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EXHIBIT (6)(ii)
[FORM]
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT executed as of _____________, 1995 by and between PNC Asset
Management Group, Inc., a Delaware corporation, and Xxxxxx Xxxxxxxx Investment
Services, Ltd. a London based company and registered investment adviser
("Sub-Adviser").
WHEREAS, PNC Asset Management Group, Inc. is the investment manager for
The PNC Fund ("Trust"), an open-end management investment company registered
under the Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, PNC Asset Management Group, Inc. desires to retain Sub-Adviser
as its agent to furnish investment advisory services for the International
Fixed Income Fund, a diversified investment portfolio of the Trust (the
"Fund").
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Appointment. PNC Asset Management Group, Inc. hereby appoints
Sub-Adviser to provide certain sub-investment advisory services to the Fund for
the period and on the terms set forth in this Agreement. Sub-Adviser accepts
such appointment and agrees to furnish the services herein set forth for the
compensation herein provided.
2. Delivery of Document. PNC Asset Management Group, Inc. has
furnished Sub-Adviser with copies properly certified or authenticated of each
of the following:
(a) Resolutions of the Fund's Board of Trustees authorizing the
appointment of Advisor as the Portfolios' advisor and approving
this Agreement;
(b) The Fund's Declaration of Trust as filed with the State Secretary
of the Commonwealth of Massachusetts and the Boston City Clerk on
December 22, 1988:
(c) The Fund's Code of Regulations;
(d) The Fund's Notification of Registration on Form N-8A under the
1940 Act as filed with the Securities and Exchange Commission
("SEC") on December 23, 1988;
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(e) The Fund's Registration Statement on Form N-1A (the "Registration
Statement") under the Securities Act of 1933 and 1940 Act, as
filed with the SEC on December 23, 1988, and all amendments
thereto;
(f) The Fund's most recent prospectus for the Portfolios (such
prospectus together with the related statement of additional
information, as currently in effect and all amendments and
supplements thereto, are herein called "Prospectus"); and
(g) Any other information reasonably needed by Sub-Adviser to satisfy
its obligations under this Agreement.
PNC Asset Management Group, Inc. will furnish Sub-Adviser from
time to time with copies of all amendments of or supplements to the foregoing.
3. Management. Subject always to the supervision of Trust's Board
of Trustees and PNC Asset Management Group, Inc., Sub-Adviser will furnish an
investment program in respect of, and make investment decisions for, all assets
of the Fund and place all orders for the purchase and sale of securities, all
on behalf of the Fund. In the performance of its duties, Sub-Adviser will
satisfy its fiduciary duties to the Fund (as set forth in Section 8, below),
and will monitor the Fund's investments, and will comply with the provisions of
Trust's Declaration of Trust and By-Laws, as amended from time to time, and the
stated investment objectives, policies and restrictions of the Fund.
Sub-Adviser and PNC Asset Management Group, Inc. will each make its officers
and employees available to the other from time to time at reasonable times to
review investment policies of the Fund and to consult with each other regarding
the investment affairs of the Fund. Sub-Adviser shall also make itself
reasonably available to the Board of Trustees at such times as the Board of
Trustees shall request.
Sub-Adviser represents and warrants that it is in compliance with all
applicable Rules and Regulations of the SEC pertaining to its investment
advisory activities and 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 Rules and Regulations of
the SEC pertaining to its investment advisory activities;
(c) will place orders pursuant to its investment determinations
for the Fund either directly with the issuer or with any broker or
dealer. In placing orders with
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brokers or dealers, Sub-Adviser will attempt to obtain the best
combination of prompt execution of orders in an effective manner and at
the most favorable price. Consistent with this obligation, when the
execution and price offered by two or more brokers or dealers are
comparable Sub-Adviser may, in its discretion, purchase and sell
portfolio securities to and from brokers and dealers who provide Sub-
Adviser with research advice and other services. In no instance will
portfolio securities be purchased from or sold to PNC Asset Management
Group, Inc., Sub-Adviser or any affiliated person of either the Trust,
PNC Asset Management Group, Inc. or Sub-Adviser, except as may be
permitted under the 1940 Act;
(d) will report regularly to PNC Asset Management Group, Inc.
and will make appropriate persons available for the purpose of reviewing
at reasonable times with representatives of PNC Asset Management Group,
Inc. and the Board of Trustees the management of the Fund, including,
without limitation, review of the general investment strategy of the
Fund, the performance of the Fund 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 PNC Asset Management Group, Inc.;
(e) will maintain books and records with respect to Trust's
securities transactions and will furnish PNC Asset Management Group,
Inc. and the Trust's Board of Trustees such periodic and special reports
as the Board or PNC Asset Management Group, Inc. may request;
(f) will act upon instructions from PNC Asset Management Group,
Inc. not inconsistent with the fiduciary duties hereunder; and
(g) will treat confidentially and as proprietary information of
Trust all such records and other information relative to Trust
maintained by the Sub-Adviser, 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 Trust, which approval shall not be
unreasonably withheld and may not be withheld 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 Trust.
Sub-Adviser shall have the right to execute and deliver, or cause its
nominee to execute and deliver, all proxies and notices
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of meetings and other notices affecting or relating to the securities of the
Fund.
4. 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 Trust are the property of Trust and further agrees to surrender
promptly to Trust any of such records upon Trust's request. Sub-Adviser
further agrees to preserve for the periods prescribed by Rule 31 a-2 under the
1940 Act the records required to be maintained by Rule 31a-1 under the 1940
Act.
5. 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 (including brokerage commissions,
if any) purchased for Trust.
6. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, PNC Asset Management Group, Inc. will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee, accrued daily and payable quarterly, in
accordance with Schedule A hereto. From time to time, Sub-Adviser may
voluntarily agree to waive or reduce some or all of the compensation to which
it is entitled under this Agreement.
7. Services to Others. PNC Asset Management Group, Inc.
understands, and has advised Trust's Board of Trustees, that Sub-Adviser now
acts, and may in the future act, as an investment adviser to fiduciary and
other managed accounts, and as investment adviser, sub-investment adviser,
and/or administrator to other investment companies, provided, however, that the
Sub-Adviser shall not provide advisory or sub-advisory services to any
bank-advised investment company without the express written consent of PNC
Asset Management Group, Inc. which will not be unreasonably withheld. With the
exception previously noted, PNC Asset Management Group, Inc. has no objection
to Sub-Adviser's acts in such capacities, provided that whenever the Fund and
one or more other investment companies advised by Sub-Adviser have available
funds for investment, investments suitable and appropriate for each will be
allocated in accordance with a formula believed by Sub-Adviser to be equitable
to each company. PNC Asset Management Group, Inc. recognizes, and has advised
the Trust's Board of Trustees, that in some cases this procedure may adversely
affect the size of the position that the Fund may obtain in a particular
security. In addition, PNC Asset Management Group, Inc. understands, and has
advised Trust's Board of Trustees, that the persons employed by Sub-Adviser to
assist in Sub-Adviser's duties under this Agreement will not devote their full
time to such service and nothing contained in this Agreement will be deemed to
limit or restrict the right of Sub-
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Adviser or any of its affiliates to engage in and devote time and attention to
other businesses or to render services of whatever kind or nature.
8. Limitation of Liability. PNC Asset Management Group, Inc. will
not take any action against Sub-Adviser to hold Sub-Adviser liable for any
error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the performance of Sub-Adviser's duties under this Agreement,
except a loss resulting from Sub-Adviser's willful misfeasance, bad faith, or
gross negligence in the performance of its duties under this Agreement.
9. Indemnification. PNC Asset Management Group, Inc. and
Sub-Adviser each agree to indemnify the other against any claim against, loss
or liability to such other party (including reasonable attorneys' fees) arising
out of any action on the part of the indemnifying party which constitutes
willful misfeasance, bad faith or gross negligence.
10. Duration and Termination. This Agreement will become effective
as to the Fund on the first day the Fund's shares are offered to the public
provided that it has been approved by vote of a majority of the outstanding
voting securities of the Fund in accordance with the requirements under the
1940 Act, and, unless sooner terminated as provided herein, will continue in
effect until March 31, 1997.
Thereafter, if not terminated, this Agreement will continue in
effect for the Fund for successive periods of 12 months, each ending on March
31, provided that such continuation is specifically approved at least annually
(a) by the vote of a majority of those members of Trust's Board of Trustees who
are not interested persons of Trust, Sub-Adviser, or PNC Asset Management
Group, Inc., cast in person at a meeting called for the purpose of voting on
such approval, and (b) by the vote of a majority of Trust's Board of Trustees
or by the vote of a majority of all votes attributable to the outstanding
Shares of the Fund. Notwithstanding the foregoing, this Agreement may be
terminated as to the Fund at any time, without the payment of any penalty, on
sixty (60) days' written notice by PNC Asset Management Group, Inc. or by Sub-
Adviser. This Agreement will immediately terminate in the event of its
assignment. (As used in this Agreement, the terms "majority of the outstanding
voting securities, "interested persons" and "assignment" have the same meaning
of such terms in the 1940 Act.)
This Agreement will terminate automatically if the advisory
agreement between the Fund and PNC Asset Management Group, Inc. is terminated.
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11. 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.
12. 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 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 hereto and their respective successors and will be
governed by the laws of the State of New Jersey.
"The PNC Fund" and "Trustees of the The PNC Fund" refer
respectively to the trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated December 22, 1988 which is hereby referred to and a copy of which
is on file at the office of the State Secretary of The Commonwealth of
Massachusetts and at the principal office of the Fund. The obligations of "The
PNC Fund" entered into in the name or on behalf thereof by any of the Trustees,
officers, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, Shareholders,
officers, representatives or agents of the Fund personally, but bind only the
Trust Property (as defined in the Declaration of Trust), and all persons
dealing with any class of shares of the Fund must look solely to the
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Trust Property belonging to such class for the enforcement of any claims
against the Fund.
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.
PNC ASSET MANAGEMENT GROUP, INC.
By:_______________________________
Name:_____________________________
Title:____________________________
XXXXXX XXXXXXXX INVESTMENT SERVICES, LTD.
By:_______________________________
Name:_____________________________
Title:____________________________
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SCHEDULE A
_______________, 1995
The International Fixed Income Fund.
Compensation will be paid at an annual rate of average annual daily net
assets.
PNC ASSET MANAGEMENT GROUP, INC.
By:_______________________________
Name:_____________________________
Title:____________________________
XXXXXX XXXXXXXX INVESTMENT SERVICES, LTD.
By:_______________________________
Name:_____________________________
Title:____________________________
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