SCHEDULE 14C
INFORMATION STATEMENT PURSUANT TO SECTION 14(c) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Check the appropriate box:
/X/ Preliminary Information Statement / / Confidential,
for use of the Commission only
/ / Definitive Information Statement (as permitted by Rule 14c-5(d)(2)).
LINDNER INVESTMENTS
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LINDNER INVESTMENTS
520 LAKE COOK ROAD, SUITE 381
DEERFIELD, ILLINOIS 60015
INFORMATION STATEMENT
FEBRUARY __, 2002
This information statement is being furnished to the shareholders of
Lindner Communications Fund (the "Fund"), a series of Lindner Investments, a
Massachusetts business trust (the "Trust"), in lieu of a proxy statement,
pursuant to the terms of an exemptive order (the "SEC Order") issued by the
Securities and Exchange Commission ("SEC"). The exemptive order permits the
Fund's Adviser to hire new subadvisers and to make certain changes to existing
subadvisory contracts with the approval of the Board of Trustees, without
obtaining shareholder approval. Pursuant to the SEC Order, the Fund has agreed
to provide certain information about any new subadviser to the shareholders of
the Fund being managed by the Sudadviser. Shareholders are not being asked to
vote on the hiring of the new subadviser, but are encouraged to review this
information statement.
The Trust is registered under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), as an open-end management investment
company. Six separate investment portfolios are currently offered by the Trust,
one of which is Lindner Communications Fund. The Trust's trustees are referred
to here as the "Board", "Board Members" or "Trustees." The Trust's principal
executive office is at 520 Lake Cook Road, Suite 381, Deerfield, Illinois 60015.
This information statement relates to the approval by the Trustees,
including a majority of the Trustees who are not parties to the contract and
were not interested persons of those parties, as defined in the Investment
Company Act (the "Independent Trustees"), on November 20, 2001, of a new
Subadvisory Contract dated November 21, 2001 for the Fund, between Lindner Asset
Management, Inc. (the "Adviser") and Argent Capital Management, LLC ("Argent"),
with respect to the Fund (the "Subadvisory Contract"), a copy of which is
attached hereto as Exhibit A.
The Fund will pay for the costs associated with preparing and
distributing this information statement to its respective shareholders. This
information statement will be mailed on or about February 28, 2002.
THIS IS NOT A PROXY STATEMENT. WE ARE NOT ASKING FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY.
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THE INVESTMENT ADVISER
Lindner Asset Management, Inc., 520 Lake Cook Road, Suite 381,
Deerfield, Illinois 60015, serves as the Fund's investment adviser (the
"Adviser"), under an investment management agreement dated as of August 1, 2001.
The Adviser also performs certain administrative services for the Fund. The
Adviser is registered as an investment adviser with the SEC. As of September 30,
2001, the Adviser managed approximately $500 million of assets, all of which
were assets of the Lindner Funds.
MANAGER-OF-MANAGERS STYLE. Lindner Management intends to act as a
"manager-of-managers." The SEC Order generally allows the Adviser to enter into
and amend agreements with unaffiliated investment subadvisers without obtaining
shareholder approval each time. This authority is subject to certain conditions,
including the requirement that the Trustees (including a majority of the
"disinterested" Trustees) of the Trust must approve any new or amended
agreements with subadvisers. Shareholders of the Fund will continue to have the
right to terminate an agreement with a subadviser at any time, without penalty,
by a vote of the majority of outstanding shares of the Fund. The Adviser, on
behalf of the Fund, will notify shareholders of any new subadviser or of any
material amendments to the agreement with a subadviser pursuant to the SEC
Order. The Adviser remains responsible for the performance of all of the Lindner
Funds, oversees subadvisers to ensure compliance with the Fund's investment
policies and guidelines, and monitors the subadviser's adherence to its
investment style and performance results in order to recommend any changes in
subadvisers to the Trust's Board of Trustees.
SHAREHOLDER REPORTS
The Fund's most recent annual report for the fiscal year ended June 30,
2001, has been sent to its shareholders. The Fund's semi-annual report for the
six month period ended December 31, 2001, is included with the mailing of this
Information Statement. Copies of the Fund's most recent annual report and
semi-annual report may be obtained without charge by writing the Fund, care of
US Bancorp Fund Services, LLC, 615 East Michigan Street, Milwaukee, Wisconsin
53202 or by calling (800) 995-7777 (toll free).
SHAREHOLDINGS
The table below sets forth the Fund's net asset value and number of
outstanding shares as of January 31, 2002:
Net Asset Value Number of Outstanding Shares
The beneficial owners, directly or indirectly, of more than 5% of the
outstanding shares of the Fund as of January 31, 2002, are listed below.
2
Percent of
Name and Address No. of Shares Owned Outstanding Shares Owned
[To the knowledge of the Trust, the executive officers and Board
members of the Fund, as a group, owned less than 1% of the outstanding shares of
the Fund as of January 31, 2002.]
NEW SUBADVISORY CONTRACT
On November 20, 2001, the Trustees, including all of the Independent
Trustees, unanimously approved the Subadvisory Contract and the selection by the
Adviser of Argent as the temporary subadviser to the Fund following the
departure of the investment personnel that were previously employed by the
Adviser.
Section 15 of the Investment Company Act requires that a majority of
the Fund's outstanding shares approve its subadvisory contract. However, on
November 30, 2001, the SEC issued the SEC Order granting exemptive relief from
certain requirements of Section 15 to the Adviser, provided that such investment
company complies with the conditions of the order. According to the SEC Order,
which is subject to a number of conditions, the Adviser may enter into
subadvisory contracts on behalf of certain funds without receiving prior
shareholder approval.
On July 6, 2001, shareholders of the Fund authorized the Adviser to
hire, terminate or replace investment subadvisers, and make material changes to
subadvisory contracts, without the approval of the Fund's shareholders, but
subject to the supervision and approval of the Board.
As a result of the SEC's issuance of the SEC Order, and the approval
by shareholders of the Fund, of the manager-of-managers management style, the
Subadvisory Contract became effective on November 30, 2001, and the Board of
Trustees will, without further shareholder approval, hereafter be able to
appoint initial, additional or replacement subadvisers for the Fund.
BOARD CONSIDERATION OF SUBADVISORY CONTRACT
In considering the approval of the Subadvisory Contract, the
Trustees, including those Trustees who are not interested persons of the Fund,
the Adviser or Argent, (the "Independent Trustees"), considered whether the
approval of the Subadvisory Contract was in the best interests of the Fund. At
the meeting, the Trustees reviewed materials furnished by the Adviser and Argent
and met with representatives of Argent. The Adviser explained to the Trustees
the research, review and selection process that it will employ to identify
potential candidates to find a subadviser for the Fund, which will
3
include the submission of requests for proposals from candidates and on-site
visits by the Adviser to those candidates under serious consideration including
Argent. The Adviser explained the reasons why it selected Argent as a temporary
subadviser and why it recommended that the Trustees approve Argent as the Fund's
new temporary subadviser.
The Trustees considered a number of factors in approving Argent,
including the imminent departure of the investment personnel that were
previously employed by the Adviser, Argent's history and background in managing
similar portfolios for other clients, Argent's investment philosophy, long-term
performance record, and the experience and background of the Argent personnel
who would be responsible for managing the Fund's assets. The Trustees also
considered Argent's facilities and compliance procedures. The Trustees also
considered the nature, quality and extent of services expected to be provided to
the Fund by Argent as well as the reputation of Argent in the asset management
industry. The Trustees also considered the size and structure of Argent, as well
as the amount of assets that Argent currently manages.
The Trustees discussed and reviewed the terms of the Subadvisory
Contract. Under the subadvisory contract between the Adviser and Argent, the
subadvisory fee is payable at the rate of 0.30% of the Fund's average daily net
assets up to $249,999,999, 0.35% of the Fund's average daily net assets next
$250 million, and 0.40% of the Fund's average daily net assets in excess of
$499,999,999, provided, however, that until June 1, 2002, Argent agreed to waive
that portion of its fees otherwise payable which are in excess of 0.05% of the
Fund's average daily net assets. These fees are paid by the Adviser and
therefore the Fund will not experience an increase in its expenses as a result
of the new agreement.
In evaluating the terms of the Subadvisory Contract, the Trustees took
into account that under the "manager-of-managers" style, the Adviser will
continue to be responsible for analyzing economic and market trends, formulating
and continuing assessment of investment policies and recommending changes to the
Board where appropriate, supervising compliance by Argent with the Fund's
investment objective, policies and restrictions, as well as with laws and
regulations applicable to the Fund, evaluating the performance of Argent as
compared to certain selected benchmarks, pre-determined peer groups, evaluating
potential additional or replacement Subadvisers and recommending changes to the
Board where appropriate, and reporting to the Board and shareholders on the
foregoing.
Based upon their review, the Trustees concluded that the Subadvisory
Contract was in the best interests of the Fund and the shareholders of the Fund.
Accordingly, after consideration of the above factors, and such other factors
and information as they deemed relevant, the Trustees, including the Independent
Trustees, unanimously approved the Subadvisory Contract.
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INFORMATION CONCERNING ARGENT CAPITAL MANAGEMENT
The following is a description of Argent Capital Management, LLC
("Argent"), which is based on information provided by Argent. Argent is not
affiliated with the Adviser.
Argent serves as interim subadviser for the Communications Fund
following the departure of the investment personnel that were previously
employed by the Adviser to manage the Communications Fund. The Adviser is
currently evaluating potential candidates, including Argent, for the position of
continuing subadviser for the Communications Fund. Argent's address is 700
Corporate Park Drive, Suite 320, Clayton, Missouri 63105. Argent is an
independent investment management company founded in 1998 that is a registered
investment adviser. The primary business of Argent is the management of equity
portfolios and investment grade bond portfolios for institutions and individuals
and at September 30, 2001, it had in excess of $300 million of assets under
management. Argent has appointed the following portfolio manager of the Fund:
John F. Meara received a BSBA degree in finance and real estate from
the University of Missouri. Mr. Meara is the President of Argent, a
position he has held since 1998. Prior to that date he served from 1997
to 1998 as a portfolio manager for Commerce Bank, St. Louis, Missouri,
and from 1995 to 1997 he was an investment analyst for American Express
Financial Advisors. Mr. Meara is a Chartered Financial Analyst.
The day-to-day management and operating control of Argent is done by
Steven Finerty, Chairman of Argent, John F. Meara, President of Argent and John
Prosperi, a Managing Director of Argent. Argent is owned primarily by its
employees.
The table below lists the name, age and principal occupation during the
past five years for each of the executive officers and investment professionals
of Argent:
Name and Age Principal Occupation (Past 5 Years)
Steven J. Finerty, 47 Chairman of Argent since 1998; Senior Equity
Advisor Moneta Group Investment Advisors,
Inc., a registered investment adviser in St.
Louis, Missouri. Mr. Finerty has been
associated with the Moneta Group since 1986.
John F. Meara, 35 President of Argent since 1998; prior to that
time he served from 1997 to 1998 as a
portfolio manager for Commerce Bank, St.
Louis, Missouri, and from 1995 to 1997 as an
investment analyst for American Express
Financial Advisors.
5
Gary J. Orf, 37 Managing Director of Investments at Argent
since 1999; prior to that he was an equity
analyst and portfolio manager for Firstar
Bank, N.A., in St. Louis, Missouri.
John D. Prosperi, 37 Managing Director of Business Development at
Argent since 2000; prior to that he was
National Sales Manager at Brinson Partners,
St. Louis, Missouri.
K. Timothy Swanson, 34 Managing Director of Investments at Argent
since 2001; prior to that he was an analyst
at A.G. Edwards, St. Louis, Missouri.
Argent does not presently serve as an investment adviser to any
investment company having a similar objective to the Fund.
TERMS OF SUBADVISORY CONTRACT
The following summary of the Subadvisory Contract is qualified in its
entirety by reference to the copy of the Subadvisory Contract attached as
Exhibit A to this information statement.
Under the Subadvisory Contract, Argent is compensated by the Adviser
(and not the Fund) at an annual rate of 0.30% of the Fund's average daily net
assets up to $249,999,999, 0.35% of the Fund's average daily net assets next
$250 million, and 0.40% of the Fund's average daily net assets in excess of
$499,999,999, provided, however, that until June 1, 2002, Argent agreed to waive
that portion of its fees otherwise payable which are in excess of 0.05% of the
Fund's average daily net assets. The Subadvisory Contract provides that, subject
to the Adviser's and the Board of Trustees' supervision, Argent is responsible
for managing the investment operations of the Fund and for making investment
decisions and placing orders to purchase and sell securities for the Fund, all
in accordance with the investment objective and policies of the Fund as
reflected in its current prospectus and statement of additional information and
as may be adopted from time to time by the Board of Trustees. In accordance with
the requirements of the Investment Company Act, Argent also provides the Adviser
with all books and records relating to the transactions it executes and renders
to the Trustees such periodic and special reports as the Board of Trustees may
reasonably request.
The Subadvisory Contract will remain in full force and effect for a
period of two years from the date of its execution, and will continue thereafter
as long as its continuance is specifically approved at least annually by vote of
a majority of the outstanding voting securities (as that term is defined in the
Investment Company Act) of the Fund, or by the Board of Trustees, including the
approval by a majority of the Independent Trustees, at a meeting called for the
purpose of voting on such approval; provided, however, that (1) the Subadvisory
Contract may be terminated at any time
6
without the payment of any penalty, either by vote of the Board of Trustees or
by vote of a majority of the outstanding voting securities of the Fund, (2) the
Subadvisory Contract will terminate immediately in the event of its assignment
(within the meaning of the Investment Company Act) or upon the termination of
the Fund's investment management agreement with the Adviser, and (3) the
Subadvisory Contract may be terminated at any time by Argent or the Adviser on
not more than 60 days' nor less than 30 days' written notice to the other party
to the Subadvisory Contract.
The Subadvisory Contract provides that, in the absence of willful
misfeasance, bad faith, gross negligence in the performance of its duties, or
reckless disregard of its obligations and duties thereunder, Argent will not be
liable for any act or omission in connection with its activities as subadviser
to the Fund.
SHAREHOLDER PROPOSALS
As a Massachusetts business trust, the Trust is not required to hold
annual meetings of shareholders and the Trustees currently do not intend to hold
such meetings unless shareholder action is required in accordance with the
Investment Company Act or the Trust's Trust Instrument. A shareholder proposal
intended to be presented at any meeting of shareholders of the Fund must be
received by the Fund a reasonable time before the Trustees' solicitation
relating thereto is made in order to be included in the Fund's proxy statement
and form of proxy relating to that meeting and presented at the meeting. The
mere submission of a proposal by a shareholder does not guarantee that the
proposal will be included in the proxy statement because certain rules under the
federal securities laws must be complied with before inclusion of the proposal
is required.
Robert L. Miller, Secretary
Dated February __, 2002
7
EXHIBIT A
SUBADVISORY CONTRACT WITH
ARGENT CAPITAL MANAGEMENT LLC
LINDNER COMMUNICATIONS FUND
This Sub-Advisory Contract (the "Agreement") is entered into on
November 21, 2001, effective as provided in Section 7, between LINDNER ASSET
MANAGEMENT, INC., a Michigan corporation ("LAMI" or the "Adviser"), and ARGENT
CAPITAL MANAGEMENT LLC, a Missouri limited liability company ("Argent" or the
"SubAdviser").
WHEREAS, the Adviser has entered into an Investment Management
Agreement, dated as of August 1, 2001 (the "Management Agreement"), with Lindner
Investments (the "Trust"), a Massachusetts business trust that is registered as
an open-end management investment company under the Investment Company Act of
1940 (the "1940 Act"), pursuant to which LAMI acts as adviser of the Trust's
separate series of shares of beneficial interest, one of which is the Lindner
Communications Fund (the "Fund"); and
WHEREAS, the Trust has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (the "Registration
Statement") for the purpose of registering its shares for public offering under
the Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, LAMI desires to retain the Subadviser to provide investment
advisory services to the Fund and to manage the Fund as the Adviser shall from
time to time direct, commencing on the Effective Date specified in Section 7,
and the Subadviser is willing to render such investment advisory services;
NOW, THEREFORE, the Parties agree as follows:
1. Subject to the direction of the Adviser and the Board of Trustees of
the Trust, the Subadviser shall provide portfolio management services to the
Fund, including (but not limited to) the purchase, retention and disposition of
portfolio securities in accordance with the Fund's investment objectives,
policies and restrictions as stated in the Prospectus and Statement of
Additional Information (such Prospectus and Statement of Additional Information
as currently in effect and as amended or supplemented from time to time, being
herein called the Prospectus), portfolio reconciliation, cash management,
back-office services, periodic reporting to the Adviser and the Board of
Trustees of the Trust and such other services as may be reasonably requested by
the Adviser. The Subadviser's activities shall be subject to the following
understandings:
(a) The Subadviser shall determine from time to time what
investments and securities will be purchased, retained, sold or loaned
by the Fund,
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and what portion of the assets will be invested or held uninvested as
cash or invested in cash equivalents.
(b) In the performance of its duties and obligations under
this Agreement, the Subadviser shall act in conformity with the
Declaration of Trust, Bylaws and Prospectus of the Fund and with the
instructions and directions of the Adviser and of the Board of Trustees
of the Trust, co-operate with the Adviser's personnel responsible for
monitoring the Fund's compliance, and will conform to and comply with
the requirements of the 1940 Act, the Internal Revenue Code of 1986 and
all other applicable federal and state laws and regulations. In
connection therewith, the Subadviser shall, among other things, comply
with the Subadviser's Code of Ethics and the Adviser's soft dollar
trading policy, brokerage allocation policy, and such other policies as
the Adviser or the Trust may establish, and it shall prepare and
provide to the Adviser such reports as are, or may in the future be,
reasonably required to permit the Adviser or the Trust to make such
filings as are required by the Commission.
(c) The Subadviser shall place orders with or through such
persons, brokers or dealers (but only with brokers or dealers that are
not directly or indirectly affiliated with the Subadviser) to carry out
the policy with respect to brokerage as set forth in the Fund's
Prospectus or as the Board of Trustees or the Adviser may direct from
time to time. In providing the Fund with investment supervision, it is
recognized that the Subadviser will give primary consideration to
securing the most favorable price and efficient execution. Within the
framework of this policy, the Subadviser may consider the financial
responsibility, research and investment information and other services
provided by brokers or dealers who may effect or be a party to any such
transaction or other transactions to which the Subadviser's other
clients may be a party. It is understood that no broker or dealer
affiliated with the Subadviser may be used as principal broker for
securities transactions. It is also understood that it is desirable for
the Fund that the Subadviser have access to supplemental investment and
market research and security and economic analysis provided by brokers
who may execute brokerage transactions at a higher cost to the Fund
than may result when allocating brokerage to other brokers on the basis
of seeking the most favorable price and efficient execution. Therefore,
the Subadviser is authorized to place orders for the purchase and sale
of securities for the Fund with such brokers, subject to review by the
Trust's Board of Trustees and the Adviser from time to time with
respect to the extent and continuation of this practice. It is
understood that the services provided by such brokers may be useful to
the Subadviser in connection with the Subadviser's services to other
clients.
On occasions when the Subadviser deems the purchase or sale of
a security to be in the best interest of the Fund as well as other
clients of the Subadviser, the Subadviser, to the extent permitted by
applicable laws and regulations, may, but shall be under no obligation
to, aggregate the securities to be sold or purchased in order to obtain
the most favorable price or lower brokerage
A-2
commissions and efficient execution. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in
the transaction, will be made by the Subadviser in the manner the
Subadviser considers to be the most equitable and consistent with its
fiduciary obligations to the Fund and to such other clients.
(d) The Subadviser shall maintain all books and records with
respect to the Fund's portfolio transactions required by subparagraphs
(b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1
under the 1940 Act, and shall render to the Trust's Board of Trustees
and to the Adviser such periodic and special reports as the Trustees or
the Adviser may reasonably request. The Subadviser shall make
reasonably available its employees and officers for consultation with
any of the Trustees or officers or employees of the Fund or the Adviser
with respect to any matter discussed herein, including, without
limitation, the valuation of the Fund's securities.
(e) The Subadviser shall provide to the Adviser and to the
Fund's Custodian on each business day information relating to all
transactions concerning the Fund's assets that it manages, including
(but not limited to) any pricing discrepancies from daily closing
prices reported by the Fund's pricing services, and shall provide the
Adviser with such other information as the Adviser may request.
(f) The Subadviser and Adviser understand and agree that the
Adviser intends to manage the Fund in a "manager-of-managers" style,
and that the Adviser will, among other things, (i) continually evaluate
the performance of the Subadviser to the Fund through quantitative and
qualitative analysis and consultations with the Subadviser, (ii)
periodically make recommendations to the Trust's Board of Trustees as
to whether this contract with the Subadviser should be renewed,
modified, or terminated and (iii) periodically report to the Trust's
Board of Trustees regarding the results of its evaluation and
monitoring functions. The Subadviser recognizes that its services may
be terminated or modified pursuant to this process.
(g) The Subadviser will provide to the Adviser reasonable
support for marketing and sales activities with respect to the Fund,
including (but not limited to) providing press and other publicity
interviews, attending conferences and seminars that the Adviser
reasonably deems to be appropriate and meeting with prospective and
existing shareholders, registered investment advisers and other
financial intermediaries. The Adviser will reimburse the Subadviser for
its out-of-pocket expenses incurred in connection with such marketing
support, provided that the expenses are approved in advance by the
Adviser.
(h) The Adviser shall have the right to approve the specific
individuals employed by the Subadviser to perform the investment
management services described above, and the Adviser shall also have
the right to direct that the
A-3
Subadviser terminate the involvement of any one or more of such
individuals with respect to the Fund's investment management
activities, but any such change in personnel of the Subadviser shall
not be deemed to be a termination of this Agreement.
(i) The Subadviser will not provide portfolio management
services to any other mutual fund using the same investment process or
style as the Subadviser uses with respect to the Fund without the prior
written consent of the Adviser, nor will the Subadviser organize a
mutual fund with a substantially similar investment objective as the
Fund. The Subadviser agrees to offer to the Trust the first opportunity
to organize and register any new mutual fund that the Subadviser
develops.
2. The Subadviser shall keep the Fund's books and records required to
be maintained by the Subadviser pursuant to Section 1(d) hereof and shall timely
furnish to the Adviser all information relating to the Subadviser's services
hereunder needed by the Adviser to keep the other books and records of the Fund
required by Rule 31a-1 under the 1940 Act. The Subadviser agrees that all
records which it maintains for the Fund are the property of the Fund and the
Subadviser will surrender promptly to the Fund any of such records upon the
Fund's request, provided, however, that the Subadviser may retain a copy of such
records. The Subadviser further agrees to 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 Section 1(d) hereof.
3. The Subadviser agrees to maintain its registration as an investment
adviser under the Investment Advisers Act of 1940 (the "Advisers Act") and to
maintain adequate compliance procedures to ensure its compliance with the 1940
Act, the Advisers Act and any other applicable state and federal laws or
regulations.
4. The Subadviser shall furnish to the Adviser copies of all records
prepared in connection with (i) the performance of this Agreement and (ii) the
maintenance of compliance procedures pursuant to Section 1(b) hereof as the
Adviser may reasonably request.
5. For the services provided and the expenses assumed pursuant to this
Agreement, the Adviser shall pay the Subadviser as full compensation therefor,
as follows:
(a) prior to the earlier of (i) the date on which this
Agreement is approved by the vote of a majority of the outstanding
voting securities (as defined in the 1940 Act) of the Fund or (ii) the
date on which the Securities and Exchange Commission issues an order
exempting the Trust and the Adviser from the provisions of Section
15(a) of the 1940 Act that would otherwise require that this Agreement
be approved by vote of a majority of the outstanding voting securities
(as defined in the 1940 Act) of the Fund, the Adviser shall pay to the
Subadviser an amount equal to the out-of-pocket costs incurred by the
Subadviser in
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performing its duties under this Agreement, which amount shall be paid
by the Adviser within ten (10) days after submission to it by the
Subadviser of an itemized statement detailing such costs; and
(b) from and after the earlier of (i) the date on which this
Agreement is approved by the vote of a majority of the outstanding
voting securities (as defined in the 1940 Act) of the Fund or (ii) the
date on which the Securities and Exchange Commission issues an order
exempting the Trust and the Adviser from the provisions of Section
15(a) of the 1940 Act that would otherwise require that this Agreement
be approved by vote of a majority of the outstanding voting securities
(as defined in the 1940 Act) of the Fund, the Adviser shall pay to the
Subadviser a fee at the annual rates described below with respect to
the average daily net assets of the Fund, which fee will be computed
daily, and paid monthly. Such fee shall be calculated by applying the
annual rates set forth below to the average daily net assets of the
Fund for the calendar year computed in the manner used for the
determination of the net asset value of shares of the Fund. The annual
fee rates are as follows:
Rate Amount of Incremental Net Assets
---- --------------------------------
30 basis points (0.30%) First $249,999,999 of net assets
35 basis points (0.35%) Next $250,000,000 of net assets up to $499,999,999
40 basis points (0.40%) Assets in excess of $499,999,999
For example, if the Fund has average daily net assets of $525,000,000,
the fee would be 30 basis points on the first $249,999,999 of assets,
35 basis points on the next $250,000,000 of assets and 40 basis points
on the last $25,000,001 of assets.
Provided, however, that until June 1, 2002, the Subadviser agrees to waive that
portion of its fees otherwise payable hereunder which are in excess of 5 basis
points (0.0005%) of the average daily net assets of the Fund.
(c) If the exemptive order referred to in this Section 5 is not issued
on or before February 1, 2002, the Adviser agrees to take reasonable actions to
recommend to the Trust's Board of Trustees that a special meeting of the
shareholders of the Fund be called for the purpose of obtaining the shareholder
approval of this Agreement required by Section 15(a) of the 1940 Act.
6. The Subadviser shall not be liable for any error of judgment or for
any loss suffered by the Fund or the Adviser in connection with the matters to
which this Agreement relates, except a loss resulting from willful misfeasance,
bad faith or gross negligence on the Subadviser's part in the performance of its
duties or from its reckless disregard of its obligations and duties under this
Agreement.
7. The Subadviser shall commence to provide services hereunder, and
this Agreement shall become effective, on the date first stated above (the
"Effective Date").
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This Agreement shall continue in effect for a period of two years from the
Effective Date, unless sooner terminated as hereinafter provided. This Agreement
shall continue in effect from year-to-year thereafter, but only so long as such
continuance is specifically approved at least annually in conformity with the
requirements of the 1940 Act; provided, however, that this Agreement may be
terminated by the Fund at any time, without the payment of any penalty, by the
Board of Trustees of the Trust or by vote of a majority of the outstanding
voting securities (as defined in the 1940 Act) of the Fund, or by the Adviser or
the Subadviser at any time, without the payment of any penalty, on 60 days'
prior written notice to the other party. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940 Act) or
upon the termination of the Management Agreement.
8. Nothing in this Agreement shall limit or restrict the right of any
of the Subadviser's directors, officers or employees who may also be a Trustee,
officer or employee of the Fund to engage in any other business or to devote his
or her time and attention in part to the management or other aspects of any
business, whether of a similar or dissimilar nature, nor limit or restrict the
Subadviser's right to engage in any other business or to render services of any
kind to any other corporation, firm, individual or association.
9. During the term of this Agreement, the Adviser agrees to furnish the
Subadviser at its principal office all prospectuses, proxy statements, reports
to shareholders, sales literature or other material prepared for distribution to
shareholders of the Fund or the public, which refer to the Subadviser in any
way, prior to use thereof and not to use material if the Subadviser reasonably
objects in writing within three (3) business days (or such other time as may be
mutually agreed) after receipt thereof. Sales literature may be furnished to the
Subadviser hereunder by first-class or overnight mail, facsimile transmission
equipment or hand delivery.
10. This Agreement may be amended by mutual consent, but the consent of
the Fund must be obtained in conformity with the requirements of the 1940 Act.
11. Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the 1940 Act or the Advisers Act shall be resolved by reference to such term
or provision of the 1940 Act or the Advisers Act and to interpretations thereof,
if any, by the United States Courts or in the absence of any controlling
decision of any such court, by rules, regulations or orders of the SEC issued
pursuant to said Acts. In addition, where the effect of a requirement of the
1940 Act or the Advisers Act reflected in any provision of the Agreement is
revised by rule, regulation or order of the SEC, such provision shall be deemed
to incorporate the effect of such rule, regulation or order. Subject to the
foregoing, this Agreement shall be governed by and construed in accordance with
the laws (without reference to conflicts of law provisions) of the State of
Illinois.
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12. Any notices or other communications required or permitted hereunder
shall be deemed to have been given if sent by first class mail, overnight
delivery or hand delivery to the following addresses:
If to the Adviser, to:
Lindner Asset Management, Inc.
520 Lake Cook Road, Suite 380
Deerfield, IL 60015
If to the Subadviser, to:
Argent Capital Management LLC
700 Corporate Park Drive, Suite 320
Clayton, MO 63105
IN WITNESS WHEREOF, the Parties hereto have caused this instrument to
be executed by their officers designed below as of the day and year first above
written.
LINDNER ASSET MANAGEMENT, INC.
By: /s/ Doug T. Valassis
-----------------------------------------
Doug T. Valassis
ARGENT CAPITAL MANAGEMENT LLC
By: /s/ Steven L. Finerty
------------------------------------------
Steven L. Finerty
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