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EXHIBIT (5)(hh)
[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 Portfolio's 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 management 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 Trustee 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:
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Name:
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Title:
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XXXXXX XXXXXXXX INVESTMENT SERVICES, LTD.
By:
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Name:
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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:
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Name:
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Title:
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XXXXXX XXXXXXXX INVESTMENT SERVICES, LTD.
By:
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Name:
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Title:
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