Exhibit 5(c)
INVESTMENT SUB-ADVISORY AGREEMENT
This Agreement (Agreement) made this ____day of _____________, 1996 by and
between Xxxxxx Xxxx Investor's Inc., a registered investment adviser (Adviser)
and PNC Equity Advisors Company, a ______________ corporation and registered
investment adviser (Sub-Adviser).
WHEREAS Adviser is the investment adviser and business manager for the
Xxxxxx Xxxx Mutual Funds (the Funds), an open-end diversified, management
investment company registered under the Investment Company Act of 1940, as
amended (1940 Act), currently consisting of three separate series or
portfolios including the Xxxxxx Xxxx Socially Responsible Fund, the Xxxxxx
Xxxx International Equity Fund, and the Xxxxxx Xxxx Small-Cap Growth Fund;
WHEREAS Adviser desires to retain the Sub-Adviser to furnish investment
advisory services for the Xxxxxx Xxxx Small-Cap Growth Fund (the Fund
Portfolio), upon the terms and conditions set forth;
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 the Fund Portfolio for the period and on the
terms set forth in this Agreement. Sub-Adviser accepts such appointment and
agrees to furnish the services set forth for the compensation herein provided.
Sub-Adviser represents the it is registered as an Investment Adviser under
federal laws and any applicable state laws.
2. SUB-ADVISER SERVICES Subject always to the supervision of the Fund's Board
of Trustees and the Adviser, Sub-Adviser will furnish an investment program in
respect of, and make investment decisions for, all assets of the Fund Portfolio
and place all orders for the purchase and sale of securities, all on behalf of
the Fund Portfolio. In the performance of its duties, Sub-Adviser will satisfy
its fiduciary duties to the Fund and the Fund Portfolio and will monitor the
Fund Portfolio's investments, and will comply with the provisions of the Fund's
Declaration of Trust and By-laws, as amended from time to time, and the stated
investment objectives, policies and restrictions of the Fund Portfolio as set
forth in the prospectus and Statement of Additional Information for the Fund
Portfolio, as amended from time to time, as well as any other objectives,
policies or limitations provided by the Adviser from time to time.
Sub-Adviser will provide reports at least quarterly to the Board of Trustees and
to Adviser. Sub-Adviser will make its officers and employees available to
Adviser and the Board of Trustees from time to time at reasonable times to
review investment policies of the Fund Portfolio and to consult with Adviser
regarding the investment affairs of the Fund Portfolio.
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 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 regulations of any governmental authority pertaining to its
investment advisory activities, including all requirements necessary for
the Fund Portfolio to comply with subchapter M and section 817(h) of the
Internal Revenue Code;
(c) is authorized to and will select the brokers or dealers that will
execute the purchases and sales of portfolio securities for the Fund
Portfolio and is directed to use its best efforts to obtain best execution,
which includes most favorable net results and execution of the Fund
Portfolio'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. It is understood that the Sub-
Adviser will not be deemed to have acted unlawfully, or to have breached a
fiduciary duty to the Fund or in respect of the Fund Portfolio, or be in
breach of any obligation owing to the Fund or in respect of the Fund
Portfolio under this Agreement, or otherwise, solely by reason of its
having caused the Fund to pay a member of a securities exchange, a broker
or a dealer a commission for effecting a securities transaction of the Fund
in excess of the amount of commission another member of an exchange, broker
or dealer would have charged if the 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 the Sub-Adviser's overall
responsibilities with respect to its accounts, including the Fund, as to
which it exercises investment discretion. Some securities considered for
investment by the Fund Portfolio may also be appropriate for other funds
and or clients served by the Sub-Adviser. To assure fair treatment of the
Fund Portfolio and all clients of the 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 the Fund Portfolio and clients in a manner deemed equitable by the
Sub-Adviser;
(d) will report regularly to Adviser and to the Board of Trustees and will
make appropriate persons available for the purpose of reviewing with
representatives of Adviser and the Board of Trustees on a regular basis at
reasonable times the management of the Fund Portfolio, including without
limitation, review of the general investment strategies of the Fund
Portfolio, the performance of the Fund Portfolio 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;
(e) will prepare such books and records with respect to the Fund
Portfolio's securities transactions as requested by the Adviser and will
furnish Adviser and Fund's Board of Trustees such periodic and special
reports as the Board or Adviser may reasonably request;
(f) will act upon 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 terms 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 commission, if any),
purchased for the Fund Portfolio.
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 therefor, at the end of each calendar quarter, a sub-advisory
fee computed at the annual rate as set forth in Exhibit 1 - Fee Schedule,
applied to the average daily net assets of the Fund Portfolio during the
calendar quarter.
5. SERVICES TO OTHERS Adviser understands and has advised Fund's Board of
Trustees, that Sub-Adviser acts as an investment adviser or sub-investment
adviser to other investment companies and other advisory clients.
7. LIMITATION OF LIABILITY Neither the Sub-Adviser nor any of its directors,
officers, stockholders, agents or employees shall have any liability to the
Adviser, the Fund or any shareholder of the Fund for any error of judgment,
mistake of law, or any loss arising out of any investment, or for any other act
or omission in the performance by the Sub-Adviser of its duties hereunder except
for liability resulting from willful misfeasance, bad faith, or negligence on
the Sub-Adviser's part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement.
8. TERM, TERMINATION, AMENDMENT This Agreement shall become effective with
respect to the Fund Portfolio on _______________, provided that it has been
approved by a vote of a majority of the outstanding voting securities of the
Fund Portfolio in accordance with the requirement of the 1940 Act and shall
remain in full force until, ______________, unless sooner terminated as
hereinafter provided. This Agreement shall continue in force from year to year
thereafter with respect to the Fund Portfolio, but only as long as such
continuance is specifically approved for the 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 the Fund Portfolio, the Sub-Adviser may continue to service in such capacity
for the Fund Portfolio in the manner and to the extent permitted by the 1940 Act
and the rules and regulations thereunder.
This Agreement shall automatically terminate in the event of its assignment and
may be terminated at any time without the payment of any penalty by the Adviser
or by the Sub-Adviser on sixty days written notice to the other party. This
Agreement may also be terminated by the Fund with respect to the Fund Portfolio
by action of the Board of Trustees or by a vote of a majority of the outstanding
voting securities of the Fund Portfolio on sixty days written notice to Sub-
Adviser by the Fund.
This Agreement may be terminated with respect to the Fund Portfolio any time
without payment of any penalty by the Adviser, the Board of Trustees or by a
vote of majority of the outstanding voting securities of the Fund Portfolio in
the event that the Sub-Adviser or any officer or director of the Sub-Adviser has
taken any action which results in a material breach of the covenants of the Sub-
Adviser under this Agreement.
Termination of this Agreement shall not affect the right of the Sub-Adviser to
receive payments on any unpaid balance of the compensation described in Section
4 earned prior to such termination.
This Agreement shall automatically terminate in the event the Investment
Management Agreement between Adviser and the Fund Portfolio is terminated,
assigned or not renewed.
9. NOTICE Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
10. LIMITATIONS ON LIABILITY All parties are expressly put on notice of the
Fund's Agreement and Declaration of Trust and all amendment thereto, all of
which are on file with the Secretary of the State of Delaware, and the
limitation of shareholder and trustee liability contained therein. The
obligations of the Fund entered in the name or on behalf thereof by any of the
Trustees, representatives or agents are made not individually but only in such
capacities and are not binding upon any of the Trustees, 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 the Fund Portfolio for the
enforcement of any claims.
11. ADVISER RESPONSIBILITY Adviser will provide Sub-Adviser with copies of the
Fund's Declaration of Trust, 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.
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 and
their respective successors.
12. APPLICABLE LAW This Agreement shall be construed in accordance with
applicable federal law and (except as to Section 10 above which will be
construed in accordance with Delaware law) the laws of the state of Illinois.
The Adviser and the Sub-Adviser have caused this Agreement to be executed as of
the date and year first above written.
XXXXXX XXXX INVESTORS INC. PNC EQUITY ADVISORS COMPANY
By_______________________________ By____________________________________
Title____________________________ Title________________________________
EXHIBIT 1
SUB-ADVISORY FEE SCHEDULE FOR XXXXXX XXXX MUTUAL FUNDS
SMALL CAP GROWTH FUND
1.00% on the First $25,000,000
.75% on the assets over $25,000,000
There is no minimum annual fee.
EXHIBIT 1
SUB-ADVISORY FEE SCHEDULE FOR XXXXXX XXXX MUTUAL FUNDS
INTERNATIONAL EQUITY FUND
DURING THE FIRST 6 MONTHS
.35% of the First $40,000,000
.25% on assets over $40,000,000
DURING THE SECOND 6 MONTHS
.525% on First $40,000,000
.375% on assets over $40,000,000
THEREAFTER
.70% of the First $40,000,000
.50% on assets over $40,000,000
There is no minimum annual fee.
SOCIALLY RESPONSIBLE FUND
.55% on the First $20,000,000
.45% on the Next $20,000,000
.30% on the assets over $40,000,000
There is no minimum annual fee.
