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Exhibit (d)(3)(iv)
SHORT-TERM BOND FUND
INTERMEDIATE BOND FUND
SUB-ADVISORY CONTRACT
NOVEMBER 25, 1996,
AS AMENDED AND RESTATED NOVEMBER 1, 2000
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Galliard Capital Management, Inc.
000 XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx, XX 00000-0000
Dear Sirs:
The Short-Term Bond Fund and the Intermediate Bond Fund (each a "Fund"
and collectively, the "Funds") are two of the investment portfolios of American
Independence Funds Trust (the "Trust"), an open-end management investment
company, which was organized as a business trust under the laws of the State of
Delaware. The Trust's shares of beneficial interest may be classified into
series in which each series represents the entire undivided interests of a
separate portfolio of assets. This Sub-Advisory Contract regards certain
services to be provided in connection with the management of the Funds, on whose
behalf INTRUST Financial Services, Inc. ("the Adviser") enters into this
Contract.
The Trustees of the Trust have selected the Adviser to provide overall
investment advice and management for the Fund and to provide certain other
services, under the terms and conditions provided in the Advisory Contract
between the Trust and the Adviser (the "Advisory Contract"). The Adviser and the
Trustees have selected Galliard Capital Management, Inc. (the "Sub-Adviser") to
provide the Adviser and the Funds with the advice and services set forth below
and the Sub-Adviser is willing to provide the Adviser and the Funds with the
advice and services, subject to the review of the Trustees and overall
supervision of the Adviser, under the terms and conditions hereinafter set
forth. Accordingly, the Adviser agrees with the Sub-Adviser as follows:
1. DEFINITIONS AND DELIVERY OF DOCUMENTS. All references herein to this
Contract shall be deemed to be references to this Contract as it may from time
to time be amended. The Trust engages in the business of investing and
reinvesting the assets of the Funds in the manner and in accordance with the
investment objectives and restrictions specified in the Trust's declaration of
Trust, dated January 26, 1996 (the "Declaration of Trust"), and the currently
effective Prospectus (the "Prospectus") relating to the Funds included in the
Trust's Registration Statement, as amended from time to time (the "Registration
Statement"), filed by the Trust under the Investment Company Act of 1940 (the
"1940 Act") and the Securities Act of 1933 (the "1933 Act"). Copies of the
documents referred to in the preceding sentence have been
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furnished to the Sub-Adviser. Any amendments to those documents shall be
furnished to the Sub-Adviser promptly.
2. REPRESENTATIONS. The Sub-Adviser is registered with the Securities
and Exchange Commission (the "SEC") as an investment adviser pursuant to Section
203 of the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and
agrees to maintain such registration during the term of this agreement.
3. SUB-ADVISORY SERVICES.
(i) The Sub-Adviser shall act as sub-adviser under the terms
of this Contract and will use its best efforts to provide to the Funds a
continuing and suitable investment program consistent with the investment
policies, objectives and restrictions of the Funds, as set forth in the Trust's
Declaration of Trust, the Registration Statement, the applicable law and
provisions of the Internal Revenue Code of 1986, as amended, relating to
regulated investment companies, subject to policy decisions adopted by the
Trust's Board of Trustees, and will take any such actions as it may in its
opinion deem necessary or desirable for or incidental to any such purposes.
(ii) The Sub-Adviser will also, at its own expense:
(a) furnish the Trust and the Adviser with advice and
recommendations, consistent with the investment policies,
objectives and restrictions of the Funds;
(b) subject to such consultation as the Adviser may
request for a written response, determine which Investments of
the Funds should be purchased, held or disposed of and what
portion of such Assets, if any, should be held in cash or cash
equivalents, and the rationale for those determinations;
(c) furnish the Adviser with a monthly commentary and
a quarterly report concerning market overview, performance
analysis and trading activity;
(d) subject to the supervision of the Adviser,
maintain and preserve certain records including this
Sub-Advisory Contract and any documentation relating to Fund
security transactions. The Sub-Adviser agrees that such Trust
records are the property of the Trust and that such Trust
records or copies thereof will be surrendered to the Trust
promptly upon request therefor;
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(e) give instructions in the form of trade tickets
representing purchases and sales of the Funds' portfolio
securities to the Adviser via facsimile transmission no later
than trade date plus one; and
(f) cooperate generally with the Trust and the
Adviser so far as the Sub-Adviser is able to provide
information necessary for the operation of the Funds,
including data processing, clerical and bookkeeping services
required in connection with maintaining the financial accounts
and records for the Funds and the Trust, providing information
necessary for the preparation of registration statements and
periodic reports to be filed with the SEC, including Forms
N-1A and N-SAR, periodic statements, shareholder
communications and proxy materials furnished to holders of
shares of the Funds, filings with state "blue sky" authorities
and with United States and foreign agencies responsible for
tax matters, and other reports and filings of like nature.
(iii) No provision of this Contract 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, and no amendment, transfer, assignment, sale,
hypothecation or pledge of this Contract shall be effective until approved by
(a) the Trustees of the Trust, including a majority of the Trustees who are not
interested persons of the Adviser, of the Sub-Adviser or of the Trust (other
than as Trustees), cast in person at a meeting called for the purpose of voting
on such approval, and (b) a majority of the outstanding voting securities of the
affected Fund; provided, however, that the approval required in subsection (a)
above, shall be evidenced by a resolution of the entire Board of Trustees and of
the Trustees who are not interested persons of the Adviser, of the Sub-Adviser
or of the Trust (other than as Trustees); and provided further that such
resolutions shall be sent to the Sub-Adviser by facsimile and confirmed in
writing by letter.
(iv) All transactions in Investments shall be subject to the
rules, regulations and customs of the exchange or market and/or clearing house
through which the transactions are executed and to all Applicable Law, and, if
there is any conflict between any such rules, customs, law and the provisions of
this Contract the former shall prevail.
(v) The Sub-Adviser may not, without specific instruction in
writing (and compliance with applicable policies and restrictions of the Fund
set forth in its Registration Statement), borrow on the Fund or Adviser's behalf
or commit the Fund or Adviser to a contract (other than a Fund trade ticket,
Swap contract or other investment contract on behalf of the Fund that comply
with applicable policies and restrictions of the Fund set forth in its
prospectus).
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(vi) The Sub-Adviser has the right under this Contract to act
for more than one client collectively (including the Adviser) in any one
transaction or series of transactions without prior reference to the Adviser.
4. THE SUB-ADVISER.
(i) The Sub-Adviser shall act as agent for the Adviser and
shall be entitled to instruct such brokers and other agents as it may decide.
The Sub-Adviser may (and any such broker or sub-agent may) execute transactions
on the Adviser's behalf without prior disclosure to the Adviser of the fact that
in doing so, it is or may be dealing with or in circumstances involving an
affiliate of the Sub-Adviser; provided, however, that (a) the Sub-Adviser will
not do business with nor pay commissions to any affiliate in any portfolio
transaction where an affiliate acts as principal; (b) in purchasing Investments
for the Funds, neither the Sub-Adviser nor any of its directors, officers or
employees will act as principal or agent or receive any commissions; and (c) the
Sub-Adviser shall use its best efforts to obtain execution and pricing within
the policy guidelines, if any, determined by the Trustees and set forth in the
Prospectus and Statement of Additional Information of the Funds. The Sub-Adviser
shall not be under any duty to account to the Adviser for any profits or other
benefits received by the Sub-Adviser or any affiliate as a result of such
transactions.
(ii) Should the Sub-Adviser deem it appropriate to match one
client's order with that of another client by acting as agent for each party,
prior written consent from both parties will be obtained before the transaction
is effected unless such transaction complies with the Fund's Rule 17a-7
Procedures with respect to both parties.
(iii) The Sub-Adviser may effect transactions with or through
the agency of another person with whom it has an arrangement under which that
person will from time to time provide to, or procure for, the Sub-Adviser
services or other benefits the nature of which are such that their provision
results, or is designed to result, in an improvement of the Sub-Adviser's
performance in providing services for its clients and for which the Sub-Adviser
makes no direct payment but instead undertakes to place business (including
business on behalf of the Adviser) with that person. All such transactions
effected for the Adviser will, however, secure best execution, disregarding any
benefit which might accrue to the Sub-Adviser from the arrangement.
(iv) The Sub-Adviser shall not knowingly recommend that the
Funds purchase, sell or retain securities of any issue in which the Sub-Adviser
or any of its affiliated persons has a financial interest, except in instances
in which the Sub-Adviser fully discloses in writing to the Adviser the nature of
its financial interest prior to purchase, sale or retention. It shall be the
duty of the Adviser to notify the Trustees of the Funds of these financial
interests.
(v) The Adviser authorizes the Sub-Adviser to disclose any
information which it may be required to disclose under this Contract, the
Applicable Law, the rules and regulations of the SEC or of any market on which
an Investment is acquired.
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(vi) Nothing herein contained shall prevent the Sub-Adviser or
any of its affiliated persons or associates from engaging in any other business
or from acting as investment adviser or Sub-Adviser for any other person or
entity, whether or not having investment policies similar to the Fund.
(vii) The Sub-Adviser will pay the cost of maintaining the
staff and personnel necessary for it to perform its obligations under this
Contract, the expenses of office rent, telephone and other facilities it is
obligated to provide in order to perform the services specified in Sections 3
and 4 and any other expenses incurred by it in connection with the performance
of its duties hereunder, including, but not limited to, attendance in person at
a minimum of one meeting each year with the Board of Trustees of the Trust and
the Adviser.
(viii) The Sub-Adviser will not be required to pay any
expenses which this Contract does not expressly state shall be payable by it. In
particular, and without limiting the generality of the foregoing but subject to
the provisions of Section 4(vii), the Sub-Adviser will not be required to pay;
(a) the compensation and expenses of Trustees of the
Trust, and of independent advisers, independent contractors,
consultants, managers, and other agents employed by the Trust
other than through the Sub-Adviser;
(b) legal, accounting and auditing fees and expenses
of the Fund;
(c) the fees or disbursements of the custodian, the
transfer agent and the dividend disbursing agent;
(d) stamp and other duties, taxes, impositions,
governmental fees, and fiscal charges of any nature
whatsoever, assessed against the Fund's assets and payable by
the Trust;
(e) the cost of preparing and mailing dividends,
distributions, reports, notices and proxy materials to
shareholders, except that the Sub-Adviser shall bear the costs
of providing the services referred to in Sections 3 and 4;
(f) brokers' commissions and underwriting fees; and
(g) the expense of periodic calculations of the net
asset value of the Fund's shares.
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5. FURTHER PROVISIONS.
(i) The Sub-Adviser enters into this Contract for itself. The
Adviser includes the Adviser's successors in title or personal representatives
as the case may be.
(ii) This Contract shall automatically terminate with respect
to a Fund in the event of its assignment or upon the termination of the Advisory
Contract with a Fund, and the Adviser shall immediately notify the Sub-Adviser
of such termination. No assignment of this Contract shall be made by the
Sub-Adviser without the consent of the Adviser.
(iii) If any provision of this Contract is or becomes invalid
or contravenes any applicable law, the remaining provisions shall remain in full
force and effect.
6. CLIENT MONEY AND CUSTODY.
The Sub-Adviser will not hold any client money on behalf of the
Adviser.
The Sub-Adviser shall not be the registered holder, or custodian, of
Investments or documents of title relating thereto.
7. INSTRUCTIONS AND COMMUNICATIONS. Instructions may be given by the
Adviser in writing (by letter or facsimile or telex with correct answer-back) or
by telephone unless it is required under an express provision of this Contract
for instructions to be given in writing. The Adviser shall give written
instructions to the Sub-Adviser at the Sub-Adviser's Registered Office. The
Sub-Adviser shall communicate with the Adviser in writing or by telephone except
when it is required to communicate in writing (by letter or facsimile or telex
with correct answer-back) either under this Contract or in accordance with
applicable law. The Sub-Adviser shall be required to communicate instructions in
the form of trade tickets by facsimile in accordance with Section 3(ii)(e)
hereof. The Sub-Adviser shall communicate with the Adviser at the Adviser's
address last notified to the Sub-Adviser. The Adviser shall be entitled to rely
on the instructions of any person who is listed on Appendix I and may assume the
genuineness of all signatures and the authenticity of all instructions and
communications unless the Adviser had reason to know such signatures,
instructions or communications were unauthorized. All trade tickets representing
purchases and sales of the Fund's portfolio securities shall be signed by at
least two such persons listed on Appendix I.
8. FEES AND EXPENSES. In consideration of the services to be rendered,
facilities furnished and expenses paid or assumed by the Sub-Adviser under this
Contract, the Adviser shall pay the Sub-Adviser a monthly fee at the annual rate
of up to 0.06% of the average net assets of the Fund for each Fund managed by
the Sub-Adviser.
If the fees payable to the Sub-Adviser pursuant to this paragraph 8
begin to accrue before the end of any month or if this Contract terminates
before the end of any month, the fees
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for the period from that date to the end of that month or from the beginning of
that month to the date of termination, as the case may be, shall be prorated
according to the proportion which the period bears to the full month in which
the effectiveness or termination occurs. For purposes of calculating the monthly
fees, the value of the net assets of the Fund shall be computed in the manner
specified in the Prospectus for the computation of net asset value.
Notwithstanding the foregoing, if, after consultation with the
Sub-Adviser, the Adviser determines to waive any part of the fee paid to it by a
Fund, the fee paid to the Sub-Adviser hereunder may be reduced proportionately.
9. LIMITATION OF LIABILITY OF SUB-ADVISER.
The Trust shall expect of the Sub-Adviser, and the Sub-Adviser will
give the Trust the benefit of, the Sub-Adviser's best judgment and efforts in
rendering its service to the Trust under this contract, and in consideration of
the Sub-Adviser's undertaking these services, the Sub-Adviser shall not be
liable hereunder for any mistake of judgment or in any event whatsoever, except
for lack of good faith, provided that nothing herein shall be deemed to protect,
or purport to protect, the Sub-Adviser against any liability to the Trust or to
the Trust's security holders 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 hereunder, or by reason of the
Sub-Adviser's reckless disregard of its obligations and duties hereunder.
10. FORCE MAJEURE. The Sub-Adviser shall not be in breach of this
Contract if there is any total or partial failure of performance of its duties
and obligations occasioned by any act of God, fire, act of government or state,
war, civil commotion, insurrection, embargo, inability to communicate with
market makers for whatever reason, failure of any computer dealing system,
prevention from or hindrance in obtaining any raw materials, energy or other
supplies, labor disputes of whatever nature or any other reason (whether or not
similar in kind to any of the above) beyond the Sub-Adviser's control, provided
the Sub-Adviser has made every reasonable effort to overcome such difficulties.
11. NO PARTNERSHIP OR JOINT VENTURE. The Trust, the Adviser and the
Sub-Adviser are not partners of or joint venturers with each other and nothing
herein shall be construed so as to make them such partners or joint ventures or
impose any liability as such on any of them.
12. TERMINATION.
(i) This Contract shall become effective upon the above date,
and shall thereafter continue in effect; provided that this Contract shall
continue in effect for a period of more than two years only as so long as the
continuance is specifically approved at least annually by (a) a majority of the
Trustees of the Trust who are not interested persons of the Adviser, the
Sub-Adviser or the Trust (other than as Trustees), cast in person at meeting
called for the purpose
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of voting on such approval, and (b) either (i) the Trustees of the Trust, or
(ii) a majority of the outstanding voting securities of the Fund. This Contract
may, on 60 days' written notice, be terminated at any time, without the payment
of any penalty, by the Trustees of the Trust, by vote of a majority of the
outstanding voting securities of the Trust, by the Adviser or by the
Sub-Adviser. Termination shall not affect any action taken by the Sub-Adviser
permitted under this Contract prior to the date of termination or any warranty
or indemnity given by the Adviser under this Contract or implied by law.
(ii) On termination by either party the Sub-Adviser shall be
entitled to receive from the Adviser all fees, costs, charges and expenses
accrued or incurred under this Contract up to the date of termination including
any additional expenses or losses necessarily incurred in settling outstanding
obligations or terminating this Contract, whether they occur before or after the
date of termination.
(iii) If the Adviser terminates this Contract, it shall be
subject to a proportion of the annual fee corresponding to the proportion of the
year that has expired when this Contract is terminated.
13. CAPTIONS. The captions in this Contract 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. This
Contract may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
14. GOVERNING LAW. This Contract shall be construed in accordance with
laws of the State of New York and the applicable provision for the Investment
Company Act of 1940, as amended (the "1940 Act") and the Advisers Act. As used
herein the Terms "affiliated person", "assignment", "interested person", and
"vote of majority of the outstanding voting securities" shall have the meaning
set forth in the 1940 Act.
15. PERSONAL LIABILITY. The Trust's Declaration of Trust is on file
with the Secretary of State of the State of Delaware. The obligations of the
Trust are not personally binding upon, nor shall resort be had to the private
property of, any of the Trustees, shareholders, officers, employee or agents of
the Trust, but only the Trust's property shall be bound. Yours very truly,
INTRUST FINANCIAL SERVICES, INC.
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By:
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Title:
GALLIARD CAPITAL MANAGEMENT, INC.
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The foregoing Contract is hereby agreed to as of the date hereof
By:
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Title: President
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SCHEDULE 1
DEFINITIONS
In this Contract the following expressions shall have the following
meaning unless the context otherwise requires:
"Applicable Law"
means applicable laws and regulations of the jurisdiction in
which the Adviser is domiciled and of the Securities and
Exchange Commission of the United States of America, and of
any governmental or self-regulatory organization of which the
Adviser is a member, each as from time to time amended;
"Assets"
means Investments of the Fund deposited by or on behalf of the
Adviser pursuant to which this Sub-Advisory Contract relates;
"Fund"
means the separate portfolio of Assets of the Trust on whose
behalf the Adviser has entered into this Sub-Advisory
Contract;
"Investment"
means any asset, right or interest in respect of property of
any kind held by the Fund;
"Registered Office"
means 000 XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxx, XX
00000-0000, Telephone: 000-000-0000. Facsimile: 000-000-0000.
"Series"
means the series of shares of beneficial interest representing
undivided interests in the Trust's investment portfolios,
including the Fund.
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