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AMENDED AND RESTATED SUB-ADVISORY CONTRACT
FMB Intermediate Government Income Fund
a portfolio of
FMB FUNDS, INC.
P.O. Box 8526
Boston, MA 02266-8526
April 1, 1996
First Michigan Bank Corporation
Xxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Dear Sirs:
This will confirm the agreement by and among FMB-Trust (the "Adviser"),
FMB Funds, Inc. (the "Company") on behalf of the FMB Intermediate Government
Income Fund (the "Fund"), and First Michigan Bank Corporation (the
"Sub-Adviser") as follows:
1. The Company is a registered open-end management investment company
currently consisting of four investment portfolios, but which may from time to
time consist of a greater or lesser number of investment portfolios (the
"Funds"). The Company engages in the business of investing and reinvesting the
assets of the Fund in the manner and in accordance with the investment objective
and restrictions specified in the Company's currently effective prospectus and
statement of additional information incorporated by reference therein relating
to the Fund and the Company (such prospectus and such statement of additional
information being collectively referred to as the "Prospectus") included in the
Company's Registration Statement, as amended from time to time (the
"Registration Statement"), filed by the Company under the Investment Company Act
of 1940 (the "Act") and the Securities Act of 1933. Copies of the documents
referred to in the preceding sentence have been furnished to the Sub-Adviser.
Any amendments to those documents shall be furnished to the Sub-Adviser
promptly.
2. The Company has engaged the Adviser to manage the investing and
reinvesting of the assets of the Fund and to provide the advisory services
specified elsewhere in the Advisory Contract, of even date herewith, subject to
the overall supervision of the Board of Directors of the Company. Pursuant to
an administration agreement between the Company and the Company's administrator
(the "Administrator") on behalf of the Fund, the Company has engaged the
Administrator to provide the administrative services specified therein.
3. (a) The Adviser hereby employs the Sub-Adviser to perform for the
Fund certain advisory services and the Sub-
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Adviser hereby accepts such employment. The Adviser shall retain the authority
to establish and modify from time to time the investment strategies and
approaches followed by the Sub-Adviser, subject, in all respects, to the
supervision and direction of the Company's Board of Directors and subject to
compliance with the investment objective, policies and restrictions set forth
in the Prospectus.
(b) Subject to the overall supervision and control of the Adviser and
the Company and subject to the right of the Adviser or the Company to re-assign
any of such responsibilities to the Adviser, the Sub-Adviser shall be
responsible for monitoring the approved list which is used for the selection of
broker/dealers to execute portfolio security transactions, coordinating the
portfolio managers' discussion regarding investment analysis, trends, selection
and strategies, maintaining approved lists for repurchase dealers and commercial
paper issuers, obtaining and analyzing performance and market pricing
information, and performing such other investment management and related
research, analysis and record-keeping services as shall be delegated to it from
time to time by the Adviser.
(c) The Sub-Adviser shall, at its expense, employ or associate with
itself such persons as the Sub-Adviser believes appropriate to assist it in
performing its obligations under this contract.
4. The Adviser shall be responsible for the Sub-Adviser's fees for its
services hereunder, and the Sub-Adviser agrees that it shall have no claim
against the Company or the Fund respecting compensation under this Agreement.
The Adviser and the Sub-Adviser shall separately agree on their rights with
respect to each other for fees and other compensation hereunder and for
contribution and reimbursement in the event they are obligated to pay or
reimburse the Company or the Fund hereunder. In no event shall such
compensation be unreasonable in amount in comparison to other charges by the
Sub-Adviser for like services to similar customers.
5. The Sub-Adviser shall give the Company the benefit of the
Sub-Adviser's best judgment and efforts in rendering services under this
contract. As consideration and an inducement to the Sub-Adviser's undertaking
to render these services, the Company and the Adviser agree that the Sub-Adviser
shall not be liable under this contract for any mistake in judgment or in any
other event whatsoever except for lack of good faith, provided that nothing in
this contract shall be deemed to protect or purport to protect the Sub-Adviser
against any liability to the Adviser, the Company or its shareholders to which
the Sub-Adviser would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of the Sub-Adviser's duties under
this contract or by reason of reckless disregard of its obligations and duties
hereunder.
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6. This contract shall become effective as of its execution date and
shall thereafter continue in effect only so long as the continuance is
specifically approved at least annually (a) by the vote of a majority of the
Fund's outstanding voting securities (as defined in the Act) or by the Company's
Board of Directors and (b) by the vote, cast in person at a meeting called for
the purpose, of a majority of the Company's directors who are not parties to
this contract or "interested persons" (as defined in the Act) of any such party.
This contract may be terminated at any time by the Company, without the payment
of any penalty, by a vote of a majority of the Fund's outstanding voting
securities (as defined in the Act) or by a vote of a majority of the Company's
entire Board of Directors on 60 days' written notice to the Sub- Adviser or by
the Sub-Adviser on 60 days' written notice to the Company. This contract shall
terminate automatically in the event of its assignment (as defined in the Act).
7. Except to the extent necessary to perform the Sub-Adviser's
obligations under this contract, nothing herein shall be deemed to limit or
restrict the right of the Sub-Adviser, or any affiliate of the Sub-Adviser, or
any employee of the Sub-Adviser, to engage in any other business or to devote
time and attention to the management or other aspects of any other business,
whether of a similar or dissimilar nature, or to render services of any kind to
any other corporation, firm, individual or association.
8. The Sub-Adviser and the Company each agree that the acronym "FMB,"
which comprises a component of the Company's name, is a property right of the
parent of the Adviser. The Company and the Sub-Adviser agree and consent that
the use of such word is subject to the provisions set forth in the Advisory
Contract between the Adviser and the Company.
9. This contract shall be governed by and construed in accordance with
the laws of the State of Michigan.
If the foregoing correctly sets forth the agreement between the Company
and the Sub-Adviser, please so indicate by signing and returning to the Company
the enclosed copy hereof.
Very truly yours,
FMB-TRUST
By: _____________________________
Name: _____________________________
Title: _____________________________
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ACCEPTED as of the date
set forth above:
FMB FUNDS, INC.
on behalf of
the FMB Intermediate Government Income Fund
By: __________________________
Name: __________________________
Title: __________________________
FIRST MICHIGAN BANK CORPORATION
By: __________________________
Name: __________________________
Title: __________________________
