Adviser"), and Conning Asset
Management Co., a Missouri corporation ("Sub-Adviser").
WHEREAS, The ARCH Fund, Inc. (the "Fund") is registered as an open-end,
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act");
WHEREAS, the Adviser has been appointed investment adviser to the
Fund's Conning Money Market Portfolio (the "Portfolio"); and
WHEREAS, the Adviser desires to retain Sub-Adviser to assist it in the
provision of a continuous investment program for the Portfolio and Sub-Adviser
is willing to do so;
WHEREAS, the Board of Directors of the Fund has approved this
Agreement, subject to approval by the shareholders of the Portfolio, and
Sub-Adviser is willing to furnish such services upon the terms and conditions
herein set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Adviser hereby appoints Sub-Adviser to act as sub-
adviser to the Portfolio as permitted by the Adviser's Advisory Agreement with
the Fund pertaining to the Portfolio. Intending to be legally bound, Sub-Adviser
accepts such appointment and agrees to render the services herein set forth for
the compensation herein provided.
2. Sub-Advisory Services. Subject to the supervision of the Fund's
Board of Directors, Sub-Adviser will assist the Adviser in providing a
continuous investment program for the Portfolio, including investment research
and management with respect to all securities and investments and cash
equivalents in the Portfolio. Sub-Adviser will provide services under this
Agreement in accordance with the Portfolio's investment objective, policies and
restrictions as stated in the Portfolio's prospectus and resolutions of the
Fund's Board of Directors applicable to the Portfolio.
Without limiting the generality of the foregoing, Sub-Adviser further
agrees that it:
(a) will determine from time to time in consultation with the
Advisor what securities and other investments will be purchased, retained or
sold for the Portfolio;
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(b) will place orders pursuant to its investment
determinations for the Portfolio either directly with the issuer or
with any broker or dealer;
(c) will manage the Portfolio's over cash position;
(d) will attend regular business and investment-related
meetings with the Fund's Board of Directors and the Adviser if
requested to do so by the Fund and/or the Adviser; and
(e) will maintain books and records with respect to the
securities transactions for the Portfolio, furnish to the Adviser and
the Fund's Board of Directors such periodic and special reports as they
may request with respect to the Portfolio, and provide in advance to
the Adviser all reports to the Board of Directors for examination and
review within a reasonable time prior to the Fund's Board meetings.
3. Covenants by Sub-Adviser. Sub-Adviser agrees with respect to the
services provided to the Portfolio that it:
(a) will conform with all Rules and Regulations of the
Securities and Exchange Commission;
(b) will telecopy trade information to the Adviser on the
first business day following the day of the trade and cause broker
confirmations to be sent directly to the Adviser; and
(c) will treat confidentially and as proprietary information
of the Fund all records and other information relative to the Fund and
prior, present or potential shareholders, and will not use such records
and information for any purpose other than performance of its
responsibilities and duties hereunder (except after prior notification
to and approval in writing by the Fund, which approval shall not be
unreasonably withheld and may not be withheld and will be deemed
granted where Sub-Adviser may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by
the Fund).
4. Services Not Exclusive. The services furnished by Sub-Adviser
hereunder are deemed not to be exclusive, and nothing in this Agreement shall
(i) prevent Sub-Adviser or any affiliated person (as defined in the 0000 Xxx) of
Sub-Adviser from acting as investment adviser or manager for any other person or
persons, including other management investment
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companies with investment objectives and policies the same as or similar to
those of the Portfolio or (ii) limit or restrict Sub-Adviser or any such
affiliated person from buying, selling or trading any securities or other
investments (including any securities or other investments which the Portfolio
is eligible to buy) for its or their own accounts or for the accounts of others
for whom it or they may be acting; provided, however, that Sub-Adviser agrees
that it will not undertake any activities which, in its reasonable judgment,
will adversely affect the performance of its obligations to the Portfolio under
this Agreement.
5. Portfolio Transactions. Investment decisions for the Portfolio shall
be made by Sub-Adviser independently from those for any other investment
companies and accounts advised or managed by Sub-Adviser. The Portfolio and such
investment companies and accounts may, however, invest in the same securities.
When a purchase or sale of the same security is made at substantially the same
time on behalf of the Portfolio and/or another investment company or account,
the transaction will be averaged as to price, and available investments
allocated as to amount, in a manner which Sub-Adviser believes to be equitable
to the Portfolio and such other investment company or account. In some
instances, this investment procedure may adversely affect the price paid or
received by the Portfolio or the size of the position obtained or sold by the
Portfolio. To the extent permitted by law, Sub-Adviser may aggregate the
securities to be sold or purchased for the Portfolio with those to be sold or
purchased for other investment companies or accounts in order to obtain best
execution.
Sub-Adviser shall place orders for the purchase and sale of portfolio
securities and will solicit broker-dealers to execute transactions in accordance
with the Portfolio's policies and restrictions regarding brokerage allocations.
Sub-Adviser shall place orders pursuant to its investment determinations for the
Portfolio either directly with the issuer or with any broker or dealer selected
by Sub-Adviser. In executing portfolio transactions and selecting brokers or
dealers, Sub-Adviser shall use its reasonable best efforts to seek the most
favorable execution of orders, after taking into account all factors Sub-Adviser
deems relevant, including the breadth of the market in the security, the price
of the security, the financial condition and execution capability of the broker
or dealer, and the reasonableness of the commission, if any, both for the
specific transaction and on a continuing basis. Consistent with this obligation,
Sub-Adviser may, to the extent permitted by law, purchase and sell portfolio
securities to and from brokers and dealers who provide brokerage and research
services (within the meaning of Section 28(e) of the Securities Exchange Act of
1934) to or for the benefit of the Portfolio and/or other accounts over which
Sub-Adviser or any of its affiliates exercises investment discretion.
Sub-Adviser is authorized to pay to a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction if
Sub-Adviser determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or
Sub-Adviser's overall responsibilities to the Portfolio and to the Fund. In no
instance will portfolio securities be purchased from or sold to the Adviser,
Sub-Adviser, or the Portfolio's principal underwriter, or any affiliated person
thereof except as permitted by the Securities and Exchange Commission.
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6. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, Sub-Adviser hereby agrees that all records which it
maintains for the Fund are the property of the Fund and further agrees to
surrender promptly to the Fund any of such records upon the Fund's request.
Sub-Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act.
7. Expenses. During the term of this Agreement, Sub-Adviser will pay
all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities, commodities and other investments
(including brokerage commissions and other transaction charges, if any)
purchased for the Portfolio.
8. Compensation.
(a) For the services provided and the expenses assumed with
respect to the Portfolio pursuant to this Agreement, Sub-Adviser will be
entitled to a fee, computed daily and payable monthly, from the Adviser,
calculated at the annual rate of .30% of the first $1.5 billion of the
Portfolio's average daily net assets, plus .25% of the next $1 billion of
average daily net assets, plus .15% of average daily net assets in excess of
$2.5 billion.
(b) If the Adviser reimburses the Fund, pursuant to Section
8(b) of the Advisory Agreement, with respect to the Portfolio, the Sub-Adviser
will bear its share of the amount of such reimbursement by waiving fees
otherwise payable to it hereunder on a proportionate basis to be determined by
comparing the aggregate fees otherwise payable to it hereunder with respect to
the Portfolio to the aggregate fees otherwise payable by the Fund to the Adviser
under the Advisory Agreement with respect to the Portfolio.
9. Standard of Care; Limitation of Liability. Sub-Adviser shall
exercise due care and diligence and use the same skill and care in providing its
services hereunder as it uses in providing services to other investment
companies, but shall not be liable for any action taken or omitted by
Sub-Adviser in the absence of bad faith, willful misconduct, gross negligence
or reckless disregard of its duties.
10. Reference to Sub-Adviser. Neither the Adviser nor any affiliate or
agent of it shall make reference to or use the name of Sub-Adviser or any of its
affiliates, or any of their clients, except references concerning the identity
of and services provided by Sub-Adviser to the Portfolio, which references shall
not differ in substance from those included in the current registration
statement pertaining to the Portfolio, this Agreement and the Advisory Agreement
between the Adviser and the Fund with respect to the Portfolio, in any
advertising or promotional materials without the prior approval of Sub-Adviser,
which approval shall not be unreasonably withheld or delayed. The Adviser hereby
agrees to make all reasonable efforts to cause the Fund and any affiliate
thereof to satisfy the foregoing obligation.
11. Duration and Termination. Unless sooner terminated, this Agreement
shall continue until ___________ , 2000, and thereafter shall continue
automatically for successive annual periods, provided such continuance is
specifically approved at least annually by the
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Fund's Board of Directors or vote of the lesser of (a) 67% of the shares of the
Portfolio represented at a meeting if holders of more than 50% of the
outstanding shares of the Portfolio are present in person or by proxy or (b)
more than 50% of the outstanding shares of the Portfolio, provided that in
either event its continuance also is approved by a majority of the Fund's
Directors who are not "interested persons" (as defined in the 0000 Xxx) of any
party to this Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval. This Agreement is terminable at any time
without penalty, on 60 days' notice, by Adviser, Sub-Adviser or by the Fund's
Board of Directors or by vote of the lesser of (a) 67% of the shares of the
Portfolio represented at a meeting if holders of more than 50% of the
outstanding shares of the Portfolio are present in person or by proxy or (b)
more than 50% of the outstanding shares of the Portfolio. This Agreement will
terminate automatically in the event of its assignment (as defined in the 1940
Act).
12. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Agreement shall be
effective with respect to the Portfolio until approved in accordance with the
1940 Act.
13. Notice. Any notice, advice or report to be given pursuant to this
Agreement shall be delivered or mailed:
To the Sub-Adviser at:
000 Xxxxxx Xxxxxx
Xx. Xxxxx, XX 00000
To the Adviser at:
One Mercantile Center
7th and Xxxxxxxxxx Xxxxxxx
Xxxxx 0000
Xx. Xxxxx, XX 00000
To the Fund at:
0000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
14. Miscellaneous. 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 shall be held or
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made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and shall be governed by
Maryland law.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
MISSISSIPPI VALLEY ADVISORS INC.
Attest:
___________________________ By:___________________________________
CONNING ASSET MANAGEMENT CO.
Attest:
___________________________ By:___________________________________
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