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Exhibit (6)(d)
Sub-Investment Advisory Agreement
between
Banc One Investment Advisors Corporation
and
Banc One High Yield Partners, LLC
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SUB-INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of November 19, 1999 by and between BANC ONE
INVESTMENT ADVISORS CORPORATION, an Ohio corporation with its principal office
in Columbus, Ohio (hereinafter called the "Investment Adviser") and BANC ONE
HIGH YIELD PARTNERS, LLC, an investment adviser with its principal office in
Columbus, Ohio (hereinafter called the "Sub-Adviser").
WHEREAS, the Investment Adviser serves as the Investment Adviser to One
Group(R) Income Bond Fund (the "Fund") of One Group(R) Mutual Funds (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 desires to retain the Sub-Adviser to
provide investment sub-advisory services to the Fund with regard to corporate
fixed-income securities and instruments which are rated below investment grade
or unrated corporate fixed-income securities of similar quality (collectively,
"High Yield Assets") 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 set forth herein to it with
regard to investments by the Fund in High Yield Assets 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 Amended and Restated Declaration
of Trust, as filed with the Secretary of State of the
Commonwealth of Massachusetts on February 19, 1993, 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");
(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 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.
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3. MANAGEMENT. Subject always to the instructions and supervision of
the Investment Adviser and the Trust's Board of Trustees, the Sub-Adviser will
provide a continuous investment program for High Yield Assets with respect to
those assets of the Fund that are designated by the Investment Adviser for
investment in High Yield Assets from time to time (the "Portfolio"), including
investment research and management with respect to all securities and
investments constituting High Yield Assets and cash equivalents related thereto.
Subject to any restrictions, instructions, or guidelines provided by either the
Fund or the Investment Adviser, the Sub-Adviser will determine from time to time
what High Yield Assets will be purchased, retained or sold by the Trust with
respect to the Portfolio and will place all purchase and sale orders on behalf
of the Fund with respect to the Portfolio. 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
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, except to the extent permitted by the 1940
Act;
(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 in the 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. The foregoing
shall not apply to any information that is publicly
available when provided or thereafter becomes publicly
available other than through a breach of this Agreement, or
that is required or requested to be disclosed by the
Securities and Exchange Commission or any other regulatory
examiner of the Sub-Adviser, any auditor of the parties
hereto, by judicial or administrative process or otherwise
by applicable law or regulation. Nothing herein shall
restrict the Sub-Adviser's ability to publish information
regarding the performance of accounts under its management;
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.
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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;
provided, however, that the Sub-Adviser may retain copies of any or all such
records. The Sub-Adviser further agrees to preserve for the periods prescribed
by Rule 3la-2 under the 1940 Act all records which it maintains for the Fund
that are 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. 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 an annual
rate of sixty one-hundredths of one percent (.60%) of the Portfolio's average
daily net assets. The Sub-Advisor agrees to waive a portion of the sub-advisory
fee equal to the percentage of the investment advisory fee waived by the
Investment Adviser under the Investment Advisory Agreement between the Trust and
the Investment Adviser.
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 according 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 Portfolio's 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 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 August 31, 2000. Thereafter, if
not terminated, this Agreement shall continue in effect for successive periods
of twelve months each ending on August 31st 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 and upon termination of the Investment Advisory Agreement between the
Trust and the Investment Adviser. (As used in this Agreement, the terms
"majority of the
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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 `One Group(R) Mutual Funds' and `Trustees of One Group(R)
Mutual Funds' 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 May 23, 1985 to which reference is hereby made and a
copy of which is on file at the office of the Secretary 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 `One Group(R) Mutual
Funds' 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: /s/Xxxx X. Xxxxxx
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Title: Senior Managing Director
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BANC ONE HIGH YIELD PARTNERS, LLC
By: /s/ Xxxxxxx Xxxxx
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Title: Vice President-- Portfolio Manager
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One Group Mutual Funds hereby acknowledges
and agrees to the provisions of paragraph
3(e) of this Agreement.
ONE GROUP MUTUAL FUNDS
By: /s/ Xxxx X. Xxxxxx
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Title: President
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