Exhibit (d)(i) under Form N-1A
Exhibit 10 under Item 601/Reg S-K
ADVISORY AGREEMENT
between
REGIONS XXXXXX XXXXXX SELECT FUNDS
and
XXXXXX ASSET MANAGEMENT, INC.
ADVISORY AGREEMENT made this 8th day of August, 2003 (the
"Agreement"), by and between Regions Xxxxxx Xxxxxx Select Funds, a
Massachusetts business trust (hereinafter called the "Fund"), and Xxxxxx
Asset Management, Inc., a corporation organized under the laws of the
State of Tennessee (hereinafter called the "Adviser").
WHEREAS, the Fund is registered under the Investment Company Act of
1940, as amended ("1940 Act") as an open-end management investment
company, and offers for sale those series set forth on Schedule A hereto
(each referred to herein as a "Portfolio"); and
WHEREAS, the Fund desires to avail itself of the services,
information, advice, assistance and facilities of an investment adviser on
behalf of the Portfolios, and to have that investment adviser provide or
perform for each Portfolio various research, statistical and investment
services;
NOW, THEREFORE, in consideration of the promises and the mutual
covenants herein contained, it is agreed between the parties as follows:
1. Employment of the Adviser. The Fund hereby employs the
Adviser to invest and reinvest the assets of each Portfolio in the manner
set forth in Section 2 of this Agreement subject to the direction of the
Board of Directors (the "Board") and the officers of the Fund, for the
period, in the manner, and on the terms set forth hereinafter. The Adviser
hereby accepts such employment and agrees during such period to render the
services and to assume the obligations herein set forth. The Adviser shall
for all purposes herein be deemed to be an independent contractor and
shall, except as expressly provided or authorized (whether herein or
otherwise), have no authority to act for or represent the Fund in any way
or otherwise be deemed an agent of the Fund.
2. Obligations of and Services to be Provided by, the Adviser.
The Adviser undertakes to provide the services hereinafter set forth and
to assume the following obligations:
A. Investment Advisory Services.
(i) The Adviser shall direct the investments of each
Portfolio, subject to and in accordance with the each Portfolio's
investment objective, policies and limitations as provided in its
Prospectus and Statement of Additional Information (the "Prospectus") and
other governing instruments, as amended from time to time, and any other
directions and policies which the Board may issue to the Adviser from time
to time.
(ii) The Adviser is authorized, in its discretion and
without prior consultation with the Fund, to purchase and sell securities
and other investments for each Portfolio.
B. Corporate Management Services.
(i) The Adviser shall furnish for the use of the Fund,
office space and all necessary office facilities, equipment and personnel
for servicing the investments of the Fund.
(ii) The Adviser shall pay the salaries of all personnel
of the Fund or the Adviser performing services relating to research,
statistical and investment activities.
C. Provision of Information Necessary for Preparation of
Registration Statement, Amendments and Other Materials. The Adviser will
make available and provide such information as the Fund or its
administrator may reasonably request for use in the preparation of its
registration statement, reports and other documents required by any
applicable federal, foreign or state statutes or regulations.
D. Code of Ethics. The Adviser will adopt a written code of
ethics complying with the requirements of Rule 17j-1 under the 1940 Act
and Section 204A of the Investment Advisers Act of 1940 and will provide
the Fund and its administrator with a copy of the code of ethics and
evidence of its adoption. Within forty-five (45) days of the end of the
last calendar quarter of each year while this Agreement is in effect, an
executive officer of the Adviser shall certify to the Board that the
Adviser has complied with the requirements of Rule 17j-1 and Section 204A
during the previous year and that there has been no violation of the
Adviser's code of ethics or, if such a violation has occurred, that
appropriate action was taken in response to such violation. Upon the
written request of the Fund or its administrator, the Adviser shall permit
the Fund or its administrator to examine the reports required to be made
to the Adviser by Rule 17j-l(c)(l).
E. Disqualification. The Adviser shall immediately notify
the Board of the occurrence of any event which would disqualify the
Adviser from serving as an investment adviser of an investment company
pursuant to Section 9 of the 1940 Act or any other applicable statute or
regulation.
F. Other Obligations and Services. The Adviser shall make
its officers and employees available to the Board and officers of the Fund
for consultation and discussion regarding the management of each Portfolio
and its investment activities.
3. Execution and Allocation of Portfolio Brokerage.
A. The Adviser, subject to the control and direction of the
Board, shall have authority and discretion to select brokers and dealers
to execute transactions for each Portfolio, and for the selection of the
markets on or in which the transactions will be executed.
B. In acting pursuant to Section 3A, the Adviser will place
orders through such brokers or dealers in conformity with the policies
with respect to transactions for each Portfolio set forth in the Fund's
registration statement.
C. It is understood that neither the Fund nor the Adviser
will adopt a formula for allocation of a Portfolio's brokerage.
D. It is understood that the Adviser may, to the extent
permitted by applicable laws and regulations, aggregate securities to be
sold or purchased for any Portfolio and for other clients in order to
obtain the most favorable price and efficient execution. In that event,
allocation of the securities purchased or sold, as well as expenses
incurred in the transaction, will be made by the Adviser in the manner it
considers to be the most equitable and consistent with its fiduciary
obligations to the Fund and to its other clients.
E. It is understood that the Adviser may, in its
discretion, use brokers who provide a Portfolio with research, analysis,
advice and similar services to execute transactions on behalf of the
Portfolio, and the Adviser may pay to those brokers in return for
brokerage and research services a higher commission than may be charged by
other brokers, subject to the Adviser determining in good faith that such
commission is reasonable in terms either of the particular transaction or
of the overall responsibility of the Adviser to such Portfolio and its
other clients and that the total commissions paid by such Portfolio will
be reasonable in relation to the benefits to the Portfolio over the long
term.
F. It is understood that the Adviser may use brokers who
(i) are affiliated with the Adviser provided that no such broker will be
utilized in any transaction in which such broker acts as principal; and
(ii) the commissions, fees or other remuneration received by such brokers
is reasonable and fair compared to the commissions, fees or other
remuneration paid to other brokers in connection with comparable
transactions involving similar securities being purchased or sold during a
comparable period of time.
G. The Adviser shall provide such reports as the Board may
reasonably request with respect to each Portfolio's total brokerage and
transaction activities and the manner in which that business was allocated.
4. Expenses of the Fund. During the term of this
Agreement, each Portfolio will bear all expenses, not specifically assumed
by the Adviser, incurred in its operations and the offering of its shares.
Expenses borne by the Portfolios will include but not be limited to the
following (or each Portfolio's proportionate share of the following):
legal and audit expenses, organizational expenses; interest; taxes;
governmental fees; fees, voluntary assessments and other expenses incurred
in connection with membership in investment company organizations; the
cost (including brokerage commissions or charges, if any) of securities
purchased or sold by each Portfolio and any losses incurred in connection
therewith; fees of custodians, transfer agents, registrars or other
agents; distribution fee; expenses of preparing share certificates;
expenses relating to the redemption or repurchase of shares; expenses of
registering and qualifying shares for sale under applicable federal and
state law and maintaining such registrations and qualifications; expenses
of preparing, setting in print, printing and distributing prospectuses,
proxy statements, reports, notices and dividends to shareholders; cost of
stationery; costs of stockholders and other meetings of the Fund;
compensation and expenses of the independent directors of the Fund; and
the Fund's pro rata portion of premiums of any fidelity bond and other
insurance covering the Fund and its officers and directors.
5. Compensation of the Adviser. For the services and facilities
to be furnished and expenses assumed hereunder, the Adviser shall receive
from each Portfolio an advisory fee at the annual rate listed along with
that Portfolio's name in Schedule A attached hereto. This advisory fee
shall be payable monthly as soon as practicable after the last day of each
month based on the average of the daily values placed on the net assets of
each respective Portfolio as determined at the close of business on each
day throughout the month. The assets of each Portfolio will be valued
separately as of the close of regular trading on the New York Stock
Exchange (currently 4:00 p.m., Eastern time) on each business day
throughout the month or, if the Fund lawfully determines the value of the
net assets of any Portfolio as of some other time on each business day, as
of such time with respect to that Portfolio. The first payment of such
fee shall be made as promptly as possible at the end of the month next
succeeding the effective date of this Agreement. In the event that the
Adviser's right to such fee commences on a date other than the last day of
the month, the fee for such month shall be based on the average daily
assets of the Portfolio in that period from the date of commencement to
the last day of the month. If the Fund determines the value of the net
assets of any Portfolio more than once on any business day, the last such
determination on that day shall be deemed to be the sole determination on
that day. The value of net assets shall be determined pursuant to the
applicable provisions of the Fund's Articles of Incorporation, its By-Laws
and the 1940 Act. If, pursuant to such provisions, the determination of
the net asset value of any Portfolio of the Fund is suspended for any
particular business day, then the value of the net assets of that
Portfolio on that day shall be deemed to be the value of its net assets as
determined on the preceding business day. If the determination of the net
asset value of any Portfolio has been suspended for more than one month,
the Adviser's compensation payable at the end of that month shall be
computed on the basis of the value of the net assets of the Portfolio as
last determined (whether during or prior to such month).
6. Activities and Affiliates of the Adviser.
A. Nothing in this Agreement shall limit or restrict the
right of any director, officer, or employee of the Adviser who may also be
a director, officer, or employee of the Fund, to engage in any other
business or to devote his time and attention in part to the management or
other aspects of any other business, whether of a similar nature or a
dissimilar nature, nor to limit or restrict the right of the Adviser to
engage in any other business or to render services of any kind, including
investment advisory and management services, to any other corporation,
firm, individual or association.
B. The Fund acknowledges that the Adviser or one or more of
its "affiliated persons" may have investment responsibilities or render
investment advice to or perform other investment advisory services for
other individuals or entities and that the Adviser, its "affiliated
persons" or any of its or their directors, officers, agents or employees
may buy, sell or trade in securities for its or their respective accounts
("Affiliated Accounts"). Subject to the provisions of paragraph 3, the
Fund agrees that the Adviser or its "affiliated persons" may give advice
or exercise investment responsibility and take such other action with
respect to Affiliated Accounts which may differ from the advice given or
the timing or nature of action with respect to the Portfolios, provided
that the Adviser acts in good faith. The Fund acknowledges that one or
more of the Affiliated Accounts may at any time hold, acquire, increase,
decrease, dispose of or otherwise deal with positions in investments in
which the Portfolio may have an interest. The Adviser shall have no
obligation to recommend for the Portfolio a position in any investment
which an Affiliated Account may acquire, and the Fund shall have no first
refusal, co-investment or other rights in respect of any such investment,
either for its Portfolios or otherwise.
C. Subject to and in accordance with the Articles of
Incorporation and By-Laws of the Fund as currently in effect and the 1940
Act and the rules thereunder, it is understood that Directors, officers
and agents of the Fund and shareholders of the Fund are or may be
interested in the Adviser or its "affiliated persons," or that directors,
officers, agents and shareholders of the Adviser or its "affiliated
persons" are or may be interested in the Fund; and that the effect of any
such interests shall be governed by said Articles of Incorporation,
By-Laws and the 1940 Act and the rules thereunder.
7. Liabilities of the Adviser.
A. Except as provided below, in the absence of willful
misfeasance, bad faith, gross negligence, or reckless disregard of
obligations or duties hereunder on the part of the Adviser, the Adviser
shall not be subject to liability to the Fund or to any shareholder of the
Fund or its Portfolios for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security or the making
of any investment for or on behalf of the Fund.
B. No provision of this Agreement shall be construed to
protect any Director or officer of the Fund, or the Adviser, from
liability in violation of Sections 17(h), 17(i), 36(a) or 36(b) of the
1940 Act.
8. Effective Date; Term. This Agreement shall continue in effect
for one year and from year to year thereafter only so long as specifically
approved annually by (i) vote of a majority of the directors of the Fund
who are not parties to this Agreement or interested persons of such
parties, cast in person at a meeting called for that purpose, and (ii) by
the Board or with respect to any given Portfolio by a vote of a majority
of the outstanding voting securities of such Portfolio.
9. Assignment. No "assignment" of this Agreement shall be made
by the Adviser, and this Agreement shall terminate automatically in event
of such assignment. The Adviser shall notify the Fund in writing in
advance of any proposed change of "control" to enable the Fund to take the
steps necessary to enter into a new advisory agreement, if necessary.
10. Amendment. This Agreement may be amended at any time, but
only by written agreement between the Adviser and the Fund, which
amendment is subject to the approval of the Board and, where required by
the 1940 Act, the shareholders of the affected Portfolio in the manner
required by the 1940 Act and the rules thereunder.
11. Termination. This Agreement:
A. may at any time be terminated without payment of any
penalty by the Fund with respect to any Portfolio (by
vote of the Board or by "vote of a majority of the
outstanding voting securities") on sixty (60) days'
written notice to the Adviser;
B. shall immediately terminate in the event of its
"assignment"; and
C. may be terminated with respect to any Portfolio by the
Adviser on sixty (60) days' written notice to the Fund.
12. Name. In the event this Agreement is terminated by either
party or upon written notice from the Adviser at any time, the Fund hereby
agrees that it will eliminate from its corporate name any reference to the
name "Xxxxxx Xxxxxx." The Fund shall have the non-exclusive use of the
name "Xxxxxx Xxxxxx" in whole or in part so long as this Agreement is
effective or until such notice is given.
13. Definitions. As used in this Agreement, the terms "affiliated
person," "assignment," "control," "interested person" and "vote of a
majority of the outstanding voting securities" shall have the meanings set
forth in the 1940 Act and the rules and regulations thereunder, subject to
any applicable orders of exemption issued by the Securities and Exchange
Commission.
13. Notice. Any notice under this Agreement shall be given in
writing addressed and delivered or mailed postage prepaid to the other
party to this Agreement at its principal place of business.
14. 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.
15. Governing Law. To the extent that state law has not been
preempted by the provisions of any law of the United States, this
Agreement shall be administered, construed and enforced according to the
laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF the parties have caused this instrument to be
signed on their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as of
the date first written above.
REGIONS XXXXXX XXXXXX SELECT FUNDS
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
XXXXXX ASSET MANAGEMENT, INC.
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: President
SCHEDULE A
REGIONS XXXXXX XXXXXX SELECT FUNDS
FEE SCHEDULE
Portfolio % of average
daily net assets
Regions Xxxxxx Xxxxxx Select Aggressive Growth Fund 0.75%
Regions Xxxxxx Xxxxxx Select Balanced Fund 0.80%
Regions Xxxxxx Xxxxxx Select Fixed Income Fund 0.75%
Regions Xxxxxx Xxxxxx Select Government Money Market Fund 0.50%
Regions Xxxxxx Xxxxxx Select Growth Fund 0.80%
Regions Xxxxxx Xxxxxx Select Limited Maturity Government 0.70%
Fund
Regions Xxxxxx Xxxxxx Select Strategic Equity Fund 0.80%
Regions Xxxxxx Xxxxxx Select Treasury Money Market Fund 0.50%
Regions Xxxxxx Xxxxxx Select Value Fund 0.80%
