EXHIBIT 99.B5(v)(ii)
FORM OF SUB-ADVISORY CONTRACT
Index Allocation Fund
a portfolio of
STAGECOACH FUNDS, INC.
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
December ____ , 1997
Barclays Global Fund Advisors
00 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Dear Sirs:
This will confirm the agreement by and among Xxxxx Fargo Bank, N.A.
(the "Adviser"), Stagecoach Funds, Inc. (the "Company"), on behalf of the Index
Allocation Fund (the "Fund"), and Barclays Global Fund Advisors (the "Sub-
Adviser") as follows:
1. The Company is a registered open-end management investment company
currently consisting of a number of investment portfolios, but which may from
time to time consist of a greater or lesser number of investment portfolios. The
Company proposes to engage in the business of investing and reinvesting the
assets of the Fund in the manner and in accordance with the investment objective
and restrictions specified in the Company's currently effective Registration
Statement, as amended from time to time (the "Registration Statement"), filed by
the Company under the Investment Company Act of 1940 (the "Act") and the
Securities Act of 1933. Copies of the Registration Statement have been furnished
to the Sub-Adviser. Any amendments to the Registration Statement shall be
furnished to the Sub-Adviser promptly.
2. The Company has engaged the Adviser to manage the investing and
reinvesting of the assets of the Fund and to provide the advisory services
specified elsewhere in the Investment Advisory Contract between the Company and
the Adviser, subject to the overall supervision of the Board of Directors of the
Company. Pursuant to an administration agreement between the Company, on behalf
of the Fund, and the Advisor, and a co-administration agreement between the
Company, on behalf of the Fund, and Xxxxxxxx Inc. (the "Administrators"), the
Company has engaged the Administrators to provide the administrative services
specified therein.
3. (a) The Adviser hereby employs the Sub-Adviser to perform for the
Fund certain advisory services and the Sub-Adviser hereby accepts such
employment. The Adviser shall retain the authority to establish and modify, from
time to time, the investment strategies and approaches to be followed by the
Sub-Adviser, subject, in all respects, to the supervision and direction of the
Company's Board of Directors and subject to compliance with the investment
objectives, policies and restrictions set forth in the Registration Statement.
(b) Subject to the overall supervision and control of the Adviser
and the Company, the Sub-Adviser shall be responsible for investing and
reinvesting the Fund's assets in a manner consistent with
the investment strategies and approaches referenced in subparagraph (a) above.
In this regard, the Sub-Adviser, in accordance with the investment objectives,
policies and restrictions set forth in the Registration Statement, the Act and
the provisions of the Internal Revenue Code of 1986 relating to regulated
investment companies, shall be responsible for implementing and monitoring the
performance of the investment model employed with respect to the Fund and shall
furnish to the Adviser periodic reports on the investment activity and
performance of the Fund. The Sub-Adviser shall also furnish such additional
reports and information as the Adviser and the Company's Board of Directors and
officers shall reasonably request.
(c) The Sub-Adviser shall, at its expense, employ or associate
with itself such persons as the Sub-Adviser believes appropriate to assist it in
performing its obligations under this contract.
4. The Adviser shall be responsible for the fees paid to the Sub-
Adviser for its services hereunder. The Sub-Adviser agrees that it shall have no
claim against the Company or the Fund respecting compensation under this
contract. In consideration of the services to be rendered by the Sub-Adviser
under this contract, the Adviser shall pay the Sub-Adviser a fee on the first
business day of each calendar month, at the annual rate of 0.20% of the average
daily value (as determined on each day that such value is determined for the
Fund at the time set forth in the Registration Statement for determining net
asset value per share) of the Fund's net assets during the preceding month. The
Sub-Adviser will also receive an annual fee from the Adviser of $60,000 payable
in monthly installments. If the fee payable to the Sub-Adviser pursuant to this
Paragraph 4 begins to accrue on a day after the first day of any month or if
this contract terminates before the end of any month, the fee for the period
from the effective date to the end of the month or from the beginning of that
month to the termination date, shall be prorated according to the proportion
that such period bears to the full month in which the effectiveness or
termination occurs. For purposes of calculating the monthly fee, the value of
the Fund's net assets shall be computed in the manner specified in the
Registration Statement and the Company's Articles of Incorporation for the
computation of the value of the Fund's net assets in connection with the
determination of the net asset value of Fund shares.
5. The Sub-Adviser shall give the Company the benefit of the Sub-
Adviser's best judgment and efforts in rendering services under this contract.
As consideration and as an inducement to the Sub-Adviser's undertaking to render
these services, the Company and the Adviser agree that the Sub-Adviser shall not
be liable under this contract for any mistake in judgment or in any other event
whatsoever except for lack of good faith, provided that nothing in this contract
shall be deemed to protect or purport to protect the Sub-Adviser against any
liability to the Adviser, the Company or its shareholders to which the Sub-
Adviser would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of the Sub-Adviser's duties under this
contract or by reason of reckless disregard of its obligations and duties
hereunder.
6. This contract shall become effective as of its execution date and
shall thereafter continue in effect, provided that this contract shall continue
in effect for a period of more than two years from the date hereof only so long
as the continuance is specifically approved at least annually (a) by the vote of
a majority of the Fund's outstanding voting securities (as defined in the Act)
or by the Company's Board of Directors and (b) by the vote, cast in person at a
meeting called specifically for the purpose of continuing this Sub-Advisory
Contract, of a majority of the Company's Directors who are not parties to this
contract or "interested persons" (as defined in the Act) of any such party. This
contract may be terminated, upon 60 days' written notice to the Sub-Adviser, by
the Company, without the payment of any penalty, by a vote of a majority of the
Fund's outstanding voting securities (as defined in the Act) or by a vote of a
majority of the Company's entire Board of Directors. The Sub-Adviser may
terminate this contract on 60 days' written
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notice to the Company. This contract shall terminate automatically in the event
of its assignment (as defined in the Act).
7. Except to the extent necessary to perform the Sub-Adviser's
obligations under this contract, nothing herein shall be deemed to limit or
restrict the right of the Sub-Adviser, or any affiliate of the Sub-Adviser, or
any employee of the Sub-Adviser, to engage in any other business or to devote
time and attention to the management or other aspects of any other business,
whether of a similar or dissimilar nature, or to render services of any kind to
any other corporation, firm, individual or association.
8. The Sub-Adviser and the Company each agree that the words
"Stagecoach," which comprise a component of the Company's name, is a property
right of the parent of the Adviser. The Company agrees and consents that: (i)
it will use the words "Stagecoach" as a component of its corporate name, the
name of any class, or both and for no other purpose; (ii) it will not grant to
any third party the right to use the words "Stagecoach" for any purpose; (iii)
the Adviser or any corporate affiliate of the Adviser may use or grant to others
the right to use the words "Stagecoach," or any combination or abbreviation
thereof, as all or a portion of a corporate or business name or for any
commercial purpose, other than a grant of such right to another registered
investment company not advised by the Adviser or one of its affiliates; and (iv)
in the event that the Adviser or an affiliate thereof is no longer acting as
investment adviser to any class, the Company shall, upon request by the Adviser,
promptly take such action as may be necessary to change its corporate name to
one not containing the words "Stagecoach" and following such change, shall not
use the words "Stagecoach," or any combination thereof, as a part of its
corporate name or for any other commercial purpose, and shall use its best
efforts to cause its directors, officers, and shareholders to take any and all
actions that the Adviser may request to effect the foregoing and to reconvey to
the Adviser any and all rights to such words.
9. This contract shall be governed by and construed in accordance
with the laws of the State of California without giving effect to the choice of
law provisions thereof.
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If the foregoing correctly sets forth the agreement between the
Company, the Adviser and the Sub-Adviser, please so indicate by signing and
returning to the Company the enclosed copy hereof.
Very truly yours,
XXXXX FARGO BANK, N.A.
By:
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Name:
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Title:
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ACCEPTED as of the date
set forth above:
STAGECOACH FUNDS, INC.
on behalf of the Index Allocation Fund
By:
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Name:
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Title:
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BARCLAYS GLOBAL FUND ADVISORS
By:
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Name:
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Title:
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By:
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Name:
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Title:
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