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EXHIBIT (5)(c)
SUB-INVESTMENT ADVISORY AGREEMENT BETWEEN
BANC ONE INVESTMENT ADVISORS CORPORATION AND
INDEPENDENCE INTERNATIONAL ASSOCIATES, INC.
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SUB-INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of October 1, 1996 by and between BANC ONE INVESTMENT
ADVISORS CORPORATION, a national banking association with its principal office
in Westerville, Ohio (hereinafter called the "Investment Adviser") and
INDEPENDENCE INTERNATIONAL ASSOCIATES, INC., an investment adviser with its
principal office in Boston, Massachusetts (hereinafter called the
"Sub-Adviser").
WHEREAS, the Investment Adviser serves as the Investment Adviser to The
One Group International Equity Index Fund (the "Fund") of The One Group (the
"Trust"), a Massachusetts business trust and an open-end diversified management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act");
WHEREAS, the Investment Adviser has entered into an investment
sub-advisory contract with the Sub-Adviser dated January 11, 1993, as amended by
an amendment dated February 11, 1993, under which the Sub-Adviser provides
investment sub-advisory services to the Fund (such investment sub-advisory
contract being hereinafter referred to as the "Existing Contract");
WHEREAS, the Board of Trustees of the Trust (the "Board") has been
advised that the Sub-Adviser and the holders of all of the outstanding voting
securities of the Sub-Adviser have negotiated the sale of all or a controlling
block of the Sub-Adviser's outstanding voting securities to Independence
Investment Associates, Inc. ("IIA");
WHEREAS, Section 2(a)(4) of the 1940 Act provides that the transfer of
all or a controlling block of the outstanding voting securities of the
Sub-Adviser to IIA would constitute an assignment of the Existing Contract, and,
as required by Section 15(a)(4) of the 1940 Act, the Existing Contract provides
for the automatic termination of such Existing Contract in the event of its
assignment; and
WHEREAS, following the termination of the Existing Contract, the
Investment Adviser desires to continue to retain the Sub-Adviser to furnish
investment advisory services and related services to it with regard to the Fund
and the Sub-Adviser is willing and believes it possesses legal authority to make
available such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
1. Retention. The Investment Adviser hereby retains the
Sub-Adviser to provide certain sub-investment advisory services herein set forth
to it with regard to the Fund for the period and on the terms set forth in this
Agreement. The Sub-Adviser accepts such retention and agrees to furnish the
services herein set forth for the compensation herein provided.
2. Delivery of Documents. The Investment Adviser has furnished
the Sub-Adviser with copies properly certified or authenticated of each of the
following documents:
(a) the Trust's Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts on May 23,
1985, and all amendments thereto or restatements thereof (such
Declaration, as presently in effect and as it shall from time to time
be amended or restated, is herein called the "Declaration of Trust");
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(b) the Trust's Code of Regulations and amendments
thereto;
(c) resolutions of the Trust's Board of Trustees
authorizing the appointment of the Sub-Adviser and approving this
Agreement;
(d) the Trust's original Notification of Registration on
Form N-8A under the 1940 Act as filed with the Securities and Exchange
Commission (the "SEC") on February 20, 1985 and all amendments thereto;
(e) the Trust's current Registration Statement on Form
N-lA under the Securities Act of 1933, as amended ("1933 Act") and
under the 1940 Act as filed with the Securities and Exchange Commission
and all amendments thereto; and
(f) the Trust's most recent prospectus and Statement of
Additional Information relating to the Fund (such prospectus and
Statement of Additional Information, as presently in effect, and all
amendments and supplements thereto are herein collectively called the
"Prospectus").
The Investment Adviser will promptly furnish the Sub-Adviser with
copies of all amendments of or supplements to the foregoing documents.
3. Management. Subject always to the instructions and supervision
of the Investment Adviser, the Sub-Adviser will provide a continuous investment
program for the Fund, including investment research and management with respect
to all securities and investments and cash equivalents in the Fund. The
Sub-Adviser will determine from time to time what securities and other
investments will be purchased, retained or sold by the Trust with respect to the
Fund and will place all purchase and sale orders on behalf of the Trust with
respect to the Fund. The Sub-Adviser will provide the services under this
Agreement in accordance with the Fund's investment objective, policies and
restrictions as stated in the Prospectus and resolutions of the Trust's Board of
Trustees. The Sub-Adviser further agrees that it:
(a) will use the same skill and care in providing such
services as it uses in providing services to fiduciary accounts for
which it has investment responsibilities;
(b) will comply in all material respects with all
applicable Rules and Regulations of the Securities and Exchange
Commission and in addition will conduct its activities under this
Agreement in accordance with any applicable regulations pertaining to
the investment advisory activities of the Sub-Adviser;
(c) will not make loans to any person to purchase or
carry units of beneficial interest ("Shares") in the Fund or make loans
to the Trust;
(d) will place orders pursuant to its investment
determinations for the Fund either directly with the issuer or with any
broker or dealer. In placing orders with brokers and dealers, the
Sub-Adviser will attempt to obtain prompt execution of orders in an
effective manner at the most favorable price. Consistent with this
obligation, when the execution and price offered by two or more brokers
or dealers are comparable, the Sub-Adviser may, in its discretion,
purchase and sell portfolio securities to and from brokers and dealers
who provide the Sub-Adviser with research advice and other services. In
no instance will
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portfolio securities be purchased from or sold to The One Group
Services Company, the Investment Adviser, the Sub-Adviser or any
affiliated person of either the Trust, The One Group Services Company,
the Investment Adviser, or the Sub-Adviser;
(e) will treat confidentially and as proprietary
information of the Trust 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 Trust, which approval
shall not be unreasonably withheld and may not be withheld where the
Sub-Adviser may be exposed to civil or criminal contempt proceedings
for failure to comply when requested to divulge such information by
duly constituted authorities, or when so requested by the Trust; and
(f) will maintain its policy and practice of conducting
its fiduciary functions independently. In making investment
recommendations for the Fund, the Sub-Adviser's personnel will not
inquire or take into consideration whether the issuers of securities
proposed for purchase or sale for the Fund's account are customers of
the Investment Adviser, the Sub-Adviser or the parents or subsidiaries
or affiliates of the Investment Adviser or Sub-Adviser. In dealing with
such customers, the Sub-Adviser and its parent, subsidiaries, and
affiliates will not inquire or take into consideration whether
securities of those customers are held by the Trust.
4. Services Not Exclusive. The investment advisory services
furnished by the Sub-Adviser hereunder are not to be deemed exclusive. Except to
the extent necessary to perform the Sub-Adviser's obligations under this
Agreement, nothing herein shall be deemed to limit or restrict the right of the
Sub-Adviser, or any subsidiary or affiliate of the Sub-Adviser, or any employee
of the Sub-Adviser, to engage in any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other person.
5. Books and Records. In compliance with the requirements of Rule
3la-3 under the 1940 Act, the Sub-Adviser hereby agrees that all records which
it maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's request.
The Sub-Adviser further agrees to preserve for the periods prescribed by Rule
3la-2 under the 1940 Act the records required to be maintained by Rule 3la-1
under the 1940 Act.
6. Expenses. During the term of this Agreement, the Sub-Adviser
will pay all expenses incurred by it in connection with its activities under
this Agreement other than the cost of securities (including brokerage
commissions, if any) purchased for the Trust. The Trust and the Investment
Adviser will be responsible for all of their respective expenses and
liabilities.
7. Compensation. (a) For the services provided and the expenses
assumed pursuant to this Agreement, the Investment Adviser will pay the
Sub-Adviser and the Sub-Adviser will accept as full compensation therefor a fee
computed daily and paid monthly in arrears on the first business day of each
month at one-twelfth of the applicable annual rate, determined as follows:
(1) For the period from the date hereof until the date on which
this Agreement is approved by the vote of a majority of the outstanding voting
securities of the Fund (the "Approval Date"):
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Assets Annual Fee
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First $10 million .25%
Next $15 million .20%
Next $25 million .175%
Next $50 million .10%
Next $400 million .025%
Over $500 million .02%
(2) From and after the Approval Date:
Assets Annual Fee
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First $10 million .275%
Next $15 million .225%
Next $25 million .195%
Next $50 million .125%
Over $100 million .06%
As used in this Section 7, "Assets" means the market value of assets in the Fund
at the end of each month. "Annual Fee" is expressed as a percentage of the
Fund's average daily net assets.
(b) In addition, for the period from the date hereof until the
Approval Date, if the Sub-Adviser is utilized to perform its obligations under
the Sub-Advisory Agreement with respect to the investment of assets of the Fund
in issuers domiciled in countries classified by the Sub-Adviser as "emerging
international markets," the Investment Adviser shall pay to the Sub-Adviser a
fee at the annual rate of $10,000, computed daily and paid monthly in arrears on
the first business day of each month at one-twelfth of such annual rate.
(c) That portion of the fees payable to the Sub-Adviser pursuant
to paragraph (a)(1) and (b) of this Section 7 will be maintained in an
interest-bearing escrow account, and amounts in such account (including interest
earned on such amounts) will be paid (1) to the Sub-Adviser only upon the
Approval Date, or (2) in the absence of such approval prior to the earlier of
(x) the date which is 120 days after the date hereof and (y) March 1, 1997 (such
earlier date being referred to herein as the "Expiration Date"), to the Fund.
(d) If the fee payable to the Sub-Adviser pursuant to this Section
7 begins to accrue before the end of any month or if this Agreement terminates
before the end of any month, the fee for the period from such date to the end of
such month or from the beginning of such month to the date of termination, as
the case may be, shall be prorated accordingly to the proportion which such
period bears to the full month in which such effectiveness or termination
occurs. For purposes of calculating fees, the value of the Trust's net assets
shall be computed in the manner specified in the Prospectus and the Trust's
Declaration of Trust for the computation of the value of the Trust's net assets
in connection with the determination of the net asset value of the Trust's
shares. Payment of said compensation shall be the sole responsibility of the
Investment Adviser and shall in no way be an obligation of the Fund or of the
Trust.
8. Limitation of Liability. The Sub-Adviser shall not be liable
for any error of judgment or mistake of law or fact or for any loss suffered by
the Trust or the Investment Adviser in
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connection with the performance of this Agreement, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Sub-Adviser in the performance of its duties or
from reckless disregard by it of its obligations and duties under this
Agreement.
9. Duration and Termination. This Agreement will become effective
as of the date first written above, provided that it shall have been approved by
vote of a majority of the outstanding voting securities of the Fund, in
accordance with the requirements under the 1940 Act, and, unless sooner
terminated as provided herein, shall continue in effect until September 30,
1998.
Thereafter, if not terminated, this Agreement shall continue in effect
for successive periods of twelve months each ending on September 30 of each
year, provided such continuance is specifically approved at least annually (a)
by the vote of a majority of those members of the Trust's Board of Trustees who
are not parties to this Agreement or interested persons of the Trust, the
Sub-Adviser, or the Investment Adviser, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by the vote of a majority of the
Trust's Board of Trustees or by the vote of a majority of the outstanding voting
securities of the Fund. Notwithstanding the foregoing, this Agreement may be
terminated at any time on sixty days' written notice, without the payment of any
penalty, by the Trust (by vote of the Trust's Board of Trustees or by vote of a
majority of the outstanding voting securities of the Fund), by the Investment
Adviser or by the Sub-Adviser. This Agreement will immediately terminate in the
event of its assignment. (As used in this Agreement, the terms "majority of the
outstanding voting securities", "interested persons" and "assignment" shall have
the same meaning of such terms in the 1940 Act.)
10. Amendment of this Agreement. No provision of this Agreement
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.
11. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and shall be governed by the
laws of the Commonwealth of Massachusetts.
The names "The One Group" and "Trustees of The One Group" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated as of May 23, 1985 to which reference is hereby made and a copy of
which is on file at the office of the Secretary of State of the Commonwealth of
Massachusetts and elsewhere as required by law, and to any and all amendments
thereto so filed or hereafter filed. The obligations of "The One Group" entered
into in the name or on behalf thereof by any of the Trustees, representatives or
agents are made not individually, but in such capacities, and are not binding
upon any of the Trustees, Shareholders or representatives of the Trust
personally, but bind only the assets of the Trust, and all persons dealing with
any series of Shares of the Trust must look solely to the assets of the Trust
belonging to such series for the enforcement of any claims against the Trust.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
BANC ONE INVESTMENT ADVISORS CORPORATION
By: Xxxx X. Xxxxxx
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Title: Senior Vice President & Chief
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Financial Officer
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INDEPENDENCE INTERNATIONAL ASSOCIATES, INC.
By: Xxxx Xxxxx
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Seal Title: President
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The One Group hereby acknowledges and
agrees to the provisions of paragraph 3(e)
of this Agreement.
THE ONE GROUP
By: Xxxx X. Xxxxxx
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Title: President
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