As filed with the Securities and Exchange Commission on December 22, 1999
Registration Nos. 811-07244 and 33-52784
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [x]
Pre-Effective Amendment No. [_]
Post-Effective Amendment No. 20 [x]
REGISTRATION STATEMENT UNDER THE [x]
INVESTMENT COMPANY ACT OF 1940
Amendment No. 21 [x]
ABN AMRO FUNDS
(Exact Name of Registrant as Specified in Charter)
c/o PFPC, Inc.
(formerly First Data Investor Services Group, Inc.)
Boston, Massachusetts 02110
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (617) 535-0300
Name and Address of Agent for Service: Copies to:
Mary Moran Zeven, Esq. John H. Grady, Esq. and
PFPC, Inc. Richard W. Grant, Esq.
101 Federal Street Morgan, Lewis & Bockius LLP
Boston, Massachusetts 02110 1701 Market Street
Philadelphia, Pennsylvania 19103
It is proposed that this filing will become effective (check appropriate box)
[__] immediately upon filing pursuant to paragraph (b)
[x ] on December 25, 1999 pursuant to paragraph (b)
[__] 60 days after filing pursuant to paragraph (a)(1)
[__] on (date) pursuant to paragraph (a)(1)
[__] 75 days after filing pursuant to paragraph (a)(2)
[__] on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
The Registrant will file its Rule 24f-2 Notice for its fiscal year end December
31, 1999 on or before the required date.
<PAGE>
LOGO
Prospectus -- Institutional Service Shares
December 28, 1999
o Institutional Prime Money Market Fund(US)
o Institutional Treasury Money Market Fund(US)
o Institutional Government Money Market Fund(US)
As with all mutual funds, the Securities and Exchange Commission (SEC) has not
approved or disapproved of these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
Not all funds are available in all states.
<PAGE>
Contents
The Funds Page
Introduction 3
Institutional Prime Money Market Fund(US) 4
Institutional Treasury Money Market 6
Fund(US)
Institutional Government Money Market 8
Fund(US)
Management 12
Account Information Page
Transaction Policies 13
Distributions and Taxes 14
Investor Services 14
Instructions for Account Transactions 15
For More Information
More information on each fund can be See back
found in the fund's current Statement of cover
Additional Information.
ABN AMRO is a service mark of ABN AMRO Holding, N.V., an indirect parent of ABN
AMRO Asset Management (USA) Inc., the investment advisor to the ABN AMRO Funds.
ABN AMRO Funds are distributed by Provident Distributors, Inc., which is not a
bank affiliate.
The Funds
Introduction
This prospectus describes three separate money market mutual funds designed for
institutional investors: Institutional Prime Money Market Fund(US),
Institutional Treasury Money Market Fund(US), and Institutional Government Money
Market Fund(US). As mutual funds, the funds are professionally managed, pooled
investments that give investors the opportunity to participate in financial
markets. The portfolio, management, operations and performance results of the
funds are unrelated to each other.
An investment in a fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although each fund seeks
to preserve the value of your investment at $1.00 per share, there is no
guarantee that it will do so and it is possible to lose money by investing in a
fund. No fund should be relied on as a complete investment program.
Money market funds are subject to specific maturity, quality and diversification
requirements that are designed to help the funds to maintain a stable net asset
value. Specifically, money market funds may not:
o have a dollar-weighted average portfolio maturity over 90 days;
o buy securities with remaining maturities of over 397 days (except for certain
variable and floating rate instruments and securities collateralizing repurchase
agreements); and
o invest in non-U.S. dollar denominated securities.
<PAGE>
INSTITUTIONAL PRIME MONEY MARKET FUND(US)
LOGO
Goal
The fund seeks to provide as high a level of current income as is consistent
with the preservation of capital and liquidity.
LOGO
Strategy
The fund invests substantially all of its assets in high quality money market
instruments issued by corporations, banks and the U.S. government or its
agencies or instrumentalities, as well as repurchase agreements involving these
instruments. The fund may also invest in dollar-denominated securities of
foreign banks and foreign branches of domestic banks.
ABN AMRO Asset Management (USA) Inc., the advisor, structures the fund's
portfolio based on its outlook on interest rates, market conditions, and
liquidity needs. The advisor monitors the fund's investments for credit quality
changes and may adjust the average maturity of the fund in anticipation of
changes in short-term interest rates. Important factors include an assessment of
Federal Reserve policy and an analysis of the yield curve.
LOGO
Main Risks
o The fund may not be able to maintain a net asset value of $1.00 at
all times.
o As market and interest rates change and as the proceeds of short term
securities in the fund's portfolio become available and are reinvested in
securities with different interest rates, the fund's yield will fluctuate. A
sharp rise in interest rates could cause the fund's share price to drop.
o An issuer may become unable to make timely payments of principal or interest.
o The credit ratings of issuers could change and affect the fund's share price.
o The fund may be unable to sell the securities underlying a repurchase
agreement on a timely basis if the other party entering into the repurchase
agreement with the fund defaults or becomes insolvent.
o Certain U.S. government agency securities are backed by the right of the
issuer to borrow from the U.S. Treasury, or are supported only by the credit of
the issuer or instrumentality. While the U.S. government provides financial
support to U.S. government-sponsored agencies or instrumentalities, no assurance
can be given that it will always do so.
o The fund may invest in dollar denominated securities of foreign banks that
will subject it to the market and economic risks of foreign markets, including
year 2000 issues. Investments in foreign securities can be more volatile than
investments in U.S. securities. Diplomatic, political, or economic developments
unique to a country or region, including nationalization or appropriation, could
affect foreign investments. Foreign securities markets generally have less
trading volume and less liquidity than U.S. markets. Foreign companies generally
are not subject to uniform accounting, auditing and financial reporting
standards comparable to those that apply to domestic U.S. companies. Transaction
costs and custodial expenses may be somewhat greater than typical expenses for
similar U.S. securities. Some foreign governments levy withholding taxes against
dividend and interest income. Although in some countries a portion of these
taxes is recoverable, the non-recovered portion will reduce the income received
from the securities comprising the portfolio.
LOGO
Expenses
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
FEE TABLE
ANNUAL FUND OPERATING EXPENSES
% of average daily net assets
Advisory fees .10%
Service fee .25%
Other expenses1 .13%
Total annual fund operating .48%
expenses
1 "Other expenses" are based on estimated amounts for the current fiscal year.
The administrator has agreed to waive a portion of its fee through April 2000 in
order to reduce total annual fund operating expenses. However, such fee waiver
is not reflected in this table. Administrative expenses are included in "Other
expenses".
EXAMPLE
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
1 3 Years
Year
$49 $154
<PAGE>
INSTITUTIONAL TREASURY MONEY MARKET FUND(US)
LOGO
Goal
The fund seeks to preserve principal value and maintain a high degree of
liquidity while providing current income.
LOGO
Strategy
The fund invests substantially all of its assets in U.S. Treasury money market
instruments, repurchase agreements in respect of these securities, and shares of
money market funds that invest in U.S. Treasury obligations.
The advisor structures the fund's portfolio based on its outlook on interest
rates, market conditions, and liquidity needs. The advisor adjusts the average
maturity of the fund in anticipation of changes in short-term interest rates.
Important factors include an assessment of Federal Reserve policy and an
analysis of the yield curve.
LOGO
Main Risks
o The fund may not be able to maintain a net asset value of $1.00 at
all times.
o As market and interest rates change and as the proceeds of short-term
securities in the fund's portfolio become available and are reinvested in
securities with different interest rates, the fund's yield will fluctuate. A
sharp rise in interest rates could cause the fund's share price to drop.
o A security backed by the full faith and credit of the United States or U.S.
Treasury is guaranteed only as to the timely payment of interest and principal
when held to maturity. The guarantee does not extend to the market prices for
such securities, which can fluctuate.
o The fund may be unable to sell the securities underlying a repurchase
agreement on a timely basis if the other party entering into the repurchase
agreement with the fund defaults or becomes insolvent.
o Certain U.S. government agency securities are backed by the right of the
issuer to borrow from the U.S. Treasury, or are supported only by the credit of
the issuer or instrumentality. While the U.S. government provides financial
support to U.S. government-sponsored agencies or instrumentalities, no assurance
can be given that it will always do so.
<PAGE>
LOGO
Expenses
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
FEE TABLE
ANNUAL FUND OPERATING EXPENSES
% of average daily net assets
Advisory fees .10%
Service fee .25%
Other expenses1 .15%
Total annual fund operating .50%
expenses
1 "Other expenses" are based on estimated amounts for the current fiscal year.
The administrator has agreed to waive a portion of its fee through April 2000 in
order to reduce total annual fund operating expenses. However, such fee waiver
is not reflected in this table. Administrative expenses are included in "Other
expenses".
EXAMPLE
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
1 3 Years
Year
$160
$57
<PAGE>
INSTITUTIONAL GOVERNMENT MONEY MARKET FUND(US)
LOGO
Goal
The fund seeks to provide as high a level of current income as is consistent
with the preservation of capital and liquidity.
LOGO
Strategy The fund invests 100% of its assets in U.S. government money market
instruments, such as U.S. Treasury obligations and U.S. government agency
securities, and repurchase agreements in respect of these securities.
The advisor structures the fund's portfolio based on its outlook on interest
rates, market conditions, and liquidity needs. The advisor monitors the fund's
investments and adjusts the average maturity of the fund in anticipation of
changes in short-term interest rates. Important factors include an assessment of
Federal Reserve policy and an analysis of the yield curve.
LOGO
Main Risks
o The fund may not be able to maintain a net asset value of $1.00 at
all times.
o As market and interest rates change and as the proceeds of short-term
securities in the fund's portfolio become available and are reinvested in
securities with different interest rates, the fund's yield will fluctuate. A
sharp rise in interest rates could cause the fund's share price to drop.
o A security backed by the full faith and credit of the United States or the
U.S. Treasury is guaranteed only as to the timely payment of interest and
principal when held to maturity. The guarantee does not extend to the market
prices for such securities, which can fluctuate.
o Certain U.S. government agency securities are backed by the right of the
issuer to borrow from the U.S. Treasury, or are supported only by the credit of
the issuer or instrumentality. While the U.S. government provides financial
support to U.S. government-sponsored agencies or instrumentalities, no assurance
can be given that it will always do so.
o The fund may be unable to sell the securities underlying a repurchase
agreement on a timely basis if the other party entering into the repurchase
agreement with the fund defaults or becomes insolvent.
<PAGE>
LOGO
Expenses
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
FEE TABLE
ANNUAL FUND OPERATING EXPENSES
% of average daily net assets
Advisory fees .10%
Service fee .25%
Other expenses1 .15%
Total annual fund operating .50%
expenses
1 "Other expenses" are based on estimated amounts for the current fiscal year.
The administrator has agreed to waive a portion of its fee through April 2000 in
order to reduce total annual fund operating expenses. However, such fee waiver
is not reflected in this table. Administrative expenses are included in "Other
expenses".
EXAMPLE
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
1 3 Years
Year
$160
$51
<PAGE>
Performance of Similarly Managed Mutual Funds
The bar charts and performance tables below reflect the performance of the ABN
AMRO Money Market, Treasury Money Market and Government Money Market Funds,
which are currently managed by the advisor. These money market funds have
investment goals, policies and strategies substantially the same as those of the
corresponding funds, and may be useful in evaluating the advisor's ability to
manage money market funds. The money market funds and the corresponding funds
are subject to the same Investment Company Act and Internal Revenue Code
restrictions.
Each money market fund has two share classes, Common Shares and Investor Shares.
The bar charts and performance tables below reflect the performance of the money
market funds' Common Shares. Common Shares have lower expenses than Investor
Shares. As a result, the performance of Investor Shares historically has been
lower than that of the Common Shares. Common Shares, however, have expenses most
similar to those of the funds. For that reason, the performance history of the
Common Shares has been presented below, rather than the performance of the
Investor Shares.
The performance information below is not an indicator of the fund's future
performance; does not reflect the fund's historical performance; and relates to
a period of time before the effective date of the funds' registration with the
SEC.
Money Market Fund *^
Year-by-year total return as of December 31 each year (%)
Worst Quarter Best Quarter
Q1/94 Q2/95
0.76% 1.42%
3.97% 5.64% 5.13% 5.41% 5.33%
'94 '95 '96 '97 '98
CHART
Average annual total return of the Money Market Fund (Common Shares) as of
December 31, 1998
This table compares the fund's average annual total returns for the periods
ending December 31, 1998 to those of the IBC Total Taxable Average. An average
measures the share prices of a specific group of mutual funds with a particular
investment goal. You cannot invest directly in an average. The IBC Total Taxable
Average is a composite of mutual funds with investment goals similar to the
fund's goal.
1 Year 3 Years 5 Years Since inception ^^
---------------------------------------------
The Fund 5.33% 5.29% 5.10% 4.75%
IBC Total Taxable Average 5.04% 5.04% 4.87% 4.50%
* Corresponding fund: Institutional Prime Money Market Fund.
^ The ratio of expenses to average net assets for the years 1994 through 1998
was 0.41%, 0.41%, 0.43%, 0.32%, 0.33%, respectively.
^^ Fund inception (1/4/93). Average inception computed from (12/31/92).
<PAGE>
Treasury Money Market Fund *^
Year-by-year total return as of December 31 each year (%)
Worst Quarter Best Quarter
Q1/94 Q2/95
0.65% 1.34%
3.58% 5.28% 4.80% 4.97% 4.90%
'94 '95 '96 '97 '98
CHART
Average annual total return of the Treasury Money Market Fund (Common Shares) as
of December 31, 1998
This table compares the fund's average annual total returns for the periods
ending December 31, 1998 to those of the IBC U.S. Treasury Average. An average
measures the share prices of a specific group of mutual funds with a particular
investment goal. You cannot invest directly in an average. The IBC U.S. Treasury
Average is a composite of mutual funds with investment goals similar to the
fund's goal.
1 Year 3 Years 5 Years Since inception
------- -----------------
^^
The Fund 4.90% 4.89% 4.71% 4.35%
IBC U.S. Treasury Average 4.65% 4.73% 4.60% 4.27%
* Corresponding fund: Institutional Treasury Money Market Fund.
^ The ratio of expenses to average net assets for the years 1994 through 1998
was 0.45%, 0.44%, 0.44%, 0.33%, 0.37%, respectively.
^^ Fund inception (1/4/93). Average inception computed from (12/31/92).
Government Money Market Fund *^
Year-by-year total return as of December 31 each year (%)
Worst Quarter Best Quarter
Q1/94 Q2/95
0.74% 1.40%
3.89% 5.59% 5.08% 5.33% 5.24%
'94 '95 '96 '97 '98
CHART
Average annual total return of the Government Money Market Fund (Common Shares)
as of December 31, 1998
This table compares the fund's average annual total returns for the periods
ending December 31, 1998 to those of the IBC Total Government Average. An
average measures the share prices of a specific group of mutual funds with a
particular investment goal. You cannot invest directly in an average. The IBC
Total Government Average is a composite of mutual funds with investment goals
similar to the fund's goal.
1 Year 3 Years 5 Years Since inception
--------------- ------------------------
^^
The Fund 5.24% 5.22% 5.03% 4.69%
IBC Total Government Average 4.97% 4.97% 4.81% 4.45%
* Corresponding fund: Institutional Government Money Market Fund.
^ The ratio of expenses to average net assets for the years 1994 through 1998
was 0.42%, 0.42%, 0.44%, 0.32%, 0.35%, respectively.
^^ Fund inception (1/4/93). Average inception computed from (12/31/92).
<PAGE>
Management
ABN AMRO Asset Management (USA) Inc., 208 South LaSalle Street, Chicago, IL
60604, is the advisor for each fund. ABN AMRO Asset Management was organized in
March 1991 under the laws of the State of Delaware. The advisor manages assets
for individuals, corporations, unions, governments, insurance companies, and
charitable organizations. As of September 30, 1999, the advisor managed
approximately $7.9 billion in assets. The advisor is an indirect, wholly-owned
subsidiary of ABN AMRO Bank, N.V.
The advisor will make investment decisions for the funds and will
review, supervise, and administer each fund's investment program. The Trustees
of the funds will supervise the investment advisor and establish policies that
the advisor must follow in its day-to-day management activities.
For its advisory services, the advisor is entitled to receive .10% of
each fund's average net assets.
The advisor may, from time to time and at its own expense, provide cash
promotional incentives, in the form of cash or other compensation, to certain
financial institutions whose representatives have sold or are expected to sell
significant amounts of the funds' shares. Some of these financial institutions
may be affiliated with the advisor.
Karen Van Cleave, Senior Vice President of the advisor, serves as portfolio
manager of each fund. Ms. Van Cleave joined the advisor in January 1994 as a
Vice President and Portfolio Manager and became a Senior Vice President in 1997.
Prior to 1994, Ms. Van Cleave was a Vice President and Portfolio Manager at
Chemical Investment Group, Ltd. for three years. Prior to that, she worked at
Shearson Lehman Hutton (and its predecessors) for seven years in their money
market fund complex. Ms. Van Cleave earned her B.S. in Business Administration
from Boston University.
Year 2000 Issues
The funds depend on the smooth functioning of computer systems in almost every
aspect of their business. Like other mutual funds, businesses and individuals
around the world, the funds could be adversely affected if the computer systems
used by its service providers do not properly process dates on and after January
1, 2000, and distinguish between the year 2000 and the year 1900. The fund's
service providers have given information about their computer systems and year
2000 readiness. It is possible that the funds and their shareholders may
experience losses as a result of year 2000 computer difficulties experienced by
U.S. and foreign issuers of portfolio securities, particularly governmental
issuers, or third parties, such as custodians, banks, broker-dealers or others
with which the funds do business. Furthermore, many foreign countries are not as
prepared as the U.S. for the year 2000 transition. As a result, computer
difficulties in foreign markets and with foreign institutions as a result of the
year 2000 may add to the possibility of losses for the Institutional Prime Money
Market Fund, which may invest in foreign securities, and its shareholders.
Transaction Policies
Fund shares are offered to institutional investors, acting for themselves or in
a fiduciary, advisory, agency, and custodial or similar capacity. Generally,
each institutional investor must open a single master account with the fund. The
funds may request investors to maintain separate master accounts for shares held
by the investor for its own account, for the account of other institutions and
for accounts for which the institution acts as a fiduciary, or in some other
capacity. Institutions purchasing Institutional shares on behalf of their
clients may establish their own transaction policies, limitations and fees that
are different from the transaction policies, limitations and fees that are
described in this prospectus.
Purchasing Shares
Shares are purchased at the fund's net asset value (NAV). The NAV for each share
class of a fund is calculated once a day, at 5 p.m., Eastern time (ET), on each
business day, excluding major holidays. Currently the funds observe the
following holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Columbus Day,
Veterans Day, Thanksgiving Day and Christmas Day. An order will be priced at the
next NAV calculated after the fund accepts the order. Each fund uses the
amortized cost method to value its investments. Portfolio securities are valued
at their purchase price, adjusted for discounts or premiums reflected in their
acquisition cost. The amortized cost method of valuation is designed to help the
fund maintain a constant price of $1.00 per share.
Orders in proper form placed prior to 5:00 p.m., ET, and for which
payments are received in or converted into Federal Funds by 6:00 p.m., ET, will
become effective at the price determined at 5:00 p.m., ET, on that day. Shares
thus purchased will receive the dividend declared on that day. All times are
Eastern time.
Minimum investment
The minimum initial investment in Institutional shares is $5,000,000.
Selling shares
Investors may redeem shares at any time, by wire or telephone. The investor will
receive the next NAV calculated after the fund's transfer agent or other
authorized agent accepts the investor's order. Ordinarily, redemption proceeds
are sent to investors within one week of a redemption request.
Selling recently purchased shares may result in a delay in receipt of
an investor's redemption proceeds of up to eight business days or until the fund
has collected payment from the investor.
General policies
The funds will not be responsible for any fraudulent telephone order, provided
that they take reasonable measures to verify the order and the investor did not
decline telephone privileges on the application.
The funds each have the right to:
o change or waive the minimum investment amounts
o refuse any purchase or exchange of shares if it could adversely affect the
fund or its operations
o change or discontinue exchange privileges or temporarily suspend exchange
privileges during unusual market conditions (see "Investor Services")
o delay sending redemption proceeds for up to seven days (generally applies only
in cases of very large redemptions, excessive trading or during unusual market
conditions)
<PAGE>
Each fund may also make a "redemption in kind" under certain
circumstances (e.g., if the advisor determines that the amount being redeemed is
large enough to affect fund operations). Investors who receive a redemption in
kind may be required to pay brokerage costs to sell the securities distributed
by the fund, as well as the taxes on any gain from the sale.
Distributions and Taxes
Typically, each fund pays its shareholders dividends from its net investment
income once a month, and distributes any net capital gains once a year. The
funds do not expect to distribute capital gains to shareholders. Dividends and
distributions are reinvested in additional fund shares unless the investor
instructs the fund otherwise.
U.S. shareholders generally must pay taxes on dividends and distributions paid
by the funds (unless, for example, the investment is in a tax-advantaged
account).
The length of time that an investor has been in the fund and whether
the investor reinvests distributions or takes them in cash will not affect the
tax status of any distribution.
Each investor's tax situation is unique. Investors should consult a
professional about federal, state and local tax consequences.
Investor Services
Exchange privilege
An investor may exchange Institutional shares of any fund for Institutional
shares of any other fund by requesting an exchange in writing or by telephone.
New accounts established through an exchange will have the same privileges as
the original account (as long as they are available). Please read the current
prospectus for a fund before exchanging into it.
Account statements
Every investor receives regular account statements. Investors will also receive
an annual statement that describes the tax characteristics of any dividends and
distributions the fund has paid to the investor during the year.
<PAGE>
Instructions
To Establish an Account
Please call an institutional fund representative at 1-888-838-5132 before wiring
funds.
By Wire--Transmit your investment to Boston Safe Deposit and Trust with these
instructions: o ABA #011001234 fund name and DDA# Boston, Massachusetts
- - ABN AMRO Institutional Prime Money Market Fund
DDA #24-4481
- - ABN AMRO Institutional Treasury Money Market Fund
DDA #24-4481
- - ABN AMRO Institutional Government Money Market Fund
DDA #24-4481
o the Institutional share class
o your Social Security or tax ID number
o account registration
o dealer number, if applicable
o account number
Call us to obtain an account number. Return your application with the account
number on the application.
To Buy Additional Shares
Please call an institutional fund representative at 1-888-838-5132 before wiring
funds.
By Wire--Transmit your investment to Boston Safe Deposit and Trust with these
instructions:
o ABA #011001234
fund name and DDA#
Boston, Massachusetts
- - ABN AMRO Institutional Prime Money Market Fund
DDA #24-4481
- - ABN AMRO Institutional Treasury Money Market Fund
DDA #24-4481
- - ABN AMRO Institutional Government Money Market Fund
DDA #24-4481
o the Institutional share class
o account number
o account registration
o dealer number, if applicable
To Sell Shares
Please call an institutional fund representative at 1-888-838-5132 before
redeeming shares.
By Wire--Be sure the fund has your bank account information on file. Proceeds
will be wired to your bank.
To open an account, make subsequent investments, or to sell shares, please
contact your ABN AMRO institutional fund representative or call 1-888-838-5132.
<PAGE>
For More Information
To obtain information:
By telephone
Call 1-888-838-5132
You can obtain product information and literature online.
By mail Write to:
ABN AMRO Funds
P.O. Box 9690
Providence, RI 02940
On the Internet Online fund documents can be viewed or downloaded from:
www.abnamrofunds-usa.com
You can also obtain copies of fund documents by visiting the SEC's Public
Reference Room in Washington, DC (phone 1-800-SEC-0330) or by sending your
request and a duplicating fee to the SEC's Public Reference Section, Washington,
DC 20549-6009. You may also view or download text-only versions of fund
documents from: www.sec.gov
More information on each fund is available free upon request, including the
following:
Annual/Semiannual Reports
Describes each fund's performance, and lists its portfolio holdings.
Statement of Additional Information (SAI)
Provides more details about each fund and its policies. A current SAI is on file
with the SEC and is incorporated by reference into this prospectus.
ABN-F-018-01299 1940 Act Registration Number: 811-07244
<PAGE>
LOGO
Prospectus -- Institutional Shares
December 28, 1999
o Institutional Prime Money Market Fund(US)
o Institutional Treasury Money Market Fund(US)
o Institutional Government Money Market Fund(US)
As with all mutual funds, the Securities and Exchange Commission (SEC) has not
approved or disapproved of these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
Not all funds are available in all states.
<PAGE>
Contents
The Funds Page
Introduction 3
Institutional Prime Money Market Fund(US) 4
Institutional Treasury Money Market 6
Fund(US)
Institutional Government Money Market 8
Fund(US)
Management 12
Account Information Page
Transaction Policies 13
Distributions and Taxes 14
Investor Services 14
Instructions for Account Transactions 15
For More Information
More information on each fund can be See back
found in the fund's current Statement of cover
Additional Information.
ABN AMRO is a service mark of ABN AMRO Holding, N.V., an indirect parent of ABN
AMRO Asset Management (USA) Inc., the investment advisor to the ABN AMRO Funds.
ABN AMRO Funds are distributed by Provident Distributors, Inc., which is not a
bank affiliate.
The Funds
Introduction
This prospectus describes three separate money market mutual funds designed for
institutional investors: Institutional Prime Money Market Fund(US),
Institutional Treasury Money Market Fund(US), and Institutional Government Money
Market Fund(US). As mutual funds, the funds are professionally managed, pooled
investments that give investors the opportunity to participate in financial
markets. The portfolio, management, operations and performance results of the
funds are unrelated to each other.
An investment in a fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although each fund seeks
to preserve the value of your investment at $1.00 per share, there is no
guarantee that it will do so and it is possible to lose money by investing in a
fund. No fund should be relied on as a complete investment program.
Money market funds are subject to specific maturity, quality and diversification
requirements that are designed to help the funds to maintain a stable net asset
value. Specifically, money market funds may not:
o have a dollar-weighted average portfolio maturity over 90 days;
o buy securities with remaining maturities of over 397 days (except for certain
variable and floating rate instruments and securities collateralizing repurchase
agreements); and
o invest in non-U.S. dollar denominated securities.
<PAGE>
INSTITUTIONAL PRIME MONEY MARKET FUND(US)
LOGO
Goal
The fund seeks to provide as high a level of current income as is consistent
with the preservation of capital and liquidity.
LOGO
Strategy
The fund invests substantially all of its assets in high quality money market
instruments issued by corporations, banks and the U.S. government or its
agencies or instrumentalities, as well as repurchase agreements involving these
instruments. The fund may also invest in dollar-denominated securities of
foreign banks and foreign branches of domestic banks.
ABN AMRO Asset Management (USA) Inc., the advisor, structures the fund's
portfolio based on its outlook on interest rates, market conditions, and
liquidity needs. The advisor monitors the fund's investments for credit quality
changes and may adjust the average maturity of the fund in anticipation of
changes in short-term interest rates. Important factors include an assessment of
Federal Reserve policy and an analysis of the yield curve.
LOGO
Main Risks
o The fund may not be able to maintain a net asset value of $1.00 at all times.
o As market and interest rates change and as the proceeds of short term
securities in the fund's portfolio become available and are reinvested in
securities with different interest rates, the fund's yield will fluctuate. A
sharp rise in interest rates could cause the fund's share price to drop.
o An issuer may become unable to make timely payments of principal or interest.
o The credit ratings of issuers could change and affect the fund's share price.
o The fund may be unable to sell the securities underlying a repurchase
agreement on a timely basis if the other party entering into the repurchase
agreement with the fund defaults or becomes insolvent.
o Certain U.S. government agency securities are backed by the right of the
issuer to borrow from the U.S. Treasury, or are supported only by the credit of
the issuer or instrumentality. While the U.S. government provides financial
support to U.S. government-sponsored agencies or instrumentalities, no assurance
can be given that it will always do so.
o The fund may invest in dollar denominated securities of foreign banks that
will subject it to the market and economic risks of foreign markets, including
year 2000 issues. Investments in foreign securities can be more volatile than
investments in U.S. securities. Diplomatic, political, or economic developments
unique to a country or region, including nationalization or appropriation, could
affect foreign investments. Foreign securities markets generally have less
trading volume and less liquidity than U.S. markets. Foreign companies generally
are not subject to uniform accounting, auditing and financial reporting
standards comparable to those that apply to domestic U.S. companies. Transaction
costs and custodial expenses may be somewhat greater than typical expenses for
similar U.S. securities. Some foreign governments levy withholding taxes against
dividend and interest income. Although in some countries a portion of these
taxes is recoverable, the non-recovered portion will reduce the income received
from the securities comprising the portfolio.
LOGO
Expenses
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
FEE TABLE
ANNUAL FUND OPERATING EXPENSES
% of average daily net assets
Advisory fees .10%
Other expenses1 .13%
Total annual fund operating .23%
expenses
1 "Other expenses" are based on estimated amounts for the current fiscal year.
The administrator has agreed to waive a portion of its fee through April 2000 in
order to reduce total annual fund operating expenses. However, such fee waiver
is not reflected in this table. Administrative expenses are included in "Other
expenses".
EXAMPLE
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
1 3 Years
Year
$24 $74
<PAGE>
INSTITUTIONAL TREASURY MONEY MARKET FUND(US)
LOGO
Goal
The fund seeks to preserve principal value and maintain a high degree of
liquidity while providing current income.
LOGO
Strategy
The fund invests substantially all of its assets in U.S. Treasury money market
instruments, repurchase agreements in respect of these securities, and shares of
money market funds that invest in U.S. Treasury obligations.
The advisor structures the fund's portfolio based on its outlook on interest
rates, market conditions, and liquidity needs. The advisor adjusts the average
maturity of the fund in anticipation of changes in short-term interest rates.
Important factors include an assessment of Federal Reserve policy and an
analysis of the yield curve.
LOGO
Main Risks o The fund may not be able to maintain a net asset value of $1.00 at
all times.
o As market and interest rates change and as the proceeds of short-term
securities in the fund's portfolio become available and are reinvested in
securities with different interest rates, the fund's yield will fluctuate. A
sharp rise in interest rates could cause the fund's share price to drop.
o A security backed by the full faith and credit of the United States or U.S.
Treasury is guaranteed only as to the timely payment of interest and principal
when held to maturity. The guarantee does not extend to the market prices for
such securities, which can fluctuate.
o The fund may be unable to sell the securities underlying a repurchase
agreement on a timely basis if the other party entering into the repurchase
agreement with the fund defaults or becomes insolvent.
o Certain U.S. government agency securities are backed by the right of the
issuer to borrow from the U.S. Treasury, or are supported only by the credit of
the issuer or instrumentality. While the U.S. government provides financial
support to U.S. government-sponsored agencies or instrumentalities, no assurance
can be given that it will always do so.
<PAGE>
LOGO
Expenses
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
FEE TABLE
ANNUAL FUND OPERATING EXPENSES
% of average daily net assets
Advisory fees .10%
Other expenses1 .15%
Total annual fund operating .25%
expenses
1 "Other expenses" are based on estimated amounts for the current fiscal year.
The administrator has agreed to waive a portion of its fee through April 2000 in
order to reduce total annual fund operating expenses. However, such fee waiver
is not reflected in this table. Administrative expenses are included in "Other
expenses".
EXAMPLE
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
1 3 Years
Year
$80
$26
<PAGE>
INSTITUTIONAL GOVERNMENT MONEY MARKET FUND(US)
LOGO
Goal
The fund seeks to provide as high a level of current income as is consistent
with the preservation of capital and liquidity.
LOGO
Strategy The fund invests 100% of its assets in U.S. government money market
instruments, such as U.S. Treasury obligations and U.S. government agency
securities, and repurchase agreements in respect of these securities.
The advisor structures the fund's portfolio based on its outlook on interest
rates, market conditions, and liquidity needs. The advisor monitors the fund's
investments and adjusts the average maturity of the fund in anticipation of
changes in short-term interest rates. Important factors include an assessment of
Federal Reserve policy and an analysis of the yield curve.
LOGO
Main Risks o The fund may not be able to maintain a net asset value of $1.00 at
all times.
o As market and interest rates change and as the proceeds of short-term
securities in the fund's portfolio become available and are reinvested in
securities with different interest rates, the fund's yield will fluctuate. A
sharp rise in interest rates could cause the fund's share price to drop.
o A security backed by the full faith and credit of the United States or the
U.S. Treasury is guaranteed only as to the timely payment of interest and
principal when held to maturity. The guarantee does not extend to the market
prices for such securities, which can fluctuate.
o Certain U.S. government agency securities are backed by the right of the
issuer to borrow from the U.S. Treasury, or are supported only by the credit of
the issuer or instrumentality. While the U.S. government provides financial
support to U.S. government-sponsored agencies or instrumentalities, no assurance
can be given that it will always do so.
o The fund may be unable to sell the securities underlying a repurchase
agreement on a timely basis if the other party entering into the repurchase
agreement with the fund defaults or becomes insolvent.
<PAGE>
LOGO
Expenses
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
FEE TABLE
ANNUAL FUND OPERATING EXPENSES
% of average daily net assets
Advisory fees .10%
Other expenses1 .15%
Total annual fund operating .25%
expenses
1 "Other expenses" are based on estimated amounts for the current fiscal year.
The administrator has agreed to waive a portion of its fee through April 2000 in
order to reduce total annual fund operating expenses. However, such fee waiver
is not reflected in this table. Administrative expenses are included in "Other
expenses".
EXAMPLE
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
1 3 Years
Year
$80
$26
<PAGE>
Performance of Similarly Managed Mutual Funds
The bar charts and performance tables below reflect the performance of the ABN
AMRO Money Market, Treasury Money Market and Government Money Market Funds,
which are currently managed by the advisor. These money market funds have
investment goals, policies and strategies substantially the same as those of the
corresponding funds, and may be useful in evaluating the advisor's ability to
manage money market funds. The money market funds and the corresponding funds
are subject to the same Investment Company Act and Internal Revenue Code
restrictions.
Each money market fund has two share classes, Common Shares and Investor Shares.
The bar charts and performance tables below reflect the performance of the money
market funds' Common Shares. Common Shares have lower expenses than Investor
Shares. As a result, the performance of Investor Shares historically has been
lower than that of the Common Shares. Common Shares, however, have expenses most
similar to those of the funds. For that reason, the performance history of the
Common Shares has been presented below, rather than the performance of the
Investor Shares.
The performance information below is not an indicator of the fund's future
performance; does not reflect the fund's historical performance; and relates to
a period of time before the effective date of the funds' registration with the
SEC.
Money Market Fund *^
Year-by-year total return as of December 31 each year (%)
Worst Quarter Best Quarter
Q1/94 Q2/95
0.76% 1.42%
3.97% 5.64% 5.13% 5.41% 5.33%
'94 '95 '96 '97 '98
CHART
Average annual total return of the Money Market Fund (Common Shares) as of
December 31, 1998.
This table compares the fund's average annual total returns for the periods
ending December 31, 1998 to those of the IBC Total Taxable Average. An average
measures the share prices of a specific group of mutual funds with a particular
investment goal. You cannot invest directly in an average. The IBC Total Taxable
Average is a composite of mutual funds with investment goals similar to the
fund's goal.
1 Year 3 Years 5 Years Since inception
---------------------------------------------
^^
The Fund 5.33% 5.29% 5.10% 4.75%
IBC Total Taxable Average 5.04% 5.04% 4.87% 4.50%
* Corresponding fund: Institutional Prime Money Market Fund.
^ The ratio of expenses to average net assets for the years 1994 through 1998
was 0.41%, 0.41%, 0.43%, 0.32%, 0.33%, respectively.
^^ Fund inception (1/4/93). Average inception computed from (12/31/92).
<PAGE>
Treasury Money Market Fund *^
Year-by-year total return as of December 31 each year (%)
Worst Quarter Best Quarter
Q1/94 Q2/95
0.65% 1.34%
3.58% 5.28% 4.80% 4.97% 4.90%
'94 '95 '96 '97 '98
CHART
Average annual total return of the Treasury Money Market Fund (Common Shares) as
of December 31, 1998
This table compares the fund's average annual total returns for the periods
ending December 31, 1998 to those of the IBC U.S. Treasury Average. An average
measures the share prices of a specific group of mutual funds with a particular
investment goal. You cannot invest directly in an average. The IBC U.S. Treasury
Average is a composite of mutual funds with investment goals similar to the
fund's goal.
1 Year 3 Years 5 Years Since inception
------- --------------------------------
^^
The Fund 4.90% 4.89% 4.71% 4.35%
IBC U.S. Treasury Average 4.65% 4.73% 4.60% 4.27%
* Corresponding fund: Institutional Treasury Money Market Fund.
^ The ratio of expenses to average net assets for the years 1994 through 1998
was 0.45%, 0.44%, 0.44%, 0.33%, 0.37%, respectively.
^^ Fund inception (1/4/93). Average inception computed from (12/31/92).
Government Money Market Fund *^
Year-by-year total return as of December 31 each year (%)
Worst Quarter Best Quarter
Q1/94 Q2/95
0.74% 1.40%
3.89% 5.59% 5.08% 5.33% 5.24%
'94 '95 '96 '97 '98
CHART
Average annual total return of the Government Money Market Fund (Common Shares)
as of December 31, 1998
This table compares the fund's average annual total returns for the periods
ending December 31, 1998 to those of the IBC Total Government Average. An
average measures the share prices of a specific group of mutual funds with a
particular investment goal. You cannot invest directly in an average. The IBC
Total Government Average is a composite of mutual funds with investment goals
similar to the fund's goal.
1 Year 3 Years 5 Years Since inception ^^
--------------- ------------------------
The Fund 5.24% 5.22% 5.03% 4.69%
IBC Total Government Average 4.97% 4.97% 4.81% 4.45%
* Corresponding fund: Institutional Government Money Market Fund.
^ The ratio of expenses to average net assets for the years 1994 through 1998
was 0.42%, 0.42%, 0.44%, 0.32%, 0.35%, respectively.
^^ Fund inception (1/4/93). Average inception computed from (12/31/92).
<PAGE>
Management
ABN AMRO Asset Management (USA) Inc., 208 South LaSalle Street, Chicago, IL
60604, is the advisor for each fund. ABN AMRO Asset Management was organized in
March 1991 under the laws of the State of Delaware. The advisor manages assets
for individuals, corporations, unions, governments, insurance companies, and
charitable organizations. As of September 30, 1999, the advisor managed
approximately $7.9 billion in assets. The advisor is an indirect, wholly-owned
subsidiary of ABN AMRO Bank, N.V.
The advisor will make investment decisions for the funds and will
review, supervise, and administer each fund's investment program. The Trustees
of the funds will supervise the investment advisor and establish policies that
the advisor must follow in its day-to-day management activities.
For its advisory services, the advisor is entitled to receive .10% of
each fund's average net assets.
The advisor may, from time to time and at its own expense, provide cash
promotional incentives, in the form of cash or other compensation, to certain
financial institutions whose representatives have sold or are expected to sell
significant amounts of the funds' shares. Some of these financial institutions
may be affiliated with the advisor.
Karen Van Cleave, Senior Vice President of the advisor, serves as portfolio
manager of each fund. Ms. Van Cleave joined the advisor in January 1994 as a
Vice President and Portfolio Manager and became a Senior Vice President in 1997.
Prior to 1994, Ms. Van Cleave was a Vice President and Portfolio Manager at
Chemical Investment Group, Ltd. for three years. Prior to that, she worked at
Shearson Lehman Hutton (and its predecessors) for seven years in their money
market fund complex. Ms. Van Cleave earned her B.S. in Business Administration
from Boston University.
Year 2000 Issues
The funds depend on the smooth functioning of computer systems in almost every
aspect of their business. Like other mutual funds, businesses and individuals
around the world, the funds could be adversely affected if the computer systems
used by its service providers do not properly process dates on and after January
1, 2000, and distinguish between the year 2000 and the year 1900. The funds'
service providers have given information about their computer systems and year
2000 readiness. It is possible that the funds and their shareholders may
experience losses as a result of year 2000 computer difficulties experienced by
U.S. and foreign issuers of portfolio securities, particularly governmental
issuers, or third parties, such as custodians, banks, broker-dealers or others
with which the funds do business. Furthermore, many foreign countries are not as
prepared as the U.S. for the year 2000 transition. As a result, computer
difficulties in foreign markets and with foreign institutions as a result of the
year 2000 may add to the possibility of losses for the Institutional Prime Money
Market Fund, which may invest in foreign securities, and its shareholders.
<PAGE>
Transaction Policies
Fund shares are offered to institutional investors, acting for themselves or in
a fiduciary, advisory, agency, and custodial or similar capacity. Generally,
each institutional investor must open a single master account with the fund. The
funds may request investors to maintain separate master accounts for shares held
by the investor for its own account, for the account of other institutions and
for accounts for which the institution acts as a fiduciary, or in some other
capacity. Institutions purchasing Institutional shares on behalf of their
clients may establish their own transaction policies, limitations and fees that
are different from the transaction policies, limitations and fees that are
described in this prospectus.
Purchasing Shares
Shares are purchased at the fund's net asset value (NAV). The NAV for each share
class of a fund is calculated once a day, at 5 p.m., Eastern time (ET), on each
business day, excluding major holidays. Currently the funds observe the
following holidays: New Year's Day, Martin Luther King, Jr. Day, President's
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Columbus Day,
Veterans Day, Thanksgiving Day and Christmas Day. An order will be priced at the
next NAV calculated after the fund accepts the order. Each fund uses the
amortized cost method to value its investments. Portfolio securities are valued
at their purchase price, adjusted for discounts or premiums reflected in their
acquisition cost. The amortized cost method of valuation is designed to help the
fund maintain a constant price of $1.00 per share.
Orders in proper form placed prior to 5:00 p.m., ET, and for which
payments are received in or converted into Federal Funds by 6:00 p.m., ET, will
become effective at the price determined at 5:00 p.m., ET, on that day. Shares
thus purchased will receive the dividend declared on that day. All times are
Eastern Standard time.
Minimum investment
The minimum initial investment in Institutional shares is $5,000,000.
Selling shares
Investors may redeem shares at any time, by wire or telephone. The investor will
receive the next NAV calculated after the fund's transfer agent or other
authorized agent accepts the investor's order. Ordinarily, redemption proceeds
are sent to investors within one week of a redemption request.
Selling recently purchased shares may result in a delay in receipt of
an investor's redemption proceeds of up to eight business days or until the fund
has collected payment from the investor.
General policies
The funds will not be responsible for any fraudulent telephone order, provided
that they take reasonable measures to verify the order and the investor did not
decline telephone privileges on the application.
The funds each have the right to:
o change or waive the minimum investment amounts
o refuse any purchase or exchange of shares if it could adversely affect the
fund or its operations
o change or discontinue exchange privileges or temporarily suspend exchange
privileges during unusual market conditions (see "Investor Services")
o delay sending redemption proceeds for up to seven days (generally applies only
in cases of very large redemptions, excessive trading or during unusual market
conditions)
Each fund may also make a "redemption in kind" under certain
circumstances (e.g., if the advisor determines that the amount being redeemed is
large enough to affect fund operations). Investors who receive a redemption in
kind may be required to pay brokerage costs to sell the securities distributed
by the fund, as well as the taxes on any gain from the sale.
Distributions and Taxes
Typically, each fund pays its shareholders dividends from its net investment
income once a month, and distributes any net capital gains once a year. The
funds do not expect to distribute capital gains to shareholders. Dividends and
distributions are reinvested in additional fund shares unless the investor
instructs the fund otherwise.
U.S. shareholders generally must pay taxes on dividends and distributions paid
by the funds (unless, for example, the investment is in a tax-advantaged
account).
The length of time that an investor has been in the fund and whether
the investor reinvests distributions or takes them in cash will not affect the
tax status of any distribution.
Each investor's tax situation is unique. Investors should consult a
professional about federal, state and local tax consequences.
Investor Services
Exchange privilege
An investor may exchange Institutional shares of any fund for Institutional
shares of any other fund by requesting an exchange in writing or by telephone.
New accounts established through an exchange will have the same privileges as
the original account (as long as they are available). Please read the current
prospectus for a fund before exchanging into it.
Account statements
Every investor receives regular account statements. Investors will also receive
an annual statement that describes the tax characteristics of any dividends and
distributions the fund has paid to the investor during the year.
<PAGE>
Instructions
To Establish an Account
Please call an institutional fund representative at 1-888-838-5132 before wiring
funds.
By Wire--Transmit your investment to Boston Safe Deposit and Trust with these
instructions: o ABA #011001234 fund name and DDA# Boston, Massachusetts
- - ABN AMRO Institutional Prime Money Market Fund
DDA #24-4481
- - ABN AMRO Institutional Treasury Money Market Fund
DDA #24-4481
- - ABN AMRO Institutional Government Money Market Fund
DDA #24-4481
o the Institutional share class
o your Social Security or tax ID number
o account registration
o dealer number, if applicable
o account number
Call us to obtain an account number. Return your application with the account
number on the application.
To Buy Additional Shares
Please call an institutional fund representative at 1-888-838-5132 before wiring
funds.
By Wire--Transmit your investment to Boston Safe Deposit and Trust with these
instructions:
o ABA #011001234
fund name and DDA#
Boston, Massachusetts
- - ABN AMRO Institutional Prime Money Market Fund
DDA #24-4481
- - ABN AMRO Institutional Treasury Money Market Fund
DDA #24-4481
- - ABN AMRO Institutional Government Money Market Fund
DDA #24-4481
o the Institutional share class
o account number
o account registration
o dealer number, if applicable
To Sell Shares
Please call an institutional fund representative at 1-888-838-5132 before
redeeming shares.
By Wire--Be sure the fund has your bank account information on file. Proceeds
will be wired to your bank.
To open an account, make subsequent investments, or to sell shares, please
contact your ABN AMRO institutional fund representative or call 1-888-838-5132.
<PAGE>
For More Information
To obtain information:
By telephone
Call 1-888-838-5132
You can obtain product information and literature online.
By mail Write to:
ABN AMRO Funds
P.O. Box 9690
Providence, RI 02940
On the Internet Online fund documents can be viewed or downloaded from:
www.abnamrofunds-usa.com
You can also obtain copies of fund documents by visiting the SEC's Public
Reference Room in Washington, DC (phone 1-800-SEC-0330) or by sending your
request and a duplicating fee to the SEC's Public Reference Section, Washington,
DC 20549-6009. You may also view or download text-only versions of fund
documents from: www.sec.gov
More information on each fund is available free upon request, including the
following:
Annual/Semiannual Reports
Describes each fund's performance, and lists its portfolio holdings.
Statement of Additional Information (SAI)
Provides more details about each fund and its policies. A current SAI is on file
with the SEC and is incorporated by reference into this prospectus.
ABN-F-017-01299 1940 Act Registration Number: 811-07244
<PAGE>
ABN AMRO Funds
Institutional Prime Money Market Fund(US)
Institutional Treasury Money Market Fund(US)
Institutional Government Money Market Fund(US)
Institutional Shares
Supplement dated December 28, 1999 to the
Prospectus dated December 28, 1999
THIS SUPPLEMENT PROVIDES NEW AND ADDITIONAL INFORMATION BEYOND THAT CONTAINED IN
THE PROSPECTUS FOR THE INSTITUTIONAL SHARES OF THE TRUST AND IT SHOULD BE
RETAINED AND READ IN CONJUNCTION WITH THE PROSPECTUS.
Currently, Institutional Shares of Institutional Treasury Money Market Fund and
Institutional Government Money Market Fund are not offered for sale by the
Trust.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
ABN-A-032-01
<PAGE>
ABN AMRO Funds
Institutional Prime Money Market Fund(US)
Institutional Treasury Money Market Fund(US)
Institutional Government Money Market Fund(US)
(the "Funds")
Institutional Shares and Institutional Service Shares
Investment Advisor:
ABN AMRO Asset Management (USA) Inc.
This Statement of Additional Information ("SAI") is not a prospectus. It is
intended to provide additional information regarding the activities and
operations of ABN AMRO Funds (the "Trust"), of which each Fund is a series, and
should be read in conjunction with the prospectuses dated December 28, 1999. The
Funds have two prospectuses. One prospectus relates to Institutional shares of
the Funds and the other relates to Institutional Service shares ("Service
shares") of the Funds.
Prospectuses may be obtained by writing Provident Distributors, Inc. (the
"Distributor"), 4400 Computer Drive, Westborough, Massachusetts 01581, or by
calling 1-888-838-5132.
TABLE OF CONTENTS
THE TRUST 2
DESCRIPTION OF PERMITTED INVESTMENTS. 2
INVESTMENT LIMITATIONS. 11
NON-FUNDAMENTAL POLICIES. 12
MANAGEMENT OF THE FUND. 13
TRUSTEES AND OFFICERS OF THE TRUST 13
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES 16
INVESTMENT ADVISORY AND OTHER SERVICES 16
THE ADVISOR 16
DISTRIBUTION AND SHAREHOLDER SERVICING 16
THE ADMINISTRATOR AND SUB-ADMINISTRATOR 17
THE TRANSFER AGENT 18
THE CUSTODIAN 18
COUNSEL AND AUDITORS 18
BROKERAGE ALLOCATION AND OTHER PRACTICES 18
PORTFOLIO TRANSACTIONS 18
TRADING PRACTICES AND BROKERAGE 19
DESCRIPTION OF THE TRUS 20
PURCHASE AND REDEMPTION OF SHARES 20
SHAREHOLDER LIABILITY 22
DETERMINATION OF NET ASSET VALUE 22
TAXATION 23
GENERAL INFORMATION ABOUT FUND PERFORMANCE 25
COMPUTATION OF YIELD 26
LIMITATION OF TRUSTEES' LIABILITY 27
APPENDIX A-1
December 28 , 1999
<PAGE>
THE TRUST
ABN AMRO Funds (formerly the Rembrandt Funds) is an open-end management
investment company established as a Massachusetts business trust pursuant to a
Declaration of Trust dated September 17, 1992. The Declaration of Trust permits
the Trust to offer separate series of units of beneficial interest ("shares")
and different classes of shares of each series. Currently, the Trust has 30
series. Investors may purchase shares of the Funds through two separate classes,
Institutional shares and Institutional Service shares which provide for
variations in shareholder servicing fees and other expenses. Except for these
differences between Institutional shares and Institutional Service shares, each
share of each Fund represents an equal proportionate interest in that Fund.
ADDITIONAL RISKS OF INVESTING IN THE FUNDS
Early Closing Risk
Unanticipated early closings of markets or exchanges may result in a Fund being
unable to sell or buy securities on that day. If an exchange or market closes
early on a day when a Fund needs to execute a high volume of securities trades
late in a trading day, a Fund might incur substantial trading losses.
Foreign Exchange Risk
MANY FOREIGN COUNTRIES ARE NOT AS PREPARED AS THE U.S. FOR THE YEAR 2000
TRANSITION. AS A RESULT, COMPUTER DIFFICULTIES IN FOREIGN MARKETS AND WITH
FOREIGN INSTITUTIONS AS A RESULT OF THE YEAR 2000 MAY ADD TO THE POSSIBILITY OF
LOSSES FOR THE FUNDS AND THEIR SHAREHOLDERS.
DESCRIPTION OF PERMITTED INVESTMENTS
Asset-Backed Securities
Asset-backed securities are offered by trusts and are secured by company
receivables, truck and auto loans, leases or credit card receivables. Such
securities are generally issued as passthrough certificates, which represent
undivided fractional ownership interests in the underlying pools of assets. Such
securities also may be debt instruments, which are also known as collateralized
obligations and are generally issued as the debt of a special purpose entity,
such as a trust, organized solely for the purpose of owning such assets and
issuing such debt. Asset-backed securities eligible for purchase by a Fund are
generally those securities issued as short-maturity tranches of large
securitizations, which receive principal and cash flow before other tranches.
Other asset-backed securities are short term debt instruments similar to
commercial paper but secured by a pool of public or private asset backed
transactions. A Fund may invest in other eligible asset-backed securities that
may be created in the future if the Advisor determines they are suitable.
Asset-backed securities may be traded over-the-counter and typically have short
to intermediate maturities depending on the cash flows of the underlying
financial assets which are passed through to the security holder.
Principal and interest on asset-backed commercial paper may be guaranteed up to
certain amounts and for a certain time period by letters of credit issued by
financial institutions (such as banks or insurance companies) unaffiliated with
the issuers of such securities. The purchase of asset-backed commercial paper
raises risk considerations particular to the nature of the underlying
instruments. There is the possibility that recoveries on repossessed collateral
may not, in some cases, be available to support payments on those securities.
Asset-backed securities entail prepayment risk, which may vary depending on the
type of asset, but is generally less than the prepayment risk associated with
mortgage-backed securities.
Bankers' Acceptances
Bankers' acceptances are bills of exchange or time drafts drawn on and accepted
by a commercial bank. Bankers' acceptances are used by corporations to finance
the shipment and storage of goods. Maturities are generally six months or less.
Borrowing
Borrowing may exaggerate changes in the net asset value of a Fund's shares and
in the return on the Fund's portfolio. Although the principal of any borrowing
will be fixed, a Fund's assets may change in value during the time the borrowing
is outstanding. A Fund may be required to liquidate portfolio securities at a
time when it would be disadvantageous to do so in order to make payments with
respect to an outstanding borrowing resulting in additional transaction costs.
In addition, liquidating portfolio securities may generate capital gains, which
will be distributed to shareholders as taxable income or capital gains. The
Funds may be required to segregate liquid assets in an amount sufficient to meet
their obligations in connection with such borrowings.
Certificates of Deposit
Certificates of deposit are interest bearing instruments with a specific
maturity. Certificates of deposit are issued by banks and savings and loan
institutions in exchange for the deposit of funds and normally can be traded in
the secondary market prior to maturity. Certificates of deposit with penalties
for early withdrawal are considered to be illiquid.
Commercial Paper
Commercial paper is a term used to describe unsecured short-term promissory
notes issued by banks, municipalities, corporations and other entities.
Maturities on these issues vary from a few to 270 days.
Demand Features and Guarantees
A demand feature permits the holder of a security to demand payment before
maturity. Subject to certain requirements, a Fund may rely on the demand feature
to shorten the maturity of the underlying security for purposes of compliance
with Rule 2a-7 under the 1940 Act. A demand feature can also provide
unconditional or conditional credit support, and liquidity. In some cases, a
premium may be paid for a demand feature, which may reduce the yield otherwise
payable on the underlying security. The right to obtain payment from the
provider of a demand feature depends on the provider's ability to pay.
A guarantee is an unconditional obligation of a person other than the issuer of
the security to undertake to pay certain amounts owed to the holder of the
security. A guarantee includes a letter of credit and financial guaranty (bond)
insurance. The right to obtain payment from a guarantor depends on the
guarantor's ability to pay.
Generally, a Fund may acquire only those demand features or guarantees that
present minimal credit risks and that are "eligible securities" (see Restraints
on Investments by Money Market Funds for more information). For purposes of
determining the maturity of a security subject of a demand feature or guarantee,
a Fund may consider the first date on which it has the right to obtain payment,
although the final maturity of the underlying security is later than that date.
Dollar-denominated Securities of Foreign Banks
The Funds may invest in dollar-denominated securities of foreign banks and
foreign branches of domestic banks. Such obligations include Eurodollar
Certificates of Deposit ("ECDs") which are U.S. dollar-denominated certificates
of deposit issued by offices of foreign and domestic banks located outside the
United States; Eurodollar Time Deposits ("ETDs") which are U.S.
Dollar-denominated deposits in a foreign branch of a U.S. bank or a foreign
bank; Yankee Certificates of Deposit ("Yankee CDs") which are U.S.
dollar-denominated certificates of deposit issued by a U.S. branch of a foreign
bank and held in the United States; and Yankee Bankers' Acceptances ("Yankee
BAs") which are U.S. dollar denominated bankers' acceptances issued by a U.S.
branch of a foreign bank and held in the United States.
Variable or Floating Rate Instruments
These instruments may involve a demand feature and may include variable amount
master demand notes that may be backed by bank letter of credit. The holder of
an instrument with a demand feature may tender the instrument back to the issuer
at par before maturity. A variable amount master demand note is issued pursuant
to a written agreement between the issuer and the holder. The amount may be
increased by the holder or decreased by the holder or issuer. It is payable on
demand and the rate of interest varies based upon an agreed formula. The quality
of the underlying credit must, in the opinion of the Advisor, be equivalent to
the commercial paper ratings applicable to the Fund's permitted investments. The
Advisor will monitor on an ongoing basis the earning power, cash flow and
liquidity ratios of the issuers of such instruments and will similarly monitor
the ability of an issuer of a demand instrument to pay principal and interest on
demand.
GNMA Certificates
GNMA Certificates are securities issued by the Government National Mortgage
Association ("GNMA"), a wholly owned U.S. Government corporation which
guarantees the timely payment of principal and interest. The market value and
interest yield of these instruments can vary due to market interest rate
fluctuations and early prepayments of underlying mortgages. These securities
represent ownership in a pool of federally insured mortgage loans. GNMA
certificates consist of underlying mortgages with a maximum maturity of 30
years. However, due to scheduled and unscheduled principal payments, GNMA
certificates have shorter average maturities and, therefore, less principal
volatility than a comparable 30-year bond. Since prepayment rates vary widely,
it is not possible to accurately predict the average maturity of a particular
GNMA pool. The scheduled monthly interest and principal payments relating to
mortgages in the pool will be "passed through" to investors. GNMA securities
differ from conventional bonds in that principal is paid back to the certificate
holders over the life of the loan rather than at maturity. As a result, there
will be monthly scheduled payments of principal and interest. In addition, there
may be unscheduled principal payments representing prepayments on the underlying
mortgages. Although GNMA certificates may offer yields higher than those
available from other types of U.S. Government securities, GNMA certificates may
be less effective than other types of securities as a means of "locking in"
attractive long-term rates because of the prepayment feature. For instance, when
interest rates decline, the value of a GNMA certificate likely will not rise as
much as comparable debt securities due to the prepayment feature. In addition,
these prepayments can cause the price of a GNMA certificate originally purchased
at a premium to decline in price to its par value, which may result in a loss.
Illiquid Securities
Illiquid securities are securities that cannot be disposed of within 7 days at
approximately the price at which they are being carried on a Fund's books. An
illiquid security includes a demand instrument with a demand notice period
exceeding 7 days, if there is no secondary market for such security, and
repurchase agreements with durations (or maturities) over 7 days in length.
Investment Company Shares
Under applicable regulations, the Funds are generally prohibited from acquiring
the securities of other investment companies if, as a result of such
acquisition, the Funds own more than 3% of the total voting stock of the
company; securities issued by any one investment company represent more than 5%
of the Fund's total assets; or securities (other than treasury stock) issued by
all investment companies represent more than 10% of the total assets of the
Funds. By investing in securities of an investment company, Fund shareholders
will indirectly bear the fees of that investment company in addition to the
Fund's own fees and expenses.
It is the position of the staff of the SEC that certain nongovernmental issuers
of CMOs and REMICs constitute investment companies under the Investment Company
Act of 1940, as amended ("1940 Act"), and either (a) investments in such
instruments are subject to the limitations set forth above or (b) the issuers of
such instruments have been granted orders from the SEC exempting such
instruments from the definition of investment company.
Loan Participations
Loan participations are interests in loans to U.S. corporations which are
administered by the lending bank or agent for a syndicate of lending banks, and
sold by the lending bank or syndicate member ("intermediary bank"). In a loan
participation, the borrower corporation will be deemed to be the issuer of the
participation interest except to the extent a Fund derives its rights from the
intermediary bank. Because the intermediary bank does not guarantee a loan
participation in any way, a loan participation is subject to the credit risks
generally associated with the underlying corporate borrower. In the event of the
bankruptcy or insolvency of the corporate borrower, a loan participation may be
subject to certain defenses that can be asserted by such borrower as a result of
improper conduct by the intermediary bank. In addition, in the event the
underlying corporate borrower fails to pay principal and interest when due, a
Fund may be subject to delays, expenses and risks that are greater than those
that would have been involved if the Fund had purchased a direct obligation of
such borrower. Under the terms of a loan participation, a Fund may be regarded
as a creditor of the intermediary bank (rather than of the underlying corporate
borrower), so that the Fund may also be subject to the risk that the
intermediary bank may become insolvent. The secondary market, if any, for these
loan participations is limited.
Money Market Instruments
Money market instruments include certificates of deposit, commercial paper,
bankers' acceptances, Treasury bills, time deposits, repurchase agreements and
shares of money market funds.
Mortgage-Backed Securities
Mortgage-backed securities are instruments that entitle the holder to a share of
all interest and principal payments from mortgages underlying the security. The
mortgages backing these securities include conventional thirty-year fixed rate
mortgages, graduated payment mortgages, balloon mortgages and adjustable rate
mortgages.
Government Pass-Through Securities: These are securities that are issued or
guaranteed by a U.S. Government agency representing an interest in a pool of
mortgage loans. The primary issuers or guarantors of these mortgage-backed
securities are GNMA, Fannie Mae and FHLMC. GNMA, Fannie Mae and FHLMC guarantee
timely distributions of interest to certificate holders. GNMA and Fannie May
also guarantee timely distributions of scheduled principal. Fannie Mae and FHLMC
obligations are not backed by the full faith and credit of the U.S. Government
as GNMA certificates are, but Fannie Mae and FHLMC securities are supported by
the instrumentalities' right to borrow from the U.S. Treasury.
Private Pass-Through Securities: These are mortgage-backed securities issued by
a non-governmental entity, such as a trust or corporation. These securities
include collateralized mortgage obligations ("CMOs") and real estate mortgage
investment conduits ("REMICs"). While they are generally structured with one or
more types of credit enhancement, private pass-through securities typically lack
a guarantee by an entity having the credit status of a governmental agency or
instrumentality.
In a CMO, series of bonds or certificates are usually issued in multiple
classes. Principal and interest paid on the underlying mortgage assets may be
allocated among the several classes of a series of a CMO in a variety of ways.
Principal payments on the underlying mortgage assets may cause CMOs to be
retired substantially earlier than their stated maturities or final distribution
dates, resulting in a loss of all or part of any premium paid.
A REMIC is a CMO that qualifies for special tax treatment under the Internal
Revenue Code and invests in certain mortgages principally secured by interests
in real property. Investors may purchase beneficial interests in REMICs, which
are known as "regular" interests, or "residual" interests. Guaranteed REMIC
pass-through certificates ("REMIC Certificates") issued by Fannie Mae or FHLMC
represent beneficial ownership interests in a REMIC trust consisting principally
of mortgage loans or Fannie Mae.
FHLMC or GNMA-guaranteed mortgage pass-through certificates: For FHLMC REMIC
Certificates, FHLMC guarantees the timely payment of interest, and also
guarantees the payment of principal as payments are required to be made on the
underlying mortgage participation certificates.
Stripped Mortgage-Backed Securities ("SMBs"): SMBs are usually structured with
two classes that receive specified proportions of the monthly interest and
principal payments from a pool of mortgage securities. One class may receive all
of the interest payments and is thus termed an interest-only class ("IO"), while
the other class may receive all of the principal payments and is thus termed the
principal-only class ("PO"). The value of IOs tends to increase as rates rise
and decrease as rates fall; the opposite is true of POs. SMBs are extremely
sensitive to changes in interest rates because of the impact thereon of
prepayment of principal on the underlying mortgage securities.
Investors purchasing such CMOs in the shortest maturities receive or are
credited with their pro rata portion of the scheduled payments of interest and
principal on the underlying mortgages plus all unscheduled prepayments of
principal up to a predetermined portion of the total CMO obligation. Until that
portion of such CMO obligation is repaid, investors in the longer maturities
receive interest only. Accordingly, the CMOs in the longer maturity series are
less likely than other mortgage pass-throughs to be prepaid prior to their
stated maturity. Although some of the mortgages underlying CMOs may be supported
by various types of insurance, and some CMOs may be backed by GNMA certificates
or other mortgage pass-throughs issued or guaranteed by U.S. Government agencies
or instrumentalities, the CMOs themselves are not generally guaranteed. FHLMC
has in the past guaranteed only the ultimate collection of principal of the
underlying mortgage loan; however, FHLMC now issues mortgage-backed securities
(FHLMC Gold PCS) which also guarantee timely payment of monthly principal
reductions. Government and private guarantees do not extend to the securities'
value, which is likely to vary inversely with fluctuations in interest rates.
A Fund also may invest in parallel pay CMOs and Planned Amortization Class CMOs
("PAC Bonds"). Parallel pay CMOs are structured to provide payments of principal
on each payment date to more than one class. These simultaneous payments are
taken into account in calculating the stated maturity date or final distribution
date of each class, which, as with other CMO structures, must be retired by its
stated maturity date or final distribution date, but may be retired earlier. PAC
Bonds are always parallel pay CMOs with the required principal payment on such
securities having the highest priority after interest has been paid to all
classes.
Municipal Securities
The two principal classifications of Municipal Securities are "general
obligation" and "revenue" issues. General obligation issues are issues involving
the credit of an issuer possessing taxing power and are payable from the
issuer's general unrestricted revenues, although the characteristics and method
of enforcement of general obligation issues may vary according to the law
applicable to the particular issuer. Revenue issues are payable only from the
revenues derived from a particular facility or class of facilities or other
specific revenue source. A Fund may also invest in "moral obligation" issues,
which are normally issued by special purpose authorities. Moral obligation
issues are not backed by the full faith and credit of the state but are
generally backed by the agreement of the issuing authority to request
appropriations from the state legislative body. Municipal Securities include
debt obligations issued by governmental entities to obtain funds for various
public purposes, such as the construction of a wide range of public facilities,
the refunding of outstanding obligations, the payment of general operating
expenses, and the extension of loans to other public institutions and
facilities. Certain private activity bonds that are issued by or on behalf of
public authorities to finance various privately-owned or operated facilities are
included within the term "Municipal Securities." Private activity bonds and
industrial development bonds are generally revenue bonds, the credit and quality
of which are directly related to the credit of the private user of the
facilities.
Municipal Securities may also include general obligation notes, tax anticipation
notes, bond anticipation notes, revenue anticipation notes, project notes,
certificates of indebtedness, demand notes, tax-exempt commercial paper,
construction loan notes and other forms of short-term, tax-exempt loans. Such
instruments are issued with a short-term maturity in anticipation of the receipt
of tax funds, the proceeds of bond placements or other revenues. Project notes
are issued by a state or local housing agency and are sold by the Department of
Housing and Urban Development. While the issuing agency has the primary
obligation with respect to its project notes, they are also secured by the full
faith and credit of the United States through agreements with the issuing
authority which provide that, if required, the federal government will lend the
issuer an amount equal to the principal of and interest on the project notes.
The quality of Municipal Securities, both within a particular classification and
between classifications, will vary, and the yields on Municipal Securities
depend upon a variety of factors, including general money market conditions, the
financial condition of the issuer (or other entity whose financial resources are
supporting the securities), general conditions of the municipal bond market, the
size of a particular offering, the maturity of the obligation and the rating(s)
of the issue. In this regard, it should be emphasized that the ratings of any
nationally recognized statistical rating organization ("NRSRO") are general and
are not absolute standards of quality. Municipal Securities with the same
maturity, interest rate and rating(s) may have different yields, while Municipal
Securities of the same maturity and interest rate with different rating(s) may
have the same yield.
An issuer's obligations under its Municipal Securities are subject to the
provisions of bankruptcy, insolvency, and other laws affecting the rights and
remedies of creditors, such as the Federal Bankruptcy Code, and laws, if any,
which may be enacted by Congress or state legislatures extending the time for
payment of principal or interest, or both, or imposing other constraints upon
the enforcement of such obligations or upon the ability of municipalities to
levy taxes. The power or ability of an issuer to meet its obligations for the
payment of interest on and principal of its Municipal Securities may be
materially adversely affected by litigation or other conditions.
Receipts
Receipts are interests in separately traded interest and principal component
parts of U.S. Treasury obligations that are issued by banks and brokerage firms
and are created by depositing U.S. Treasury obligations into a special account
at a custodian bank. The custodian holds the interest and principal payments for
the benefit of the registered owners of the certificates or receipts. The
custodian arranges for the issuance of the certificates or receipts evidencing
ownership and maintains the register. Receipts are sold as zero coupon
securities which means that they are sold at a substantial discount and redeemed
at face value at their maturity date without interim cash payments of interest
or principal. This discount is amortized over the life of the security, and such
amortization will constitute the income earned on the security for both
accounting and tax purposes. Because of these features, receipts may be subject
to greater price volatility than interest paying U.S. Treasury obligations.
Receipts include "Treasury Receipts" ("TRs"), "Treasury Investment Growth
Receipts" ("TIGRs"), and "Certificates of Accrual on Treasury Securities"
("CATS").
Repurchase Agreements
Repurchase agreements are agreements by which a person (e.g., a Fund) obtains a
security and simultaneously commits to return the security to the seller
(primary securities dealer recognized by the Federal Reserve Bank of New York or
a national member bank as defined in Section 3(d)(1) of the Federal Deposit
Insurance Act, as amended) at an agreed upon price (including principal and
interest) on an agreed upon date within a number of days (usually not more than
seven) from the date of purchase. The resale price reflects the purchase price
plus an agreed upon market rate of interest which is unrelated to the coupon
rate or maturity of the underlying security. A repurchase agreement involves the
obligation of the seller to pay the agreed upon price, which obligation is in
effect secured by the value of the underlying security.
Repurchase agreements are considered to be loans by the Funds for purposes of
their investment limitations. The repurchase agreements entered into by the
Funds will provide that the underlying security at all times shall have a value
at least equal to 100% of the resale price stated in the agreement (the Advisor
monitors compliance with this requirement). Under all repurchase agreements
entered into by the Funds, the custodian or its agent must take possession of
the underlying collateral. However, if the seller defaults, the Funds could
realize a loss on the sale of the underlying security to the extent that the
proceeds of sale including accrued interest are less than the resale price
provided in the agreement including interest. In addition, even though the
Bankruptcy Code provides protection for most repurchase agreements, if the
seller should be involved in bankruptcy or insolvency proceedings, the Funds may
incur delay and costs in selling the underlying security or may suffer a loss of
principal and interest if the Funds are treated as unsecured creditors and
required to return the underlying securities to the seller's estate.
Restraints on Investments by Money Market Funds
Investments by each of the Funds are subject to limitations imposed on money
market funds under rules adopted by the SEC. Under SEC rules, money market funds
may acquire only obligations that present minimal credit risks and that are
"eligible securities," which generally means they are rated, at the time of
investment, in the highest short-term rating category for debt obligations
(within which there may be sub-categories) by at least two NRSROs (one if there
is only one organization rating such obligation) in one of the two highest
short-term rating categories or, if unrated, determined to be of comparable
quality. First tier securities are securities that are rated by at least two
NRSROs (one if it is the only organization rating such securities) or an unrated
security determined to be of comparable quality. Second tier securities are
eligible securities that do not qualify as first tier securities. The Advisor
will determine that an obligation presents minimal credit risks or that unrated
instruments are of comparable quality in accordance with guidelines established
by the Trustees. In the event that an investment held by a Fund is assigned a
lower rating or ceases to be rated, the Advisor will promptly reassess whether
such security presents suitable credit risks and whether the Fund should
continue to hold the security or obligation in its portfolio. If a portfolio
security or obligation no longer presents suitable credit risks or is in
default, the Fund will dispose of the security or obligation as soon as
reasonably practicable unless the Trustees of the Trust determine that to do so
is not in the best interest of the Fund.
Securities Lending
Securities loaned by a Fund pursuant to an agreement which requires collateral
to secure the loan are not made if, as a result, the aggregate amount of all
outstanding securities loans for the Fund exceeds one-third of the value of a
Fund's total assets (including the value of the collateral) taken at fair market
value. A Fund continues to receive interest on the loaned securities while
simultaneously earning interest on the investment of the cash collateral in U.S.
Government securities. However, a Fund normally pays lending fees to such
broker-dealers and related expenses from the interest earned on invested
collateral. Loans are made only to borrowers deemed by the Advisor to be of good
standing and when, in the judgment of the Advisor, the consideration which can
be earned currently from such securities loans justifies the attendant risk. Any
loan may be terminated by either party upon reasonable notice to the other
party.
Lending portfolio securities involves risks that the borrower may fail to return
the securities or provide additional collateral. Voting rights with respect to
the loaned securities may pass with the lending of the securities and efforts to
call such securities promptly may be unsuccessful, especially for foreign
securities. A Fund may loan portfolio securities to qualified broker-dealers or
other institutional investors provided: (1) the loan is secured continuously by
collateral consisting of U.S. government securities, letters of credit, cash or
cash equivalents maintained on a daily marked-to-market basis in an amount at
least equal to the current market value of the securities loaned; (2) the Fund
may at any time call the loan and obtain the return of the securities loaned;
and (3) the Fund will receive any interest or dividends paid on the loaned
securities.
STRIPS
Separately traded interest and principal securities ("STRIPS") are component
parts of U.S. Treasury Securities traded through the Federal Book-Entry System.
The Advisor will purchase only STRIPS that it determines are liquid or, if
illiquid, that do not violate the Fund's investment policy concerning
investments in illiquid securities. Consistent with Rule 2a-7, the Advisor will
purchase only STRIPS that have a remaining maturity of 397 days or less. While
there is no limitation on the percentage of a Fund's assets that may be
comprised of STRIPS, the Advisor will monitor the level of such holdings to
avoid the risk of impairing shareholders' redemption rights and of deviations in
the value of shares of the Funds.
Obligations of Supranational Entities
Supranational entities are entities established through the joint participation
of several governments, and include the Asian Development Bank, Inter-American
Development Bank, International Bank for Reconstruction and Development (World
Bank), African Development Bank, European Economic Community, European
Investment Bank and Nordic Investment Bank. The governmental members, or
"stockholders," usually make initial capital contributions to the supranational
entity and in many cases are committed to make additional capital contributions
if the supranational entity is unable to repay its borrowings.
U.S. Government Agency Obligations
Obligations issued or guaranteed by agencies of the U.S. Government, including,
among others, the Federal Farm Credit Bank, the Federal Housing Administration
and the Small Business Administration, and obligations issued or guaranteed by
instrumentalities of the U.S. Government, including, among others, the Federal
Home Loan Mortgage Corporation, the Federal Land Banks and the U.S. Postal
Service. Some of these securities are supported by the full faith and credit of
the U.S. Treasury (e.g. GNMA securities), others are supported by the right of
the issuer to borrow from the Treasury (e.g., Federal Farm Credit Bank
securities), while still others are supported only by the credit of the
instrumentality (e.g., Fannie Mae securities). Guarantees of principal by
agencies or instrumentalities of the U.S. Government may be a guarantee of
payment at the maturity of the obligation so that in the event of a default
prior to maturity there might not be a market and thus no means of realizing on
the obligation prior to maturity. Guarantees as to the timely payment of
principal and interest do not extend to the value or yield of these securities
nor to the value of the Fund's shares.
U.S. Treasury Obligations
U.S. Treasury obligations consist of bills, notes and bonds issued by the U.S.
Treasury, as well as separately traded interest and principal component parts of
such obligations, known as "Separately Traded Registered Interest and Principal
Securities" ("STRIPS"), that are transferable through the Federal book-entry
system.
When-Issued Securities
When-issued or delayed delivery basis transactions involve the purchase of an
instrument with payment and delivery taking place in the future. Delivery of and
payment for these securities may occur a month or more after the date of the
purchase commitment. The interest rate realized on these securities is fixed as
of the purchase date and no interest accrues to the Fund before settlement.
These securities are subject to market fluctuations due to changes in market
interest rates, and it is possible that the market value at the time of
settlement could be higher or lower than the purchase price if the general level
of interest rates has changed. Although a Fund generally purchases securities on
a when-issued or forward commitment basis with the intention of actually
acquiring securities for its portfolio, a Fund may dispose of a when-issued
security or forward commitment prior to settlement if it deems appropriate. When
investing in when-issued securities, a Fund will not accrue income until
delivery of the securities and will invest in such securities only for purposes
of actually acquiring the securities and not for the purpose of leveraging.
The when-issued securities are subject to market fluctuations, and the purchaser
accrues no interest on the security during this period. The payment obligation
and the interest rate that will be received on the securities are each fixed at
the time the purchaser enters into the commitment.
The Funds segregate cash or liquid assets in an amount at least equal in value
to the Funds' commitments to purchase when-issued securities. If the value of
these assets declines, the Funds place additional liquid assets aside on a daily
basis so that the value of the assets set aside is equal to the amount of such
commitments. Consequently, the Funds do not use such purchases for leveraging.
Whenever a Fund is required to establish a segregated account, notations on the
books of the Trust's custodian are sufficient to constitute a segregated
account.
Zero Coupon Obligations
Zero coupon obligations are debt obligations that do not bear any interest, but
instead are issued at a deep discount from face value or par. The value of a
zero coupon obligation increases over time to reflect the interest accreted.
Such obligations will not result in the payment of interest until maturity, and
will have greater price volatility than similar securities that are issued at
face value or par and pay interest periodically.
Temporary Defensive Investing
The investments and strategies described throughout the prospectus are those the
Advisor intends to use under normal market conditions. When the Advisor
determines that market conditions warrant, each Fund may invest up to 100% of
its assets in money market instruments other than those described under
Principal Investment Strategies, or hold U.S. dollars. This may occur, for
example, if securities markets or issuers experience difficulties with the year
2000 transition. When a Fund is investing for temporary, defensive purposes, it
is not pursuing its investment goal.
INVESTMENT LIMITATIONS
Each Fund has adopted certain investment limitations which are fundamental and
may not be changed without approval by a majority vote of the Fund's outstanding
shares. The term "majority of the Fund's outstanding shares" means the vote of
(i) 67% or more of the Fund's shares present at a meeting, if more than 50% of
the outstanding shares of the Fund are present or represented by proxy, or (ii)
more than 50% of the Fund's outstanding shares, whichever is less.
<PAGE>
No Fund may:
1. Underwrite securities issued by others, except to the extent that a Fund may
be considered an underwriter within the meaning of the Securities Act of 1933 in
the disposition of shares of the Fund.
2. Issue senior securities (as defined in the 1940 Act) except in connection
with permitted borrowings as described below or as permitted by rule, regulation
or order of the SEC.
3. Borrow money, except that a Fund (a) may borrow money for temporary or
emergency purposes in an amount not exceeding 5% of the Fund's total assets
determined at the time of the borrowing and (b) may borrow money from banks or
by engaging in reverse repurchase agreements. Asset coverage of at least 300% is
required for all borrowings, except where a Fund has borrowed money for
temporary purposes in amounts not exceeding 5% of its total assets.
4. Purchase or sell real estate or physical commodities, unless acquired as a
result of ownership of securities or other instruments (but this shall not
prevent a Fund from investing in securities or other instruments either issued
by companies that invest in real estate, backed by real estate or securities of
companies engaged in the real estate business).
5. Purchase securities of any issuer if, as a result, the Fund would violate the
diversification provisions of Rule 2a-7 under the 1940 Act.
6. Purchase securities of any issuer if, as a result, more than 25% of the total
assets of the Fund are invested in the securities of one or more issuers whose
principal business activities are in the same industry or securities the
interest upon which is paid from revenue of similar type industrial development
projects, provided that this limitation does not apply to: (i) investment in
obligations issued or guaranteed by the U.S. Government or its agencies and
instrumentalities or in repurchase agreements involving such securities; (ii)
obligations issued by domestic branches of U.S. banks or U.S. branches of
foreign banks subject to the same regulations as U.S. banks; or (iii) tax-exempt
securities issued by government or political subdivisions of governments.
7. Make loans, except as permitted by the 1940 Act, and the rules and
regulations thereunder.
The foregoing percentages (except for the limitation on illiquid securities
below) apply at the time of the purchase of a security and shall not be
considered violated unless an excess occurs or exists immediately after and as a
result of a purchase of such security.
NON-FUNDAMENTAL POLICIES
No Fund may invest in illiquid securities in an amount exceeding, in the
aggregate, 10% of the Fund's net assets.
A Fund's goal may be changed without shareholder approval.
<PAGE>
MANAGEMENT OF THE FUND
TRUSTEES AND OFFICERS OF THE TRUST
The management and affairs of the Trust are supervised by the Trustees under the
laws governing business trusts in The Commonwealth of Massachusetts. The
Trustees have approved contracts under which certain companies provide essential
management, administrative and other services to the Trust. The Trustees and
executive officers of the Trust and their principal occupations for the last
five years are set forth below.
<TABLE>
<CAPTION>
<S> <C> <C>
Name Age and Address Position with Fund Principal Occupation for past 5 years
- -------------------- ------------------ -------------------------------------
Arnold F. Brookstone (04/08/30) Trustee, Chairman Retired. Executive Vice President, Chief Financial
950 N. Michigan Avenue Officer and Planning Officer of Stone Container
Chicago, IL 60611 Corporation (pulp and paper business), 1991-1996
William T. Simpson (07/26/27) Trustee Retired since July 1992
1318 Navajo Court
Louisville, KY 40207
Robert Fietler (11/19/30) Trustee Retired. Chairman of Executive Committee, Board of
179 East Lake Shore Drive Directors, Weyco Group, Inc. (men's footwear), since
Chicago, IL 60611 1996. President and Director, Weyco Group, Inc.,
1968-1996.
James Wynsma (04/19/36) President and CEO** Since April 1992, Vice Chairman
ABN AMRO Asset Management LaSalle National Bank and ABN AMRO Asset Management
(USA) Inc. since May 1999, President, CEO and Director ABN AMRO
208 S. LaSalle Street Asset Management (USA) Inc.
Chicago, IL 60604
Steven Smith (04/20/53) Senior Vice President** Since 1999, Senior Vice President and Director of Mutual
ABN AMRO Asset Management Funds for ABN AMRO Asset Management (USA) Inc., 1994 -
(USA) Inc. 1999, Senior Vice President and Director of External
208 S. LaSalle Street Distribution (prior to 1996 Director of Retail
Chicago, IL 60604 Distribution), BISYS Fund Services, 1990 - 1994, Senior
Vice President and Director of Institutional Accounts,
Selected Financial Services, Inc., Kemper Corporation.
Craig R. Carberry (07/12/60) Vice President and Vice President and Counsel , Legal Department, ABN AMRO
ABN AMRO Asset Management Secretary** North America, Inc., Vice President and Head of Legal and
(USA) Inc. Compliance, ABN AMRO Bank N.V., Global Asset Management
208 S. LaSalle Street Directorate, Amsterdam, the Netherlands, November 1996 -
Chicago, IL 60604 September 1999. Joined ABN AMRO North America, Inc. in
1994 as a Senior Attorney.
</TABLE>
** This person is an "affiliated person" of both the Advisor and The Trust, as
the term is defined in the 1940 Act.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Name Age and Address Position with Fund Principal Occupation for past 5 years
- -------------------- ------------------ -------------------------------------
Michael T. Castino (08/10/62) Vice President** Since July 1997, Vice President, Fund Marketing, of ABN
ABN AMRO Asset Management AMRO Asset Management (USA) Inc. Assistant Vice
(USA) Inc. President, Rembrandt Product Manager of LaSalle
208 S. LaSalle Street National Bank (formerly, LaSalle National Trust, N.A.),
Chicago, IL 60604 June 1995-July 1997. Director of Fund Marketing,
Kemper Financial Services, Inc., October 1991-June 1995.
Kathryn L. Martin (10/23/57) Vice President** Since March 1998, Senior Vice President, Director of
ABN AMRO Asset Management Compliance of ABN AMRO Asset Management (USA) Inc.,
(USA) Inc. June 1995-March 1998. Assistant Vice President,
208 S. LaSalle Street LaSalle Street Capital Management, Ltd. (formerly,
Chicago, IL 60604 Chemical Investment Group), October 1989-June 1995.
Laurie Lynch (08/31/61) Vice President** Since April 1997, Marketing Associate, Fund Marketing
ABN AMRO Asset Management of ABN AMRO Asset Management (USA) Inc. Executive
(USA) Inc. Assistant, LaSalle Street Capital Management, Ltd.,
208 LaSalle Street April 1996-April 1997. Municipal Underwriting
Chicago, IL 60604 Assistant, Fidelity Capital Markets, September
1994-April 1997. Office Administrator, The Choice for
Staffing, March 1992-September 1994.
Michael C. Kardok (07/17/59) Treasurer Vice President and Division Manager, PFPC, Inc.; prior
PFPC Inc. to May 1994, Vice President, The Boston Company
4400 Computer Drive Advisors, Inc.
Westborough, MA 01581
Therese M. Hogan (02/27/62) Vice President and Assistant Director of State Regulation of PFPC, Inc., since June
PFPC Inc. Treasurer 1994. For more than eight years prior thereto, a
4400 Computer Drive paralegal at Robinson & Cole in Hartford, CT.
Westborough, MA 01581
Elizabeth Lawrence (01/10/64) Vice President and Assistant Vice President of Client Services for PFPC, Inc., since
PFPC Inc. Treasurer 1988. Prior to joining PFPC Inc., Ms. Lawrence was at
4400 Computer Drive Fidelity Investments serving in the institutional
Westborough, MA 01581 trading unit and at Merrill, Lynch, Pierce, Fenner and
Smith.
Marc Peirce (04/06/62) Vice President** Since September 1998, Compliance Analyst of ABN AMRO
ABN AMRO Asset Management Asset Management (USA) Inc. Compliance Analyst, The
(USA) Inc. Northern Trust Company from August 1996 to September
208 S. LaSalle Street 1998; Tax Analyst, The Northern Trust Company,
Chicago, IL 60604 September 1991 - August 1996.
</TABLE>
** This person is an "affiliated person" of both the Advisor and The Trust, as
the term is defined in the 1940 Act.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Name Age and Address Position with Fund Principal Occupation for past 5 years
- -------------------- ------------------ -------------------------------------
Karen DePoutot (10/07/66) Assistant Treasurer Director of Mutual Fund Treasury and Assistant
PFPC Inc. Treasurer for PFPC, Inc. since June 1994. Prior to
4400 Computer Drive June 1994, Ms. DePoutot was a Senior Treasury
Westborough, MA 01581 Analyst at The New England and an Assistant Vice
President in the Mutual Fund Accounting Department
at The Boston Company Advisors, Inc.
John H. Grady, Jr. (06/01/61) Assistant Secretary Partner, Morgan, Lewis & Bockius LLP (law firm)
Morgan, Lewis & Bockius LLP since 1995; Associate, Morgan, Lewis & Bockius LLP,
1701 Market Street 1993-1995.
Philadelphia, PA 19103
Richard W. Grant (10/25/45) Assistant Secretary Partner, Morgan, Lewis & Bockius LLP (law firm)
Morgan, Lewis & Bockius LLP since 1989.
1701 Market Street
Philadelphia, PA 19103
Mary Moran Zeven (02/27/61) Assistant Secretary Vice President, PFPC Inc. Prior to October 1999,
PFPC Inc. Counsel, Curtis, Mallet-Prevost, Colt & Mosle LLP
101 Federal Street (law firm). Prior to June 1996, General Counsel,
Boston, Massachusetts 02110 Global Asset Management (USA) Inc.
</TABLE>
For the fiscal year ended December 31, 1998 (except as noted), the Trustees
received the following compensation:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
- --------------------------- -------------------------- -------------------------- -------------------------- ----------------------
Total Compensation From
Aggregate Compensation Registrant and Fund
From Registrant through Pension or Retirement Estimated Annual Complex Paid to
Name of Person current Fiscal Year Benefits Accrued as Part Benefits Upon Retirement Directors for Fiscal
Position of Fund Expenses Year Ended 1998
- --------------------------- -------------------------- -------------------------- -------------------------- ---------------------
Arnold F. Brookstone $3,500 (estimated) N/A N/A $14,000 for service on
Trustee one board
- --------------------------- -------------------------- -------------------------- -------------------------- ----------------------
William T. Simpson $3,500(estimated) N/A N/A $14,000 for service on
Trustee one board
- --------------------------- -------------------------- -------------------------- -------------------------------------------------
John A. Wing None N/A N/A None
Trustee/1/
- --------------------------- -------------------------- -------------------------- -------------------------- ---------------------
Robert Fietler $3,500(estimated) N/A N/A $14,000
Trustee
- --------------------------- -------------------------- -------------------------- -------------------------- ---------------------
Timothy Leach None N/A N/A N/A
Trustee/1/
- --------------------------- -------------------------- -------------------------- -------------------------- --------------------
</TABLE>
/1/ No longer serves on the Board.
The Trust pays the fees for unaffiliated Trustees who are not "interested
persons" of the Trust. Officers and affiliated Trustees are not compensated by
the Trust.
<PAGE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of September 30, 1999, the Trustees and officers of the Trust owned less than
1% of the outstanding shares of the Funds. As of the same date, there were no
persons owning 5% or more of the outstanding shares of any of the Funds.
INVESTMENT ADVISORY AND OTHER SERVICES
THE ADVISOR
The Trust and ABN AMRO Asset Management (USA) Inc., 208 South LaSalle Street,
Chicago, Illinois 60604 (the "Advisor"), have entered into an advisory agreement
(the "Advisory Agreement"). The Advisory Agreement provides that the Advisor
shall not be protected against any liability to the Trust or its shareholders by
reason of willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard of its obligations or
duties thereunder.
The Advisor is a direct, wholly-owned subsidiary of ABN AMRO Capital Markets
Holding, Inc., which is an indirect, wholly-owned subsidiary of ABN AMRO Holding
N.V., a Netherlands company. The Administrator and Advisor are affiliated and
under the common control of ABN AMRO Holding N.V.
The continuance of the Advisory Agreement, after the first two years, must be
specifically approved at least annually (i) by the vote of the Trustees, and
(ii) by the vote of a majority of the Trustees who are not parties to the
Agreement or "interested persons" of any party thereto, cast in person at a
meeting called for the purpose of voting on such approval. The Advisory
Agreement will terminate automatically in the event of its assignment, and is
terminable at any time without penalty by the Trustees of the Trust or, with
respect to the Funds by a majority of the outstanding shares of the Funds, on
not less than 30 days' nor more than 60 days' written notice to the Advisor, or
by the Advisor on 90 days' written notice to the Trust. The Advisor is entitled
to receive .10% of each Fund's daily net assets as its advisory fee.
The Advisor structures the Fund's portfolio based on its outlook on interest
rates, market conditions, and liquidity needs.
The Advisor's judgments about the securities markets, economy and companies, or
selecting investments may not reflect actual market movements, economic
conditions or company performance. In addition, the Advisor may need to change
the Fund's investment strategy in response to changing market or economic
conditions.
The Advisor monitors the Institutional Prime Money Market Fund's investments for
credit quality changes and may adjust the average maturity of all the Funds in
anticipation of changes in short-term interest rates. Important factors in this
decision by the Advisor include an assessment of Federal Reserve policy and an
analysis of the yield curve (the range of yields offered).
DISTRIBUTION AND SHAREHOLDER SERVICING
Provident Distributors, Inc., (the "Distributor"), Four Falls Corporate Center,
6th Floor, West Conshohocken, Pennsylvania 19428-2961, and the Trust are parties
to a distribution agreement (the "Distribution Agreement") dated December 1,
1999. The Distribution Agreement shall be reviewed and ratified at least
annually (i) by the Trustees or by the vote of a majority of the outstanding
shares of the Trust, and (ii) by the vote of a majority of the Trustees of the
Trust who are not parties to the Distribution Agreement or "interested persons"
(as defined in the 1940 Act) of any party to the Distribution Agreement, cast in
person at a meeting called for the purpose of voting on such approval. The
Distribution Agreement will terminate in the event of any assignment, as defined
in the 1940 Act, and is terminable, without penalty, on at least 60 days'
written notice, by either party, or by vote of a majority of the outstanding
shares of such Fund. Under the Distribution Agreement, the Distributor has
agreed to use its best efforts in connection with the distribution of Fund
shares. Fund shares are offered continuously.
Shareholder Servicing Plan
The Trust has adopted a shareholder servicing plan for the Service shares of
each Fund (the "Shareholder Servicing Plan"). Under the Shareholder Servicing
Plan, the Trust pays a fee of 0.25% of the average daily net assets of the
Service shares. This fee is paid to the Distributor to perform, or to compensate
other service providers for performing, the following shareholder services:
maintaining client accounts; arranging for bank wires; responding to client
inquiries concerning services provided on investments; assisting clients in
changing dividend options, account designations and addresses; sub-accounting;
providing information on share positions to clients; forwarding shareholder
communications to clients; processing purchase, exchange and redemption orders;
providing sweep services; and processing dividend payments. The Distributor may
voluntarily waive all or a portion of its shareholder servicing fee, and may
discontinue its waiver at any time.
It is possible that an intermediary may offer different classes of shares to its
customers and differing services to the classes, and thus receive compensation
with respect to different classes. Intermediaries also may charge separate fees
to their customers.
THE ADMINISTRATOR AND SUB-ADMINISTRATOR
ABN AMRO Fund Services, Inc. (the "Administrator") serves as the Administrator
for the Trust. The Administrator is an affiliate of the Advisor and both are
under common control of ABN AMRO Holding N.V., a Netherlands company. As
Administrator, it provides the Trust with administrative services, including
oversight and monitoring of the sub-administrator, transfer agent, distributor
and custodian. The Administrator is entitled to a fee, which is calculated daily
and paid monthly, at an annual rate of 0.05% of the average daily net assets of
the Funds.
Under the Administration Agreement: (i) the Administrator is entitled to receive
a fee at an annual rate of 0.05% of the average daily net assets of the Funds;
(ii) the Trust may withhold a portion of this fee in the event that the
Administrator fails to perform its duties according to the performance standards
as set forth in the Agreement; and (iii) the Trust agreed to pay the
Administrator $1,500,000 if the Trust terminates the Agreement within the first
year and $750,000 if the Trust terminates the Agreement in the second year. The
Administrator has agreed to waive a portion of its fees through April 2000 in
order to reduce total annual fund operating expenses.
The Administrator, a Delaware corporation, has its principal business offices at
208 South LaSalle Street, Chicago, Illinois 60604. ABN AMRO Holding N.V. and its
subsidiaries and affiliates, including the Administrator, are global providers
of financial services, including banking and investment management.
PFPC Inc. ("PFPC") serves as the Sub-Administrator for the Trust. As
Sub-Administrator it provides the Trust with sub-administrative services,
including fund accounting, regulatory reporting, necessary office space,
equipment, personnel and facilities. Compensation for these services is paid
under a Sub-Administrative and Fund Accounting Agreement with the Administrator.
Under the Sub-Administration Agreement: (i) the Sub-Administrator is entitled to
receive a fee at an annual rate of 0.02% of the average net assets of the Trust;
(ii) the Administrator may withhold a portion of this fee in the event that the
Sub-Administrator fails to perform its duties according to the performance
standards as set forth in the Agreement; and (iii) the Administrator agreed to
pay the Sub-Administrator $1,500,000 if the Administrator terminates the
Agreement within the first year and $750,000 if the Administrator terminates the
Agreement in the second year.
PFPC, a Massachusetts corporation and an indirect majority-owned subsidiary of
PNC Bank Corp., has its principal offices at 249 Fifth Avenue, Pittsburgh,
Pennsylvania 15222-2707. PFPC is a leading provider of funds evaluation
services, trust accounting systems, and brokerage and information services to
financial institutions, institutional investors, and money managers.
THE TRANSFER AGENT
PFPC (the "Transfer Agent"), serves as the transfer agent and dividend
disbursing agent to the Trust pursuant to a transfer agency agreement (the
"Transfer Agency Agreement") between the Trust and PFPC dated May 11, 1998, as
amended. Under the Transfer Agency Agreement, the Transfer Agent is entitled to
receive fees for its services, which may be reduced in the event that the
Transfer Agent fails to meet certain performance standards set forth in the
Agreement. Under the Agreement, the Trust agreed to pay the Transfer Agent
$1,500,000 if the Trust terminates the Agreement within the first year and
$750,000 if it terminates the Agreement during the second year. PFPC provides
transfer agency services to the Trust at PFPC's facility located at 3200 Horizon
Drive, King of Prussia, Pennsylvania 19406-10549.
THE CUSTODIAN
The Chase Manhattan Bank, 270 Park Avenue, New York, New York 10017, acts as
custodian of the Trust. The Custodian holds cash, securities, and other assets
of the Trust as required by the Investment Company Act of 1940.
COUNSEL AND AUDITORS
Morgan, Lewis & Bockius LLP serves as counsel to the Trust. Ernst & Young LLP,
with offices at 200 Clarendon Street, Boston, Massachusetts 02116-5072, serves
as the independent auditors of the Trust.
BROKERAGE ALLOCATION AND OTHER PRACTICES
PORTFOLIO TRANSACTIONS
The Trust has no obligation to deal with any dealer or group of dealers in the
execution of transactions in portfolio securities. Subject to policies
established by the Trustees, the Advisor is responsible for placing the orders
to execute transactions for the Funds. In placing orders, it is the policy of
the Trust to seek to obtain the best net results taking into account such
factors as price (including the applicable dealer spread), the size, type and
difficulty of the transaction involved, the firm's general execution and
operational facilities, research and the firm's risk in positioning the
securities involved. While the Advisor generally seeks reasonably competitive
spreads or commissions, the Trust will not necessarily be paying the lowest
spread or commission available.
The money market securities in which the Funds invest are traded primarily in
the over-the-counter market. Bonds and debentures are usually traded over-the-
counter, but may be traded on an exchange. The Advisor usually deals directly
with the dealers who make a market in the securities, unless better prices and
execution are available elsewhere. Such dealers usually are acting as principal
for their own account. On occasion, securities may be purchased directly from
the issuer. Money market securities are generally traded on a net basis and do
not normally involve either brokerage commissions or transfer taxes. The cost of
executing portfolio securities transactions of the Trust will primarily consist
of dealer spreads and underwriting commissions.
TRADING PRACTICES AND BROKERAGE
The Advisor selects brokers or dealers to execute transactions for the purchase
or sale of portfolio securities on the basis of their judgment of the
professional capability of the brokers or dealers to provide the service. The
primary consideration is to have brokers or dealers execute transactions at best
price and execution. Best price and execution refer to many factors, including
the price paid or received for a security, the commission charged, the
promptness and reliability of execution, the confidentiality and placement
accorded the order and other factors affecting the overall benefit obtained by
the account on the transaction. The Trust's determination of what are reasonably
competitive rates is based upon the professional knowledge of its trading
department as to rates paid and charged for similar transactions throughout the
securities industry. In some instances, the Trust pays a minimal share
transaction cost when the transaction presents no difficulty. Some trades are
made on a net basis where the Trust either buys securities directly from the
dealer or sells them to the dealer. In these instances, there is no direct
commission charged but there is a spread (the difference between the buy and
sell price) which is the equivalent of a commission.
The Advisor may place a combined order for two or more accounts or Funds engaged
in the purchase or sale of the same security if, in their judgment, joint
execution is in the best interest of each participant and will result in best
price and execution. Transactions involving commingled orders are allocated in a
manner deemed equitable to each account or Fund. It is believed that an ability
to participate in volume transactions will generally be beneficial to the
accounts and Funds. Although it is recognized that, in some cases, the joint
execution of orders could adversely affect the price or volume of the security
that a particular account or Fund may obtain, it is the opinion of the Advisor
and the Trust's Board of Trustees that the advantages of combined orders
outweigh the possible disadvantages of separate transactions.
Consistent with the Conduct Rules of the National Association of Securities
Dealers, Inc., and subject to seeking best price and execution, the Funds may
place orders with broker-dealers which have agreed to defray certain Trust
expenses such as custodian fees, and may, at the request of the Distributor,
give consideration to sales of shares of the Trust as a factor in the selection
of brokers and dealers to execute Trust portfolio transactions.
The broker-dealers who execute transactions on behalf of the Funds and who are
affiliates of the Fund's Advisor are brokers in the ABN AMRO International
brokerage network.
<PAGE>
DESCRIPTION OF THE TRUST
The Declaration of Trust authorizes the issuance of an unlimited number of
shares of the Funds each of which represents an equal proportionate interest in
that Fund with each other share. Shares are entitled upon liquidation to a pro
rata share in the net assets of the Funds. Shareholders have no preemptive
rights. The Declaration of Trust provides that the Trustees of the Trust may
create additional series of shares. All consideration received by the Trust for
shares of any additional series and all assets in which such consideration is
invested would belong to that series and would be subject to the liabilities
related thereto. Share certificates representing shares will not be issued.
Each share held entitles the shareholder of record to one vote. Shareholders of
each Fund or class will vote separately on matters relating solely to that Fund
or class. As a Massachusetts business trust, the Trust is not required to hold
annual shareholder meetings but such meetings will be held from time to time to
seek approval for certain changes in the operation of the Trust and for the
election of Trustees under certain circumstances. In addition, a Trustee may be
removed by the remaining Trustees or by shareholders at a special meeting called
upon written request of shareholders owning at least 10% of the outstanding
shares of the Trust. In the event that such a meeting is requested, the Trust
will provide appropriate assistance and information to the shareholders
requesting the meeting.
The Trust pays its expenses, including fees of its service providers, audit and
legal expenses, expenses of preparing prospectuses, proxy solicitation material
and reports to shareholders, costs of custodial services and registering the
shares under Federal and state securities laws, pricing, insurance expenses,
litigation and other extraordinary expenses, brokerage costs, interest charges,
taxes and organization expenses.
PURCHASE AND REDEMPTION OF SHARES
It is currently the Trust's policy to pay for all redemptions in cash. The Trust
retains the right, however, to alter this policy to provide for redemptions in
whole or in part by a distribution in-kind of securities held by the Funds in
lieu of cash. Shareholders may incur brokerage charges and taxes on the sale of
any such securities so received in payment of redemptions. However, the Trust
has elected to be governed by Rule 18f-1 under the 1940 Act pursuant to which
the Trust is obligated to redeem shares solely in cash for any shareholder
during any 90-day period up to the lesser of $250,000 or 1% of the total net
asset value of the Trust at the beginning of such period.
Your purchase request may be canceled if the Custodian does not receive federal
funds before net asset value is determined on the next Business Day, and you
could be liable for any fees or expenses incurred by the Trust.
A redemption request submitted by mail must be received by the Transfer Agent in
order to constitute a valid request for redemption. The Transfer Agent may
require that the signature on the written request be guaranteed by a bank which
is a member of the Federal Deposit Insurance Corporation, a trust company,
broker dealer, credit union (if authorized under state law), securities exchange
or association, clearing agency or savings association. This signature guarantee
requirement will be waived if all of the following conditions apply: (1) the
redemption is for $5,000 worth of shares or less, (2) the redemption check is
payable to the shareholder(s) of record, and (3) the redemption check is mailed
to the shareholder(s) at the address of record or to a commercial bank account
previously designated either on the Account Application or by written
instruction to the Transfer Agent.
You may redeem your Shares by writing checks on your account. Once you have
signed and returned a signature card, you will receive a supply of checks. A
check may be made payable to any person, and your account will continue to earn
dividends until the check clears.
Because of the difficulty of determining in advance the exact value of a Fund
account, you may not use a check to close your account. The checks are free, but
your account may be charged a fee for stopping payment of a check upon your
request or if the check cannot be honored because of insufficient funds or other
valid reasons.
The Trust reserves the right to suspend the right of redemption and/or to
postpone the date of payment upon redemption for any period on which trading on
the New York Stock Exchange is restricted, or during the existence of an
emergency (as determined by the SEC by rule or regulation) as a result of which
disposal or valuation of the Fund's securities is not reasonably practicable, or
for such other periods as the SEC has by order permitted. The Trust also
reserves the right to suspend sales of shares of the Fund for any period during
which the New York Stock Exchange, the Advisor, the Administrator and/or the
Custodian are not open for business.
Neither the Trust nor the Transfer Agent will be responsible for any loss,
liability, cost or expense for acting upon wire instructions or upon telephone
instructions that it reasonably believes to be genuine. The Trust and the
Transfer Agent will each employ reasonable procedures to confirm that
instructions communicated by telephone are genuine, including requiring a form
of personal identification prior to acting upon instructions received by
telephone and recording telephone instructions. If market conditions are
extraordinarily active, or other extraordinary circumstances exist, and a
financial intermediary experiences difficulties placing redemption orders by
telephone, the intermediary may wish to consider placing the order by other
means.
Share certificates are issued only upon written request. No certificates are
issued for fractional shares.
Fund shares cannot be purchased by wire on Federal holidays that restrict wire
transfers or on a day when the Federal Reserve is closed. You may purchase a
Fund's shares on any business day, excluding major holidays ("Business Day").
Currently, the Funds observe the following holidays: New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day.
Effective September 1, 1999, the Trust has authorized certain brokers and
intermediaries to accept on its behalf purchase and redemption orders under
certain terms and conditions. These brokers and intermediaries are authorized to
designate other parties to accept purchase and redemption orders on a Fund's
behalf subject to those terms and conditions. Under this arrangement, a Fund
will be deemed to have received a purchase or redemption order when an
authorized broker or intermediary or, if applicable, authorized designee,
accepts the order in accordance with a Fund's instructions. Customer orders that
are properly transmitted to a Fund will be priced at the net asset value per
share computed after the order is accepted by the authorized broker,
intermediary or designee.
If you own shares that are registered in your intermediary's name, and you want
to change the registration to another intermediary or want the shares registered
in your name, then you should contact your intermediary for instructions to make
this change.
TELEPHONE TRANSACTIONS WITH THE FUNDS TO BUY, SELL OR EXCHANGE FUND SHARES ARE
EXTREMELY CONVENIENT, BUT NOT WITHOUT RISK. IN ORDER TO KEEP YOUR TELEPHONE
TRANSACTIONS AS SAFE, SECURE, AND RISK-FREE AS POSSIBLE, WE HAVE DEVELOPED
CERTAIN SAFEGUARDS AND PROCEDURES FOR DETERMINING THE IDENTITY OF CALLERS AND
AUTHENTICITY OF INSTRUCTIONS. WE ARE NOT RESPONSIBLE FOR ANY LOSS, LIABILITY,
COST, OR EXPENSE FOR FOLLOWING TELEPHONE OR WIRE INSTRUCTIONS WE REASONABLY
BELIEVE TO BE GENUINE. IF YOU CHOOSE TO MAKE TELEPHONE TRANSACTIONS, YOU WILL
GENERALLY BEAR THE RISK OF ANY LOSS. IF YOUR INTERMEDIARY CHOOSES TO MAKE
TELEPHONE TRANSACTIONS, YOU AND YOUR INTERMEDIARY WILL GENERALLY BEAR THE RISK
OF ANY LOSS.
YOU, OR YOUR INTERMEDIARY, MAY NOT CLOSE YOUR ACCOUNT BY TELEPHONE.
Provision of Taxpayer Identification Numbers
Federal regulations require that you provide a certfied Taxpayer Identification
Number ("TIN") upon opening or reopening an account. Failure to furnish a
certified TIN to the Fund could subject you to a $50 penalty imposed by the
Internal Revenue Service
Dividend Reinvestment
To elect cash payment of dividends instead of automatic reinvestment in Fund
shares, you must notify us in writing prior to the date of distribution. Your
election will become effective for dividends paid after we receive your written
notice. To cancel your election, simply send us written notice.
SHAREHOLDER LIABILITY
The Trust is an entity of the type commonly known as a "Massachusetts business
trust." Under Massachusetts law, shareholders of such a trust, under certain
circumstances, could be held personally liable as partners for the obligations
of the Trust. Even if, however, the Trust were held to be a partnership, the
possibility of shareholders incurring financial loss for that reason appears
remote because the Trust's Declaration of Trust contains an express disclaimer
of shareholder liability for obligations of the Trust and requires that notice
of such disclaimer be given in each agreement, obligation or instrument entered
into or executed by or on behalf of the Trust or the Trustees, and because the
Declaration of Trust provides for indemnification out of the Trust property for
any shareholder held personally liable for the obligations of the Trust.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of the Funds is calculated by adding the value of
securities and other assets, subtracting liabilities and dividing by the total
number of outstanding shares. Although the methodology and procedures are
identical, the net asset value per share of Institutional shares and Service
shares within the Funds may differ because of the shareholder servicing expenses
charged to Service shares.
Securities of the Funds will be valued by the amortized cost method, which
involves valuing a security at its cost on the date of purchase and thereafter
(absent unusual circumstances) assuming a constant amortization to maturity of
any discount or premium, regardless of the impact of fluctuations in general
market rates of interest on the value of the instrument. While this method
provides certainty in valuation, it may result in periods during which a
security's value, as determined by this method, is higher or lower than the
price the Fund would receive if it sold the instrument. During periods of
declining interest rates, the daily yield of the Fund may tend to be higher than
a like computation made by a company with identical investments utilizing a
method of valuation based upon market prices and estimates of market prices for
all of its portfolio securities. Thus, if the use of amortized cost by the Fund
resulted in a lower aggregate portfolio value on a particular day, a prospective
investor in the Fund would be able to obtain a somewhat higher yield than would
result from investment in a company utilizing solely market values, and existing
investors in the Fund would experience a lower yield. The converse would apply
in a period of rising interest rates.
A Fund's use of amortized cost and the maintenance of the Fund's net asset value
at $1.00 are permitted by Rule 2a-7 under the 1940 Act, provided that certain
conditions are met. Rule 2a-7 also requires the Trustees to establish procedures
which are reasonably designed to stabilize the net asset value per share at
$1.00 for the Funds. Such procedures include the determination of the extent of
deviation, if any, of the Funds' current net asset value per share calculated
using available market quotations from the Funds' amortized cost price per share
at such intervals as the Trustees deem appropriate and reasonable in light of
market conditions and periodic reviews of the amount of the deviation and the
methods used to calculate such deviation. In the event that such deviation
exceeds 1/2 of 1%, the Trustees are required to consider promptly what action,
if any, should be initiated, and, if the Trustees believe that the extent of any
deviation may result in material dilution or other unfair results to
shareholders, the Trustees are required to take such corrective action as they
deem appropriate to eliminate or reduce such dilution or unfair results to the
extent reasonably practicable. Such actions may include the sale of portfolio
instruments prior to maturity to realize capital gains or losses or to shorten
average portfolio maturity; withholding dividends; redeeming shares in kind; or
establishing a net asset value per share by using available market quotations.
In addition, if the Funds incur a significant loss or liability, the Trustees
have the authority to reduce pro rata the number of shares of the Funds in each
shareholder's account and to offset each shareholder's pro rata portion of such
loss or liability from the shareholder's accrued but unpaid dividends or from
future dividends while each other Fund must annually distribute at least 90% of
its investment company taxable income.
TAXATION
The following is only a summary of certain income tax considerations generally
affecting a Fund and its shareholders, and is not intended as a substitute for
careful tax planning. Shareholders are urged to consult their tax advisers with
specific reference to their own tax situations, including their state and local
income tax liabilities.
Federal Income Tax
This discussion of Federal income tax consequences is based on the Internal
Revenue Code of 1986 (the "Code"), and the regulations issued thereunder, in
effect on the date of this Statement of Additional Information. New legislation,
as well as administrative changes or court decisions, may change the conclusions
expressed herein, and may have a retroactive effect with respect to the
transactions contemplated herein. No attempt has been made to present a detailed
explanation of the Federal, state, or local income tax treatment of a Fund or
its shareholders. In addition, state and local tax consequences on an investment
in a Fund may differ from the Federal income tax consequences described below.
Accordingly, you are urged to consult your tax advisor regarding specific
questions as to Federal, state, and local income taxes.
Tax Status of the Funds
Each Fund is treated as a separate entity for Federal income tax purposes and is
not combined with the other Funds or other series of the Trust. Each Fund
intends to qualify for the special tax treatment afforded regulated investment
companies as defined under Subchapter M of the Code. As long as each Fund
qualifies for this special tax treatment, it will be relieved of Federal income
tax on that part of its net investment income and net capital gains (the excess
of net long-term capital gain over net short-term capital loss) which is
distributed to shareholders.
In order to qualify for treatment as a RIC under the Code, each Fund must
distribute annually to its shareholders at least the sum of 90% of its net
investment income excludable from gross income plus 90% of its investment
company taxable income (generally, net investment income plus net short-term
capital gain) (the "Distribution Requirement") and also must meet several
additional requirements. Among these requirements are the following: (a) at
least 90% of a Fund's gross income each taxable year must be derived from
dividends, interest, payments with respect to securities loans, and gains from
the sale or other disposition of stock or securities, or certain other income;
and (b) diversify its holdings so that: (i) at the close of each quarter of a
Fund's taxable year, at least 50% of the value of its total assets must be
represented by cash and cash items, U.S. Government securities, securities of
other RICs and other securities, with such other securities limited, in respect
to any one issuer, to an amount that does not exceed 5% of the value of a Fund's
assets and that does not represent more than 10% of the outstanding voting
securities of such issuer; and (ii) at the close of each quarter of a Fund's
taxable year, not more than 25% of the value of its assets may be invested in
securities (other than U.S. Government securities or the securities of other
RICs) of any one issuer or of two or more issuers which are engaged in the same,
similar or related trades or businesses if the Fund owns at least 20% of the
voting power of such issuers.
Notwithstanding the Distribution Requirement described above, which only
requires a Fund to distribute at least 90% of its annual investment company
taxable income and does not require any minimum distribution of net capital gain
(the excess of net long-term capital gain over net short-term capital loss), a
Fund will be subject to a nondeductible 4% excise tax to the extent it fails to
distribute by the end of any calendar year 98% of its ordinary income for that
year and 98% of its capital gain net income for the one-year period ending on
October 31 of that year, plus certain other amounts. Each Fund intends to make
sufficient distributions to avoid liability for the 4% federal excise tax.
Tax Status of Distributions
Each Fund will distribute substantially all of its net investment income
(including, for this purpose, net short-term capital gain) to shareholders.
Distributions from net investment income will be taxable to you as ordinary
income whether received in cash or in additional shares. Any net capital gains
will be distributed annually as capital gains and will be treated as gain from
the sale or exchange of capital assets held for more than one year, regardless
of how long you have held shares and regardless of whether the distributions are
received in cash or in additional shares. Each Fund will notify you annually of
the Federal income tax character of all distributions.
Certain securities purchased by a Fund (such as STRIPS, TRS, TIGRs and CATS) are
sold at original issue discount, and thus do not make periodic cash interest
payments. A Fund will be required to include as part of its current income the
imputed interest on such obligations even though the Fund has not received any
interest payments on such obligations during that period. Because each Fund
distributes substantially all of its net investment income to shareholders, a
Fund may have to sell portfolio securities to distribute such income, which may
occur at a time when the Advisor would not have chosen to sell such securities
and which may result in a taxable gain or loss.
Income received on U.S. obligations is exempt from tax at the state level when
received directly by a Fund and may be exempt, depending on the state, when
received by you as income dividends from the Fund, provided certain state-
specific conditions are satisfied. Each Fund will inform you annually of the
percentage of income and distributions derived from U.S. obligations. You should
consult your tax advisor to determine whether any portion of the income
dividends received from a Fund is considered tax exempt in your particular
state.
Dividends declared by a Fund in October, November or December of any year and
payable to shareholders of record on a date in that month will be deemed to have
been paid by the Fund and received by shareholders on December 31 of that year,
if paid by the Fund at any time during the following January.
If for any taxable year a Fund does not qualify as a RIC, all of its taxable
income will be subject to tax at regular corporate rates without any deduction
for distributions to shareholders. In such case, distributions (including
capital gains distributions) will be taxable as ordinary dividends to the extent
of the Fund's current and accumulated earnings and profits.
State Taxes
A Fund is not liable for any income or franchise tax in Massachusetts if it
qualifies as a RIC for federal income tax purposes. Distributions by the Funds
to shareholders and the ownership of shares may be subject to state and local
taxes. Shareholders should verify their state and local tax liability with their
tax advisors.
GENERAL INFORMATION ABOUT FUND PERFORMANCE
From time to time a Fund may advertise its current yield and effective compound
yield. Both yield figures are based on historical earnings and are not intended
to indicate future performance. The current yield of a Fund refers to the income
generated by an investment in the Fund over a seven-day period (which period
will be stated in the advertisement). This income is then annualized. That is,
the amount of income generated by the investment during that week is assumed to
be generated each week over a 52-week period and is shown as a percentage of the
investment. The effective compound yield is calculated similarly, but when
annualized, the income earned by an investment in a Fund is assumed to be
reinvested. The effective compound yield will be slightly higher than the
current yield because of the compounding effect of this assumed reinvestment.
A Fund may periodically compare its performance to that of other mutual funds
tracked by mutual fund rating services (such as Lipper Analytical Securities
Corp.) or by financial and business publications and periodicals, broad groups
of comparable mutual funds or unmanaged indices which may assume investment of
dividends but generally do not reflect deductions for administrative and
management costs. A Fund may quote services such as Morningstar, Inc., a service
that ranks mutual funds on the basis of risk-adjusted performance, and Ibbotson
Associates of Chicago, Illinois, which provides historical returns of the
capital markets in the U.S. A Fund may use long-term performance of these
capital markets to demonstrate general long-term risk versus reward scenarios
and could include the value of a hypothetical investment in any of the capital
markets. A Fund may also quote financial and business publications and
periodicals as they relate to fund management, investment philosophy, and
investment techniques.
A Fund may quote various measures of volatility and benchmark correlation in
advertising, and may compare these measures to those of other funds. Measures of
volatility attempt to compare historical share price fluctuations or total
returns to benchmark while measures of benchmark correlation indicate the
validity of a comparative benchmark. Measures of volatility and correlation are
calculated using averages of historical data and cannot be precisely calculated.
The performance of Institutional shares will normally be higher than that of
Service shares because of the additional shareholder service expenses charged to
Service shares.
COMPUTATION OF YIELD
From time to time the Funds may advertise their current yield and effective
compound yield. Both yield figures are based on historical earnings and are not
intended to indicate future performance. The yield of the Funds refers to the
income generated by an investment in a Fund over a seven-day period (which
period will be stated in the advertisement). This income is then "annualized."
That is, the amount of income generated by the investment during that week is
assumed to be generated each week over a 52-week period and is shown as a
percentage of the investment. The effective yield is calculated similarly but,
when annualized, the income earned by an investment in a Fund is assumed to be
reinvested. The effective yield will be slightly higher than the yield because
of the compounding effect of this assumed reinvestment.
The current yield of the Funds will be calculated daily based upon the seven
days ending on the date of calculation ("base period"). The yield is computed by
determining the net change (exclusive of capital changes) in the value of a
hypothetical pre-existing shareholder account having a balance of one share at
the beginning of the period, subtracting a hypothetical charge reflecting
deductions from shareholder accounts, and dividing such net change by the value
of the account at the beginning of the same period to obtain the base period
return and multiplying the result by (365/7). Realized and unrealized gains and
losses are not included in the calculation of the yield. The effective yield of
the Funds is determined by computing the net change, exclusive of capital
changes, in the value of a hypothetical pre-existing account having a balance of
one share at the beginning of the period, subtracting a hypothetical charge
reflecting deductions from shareholder accounts, and dividing the difference by
the value of the account at the beginning of the base period to obtain the base
period return, and then compounding the base period return by adding 1, raising
the sum to a power equal to 365 divided by 7, and subtracting 1 from the result,
according to the following formula: Effective Yield = (Base Period Return +
1(365/7) - 1. The current and the effective yields reflect the reinvestment of
net income earned daily on portfolio assets.
Yield = 2[((a-b)/(cd) + 1)/6/ - 1] where a = dividends and interest earned
during the period; b = expenses accrued for the period (net of reimbursement); c
= the current daily number of shares outstanding during the period that were
entitled to receive dividends; and d = the maximum offering price per share on
the last day of the period.
The yield of these Funds fluctuates, and the annualization of a week's dividend
is not a representation by the Trust as to what an investment in the Fund will
actually yield in the future. Actual yields will depend on such variables as
asset quality, average asset maturity, the type of instruments the Fund invests
in, changes in interest rates on money market instruments, changes in the
expenses of the Fund and other factors.
Yields are one basis upon which investors may compare the Funds with other money
market funds; however, yields of other money market funds and other investment
vehicles may not be comparable because of the factors set forth above and
differences in the methods used in valuing portfolio instruments.
LIMITATION OF TRUSTEES' LIABILITY
The Declaration of Trust provides that a Trustee shall be liable only for his
own willful defaults and, if reasonable care has been exercised in the selection
of officers, agents, employees or investment advisers, shall not be liable for
any neglect or wrongdoing of any such person. The Declaration of Trust also
provides that the Trust will indemnify its Trustees and officers against
liabilities and expenses incurred in connection with actual or threatened
litigation in which they may be involved because of their offices with the Trust
unless it is determined in the manner provided in the Declaration of Trust that
they have not acted in good faith in the reasonable belief that their actions
were in the best interests of the Trust. However, nothing in the Declaration of
Trust shall protect or indemnify a Trustee against any liability for his willful
misfeasance, bad faith, gross negligence or reckless disregard of his duties.
<PAGE>
APPENDIX
Ratings
NRSROs provide ratings for certain instruments in which the Funds may invest.
The quality standards of debt securities and other obligations as described for
the Funds must be satisfied at the time an investment is made. In the event that
an investment held by a Fund is assigned a lower rating or ceases to be rated,
the Advisor will promptly reassess whether such security presents suitable
credit risks and whether the Fund should continue to hold the security or
obligation in its portfolio. If a portfolio security or obligation no longer
presents suitable credit risks or is in default, the Fund will dispose of the
security or obligation as soon as reasonably practicable unless the Trustees of
the Trust determine that to do so is not in the best interest of the Fund. The
Funds may invest in unrated securities that the Advisor determines to be of
comparable quality at the time of purchase.
Description of Commercial Paper Ratings
The following descriptions of commercial paper ratings have been published by
Standard & Poor's Corporation ("S&P"), Moody's Investors Service, Inc.
("Moody's"), Fitch Investors Service, Inc. ("Fitch"), Duff & Phelps, Inc.
("Duff") and IBCA Limited and IBCA, Inc. (together, "IBCA").
Commercial paper rated A by S&P is regarded by S&P as having the greatest
capacity for timely payment. Issues rated A are further refined by use of the
numbers 1, 1+ and 2, to indicate the relative degree of safety. Issues rated A-
1+ are those with "extremely strong safety characteristics." Those rated A-1,
the highest rating category, reflect a "satisfactory" degree of safety regarding
timely payment. Those rated A-2, the second highest rating category, reflect a
safety regarding timely payment but not as high as A-1.
Commercial paper issues rated Prime-1 or Prime-2 by Moody's are judged by
Moody's to be of "superior" quality and "strong" quality respectively on the
basis of relative repayment capacity.
The rating F-1+ (Exceptionally Strong) is the highest commercial paper rating
assigned by Fitch. Paper rated Fitch-1+ is regarded as having the strongest
degree of assurance for timely payment. Paper rated F-1 (Very Strong) reflects
an assurance of timely payment only slightly less in degree than paper rated
F-1+ the strongest issues.
The rating Duff-1 is the highest commercial paper rating assigned by Duff. Paper
rated Duff-1 is regarded as having very high certainty of timely payment with
excellent liquidity factors which are supported by good fundamental protection
factors. Risk factors are minor. Duff has incorporated gradations of 1+ and 1-
to assist investors in recognizing quality differences within this highest tier.
Paper rated Duff-1+ has the highest certainty of timely payment, with
outstanding short-term liquidity and safety just below risk-free U.S. Treasury
short-term obligations. Paper rated Duff-1- has high certainty of timely payment
with strong liquidity factors which are supported by good fundamental protection
factors. Risk factors are very small. Paper rated Duff-2 is regarded as having
good certainty of timely payment, good access to capital markets (although
ongoing funding may enlarge total financing requirements) and sound liquidity
factors and company fundamentals. Risk factors are small.
The designation A1, the highest rating category established by IBCA indicates
that the obligation is supported by a very strong capacity for timely repayment.
Those obligations rated A1+ are supported by the highest capacity for timely
repayment. Obligations rated A2, the second highest rating category, are
supported by a satisfactory capacity for timely repayment, although such
capacity may be susceptible to adverse changes in business, economic or
financial conditions.
Description of Corporate Bond Ratings
The following descriptions of corporate bond ratings have been published by S&P,
Moody's, Fitch, Duff and IBCA.
Bonds rated AAA have the highest rating S&P assigns to a debt obligation. Such a
rating indicates an extremely strong capacity to pay principal and interest.
Bonds rated AA also qualify as high-quality debt obligations. Capacity to pay
principal and interest is very strong, and differs from AAA issues only in small
degree. Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
Bonds which are rated Baa are considered as medium-grade obligations (i.e., they
are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Bonds which are rated Aaa by Moody's are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged". Interest payments are protected by a large, or an exceptionally
stable, margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues. Bonds rated Aa by
Moody's are judged by Moody's to be of high quality by all standards. Together
with bonds rated Aaa, they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risk appear somewhat larger than in Aaa securities.
Bonds which are rated A possess many favorable investment attributes and are to
be considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Debt rated BBB is regarded as having an adequate capacity to pay interest and
repay principal. Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay interest and repay principal for debt in this
category than in higher rated categories.
Bonds rated AAA by Fitch are judged by Fitch to be strictly high grade, broadly
marketable, suitable for investment by trustees and fiduciary institutions
liable to but slight market fluctuation other than through changes in the money
rate. The prime feature of an AAA bond is a showing of earnings several times or
many times interest requirements, with such stability of applicable earnings
that safety is beyond reasonable question whatever changes occur in conditions.
Bonds rated AA by Fitch are judged by Fitch to be of safety virtually beyond
question and are readily salable, whose merits are not unlike those of the AAA
class, but whose margin of safety is less strikingly broad. The issue may be the
obligation of a small company, strongly secured but influenced as to rating by
the lesser financial power of the enterprise and more local type market. Fitch
uses plus and minus signs to indicate the relative position of a credit within
the AA rating category. Bonds rated AAA by Fitch are considered to be investment
grade and of the highest credit quality. The obligor has an exceptionally strong
ability to pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events. Bonds rated AA by Fitch are considered to be
investment grade and of very high credit quality. The obligor's ability to pay
interest and repay principal is very strong, although not quite as strong as
bonds rated AAA. Because bonds rated in the AAA and AA categories are not
significantly vulnerable to foreseeable future developments, short-term debt of
these issuers is generally rated F-1+.
Fitch uses plus and minus signs to indicate the relative position of a credit
within the AA rating category. Bonds rated Duff-1 are judged by Duff to be of
the highest credit quality with negligible risk factors; only slightly more than
for risk-free U.S. Treasury debt. Bonds rated AA by Duff are judged to be of
high credit quality. Protection factors are strong. Risk is modest but may vary
slightly from time to time because of economic conditions.
Obligations rated AAA by IBCA have the lowest expectation of investment risk.
Capacity for timely repayment of principal and interest is substantial, such
that adverse changes in business, economic or financial conditions are unlikely
to increase investment risk significantly. Obligations for which there is a very
low expectation of investment risk are rated AA by IBCA. Capacity for timely
repayment of principal and interest is substantial. Adverse changes in business,
economic or financial conditions may increase investment risk albeit not very
significantly.
<PAGE>
ABN AMRO Funds
Institutional Prime Money Market Fund(US)
Institutional Treasury Money Market Fund(US)
Institutional Government Money Market Fund(US)
Institutional Shares
Institutional Service Shares
Supplement dated December 28, 1999 to the
Statement of Additional Information dated December 28, 1999
THIS SUPPLEMENT PROVIDES NEW AND ADDITIONAL INFORMATION BEYOND THAT CONTAINED IN
THE STATEMENT OF ADDITIONAL INFORMATION FOR THE INSTITUTIONAL SHARES AND
INSTITUTIONAL SERVICE SHARES OF THE TRUST AND IT SHOULD BE RETAINED AND READ IN
CONJUNCTION WITH THAT STATEMENT OF ADDITIONAL INFORMATION.
INSTITUTIONAL SHARES:
Currently, Institutional Shares of Institutional Treasury Money Market Fund and
Institutional Government Money Market Fund are not offered for sale by the
Trust.
Institutional Service Shares:
Currently, Institutional Service Shares of Institutional Prime Money Market
Fund, Institutional Treasury Money Market Fund and Institutional Government
Money Market Fund are not offered for sale by the Trust.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
ABN-A-033-01
<PAGE>
ABN AMRO FUNDS
PART C: OTHER INFORMATION
Post-Effective Amendment No. 20
Item 23. Exhibits
a(1) Agreement and Declaration of Trust and Amendment as originally filed as
Exhibit 1 to Registrant's initial Registration Statement on October 2, 1992 is
incorporated by reference to Exhibit 1 of Post-Effective Amendment No. 11, filed
April 29, 1997.
a(2) Amendment, dated October 20, 1992, to Registrant's Agreement and
Declaration of Trust as originally filed as Exhibit 1(b) with the Registrant's
Pre-Effective Amendment No. 1 filed on December 3, 1992 is incorporated by
reference to Exhibit 1(a) of Post-Effective Amendment No. 11, filed April 29,
1997.
a(3) Amendment, dated April 15, 1998, to Registrant's Agreement and Declaration
of Trust is incorporated by reference to Exhibit 1(b) of Post-Effective
Amendment No. 15, filed April 28, 1998.
a(4) Amendment, dated April 27, 1998, to Registrant's Agreement and Declaration
of Trust is incorporated by reference to Exhibit 1(b) of Post-Effective
Amendment No. 16, filed June 30, 1998.
b(1) Registrant's By-Laws are incorporated by reference to Exhibit b(1) of
Post-Effective Amendment No. 15, filed April 28, 1998.
b(2) Amendment to Registrant's By-Laws is filed herein as Exhibit b(2).
c Not applicable.
d(1) Investment Advisory Agreement with LaSalle Street Capital Management, Ltd.
as originally filed as Exhibit 5(b) with Registrant's initial Registration
Statement on October 2, 1992 and incorporated by reference to Exhibit 5 of
Post-Effective Amendment No. 11, filed April 29, 1997.
d(2) Form of Amendment, dated September 16, 1999, to Schedule A to the
Investment Advisory Agreement between ABN AMRO Asset Management (USA) Inc. and
the Registrant, on behalf of the Institutional Prime Money Market Fund,
Institutional Treasury Money Market Fund and the Institutional Government Money
Market Fund, is filed herein as Exhibit d(2).
d(3) Contractual Advisory Agreement between Registrant and ABN AMRO Asset
Management (USA) Inc., dated March 30, 1999, is incorporated by reference to
Exhibit h(10) of Post-Effective Amendment No. 18, filed May 4, 1999.
d(4) Investment Sub-Advisory Agreement between ABN AMRO Asset Management (USA)
Inc. and Mellon Equity Associates, LLP, dated December 1, 1999, is filed herein
as Exhibit d(4).
d(5) Investment Sub-Advisory Agreement between ABN AMRO Asset Management (USA)
Inc. and Delaware Management Company, a series of Delaware Management Business
Trust, dated December 1, 1999, is filed herein as Exhibit d(5).
e(1) Distribution Agreement between the Registrant and Provident Distributors,
Inc., dated December 1, 1999, is filed herein as Exhibit e(1).
f Not applicable.
g(1) Global Custody Agreement between the Registrant and The Chase Manhattan
Bank, dated August 13, 1998, is filed herein as Exhibit g(1).
g(2) Form of Amendment, dated September 16, 1999, to Schedule A to the Global
Custody Agreement, dated August 13, 1998, between the Registrant, on behalf of
the Institutional Prime Money Market Fund, Institutional Treasury Money Market
Fund and the Institutional Government Money Market Fund, and The Chase Manhattan
Bank is filed herein as Exhibit g(2).
h(1) Transfer Agency and Services Agreement, dated February 26, 1998, between
the Registrant and First Data Investor Services Group, Inc. is incorporated by
reference to Exhibit 8(b) of Post-Effective Amendment No. 16, filed June 30,
1998.
h(2) Amendment, dated March 4, 1999, to the Transfer Agency and Services
Agreement is filed herein as Exhibit h(2).
h(3) Form of Consent to Transaction (relating to the Transfer Agency and
Services Agreement) by ABN AMRO Fund Services, Inc., regarding the First Data
Corporation and PNC Bank transaction, is filed herein as Exhibit h(3).
h(4) Form of Amendment to the Transfer Agency and Services Agreement between the
Registrant and PFPC Inc. is filed herein as Exhibit h(4).
h(5) Administration and Fund Accounting Agreement between the Registrant and ABN
AMRO Fund Services, Inc., dated July 1, 1998, is incorporated by reference to
Exhibit h(8) of Post-Effective Amendment No. 17, filed March 1, 1999.
h(6) Contractual Administrative Agreement between Registrant and ABN AMRO Fund
Services, Inc. dated March 30, 1999 is incorporated by reference to Exhibit
h(11) of Post-Effective Amendment No. 18, filed May 4, 1999.
h(7) Form of Amendment, dated September 16, 1999, to Administration and Fund
Accounting Agreement between the Registrant, on behalf of the Institutional
Prime Money Market Fund, Institutional Treasury Money Market Fund and the
Institutional Government Money Market Fund, and ABN AMRO Fund Services, Inc. is
filed herein as Exhibit h(7).
h(8) Form of Contractual Administration Fee Waivers, dated September 16, 1999,
between Registrant, on behalf of the Institutional Prime Money Market Fund,
Institutional Treasury Money Market Fund and the Institutional Government Money
Market Fund, and ABN AMRO Fund Services, Inc., is filed herein as Exhibit h(8).
h(9) Sub-Administration and Fund Accounting Agreement between First Data
Investor Services Group, Inc. and ABN AMRO Fund Services, Inc., dated July 1,
1998, is incorporated by reference to Exhibit h(9) of Post-Effective Amendment
No. 17, filed March 1, 1999.
h(10) Amendment, dated September 16, 1999, to Sub-Administration and Fund
Accounting Agreement between First Data Investor Services Group, Inc. and ABN
AMRO Fund Services, Inc., dated July 1, 1998, is filed herein as Exhibit h(10).
h(11) Form of Amendment to the Sub-Administration and Fund Accounting Agreement
between ABN AMRO Fund Services Inc. and PFPC Inc. is filed herein as Exhibit
h(11).
h(12) Shareholder Service Plan and Form of Shareholder Servicing Agent Agreement
for Investor Shares between the Registrant and Provident Distributors, Inc.,
dated December 1, 1999, is filed herein as Exhibit h(12).
h(13) Shareholder Service Plan and Form of Shareholder Servicing Agent Agreement
for Institutional Service Shares, of the Institutional Prime Money Market Fund,
Institutional Treasury Money Market Fund and the Institutional Government Money
Market Fund, between the Registrant and Provident Distributors, Inc., dated
December 1, 1999, is filed herein as Exhibit h(13).
i(1) Opinion and Consent of Counsel as originally filed as Exhibit 10 with the
Registrant's Post-Effective Amendment No. 2 and incorporated by reference to
Exhibit 10 of Post-Effective Amendment No. 11, filed on April 29, 1997.
i(2) Opinion and Consent of Counsel is filed herein as Exhibit i(2).
j Not applicable.
k Not applicable.
l(1) Purchase Agreement between the Registrant and First Data Distributors, Inc.
is incorporated by reference to Exhibit 13 of Post-Effective Amendment No. 16,
filed June 30, 1998.
l(2) Form of Purchase Agreement between the Registrant, on behalf of the
Institutional Prime Money Market Fund, Institutional Treasury Money Market Fund
and the Institutional Government Money Market Fund, and ABN AMRO Asset
Management (USA) Inc. is filed herein as Exhibit l(2).
m(1) Distribution Plan - Investor Class, between the Registrant and First Data
Distributors, Inc., as of February 26, 1998, is incorporated by reference to
Exhibit 15(a) of Post-Effective Amendment No. 15, filed April 26, 1998.
n(1) Rule 18f-3 Plan as originally filed as Exhibit 18 with Registrant's
Post-Effective Amendment No. 8 and incorporated by reference to Exhibit 18 of
Post-Effective Amendment No. 11, filed April 29, 1997.
n(2) Amended and Restated Rule 18f-3 Plan, on behalf of the Institutional
Service Class, is filed herein as Exhibit n(2).
o(1) Power of Attorney is incorporated by reference to Exhibit o(2) of
Post-Effective Amendment No. 19, filed October 11, 1999.
Item 24. Persons Controlled by or under Common Control with Registrant:
See the Prospectuses and Statement of Additional Information regarding the
Trust's control relationships.
Item 25. Indemnification:
Article VIII of the Agreement of Declaration of Trust filed as Exhibit 1 to the
Registration Statement is incorporated by reference. Insofar as indemnification
for liabilities arising under the Securities Act of 1933, as amended (the
"Act"), may be permitted to trustees, directors, officers and controlling
persons of the Registrant by the Registrant pursuant to the Declaration of Trust
or otherwise, the Registrant is aware that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and, therefore, is unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by trustees, directors, officers or
controlling persons of the Registrant in connection with the successful defense
of any act, suit or proceeding) is asserted by such trustees, directors,
officers or controlling persons in connection with the shares being registered,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issues.
<PAGE>
Item 26. Business and Other Connections of Investment Adviser:
<TABLE>
<CAPTION>
<S> <C> <C>
Name and Position Name of Connection with
with Investment Advisor Other Company Other Company
John M. Kramer ABN AMRO Incorporated Secretary, General Counsel
Director Senior Vice President
ABN AMRO Capital Markets Holding, Inc. Secretary
ABN AMRO Acceptance Corporation Director & Secretary
ABN AMRO Commodity Finance, Inc. Director & Secretary
ABN AMRO Funding Corporation Secretary
ABN AMRO Funds Services, Inc. Director
ABN AMRO Investment Services, Inc. Assistant Secretary
ABN AMRO Mezzanine Management, Inc. Director & Secretary
ABN AMRO Mezzanine Management II, Inc. Director & Secretary
ABN AMRO Mortgage Corporation Assistant Secretary
ABN AMRO Sage Corporation Secretary
Bluestone Private Equity Management, Inc. Director & Secretary
ChiCorp Financial Services, Inc. Director & Secretary
Jackson LaSalle Investment Services, Inc. Director & Secretary
Wilbert Thiel ABN AMRO Incorporated President, CEO, Director
Director Securities Industry Association Director
Lutheran Social Services of Illinois Director & Officer
Chicago Area Council of the Boy Scouts
of America Director
Dexter Tong ABN AMRO Incorporated Senior Vice President
Treasurer
James B. Wynsma LaSalle Bank N.A. Vice Chairman, Director
President, CEO LaSalle National Corporation Director
ABN AMRO Investment Services Director
ABN AMRO Funds President
Jon T. Ender None
Executive Vice President
Randall C. Hampton LaSalle Bank N.A. Executive Vice President
Executive Vice President
Paul Becker LaSalle Bank N.A. Group Senior Vice President
Group Senior Vice President
Carla Eyre Women in Pensions Board Member
Group Senior Vice President YWCA Board Member
Chicago Board of Trade Associate Member
William Finley LaSalle Bank N.A. Group Senior Vice President
Group Senior Vice President
Johannes N.A. Specker ABN AMRO Bank N.V. Senior Vice President
Group Senior Vice President
Linda L. Turner LaSalle Bank N.A. Group Senior Vice President
Group Senior Vice President
Robert Antognoli LaSalle Bank N.A. Senior Vice President
Senior Vice President
George J. Baxter None
Senior Vice President
Gregory D. Boal None
Senior Vice President
Lawrence J. Brottman None
Senior Vice President
Edwin M. Bruere LaSalle Bank N.A. Senior Vice President
Senior Vice President
A. Wade Buckles None
Senior Vice President
Jac A. Cerney LaSalle Bank N.A. Senior Vice President
Senior Vice President
Nancy J. Holland None
Senior Vice President
Susan E. Lorsch None
Senior Vice President
Kathryn L. Martin ABN AMRO Funds Vice President
Senior Vice President
George S. McElroy, Jr. None
Senior Vice President
Thomas F. McGrath None
Senior Vice President
Scott Moore None
Senior Vice President
Mark T. Morgan None
Senior Vice President
Jose Santillan LaSalle Bank N.A. Senior Vice President
Senior Vice President
Steve Smith ABN AMRO Funds Senior Vice President
Senior Vice President
Daniel Strumphler None
Senior Vice President
Karen L. Van Cleave None
Senior Vice President
Michael Wasson None
Senior Vice President
Peter Williams None
Senior Vice President
Todd Youngberg None
Senior Vice President
Patrick Bauer LaSalle Bank N.A. First Vice President
First Vice President
Kevin Kehres LaSalle Bank N.A. First Vice President
First Vice President
Chris Kostiuk LaSalle Bank N.A. First Vice President
First Vice President
Simon Reeves LaSalle Bank N.A. First Vice President
First Vice President
Tim Scanlan LaSalle Bank N.A. First Vice President
First Vice President
James J. Baudendistel LaSalle Bank N.A. Vice President
Vice President
Michael T. Castino ABN AMRO Funds Vice President
Vice President
Brett M. Detterbeck LaSalle Bank N.A. Vice President
Vice President
Anne Durkin LaSalle Bank N.A. Vice President
Vice President
Martin L. Eisenberg ABN AMRO Bank N.V. Vice President
Vice President ABN AMRO Capital Markets Holding, Inc. Vice President
ABN AMRO Incorporated Vice President
ABN AMRO Mortgage Corp. Vice President
Netherlands Trading Society East, Inc. Vice President
Pine Tree Capital Holdings, Inc. Vice President
AMRO Securities, Inc. Vice President
ABN AMRO North America Finance, Inc. Vice President
DBI Holdings, Inc. Vice President
ABN AMRO North America, Inc. Senior Vice President
ABN AMRO Resource Management, Inc. Vice President
Danic Asset Management Corp. Vice President
National Asset Management Vice President
SFH, Inc. Vice President
ABN AMRO Acceptance Corp. Vice President
ABN AMRO Credit Corp. Vice President
ABN AMRO Investment Services, Inc. Vice President
ABN AMRO Leasing, Inc. Vice President
Cragin Financial Corp. Vice President
Cragin Service Corp. Vice President
Cumberland & Higgins, Inc. Vice President
LaSalle Bank, F.S.B. Vice President
Lease Plan Illinois, Inc. Vice President
LaSalle Financial Services, Inc. Vice President
LaSalle Home Mortgage Corporation Vice President
LaSalle National Corporation Vice President
ABN AMRO Capital (USA) Inc. Vice President
Lease Plan North America, Inc. Vice President
ABN AMRO Information Technology Vice President
Services Company
Lisle Corporation Vice President
ABN AMRO Services Company, Inc. Vice President
LaSalle Bank National Association Vice President
LaSalle National Bancorp, Inc. Vice President
Amsterdam Pacific Corporation Vice President
LaSalle Trade Services Limited Vice President
CNBC Bancorp, Inc. Vice President
ChiCorp. Commodity Finance, Inc. Vice President
ChiCorp. Commodities, Inc. Vice President
Bluestone Private Equity Management, Inc. Vice President
Columbia Financial Services, Inc. Vice President
CNBC Development Corporation Vice President
CNBC Investment Corporation Vice President
CNBC Leasing Corporation Vice President
Sky Mortgage Company Vice President
Sky Finance Company Vice President
CNB Property Corporation Vice President
Union Realty Mortgage Co., Inc. Vice President
ABN AMRO Fund Services Vice President
LaSalle Bank N.A. Vice President
LaSalle Distributors, Inc. Vice President
LaSalle Community Development Corporation Vice President
Rob-Wal Investment Co. Vice President
ENB Realty Co., Inc. Vice President
LaSalle Trade Services Corporation Vice President
LaSalle National Leasing Corporation Vice President
LaSalle Business Credit, Inc. Vice President
European American Bank Vice President
Cityspire Realty Corp. Vice President
EA Debt Corp. Vice President
EA Land Corp. Vice President
EAB Land Company, Inc. Vice President
EAB Mortgage Company, Inc. Vice President
EAB Realty Corp. Vice President
EAB Realty of Florida, Inc. Vice President
EAB Securities, Inc. Vice President
Ashland Properties, Inc. Vice President
Discount Brokers International, Inc. Vice President
Kany Long Island City Corp. Vice President
Cragin Service Development Corp. Vice President
Wasco Funding Corp. Vice President
Island Abodes Corp. Vice President
Lyric Holdings, Inc. Vice President
EAB Credit Corp. Vice President
ORE Realty Inc. Vice President
Texas Holdings, Inc. Vice President
Twelve Polo Realty Inc. Vice President
Vail at North Salem Inc. Vice President
81 Lee Avenue Corp. Vice President
169 East Flagler Corp. Vice President
EAB Plaza, Inc. Vice President
117 Seaman Realty, Inc. Vice President
Garden City Marble Corp. Vice President
Huntington Bay Development Corp. Vice President
Plaza Homes Inc. (Metrofund) Vice President
LSR Realty Inc. Vice President
Beckman Hospitality Corp. Vice President
Bennett 143 Corp. Vice President
Birch Locust Valley Corp. Vice President
Broadhollow 532 Melville Corporation Vice President
Colony at Sayerville, Corp. Vice President
Corners Estates at Hauppauge Inc. Vice President
Corona 114 Apartments Inc. Vice President
Country Knolls at Manorville Inc. Vice President
Cove Townhouses at Southold Inc. Vice President
Crystal Domiciles Inc. Vice President
Eastern Shores at Northampton Corp. Vice President
Forestwood at North Hills Inc. Vice President
Garden State Convention Center at Somerest
County, Inc. Vice President
Half Acre on 347 at Nesoonset Inc. Vice President
Horse Race Lane at Nissequogue Inc. Vice President
Jericho 969 Turnpike Inc. Vice President
Fairfield Avenue Corp. Vice President
Amsterdam Development Corp. Vice President
Brownstone Apts. Inc. Vice President
Central Cedarhurst Corp. Vice President
GSC Land Corp. Vice President
East 91st Street Development Corp. Vice President
East 92nd Street Development Corp. Vice President
LLPA Corporation Vice President
Lake Front Land Corp. Vice President
Lattingtown Mansion, Inc. Vice President
Lowell Acquisition Corp. Vice President
Ludlow Development Corp. Vice President
Maspeth 56-25 58th Street Corp. Vice President
Metro Case Corp. Vice President
Montauk Hospitality Corp. Vice President
Montauk YC Corp. Vice President
Moreland Hauppauge Corp. Vice President
North Hills Links Corp. Vice President
Parkway Plaza 1400 Corp. Vice President
Plaza Boulevard Equities Corp. Vice President
Plaza Boulevard Properties Corp. Vice President
Plaza Uniondale Properties, Inc. Vice President
Remington Ronkonkoma Corp. Vice President
Rendezvous Realty Corp. Vice President
S E at Commack Inc. Vice President
S E at Commack II Inc. Vice President
S E at Commack III Inc. Vice President
S E at Commack IV Inc. Vice President
Scholar Estates at Commack Inc. Vice President
Seaman Shares at Inwood Corp. Vice President
Showcase Estates at Dix Hills Inc. Vice President
Southampton Settlers Corporation Vice President
Southeast Ridgefield Land Corp. Vice President
Steinway 18-50 Astoria Corp. Vice President
Sterling DTVA Corp. Vice President
T E at Dix Hills Inc. Vice President
T E at Dix Hills II Inc. Vice President
T E at Dix Hills III Inc. Vice President
Thornwood Estates at Dix Hills Inc. Vice President
W.M. Seaman at Inwood Corp. Vice President
Welcome Center at Manorville Inc. Vice President
West End 700 Inc. Vice President
Westminster Downs at Dix Hills, Inc. Vice President
Westwood Hills at Middletown, Inc. Vice President
Ziegfeld Villas Corp. Vice President
41 East Sunrise Highway Corporation Vice President
55 Commerce, Inc. Vice President
(Sold to EMI 1/20/92)
Seventh Street Development Corp. Vice President
Fourteenth Street Development Corp. Vice President
West 51st Street Development Corp. Vice President
West 73rd Street Development Corp. Vice President
Lemark Land in Setauket, Inc. Vice President
Ludlow Street Development Corp. Vice President
Milestone Square Corp. Vice President
Oceanside 35-05 Hampton Road Inc. Vice President
Oceanside 35-39 Hampton Road Inc. Vice President
Sangeo 709 Merrick Road Corp. Vice President
Sherwood Plaza Corp. Vice President
Syosset 240 Jericho, Inc. Vice President
Nancy A. Ellefson LaSalle Bank N.A. Vice President
Vice President
John Erickson LaSalle Bank N.A. Vice President
Vice President
John Finley LaSalle Bank N.A. Vice President
Vice President
Frank Germack None
Vice President
Frank J. Haggerty None
Vice President
Steve Haldi LaSalle Bank N.A. Vice President
Vice President
Ann H. Heffron None
Vice President
Tom Lennox None
Vice President
Phillip P. Mierzwa LaSalle Bank N.A. Vice President
Vice President
Kurt Moeller LaSalle Bank N.A. Vice President
Vice President
Michelle Montgomery None
Vice President
Mary E. Ras LaSalle Bank N.A. Vice President
Vice President
Roger Sullivan LaSalle Bank N.A. Vice President
Vice President
Kenneth Tyszko None
Vice President
Bridget Vogenthaler None
Vice President
Don Wampach LaSalle Bank N.A. Vice President
Vice President
Ann Weis None
Vice President
Robert Bennett None
Assistant Vice President
Christine Dragon None
Assistant Vice President
Timothy Kelly None
Assistant Vice President
Laurie Lynch ABN AMRO Funds Vice President
Assistant Vice President
Alan Mason LaSalle Bank N.A. Trust Officer &
Assistant Vice President Assistant Secretary
Kathleen McClure None
Assistant Vice President
Patrick O'Hara None
Assistant Vice President
Shelly Paulger None
Assistant Vice President
Marc Peirce ABN AMRO Funds Vice President
Assistant Vice President
Monica Kim Phillips None
Assistant Vice President
Marcia Roth None
Assistant Vice President
Susan M. Wiemeler None
Assistant Vice President
Edmund Zelko None
Assistant Vice President
Wiepke Postma ABN AMRO NSM International Funds
Portfolio Manager Management B.V. Director
ABN AMRO Bank N.V. Vice President
Jaap Bettink ABN AMRO Bank N.V. Portfolio Manager
Portfolio Manager
Willem Ploeger ABN AMRO Bank N.V. Portfolio Manager
Portfolio Manager
Theo Maas ABN AMRO Bank N.V. Portfolio Manager
Portfolio Manager
A.A. Pals - de Groot ABN AMRO Bank N.V. Portfolio Manager
Portfolio Manager
Edward Moolenburgh ABN AMRO Bank N.V. Portfolio Manager
Portfolio Manager
Luigi Leo ABN AMRO Bank N.V. Portfolio Manager
Portfolio Manager
Edward Niehoff ABN AMRO Bank N.V. Vice President
Portfolio Manager Portfolio Manager
Theodoor Maters ABN AMRO Bank N.V. Portfolio Manager
Portfolio Manager
Wouter Weijand ABN AMRO NSM International Funds
Portfolio Manager Management B.V. Portfolio Manager
ABN AMRO Bank N.V. Vice President
Portfolio Manager
Chris Huys ABN AMRO Bank N.V. Vice President
Portfolio Manager Portfolio Manager
Catharina Hooyman ABN AMRO Bank N.V. Portfolio Manager
Portfolio Manager
Kim Guan Ng ABN AMRO NSM International Funds
Portfolio Manager Management B.V. Portfolio Manager
ABN AMRO Asset Management (Asia) Ltd. Managing Director
Vice President
Chi Keung Leung ABN AMRO Asset Management (Asia) Ltd. Senior Portfolio Manager
Portfolio Manager Vice President
Lester Yiu-Cheong Poon ABN AMRO Asset Management (Asia) Ltd. Portfolio Manager
Portfolio Manager Vice President
Paritosh Thakore ABN AMRO Asset Management (Asia) Ltd. Portfolio Manager
Portfolio Manager Vice President
Hak Kau Lung ABN AMRO Asset Management (Asia) Ltd. Portfolio Manager
Portfolio Manager Vice President
Shing On Kwang ABN AMRO Asset Management (Asia) Ltd. Portfolio Manager
Portfolio Manager
</TABLE>
Item 27. Principal Underwriters:
(a) Provident Distributors, Inc. (the "Distributor") serves as the principal
underwriter for the following investment companies: International Dollar Reserve
Fund I, Ltd., Provident Institutional Funds Trust, Pacific Innovations Trust,
Columbia Common Stock Fund, Inc., Columbia Growth Fund, Inc., Columbia
International Stock Fund, Inc., Columbia Special Fund, Inc., Columbia Small Cap
Fund, Inc., Columbia Real Estate Equity Fund, Inc., Columbia Balanced Fund,
Inc., Columbia Daily Income Company, Columbia U.S. Government Securities Fund,
Inc., Columbia Fixed Income Securities Fund, Inc., Columbia Municipal Bond Fund,
Inc., Columbia High Yield Fund, Inc., Columbia National Municipal Bond Fund,
Inc., GAMNA Series Funds, Inc., WT Investment Trust, Kalmar Pooled Investment
Trust, The RBB Fund, Inc., Robertson Stephens Investment Trust, HT Insight
Funds, Inc., Harris Insight Funds Trust, Hilliard-Lyons Government Fund, Inc.,
Hilliard-Lyons Growth Fund, Inc., Hilliard-Lyons Research Trust, Senbanc Fund,
ABN AMRO Funds, Alleghany Funds, BT Insurance Funds Trust, First Choice Funds
Trust, Forward Funds, Inc., IAA Trust Asset Allocation Fund, Inc., IAA Trust Tax
Exempt Bond Fund, Inc., IAA Trust Taxable Fixed Income Series Fund, Inc., IBJ
Funds Trust, Light Index Funds, Inc., LKCM Funds, Matthews International Funds,
MCM Funds, Metropolitan West Funds, New Covenant Funds, Panorama Trust, Smith
Breeden Series Funds, Smith Breeden Trust, Stratton Growth Fund, Inc., Stratton
Monthly Dividend REIT Shares, Inc., The Stratton Funds, Inc., The Galaxy Fund,
The Galaxy VIP Fund, Galaxy Fund II, The Govett Funds, Inc., Trainer, Wortham
First Mutual Funds, Undiscovered Manages Funds, Wilshire Target Funds, Inc.,
Weiss, Peck & Greer Funds Trust, Weiss, Peck & Greer International Fund, WPG
Growth Fund, WPG Tudor Fund, RWB/WPG U.S. Large Stock Fund and Tomorrow Funds
Retirement Trust.
The BlackRock Funds, Inc. are distributed by BlackRock Distributors, Inc., a
wholly-owned subsidiary of Provident Distributors, Inc. Northern Funds Trust are
distributed by Northern Funds Distributors, LLC. a wholly-owned subsidiary of
Provident Distributors, Inc. The Offit Investment Fund, Inc. and The Offit
Variable Insurance Fund, Inc. are distributed by Offit Funds Distributor, Inc.,
a wholly-owned subsidiary of Provident Distributors, Inc.
The Distributor is registered with the Securities and Exchange Commission as a
broker-dealer and is a member of the National Association of Securities Dealers,
Inc. The Distributor is located at Four Falls Corporate Center, Suite 600, West
Conshohocken, Pennsylvania 19428-2961.
(b) The information required by this Item 27(b) with respect to each director,
officer, or partner of Provident Distributors, Inc. is incorporated by reference
to Schedule A of Form BD filed by Provident Distributors, Inc. with the
Securities and Exchange Commission pursuant to the Securities Act of 1934 (File
no.
8-46564).
(c) Not applicable.
Item 28. Location of Accounts and Records
All accounts, books and other documents required to be maintained by the
Registrant by Section 31(a) of the Investment Company Act of 1940 and the Rules
thereunder will be maintained by the offices of:
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
ABN AMRO Asset Management (USA) Inc.
208 South LaSalle Street
Chicago, Illinois 60604
PFPC Inc. (formerly First Data Investor Services Group, Inc.)
101 Federal Street
Boston, Massachusetts 02110
PFPC Inc. (formerly First Data Investor Services Group, Inc.)
4400 Computer Drive
Westborough, Massachusetts 01581
PFPC Inc. (formerly First Data Investor Services Group, Inc.)
3200 Horizon Drive
King of Prussia, Pennsylvania 19406
Item 29. There are no management-related service contracts not discussed in
Parts A and B.
Item 30. Undertakings: None.
<PAGE>
NOTICE
A copy of the Agreement and Declaration of Trust for ABN AMRO Funds (formerly
The Rembrandt Funds, The LSNT Funds and The Passport Funds) is on file with the
Secretary of State of The Commonwealth of Massachusetts and notice is hereby
given that this Registration Statement has been executed on behalf of the Trust
by an officer of the Trust as an officer and by its Trustees as trustees and not
individually and the obligations of or arising out of this Registration
Statement are not binding upon any of the Trustees, officers, or Shareholders
individually but are binding only upon the assets and property of the Trust.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant certifies that it
meets all of the requirements for the effectiveness of this Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 20 to its Registration Statement to be
signed on its behalf by the undersigned on December 22, 1999.
ABN AMRO Funds
By: /s/James Wynsma
James Wynsma
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment to the Registration Statement has been signed below by the following
persons in the capacity on the dates as indicated.
/s/ Arnold F. Brookstone Trustee December 22, 1999
- ---------------------------
Arnold F. Brookstone
/s/William T. Simpson Trustee December 22, 1999
William T. Simpson
/s/ Robert Feitler Trustee December 22, 1999
Robert Feitler
/s/James Wynsma President and December 22, 1999
James Wynsma Chief Executive Officer
/s/Michael C. Kardok Treasurer December 22, 1999
Michael C. Kardok
<PAGE>
LIST OF EXHIBITS
Exhibit Item
b(2) Amendment to the By-Laws d(2) Form of Amendment to Investment Advisory
Agreement for Institutional Money Market Funds
d(4) Investment Sub-Advisory Agreement - Mellon Equity Associates, LLP
d(5) Investment Sub-Advisory Agreement - Delaware Management Company
e(1) Distribution Agreement
g(1) Global Custody Agreement
g(2) Form of Amendment to Global Custody Agreement
h(2) Amendment to Transfer Agency and Services Agreement
h(3) Form of Consent to Transaction
h(4) Form of Amendment to the Transfer Agency and Services Agreement
h(7) Form of Amendment to Administration and Fund Accounting Agreement for
Institutional Money Market Funds
h(8) Form of Contractual Administration Fee Waivers for Institutional Money
Market Funds
h(10) Amendment to Sub-Administration and Fund Accounting Agreement
h(11) Form of Amendment to Sub-Administration and Fund Accounting Agreement
h(12) Shareholder Service Plan and Form of Shareholder Servicing Agent Agreement
for Investor Shares
h(13) Shareholder Service Plan and Form of Shareholder
Servicing Agent Agreement for Institutional Service Shares
i(2) Opinion and Consent of Counsel
l(2) Form of Purchase Agreement for Institutional Money Market Funds
n(2) Amended and Restated Rule 18f-3 Plan for Institutional Service
shares
<PAGE>
Exhibit b(2)
AMENDMENT TO THE BY-LAWS OF THE TRUST
Pursuant to Section 13 of the By-Laws of the Trust, the Board of
Trustees, by affirmative vote of a majority thereof, shall have the right to
amend or repeal, in whole or in part, the By-Laws at any meeting of the Board of
Trustees, or by one or more writings signed by such majority.
Pursuant to this Section 13, as of October 14, 1999, a majority of the
Trust's Board of Trustees amend, by Unanimous Written Consent, Section 2.4 to
read as follows:
Place of Meetings. All meetings of the shareholders shall be held at a place
within the United States, as shall be designated by the Trustees or the
President of the Trust.
<PAGE>
Exhibit d(2)
FORM OF
AMENDMENT DATED SEPTEMBER 16, 1999
TO SCHEDULE A
TO THE INVESTMENT ADVISORY AGREEMENT (THE "AGREEMENT")
DATED DECEMBER 31, 1992
BETWEEN
ABN AMRO ASSET MANAGEMENT (USA) INC.
AND
ABN AMRO FUNDS
Pursuant to the Introduction and Article 3 of the Agreement, Schedule A to the
Agreement is hereby amended to include Institutional Treasury Money Market Fund
(US), Institutional Government Money Market Fund (US) and Institutional Prime
Money Market Fund (US).
ABN AMRO FUNDS
By:
Title:
ABN AMRO ASSET MANAGEMENT (USA) INC.
By:
Title:
<PAGE>
Exhibit d(2)
FORM OF
Schedule A
To the
Investment Advisory Agreement
Between
Rembrandt Funds
(now known as ABN AMRO Funds)
and
ABN AMRO Asset Management (USA) Inc.
Pursuant to Article 3, the Trust shall pay the Advisor compensation at an annual
rate as follows:
Portfolio Fee (in basis points)
Fixed Income Fund (US) 60
Intermediate Government (US)
Fixed Income Fund (US) 60
Tax-Exempt Fixed Income Fund (US) 60
International Fixed Income Fund (US) 80
Limited Volatility Fixed Income Fund (US) 60
Balanced Fund (US) 70
Value Fund (US) 80
Growth Fund (US) 80
Small Cap Growth Fund (US) 80
International Equity Fund (US) 100
TransEurope Fund (US) 100
Asian Tigers Fund (US) 100
Latin America Equity Fund (US) 100
Real Estate Fund (US) 100
Treasury Money Market Fund (US) 35
Government Money Market Fund (US) 20
Money Market Fund (US) 35
Tax-Exempt Money Market Fund (US) 35
Institutional Treasury Money Market Fund (US) 10
Institutional Government Money Market Fund (US) 10
Institutional Prime Money Market Fund (US) 10
Dated: September 16, 1999
<PAGE>
Exhibit d(4)
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made this 1st day of December, 1999, 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(US) (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-Advisor 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 1940 (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, 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 1. 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 Sub-Advisor'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.
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)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-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 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 judgment 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 not 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 rules
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 the 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.
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. Steven Smith, Director of Mutual Funds
ABN AMRO Asset Management (USA) Inc.
208 South LaSalle Street, 4th Floor
Chicago, Illinois 60604
If to the Sub-Advisor: Attn: Mr. William P. Rydell, President
Mellon Equity Associates, LLP
500 Grant Street
Suite 4200
Pittsburgh, PA 15258-0001
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
representations 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.
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: /s/ Steven A. Smith By: /s/ Carla J. Eyre
Attest_____________________ Attest:______________________
Mellon Equity Associates, LLP
By: /s/ William P. Rydell By: /s/ Mark W. Sikorski
Attest: Attest:
<PAGE>
Exhibit d(4)
Schedule 1
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: /s/ Steven A. Smith By: /s/William P. Rydell
Name: Steven A. Smith Name: William P. Rydell
Title: Senior Vice President Title: President and CEO
By: /s/ Carla J. Eyre By: /s/ Mark W. Sikorski
Name: Carla J. Eyre Name: Mark W. Sikorski
Title: Group Senior Vice President Title: Vice President/Portfolio Manager
<PAGE>
Exhibit d(5)
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made this 1st day of December, 1999, by and between ABN AMRO Asset
Management (USA) Inc., a Delaware corporation and U.S. registered Investment
Advisor (the "Investment Manager") and Delaware Management Company, a series of
Delaware Management Business Trust, a Delaware business trust and U.S.
registered Investment Advisor (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 Small Cap Fund(US) (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-Advisor 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, (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 1940 (the "1940 Act") and the Internal Revenue Code of 1986, as
both may be amended from time to time.
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, 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, 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 1. 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 by an amount equal to one-half of the amount by which the Investment
Manager reduced its fee rate. 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.
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 withheld and will be
deemed granted where Sub-Advisor 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 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 or any of their affiliates, or any of their clients and the
Sub-Advisory Agreement in any advertising or promotional materials without the
prior written approval of the Investment Manager.
Certain Records. The Sub-Advisor shall maintain all books and records with
respect to transactions involving the Fund's assets required by subparagraphs
(b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-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 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 judgment 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 be come 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 not 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 rules
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 the 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.
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. Steven Smith, Director of Mutual Funds
ABN AMRO Asset Management (USA) Inc.
208 South LaSalle Street, 4th Floor
Chicago, Illinois 60604
If to the Sub-Advisor: Attn: Mr. David K. Downes, President
Delaware Management Company
One Commerce Square
Philadelphia, PA 19103
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
representations 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.
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: /s/ Steven A. Smith By: /s/ Carla J. Eyre
Attest: Attest:
Delaware Management Company
By: /s/ David K. Downes By: /s/ Michael D. Mabry
Attest: Attest:
<PAGE>
Exhibit d(5)
Schedule 1
to the
Investment Sub-Advisory Agreement
Dated December 1, 1999
between
ABN AMRO Asset Management (USA) Inc.
and
Delaware Investment Advisers
Fees
.550 of 1% (.00550) per annum on the first $50 million of the Fund's average
daily net assets, .450 of 1% (.00450) per annum thereafter of the Fund's average
daily net assets, to be paid monthly in arrears.
ABN AMRO ASSET MANAGEMENT (USA) INC. DELAWARE MANAGEMENT COMPANY
By: /s/ Carla J. Eyre By: /s/ David K. Downes
Name: Carla J. Eyre Name: David K. Downes
Title: Chief Administrative Officer Title: President
By: /s/ Steven A. Smith By: /s/ Michael D. Mabry
Name: Steven A. Smith Name: Michael D. Mabry
Title: Director of Mutual Funds Title: Vice President
<PAGE>
Exhibit e(1)
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT is made as of this 16th day of September,
1999 (the "Agreement") by and between ABN AMRO Funds, a Massachusetts business
trust (the "Company") having its principal place of business at 208 South La
Salle Street, Chicago, Illinois 60604 and Provident Distributors, Inc., a
Delaware corporation (the "Distributor") having its principal place of business
at Four Falls Corporate Center, 6th Floor, West Conshohocken, Pennsylvania
19428-2961.
WHEREAS, the Company is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and its units of beneficial interest (such units of all series are hereinafter
called the "Shares") are registered with the Securities and Exchange Commission
(the "SEC") under the Securities Act of 1933 (the "1933 Act"), and
WHEREAS, the Distributor is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934 (the "1934 Act"), and is a member in
good standing of the National Association of Securities Dealers, Inc. ("NASD"),
and
WHEREAS, the Company desires to retain the Distributor as distributor
for the investment portfolios of the Company to provide for the sale and
distribution of the Shares of the investment portfolios identified on Schedule A
(the "Funds") and for such additional classes or series as the Company may
issue, and the Distributor is prepared to provide such services commencing on
the date first written above, and
WHEREAS, the Company and the Distributor wish to enter into an
agreement with each other with respect to the continuous offering of the
Company's Shares.
NOW THEREFORE, in consideration of the premises and mutual covenants
set forth herein the Distributor and the Company hereby agree as follows:
1. Service as Distributor
1.1 The Company hereby appoints and the Distributor agrees to act as the
Company's agent to sell and arrange for the sale of the Shares covered by the
Company's registration statement under the 1933 Act.
1.2 The Distributor agrees to use its best efforts in connection with the
distribution of Shares, including such advertising and promotion as it believes
reasonable in connection with such distribution.
The Distributor will hold itself available to receive orders, that the
Distributor reasonably believes to be in good order, for the purchase of the
Shares and will accept such orders and will transmit such orders as are so
accepted and funds received by it in payment for such Shares to the Company's
transfer agent or custodian, as appropriate, as promptly as practicable.
Purchase orders shall be deemed effective at the time and in the manner set
forth in the Prospectus. The offering price of the Shares will be the net asset
value per share of the Shares plus any applicable sales charges, determined as
set forth in the Prospectus. The Distributor shall not make any short sales of
the Shares.
The Distributor shall comply with all applicable laws, rules and
regulations, including, without limitation, all rules and regulations made or
adopted by the SEC or by any securities association registered under the 1934
Act and which regulates the Distributor. The Distributor shall maintain the
required licenses and registration for itself as a broker-dealer, and for its
registered representatives or other associated persons, under the 1934 Act and
applicable state securities laws.
The Distributor is not authorized by the Company to give on behalf of
the Company any information or make any representations in connection with the
sale of Shares other than the information and representations contained in the
Registration Statement filed with the SEC under the 1933 Act and the 1940 Act,
as such Registration Statement may be amended from time to time, or contained in
shareholder reports or other material that may be prepared by or on behalf of
the Company for the Distributor's use.
1.3 The Company understands that the Distributor is now, and may in the future
be, the distributor of the shares of several investment companies or series
(collectively, the "Investment Entities"), including Investment Entities having
investment objectives similar to those of the Company. The Company further
understands that investors and potential investors in the Company may invest in
shares of such other Investment Entities. The Company agrees that the
Distributor's duties to such Investment Entities shall not be deemed in conflict
with its duties to the Company under this Section 1.3.
1.4 The Distributor shall not utilize any materials in connection with the sale
or offering of Shares except the Company's current prospectus and statement of
additional information and such other materials as the Company shall provide or
approve.
1.5 All activities by the Distributor and its employees, as distributor of the
Shares, shall comply with all applicable laws, rules and regulations, including,
without limitation, all rules and regulations made or adopted by the SEC or the
National Association of Securities Dealers.
1.6 The Distributor will transmit any orders received by it for purchase or
redemption of the Shares to the transfer agent for the Company.
1.7 Whenever in its judgment such action is warranted by unusual market,
economic or political conditions or abnormal circumstances of any kind, the
Company may decline to accept any orders for, or make any sales of, the Shares
until such time as the Company deems it advisable to accept such orders and to
make such sales, and the Company advises the Distributor promptly of such
determination.
1.8 The Company agrees to pay all costs and expenses in connection with the
registration of Shares under the Securities Act of 1933, as amended, and all
expenses in connection with maintaining facilities for the issue and transfer of
Shares and for supplying information, prices and other data to be furnished by
the Fund hereunder, and all expenses in connection with the preparation and
printing of the Fund's prospectuses and statements of additional information for
regulatory purposes and for distribution to shareholders.
1.9 The Company agrees at its own expense to execute any and all documents and
to furnish any and all information and otherwise to take all actions that may be
reasonably necessary in connection with the qualification of the Shares for sale
in such states as the Distributor may designate. The Company shall notify the
Distributor in writing of the states in which the Shares may be sold and shall
notify the Distributor in writing of any changes to the information contained in
the previous notification.
1.10 The Company shall furnish from time to time, for use in connection with the
sale of the Shares, such information with respect to the Company and the Shares
as the Distributor may reasonably request. The Company shall also furnish the
Distributor upon request with: (a) audited annual statements and unaudited
semi-annual statements of a Fund's books and accounts prepared by the Company,
(b) quarterly earnings statements prepared by the Company, (c) a monthly
itemized list of the securities in the Funds, (d) monthly balance sheets as soon
as practicable after the end of each month, and (e) from time to time such
additional information regarding the financial condition of the Company as the
Distributor may reasonably request.
1.11 The Company represents to the Distributor that all Registration Statements
and prospectuses filed by the Company with the SEC under the 1933 Act with
respect to the Shares have been prepared in conformity with the requirements of
the 1933 Act and the rules and regulations of the SEC thereunder. As used in
this Agreement, the term "Registration Statement" shall mean any registration
statement and any prospectus and any statement of additional information
relating to the Company filed with the SEC and any amendments or supplements
thereto at any time filed with the SEC. Except as to information included in the
Registration Statement in reliance upon information provided to the Company by
the Distributor or any affiliate of the Distributor expressly for use in the
Registration Statement, the Company represents and warrants to the Distributor
that any Registration Statement, when such Registration Statement becomes
effective, will contain statements required to be stated therein in conformity
with the 1933 Act and the rules and regulations of the SEC; that all statements
of fact contained in any such Registration Statement will be true and correct
when such Registration Statement becomes effective; and that no Registration
Statement when such Registration Statement becomes effective will include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading to
a purchaser of the Shares. The Distributor may, but shall not be obligated to,
propose from time to time such amendment or amendments to any Registration
Statement and such supplement or supplements to any prospectus as, in the light
of future developments, may, in the opinion of the Company's counsel, be
necessary or advisable. The Company shall promptly notify the Distributor of any
advice given to it by its counsel regarding the necessity or advisability of
amending or supplementing such Registration Statement. The Company shall not
file any amendment to any Registration Statement or supplement to any prospectus
without giving the Distributor reasonable notice thereof in advance; provided,
however, that nothing contained in this Agreement shall in any way limit the
Company's right to file at any time such amendments to any Registration
Statements and/or supplements to any prospectus, of whatever character, as the
Company may deem advisable, such right being in all respects absolute and
unconditional.
1.12 The Company agrees to indemnify and hold harmless the Distributor, its
officers, directors, and employees, and any person who controls the Distributor
within the meaning of Section 15 of the 1933 Act, free and harmless from and
against any and all claims, costs, expenses (including reasonable attorneys'
fees) losses, damages, charges, payments and liabilities of any sort or kind
which the Distributor, its officers, directors, employees or any such
controlling person may incur under the 1933 Act, under any other statute, at
common law or otherwise, but only to the extent that such liability or expense
incurred by the Distributor, its officers, directors, employees or any
controlling person resulting from such claims or demands arise out of the
acquisition of Shares by any person which is based upon: (i) any untrue
statement, or alleged untrue statement, of a material fact contained in the
Company's Registration Statement, prospectus, statement of additional
information, or sales literature (including amendments and supplements thereto),
or (ii) any omission, or alleged omission, to state a material fact required to
be stated in the Company's Registration Statement, prospectus, statement of
additional information or sales literature (including amendments or supplements
thereto), necessary to make the statements therein not misleading.
Notwithstanding the foregoing, the Company shall not be obligated to indemnify
any entity or person pursuant to this paragraph 1.12 against any losses, claims,
costs, charges, payments, damages, liabilities or expenses (including attorneys'
fees) of any sort or kind (i) arising out of the acquisition of Shares by any
person which is based upon any untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
furnished to the Company by the Distributor or its affiliated persons for use in
the Company's Registration Statement, prospectus, or statement of additional
information or sales literature (including amendments or supplements thereto) or
(ii) arising by reason of the Distributor's willful misfeasance, bad faith or
negligence in the performance of the Distributor's duties hereunder or by reason
of reckless disregard of its obligations or duties hereunder, from reliance on
information furnished to the Company by the Distributor or its affiliates, or
from the Distributor's refusal or failure to comply with the terms or conditions
of this Agreement.
1.13 The Distributor agrees to indemnify and hold harmless the Company, its
several officers and Trustees and each person, if any, who controls a Fund
within the meaning of Section 15 of the 1933 Act against any and all claims,
costs, expenses (including reasonable attorneys' fees), losses, damages,
charges, payments and liabilities of any sort or kind which the Company, its
officers, Trustees or any such controlling person may incur under the 1933 Act,
under any other statute, at common law or otherwise, but only to the extent that
such liability or expense incurred by the Company, its officers or Trustees, or
any controlling person resulting from such claims or demands arose (i) out of
the acquisition of any Shares by any person which may be based upon any untrue
statement, or alleged untrue statement, of a material fact contained in the
Company's Registration Statement, prospectus, statement of additional
information (including amendments and supplements thereto) or sales literature,
or any omission, or alleged omission, to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, if
such statement or omission was made in reliance upon information furnished or
confirmed in writing to the Company by the Distributor or its affiliated persons
(as defined in the 1940 Act), (ii) by reason of the Distributor's willful
misfeasance, bad faith or negligence in performance of the Distributor's duties
or obligations hereunder or by reason of reckless disregard of its duties or
obligations hereunder, (iii) from reliance on information furnished to the
Company by the Distributor or its affiliates, or (iv) from the Distributor's
refusal or failure to comply with the terms or conditions of this Agreement.
1.14 In any case in which one party hereto (the "Indemnifying Party") may be
asked to indemnify or hold the other party hereto (the "Indemnified Party")
harmless, the Indemnified Party will notify the Indemnifying Party promptly
after identifying any situation which it believes presents or appears likely to
present a claim for indemnification (an "Indemnification Claim") against the
Indemnifying Party, although the failure to do so shall not prevent recovery by
the Indemnified Party, and shall keep the Indemnifying Party advised with
respect to all developments concerning such situation. The Indemnifying Party
shall have the option to defend the Indemnified Party against any
Indemnification Claim which may be the subject of this indemnification, and, in
the event that the Indemnifying Party so elects, such defense shall be conducted
by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified
Party, whose approval shall not be unreasonably withheld, and thereupon the
Indemnifying Party shall take over the complete defense of the Claim and the
Indemnified Party shall sustain no further legal or other expenses in respect of
such Claim. In the event that the Indemnifying Party elects to assume the
defense of any Indemnification Claim and retains legal counsel, the Indemnified
Party shall bear the fees and expenses of any additional legal counsel retained
by it. The Indemnified Party will not confess any Indemnification Claim or make
any compromise in any case in which the Indemnifying Party will be asked to
provide indemnification, except with the Indemnifying Party's prior written
consent. The obligations of the parties hereto under this Section 1.14 and
Section 3.1 shall survive the termination of this Agreement.
In the event that the Indemnifying Party does not elect to assume the
defense of any such suit, or in case the Indemnified Party reasonably does not
approve of counsel chosen by the Indemnifying Party, or in case there is a
conflict of interest between the Indemnifying Party and the Indemnified Party,
the Indemnifying Party will reimburse the Indemnified Party, its officers,
trustees, directors and employees, or the controlling person or persons named as
defendant or defendants in such suit, for the reasonable fees and expenses of
any counsel retained by the Indemnified Party or such Defendant. The
Indemnifying Party's indemnification agreement contained in this Section 1.14
and the Indemnifying Party's representations and warranties in this Agreement
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Party, its officers,
directors, trustees or employees, or any controlling persons, and shall survive
the delivery of any Shares. This agreement of indemnity will inure exclusively
to the Indemnified Party's benefit, to the benefit of its several officers,
directors, trustees or employees, and their respective estates and to the
benefit of the controlling persons and their successors. The Indemnifying Party
agrees promptly to notify the Indemnified Party of the commencement of any
litigation or proceedings against the Indemnifying Party or any of its officers,
trustees, employees or directors in connection with the issue and sale of any
Shares.
1.15 No Shares shall be offered by either the Distributor or the Company under
any of the provisions of this Agreement and no orders for the purchase or sale
of Shares hereunder shall be accepted by the Company if and so long as
effectiveness of the Registration Statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the 1933
Act, or if and so long as a current prospectus as required by Section 5(b)(2) of
the 1933 Act is not on file with the SEC; provided, however, that nothing
contained in this Section 1.15 shall in any way restrict or have any application
to or bearing upon the Company's obligation to redeem Shares tendered for
redemption by any shareholder in accordance with the provisions of the Company's
Registration Statement, Declaration of Company, or bylaws.
1.16 The Company agrees to advise the Distributor as soon as reasonably
practical by a notice in writing delivered to the Distributor:
(a) in the event of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement, prospectus or statement of
additional information then in effect or the initiation by service of process on
the Company of any proceeding for that purpose;
(b) of the happening of any event that makes untrue any statement of a material
fact made in the Registration Statement, prospectus or statement of additional
information then in effect or that requires the making of a change in such
Registration Statement, prospectus or statement of additional information in
order to make the statements therein not misleading; and
(c) of all actions of the SEC with respect to any amendments to any Registration
Statement, prospectus or statement of additional information which may from time
to time be filed with the SEC.
For purposes of this section, informal requests by or acts of the Staff
of the SEC shall not be deemed actions of the SEC.
2. Term and Termination of Agreement
2.1 This Agreement shall become effective immediately upon the consummation of
the acquisition of First Data Investor Services Group, Inc. by a subsidiary of
PNC Bank Corp., which the parties anticipate to occur on or about December 1,
1999, and, unless sooner terminated as provided herein, shall continue for an
initial one-year term and thereafter shall be renewed for successive one-year
terms in accordance with the requirements of the 1940 Act. This Agreement is
terminable without penalty, on at least sixty days' written notice, by either
party. This Agreement will also terminate automatically in the event of its
assignment (as defined in the 1940 Act and the rules thereunder).
2.2 In the event a termination notice is given by the Company, all reasonable
expenses associated with movement of records and materials and conversion
thereof will be borne by the Company.
3. Limitation of Liability
3.1 The Distributor shall at all times act in good faith and agrees to use its
best efforts within commercially reasonable limits to ensure the accuracy of all
services performed under this Agreement. The Distributor shall not be liable to
the Company for any error of judgment or mistake of law or for any loss suffered
by the Company in connection with the performance of its obligations and duties
under this Agreement, except a loss resulting from the Distributor's willful
misfeasance, bad faith or negligence in the performance of such obligations and
duties, or by reason of its reckless disregard thereof, reliance on information
furnished to the Company by the Distributor or its affiliates, or the
Distributor's refusal or failure to comply with the terms and conditions of this
Agreement. The Company shall not be liable to the Distributor for any error of
judgment or mistake of law or for any loss suffered by the Distributor, except a
loss resulting from the Company's willful misfeasance, bad faith or negligence
in the performance of its duties and obligations hereunder, or by reason of its
reckless disregard thereof.
3.2 Each party shall have the duty to mitigate damages for which the other party
may become responsible.
3.3 NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT
SHALL EITHER PARTY, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS, TRUSTEES,
OFFICERS, EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE FOR LOST PROFITS,
EXEMPLARY, PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES.
4. EXCLUSION OF WARRANTIES
THIS IS A SERVICE AGREEMENT. EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT, THE DISTRIBUTOR DISCLAIMS ALL OTHER REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, MADE TO THE COMPANY, A FUND OR ANY OTHER PERSON, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTIES REGARDING QUALITY, SUITABILITY,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE (IRRESPECTIVE OF
ANY COURSE OF DEALING, CUSTOM OR USAGE OF TRADE) OF ANY SERVICES OR ANY GOODS
PROVIDED INCIDENTAL TO SERVICES PROVIDED UNDER THIS AGREEMENT. THE DISTRIBUTOR
DISCLAIMS ANY WARRANTY OF TITLE OR NON-INFRINGEMENT EXCEPT AS OTHERWISE SET
FORTH IN THIS AGREEMENT.
5. Modifications and Waivers
No change, termination, modification, or waiver of any term or condition of the
Agreement shall be valid unless in writing signed by each party. No such writing
shall be effective as against the Distributor unless said writing is executed by
a Senior Vice President, Executive Vice President or President of the
Distributor. A party's waiver of a breach of any term or condition in the
Agreement shall not be deemed a waiver of any subsequent breach of the same or
another term or condition.
6. No Presumption Against Drafter
The Distributor and the Company have jointly participated in the
negotiation and drafting of this Agreement. The Agreement shall be construed as
if drafted jointly by the Company and the Distributor, and no presumptions arise
favoring any party by virtue of the authorship of any provision of this
Agreement.
7. Publicity
Neither the Distributor nor the Company shall release or publish news
releases, public announcements, advertising or other publicity relating to this
Agreement or to the transactions contemplated by it, other than factual
statements concerning the existence of the relationship, without prior review
and written approval of the other party; provided, however, that either party
may make such disclosures as are required by legal, accounting or regulatory
requirements after making reasonable efforts in the circumstances to consult in
advance with the other party.
8. Severability
The parties intend every provision of this Agreement to be severable.
If a court of competent jurisdiction determines that any term or provision is
illegal or invalid for any reason, the illegality or invalidity shall not affect
the validity of the remainder of this Agreement. In such case, the parties shall
in good faith modify or substitute such provision consistent with the original
intent of the parties. Without limiting the generality of this paragraph, if a
court determines that any remedy stated in this Agreement has failed of its
essential purpose, then all other provisions of this Agreement, including the
limitations on liability and exclusion of damages, shall remain fully effective.
9. Force Majeure
No party shall be liable for any default or delay in the performance of
its obligations under this Agreement if and to the extent such default or delay
is caused, directly or indirectly, by (i) fire, flood, elements of nature or
other acts of God; (ii) any outbreak or escalation of hostilities, war, riots or
civil disorders in any country, (iii) any act or omission of the other party or
any governmental authority; (iv) any labor disputes (whether or not the
employees' demands are reasonable or within the party's power to satisfy); or
(v) nonperformance by a third party or any similar cause beyond the reasonable
control of such party, including without limitation, failures or fluctuations in
telecommunications or other equipment. In any such event, the non-performing
party shall be excused from any further performance and observance of the
obligations so affected only for so long as such circumstances prevail and such
party continues to use commercially reasonable efforts to recommence performance
or observance as soon as practicable.
10. Equipment Failures
Notwithstanding any other provision in this Agreement, in the event of
equipment failures or the occurrence of events beyond the Distributor's control
which render its performance under this Agreement impossible, the Distributor
shall at no additional expense to the Company take reasonable steps to minimize
service interruptions. The Distributor represents that the various procedures
and systems which the Distributor has implemented with regard to safekeeping
from loss or damage attributable to fire, theft or any other cause of the
records, and other data of the Company and the Distributor's records, data,
equipment, facilities and other property used in performance of its obligations
hereunder are reasonably adequate and are covered by a reasonably adequate
disaster recovery plan, and it will make such changes therein from time to time
as are reasonably required for the secure performance of its obligations
hereunder.
11. Year 2000
The Distributor's services hereunder shall be rendered, and its
computer systems used in rendering such services shall operate and function,
without any Year 2000 Error. The term "Year 2000 Error" means:
(a) any failure of the Distributor's systems to properly record, store,
process, calculate or present calendar dates falling on and after (and, if
applicable, spans of time including) January 1, 2000 as a result of the
occurrence or use of data consisting of such dates;
(b) any failure of the Distributor's systems to calculate any
information dependent on or relating to dates on or after January 1, 2000 in the
same manner, and with the same functionality, date integrity and performance, as
such systems record, store, process, calculate and present calendar dates on or
before December 31, 1999, or information dependent on or relating to such dates;
or
(c) any loss of functionality or performance with respect to the
introduction of records or processing of data containing dates falling on or
after January 1, 2000.
12. Notices
Any notice or other instrument authorized or required by this Agreement
to be given in writing to the Company or the Distributor shall be sufficiently
given if addressed to the party and received by it at its office set forth below
or at such other place as it may from time to time designate in writing.
To the Company:
ABN Amro Funds
208 South La Salle Street
Chicago, Illinois 60604
To the Distributor:
Provident Distributors, Inc.
Four Falls Corporate Center, 6th Floor
West Conshohocken, Pennsylvania 19428-2961
Attention: Philip Rinnander
13. Governing Law/Venue
The laws of theState of Delaware, excluding the laws on conflicts of
laws, and the applicable provisions of the 1940 Act shall govern the
interpretation, validity, and enforcement of this Agreement. To the extent the
provisions of Delaware law or the provisions hereof conflict with the 1940 Act,
the 1940 Act shall control. All actions arising from or related to this
Agreement shall be brought in the state and federal courts sitting in the City
of Wilmington, and the Distributor and the Company hereby submit themselves to
the exclusive jurisdiction of those courts
14. Counterparts
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and which collectively shall be deemed
to constitute only one instrument.
15. Captions
The captions of 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.
16. Successors
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and is not intended to confer
upon any other person any rights or remedies hereunder.
17. Arbitration
Any claim or controversy arising out of or related to this Agreement,
or breach hereof, shall be settled by arbitration administered by the American
Arbitration Association in Wilmington, Delaware in accordance with its
applicable rules, except that the Federal Rules of Evidence and the Federal
Rules of Civil Procedure with respect to the discovery process shall apply. The
parties hereby agree that judgment upon the award rendered by the arbitrator may
be entered in any court having jurisdiction.
The parties acknowledge and agree that the performance of the
obligations under this Agreement necessitates the use of instrumentalities of
interstate commerce and, notwithstanding other general choice of law provisions
in this Agreement, the parties agree that the Federal Arbitration Act shall
govern and control with respect to the provisions of this Article.
18. Confidentiality
18.1 Confidentiality. In the course of performance under this Agreement, each
party may have access to and receive disclosure of confidential information
about the other party, including but not limited to that party's financial
information, financial strategies, marketing plans, customer profiles, sales
estimates, business plans and a variety of other information which the receiving
party should reasonably consider to be confidential and proprietary (hereinafter
referred to as "Confidential Information"). The contents of this Agreement are
also Confidential Information. Each party shall exercise reasonable care to
safeguard the confidentiality of the Confidential Information of the other.
Confidential Information of the disclosing party shall be used by the receiving
party solely in the performance of the receiving party's obligations pursuant to
this Agreement. The receiving party shall receive Confidential Information in
confidence and not disclose Confidential Information of the disclosing party to
any third party, except as may be necessary for the receiving party to perform
its obligations pursuant to this Agreement, as required by law or a court of
competent jurisdiction or by a regulatory agency with supervisory
responsibilities over the disclosing party, for confidential consultations with
accountants or attorneys, or as may otherwise be agreed upon in writing by the
disclosing party. Each party may, however, disclose Confidential Information to
its parent corporation, affiliates, subsidiaries and affiliated companies and
employees, provided that each shall use reasonable efforts to ensure that the
Confidential Information is not duplicated or disclosed in breach of this
Agreement.
Each party acknowledges that breach of the restrictions on use,
dissemination or disclosure of any Confidential Information of the other party
would result in immediate and irreparable harm, and money damages would be
inadequate to compensate the other party for that harm. Each party shall be
entitled to equitable relief, in addition to all other available remedies, to
redress any such breach.
18.2 Ownership. In the course of performance under this Agreement, the
Distributor may create reports, marketing materials, promotional materials, and
other materials relating to the Company ("Results"). The Company acknowledges
and agrees that the Distributor is the sole owner of all rights (including, but
not limited to, copyrights) to any Results, or aspects of Results, that are used
by the Distributor for administering its clients generally and are not created
solely for the Company. Notwithstanding the foregoing, all rights (including,
but not limited to, copyrights) to any Results that are created solely for the
Company (including, but not limited to, any marketing materials and promotional
materials created solely in connection with the Company) are solely owned by the
Company and are assigned to the Company by the Distributor and the Company shall
have a perpetual, royalty free, worldwide, transferable license to use, copy,
transmit, distribute and modify any Results owned by the Distributor as may
reasonably be necessary for the Company to exploit fully all of its rights in
any Results owned by the Company.
19. Obligations of the Company
The Company and the Distributor agree that the obligations of the Company under
the Agreement shall not be binding upon any of the Trustees, shareholders,
nominees, officers, employees or agents, whether past, present or future, of the
Company individually, but are binding only upon the assets and property of the
Company, as provided in the Declaration of Trust of the Company. The execution
and delivery of this Agreement have been authorized by the Directors of the
Company, and signed by an authorized officer of the Company, acting as such, and
neither such authorization by such Trustees nor such execution and delivery by
such officer shall be deemed to have been made by any of them or any shareholder
of the Company individually or to impose any liability on any of them or any
shareholder of the Company personally, but shall bind only the assets and
property of the Company as provided in the Declaration of Trust of the Company.
The Company and the Distributor further agree that the obligations of a Fund
under the Agreement shall not be binding on any other Fund, but are binding only
upon the assets and property of such Fund, as provided in the Declaration of
Trust.
20. Entire Agreement
This Agreement, including all Schedules hereto, constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior and contemporaneous proposals, agreements, contracts, representations, and
understandings, whether written or oral, between the parties with respect to the
subject matter hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
ABN AMRO FUNDS
By: /s/ Steven A. Smith
Name: Steven A. Smith
Title: Senior Vice President
PROVIDENT DISTRIBUTORS, INC.
By: /s/ Philip H. Rinnander
Name: Philip H. Rinnander
Title: President
<PAGE>
Exhibit e(1)
SCHEDULE A to the Distribution Agreement between ABN Amro Funds and Provident
Distributors, Inc.
Name of Funds
Money Market Funds
Treasury Money Market Fund
Government Money Market Fund
Money Market Fund
Tax-Exempt Money Market Fund
Fixed Income Funds
Fixed Income Fund
Intermediate Government Fixed Income Fund
Tax-Exempt Fixed Income Fund
International Fixed Income Fund
Limited Volatility Fixed Income Fund
Balanced Funds
Balanced Fund
Equity Funds
Value Fund
Growth Fund
International Equity Fund
Small Cap Fund
Asian Tigers Fund
TransEurope Fund
Latin America Equity Fund
Real Estate Fund
Institutional Funds
Prime Money Market Fund
Treasury Money Market Fund
Government Money Market Fund
<PAGE>
Exhibit g(1)
GLOBAL CUSTODY AGREEMENT
This AGREEMENT is effective August 13, 1998, and is between THE CHASE
MANHATTAN BANK ("Bank") and THE REMBRANDT FUNDS ("Customer").
1. Customer Accounts.
Bank, acting as "Securities Intermediary" (as defined in Section 15(g)
hereof) shall establish and maintain the following accounts ("Accounts"): (a) a
Custody Account (as defined in Section 15(b) hereof) in the name of Customer for
Financial Assets, which shall, except as modified by Section 15(d) hereof, mean
stocks, shares, bonds, debentures, notes, mortgages or other obligations for the
payment of money, bullion, coin and any certificates, receipts, warrants or
other instruments representing rights to receive, purchase or subscribe for the
same or evidencing or representing any other rights or interests therein and
other similar property whether certificated or uncertificated as may be received
by Bank or its Subcustodian (as defined in Section 3 hereof) for the account of
Customer, including as an "Entitlement Holder" as defined in Section 15(c)
hereof); and
(b) an account in the name of Customer ("Deposit Account") for any and
all cash in any currency received by Bank or its Subcustodian for the account of
Customer, which cash shall not be subject to withdrawal by draft or check.
Customer warrants its authority to: 1) deposit the cash and Financial Assets
(collectively "Assets") received in the Accounts and 2) give Instructions (as
defined in Section 11 hereof) concerning the Accounts. Bank may deliver
Financial Assets of the same class in place of those deposited in the Custody
Account.
Upon written agreement between Bank and Customer, additional Accounts
may be established and separately accounted for as additional Accounts
hereunder.
2. Maintenance of Financial Assets and Cash at Bank and Subcustodian Locations.
Unless Instructions specifically require another location acceptable to
Bank:
(a) Financial Assets shall be held in the country or other jurisdiction
in which the principal trading market for such Financial Assets is located,
where such Financial Assets are to be presented for payment or where such
Financial Assets are acquired; and
(b) Cash shall be credited to an account in a country or other
jurisdiction in which such cash may be legally deposited or is the legal
currency for the payment of public or private debts.
Cash may be held pursuant to Instructions in either interest or
non-interest bearing accounts as may be available for the particular currency.
To the extent Instructions are issued and Bank can comply with such
Instructions, Bank is authorized to maintain cash balances on deposit for
Customer with itself or one of its "Affiliates" at such reasonable rates of
interest as may from time to time be paid on such accounts, or in non-interest
bearing accounts as Customer may direct, if acceptable to Bank. For purposes
hereof, the term "Affiliate" shall mean an entity controlling, controlled by, or
under common control with, Bank.
If Customer wishes to have any of its Assets held in the custody of an
institution other than the established Subcustodians as defined in Section 3 (or
their securities depositories), such arrangement must be authorized by a written
agreement, signed by Bank and Customer.
3. Subcustodians and Securities Depositories.
Bank may act hereunder through the subcustodians listed in Schedule A
hereof with which Bank has entered into subcustodial agreements
("Subcustodians"). Customer authorizes Bank to hold Assets in the Accounts in
accounts which Bank has established with one or more of its branches or
Subcustodians. Bank and Subcustodians are authorized to hold any of Financial
Assets in their account with any securities depository in which they
participate.
Bank reserves the right to add new, replace or remove Subcustodians.
Customer shall be given reasonable notice by Bank of any amendment to Schedule
A. Upon request by Customer, Bank shall identify the name, address and principal
place of business of any Subcustodian of Customer's Assets and the name and
address of the governmental agency or other regulatory authority that supervises
or regulates such Subcustodian.
4. Use of Subcustodian.
(a) Bank shall identify the Assets on its books as belonging to Customer.
(b) A Subcustodian shall hold such Assets together with assets
belonging to other customers of Bank in accounts identified on such
Subcustodian's books as custody accounts for the exclusive benefit of customers
of Bank.
(c) Any Assets in the Accounts held by a Subcustodian shall be subject
only to the instructions of Bank or its agent. Any Financial Assets held in a
securities depository for the account of a Subcustodian shall be subject only to
the instructions of such Subcustodian.
(d) Any agreement Bank enters into with a Subcustodian for holding
Bank's customers' assets shall provide that such assets shall not be subject to
any right, charge, security interest, lien or claim of any kind in favor of such
Subcustodian except for safe custody or administration, and that the beneficial
ownership of such assets shall be freely transferable without the payment of
money or value other than for safe custody or administration. Where Securities
are deposited by a Subcustodian with a securities depository, Bank shall cause
the Subcustodian to identify on its books as belonging to Bank, as agent, the
Securities shown on the Subcustodian's account on the books of such securities
depository. The foregoing shall not apply to the extent of any special agreement
or arrangement made by Customer with any particular Subcustodian.
5. Deposit Account Transactions.
(a) Bank or its Subcustodians shall make payments from the Deposit
Account upon receipt of Instructions which include all information required by
Bank.
(b) In the event that any payment to be made under this Section 5
exceeds the funds available in the Deposit Account, Bank, in its discretion, may
advance Customer such excess amount which shall be deemed a loan payable on
demand, bearing interest at the rate customarily charged by Bank on similar
loans.
(c) If Bank credits the Deposit Account on a payable date, or at any
time prior to actual collection and reconciliation to the Deposit Account, with
interest, dividends, redemptions or any other amount due, Customer shall
promptly return any such amount upon oral or written notification: (i) that such
amount has not been received in the ordinary course of business or (ii) that
such amount was incorrectly credited. If Customer does not promptly return any
amount upon such notification, Bank shall be entitled, upon oral or written
notification to Customer, to reverse such credit by debiting the Deposit Account
for the amount previously credited. Bank or its Subcustodian shall have no duty
or obligation to institute legal proceedings, file a claim or a proof of claim
in any insolvency proceeding or take any other action with respect to the
collection of such amount, but may act for Customer upon Instructions after
consultation with Customer.
6. Custody Account Transactions.
(a) Financial Assets shall be transferred, exchanged or delivered by
Bank or its Subcustodian upon receipt by Bank of Instructions which include all
information required by Bank. Settlement and payment for Financial Assets
received for, and delivery of Financial Assets out of, the Custody Account may
be made in accordance with the customary or established securities trading or
securities processing practices and procedures in the jurisdiction or market in
which the transaction occurs, including, without limitation, delivery of
Financial Assets to a purchaser, dealer or their agents against a receipt with
the expectation of receiving later payment and free delivery. Delivery of
Financial Assets out of the Custody Account may also be made in any manner
specifically required by Instructions acceptable to Bank.
(b) Bank, in its discretion, may credit or debit the Accounts on a
contractual settlement date with cash or Financial Assets with respect to any
sale, exchange or purchase of Financial Assets. Otherwise, such transactions
shall be credited or debited to the Accounts on the date cash or Financial
Assets are actually received by Bank and reconciled to the Account.
(i) Bank may reverse credits or debits made to the Accounts in its
discretion if the related transaction fails to settle within a reasonable
period, determined by Bank in its discretion, after the contractual settlement
date for the related transaction.
(ii) If any Financial Assets delivered pursuant to this Section 6 are
returned by the recipient thereof, Bank may reverse the credits and debits of
the particular transaction at any time.
7. Actions of Bank.
Bank shall follow Instructions received regarding Assets held in the
Accounts. However, until it receives Instructions to the contrary, Bank shall:
(a) Present for payment any Financial Assets which are called, redeemed
or retired or otherwise become payable and all coupons and other income items
which call for payment upon presentation, to the extent that Bank or
Subcustodian is actually aware of such opportunities.
(b) Execute in the name of Customer such ownership and other
certificates as may be required to obtain payments in respect of Financial
Assets.
(c) Exchange interim receipts or temporary Financial Assets for
definitive Financial Assets.
(d) Appoint brokers and agents for any transaction involving the
Financial Assets, including, without limitation, Affiliates of Bank or any
Subcustodian.
(e) Issue statements to Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.
Bank shall send Customer an advice or notification of any transfers of
Assets to or from the Accounts. Such statements, advices or notifications shall
indicate the identity of the entity having custody of the Assets. Unless
Customer sends Bank a written exception or objection to any Bank statement
within sixty (60) days of receipt, Customer shall be deemed to have approved
such statement. In such event, or where Customer has otherwise approved any such
statement, Bank shall, to the extent permitted by law, be released, relieved and
discharged with respect to all matters set forth in such statement or reasonably
implied therefrom as though it had been settled by the decree of a court of
competent jurisdiction in an action where Customer and all persons having or
claiming an interest in Customer or Customer's Accounts were parties.
All collections of funds or other property paid or distributed in
respect of Financial Assets in the Custody Account shall be made at the risk of
Customer. Bank shall have no liability for any loss occasioned by delay in the
actual receipt of notice by Bank or by its Subcustodians of any payment,
redemption or other transaction regarding Financial Assets in the Custody
Account in respect of which Bank has agreed to take any action hereunder.
8. Corporate Actions; Proxies; Tax Reclaims.
(a) Corporate Actions. Whenever Bank receives information concerning
the Financial Assets which requires discretionary action by the beneficial owner
of the Financial Assets (other than a proxy), such as subscription rights, bonus
issues, stock repurchase plans and rights offerings, or legal notices or other
material intended to be transmitted to securities holders ("Corporate Actions"),
Bank shall give Customer notice of such Corporate Actions to the extent that
Bank's central corporate actions department has actual knowledge of a Corporate
Action in time to notify its customers.
When a rights entitlement or a fractional interest resulting from a
rights issue, stock dividend, stock split or similar Corporate Action is
received which bears an expiration date, Bank shall endeavor to obtain
Instructions from Customer or its Authorized Person (as defined in Section 10
hereof), but if Instructions are not received in time for Bank to take timely
action, or actual notice of such Corporate Action was received too late to seek
Instructions, Bank is authorized to sell such rights entitlement or fractional
interest and to credit the Deposit Account with the proceeds or take any other
action it deems, in good faith, to be appropriate in which case it shall be held
harmless for any such action.
(b) Proxy Voting. Bank shall provide proxy voting services, if elected
by Customer, in accordance with the terms of the proxy voting services rider
hereto. Proxy voting services may be provided by Bank or, in whole or in part,
by one or more third parties appointed by Bank (which may be Affiliates of
Bank).
(c) Tax Reclaims.
(i) Subject to the provisions hereof, Bank shall apply for a reduction
of withholding tax and any refund of any tax paid or tax credits which apply in
each applicable market in respect of income payments on Financial Assets for
Customer's benefit which Bank believes may be available to Customer.
(ii) The provision of tax reclaim services by Bank is conditional upon
Bank's receiving from Customer or, to the extent the Financial Assets are
beneficially owned by others, from each beneficial owner, A) a declaration of
the beneficial owner's identity and place of residence and (B) certain other
documentation (pro forma copies of which are available from Bank). Customer
acknowledges that, if Bank does not receive such declarations, documentation and
information Bank shall be unable to provide tax reclaim services.
(iii) Bank shall not be liable to Customer or any third party for any
taxes, fines or penalties payable by Bank or Customer, and shall be indemnified
accordingly, whether these result from the inaccurate completion of documents by
Customer or any third party, or as a result of the provision to Bank or any
third party of inaccurate or misleading information or the withholding of
material information by Customer or any other third party, or as a result of any
delay of any revenue authority or any other matter beyond Bank's control.
(iv) Bank shall perform tax reclaim services only with respect to
taxation levied by the revenue authorities of the countries notified to Customer
from time to time and Bank may, by notification in writing, at Bank's absolute
discretion, supplement or amend the markets in which tax reclaim services are
offered. Other than as expressly provided in this sub-clause, Bank shall have no
responsibility with regard to Customer's tax position or status in any
jurisdiction.
(v) Customer confirms that Bank is authorized to disclose any
information requested by any revenue authority or any governmental body in
relation to Customer or the securities and/or cash held for Customer.
(vi) Tax reclaim services may be provided by Bank or, in whole or in part, by
one or more third parties appointed by Bank (which may be Bank's affiliates);
provided that Bank shall be liable for the performance of any such third party
to the same extent as Bank would have been if Bank performed such services.
(d) Tax Obligations and Indemnification.
(i) Customer confirms that Bank is authorized to deduct from any cash
received or credited to the Deposit Account any taxes or levies required by any
revenue or governmental authority for whatever reason in respect of the Custody
Account.
(ii) If Bank does not receive appropriate declarations, documentation
and information that additional United Kingdom taxation shall be deducted from
all income received in respect of the Financial Assets issued outside the United
Kingdom and any applicable United States withholding tax shall be deducted from
income received from the Financial Assets. Customer shall provide to Bank such
documentation and information as Bank may require in connection with taxation,
and warrants that, when given, this information shall be true and correct in
every respect, not misleading in any way, and contain all material information.
Customer undertakes to notify Bank immediately if any such information requires
updating or amendment.
(iii) Customer shall be responsible for the payment of all taxes
relating to the Financial Assets in the Custody Account, and Customer agrees to
pay, indemnify and hold Bank harmless from and against any and all liabilities,
penalties, interest or additions to tax with respect to or resulting from, any
delay in, or failure by, Bank (1) to pay, withhold or report any U.S. federal,
state or local taxes or foreign taxes imposed on, or (2) to report interest,
dividend or other income paid or credited to the Deposit Account, whether such
failure or delay by Bank to pay, withhold or report tax or income is the result
of (x) Customer's failure to comply with the terms of this paragraph, or (y)
Bank's own acts or omissions; provided however, Customer shall not be liable to
Bank for any penalty or additions to tax due as a result of Bank's failure to
pay or withhold tax or to report interest, dividend or other income paid or
credited to the Deposit Account solely as a result of Bank's negligent acts or
omissions.
9. Nominees.
Financial Assets which are ordinarily held in registered form may be
registered in a nominee name of Bank, Subcustodian or securities depository, as
the case may be. Bank may without notice to Customer cause any such Financial
Assets to cease to be registered in the name of any such nominee and to be
registered in the name of Customer. In the event that any Financial Assets
registered in a nominee name are called for partial redemption by the issuer,
Bank may allot the called portion to the respective beneficial holders of such
class of security in any manner Bank deems to be fair and equitable. Customer
shall hold Bank, Subcustodians, and their respective nominees harmless from any
liability arising directly or indirectly from their status as a mere record
holder of Financial Assets in the Custody Account.
10. Authorized Persons.
As used herein, the term "Authorized Person" means employees or agents
including investment managers as have been designated by written notice from
Customer or its designated agent to act on behalf of Customer hereunder. Such
persons shall continue to be Authorized Persons until such time as Bank receives
Instructions from Customer or its designated agent that any such employee or
agent is no longer an Authorized Person.
11. Instructions.
The term "Instructions" means instructions of any Authorized Person
received by Bank, via telephone, telex, facsimile transmission, bank wire or
other teleprocess or electronic instruction or trade information system
acceptable to Bank which Bank believes in good faith to have been given by
Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which Bank may specify. Unless
otherwise expressly provided, all Instructions shall continue in full force and
effect until canceled or superseded. The term "Instructions" includes, without
limitation, instructions to sell, assign, transfer, deliver, purchase or receive
for the Custody Account, any and all stocks, bonds and other Financial Assets or
to transfer funds in the Deposit Account.)
Any Instructions delivered to Bank by telephone shall promptly
thereafter be confirmed in writing by an Authorized Person (which confirmation
may bear the facsimile signature of such Person), but Customer shall hold Bank
harmless for the failure of an Authorized Person to send such confirmation in
writing, the failure of such confirmation to conform to the telephone
instructions received or Bank's failure to produce such confirmation at any
subsequent time. Bank may electronically record any Instructions given by
telephone, and any other telephone discussions with respect to the Custody
Account. Customer shall be responsible for safeguarding any testkeys,
identification codes or other security devices which Bank shall make available
to Customer or its Authorized Persons.
12. Standard of Care; Liabilities.
(a) Bank shall be responsible for the performance of only such duties
as are set forth herein or expressly contained in Instructions which are
consistent with the provisions hereof as follows:
(i) Notwithstanding any other provisions of this Agreement, Bank's
responsibilities shall be limited to the exercise of reasonable care with
respect to its obligations hereunder. Bank shall only be liable to Customer for
any loss which shall occur as the result of the failure of a Subcustodian to
exercise reasonable care with respect to the safekeeping of such Assets where
such loss results directly from the failure by the Subcustodian to use
reasonable care in the provision of custodial services by it in accordance with
the standards prevailing in its local market or from the willful default of such
Subcustodian in the provision of custodial services by it. In the event of any
loss to Customer which is compensable hereunder (i.e. a loss arising by reason
of willful misconduct or the failure of Bank or its Subcustodian to use
reasonable care), Bank shall be liable to Customer only to the extent of
Customer's direct damages, to be determined based on the market value of the
property which is the subject of the loss at the date of discovery of such loss
and without reference to any special conditions or circumstances. Bank shall
have no liability whatsoever for any consequential, special, indirect or
speculative loss or damages (including, but not limited to, lost profits)
suffered by Customer in connection with the transactions and services
contemplated hereby and the relationship established hereby even if Bank has
been advised as to the possibility of the same and regardless of the form of the
action.
(ii) Bank shall not be responsible for the insolvency of any
Subcustodian which is not a branch or Affiliate of Bank. Bank shall not be
responsible for any act, omission, default or the solvency of any broker or
agent which it or a Subcustodian appoints unless such appointment was made
negligently or in bad faith.
(iii) (A) Customer shall indemnify and hold Bank and its directors,
officers, agents and employees (collectively the "Indemnitees") harmless from
and against any and all claims, liabilities, losses, damages, fines, penalties,
and expenses, including out-of-pocket and incidental expenses and legal fees
("Losses") that may be imposed on, incurred by, or asserted against, the
Indemnitees or any of them for following any instructions or other directions
upon which Bank is authorized to rely pursuant to the terms of this Agreement.
(B) In addition to and not in limitation of the preceding subparagraph, customer
shall also indemnify and hold the Indemnitees and each of them harmless from and
against any and all Losses that may be imposed on, incurred by, or asserted
against, the Indemnitees or any of them in connection with or arising out of
Bank's performance under this Agreement, provided the Indemnitees have not acted
with negligence or engaged in willful misconduct. (C) In performing its
obligations hereunder, Bank may rely on the genuineness of any document which it
believes in good faith to have been validly executed.
(iv) Customer shall pay for and hold Bank harmless from any liability
or loss resulting from the imposition or assessment of any taxes or other
governmental charges, and any related expenses with respect to income from or
Assets in the Accounts.
(v) Bank shall be entitled to rely, and may act, upon the advice of
counsel (who may be counsel for Customer) on all matters and shall be without
liability for any action reasonably taken or omitted pursuant to such advice.
(vi) Bank need not maintain any insurance for the benefit of Customer.
(vii) Without limiting the foregoing, Bank shall not be liable for any
loss which results from: 1) the general risk of investing, or 2) investing or
holding Assets in a particular country including, but not limited to, losses
resulting from malfunction, interruption of or error in the transmission of
information caused by any machines or system or interruption of communication
facilities, abnormal operating conditions, nationalization, expropriation or
other governmental actions; regulation of the banking or securities industry;
currency restrictions, devaluations or fluctuations; and market conditions which
prevent the orderly execution of securities transactions or affect the value of
Assets.
(viii) Neither party shall be liable to the other for any loss due to
forces beyond their control including, but not limited to strikes or work
stoppages, acts of war (whether declared or undeclared) or terrorism,
insurrection, revolution, nuclear fusion, fission or radiation, or acts of God.
(b) Consistent with and without limiting the first paragraph of this
Section 12, it is specifically acknowledged that Bank shall have no duty or
responsibility to:
(i) question Instructions or make any suggestions to Customer or an Authorized
Person regarding such Instructions;
(ii) supervise or make recommendations with respect to investments or
the retention of Financial Assets;
(iii) advise Customer or an Authorized Person regarding any default in
the payment of principal or income of any security other than as provided in
Section 5(c) hereof;
(iv) evaluate or report to Customer or an Authorized Person regarding
the financial condition of any broker, agent or other party to which Financial
Assets are delivered or payments are made pursuant hereto; and
(v) review or reconcile trade confirmations received from brokers.
Customer or its Authorized Persons issuing Instructions shall bear any
responsibility to review such confirmations against Instructions issued to and
statements issued by Bank.
(c) Customer authorizes Bank to act hereunder notwithstanding that Bank
or any of its divisions or Affiliates may have a material interest in a
transaction, or circumstances are such that Bank may have a potential conflict
of duty or interest including the fact that Bank or any of its Affiliates may
provide brokerage services to other customers, act as financial advisor to the
issuer of Financial Assets, act as a lender to the issuer of Financial Assets,
act in the same transaction as agent for more than one customer, have a material
interest in the issue of Financial Assets, or earn profits from any of the
activities listed herein.
13. Fees and Expenses.
Customer shall pay Bank for its services hereunder the fees set forth
in Schedule B hereto or such other amounts as may be agreed upon in writing,
together with Bank's reasonable out-of-pocket or incidental expenses, including,
but not limited to, legal fees. Bank shall have a lien on and is authorized to
charge any Accounts of Customer for any amount owing to Bank under any provision
hereof
14. Miscellaneous.
(a) Foreign Exchange Transactions. To facilitate the administration of
Customer's trading and investment activity, Bank is authorized to enter into
spot or forward foreign exchange contracts with Customer or an Authorized Person
for Customer and may also provide foreign exchange through its subsidiaries,
Affiliates or Subcustodians. Instructions, including standing instructions, may
be issued with respect to such contracts but Bank may establish rules or
limitations concerning any foreign exchange facility made available. In all
cases where Bank, its subsidiaries, Affiliates or Subcustodians enter into a
foreign exchange contract related to Accounts, the terms and conditions of the
then current foreign exchange contract of Bank, its subsidiary, Affiliate or
Subcustodian and, to the extent not inconsistent, this Agreement shall apply to
such transaction.
(b) Certification of Residency, etc. Customer certifies that it is a
resident of the United States and shall notify Bank of any changes in residency.
Bank may rely upon this certification or the certification of such other facts
as may be required to administer Bank's obligations hereunder. Customer shall
indemnify Bank against all losses, liability, claims or demands arising directly
or indirectly from any such certifications.
(c) Access to Records. Bank shall allow Customer's independent public
accountant reasonable access to the records of Bank relating to the Assets as is
required in connection with their examination of books and records pertaining to
Customer's affairs. Subject to restrictions under applicable law, Bank shall
also obtain an undertaking to permit Customer's independent public accountants
reasonable access to the records of any Subcustodian which has physical
possession of any Assets as may be required in connection with the examination
of Customer's books and records.
(d) Governing Law; Successors and Assigns, Captions THIS AGREEMENT
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED IN NEW YORK and shall not be assignable by either
party, but shall bind the successors in interest of Customer and Bank. The
captions given to the sections and subsections of this Agreement are for
convenience of reference only and are not to be used to interpret this
Agreement.
(e) Entire Agreement; Applicable Riders. Customer represents that the
Assets deposited in the Accounts are (Check one):
X Investment Company assets subject to certain U.S. Securities and
Exchange Commission rules and regulations;
Other (specify)
This Agreement consists exclusively of this document together with
Schedules A and B, Exhibits I - _______ and the following Rider(s) [Check
applicable rider(s)]:
X INVESTMENT COMPANY
X PROXY VOTING
X SPECIAL TERMS AND CONDITIONS
There are no other provisions hereof and this Agreement supersedes any
other agreements, whether written or oral, between the parties. Any amendment
hereto must be in writing, executed by both parties.
(f) Severability. In the event that one or more provisions hereof are
held invalid, illegal or unenforceable in any respect on the basis of any
particular circumstances or in any jurisdiction, the validity, legality and
enforceability of such provision or provisions under other circumstances or in
other jurisdictions and of the remaining provisions shall not in any way be
affected or impaired.
(g) Waiver. Except as otherwise provided herein, no failure or delay on
the part of either party in exercising any power or right hereunder operates as
a waiver, nor does any single or partial exercise of any power or right preclude
any other or further exercise, or the exercise of any other power or right. No
waiver by a party of any provision hereof, or waiver of any breach or default,
is effective unless in writing and signed by the party against whom the waiver
is to be enforced.
(h) Representations and Warranties. (i) Customer hereby represents and
warrants to Bank that: (A) it has full authority and power to deposit and
control the Financial Assets and cash deposited in the Accounts; (B) it has all
necessary authority to use Bank as its custodian; (C) this Agreement constitutes
its legal, valid and binding obligation, enforceable in accordance with its
terms; (D) it shall have full authority and power to borrow moneys and enter
into foreign exchange transactions; and (E) it has not relied on any oral or
written representation made by Bank or any person on its behalf, and
acknowledges that this Agreement sets out to the fullest extent the duties of
Bank. (ii) Bank hereby represents and warrants to Customer that: (A) it has the
full power and authority to perform its obligations hereunder, (B) this
Agreement constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms; and (C) that it has taken all necessary action to
authorize the execution and delivery hereof.
(i) Notices. All notices hereunder shall be effective when actually received.
Any notices or other communications which may be required hereunder are to be
sent to the parties at the following addresses or such other addresses as may
subsequently be given to the other party in writing: (a) Bank: The Chase
Manhattan Bank, 4 Chase MetroTech Center, Brooklyn, N.Y. 11245, Attention:
Global Investor Services, Investment Management Group; and (b) Customer: THE
REMBRANDT FUNDS
(j) Termination. This Agreement may be terminated by Customer or Bank
by giving sixty (60) days written notice to the other, provided that such notice
to Bank shall specify the names of the persons to whom Bank shall deliver the
Assets in the Accounts. If notice of termination is given by Bank, Customer
shall, within sixty (60) days following receipt of the notice, deliver to Bank
Instructions specifying the names of the persons to whom Bank shall deliver the
Assets. In either case Bank shall deliver the Assets to the persons so
specified, after deducting any amounts which Bank determines in good faith to be
owed to it under Section 13. If within sixty (60) days following receipt of a
notice of termination by Bank, Bank does not receive Instructions from Customer
specifying the names of the persons to whom Bank shall deliver the Assets, Bank,
at its election, may deliver the Assets to a bank or trust company doing
business in the State of New York to be held and disposed of pursuant to the
provisions hereof, or to Authorized Persons, or may continue to hold the Assets
until Instructions are provided to Bank.
(k) Money Laundering. Customer warrants and undertakes to Bank for
itself and its agents that all Customer's customers are properly identified in
accordance with U.S. Money Laundering Regulations as in effect from time to
time.
(l) Imputation of certain information. Bank shall not be held
responsible for and shall not be required to have regard to information held by
any person by imputation or information of which Bank is not aware by virtue of
a "Chinese Wall" arrangement. If Bank becomes aware of confidential information
which in good faith it feels inhibits it from effecting a transaction hereunder
Bank may refrain from effecting it.
15. Definitions.
As used herein, the following terms shall have the meaning hereinafter
stated:
"Certificated Security" shall mean a security that is represented by a
certificate.
"Custody Account" means each Securities custody account on Bank's
records to which Financial Assets are or may be credited pursuant hereto.
"Entitlement Holder" shall mean the person on the records of a
Securities Intermediary as the person having a Securities Entitlement against
the Securities Intermediary.
"Financial Asset" shall mean, as the context requires, either the asset
itself or the means by which a person's claim to it is evidenced, including a
Certificated Security or Uncertificated Security, a security certificate, or a
Securities Entitlement.
"Securities" means stocks, bonds, rights, warrants and other negotiable
and non-negotiable paper whether issued as Certificated Securities or
Uncertificated Securities and commonly traded or dealt in on securities
exchanges or financial markets, and other obligations of an issuer, or shares,
participations and interests in an issuer recognized in an area in which it is
issued or dealt in as a medium for investment and any other property as shall be
acceptable to Bank for the Custody Account.
"Securities Entitlement" shall mean the rights and property interest of
an Entitlement Holder with respect to a Financial Asset as set forth in Part 5
of the Uniform Commercial Code.
"Securities Intermediary" shall mean Bank, a Subcustodian, a securities
depository, and any other financial institution which in the ordinary course of
business maintains custody accounts for others and acts in that capacity.
"Uncertificated Security" shall mean a security that is not represented by a
certificate.
"Uniform Commercial Code" means Article 8 of the Uniform Commercial
Code of the State of New York, as the same may be amended from time to time.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first-above written.
CUSTOMER
By: /s/ Timothy J. Leach
Title: President and CEO ABN AMRO Funds
THE CHASE MANHATTAN BANK
By: /s/ Mary C. Orr
Title: Senior Vice President
<PAGE>
STATE OF Illinois )
: ss.
COUNTY OF Cook )
On this 13th day of August, 1998 , before me personally came Timonthy J.
Leach, to me known, who being by me duly sworn, did depose and say that he/she
resides in at , that he/she is President of ABN AMRO Funds, the entity described
in and which executed the foregoing instrument; that he/she knows the seal of
said entity, that the seal affixed to said instrument is such seal, that it was
so affixed by order of said entity, and that he/she signed his/her name thereto
by like order.
Sworn to before me this 13th day of August, 1998.
Notary
<PAGE>
STATE OF NEW YORK )
: ss.
COUNTY OF NEW YORK )
On this 14th day of August, 1998, before me personally
came , to me known, who being by me duly sworn, did depose and say that he/she
resides in at New York; that he/she is a Vice President of THE CHASE MANHATTAN
BANK, the corporation described in and which executed the foregoing instrument;
that he/she knows the seal of said corporation, that the seal affixed to said
instrument is such corporate seal, that it was so affixed by order of the Board
of Directors of said corporation, and that he/she signed his/her name thereto by
like order.
Sworn to before me this 14th day of August, 1998.
Notary
<PAGE>
Investment Company Rider to Global Custody Agreement
Between The Chase Manhattan Bank and
ABN AMRO Funds
effective August 13, 1998
Customer represents that the Assets being placed in Bank's custody are
subject to the Investment Company Act of 1940 (the Act), as the same may be
amended from time to time.
Except to the extent that Bank has specifically agreed to comply with a
condition of a rule, regulation, interpretation promulgated by or under the
authority of the SEC or unless Bank has otherwise specifically agreed, Customer
shall be solely responsible to assure that the maintenance of Assets under this
Agreement complies with such rules, regulations, interpretations or exemptive
order promulgated by or under the authority of the Securities Exchange
Commission.
The following modifications are made to the Agreement:
Section 3. Subcustodians and Securities Depositories.
Add the following language to the end of Section 3:
The terms "Subcustodian" as used in this Agreement shall mean a branch
of a qualified U.S. bank or an eligible foreign custodian and the term
"securities depositories" as used in this Agreement shall mean an eligible
foreign securities depository, which are further defined as follows:
(a) "qualified U.S. Bank" shall mean a qualified U.S. bank as defined
in Rule 17f-5 under the Investment Company Act of 1940;
(b) "eligible foreign custodian" shall mean (i) a banking institution
or trust company incorporated or organized under the laws of a country other
than the United States that is regulated as such by that country's government or
an agency thereof and that has shareholders' equity in excess of $200 million in
U.S. currency (or a foreign currency equivalent thereof), (ii) a majority owned
direct or indirect subsidiary of a qualified U.S. bank or bank holding company
that is incorporated or organized under the laws of a country other than the
United States and that has shareholders' equity in excess of $100 million in
U.S. currency (or a foreign currency equivalent thereof)(iii) a banking
institution or trust company incorporated or organized under the laws of a
country other than the United States or a majority owned direct or indirect
subsidiary of a qualified U.S. bank or bank holding company that is incorporated
or organized under the laws of a country other than the United States which has
such other qualifications as shall be specified in Instructions and approved by
the Bank; or (iv) any other entity that shall have been so qualified by
exemptive order, rule or other appropriate action of the SEC; and
(c) "eligible foreign securities depository" shall mean a securities
depository or clearing agency, incorporated or organized under the laws of a
country other than the United States, which operates (i) the central system for
handling securities or equivalent book-entries in that country, or (ii) a
transnational system for the central handling of securities or equivalent
book-entries.
For purposes of clarity, it is agreed that as used in Section 12(a)(I) of the
Agreement, the term Subcustodian shall not include any eligible foreign
custodian appointed pursuant to the last paragraph of Section 2(b) of the
Agreement or any eligible foreign securities depository.
Customer represents that its Board of Directors has approved each of the
Subcustodians listed in Schedule A to this Agreement and the terms of the
subcustody agreements between Bank and each Subcustodian, which are attached as
Exhibits I through of Schedule A, and further represents that its Board has
determined that the use of each: (a) Subcustodian and the terms of each
subcustody agreement are consistent with the best interests of the Fund(s) and
its (their) shareholders; and (b) securities depository is consistent with the
best interests of the Fund(s) and its (their) shareholders. Bank will supply
Customer with any amendment to Schedule A for approval. Customer has supplied or
will supply Bank with certified copies of its Board of Directors resolution(s)
with respect to the foregoing prior to placing Assets with any Subcustodian so
approved.
Section 14. Access to Records.
Add the following language to the end of Section 14(c):
Upon reasonable request from Customer, Bank shall furnish Customer such
reports (or portions thereof) of Bank's system of internal accounting controls
applicable to the Bank's duties under this Agreement. Bank shall endeavor to
obtain and furnish the Customer with such similar reports as it may reasonably
request with respect to each Subcustodian and securities depository holding
Customer's assets.
<PAGE>
GLOBAL PROXY SERVICE RIDER
To Global Custody Agreement
Between
THE CHASE MANHATTAN BANK
AND
ABN AMRO Funds
Dated August 13, 1998
1. Global Proxy Services ("Proxy Services") shall be provided for the countries
listed in the procedures and guidelines ("Procedures") furnished to Customer, as
the same may be amended by Bank from time to time on prior notice to Customer.
The Procedures are incorporated by reference herein and form a part of this
Rider.
2. Proxy Services shall consist of those elements as set forth in the
Procedures, and shall include (a) notifications ("Notifications") by Bank to
Customer of the dates of pending shareholder meetings, resolutions to be voted
upon and the return dates as may be received by Bank or provided to Bank by its
Subcustodians or third parties, and (b) voting by Bank of proxies based on
Customer Instructions. Original proxy materials or copies thereof shall not be
provided. Notifications shall generally be in English and, where necessary,
shall be summarized and translated from such non-English materials as have been
made available to Bank or its Subcustodian. In this respect Bank's only
obligation is to provide information from sources it believes to be reliable
and/or to provide materials summarized and/or translated in good faith. Bank
reserves the right to provide Notifications, or parts thereof, in the language
received. Upon reasonable advance request by Customer, backup information
relative to Notifications, such as annual reports, explanatory material
concerning resolutions, management recommendations or other material relevant to
the exercise of proxy voting rights shall be provided as available, but without
translation.
3. While Bank shall attempt to provide accurate and complete Notifications,
whether or not translated, Bank shall not be liable for any losses or other
consequences that may result from reliance by Customer upon Notifications where
Bank prepared the same in good faith.
4 Notwithstanding the fact that Bank may act in a fiduciary capacity with
respect to Customer under other agreements or otherwise under the Agreement, in
performing Proxy Services Bank shall be acting solely as the agent of Customer,
and shall not exercise any discretion with regard to such Proxy Services.
5. Proxy voting may be precluded or restricted in a variety of circumstances,
including, without limitation, where the relevant Financial Assets are: (i) on
loan; (ii) at registrar for registration or reregistration; (iii) the subject of
a conversion or other corporate action; (iv) not held in a name subject to the
control of Bank or its Subcustodian or are otherwise held in a manner which
precludes voting; (v) not capable of being voted on account of local market
regulations or practices or restrictions by the issuer; or (vi) held in a margin
or collateral account.
6 Customer acknowledges that in certain countries Bank may be unable to vote
individual proxies but shall only be able to vote proxies on a net basis (e.g.,
a net yes or no vote given the voting instructions received from all customers).
7. Customer shall not make any use of the information provided hereunder, except
in connection with the funds or plans covered hereby, and shall in no event
sell, license, give or otherwise make the information provided hereunder
available, to any third party, and shall not directly or indirectly compete with
Bank or diminish the market for Proxy Services by provision of such information,
in whole or in part, for compensation or otherwise, to any third party.
8. The names of Authorized Persons for Proxy Services shall be furnished to Bank
in accordance with ss.10 of the Agreement. Proxy Services fees shall be as set
forth in ss.13 of the Agreement or as separately agreed.
<PAGE>
DOMESTIC AN GLOBAL
SPECIAL TERMS AND CONDITIONS RIDER
To Global Custody Agreement Between
The Chase Manhattan Bank and ABN AMRO Funds
Dated August 13, 1998
Domestic Corporate Actions and Proxies
With respect to domestic U.S. and Canadian Financial Assets (the latter if held
in DTC), the following provisions shall apply rather than the provisions of
Section 8 of the Agreement and the Global Proxy Service rider:
Bank shall send to Customer or the Authorized Person for a Custody
Account, such proxies (signed in blank, if issued in the name of Bank's nominee
or the nominee of a central depository) and communications with respect to
Financial Assets in the Custody Account as call for voting or relate to legal
proceedings within a reasonable time after sufficient copies are received by
Bank for forwarding to its customers. In addition, Bank shall follow coupon
payments, redemptions, exchanges or similar matters with respect to Financial
Assets in the Custody Account and advise Customer or the Authorized Person for
such Account of rights issued, tender offers or any other discretionary rights
with respect to such Financial Assets, in each case, of which Bank has received
notice from the issuer of the Financial Assets, or as to which notice is
published in publications routinely utilized by Bank for this purpose. Fees The
fees referenced in Section 13 hereof cover only domestic and euro-dollar
holdings. There shall be no Schedule A hereto, as there are no foreign assets in
the Accounts.
<PAGE>
Exhibit g(2)
FORM OF
AMENDMENT DATED SEPTEMBER 16, 1999
TO SCHEDULE A
TO THE GLOBAL CUSTODY AGREEMENT (THE "AGREEMENT")
DATED AUGUST 13, 1998
BETWEEN
ABN AMRO FUNDS
AND
THE CHASE MANHATTAN BANK
Pursuant to Article 1(b) of the Agreement, the Agreement is hereby amended to
include Institutional Treasury Money Market Fund (US), Institutional Government
Money Market Fund (US) and Institutional Prime Money Market Fund (US) as new
portfolios of the Trust.
ABN AMRO FUNDS
By:
Title:
THE CHASE MANHATTAN BANK
By:
Title:
<PAGE>
Exhibit h(2)
AMENDMENT TO THE TRANSFER AGENCY AND SERVICE AGREEMENT
THIS AMENDMENT, dated as of March 4, 1999 is made to the Transfer
Agency and Services Agreement dated February 26, 1998 (the "Agreement") between
ABN AMRO FUNDS (then known as the Rembrandt Funds) (the "Fund") and FIRST DATA
INVESTOR SERVICES GROUP, INC. ("Investor Services Group").
WITNESSETH
WHEREAS, Investor Services Group has developed a recordkeeping service
link ("DCXchangeSM") between investment companies and benefit plan consultants
(the "Recordkeepers") which administer employee benefit plans, including plans
qualified under Section 401(a) of the Internal Revenue Code (the "Plans"); and
WHEREAS, Investor Services Group has entered into agreements with
various Recordkeepers relating to the recordkeeping and related services
performed on behalf of such Plans in connection with daily valuation and
processing of orders for investment and reinvestment of assets of the Plans in
various investment options available to the participants under such Plans (the
"Participants"); and
WHEREAS, the Fund, on behalf of the Portfolios set forth in Exhibit 1
to the Agreement, desires to participate in the DCXchangeSM Program and retain
Investor Services Group to perform such services with respect to shares of the
Funds ("Shares") held by or on behalf of the Participants as further described
herein and Investor Services Group is willing and able to furnish such services
on the terms and conditions hereinafter set forth.
NOW THEREFORE, the Fund and Investor Services Group agree that as of
the date first referenced above, the Agreement shall be amended as follows:
1. Investor Services Group agrees to perform recordkeeping and related services
for the benefit of the Plan Participants that maintain shares of the Fund
through Plans administered by certain Recordkeepers. Investor Services Group
shall subcontract with Recordkeepers to link Investor Services Group
recordkeeping system with the Recordkeepers, in order for the Recordkeepers to
maintain Fund share positions for each Participant. Fund shall reimburse
Investor Services Group for the costs and expenses set forth on the attached
Exhibit A. Fund positions of the Participants shall constitute open accounts for
which a designated third party (agreed to by the parties hereto) (the "Payor")
shall pay to Investor Services Group the annual fees specified in a separate
agreement between such third party and Investor Services Group of even date
herewith. In the event any invoice for such fees is not paid within fifteen (15)
days of its receipt by Payor, Investor Services Group shall so notify the Payor
of such failure.
If payment is not then received by Investor Services Group within ten (10) days
after such notice, Fund hereby acknowledges and agrees that Investor Services
Group shall have the right to immediately discontinue the services described in
this Amendment and such suspension of services shall not constitute a breach on
the part of Investor Services Group of any term of the Agreement, as amended.
2. This Amendment contains the entire understanding between the parties with
respect to the transactions contemplated hereby. To the extent that any
provision of this Amendment modifies or is otherwise inconsistent with any
provision of the Agreement and related agreements, this Amendment shall control,
but the Agreement and all related documents shall otherwise remain in full force
and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers, as of the day and year first above
written.
ABN AMRO FUNDS
By: /s/ Steven A. Smith
Title: Senior Vice President
FIRST DATA INVESTOR SERVICES GROUP, INC.
By: /s/ Jylanne Dunne
Title: Senior Vice President
<PAGE>
Schedule A
DCXchangeSM Costs and Expenses
The Fund shall reimburse Investor Services Group monthly for such miscellaneous
expenses reasonably incurred by Investor Services Group in performing its duties
and responsibilities under this Agreement, as pre-approved by the Fund. The Fund
further agrees that any volume discounts achieved by Investor Services Group on
behalf of its clients shall be retained by Investor Services Group, unless
otherwise agreed to by Investor Services Group and the Fund.
<PAGE>
Exhibit h(3)
FORM OF
CONSENT TO TRANSACTION
First Data Corporation ("FDC") and PNC Bank Corp. ("PNC") have entered
into a definitive agreement pursuant to which FDC will sell its wholly-owned
subsidiary, First Data Investor Services Group, Inc. ("FDISG") to PNC's
wholly-owned subsidiary, PFPC Worldwide, Inc. ("PFPC") or another wholly-owned
affiliate of PNC (the "Transaction"). The Transaction is expected to close in
the fourth quarter of 1999 (the "Closing Date").
Reference is made to the Agreements listed on Exhibit A and all
amendments and supplements thereto (collectively, the "Agreement(s)") between
FDISG and the below named company or companies (the "Company") pursuant to which
FDISG provides certain services to the Company. Under the terms of the
Agreements, the consent of the Company is required in the event of a change of
control of FDISG such as described in the first paragraph above.
The undersigned, a duly authorized officer of the Company, hereby
agrees and consents to the change of control of FDISG as contemplated by the
Transaction, waives any rights arising under the Agreement(s) as a result of, or
in connection with, the Transaction and acknowledges and agrees that upon the
Closing Date the Agreement(s) shall, subject to the foregoing waiver, remain in
full force and effect pursuant to its terms as in effect immediately prior to
the Closing Date.
ABN AMRO Fund Services Inc.
By: ____________________
Name: ____________________
Title: ____________________
Date: ____________________
<PAGE>
h(4)
FORM OF
AMENDMENT TO THE TRANSFER AGENCY
AND SERVICES AGREEMENT
THIS AMENDMENT, dated as of this day of , 1999 is made to the Transfer Agency
and Services Agreement (the "Agreement") dated February 26, between REMBRANDT
FUNDS (n/k/a the ABN AMRO Funds)(the "Fund") and FIRST DATA INVESTOR SERVICES
GROUP, INC. (n/k/a PFPC Inc.)("PFPC").
WITNESSETH
WHEREAS, the parties desire to amend the Agreement.
NOW THEREFORE, the Fund and PFPC agree that as of the date first referenced
above, the Agreement shall be amended as follows:
1. All references to "First Data Investor Services Group, Inc." and "Investor
Services Group" are hereby deleted and replaced with "PFPC Inc." and "PFPC"
respectively.
2. Section 6.1 is modified by adding the following sentence: "The Fund
acknowledges that PFPC receives float benefits and investment earnings in
connection with maintaining certain accounts required to provide services under
this Agreement."
3. Exhibit 1 "LIST OF PORTFOLIOS" is hereby deleted and replaced with the
attached revised Exhibit 1.
4. Schedule B "FEE SCHEDULE" is hereby deleted and replaced with the attached
revised Schedule B.
5. Schedule C "OUT-OF-POCKET EXPENSES is hereby deleted and replaced with the
attached revised Schedule C.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their duly authorized officers, as of the day and year first above written.
ABN AMRO FUNDS PFPC INC.
(f/k/a Rembrandt Funds) (f/k/a First Data Investor Services Group)
By: _____________________________ By: ______________________________
Title: ____________________________ Title: ____________________________
<PAGE>
Exhibit 1
LIST OF PORTFOLIOS
Revised as of [ ]
Money Market Funds
Treasury Money Market Fund
Government Money Market Fund
Money Market Fund
Tax-Exempt Money Market Fund
Fixed Income Funds
Fixed Income Fund
Tax-Exempt Fixed Income Fund
International Fixed Income Fund
Limited Volatility Fixed Income Fund
Balanced Funds
Balanced Fund
Equity Funds
Value Fund
Growth Fund
International Equity Fund
Small Cap Fund
Asian Tigers Fund
TransEurope Fund
Latin America Equity Fund
Real Estate Fund
Institutional Funds
Prime Money Market Fund
Treasury Money Market Fund
Government Money Market Fund
<PAGE>
Schedule B
FEE SCHEDULE
Revised As of [ ]
1. Standard Fees
Per Open Account:
Money Market Funds $20.00 per account
Fixed Income Funds $17.00 per account
Balanced Funds $17.00 per account
Equity Fund $15.00 per account
Institutional Funds *
Per Closed Account: $3.00 per account
Minimum fee per class $10,000
*Open Account Fee, Closed Account Fee and Minimum fee per class is waived for
the Institutional Fund
After the one year anniversary of the effective date of this Agreement, Investor
Services Group may adjust the above fees once per calendar year, upon thirty
(30) days prior written notice in an amount not to exceed the cumulative
percentage increase in the Consumer Price Index for All Urban Consumers (CPI-U)
U.S. City Average, All items (unadjusted) - (1982-84=100), published by the U.S.
Department of Labor since the last such adjustment in the Client's monthly fees
(or the Effective Date absent a prior such adjustment).
2. Programming Costs
(a) Dedicated Team:
Programmer $100,000 per annum
BSA $ 85,000 per annum
Tester $ 65,000 per annum
(b) System Enhancements (Non Dedicated Team):
Programmer $135.00 per hour
No Programming Costs shall be incurred by Investor Services Group on
behalf of the Fund without the prior written consent of the Fund.
<PAGE>
3. Early Termination Fee. The Early Termination Fee referred to in Section 13.5
and Section 8(e) of the Administration Agreement (together with this Agreement,
the "Agreements") shall equal in the aggregate $1,500,000 if such termination
occurs during the first year of the Agreements and $750,000 if such termination
occurs during the second year of the Agreements.
4. Print/Mail Fees.
Work Order $7.00 per work order
Daily Work (Confirms)
Hand $71/M with $75.00 minimum
$0.07/each insert (BRE & CRE have no
charge)
Machine $42/M with $50.00 minimum
$0.003/each insert (BRE & CRE have no
charge)
Daily Checks
Hand $71/M with $100.00 minimum daily
$0.08/each insert (BRE & CRE have no
charge)
Machine $42/M with $75.00 minimum daily
$0.003/each insert (BRE & CRE have no
charge)
There is a $2.50 charge for each Form 3606 sent.
Statements
Hand $78/M with $75.00 minimum
$0.08/each insert (BRE & CRE have no
charge)
Machine $52/M with $75.00 minimum
$0.003/each insert (BRE & CRE have no
charge)
$58/M for intelligent inserting
Periodic Checks
Hand $78/M with $100.00 minimum
$0.08/each insert (BRE & CRE have no
charge)
<PAGE>
Machine $52/M with $100.00 minimum
$0.01/each insert (BRE & CRE have no
charge)
12b-1/Dealer Commission
Checks/Statements $0.78/each envelope with $100.00 minimum
Spac Reports/Group Statements $78/M with $75.00 minimum
Messaging $20/message
Listbills $0.78 per envelope with $75.00 minimum
Printing Charges $0.08/confirm/statement/page
$0.10/check
Folding (Machine) $18/M
Folding (Hand) $.12 each
Presort Charge $0.277 postage rate
$0.035/piece
Courier Charge $15.00 for each on call courier trip/
or actual cost for on demand
Overnight Charge $3.50/package service charge plus
Federal Express/Airborne charge
Inventory Charge $20.00 for each inventory location as of
the 15th of the month
Hourly Work: Special Projects,
Opening Envelopes, etc. $24.00/hour
Special Pulls $2.50 per account pull
Boxes/Envelopes
Shipping Boxes $0.85 each
Oversized Envelopes $0.45 each
Forms Development/Programming Fee $100.00/hour
Cutting Charges $10.00/M
5. Miscellaneous Charges. The Fund shall be charged for the following products
and services as applicable: Ad hoc reports Ad hoc SQL time Banking Services COLD
Storage Digital Recording Microfiche/microfilm production Magnetic media tapes
and freight Pre-Printed Stock, including business forms, certificates,
envelopes, checks and stationary
<PAGE>
OUT-OF-POCKET EXPENSES
The Fund shall reimburse PFPC monthly for applicable out-of-pocket expenses,
including, but not limited to the following items:
Postage - direct pass through to the Fund
Telephone and telecommunication costs, including all lease, maintenance and line
costs Proxy solicitations, mailings and tabulations Shipping, Certified and
Overnight mail and insurance Terminals, communication lines, printers and other
equipment and any expenses incurred in connection with such terminals and lines
Duplicating services Distribution and Redemption Check Issuance ($.07 per item
for FSR System Clients) Courier services Federal Reserve charges for check
clearance Overtime, as approved by the Fund Temporary staff, as approved by the
Fund Travel and entertainment, as approved by the Fund Record retention,
retrieval and destruction costs, including, but not limited to exit fees charged
by third party record keeping vendors Third party audit reviews Insurance
The Fund agrees that postage and mailing expenses will be paid on the day of or
prior to mailing as agreed with PFPC. In addition, the Fund will promptly PFPC
for any other unscheduled expenses incurred by Investor Services Group whenever
the Fund PFPC mutually agree that such expenses are not otherwise properly borne
by PFPC as part of its duties and obligations under the Agreement.
<PAGE>
Exhibit h(7)
FORM OF
AMENDMENT DATED SEPTEMBER 16, 1999
TO SCHEDULE A
TO THE ADMINISTRATION AND FUND ACCOUNTING AGREEMENT
(THE "AGREEMENT")
DATED JULY 1, 1998
BETWEEN
ABN AMRO FUND SERVICES, INC.
AND
ABN AMRO FUNDS
Pursuant to the Introduction and Paragraph 8 of the Agreement, Schedule A to the
Agreement is hereby amended to include Institutional Treasury Money Market Fund
(US), Institutional Government Money Market Fund (US) and Institutional Prime
Money Market Fund (US).
Schedule B to the Agreement is hereby amended as follows with respect to the
Institutional Treasury Money Market Fund (US), Institutional Government Money
Market Fund (US) and Institutional Prime Money Market Fund (US) :
o Fund Administration Fee: 0.05% of average net assets
ABN AMRO FUNDS
By:
Title:
ABN AMRO FUND SERVICES, INC.
By:
Title:
<PAGE>
Exhibit h(8)
FORM OF
Contractual Administration Fee Waivers
AGREEMENT made this 16th day of September, 1999, by and between the ABN AMRO
Funds, a Massachusetts business trust (the "Trust"), and ABN AMRO Fund Services,
Inc. (the "Administrator").
The Administrator hereby agrees to waive .03% of its fee for each of the
following funds through April, 2000:
Institutional Treasury Money Market Fund (US)
Institutional Government Money Market Fund (US)
Institutional Prime Money Market Fund (US)
This Agreement shall be renewable for additional one year periods, beginning May
1, 2000, upon the written agreement of the parties hereto.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the day and year first written above.
ABN AMRO FUNDS ABN AMRO Fund Services, Inc.
By: By:
Attest: Attest:
<PAGE>
h(10)
SUB-ADMINISTRATION AGREEMENT
This Amendment dated as of September 16, 1999, is entered into by ABN AMRO FUND
SERVICES, INC. (the "Company") and FIRST DATA INVESTOR SERVICES GROUP, INC.
("Investor Services Group").
WHEREAS, the Company and Investor Services Group have entered into a
Sub-Administration Agreement dated as of July 1, 1998 (as amended or
supplemented, the "Agreement"); and
WHEREAS, the Company and Investor Services Group wish to amend the
Agreement to revise the description of services to be provided by Investor
Services Group to the Company and related matters;
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, hereby agree as follows:
I. The following is hereby added to Schedule D of the Agreement:
Sales Support Services
Sales literature review and recommendations for compliance with NASD and SEC
rules and regulations Preparation of training materials for use by personnel of
the Company or the Adviser Preparation of ongoing compliance updates
Coordination of registration of the Fund with National Securities Clearing Corp.
("NSCC") and filing required Fund/SERV reports with NSCC Provision of advice and
counsel to the Company with respect to regulatory matters, including monitoring
regulatory and legislative developments that may affect the Company Assistance
in the preparation of quarterly board materials with regard to sales and other
distribution related data reasonably requested by the board
II. This Amendment shall become effective immediately upon the consummation of
the acquisition of Investor Services Group by a subsidiary of PNC Bank Corp.,
which the parties anticipate to occur on or about December 1, 1999.
III. Except to the extent amended hereby, the Agreement shall remain
unchanged and in full force and effect and is hereby ratified and confirmed in
all respects as amended hereby.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the date and year first written above.
ABN AMRO FUND SERVICES, INC.
By: /s/ Steven A. Smith
FIRST DATA INVESTOR SERVICES
GROUP, INC.
By: /s/ Jylanne Dunne
<PAGE>
Exhibit h(11)
FORM OF
AMENDMENT TO THE SUB-ADMINISTRATION
AND FUND ACCOUNTING AGREEMENT
THIS AMENDMENT, dated as of this day of , 1999 is made to the Sub-Administration
and Fund Accounting Agreement (the "Agreement") dated July 1, 1998, between ABN
AMRO FUND SERVICES, INC. (the "Company") and FIRST DATA INVESTOR SERVICES GROUP,
INC. (n/k/a PFPC Inc.)("PFPC").
WITNESSETH
WHEREAS, the parties desire to amend the Agreement to document certain revisions
thereto.
NOW THEREFORE, the Company and PFPC agree that as of the date first referenced
above, the Agreement shall be amended as follows:
1. All references to "First Data Investor Services Group, Inc." and "Investor
Services Group" are hereby deleted and replaced with "PFPC Inc." and "PFPC"
respectively.
2. Schedule A is hereby deleted and replaced with the attached revised Schedule
A.
3. Schedule B "FEE SCHEDULE" is hereby deleted and replaced with the attached
revised Schedule B.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their duly authorized officers, as of the day and year first above written.
ABN AMRO FUND SERVICES, INC. PFPC INC.
(f/k/a/ First Data Investor Services Group)
By: _____________________________ By: ______________________________
Title: ____________________________ Title: ____________________________
<PAGE>
Exhibit 1
LIST OF PORTFOLIOS
Revised as of [ ]
Money Market Funds
Treasury Money Market Fund
Government Money Market Fund
Money Market Fund
Tax-Exempt Money Market Fund
Fixed Income Funds
Fixed Income Fund
Tax-Exempt Fixed Income Fund
International Fixed Income Fund
Limited Volatility Fixed Income Fund
Balanced Funds
Balanced Fund
Equity Funds
Value Fund
Growth Fund
International Equity Fund
Small Cap Fund
Asian Tigers Fund
TransEurope Fund
Latin America Equity Fund
Real Estate Fund
Institutional Funds
Prime Money Market Fund
Treasury Money Market Fund
Government Money Market Fund
<PAGE>
Schedule B
FEE SCHEDULE
Revised As of [ ]
For the services to be rendered, the facilities to be furnished and the
payments to be made by PFPC, as provided for in this Agreement, the Company, on
behalf of each Portfolio, will pay PFPC a fee for the previous month at the
rates listed below. The fee for the period from the effective date of this
Agreement to the end of such month shall be prorated according to the proportion
that such period bears to the full monthly period. Upon any termination of this
Agreement before the end of any month, the fee for such part of a month shall be
prorated according to the proportion which such period bears to the full monthly
period and shall be payable upon the date of termination of this Agreement.
Fund Administration Fee:
A. Money Market Funds, Fixed Income Funds, Balanced Funds and Equity Funds:
0.06% of average net assets for assets up to $2 billion* 0.04% of average net
assets for assets over $2 billion* *average assets shall be calculated in the
aggregate for all of the referenced funds
B. Institutional Funds: $10,000 one time start up fee (Preparation, review and
filing of a new prospectus for three portfolios - two classes each) 0.02% of
average net assets** **after six months a minimum fee of $40,000 per portfolio
shall apply if the average net assets of the Institutional Funds do not exceed
$200,000million
Fund Accounting Fee:
A. Money Market Funds, Fixed Income Funds, Balanced Funds and Equity Funds:
Regular Rate: Per Portfolio $35,000 Each additional class $2,500
For any new Portfolios commencing operations on of after December 31, 1997, the
following fee schedule shall apply:
Portfolio Assets Fund Accounting Fee
up to $10 million waived
$10 million to $20 million $17,500 (1/2 regular rate)
over $20 million regular rate
B. Institutional Funds: Fund Accounting Fee Waived
Early Termination Fee:
The Early Termination Fee referred to in Section 8(e) and Section 13.5 of the
Transfer Agency Agreement (together with this Agreement, the "Agreements") shall
equal in the aggregate $1,500,000 if such termination occurs during the first
year of the Agreements and $750,000 if such termination occurs during the second
year of the Agreements.
Investor Services Group shall be entitled to collect all out-of-pocket fees
described in Schedule C.
<PAGE>
EXHIBIT h(12)
SHAREHOLDER SERVICE PLAN
REMBRANDT FUNDS
INVESTOR SHARES
Rembrandt Funds ("the Fund") has adopted this Investor Shares Shareholder
Service Plan (the "Plan") in order to provide certain shareholder services to
clients ("Clients") who from time to time beneficially own Investor Shares
("Shares") of any portfolio of the Fund (a "Portfolio").
Section 1. Each Shareholder Servicing Agent of the Fund will provide, or will
enter into written agreements in the form attached hereto with service providers
pursuant to which the service providers will provide, one or more of the
following shareholder services to Clients who may from time to time beneficially
own Shares:
(i) maintaining accounts relating to Clients that invest in Shares;
(ii) providing information periodically to Clients showing their positions in
Shares;
(iii) arranging for bank wires;
(iv) responding to Client inquiries relating to the services performed by the
Fund's distributor or any service provider;
(v) responding to inquiries from Clients concerning their investments in Shares;
(vi) forwarding shareholder communications from the Fund (such as proxies,
shareholder reports, annual and semi-annual statements and dividend,
distribution and tax notices) to Clients;
(vii) processing purchases, exchange and redemption requests from Clients and
placing such orders with the Fund or its service providers;
(viii) assisting Clients in changing dividend options, account designations, and
addresses;
(ix) providing subaccounting with respect to Shares beneficially owned by
Clients;
(x) processing dividend payments from the Fund on behalf of Clients; and
(xi) providing such other similar services as the Fund may reasonably request to
the extent that a Shareholder Servicing Agent and/or the service provider is
permitted to do so under applicable laws or regulations.
Section 2. No Shareholder Servicing Agent or any of its officers, employees, or
agents may make any representations concerning the Fund or the Shares except
those contained in the Fund's current prospectus or statement of additional
information for the Shares or in such supplemental literature or advertising
provided by the Fund to the Shareholder Servicing Agent and authorized by the
Fund for the Shareholder Servicing Agent's use pursuant to the Plan.
Section 3. Shareholder Servicing Agents and service providers shall have no
authority to act as agent for the Fund in any matter or in any respect.
Section 4. In consideration of the services and facilities to be provided by any
Shareholder Servicing Agent or service provider, each Portfolio that has issued
Investor Shares will pay to one or more Shareholder Servicing Agents a fee, as
agreed from time to time, at an annual rate which will not exceed .25%
(twenty-five basis points) of the average net asset value of all Investor Shares
of each Portfolio, which fee is computed daily and paid monthly, provided that
the aggregate fees paid to all Shareholder Servicing Agents pursuant to this
Plan do not exceed .25% (twenty-five basis points) of the average net asset
value of all Investor Shares of each Portfolio. The Fund may, in its discretion
and without notice, suspend or withdraw the sale of Investor Shares of any
Portfolio, including the sale of Investor Shares to any service provider for the
account of any Client or Clients. A Shareholder Servicing Agent may waive all or
any portion of its fee from time to time.
Section 5. The Fund may enter into other similar servicing agreements with any
other person or persons without a Shareholder Servicing Agent's consent.
Section 6. The services provided by a Shareholder Servicing Agent under this
Plan are not primarily intended to result in the sale of Shares.
<PAGE>
EXHIBIT h(12)
FORM OF
SHAREHOLDER SERVICING AGENT AGREEMENT
ABN AMRO FUNDS
INVESTOR SHARES
THIS SHAREHOLDER SERVICING AGENT AGREEMENT is made as of this 16th day of
September, 1999 (the "Agreement") by and between ABN AMRO Funds (the "Fund"), a
Massachusetts business trust and Provident Distributors, Inc. (the
"Distributor"), a Delaware corporation.
WHEREAS, the Fund is an open-end investment company registered under the
Investment Company Act of 1940, as amended, currently consisting of a number of
separately managed portfolios (the "Portfolios").
WHEREAS, the Fund has adopted an Investor Shares Shareholder Service Plan (the
"Plan") in respect of Investor Shares.
WHEREAS, the Fund desires to appoint the Distributor as a Shareholder Servicing
Agent under the Plan and to retain the Distributor to provide or to compensate
service providers who themselves provide, the services described herein to
clients (the "Clients") who from time to time beneficially own Investor Shares
("Shares") of any Portfolio of the Fund.
WHEREAS, the Distributor is willing to itself provide or to compensate service
providers for providing, such shareholder services in accordance with the terms
and conditions of this Agreement.
NOW THEREFORE, in consideration of the premises and mutual covenants set forth
herein, the Distributor and the Fund hereto agree as follows:
Section 1. The Fund hereby appoints the Distributor as a Shareholder Servicing
Agent under the Plan and the Distributor accepts such appointment and agrees to
perform the services hereinafter set forth. The Fund may, in its sole
discretion, appoint other Shareholder Servicing Agents from time to time to
perform services pursuant to the Plan. The Distributor shall provide, or shall
enter into written agreements in the form attached hereto with service providers
pursuant to which the service providers will provide, one or more of the
following shareholder services to Clients who may from time to time beneficially
own Shares:
(i) maintaining accounts relating to Clients that invest in Shares;
(ii) providing information periodically to Clients showing their positions in
Shares;
(iii) arranging for bank wires;
(iv) responding to Client inquiries relating to the services performed by the
Distributor or any service provider;
(v) responding to inquiries from Clients concerning their investments in Shares;
(vi) forwarding shareholder communications from the Fund (such as proxies,
shareholder reports, annual and semi-annual statements and dividend,
distribution and tax notices) to Clients;
(vii) processing purchases, exchange and redemption requests from Clients and
placing such orders with the Fund or its service providers;
(viii) assisting Clients in changing dividend options, account designations, and
addresses;
(ix) providing subaccounting with respect to Shares beneficially owned by
Clients;
(x) processing dividend payments from the Fund on behalf of Clients; and
(xi) providing such other similar services as the Fund may reasonably request to
the extent that the Distributor and/or the service provider is permitted to do
so under applicable laws or regulations.
Section 2. The Distributor shall provide all office space and equipment,
telephone facilities and personnel (which may be part of the space, equipment
and facilities currently used in the Distributor's business, or any personnel
employed by the Distributor) as may be reasonably necessary or beneficial in
order to fulfill its responsibilities under this Agreement.
Section 3. Neither the Distributor nor any of its officers, employees, or agents
is authorized to make any representations concerning the Fund or the Shares
except those contained in the Fund's current prospectus or statement of
additional information for the Shares, copies of which will be supplied to the
Distributor, or in such supplemental literature or advertising as may be
authorized in writing.
Section 4. For purposes of this Agreement, the Distributor and each service
provider will be deemed to be independent contractors, and will have no
authority to act as agent for the Fund in any matter or in any respect. By its
written acceptance of this Agreement, the Distributor agrees to and does
release, indemnify, and hold the Fund harmless from and against any and all
liabilities or losses resulting from requests, directions, actions, or inactions
of or by the Distributor or its officers, employees, or agents regarding the
Distributor's responsibilities under this Agreement, the provision of the
aforementioned services to Clients by the Distributor or any service provider,
or the purchase, redemption, transfer, or registration of Shares (or orders
relating to the same) by or on behalf of Clients. The Distributor and its
officers and employees shall, upon request, be available during normal business
hours to consult with representatives of the Fund or its designees concerning
the performance of the Distributor's responsibilities under this Agreement.
The Fund agrees to indemnify and hold the Distributor harmless from and against
any and all claims, costs, expenses (including reasonable attorneys' fees),
losses, damages, charges, payments and liabilities of any sort or kind which may
be asserted against the Distributor or for which the Distributor may be held to
be liable in connection with any action required to be taken pursuant to this
Agreement (a "Claim"), unless such Claim resulted from willful misfeasance, bad
faith or negligence by the Distributor in the performance of its duties
hereunder or reckless disregard thereof; reliance on information furnished to
the Fund by the Distributor or its affiliates; or the Distributor's refusal or
failure to comply with the terms or conditions of this Agreement.
The Distributor shall at all times act in good faith and agrees to use its best
efforts within commercially reasonable limits to ensure the accuracy of all
services performed under this Agreement. The Distributor shall not be liable to
the Fund for any error of judgment or mistake of law or for any loss suffered by
the Fund in connection with the performance of its obligations and duties under
this Agreement, except a loss resulting from the Distributor's willful
misfeasance, bad faith or negligence in the performance of such obligations and
duties, or by reason of its reckless disregard thereof; reliance on information
furnished to the Fund by the Distributor or its affiliates; or the Distributor's
refusal or failure to comply with the terms and conditions of this Agreement.
The Fund shall not be liable to the Distributor for any error of judgment or
mistake of law or for any loss suffered by the Distributor, except a loss
resulting from the Fund's willful misfeasance, bad faith or negligence in the
performance of its duties and obligations hereunder, or by reason of its
reckless disregard thereof.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT SHALL
EITHER PARTY, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS, TRUSTEES,
OFFICERS, EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE FOR LOST PROFITS,
EXEMPLARY, PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES.
Section 5. In consideration of the services and facilities to be provided by the
Distributor or any service provider, each Portfolio that has issued Investor
Shares shall pay to the Distributor a fee, as agreed from time to time, at an
annual rate of up to .25% (twenty-five basis points) of the average net asset
value of all Investor Shares of each Portfolio, which fee shall be computed
daily and paid monthly. The Fund may, in its discretion and without notice,
suspend or withdraw the sale of Investor Shares of any Portfolio, including the
sale of Investor Shares to any service provider for the account of any Client or
Clients. The Distributor may waive all or any portion of its fee from time to
time.
Section 6. The Fund may enter into other similar servicing agreements with any
other person or persons and may appoint any other person or persons as a
Shareholder Servicing Agent under the Plan without the Distributor's consent.
Section 7. By its written acceptance of this Agreement, the Distributor
represents, warrants, and agrees that the services provided by the Distributor
under this Agreement shall in no event be primarily intended to result in the
sale of Shares.
Section 8. This Agreement shall become effective on the date a fully executed
copy of this Agreement is received by the Fund or its designee and shall
continue until terminated by either party. This Agreement is terminable with
respect to the Investor Shares of any Portfolio, without penalty, at any time by
the Fund or by the Distributor upon written notice to the Fund.
Section 9. All notices and other communications to either the Fund or to the
Distributor shall be duly given if mailed, telegraphed, telefaxed, or
transmitted by similar communications device to the appropriate address stated
herein, or to such other address as either party shall so provide the other.
Section 10. This Agreement will be construed in accordance with the laws of the
State of Delaware and may not be "assigned" by either party thereto as that term
is defined in the Investment Company Act of 1940.
Section 11. References to the "ABN AMRO Funds" the "Fund," and the "Trustees" of
the Fund refer respectively to the Trust created and the Trustees as trustees,
but not individually or personally, acting from time to time under the
Declaration of Trust of the Fund dated September 17, 1992, a copy of which is on
file at the Fund's principal office. The obligations of the 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. Further, any obligations of the Fund with respect to any
one Portfolio shall not be binding upon any other Portfolio.
Section 12. The Distributor's services hereunder shall be rendered, and its
computer systems used in rendering such services shall operate and function,
without any Year 2000 Error. The term "Year 2000 Error" means:
(a) any failure of the Distributor's systems to properly record, store, process,
calculate or present calendar dates falling on and after (and, if applicable,
spans of time including) January 1, 2000 as a result of the occurrence or use of
data consisting of such dates;
(b) any failure of the Distributor's systems to calculate any information
dependent on or relating to dates on or after January 1, 2000 in the same
manner, and with the same functionality, date integrity and performance, as such
systems record, store, process, calculate and present calendar dates on or
before December 31, 1999, or information dependent on or relating to such dates;
or
(c) any loss of functionality or performance with respect to the introduction of
records or processing of data containing dates falling on or after January 1,
2000.
Section 13. Any claim or controversy arising out of or relating to this
Agreement, or breach hereof, shall be settled by arbitration administered by the
American Arbitration Association in Boston, Massachusetts in accordance with its
applicable rules, except that the Federal Rules of Evidence and the Federal
Rules of Civil Procedure with respect to the discovery process shall apply. The
parties hereby agree that judgment upon the award rendered by the arbitrator may
be entered in any court having jurisdiction.
The parties acknowledge and agree that the performance of the obligations under
this Agreement necessitates the use of instrumentalities of interstate commerce
and, notwithstanding other general choice of law provisions in this Agreement,
the parties agree that the Federal Arbitration Act shall govern and control with
respect to the provisions of this Article.
Section 14. No change, termination, modification or waiver of any term or
condition of this Agreement shall be valid unless in writing signed by each
party. A party's waiver of a breach of any term or condition in the Agreement
shall not be deemed a waiver of any subsequent breach of the same or another
term or condition.
Section 15. The parties intend every provision of this Agreement to be
severable. If a court of competent jurisdiction determines that any term or
provision is illegal or invalid for any reason, the illegality or invalidity
shall not affect the validity of the remainder of this Agreement. In such case,
the parties shall in good faith modify or substitute such provision consistent
with the original intent of the parties. Without limiting the generality of this
paragraph, if a court determines that any remedy stated in this Agreement has
failed of its essential purpose, then all other provisions of this Agreement,
including the limitations on liability shall remain fully effective.
Section 16. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument.
Section 17. This Agreement constitutes the entire Agreement between the parties
with respect to the subject matter hereof and supersedes all prior and
contemporaneous proposals, agreements, contracts, representations, and
understandings, whether written or oral, between the parties with respect to the
subject matter hereof.
By their signatures, the Fund and the Distributor agree to the terms of this
Agreement.
ABN AMRO FUNDS
208 South LaSalle Street
Chicago, Illinois 60604
By: Date:
PROVIDENT DISTRIBUTORS, INC.
Four Falls Corporate Center, 6th Floor
West Conshohocken, Pennsylvania 19428-2961
By: Date:
<PAGE>
Exhibit h(13)
SHAREHOLDER SERVICE PLAN
ABN AMRO FUNDS
INSTITUTIONAL SERVICE SHARES
ABN AMRO Funds (the "Fund") has adopted this Institutional Service Shares
Shareholder Service Plan (the "Plan") in order to provide certain shareholder
services to clients ("Clients") who from time to time beneficially own
Institutional Service Shares ("Shares") of any portfolio of the Fund ( a
"Portfolio").
Section 1. Each Shareholder Servicing Agent of the Fund will provide, or will
enter into written agreements in the form attached hereto with service providers
pursuant to which the service providers will provide, one or more of the
following shareholder services to Clients who may from time to time beneficially
own Shares:
(i) maintaining accounts relating to Clients that invest in Shares;
(ii) providing information periodically to Clients showing their positions in
Shares;
(iii) arranging for bank wires;
(iv) responding to Client inquiries relating to the services performed by the
Fund's distributor or any service provider;
(v) responding to inquiries from Clients concerning their investments in Shares;
(vi) forwarding shareholder communications from the Fund (such as proxies,
shareholder reports, annual and semi-annual statements and dividend,
distribution and tax notices) to Clients;
(vii) processing purchase, exchange and redemption requests from Clients and
placing such orders with the Fund or its service providers;
(viii) assisting Clients in changing dividend options, account designations, and
addresses;
(ix) providing subaccounting with respect to Shares beneficially owned by
Clients;
processing dividend payments from the Fund on behalf of Clients;
(xi) providing sweep services; and
(xii) providing such other similar services as the Fund may reasonably request
to the extent that a Shareholder Servicing Agent and/or the service provider is
permitted to do so under applicable laws or regulations.
Section 2. No Shareholder Servicing Agent or any of its officers, employees, or
agents may make any representations concerning the Fund or the Shares except
those contained in the Fund's current prospectus or statement of additional
information for the Shares or in such supplemental literature or advertising
provided by the Fund to the Shareholder Servicing Agent and authorized by the
Fund for the Shareholder Servicing Agent's use pursuant to the Plan.
Section 3. Shareholder Servicing Agents and service providers shall have no
authority to act as agent for the Fund in any matter or in any respect.
Section 4. In consideration of the services and facilities to be provided by any
Shareholder Servicing Agent or service provider, each Portfolio that has issued
Institutional Service Shares will pay to one or more Shareholder Servicing
Agents a fee, as agreed from time to time, at an annual rate which will not
exceed .25% (twenty-five basis points) of the average net asset value of all
Institutional Service Shares of each Portfolio, which fee is computed daily and
paid monthly, provided that the aggregate fees paid to all Shareholder Servicing
Agents pursuant to this Plan do not exceed .25% (twenty-five basis points) of
the average net asset value of all Institutional Service Shares of each
Portfolio. The Fund may, in its discretion and without notice, suspend or
withdraw the sale of Institutional Service Shares of any Portfolio, including
the sale of Institutional Service Shares to any service provider for the account
of any Client or Clients. A Shareholder Servicing Agent may waive all or any
portion of its fee from time to time.
Section 5. The Fund may enter into other similar servicing agreements with any
other person or persons without a Shareholder Servicing Agent's consent.
Section 6. The services provided by a Shareholder Servicing Agent under this
Plan are not primarily intended to result in the sale of Shares.
<PAGE>
Exhibit h(13)
FORM OF
SHAREHOLDER SERVICING AGENT AGREEMENT
ABN AMRO FUNDS
INSTITUTIONAL SERVICE SHARES
THIS SHAREHOLDER SERVICING AGENT AGREEMENT is made as of this 16th day of
September, 1999, (the "Agreement") by and between ABN AMRO Funds (the "Fund"), a
Massachusetts business trust and Provident Distributors, Inc. (the
"Distributor"), a Delaware corporation.
WHEREAS, the Fund is an open-end investment company registered under the
Investment Company Act of 1940, as amended, currently consisting of a number of
separately managed portfolios (the "Portfolios").
WHEREAS, the Fund has adopted an Institutional Service Shares Shareholder
Service Plan (the "Plan") in respect of Institutional Service Shares.
WHEREAS, the Fund desires to appoint the Distributor as a Shareholder Servicing
Agent under the Plan and to retain the Distributor to provide or to compensate
service providers who themselves provide, the services described herein to
clients (the "Clients") who from time to time beneficially own Institutional
Service Shares ("Shares") of any Portfolio of the Fund.
WHEREAS, the Distributor itself is willing to provide, or to compensate service
providers for providing, such shareholder services in accordance with the terms
and conditions of this Agreement.
NOW THEREFORE, in consideration of the premises and mutual covenants set forth
herein, the Distributor and the Fund hereto agree as follows:
Section 1. The Fund hereby appoints the Distributor as a Shareholder Servicing
Agent under the Plan and the Distributor accepts such appointment and agrees to
perform the services hereinafter set forth. The Fund may, in its sole
discretion, appoint other Shareholder Servicing Agents from time to time to
perform services pursuant to the Plan. The Distributor shall provide, or shall
enter into written agreements in the form attached hereto with service providers
pursuant to which the service providers will provide, one or more of the
following shareholder services to Clients who may from time to time beneficially
own Shares:
(i) maintaining accounts relating to Clients that invest in Shares;
(ii) providing information periodically to Clients showing their positions in
Shares;
(iii) arranging for bank wires;
(iv) responding to Client inquiries relating to the services performed by the
Distributor or any service provider;
(v) responding to inquiries from Clients concerning their investments in Shares;
(vi) forwarding shareholder communications from the Fund (such as proxies,
shareholder reports, annual and semi-annual statements and dividend,
distribution and tax notices) to Clients;
(vii) processing purchases, exchange and redemption requests from Clients and
placing such orders with the Fund or its service providers;
(viii) assisting Clients in changing dividend options, account designations, and
addresses;
(ix) providing subaccounting with respect to Shares beneficially owned by
Clients;
processing dividend payments from the Fund on behalf of Clients;
(xi) providing sweep services; and
(xi) providing such other similar services as the Fund may reasonably request to
the extent that the Distributor and/or the service provider is permitted to do
so under applicable laws or regulations.
Section 2. The Distributor shall provide all office space and equipment,
telephone facilities and personnel (which may be part of the space, equipment
and facilities currently used in the Distributor's business, or any personnel
employed by the Distributor) as may be reasonably necessary or beneficial in
order to fulfill its responsibilities under this Agreement.
Section 3. Neither the Distributor nor any of its officers, employees, or agents
is authorized to make any representations concerning the Fund or the Shares
except those contained in the Fund's current prospectus or statement of
additional information for the Shares, copies of which will be supplied to the
Distributor, or in such supplemental literature or advertising as may be
authorized in writing.
Section 4. For purposes of this Agreement, the Distributor and each service
provider will be deemed to be independent contractors, and will have no
authority to act as agent for the Fund in any matter or in any respect. By its
written acceptance of this Agreement, the Distributor agrees to and does
release, indemnify, and hold the Fund harmless from and against any and all
liabilities or losses resulting from requests, directions, actions, or inactions
of or by the Distributor or its officers, employees, or agents regarding the
Distributor's responsibilities under this Agreement, the provision of the
aforementioned services to Clients by the Distributor or any service provider,
or the purchase, redemption, transfer, or registration of Shares (or orders
relating to the same) by or on behalf of Clients. The Distributor and its
officers and employees shall, upon request, be available during normal business
hours to consult with representatives of the Fund or its designees concerning
the performance of the Distributor's responsibilities under this Agreement.
The Fund agrees to indemnify and hold the Distributor harmless from and against
any and all claims, costs, expenses (including reasonable attorneys' fees),
losses, damages, charges, payments and liabilities of any sort or kind which may
be asserted against the Distributor or for which the Distributor may be held to
be liable in connection with any action required to be taken pursuant to this
Agreement (a "Claim"), unless such Claim resulted from willful misfeasance, bad
faith or negligence by the Distributor in the performance of its duties
hereunder or reckless disregard thereof; reliance on information furnished to
the Fund by the Distributor or its affiliates; or the Distributor's refusal or
failure to comply with the terms or conditions of this Agreement.
The Distributor shall at all times act in good faith and agrees to use its best
efforts within commercially reasonable limits to ensure the accuracy of all
services performed under this Agreement. The Distributor shall not be liable to
the Fund for any error of judgment or mistake of law or for any loss suffered by
the Fund in connection with the performance of its obligations and duties under
this Agreement, except a loss resulting from the Distributor's willful
misfeasance, bad faith or negligence in the performance of such obligations and
duties, or by reason of its reckless disregard thereof; reliance on information
furnished to the Fund by the Distributor or its affiliates; or the Distributor's
refusal or failure to comply with the terms and conditions of this Agreement.
The Fund shall not be liable to the Distributor for any error of judgment or
mistake of law or for any loss suffered by the Distributor, except a loss
resulting from the Fund's willful misfeasance, bad faith or negligence in the
performance of its duties and obligations hereunder, or by reason of its
reckless disregard thereof.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT SHALL
EITHER PARTY, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS, TRUSTEES,
OFFICERS, EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE FOR LOST PROFITS,
EXEMPLARY, PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES.
Section 5. In consideration of the services and facilities to be provided by the
Distributor or any service provider, each Portfolio that has issued
Institutional Service Shares shall pay to the Distributor a fee, as agreed from
time to time, at an annual rate of up to .25% (twenty-five basis points) of the
average net asset value of all Institutional Service Shares of each Portfolio,
which fee shall be computed daily and paid monthly. The Fund may, in its
discretion and without notice, suspend or withdraw the sale of Institutional
Service Shares of any Portfolio, including the sale of Institutional Service
Shares to any service provider for the account of any Client or Clients. The
Distributor may waive all or any portion of its fee from time to time.
Section 6. The Fund may enter into other similar servicing agreements with any
other person or persons and may appoint any other person or persons as a
Shareholder Servicing Agent under the Plan without the Distributor's consent.
Section 7. By its written acceptance of this Agreement, the Distributor
represents, warrants, and agrees that the services provided by the Distributor
under this Agreement shall in no event be primarily intended to result in the
sale of Shares.
Section 8. This Agreement shall become effective on the date a fully executed
copy of this Agreement is received by the Fund or its designee and shall
continue until terminated by either party. This Agreement is terminable with
respect to the Institutional Service Shares of any Portfolio, without penalty,
at any time by the Fund or by the Distributor upon written notice to the Fund.
Section 9. All notices and other communications to either the Fund or to the
Distributor shall be duly given if mailed, telegraphed, telefaxed, or
transmitted by similar communications device to the appropriate address stated
herein, or to such other address as either party shall so provide the other.
Section 10. This Agreement will be construed in accordance with the laws of the
State of Delaware and may not be "assigned" by either party thereto as that term
is defined in the Investment Company Act of 1940.
Section 11. References to "ABN AMRO Funds" the "Fund," and the "Trustees" of the
Fund refer respectively to the Trust created and the Trustees as trustees, but
not individually or personally, acting from time to time under the Declaration
of Trust of the Fund dated September 17, 1992, and amendments thereto, copies of
which are on file at the Fund's principal office. The obligations of the 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. Further, any obligations of
the Fund with respect to any one Portfolio shall not be binding upon any other
Portfolio.
Section 12. The Distributor's services hereunder shall be rendered, and its
computer systems used in rendering such services shall operate and function,
without any Year 2000 Error. The term "Year 2000 Error" means:
(a) any failure of the Distributor's systems to properly record, store, process,
calculate or present calendar dates falling on and after (and, if applicable,
spans of time including) January 1, 2000 as a result of the occurrence or use of
data consisting of such dates;
(b) any failure of the Distributor's systems to calculate any information
dependent on or relating to dates on or after January 1, 2000 in the same
manner, and with the same functionality, date integrity and performance, as such
systems record, store, process, calculate and present calendar dates on or
before December 31, 1999, or information dependent on or relating to such dates;
or
(c) any loss of functionality or performance with respect to the introduction of
records or processing of data containing dates falling on or after January 1,
2000.
Section 13. Any claim or controversy arising out of or relating to this
Agreement, or breach hereof, shall be settled by arbitration administered by the
American Arbitration Association in Boston, Massachusetts in accordance with its
applicable rules, except that the Federal Rules of Evidence and the Federal
Rules of Civil Procedure with respect to the discovery process shall apply. The
parties hereby agree that judgment upon the award rendered by the arbitrator may
be entered in any court having jurisdiction.
The parties acknowledge and agree that the performance of the obligations under
this Agreement necessitates the use of instrumentalities of interstate commerce
and, notwithstanding other general choice of law provisions in this Agreement,
the parties agree that the Federal Arbitration Act shall govern and control with
respect to the provisions of this Article.
Section 14. No change, termination, modification or waiver of any term or
condition of this Agreement shall be valid unless in writing signed by each
party. A party's waiver of a breach of any term or condition in the Agreement
shall not be deemed a waiver of any subsequent breach of the same or another
term or condition.
Section 15. The parties intend every provision of this Agreement to be
severable. If a court of competent jurisdiction determines that any term or
provision is illegal or invalid for any reason, the illegality or invalidity
shall not affect the validity of the remainder of this Agreement. In such case,
the parties shall in good faith modify or substitute such provision consistent
with the original intent of the parties. Without limiting the generality of this
paragraph, if a court determines that any remedy stated in this Agreement has
failed of its essential purpose, then all other provisions of this Agreement,
including the limitations on liability shall remain fully effective.
Section 16. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument.
Section 17. This Agreement constitutes the entire Agreement between the parties
with respect to the subject matter hereof and supersedes all prior and
contemporaneous proposals, agreements, contracts, representations, and
understandings, whether written or oral, between the parties with respect to the
subject matter hereof.
By their signatures, the Fund and the Distributor agree to the terms of this
Agreement.
ABN AMRO FUNDS
208 South LaSalle Street
Chicago, Illinois 60604
By: Date:
PROVIDENT DISTRIBUTORS, INC.
Four Falls Corporate Center, 6th Floor
West Conshohocken, PA 19428-2961
By: Date:
<PAGE>
Exhibit i(2)
December 22, 1999
ABN AMRO Funds
101 Federal Street
Boston, Massachusetts 02110
Re: Opinion of Counsel regarding Post-Effective Amendment No. 20 to the
Registration Statement filed on Form N-1A under the Securities Act of 1933 (File
No. 33-52784)
Ladies and Gentlemen:
We have acted as counsel to ABN AMRO Funds, a Massachusetts business trust (the
"Trust"), in connection with the above-referenced Registration Statement (as
amended, the "Registration Statement") which relates to the Trust's units of
beneficial interest, without par value, to be issued on behalf of three new
series of the Trust (collectively, the "Shares"). This opinion is being
delivered to you in connection with the Trust's filing of Post-Effective
Amendment No. 20 to the Registration Statement (the "Amendment") to be filed
with the Securities and Exchange Commission pursuant to Rule 485(b) of the
Securities Act of 1933 (the "1933 Act"). With your permission, all assumptions
and statements of reliance herein have been made without any independent
investigation or verification on our part except to the extent otherwise
expressly stated, and we express no opinion with respect to the subject matter
or accuracy of such assumptions or items relied upon.
In connection with this opinion, we have reviewed, among other things, executed
copies of the following documents:
(a) a certificate of the Commonwealth of Massachusetts as to the existence and
good standing of the Trust;
(b) the Agreement and Declaration of Trust for the Trust and all amendments and
supplements thereto (the "Declaration of Trust");
(c) a certificate executed by Mary Moran Zeven, Assistant Secretary of the
Trust, certifying as to, and attaching copies of, the Trust's Declaration of
Trust and By-Laws (the "By-Laws"), and all amendments and supplements thereto,
and certain resolutions adopted by the Board of Trustees of the Trust
authorizing the issuance of the Shares; and
(d) a printer's proof of the Amendment.
In our capacity as counsel to the Trust, we have examined the originals, or
certified, conformed or reproduced copies, of all records, agreements,
instruments and documents as we have deemed relevant or necessary as the basis
for the opinion hereinafter expressed. In all such examinations, we have assumed
the legal capacity of all natural persons executing documents, the genuineness
of all signatures, the authenticity of all original or certified copies, and the
conformity to original or certified copies of all copies submitted to us as
conformed or reproduced copies. As to various questions of fact relevant to such
opinion, we have relied upon, and assume the accuracy of, certificates and oral
or written statements of public officials and officers or representatives of the
Trust. We have assumed that the Amendment, as filed with the Securities and
Exchange Commission, will be in substantially the form of the printer's proof
referred to in paragraph (d) above.
Based upon, and subject to, the limitations set forth herein, we are of the
opinion that the Shares, when issued and sold in accordance with the Declaration
of Trust and By-Laws, as amended, and for the consideration described in the
Registration Statement, will be legally issued, fully paid and nonassessable
under the laws of the Commonwealth of Massachusetts.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not concede that we are in
the category of persons whose consent is required under Section 7 of the 1933
Act.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
<PAGE>
Exhibit l(2)
FORM OF
ABN AMRO FUNDS
PURCHASE AGREEMENT
ABN AMRO Funds (the "Trust"), a Massachusetts business trust, and ABN
AMRO Asset Management (USA) Inc. (the "Buyer"), hereby agree as follows:
1. The Trust hereby offers the Buyer and the Buyer hereby agrees to
purchase one share of beneficial interest having no par value (the "Shares") at
$1.00 per share of each of the Trust's Institutional Treasury Money Market
Fund(US), Institutional Government Money Market Fund(US) and Institutional Prime
Money Market Fund(US) (each a "New Fund). Each Share is the "initial share" of a
New Fund. The Buyer hereby acknowledges receipt of a purchase confirmation
reflecting the purchase of three Shares, and the Trust hereby acknowledges
receipt from the Buyer of funds in the amount of $3.00 in full payment for the
Shares.
2. The Buyer represents and warrants to the Trust that the Shares are
being acquired for investment purposes and not for the purpose of distribution.
3. The Buyer agrees that neither it nor any direct or indirect
transferee of the Shares held by it shall redeem the Shares prior to the second
anniversary of the date that the Fund begins its investment activities.
4. The Trust represents that a copy of its Declaration of Trust, dated
September 17, 1992, and amendments are on file in the office of the Secretary of
the Commonwealth of Massachusetts.
5. This Agreement has been executed on behalf of the Trust by the
undersigned officer of the Trust in his capacity as an officer of the Trust. The
obligations of this Agreement shall be binding only upon the assets and property
of the New Funds and not upon the assets and property of any other fund of the
Trust and shall not be binding upon any Trustee, officer or shareholder of the
New Funds or the Trust individually.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the 16th day of September, 1999.
Attest: ABN AMRO FUNDS
By:
Name: Steven A. Smith
Title: Senior Vice President
Attest: ABN AMRO Asset Management (USA) Inc.
By:
Name:
Title:
<PAGE>
Exhibit n(2)
ABN AMRO Funds
Rule 18f-3
Multiple Class Plan
Initially Adopted on June 22, 1995
Amended and Restated on September 16, 1999
Introduction
ABN AMRO Funds (the "Trust"), a registered investment company
that currently consists of twenty-one (21) separately managed portfolios (the
Treasury Money Market Fund(US), Government Money Market Fund(US), Money Market
Fund(US), Tax-Exempt Money Market Fund(US), Value Fund(US), Growth Fund(US),
Small Cap Growth Fund(US), Real Estate Fund(US), Balanced Fund(US),
International Equity Fund(US), TransEurope Fund(US), Asian Tigers Fund(US),
Latin American Equity Fund(US), International Fixed Income Fund(US), Fixed
Income Fund(US), Intermediate Government Fixed Income Fund(US), Tax-Exempt Fixed
Income Fund(US), Limited Volatility Fixed Income Fund(US), Institutional
Treasury Money Market Fund(US), Institutional Government Money Market Fund(US)
and Institutional Prime Money Market Fund(US)) and that may consist of
additional portfolios in the future as listed on Schedule A hereto (each a
"Fund" and, collectively, the "Funds"), have elected to rely on Rule 18f-3 under
the Investment Company Act of 1940, as amended (the "1940 Act") in offering
multiple classes of units of beneficial interest ("shares") in each Fund. The
Plan sets forth the differences among classes, including shareholder services,
distribution arrangements, expense allocations, and conversion or exchange
options.
A. Attributes of Share Classes
The rights of Common (formerly Trust) and Investor Classes are set forth in the
resolutions and related materials of the Trust's Board adopted pursuant to the
order dated September 9, 1993, obtained by SEI Liquid Asset Trust, et al. (Inv.
Co. Act Release No. IC-19698), and attached hereto as Exhibits A - C.
The rights of Institutional and Institutional Service Classes
are set forth and attached hereto as Exhibits D and E.
With respect to any class of shares of a Fund created after
the date hereof, each share of a Fund will represent an equal pro rata interest
in the Fund and will have identical terms and conditions, except that: (i) each
new class will have a different class name (or other designation) that
identifies the class as separate from any other class; (ii) each class will
separately bear any distribution expenses ("distribution fees") in connection
with a plan adopted pursuant to Rule 12b-1 under the 1940 Act (a "Rule 12b-1
Plan"), and will separately bear any non-Rule 12b-1 Plan service payments
("service fees") that are made under any servicing agreement entered into with
respect to that class; (iii) each class may bear, consistent with rulings and
other published statements of position by the Internal Revenue Service, the
expenses of the Fund's operations which are directly attributable to such class
("Class Expenses"); and (iv) shareholders of the class will have exclusive
voting rights regarding the Rule 12b-1 Plan and the servicing agreements
relating to such class, and will have separate voting rights on any matter
submitted to shareholders in which the interests of that class differ from the
interests of any other class.
B. Expense Allocations
Expenses of each existing class and of each class created
after the date hereof shall be allocated as follows: (i) distribution and
shareholder servicing payments associated with any Rule 12b-1 Plan or servicing
agreement relating to each class of shares are (or will be) borne exclusively by
that class; (ii) any incremental transfer agency fees relating to a particular
class are (or will be) borne exclusively by that class; and (iii) class Expenses
relating to a particular class are (or will be) borne exclusively by that class.
Until and unless changed by the Board, the methodology and
procedures for calculating the net asset value of the various classes of shares
and the proper allocation of income and expenses among the various classes of
shares shall be as set forth in the Report rendered by Ernst & Young LLP.
C. Amendment of Plan; Periodic Review
This Plan must be amended to properly describe (through
additional exhibits hereto or otherwise) each new class of shares approved by
the Board after the date hereof.
The Board of the Trust, including a majority of the
independent Trustees, must periodically review this Plan for its continued
appropriateness, and must approve any material amendment of the Plan as it
relates to any class of any Fund covered by the Plan.
<PAGE>
EXHIBITS A-C
WHEREAS, on December 24, 1990 the Securities and Exchange Commission granted an
order exempting mutual funds administered or distributed by SEI now or in the
future from Sections 18(f), 18(g), and 18(i) of the Investment Company Act of
1940 to permit such funds to sell five classes of shares with different
distribution arrangements; and
WHEREAS, said exemptive order requires that the Board of Trustees of the Trust,
including a majority of the non-interested Trustees approve the offering of
different classes of shares only after a determination that multiple classes is
in the best interest of the Trust and its Shareholders;
NOW THEREFORE, be it
VOTED: That based upon information presented to this Board of Trustees, the
Trustees, including a majority of the non-interested Trustees, have determined
that a two class system for distribution of shares of the Trust is in the best
interests of the Trust and its shareholders.
FURTHER
VOTED: That the Board of Trustees must receive and review quarterly statements
detailing the amounts paid by the Trust under its Rule 12b-1 Plan for Investor
Class shares and under related Servicing Agreements.
FURTHER VOTED: That the Adviser and the Distributor shall report to the Board of
Trustees any material conflicts of interest that develop between classes of
shares of the Trust.
<PAGE>
REMBRANDT FUNDS
Investment Advisor:
LASALLE STREET CAPITAL MANAGEMENT, LTD.
Rembrandt Funds (the "Trust") is a mutual fund that offers a convenient means of
investing in one or more professionally managed portfolios of securities. This
Prospectus relates to the Trust Class shares and Investor Class shares of the
following Funds:
. Value Fund
. Growth Fund
. Small Cap Fund
. International Equity Fund
. TransEurope Fund
. Asian Tigers Fund
. Balanced Fund
The Trust Class Shares of the Trust are offered primarily to institutional
investors, including customers of LaSalle National Trust, N.A. its affiliates
and correspondents for the investment of their own funds or funds for which they
act in a fiduciary, agency or custodial capacity. The Investor Class shares are
offered primarily to individuals and institutional accounts for which LaSalle
National Trust, N.A. does not act in a fiduciary, agency or custodial capacity.
Investors in the Trust Class shares and investors in the Investor Class shares
are referred to hereinafter as "Shareholders"
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, INCLUDING LASALLE NATIONAL TRUST, N.A. OR ANY OF ITS AFFILIATES OR
CORRESPONDENTS INCLUDING LASALLE NATIONAL CORPORATION. THE TRUST'S SHARES ARE
NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THE SHARES INVOLVES
RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
This Prospectus sets forth concisely the information about the Trust that a
prospective investor should know before investing. Investors are advised to read
this Prospectus and retain it for future reference. A Statement of Additional
Information dated April 30, 1995 has been filed with the Securities and Exchange
Commission (the "SEC") and is available without charge by calling 1-800-443-
4725. The Statement of Additional Information is incorporated into this
Prospectus by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
April 30, 1995
EXPENSE SUMMARY
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets) TRUST CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Small Int'l Trans Asian
Value Growth Cap Equity Europe Tigers
Balanced
- --------------------------------------------------------------------------------------------------------
Advisory Fees............. .80% .80% .80% 1.00% 1.00% 1.00% .70%
Other Expenses............ .26% .22% .26% .43% .60% .60% . 24%
- --------------------------------------------------------------------------------------------------------
Total Operating Expenses.. 1.06% 1.02% 1.06% 1.43% 1.60% 1.60% . 94%
===============================================================
</TABLE>
(1) The Administrator has waived, on a voluntary basis, a portion of its fee
from the International Equity and Asian Tigers Funds. The Administrator reserves
the right to terminate its waiver at any time in its sole discretion. Absent
such waivers Other Expenses and Total Operating Expenses respectively would be
as follows: International Equity Fund (.46% and 1.46%) and Asian Tigers Fund
(.71% and 1.71%). Additional information may be found under "The Administrator".
(2) "Other Expenses" for the TransEurope Fund is based on estimated amounts for
the current fiscal year.
<PAGE>
EXAMPLE
- -------------------------------------------------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- -------------------------------------------------------------------------------
An investor would pay the following expenses on a $1,000 investment assuming (1)
5% annual return and (2) redemption at the end of each time period:
Value Fund.................................. $11 $34 $58 $129
Growth Fund................................ 10 32 56 125
Small Cap Fund............................. 11 34 58 129
International Equity Fund................. 15 45 78 171
TransEurope Fund........................... 16 50 87 190
Asian Tigers Fund.......................... 16 50 87 190
Balanced Fund.............................. 10 30 52 115
===============================================================
The example is based upon total operating expenses, except with respect to the
TransEurope Fund for which it is based on estimated expenses for the current
fiscal year. The example should not be considered a representation of past or
future expenses and actual expenses may be greater or less than those shown. The
purpose of this table is to assist the investor in understanding the various
costs and expenses that may be directly or indirectly borne by investors in the
Funds. A person who purchases shares through a financial institution may be
charged separate fees by the financial institution. The information set forth in
the foregoing table and example relates only to the Trust Class shares. The
Trust also offers Investor Class shares of the Funds which are subject to the
same expenses except for a sales load and certain distribution costs. Additional
information may be found under "The Advisor", "The Administrator" and "The
Distributor".
<PAGE>
SHAREHOLDER TRANSACTION EXPENSES
(As a percentage of offering price) INVESTOR CLASS
- --------------------------------------------------------------------------------
Maximum Sales Charge imposed on Purchases......................... 4.50%
Redemption Fee (1) ............................................... None
- --------------------------------------------------------------------------------
(1) A charge, currently $10.00, is imposed on wires of redemption proceeds.
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Small Int'l Trans Asian
Value Growth Cap Equity Europe Tigers Balanced
- -
- ----------------------------------------------------------------------------------------------------------
Advisory Fees............. .80% .80% .80% 1.00% 1.00% 1.00% . 70%
12b-1 Fees................ .30% .30% .30% .30% .30% .30% . 30%
Other Expenses............ .26% .22% .26% .43% .60% .60% . 24%
- -
- ----------------------------------------------------------------------------------------------------------
Total Operating Expenses.. 1.36% 1.32% 1.36% 1.73% 1.90% 1.90% 1.24%
===============================================================
</TABLE>
(1) The Administrator has waived, on a voluntary basis, a portion of its fee
from the International Equity and Asian Tigers Funds. The Administrator reserves
the right to terminate its waiver at any time in its sole discretion. Absent
such waivers Other Expenses and Total Operating Expenses respectively would be
as follows: International Equity Fund (.46% and 1.76%) and Asian Tigers Fund
(.71% and 2.01%). Additional information may be found under "The Administrator".
(2) "Other Expenses" for the TransEurope Fund is based on estimated amounts for
the current fiscal year.
<PAGE>
EXAMPLE
- ------------------------------------------------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- -------------------------------------------------------------------------------
An investor would pay the following expenses on a $1,000 investment assuming (1)
imposition of the maximum sales load; (2) 5% annual return; and (3) redemption
at the end of each time period:
Value Fund.................................. $58 $ 86 $116 $201
Growth Fund................................ 58 85 114 197
Small Cap Fund............................. 58 87 116 201
International Equity Fund................ 62 97 135 240
TransEurope Fund........................... 63 102 143 257
Asian Tigers Fund.......................... 63 102 143 257
Balanced Fund.............................. 57 83 110 188
===============================================================
The example is based upon total operating expenses, except with respect to the
TransEurope Fund for which it is based on estimated expenses for the current
fiscal year. The example should not be considered a representation of past or
future expenses and actual expenses may be greater or less than those shown. The
purpose of this table is to assist the investor in understanding the various
costs and expenses that may be directly or indirectly borne by investors in the
Funds. A person who purchases shares through a financial institution may be
charged separate fees by the financial institution. The information set forth in
the foregoing table and example relates only to the Investor Class shares. The
Trust also offers Trust Class shares of the Funds which are subject to the same
expenses except there are no sales load or distribution fees. Additional
information may be found under "The Advisor", "The Administrator" and "The
Distributor".
The rules of the Securities and Exchange Commission require that the maximum
sales charge be reflected in the above table. However, certain investors may
qualify for reduced sales charges. See "Purchase of Shares", "Redemption of
Shares" and "Eligibility For Reduced Sales Charge".
Long-term Shareholders may eventually pay more than the economic equivalent of
the maximum front-end sales charge otherwise permitted by the Rules of Fair
Practice of the National Association of Securities Dealers, Inc.
<PAGE>
THE TRUST
Rembrandt Funds (the "Trust") is an open-end management investment company that
offers units of beneficial interest ("shares") in any of its currently offered
investment funds. Shareholders may purchase shares in a fund through two
separate classes, the Trust Class and the Investor Class, which provide for
variations in distribution costs, voting rights and dividends. Except for these
differences between classes, each share of each fund represents an undivided,
proportionate interest in that fund. This Prospectus relates to the Trust class
shares and the Investor Class shares of the following funds of the Trust: Value
Fund, Growth Fund, Small Cap Fund, International Equity Fund, TransEurope Fund,
Asian Tigers Fund (collectively, the "Equity Funds") and the Balanced Fund (the
"Balanced Fund") (together, the "Funds"). Each of the Funds is a diversified
mutual fund. Information regarding the Trust's other funds is contained in
separate prospectuses that may be obtained from the Trust's Distributor,
Rembrandt(R) Financial Services Company, 680 East Swedesford Road, Wayne, PA
19087 or by calling 1-800-443-4725.
THE DISTRIBUTOR
Rembrandt Financial Services Company (the "Distributor"), 680 East Swedesford
Road, Wayne, PA 19087, a subsidiary of SEI Financial Services Company, and the
Trust are parties to a distribution agreement (the "Distribution Agreement").
The Investor Class shares of the Trust have a distribution plan dated December
31, 1992 (the "Investor Class Plan"). As provided in the Investor Class Plan,
the Trust will pay a fee of .30% of the average daily net assets of the Investor
Class shares of the Funds to the Distributor as compensation for its services.
From this amount the Distributor may make payments to financial institutions and
intermediaries such as banks (including LaSalle National Trust, N.A.), savings
and loan associations, insurance companies, and investment counselors, broker-
dealers, and the Distributor's affiliates and subsidiaries as compensation for
services, reimbursement of expenses incurred in connection with distribution
assistance, or provision of Shareholder services. The Investor Class Plan is
characterized as a compensation plan since the distribution fee will be paid to
the Distributor without regard to the distribution or Shareholder services
expenses incurred by the Distributor or the amount of payments made to financial
institutions and intermediaries. The Funds may also execute brokerage or other
agency transactions through an affiliate of the Advisor or through the
Distributor for which the affiliate or the Distributor receives compensation.
The Trust Class shares of the Funds are offered without distribution fees to
institutional investors, including customers of LaSalle National Trust, N.A.,
its affiliates and correspondent banks, for the investment of their own funds or
funds for which they act in a fiduciary, agency or custodial capacity. It is
possible that a financial institution may offer different classes of shares of
the Funds to its customers and the shares of such customers may be assessed for
different distribution expenses with respect to different classes of shares.
ELIGIBILITY FOR REDUCED SALES CHARGE
Rights of Accumulation
Investors in Investor Class shares will be entitled to lower, graduated sales
charges if the investors' total investment in a Fund exceeds certain thresholds.
In calculating the sales charge rates applicable to current purchases of
Investor Class shares, a "single purchaser" is entitled to cumulate current
purchases with the current market value of previously purchased shares of the
Fund and the following other eligible funds: Fixed Income Fund, Intermediate
Government Fixed Income Fund, Tax-Exempt Fixed Income Fund, Global Fixed Income
Fund and Limited Volatility Fixed Income Fund (the "Eligible Funds") which are
sold subject to a comparable sales charge.
PERFORMANCE
The performance of Trust Class shares will normally be higher than for Investor
Class shares because the Trust Class is not subject to distribution expenses
charged to the Investor Class shares.
Dividends and distributions of the Funds are paid on a per-share basis. The
value of each share will be reduced by the amount of the payment. If shares are
purchased shortly before the record date for a dividend or the distribution of
capital gains, a Shareholder will pay the full price for the shares and receive
some portion of the price back as a taxable dividend or distribution. The amount
of dividends payable on Trust Class shares will be more than the dividends
payable on the Investor Class shares because of the distribution expenses
charged to Investor Class shares.
<PAGE>
Schedule A to
Amended and Restated Rule 18f-3
Multiple Class Plan
<PAGE>
FUNDS
CERTIFICATE OF CLASS DESIGNATION
Institutional Treasury Money Market Fund (US)
Institutional Government Money Market Fund (US)
Institutional Prime Money Market Fund (US)
Institutional Service Class
1. Class-Specific Distribution Arrangements; Other Expenses
Shares of Institutional Service Class are sold without a sales charge, but are
subject to a shareholder servicing fee of up to .25% payable to the Distributor.
The Distributor will provide or will enter into written agreements with service
providers who will provide one or more of the following shareholder services to
clients who may from time to time beneficially own shares: (i) maintaining
accounts relating to clients that invest in shares; (ii) providing information
periodically to clients showing their position in shares; (iii) arranging for
bank wires; (iv) responding to client inquiries relating to the services
performed by the Distributor or any service provider; (v) responding to
inquiries from clients concerning their investments in shares; (vi) forwarding
shareholder communications from a Fund (such as proxies, shareholder reports,
annual and semi-annual financial statements and dividend, distribution and tax
notices) to clients; (vii) processing purchase, exchange and redemption requests
from clients and placing such orders with a Fund or its service providers;
(viii) assisting clients in changing dividend options, account designations, and
addresses; (ix) providing subaccounting with respect to shares beneficially
owned by clients; (x) processing dividends payments from a Fund on behalf of
clients; (xi) providing sweep services; and (xii) providing such other similar
services as a Fund may reasonably request to the extent that the Distributor
and/or the service provider is permitted to do so under applicable laws or
regulations.
2. Eligibility of Purchasers
Refer to the current prospectus for the Institutional Service Class of the
Funds.
3. Exchange Privileges
Institutional shares of a Fund may be exchanged for Institutional shares of each
other Fund of the Trust in accordance with the procedures disclosed in each
Fund's Prospectus and subject to and applicable limitations resulting from the
closing of Funds to new investors.
4. Voting Rights
Each shareholder will have one vote for each full Share held and a fractional
vote for each fractional Share held. Shareholders will have exclusive voting
rights regarding any matter submitted to shareholders that relates solely to
Shares (such as a distribution plan or service agreement relating to Shares),
and will have separate voting rights on any other matter submitted to
shareholders in which the interests of the Shares' shareholders differ from the
interests of holders of any other class.
5. Conversion Rights
Shares do not have a conversion feature.
[/R]
<PAGE>
