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EXHIBIT (d)(5)
FORM OF
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made this _________________________, by and between ABN AMRO Asset
Management (USA) Inc., a Delaware corporation and U.S. registered Investment
Advisor (the "Investment Manager") and Mellon Equity Associates, LLP, a
Pennsylvania limited liability partnership (the "Sub-Advisor").
WHEREAS, the Investment Manager serves as the investment advisor to the ABN AMRO
Funds (the "Company"), an open-end, management investment company registered
under the Investment Company Act of 1940, as amended, which consists of several
series, each having its own investment objective and policies; and
WHEREAS, one of those series is the ABN AMRO Value Fund (the "Fund"): and
WHEREAS, the Investment Manager serves as the investment advisor to the Company
pursuant to an investment advisory agreement with the Investment Manager
pursuant to which the Investment Manager has agreed to act as investment manager
to the Fund; and
WHEREAS, the Investment Manager, acting with the approval of the Company, wishes
to retain the Sub-Advisor to render discretionary investment advisory services
to the Fund, and the Sub-Advisory is willing to render such services.
NOW THEREFORE, in consideration of mutual covenants herein contained, the
parties hereto agree as follows;
1. DUTIES OF SUB-ADVISOR. The Sub-Advisor shall manage the investment and
reinvestment of the Fund's assets and determine in its discretion, the
securities and other property to be purchased or sold and the portion of the
Fund's assets to retain in cash. The Sub-Advisor shall review all proxy
solicitation materials and shall exercise any voting rights associated with
securities comprising the Fund's assets in the best interests of the Fund and
its shareholders. The Sub-Advisor shall provide the Investment Manager and the
Fund with records concerning the Sub-Advisor's activities that the Investment
Manager is required to maintain, and to render regular reports to the Investment
Manager concerning the Sub-Advisor's discharge of the foregoing
responsibilities.
The Sub-Advisor shall discharge the foregoing responsibilities subject to the
supervision of the Investment Manager and the Company's Board of Trustees and
their agents, including the officers of the Company and the Investment Manager,
and in compliance with (i) such policies as the Investment Manager may from time
to time establish and communicate to the Sub-Advisor in writing, (ii) the
objectives, policies, and limitations for the Fund set forth in the Prospectus
and Statement of Additional Information as those documents may from time to time
be amended or supplemented from time to time and delivered to the Sub-Advisor
(the "Prospectus and Statement of Additional Information"), (iii) the
Declaration of Trust of the Company, and (iv) applicable laws and regulations
including the Investment Company Act of l 940 (the "1940 Act") and the Internal
Revenue Code of 1986, as both may from time to time be amended.
The Sub-Advisor agrees to perform such duties at its own expense and to provide
the office space, furnishings and equipment and the personnel required by it to
perform the services on the terms and for the compensation provided herein. The
Sub-Advisor will not, however, pay for the cost of securities,
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commodities, and other investments (including brokerage commissions and other
transaction charges, if any) purchased or sold for the Fund.
2. DUTIES OF INVESTMENT MANAGER. The Investment Manager shall continue to have
responsibility for all services to be provided to the Fund pursuant to the
Advisory Agreement between it and the Company and shall oversee and review the
Sub-Advisor's performance under this Agreement.
The Investment Manager shall furnish to the Sub-Advisor current and complete
copies of the Declaration of Trust and By-laws of the Company, and the current
Prospectus and Statement of Additional Information and copies of such documents
as they may be amended from time to time.
3. CUSTODY, DELIVERY AND RECEIPT OF SECURITIES. The Fund shall designate one or
more custodians to hold the Fund's assets. The custodians, as so designated,
will be responsible for the custody, receipt and delivery of securities and
other assets of the Fund, and the Sub-Advisor shall have no authority,
responsibility or obligation with respect to the custody, receipt or delivery of
securities or other assets of the Fund. In the event that any cash or securities
of the Fund are delivered to the Sub-Advisor, it will promptly deliver the same
over to the custodian for the benefit of and in the name of the Fund.
4. PORTFOLIO TRANSACTIONS. The Sub-Advisor is authorized to select the brokers
or dealers that will execute the purchases and sales of portfolio securities and
other property for the Fund in a manner that implements the policy with respect
to brokerage set Forth in the Prospectus and Statement of Additional Information
for the Fund or as the Board of Trustees or the Investment Manager may direct
from time to time in conformity with federal securities laws.
In executing Fund transactions and selecting brokers or dealers, the Sub-Advisor
will use its best efforts to seek on behalf of the Fund the best overall terms
available. In assessing the best overall terms available for any transaction,
the Sub-Advisor shall consider all factors that it deems relevant, including the
breadth of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the specific transaction and
on a continuing basis. In evaluating the best overall terms available, and in
selecting the broker-dealer to execute a particular transaction, the Sub-Advisor
may also consider the brokerage and research services provided (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934). In no
instance, however, will Fund assets be purchased from or sold to the Investment
Manager, Sub-Advisor, the Company's principal underwriter, or any affiliated
person of either the Company, the Investment Manager or the principal
underwriter (as such affiliates may be disclosed to the Sub-Advisor), except to
the extent permitted by the Investment Manager, the Securities and Exchange
Commission ("SEC") and the 1940 Act.
5. COMPENSATION OF THE SUB-ADVISOR. For the services to be rendered by the
Sub-Advisor under this Agreement, the Investment Manager shall pay to the
Sub-Advisor compensation at the rate specified in Schedule 1 as it may be
amended from time to time. Such compensation shall be paid at the times and on
the terms set forth in Schedule l. All rights of compensation under this
Agreement for services performed as of the termination date shall survive the
termination of this Agreement. If the Investment Manager reduces its fee rate
for the Fund because of excess expenses, the Sub-Advisor shall reduce its fee
rate pro rata. Likewise, in the event of a fee increase, the SubAdvisor's fee
will increase consistent with this same calculation. Except as may otherwise be
prohibited by law or regulation (including any then current SEC staff
interpretations), the Sub-Advisor may, in its discretion and from time to time,
waive a portion of its fee.
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6. REPORTS.
(i) The Sub-Advisor shall provide to the Fund's custodian and Fund's accounting
agent promptly, on each business day, information relating to all Fund
transactions and shall provide such information to the Investment Manager upon
request. The Sub-Advisor will make all reasonable efforts to notify the
sub-administrator of all orders to brokers by 10:00 am ET one business day
following the trade date and the sub-administrator will affirm the trade to the
custodian before the close of business one business day after the trade date (T
+ 1).
(ii) The Sub-Advisor will promptly communicate to the Investment Manager and to
the Company such information relating to portfolio transactions as they may
reasonably request.
(iii) The Sub-Advisor shall promptly notify the Company and the Investment
Manager of any financial condition likely to impair the ability of the
Sub-Advisor to fulfill its commitments under this Agreement.
7. STATUS OF SUB-ADVISOR. The Sub-Advisor is a registered investment advisor and
will continue to be registered as such under the Investment Advisers Act of
1940. The services of the Sub-Advisor to the Investment Manager for the benefit
of the Company are not to be deemed exclusive, and the Sub-Advisor shall be free
to render similar services to others so long as its services to the Fund are not
impaired thereby. The Sub-Advisor shall be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Fund in any way or otherwise be deemed an
agent of the Fund. The Sub-Advisor 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) does now and will continue to conform with all applicable rules and
regulations of the SEC pertaining to its investment advisory activities;
(b) will act upon proper instructions from the Investment Manager not
inconsistent with its fiduciary duties hereunder:
(c) will treat confidentially and as proprietary information of the Fund
all records and other information relative to the Fund and prior, present or
potential shareholders, 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 the Fund, which
approval shall not be unreasonably withheld and may not be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to divulge
such information by duly constituted authorities, or when release of such
information is so requested by the Fund); and
(d) will not make reference to or use the name of the Fund or the
Investment Manager and this Sub-Advisory Agreement in any advertising or
promotional materials without the prior written approval of the Investment
Manager.
8. CERTAIN RECORDS. The Sub-Advisor shall maintain all books and records with
respect to transactions involving the Fund's assets required by subparagraphs
(b)(S), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 3la-1 under the
1940 Act. The Sub-Advisor shall provide to the Investment Manager or the Board
of Trustees such periodic and special reports, balance sheets or financial
information, and such other information with regard to its affairs as the
Investment Manager or the Board of Trustees may reasonably request.
The Sub-Advisor shall keep the books and records relating to the Fund's assets
required to be maintained by the Sub-Advisor under this Agreement and shall
timely furnish to the Investment Manager all information
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relating to the Sub-Advisor's services under this Agreement needed by the
Investment Manager to keep the other books and records of the Fund required by
Rule 31a-1 under the 1940 Act. The Sub-Advisor shall also furnish to the
Investment Manager any other information relating to its management of the
Fund's assets that is required to be filed by the Investment Manager or the
Company with the SEC or sent to shareholders under the 1940 Act (including the
rules adopted thereunder) or any exemptive or other relief that the Investment
Manager or the Company obtains from the SEC. The Sub-Advisor agrees that all
records that it maintains on behalf of the Fund are property of the Company and
the Sub-Advisor will surrender promptly to the Company any of such records upon
the Company's request; provided, however, that the Sub-Advisor may retain a copy
of such records. In addition, for the duration of this Agreement, the
Sub-Advisor shall preserve for the periods prescribed by Rule 31a-2 under the
1940 Act any such records as are required to be maintained by it pursuant to
this Agreement, and shall transfer said records to any successor Sub-Advisor
upon the termination of this Agreement (or, if there is no successor
Sub-Advisor, to the Investment Manager).
9. LIMITATION OF LIABILITY OF SUB-ADVISOR. The duties of the Sub-Advisor shall
be confined to those expressly set forth herein, and no implied duties are
assumed by or may be asserted against the Sub-Advisor hereunder. The Sub-Advisor
shall not be liable for any error of judgement or mistake of law or for any loss
arising out of any investment or for any act or omission in carrying out its
duties hereunder except where there is a loss resulting from willful
misfeasance, bad faith or gross negligence in the performance of its duties, or
by reason of reckless disregard of its obligations and duties hereunder (except
as may otherwise be provided under provisions of applicable state law or Federal
securities law which cannot be waived or modified hereby), wherein Sub-Advisor
agrees to indemnify and hold harmless the Investment Manager, the Fund, the
Company and their officers and employees, against any and all costs and
liabilities (including legal and other expenses) which the Investment Manager,
the Fund or the Company may incur as a result of such willful misfeasance, bad
faith, gross negligence or reckless disregard by the Sub-Advisor. (as used in
this Paragraph 9, the term "Sub-Advisor" shall include directors, officers,
employees and other corporate agents of the Sub-Advisor as well as that entity
itself).
10. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Board of Trustees of the Company and by a vote of the majority
of the outstanding voting securities of the Fund, and its execution by the
parties hereto. This Agreement shall remain in effect until two years from date
of execution, and thereafter, for periods of one year so long as such
continuance thereafter is specifically approved at least annually by the vote of
a (a) majority of those Trustees of the Company who are nor parties to this
Agreement or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the Trustees of
the Company; or by the vote of a majority of the outstanding voting securities
of the Fund; provided, however, that if the shareholders of the Fund fail to
approve the Agreement as provided herein, the Sub-Advisor may continue to serve
hereunder in the manner and to the extent permitted by the 1940 Act and rule and
regulations thereunder. The foregoing requirement that continuance of this
Agreement be "specifically approved at least annually" shall be construed in a
manner consistent with the 1940 Act and the rules and regulations thereunder.
This Agreement may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Trustees of the Company or by vote of a
majority of the outstanding voting securities of the Fund on not more than 60
days written notice to the Sub-Advisor, by the Investment Manager at any time
without the payment of a penalty upon 60 days written notice to the Sub-Advisor,
or by the Sub-Advisor at any time without due payment of any penalty on 60 days
written notice to the Investment Manager. This Agreement will automatically and
immediately terminate in the event of its assignment or in the event of the
termination of the Investment Manager's advisory agreement with the Company. Any
termination of this Agreement in accordance with the terms hereof will not
affect the obligations or liabilities accrued prior to termination. Any notice
under this Agreement shall be given in writing, addressed and delivered or
mailed postpaid to the other party at any office of such party.
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As used in this Section 12, the terms "assignment", "interested persons and a
"vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in the 1940 Act and the rules and regulations
thereunder; subject to such exceptions as may be granted by the SEC under said
Act.
11. NOTICE. Any notice required or permitted to be given by either party to the
other shall be deemed sufficient if sent by registered or certified mail,
postage prepaid, or by a nationally recognized courier or delivery service,
addressed by the party giving notice to the other party at the last address
furnished by the other party to the party giving notice. At the outset, such
notices shall be delivered to the following addresses:
If to the Investment Manager: Attn: Mr. Xxxxxx Xxxxx, Director of Mutual Funds
ABN AMRO Asset Management; (USA) Inc.
000 Xxxxx XxXxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
If to the Sub-Advisor: Attn: Xx. Xxxxxxx X. Xxxxxx, President
Mellon Equity Associates, LLP
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, XX I 5258-000 I
12. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise. the remainder of this
Agreement shall not be affected thereby.
13. GOVERNING LAW. This Agreement shall be construed in accordance with the laws
of the State of Illinois and the applicable provisions of the 1940 Act. To the
extent that the applicable laws of the State of Illinois, or any of the
provisions herein, conflict with the applicable provisions of the 1940 Act, the
latter shall control.
14. MISCELLANEOUS. This instrument constitutes the sole and only agreement of
the parties to it relating to its object; any prior agreements, promises or
representation not expressly set forth in this Agreement are of no force and
effect. No waiver or modification of this Agreement shall be effective unless
reduced to writing and signed by the party to be charged. No failure to exercise
and no delay in exercising on the part of any party hereto of any right, remedy,
power or privilege hereunder shall operate as a waiver thereof. Except as set
forth in Section 12, this Agreement binds and inures to the benefit of parties,
their successors and assigns. This Agreement may be executed in more than one
counterpart each of which shall be deemed an original and both of which, taken
together, shall be deemed to constitute one and the same instrument. The name
"ABN AMRO Funds" and "Board of Trustees" refers respectively to the Company
created by, and the trustees, as trustees but not individually or personally,
acting from time to time under, the Declaration of Trust, to which reference is
hereby made and a copy of which is on file with the Secretary of the
Commonwealth of Massachusetts and elsewhere as required by law, and to any and
all amendments thereto so filed or hereinafter filed The obligations of "ABN
AMRO Funds" 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, shareholders or representatives of
the Company personally, but bind only the assets of the Company, and persons
dealing with the Fund must look solely to the assets of the Company belonging to
such Fund for the enforcement of any claims against the Company. Where the
effect of a requirement of the 1940 Act reflected in any provision of this
Agreement is altered by rule, regulation or order of the SEC, whether of special
or general application, such provision shall be deemed to incorporate the effect
of such rule, regulation or order.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first written above.
ABN AMRO Asset Management (USA) Inc.
By: By:
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Attest: Attest:
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Mellon Equity Associates, LLP
By: By:
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Attest: Attest:
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SCHEDULE I
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
DATED DECEMBER 1, 1999
BETWEEN
ABN AMRO ASSET MANAGEMENT (USA) INC.
AND
MELLON EQUITY ASSOCIATES, LLP
FEES
.400 OF 1% (.00400) PER ANNUM ON THE FIRST $100 MILLION OF THE FUND'S
AVERAGE DAILY NET ASSETS
.350 OF 1% (.00350) PER ANNUM ON THE NEXT $150 MILLION OF THE FUND'S
AVERAGE DAILY NET ASSETS
.300 OF 1% (.00300) PER ANNUM ON THE NEXT $250 MILLION OF THE FUND'S AVERAGE
DAILY NET ASSETS
.250 OF 1% (.00250) PER ANNUM THEREAFTER OF THE FUND'S AVERAGE DAILY NET ASSETS
ABN AMRO Asset Management (USA) Inc. Mellon Equity Associates, LLP
By: By:
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Name: Xxxxxx X. Xxxxx Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President Title: President and CEO
By: By:
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Name: Xxxxx X. Xxxx Name: Xxxx X. Xxxxxxxx
Title: Group Senior Vice President Title: Vice President/Portfolio Manager
