Exhibit (d)(iv)
SUB-ADVISORY AGREEMENT
AGREEMENT dated January 8, 2003, between FIFTH THIRD ASSET MANAGEMENT
INC., an Ohio corporation (the "Adviser") and CHARTWELL INVESTMENT PARTNERS, a
limited partnership located in Pennsylvania, (the "Sub-Adviser"), and the Fifth
Third Funds.
WHEREAS, the Trust is a diversified, open-end management investment
company registered under the Investment Company Act of 1940, as amended
(the "1940 Act");
WHERAS, the Trust is authorized to issue shares of beneficial interest
in separate series with each such series representing an interest in a
separate portfolio of securities and other assets (each a "Fund");
WHEREAS, the Adviser is the investment adviser to Fifth Third Funds, a
business trust organized under the laws of the state of Massachusetts
(the "Trust");
WHEREAS, the Adviser and Sub-Adviser are each registered as an
investment adviser under the Investment Advisers Act of 1940;
WHEREAS, the Adviser wishes to retain the Sub-Adviser to assist the
Adviser in providing investment advisory services in connection with
the Fifth Third Small Cap Value Fund; and
WHEREAS, the Sub-Adviser is willing to provide such services to the
Adviser upon the terms and conditions and for the compensation set
forth below.
NOW, THEREFORE, in consideration of the premises and mutual covenants
therein contained, and intending to be legally bound hereby, it is agreed
between the parties hereto as follows:
1. APPOINTMENT. The Adviser hereby appoints the Sub-Adviser its
sub-adviser with respect to the Fund as provided for in the Investment Advisory
Agreement between the Adviser and the Trust dated as of April 30, 2001 (such
Agreement or the most recent successor advisory agreement between such parties
is herein called the "Advisory Agreement"). The Sub-Adviser accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Adviser shall provide to the Sub-Adviser
copies of the Trust's most recent prospectus and statement of additional
information (including all supplements thereto) which relate to any class of
shares representing interests in the Fund (each
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such prospectus and statement of additional information as presently in effect,
and as they shall from time to time be amended and supplemented, is herein
respectively called a "Prospectus" and a "Statement of Additional Information").
3. SUB-ADVISORY SERVICES TO THE FUND(S).
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(a) Subject to the supervision of the Adviser, the
Sub-Adviser will perform the following services: (i) provide investment research
and credit analysis concerning the Fund's investments; (ii) conduct a continual
program of investment of the Fund's assets; (iii) place orders for all purchases
and sales of the investments made for the Funds; (iv) maintain the books and
records required in connection with its duties hereunder; and (v) keep the
Adviser informed of developments materially affecting the Fund.
(b) The Sub-Adviser will use the same skill and care in
providing such services as it uses in providing services to other accounts for
which it has investment responsibilities; provided that, notwithstanding this
Paragraph 3(b), the liability of the Sub-Adviser for actions taken and
non-actions with respect to the performance of services under this Agreement
shall be subject to the limitations set forth in Paragraph 10(a) of this
Agreement.
(c) The Sub-Adviser will communicate to the Adviser and to
the Trust's custodian and fund accountants as instructed by the Adviser on each
day that a purchase or sale of a security is effected for the Fund (i) the name
of the issuer, (ii) the amount of the purchase or sale, (iii) the name of the
broker or dealer, if any, through which the purchase or sale has been affected,
(iv) the CUSIP number of the security, if any, and (v) such other information as
the Adviser may reasonably require for purposes of fulfilling its obligations to
the Trust under the Advisory Agreement.
(d) The Sub-Adviser will provide the services rendered by it
hereunder in accordance with the Fund's investment objectives, policies and
restrictions as stated in the Prospectus and Statement of Additional
Information.
(e) The Sub-Advisor will maintain records of the information
set forth in Paragraph 3(c) hereof with respect to the securities transactions
of the Fund and will furnish the Trust's Board of Trustees and the Adviser with
such periodic and special reports as the Board and Adviser may reasonably
request.
(f) The Sub-Adviser will promptly review all (1) reports of
current security holdings in the Fund, (2) summary reports of transactions and
pending maturities (including the principal, cost and accrued interest on each
portfolio security in maturity date order) and (3) current cash position reports
(including cash available from portfolio sales and maturities and sales of the
Fund's shares less cash needed for redemptions and settlement of portfolio
purchasers), all within a reasonable time after receipt thereof from the Trust
and will promptly report any errors or discrepancies in such reports of which it
is aware to the Trust or its designee and Adviser.
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4. BROKERAGE.
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(a) The Sub-Adviser may place orders pursuant to its
investment determinations for the Fund either directly with the issuer or with
any broker or dealer. In selecting brokers or dealers through which to place
orders, the Sub-Adviser will consider the factors it considers relevant,
including, but not limited to the experience and skill of the firm's securities
traders, as well as the firm's financial responsibility and administrative
efficiency. The Sub-Adviser will attempt to obtain the best price and the most
favorable execution of its orders. Consistent with these obligations, the
Sub-Adviser is authorized to select brokers on the basis of the research,
statistical and pricing services they provide to the Fund. A commission paid to
such brokers may be higher than that which another qualified broker would have
charged for effecting the same transaction, provided that the Sub-Adviser
determines in good faith that such transaction is reasonable in relation to the
benefits in the Fund over the long term. In no instance will portfolio
securities be purchased from or sold, on a principal basis, to the Trust's
principal underwriter, the Adviser or any affiliated person thereof (as the term
"affiliated person" is defined in the 1940 Act), except to the extent permitted
by SEC exemptive order or by applicable law.
5. COMPLIANCE WITH LAWS; CONFIDENTIALITY; CONFLICTS OF INTEREST.
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(a) The Sub-Adviser agrees that it will comply with all
applicable laws, rules and regulations of all federal and state regulatory
agencies having jurisdiction over the Sub-Adviser in performance of its duties
hereunder (herein called the "Rules").
(b) The Sub-Adviser will treat confidentially and as
proprietary information of the Trust and the Adviser all records and information
relative to the Trust and the Adviser and prior, present or potential
shareholders (other than information that has been made public by the Trust or
Adviser), 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 or Adviser as
appropriate, 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. The terms of
this section 5(b) shall survive the termination of this Agreement.
6. CONTROL BY TRUST'S BOARD OF TRUSTEES. Any recommendations
concerning the Fund's investment program proposed by the Sub-Adviser to the Fund
and the Adviser pursuant to this Agreement, as well as any other activities
undertaken by the Sub-Adviser on behalf of the Fund pursuant thereto shall at
all times be subject to any applicable directives of the Board of Trustees of
the Trust.
7. BOOKS AND RECORDS. The Sub-Adviser shall maintain and preserve such
records related to the Funds' portfolio transactions as required under the 1940
Act. The Adviser shall maintain and preserve all books and other records not
related to the Funds' portfolio transactions as required under the 1940 Act. The
Sub-Adviser agrees that all records that it maintains for the
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Funds are the property of the Trust and further agrees to surrender copies of
such records to the Trust promptly upon the Trust's request. The terms of this
section 7 shall survive the termination of this Agreement.
8. EXPENSES. During the term of this Agreement, the Sub-Adviser will
bear all expenses incurred by it in connection with the performance of its
services under this Agreement other than the cost of securities, brokerage
commissions, custodian fees, auditors' fees, taxes, interest, extraordinary
expense items, and other expenses related to the operation of the Trust or any
Fund.
9. AUDIT / COOPERATION.
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(a) Adviser and Trust shall have the right to audit and inspect the
records, policies, procedures and premises of Sub-Adviser as reasonably required
to ensure compliance with the terms of this Agreement and the Rules.
(b) Sub-Adviser shall cooperate fully with Adviser and Trust in
regards to any inquiry, examination or request for information from any federal
or state regulatory agencies having authority over the Trust, Adviser or Funds.
10. COMPENSATION. For the services provided and the expenses borne by
the Sub-Adviser pursuant to this Agreement, the Adviser will pay the Sub-Adviser
an annual investment advisory fee equal to 0.50 of 1% of the portion of the
average daily net assets of the Fifth Third Small Cap Value Fund managed by the
Sub-Adviser. Payment of this compensation shall be the sole responsibility of
the Adviser and shall in no way be an obligation of the Fund or of the Trust.
11. LIMITATION OF LIABILITY.
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(a) The Sub-Adviser shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Adviser, the Trust or the Fund
in connection with the matters to which this Agreement relates, except that
Sub-Adviser shall be liable to the Adviser for a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of Sub-Adviser in the
performance of its duties or from reckless disregard by it of its obligations or
duties under this Agreement. In no case shall the Sub-Adviser be liable for
actions taken or non-actions with respect to the performance of services under
this Agreement based upon specific information, instructions or requests given
or made to the Sub-Adviser by the Adviser.
(b) The Adviser shall be responsible at all times for supervising
the Sub-Adviser, and this Agreement does not in any way limit the duties and
responsibilities that the Adviser has agreed to under the Advisory Agreement.
12. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless
the Adviser and each of its officers, directors, employees and controlling
persons from and against any losses, expenses, (including reasonable attorneys'
fees and court costs), damages or liabilities to which the Adviser becomes
subject in so much as such losses, expenses, damages or
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liabilities (or actions in respect thereof) arise out of or are based upon the
willful misfeasance, bad faith, gross negligence or breach of this Agreement by
the Sub-Adviser. The terms of this section 12 shall survive the termination of
this Agreement.
13. DURATION AND TERMINATION. This Agreement shall become effective as
of the date hereof provided that it shall have been approved by vote of a
majority of the outstanding voting securities of the Fund and, unless sooner
terminated as provided herein, shall continue with respect to the Fund until
April 30, 2004. Thereafter, if not terminated, this Agreement shall continue in
effect for successive 12-month periods ending on April 30th of each year,
provided such continuance is specifically approved at least annually (a) by the
vote of a majority of those members of the Board of Trustees of the Trust who
are not parties to this Agreement or interested persons of the Trust or any such
party, cast in person at a meeting called for the purpose of voting on such
approval, and (b) by the Board of Trustees of the Trust or by vote of a majority
of the outstanding voting securities of the Fund; provided, however, that this
Agreement may be terminated with respect to the Fund (i) by the Trust at any
time upon 60 days' prior notice without the payment of any penalty by the Board
of Trustees of the Trust; (ii) by the vote of the majority of the outstanding
voting securities of the Fund upon 60 days' prior notice, (iii) by the Adviser
on 180 days written notice to the Sub-Adviser or (iv) by the Sub-Adviser on 180
days written notice to the Adviser. This Agreement will also immediately
terminate in the event of its assignment. (As used in this Agreement, the terms
"majority of the outstanding voting securities," "interested person" and
"assignment" shall have the same meaning as such terms have in the 1940 Act.)
14. TRADEMARKS. The Sub-Adviser hereby expressly authorizes the Trust
and the Adviser to use the Chartwell Investment Partners in its sales literature
and advertising pertaining to the Fund and/or the Trust. The Sub-Adviser agrees
to submit any proposed sales literature for the Trust or for itself or its
affiliates which mentions the Trust or Fund to the Trust's distributor and the
Adviser for review and approval or disapproval.
15. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, discharge or
termination is sought.
16. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any 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 effected thereby.
This Agreement shall be binding upon and shall inure to the benefit of the
parties herein and their respective successors and shall be governed by the laws
of the State of Ohio.
The names "Fifth Third Funds" and "Trustees of Fifth Third Funds"
refer respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under an Declaration of
Trust dated as of September 15, 1988, as amended, 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
"Fifth Third Funds" entered
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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.
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.
(SEAL) FIFTH THIRD ASSET MANAGEMENT
INC.
By: /s/ Xxxxx Xxxxx
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Title: President
(SEAL) CHARTWELL INVESTMENT PARTNERS
By: /s/ Xxxxxxx X. Xxxxxx
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Title: Managing Partner
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