Exhibit 24(b)5b
INVESTMENT SUBADVISORY CONTRACT
CONTRACT made this ____ day of ____________ 1997, by and between AIB Govett
Inc. (the "Manager"), a Maryland corporation, and AIB Govett Asset Management
Limited (former, Xxxx Xxxxxx & Co. Limited) (the "Subadviser"), a U.K. company.
WHEREAS, each of the Manager and the Subadviser is a registered investment
adviser under the Investment Advisers Act of 1940, as amended (the "Advisers
Act");
WHEREAS, The Govett Funds, Inc., a Maryland corporation (the "Company"), is
registered as an open-end, management investment company under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), and, pursuant to
the Investment Management Contract dated of even date herewith (the "Investment
Management Contract") between the Company and the Manager, the Manager provides
investment advisory and administrative services to the Company for each of the
separate series of the Company's Common Stock;
WHEREAS, the Company offers separate series of Common Stock, each series
representing interests in a separate investment portfolio (such series referred
to individually as a "Portfolio" and collectively as "Portfolios"), the names of
which are identified on Schedule A hereto;
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WHEREAS, AIB Asset Management Holdings Limited, the parent company of Xxxx
Xxxxxx & Co. Limited and AIB Govett, Inc., has decided to reorganize its
investment management operations by (i) consolidating all of Xxxx Xxxxxx & Co.
Limited's U.S. operations into AIB Govett, Inc., an entity organized under the
laws of the United States for the purpose of facilitating the reorganization and
managed by substantially the same officers and directors as Xxxx Xxxxxx & Co.
Limited, and (ii) changing the name of Xxxx Xxxxxx & Co. Limited to AIB Govett
Asset Management Limited;
WHEREAS, as part of the reorganization, and subject to the approval of the
Board of Directors of the Company, (i) AIB Govett, Inc. desires to assume the
responsibilities of Xxxx Xxxxxx & Co. Limited under the Investment Management
Contract as Manager to the Portfolios of the Company immediately prior to the
amendment and restatement of that Contract, and (ii) Xxxx Xxxxxx & Co. Limited,
now AIB Govett Asset Management Limited, desires to become a Subadviser to those
Portfolios pursuant to this Investment Subadvisory Contract;
WHEREAS, the Board of Directors of the Company, upon a finding that the
reorganization will not result in any change of actual control or management of
the manager to the Portfolios, has consented to AIB Govett, Inc. assuming the
responsibilities of Xxxx Xxxxxx & Co. Limited as Manager under the terms of the
Exhibit 24(b)5b
Investment Management Contract and to Xxxx Xxxxxx & Co. Limited assuming the
responsibilities as Subadviser under the terms of this Investment Subadvisory
Contract; and
WHEREAS, the Manager desires to retain the Subadviser under the terms of
this Contract to render investment advisory services to the Company and to each
of the Portfolios listed on Schedule A hereto, and the Manager may retain the
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Subadviser to render such services to additional series from time to time by
notifying the Subadviser, and if the Subadviser is willing to render such
services on the terms provided herein, such series of shares shall become a
Portfolio hereunder, in each case subject to all approvals required pursuant to
the requirements of the Investment Company Act;
and
WHEREAS, the Subadviser is willing to render such services under the terms
of this Contract;
NOW THEREFORE, it is hereby agreed:
1. Appointment of Subadviser. The Manager hereby appoints the Subadviser
to act as investment subadviser adviser to the Company and the Portfolios for
the period and on such terms as are set forth in this Contract. The
Subadviser hereby accepts such appointment and agrees to render the services
herein set forth for the compensation herein provided.
2. Duties as Investment Subadviser. Subject to the supervision of the
Company's Board of Directors ("Board") and the Manager, the Subadviser will be
responsible for providing a continuous investment program for each of the
Company's Portfolios, including the provision of investment research and
management with respect to all securities and investments and cash equivalents
purchased, sold or held in the Portfolios and the selection of brokers and
dealers through which securities transactions for the respective Portfolios will
be executed. In carrying out its responsibilities under this Contract, the
Subadviser will at all times act in accordance with the investment objectives,
policies and restrictions of each Portfolio as stated in the current
Registration Statement as it may be amended from time to time ("Registration
Statement") as well as all applicable rules and regulations of the Securities
and Exchange Commission.
The Subadviser further agrees that it will:
(a) report regularly to the Manager and to the Company's Board of
Directors and make available appropriate persons for the purposes of
reviewing with representatives of the Manager and the Company on a regular
basis at reasonable times the management of the Portfolios, including,
without limitation, review of the general investment strategy of the
Portfolios, the
Exhibit 24(b)5b
performance of the Portfolios in relation to standard industry indices,
interest rate considerations and general conditions affecting the
marketplace;
(b) conform with all applicable regulations of the Securities and
Exchange Commission and conduct its activities under this Contract in
accordance with all applicable regulations of any governmental authority
with jurisdiction over the Subadviser's investment advisory activities
hereunder;
(c) maintain all books and records with respect to the securities
transactions of each Portfolio and furnish to the Board such special
reports as the Board may request from time to time; and
(d) will receive the research and recommendations of the Manager
with respect to the investment and reinvestment of the management of the
Portfolios.
3. Orders and Commissions. In placing orders with brokers and dealers,
the Subadviser shall obtain the most favorable execution of such orders.
However, the Subadviser may, in its discretion, purchase and sell portfolio
securities to and from brokers and dealers who provide the Manager or Subadviser
with research, analysis, advice and similar services, and the Subadviser may
cause the Manager to pay to those brokers or dealers on behalf of the Company,
in return for research and analysis, a higher commission or spread than may be
charged by other brokers or dealers, provided that the Subadviser determines in
good faith that such commission or spread is reasonable in terms either of the
particular transaction or of the overall responsibility of the Subadviser to the
Manager, the Company or both, and any other accounts with respect to which the
Subadviser exercises investment discretion. In no instance will securities be
purchased from or sold to the Subadviser or any affiliated person of the
Subadviser except in accordance with the rules and regulations promulgated by
the Securities and Exchange Commission pursuant to the Investment Company Act.
4. Services Not Exclusive. The services furnished by the Subadviser
hereunder are not to be deemed exclusive, and the Subadviser shall be free to
furnish similar services to others so long as its services under this Contract
are not impaired thereby.
5. Books and Records. In compliance with the requirements of Rule 31a-3
under the Investment Company Act, all records that the Subadviser maintains for
any of the Company, the Manager and the Portfolios are the property of the
Company or the Manager, as the case may be, and the Subadviser will surrender
promptly to the Company or the Manager any of such records upon request by the
Company or the Manager, respectively. The Subadviser will preserve for the
periods prescribed by Rule 31a-2 under the Investment Company Act the records
required to be maintained by it pursuant to Rule 31a-1 under the Investment
Company Act.
Exhibit 24(b)5b
6. Expenses of the Manager. During the term of this Contract, the
Subadviser will bear all expenses incurred in the conduct of its operations,
except:
(a) the cost (including brokerage commissions) of securities
purchased or sold by the Portfolios and any losses incurred in connection
therewith; and
(b) those expenses not specifically assumed by the Manager or
another person.
7. Compensation. For the services provided and the expenses assumed
pursuant to this Contract, the Manager will pay to the Subadviser a monthly fee
calculated at the per annum rate reflected on Schedule A to this Contract.
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8. Limitation of Liability of the Subadviser. The Subadviser shall not
be liable for any error of judgment or mistake of law or for any loss suffered
by the Manager, the Company or any of its Portfolios in connection with the
matters to which this Contract relates including, without limitation, losses
that may be sustained in connection with the purchase, holding, redemption, or
sale of any security on behalf of any Portfolio of the Company, except a loss
resulting from the willful misfeasance, bad faith or gross negligence of the
Subadviser in the performance of its duties or from reckless disregard by it of
its obligations and duties under this Contract. Any person, even though also an
officer, director, partner, employee, or agent of the Subadviser, who may be or
become an officer, director, employee or agent of the Company or the Manager
shall be deemed, when rendering services to the Manager, Company or any of its
Portfolios or acting in any business of the Manager, Company or any of its
Portfolios, to be rendering such services to, or acting solely for, the Manager,
the Company or any of its Portfolios and not as an officer, partner, employee,
or agent or one under the control or direction of the Subadviser even though
paid by the Subadviser.
9. Duration and Termination. This Contract shall become effective upon
the date first above written and, unless sooner terminated as provided herein,
shall continue automatically with respect to such Portfolio(s) for successive
periods of twelve months each, so long as such continuance is specifically
approved with respect to such Portfolio(s) at least annually by (a) the vote of
a majority of those members of the Board who are not parties to this Contract or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval; and (b) all of the members of the Board or
by vote of the holders of a majority of the outstanding voting securities of
such Portfolio(s).
Notwithstanding the foregoing, this Contract may be terminated with respect
to any Portfolio or the Company at any time, without the payment of any penalty
by the Company, upon the vote of the Board or the vote of a majority of the
outstanding
Exhibit 24(b)5b
voting securities of such Portfolio or the Company and on 60 days' written
notice to the Subadviser or by the Subadviser at any time, without the payment
of any penalty, on 60 days' written notice to the Manager and the Company. As
used in this Contract, the terms "majority of the outstanding voting
securities," "interested persons" and "assignment" shall have the same meaning
as such terms have in the Investment Company Act.
In the event that this Contract shall not be approved in the manner
provided herein or shall have been terminated with respect to any Portfolio, the
Subadviser and the Manager shall continue to be bound by the terms of this
Contract with respect to any other Portfolio provided that this Contract shall
have been approved in the manner contemplated herein with respect to such
Portfolio.
This contract shall terminate automatically upon its assignment or upon the
assignment of the Investment Management Contract.
10. Amendment of this Contract. No provision of this Contract may be
changed, waived, discharged or terminated except by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought, and no amendment of this Contract shall be effective
until approved by vote of the holders of a majority of the outstanding voting
securities of the Portfolio(s) affected by such amendment.
11. Miscellaneous. The captions in this Contract 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 Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and shall be governed by the
law of the State of California. Any notice required or permitted to be given
under this Contract shall be in writing and delivered either personally, by
facsimile (confirming receipt by telephone), or by international air courier to
the parties as follows:
If to the Manager:
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AIB Govett, Inc.
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn.: President
Tel: (000) 000-0000
Fax: (000) 000-0000
If to the Subadviser:
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AIB Govett Asset Management Limited
Exhibit 24(b)5b
Xxxxxxxxxx Xxxxx
0 Xxxxxx Xxxxxx Xxxx
Xxxxxx XX0 0XX Xxxxxxx
Attn.: Managing Director
Tel: (00 000) 000-0000
Fax: (00 000) 000-0000
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Exhibit 24(b)5b
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated as of the day and year first above
written.
AIB GOVETT ASSET MANAGEMENT LIMITED
By:
______________________________________
Attest: Title:
__________________
AIB GOVETT, INC.
By:
_______________________________________
Attest: Title:
__________________
Exhibit 24(b)5b
SCHEDULE A
Rate
Fund Name (of average daily net assets)
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Govett International Equity Fund 1.00%
Govett Emerging Markets Fund 1.00%
Govett Smaller Companies Fund 1.00%
Govett Pacific Strategy Fund 1.00%
Govett Latin America Fund 1.00%
Govett Global Income Fund 0.75%
Govett China Fund 1.00%
Govett Europe Fund 1.00%
