Exhibit (d)(3)
AMENDED AND RESTATED
SUB-ADVISORY AGREEMENT
AGREEMENT dated as of May 12, 2001, and amended and restated as of October
1, 2003 between AmSouth Asset Management Inc., a corporation with its principal
place of business in Alabama (herein called the "Investment Advisor") and
OakBrook Investments, LLC, a corporation with its principal place of business in
Illinois (herein called the "Sub-Advisor").
WHEREAS, the Investment Advisor is the investment advisor to AmSouth
Mutual Funds, a Massachusetts business trust (herein called the "Trust"), an
open-end management investment company registered under the Investment Company
Act of 1940, as amended ("1940 Act");
WHEREAS, the AmSouth Investment Management Company, LLC (AIMCO), is a
separate, wholly-owned subsidiary of AmSouth Bank, which formerly served as
investment advisor to the Trust;
WHEREAS, the Investment Advisor is a separate, wholly-owned subsidiary of
AmSouth Bank;
WHEREAS, AmSouth Bank reorganized its investment advisory subsidiaries so
that management and investment advisory personnel that formerly provided
investment management services as personnel of AIMCO now do so as the personnel
of the Investment Advisor;
WHEREAS, the reorganization of the investment advisory subsidiaries of
AmSouth Bank does not effect an actual change in management or control of the
investment advisor within the meaning of Rule 2a-6 under the 1940 Act, and,
therefore, did not constitute an assignment of this Agreement for purposes of
Section 15(a)(4) of the 1940 Act;
WHEREAS, the Investment Advisor wishes to retain the Sub-Advisor to assist
the Investment Advisor in providing investment advisory services in connection
with such portfolios of the Trust as now or hereafter may be identified on
Schedule A hereto as such Schedule may be amended from time to time with the
consent of the parties hereto (each herein called a "Fund");
WHEREAS, the Board of Trustees of the Trust has duly approved this
Agreement upon consideration of the Trust's existing contractual arrangements
and applicable law; and
WHEREAS, the Sub-Advisor is willing to provide such services to the
Investment Advisor upon the terms and conditions and for the compensation set
forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, it is agreed between
the parties hereto as follows:
1. APPOINTMENT. The Investment Advisor hereby appoints the Sub-Advisor to
act as sub-advisor with respect to the Fund. The Sub-Advisor accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Investment Advisor shall provide to the
Sub-Advisor copies of the Trust's most recent prospectus and statement of
additional information (including supplement thereto) which relate to any class
of shares representing interests in the Fund (each 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 FUNDS.
(a) Subject to the supervision of the Investment Advisor, the
Sub-Advisor will supervise the day-to-day operations of the Fund and 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 Fund; (iv) maintain the books and records
required in connection with its duties hereunder; and (v) keep the Investment
Advisor informed of developments materially affecting the Fund.
(b) The Sub-Advisor 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; provided that, notwithstanding this Paragraph 3(b),
the liability of the Sub-Advisor 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 11(a) of this Agreement.
(c) The Sub-Advisor will communicate to the Investment Advisor and to
the Trust's custodian and Fund accountants as instructed by the Investment
Advisor 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
will be affected, (iv) the CUSIP number of the security, if any, and (v) such
other information as the Investment Advisor may reasonably require for purposes
of fulfilling its obligations to the Trust under its investment advisory
agreement.
(d) The Sub-Advisor 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
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and will furnish the Trust's Board of Trustees with such periodic and special
reports as the Board may reasonably request.
(f) The Sub-Advisor 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
purchases), all within a reasonable time after receipt thereof from the Trust
and will report any errors or discrepancies in such reports to the Trust or its
designee within three (3) business days after discovery of such discrepancies.
4. BROKERAGE. The Sub-Advisor may place orders pursuant to its investment
determinations for the Fund either directly with the issuer or with any broker
or dealer. In placing orders, the Sub-Advisor will consider the experience and
skill of the firm's securities traders, as well as the firm's financial
responsibility and administrative efficiency. The Sub-Advisor will attempt to
obtain the best price and the most favorable execution of its orders. Consistent
with these obligations, the Sub-Advisor may, subject to the approval of the
Board of Trustees of the Trust, 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-Advisor
determines in good faith that such transaction is reasonable in terms either of
the transaction or the overall responsibility of the Sub-Advisor to the Fund and
its other clients and that the total commissions paid by the Fund will be
reasonable in relation to the benefits in the Fund over the long term. In no
instance will portfolio securities be purchased from or sold to the Trust's
principal distributor, the Investment Advisor or any affiliate thereof (as the
term "affiliate" 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.
(a) The Sub-Advisor agrees that it will comply with all applicable
laws, rules and regulations of all federal and state regulatory agencies having
jurisdiction over the Sub-Advisor in performance of its duties hereunder (herein
called the "Rules").
(b) The Sub-Advisor will treat confidentially and as proprietary
information of the Trust all records and information relative to the Trust 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-Advisor 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.
(c) The Sub-Advisor will maintain a policy and practice of conducting
sub-advisory services hereunder independently of the banking operations of its
affiliates. In making investment recommendations for the Fund, the Sub-Advisor's
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personnel will not inquire or take into consideration whether the issuers of
securities proposed for purchase or sale for the Fund's account are bank
customers of the Sub-Advisor's affiliates unless so required by applicable law.
In dealing with their bank customers, affiliates of Sub-Advisor will not inquire
or take into consideration whether securities of those customers are held by the
Fund. AmSouth Bank, upon request, will supply the Sub-Advisor with a list of
"affiliated persons" for purposes of the 1940 Act.
6. CONTROL BY TRUST'S BOARD OF TRUSTEES. Any recommendations concerning
the Fund's investment program proposed by the Sub-Advisor to the Fund and the
Investment Advisor pursuant to this Agreement, as well as any other activities
undertaken by the Sub-Advisor 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. SERVICES NOT EXCLUSIVE. The Sub-Advisor's services hereunder are not
deemed to be exclusive, and the Sub-Advisor shall be free to render similar or
dissimilar services to others so long as its services under this Agreement are
not impaired thereby.
8. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3 of
the 1940 Act, and any other applicable Rule, the Sub-Advisor 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 such records upon the
Trust's request. The Sub-Advisor further agrees to preserve for the periods
prescribed by Rule 31a-2 and any other applicable Rule, the records required to
be maintained by the Sub-Advisor hereunder pursuant to Rule 31a-1 and any other
applicable Rule. The Sub-Advisor may retain a copy of Trust records solely for
the purpose of satisfying its record retention obligations under the 1940 Act
and the Investment Advisors Act of 1940, as amended.
9. EXPENSES. During the term of this Agreement, the Sub-Advisor will bear
all expenses incurred by it in connection with the performance of its services
under this Agreement other than the cost of securities (including brokerage
commissions, if any) purchased for the Fund. Notwithstanding the foregoing, the
Sub-Advisor shall not bear expenses related to the operation of the Trust or any
Fund including, but not limited to, taxes, interest, brokerage fees and
commissions and any extraordinary expense items.
10. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, the Investment Advisor will pay the Sub-Advisor and
the Sub-Advisor will accept as full compensation therefor a fee computed daily
and paid monthly in arrears on the first business day of each month equal to the
lesser of (i) the fee at the applicable annual rates set forth on Schedule A
hereto or (ii) such fee as may from time to time be agreed upon in writing by
the Investment Advisor and the Sub-Advisor. If the fee payable to the
Sub-Advisor pursuant to this paragraph begins to accrue after the beginning 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
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such effectiveness or termination occurs. For purposes of calculating fees, the
value of a Fund'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 Fund's net assets in connection with the determination of the net asset
value of the Fund's shares. Payment of said compensation shall be the sole
responsibility of the Investment Advisor and shall in no way be an obligation of
the Fund or of the Trust.
11. LIMITATION OF LIABILITY.
(a) The Sub-Advisor shall not be liable for any error of judgement or
mistake of law or for any loss suffered by the Investment Advisor, the Trust or
the Fund in connection with the matters to which Agreement relates, except that
Sub-Advisor shall be liable to the Investment Advisor for a loss resulting from
a breach of fiduciary duty by Sub-Advisor under the 1940 Act 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 Sub-Advisor 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-Advisor 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-Advisor by the Investment Advisor.
(b) The Investment Advisor shall be responsible at all times for
supervising the Sub-Advisor, and this Agreement does not in any way limit the
duties and responsibilities that the Investment Advisor has agreed to under its
investment advisory agreement.
12. DURATION AND TERMINATION. This Agreement shall 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 and, unless
sooner terminated as provided herein, shall continue with respect to the Fund
until December 31, 2004. Thereafter, if not terminated, this Agreement shall
continue in effect for successive 12-month periods ending on December 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 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 without the payment of any penalty by the Board of Trustees of the
Trust, (ii) by vote of a majority of the outstanding voting securities of the
Fund, (iii) by the Investment Advisor on 60 days written notice to the
Sub-Advisor or (iv) by the Sub-Advisor on 60 days written notice to the
Investment Advisor. 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.)
13. 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.
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14. 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 affected 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 Alabama
law.
The names "AmSouth Mutual Funds" and "Trustees of AmSouth Mutual Funds"
refer respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under an Amended and
Restated Declaration of Trust dated as of March 19, 2003 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 "AmSouth 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.
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) AMSOUTH ASSET MANAGEMENT INC.
/s/ Xxxxxx X. Xxxxxxx
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By: Xxxxxx X Xxxxxxx
Title: Chairman
(SEAL) OAKBROOK INVESTMENTS, LLC
/s/ Xxxxx X. Xxxxxxx
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By: Xxxxx X. Xxxxxxx
Title: Director
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Dated: October 1, 2003
SCHEDULE A
To Sub-Advisory Agreement
dated as of October 1,2003
between AmSouth Asset Management Inc. and OakBrook Investments, LLC
NAME OF FUND COMPENSATION
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AmSouth Select Equity Fund Annual rate of fifty-six one-hundredths of
one percent (.56%) of the AmSouth Select
Equity Fund's average daily net assets
AmSouth Enhanced Market Fund Annual rate of thirty-two one-hundredths
of one percent (.32%) of the AmSouth
Enhanced Market Fund's average daily net
assets
Consented to by:
Date: AMSOUTH ASSET MANAGEMENT INC.
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/s/ Xxxxxx X. Xxxxxxx
-----------------------------------
By: Xxxxxx X. Xxxxxxx
Title: Chairman
Date: OAKBROOK INVESTMENTS, LLC
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/s/ Xxxxx X. Xxxxxxx
-----------------------------------
By: Xxxxx X. Xxxxxxx
Title: Director
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