ADVISORY AGREEMENT
between
REGIONS XXXXXX XXXXXX SELECT FUNDS
and
XXXXXX ASSET MANAGEMENT, INC.
ADVISORY AGREEMENT made this ___ day of February, 2005 (the "Agreement"),
by and between Regions Xxxxxx Xxxxxx Select Funds, a Massachusetts business
trust ("Regions Funds"), and Xxxxxx Asset Management, Inc., a corporation
organized under the laws of the State of Tennessee ("Adviser").
WHEREAS, Regions Funds 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 of shares of beneficial interest designated as
Regions Xxxxxx Xxxxxx Select LEADER Growth Equity Fund, Regions Xxxxxx Xxxxxx
Select LEADER Growth & Income Fund, Regions Xxxxxx Xxxxxx Select LEADER Balanced
Fund, Regions Xxxxxx Xxxxxx Select LEADER Tax-Exempt Fund, Regions Xxxxxx Xxxxxx
Select LEADER Intermediate Bond Fund, Regions Xxxxxx Xxxxxx Select LEADER
Tax-Exempt Money Market Fund and Regions Xxxxxx Xxxxxx Select LEADER Money
Market Fund (individually a "Fund" and collectively, the "Funds") and
WHEREAS, Regions Funds desires to avail itself of the services,
information, advice, assistance and facilities of an investment adviser on
behalf of the Funds, and to have that investment adviser provide or perform for
each Fund's 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. Regions Funds hereby employs the Adviser to
invest and reinvest the assets of each Fund in the manner set forth in Section 2
of this Agreement subject to the direction of the Board of Trustees (the
"Board") and the officers of Regions Funds, 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 Regions Funds in any way or otherwise be deemed an agent of Regions
Funds.
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 Fund, subject
to and in accordance with each Fund's investment objective, policies and
limitations as provided in its Prospectus and Statement of Additional
Information 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 Regions Funds, to purchase and sell securities and other
investments for each Fund.
B. CORPORATE MANAGEMENT SERVICES.
(i) The Adviser shall furnish for the use of Regions Funds, office
space and all necessary office facilities, equipment and personnel for servicing
the investments of Regions Funds.
(ii) The Adviser shall pay the salaries of all personnel of Regions
Funds, or the Adviser, performing services relating to research, statistical and
investment activities of each Fund.
C. PROVISION OF INFORMATION NECESSARY FOR PREPARATION OF REGISTRATION
STATEMENT, AMENDMENTS AND OTHER MATERIALS. The Adviser will make available and
provide such information as Regions Funds 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 Regions Funds 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 Regions Funds or its administrator, the Adviser shall
permit Regions Funds 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.
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F. OTHER OBLIGATIONS AND SERVICES. The Adviser shall make its officers
and employees available to the Board and officers of Regions Funds for
consultation and discussion regarding the management of each Fund and its
investment activities.
3. EXECUTION AND ALLOCATION OF FUND 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 Fund, and for the selection of the markets on or in which
the transactions will be executed.
B. In acting pursuant to Section 3.A, the Adviser will place orders
through such brokers or dealers in conformity with the policies with respect to
transactions for each Fund set forth in Regions Funds' registration statement.
C. It is understood that neither the Regions Funds nor the Adviser will
adopt a formula for allocation of the Funds' 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 Fund 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 Regions Funds and to its other clients.
E. It is understood that the Adviser may, in its discretion, use
brokers who provide the Funds with research, analysis, advice and similar
services to execute transactions on behalf of the Funds, 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
the Funds and its other clients and that the total commissions paid by a Fund
will be reasonable in relation to the benefits to a Fund 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 Fund's total brokerage and transaction activities
and the manner in which that business was allocated.
4. EXPENSES OF REGIONS FUNDS. During the term of this Agreement, each Fund
will bear all expenses, not specifically assumed by the Adviser, incurred in its
operations and the offering of its shares. Expenses borne by the Funds will
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include but not be limited to the following (or each Fund'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 Fund and any losses incurred in connection therewith;
fees of custodians, transfer agents, registrars or other agents; distribution
fees; 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, statements of additional information,
proxy statements, reports, notices and dividends to shareholders; cost of
stationery; costs of stockholders and other meetings of Regions Funds;
compensation and expenses of the independent trustees of Regions Funds; and
Regions Funds' pro rata portion of premiums of any fidelity bond and other
insurance covering Regions Funds and its officers and trustees.
5. COMPENSATION OF THE ADVISER. For the services and facilities to be
furnished and expenses assumed hereunder, the Adviser shall receive from each
Fund an advisory fee at the annual rate listed along with the Fund'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 Fund as determined at
the close of business on each day throughout the month. The assets of each Fund
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 Regions Funds lawfully determines the value of the
net assets of any Fund as of some other time on each business day, as of such
time with respect to that Fund. 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 Fund in that period from the date of
commencement to the last day of the month. If Regions Funds determines the value
of the net assets of any Fund 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 Regions Funds' Declaration of Trust, its By-Laws and the 1940 Act.
If, pursuant to such provisions, the determination of the net asset value of any
Fund is suspended for any particular business day, then the value of the net
assets of that Fund 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 Fund 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 Fund 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 trustee,
officer, or employee of Regions Funds, to engage in any other business or to
devote his time and attention in part to the management or other aspects of any
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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. Regions Funds 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, Regions Funds 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 Funds,
provided that the Adviser acts in good faith. Regions Funds 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 a
Fund may have an interest. The Adviser shall have no obligation to recommend for
any Fund a position in any investment which an Affiliated Account may acquire,
and Regions Funds shall have no first refusal, co-investment or other rights in
respect of any such investment, either for any Fund or otherwise.
C. Subject to and in accordance with the Amended and Restated
Declaration of Trust and By-Laws of Regions Funds as currently in effect and the
1940 Act and the rules thereunder, it is understood that Trustees, officers and
agents of Regions Funds and shareholders of Regions Funds 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 Regions Funds; and that the effect of any such interests
shall be governed by said Declaration of Trust, 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 Regions Funds or to any shareholder of Regions Funds or any Fund
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 Regions
Funds.
B. No provision of this Agreement shall be construed to protect any
Trustee or officer of Regions Funds, or any director or officer of 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 trustees of Regions Funds 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
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any Fund, by a vote of a majority of the outstanding voting securities of each
Fund.
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 Regions Funds in writing in advance of any
proposed change of "control" to enable Regions Funds 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 Regions Funds, which amendment is
subject to the approval of the Board and, where required by the 1940 Act, the
shareholders of an affected Fund 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
Regions Funds with respect to any Fund (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 Fund by the Adviser on sixty
(60) days' written notice to Regions Funds.
12. NAME. In the event this Agreement is terminated by either party or upon
written notice from the Adviser at any time, Regions Funds hereby agrees that it
will eliminate from its name, or the name of any of its series, any reference to
the name "Xxxxxx Xxxxxx." Regions Funds 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.
14. 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.
15. 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.
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16. 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.
17. MATTERS RELATING TO THE FUND AS A MASSACHUSETTS BUSINESS TRUST. It is
expressly agreed that the obligations of Regions Funds hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of Regions Funds personally, but shall bind only the trust property of
Regions Funds. The execution and delivery of this Agreement have been authorized
by the Board, and this Agreement has been signed and delivered by an authorized
officer of Regions Funds, acting as such, and neither such authorization by the
Board nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, but shall bind only the trust property of Regions Funds as provided
in the Fund's Declaration of Trust.
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
(SEAL) By:
----------------------------------------
Name:
Title:
XXXXXX ASSET MANAGEMENT, INC.
(SEAL) By:
----------------------------------------
Name:
Title:
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SCHEDULE A
REGIONS XXXXXX XXXXXX SELECT FUNDS
FEE SCHEDULE
Fund % of average
---- daily net assets
----------------
Regions Xxxxxx Xxxxxx Select LEADER
Growth Equity Fund 0.75%
Regions Xxxxxx Xxxxxx Select LEADER
Growth & Income Fund 0.75%
Regions Xxxxxx Xxxxxx Select LEADER
Balanced Fund 0.80%
Regions Xxxxxx Xxxxxx Select LEADER
Tax-Exempt Bond Fund 0.50%
Regions Xxxxxx Xxxxxx Select LEADER
Intermediate Bond Fund 0.50%
Regions Xxxxxx Xxxxxx Select LEADER
Tax-Exempt Money 0.40%
Market Fund
Regions Xxxxxx Xxxxxx Select LEADER
Money Market Fund 0.40%
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