Exhibit (d)(ii)
FIFTH THIRD FUNDS
LARGE CAP OPPORTUNITY FUND
INVESTMENT ADVISORY CONTRACT
DATED AUGUST 1, 2002
THIS CONTRACT is made between Heartland Capital Management, Inc.
("Heartland"), an Indiana corporation having its principal place of business in
Indianapolis, Indiana and which is a wholly owned subsidiary of Fifth Third
Bancorp, an Ohio corporation, and Fifth Third Funds, a Massachusetts business
trust having its principal place of business in Columbus, Ohio (the "Trust").
WHEREAS, the Trust is an open-end management investment company as that
term is defined in the Investment Company Act of 1940 and is registered as such
with the Securities and Exchange Commission; and
WHEREAS, Heartland is engaged in the business of rendering investment
advisory and management services.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
i. The Trust hereby appoints Heartland as Investment Adviser for each of the
portfolios ("Funds") of the Trust on whose behalf the Trust executes an exhibit
to this Contract, and Heartland, by its execution of each such exhibit, accepts
the appointments. Subject to the direction of the Trustees of the Trust,
Heartland shall provide investment research and supervision of the investments
of each of the Funds and conduct a continuous program of investment evaluation
and of appropriate sale or other disposition and reinvestment of each Fund's
assets.
ii. Heartland, in its supervision of the investments of each of the Funds will
be guided by each of the Fund's fundamental investment policies and the
provisions and restrictions contained in the Declaration of Trust and By-Laws of
the Trust and as set forth in the Registration Statement and exhibits as may be
on file with the Securities and Exchange Commission.
iii. The Trust shall pay or cause to be paid, on behalf of each Fund, all of the
Fund's expenses and the Fund's allocable share of Trust expenses, including
without limitation, the expenses of organizing the Trust and continuing its
existence; fees and expenses of officers and Trustees of the Trust; fees for
investment advisory services and administrative services; fees and expenses of
preparing and printing amendments to its Registration Statement under the
Securities Act of 1933 and the Investment Company Act of 1940; expenses of
registering and qualifying the Trust, the Funds and shares of the Funds
("Shares") under Federal and state laws and regulations; expenses of preparing,
printing and distributing prospectuses (and any amendments thereto) and sales
literature; expenses of registering, licensing, or other authorization of the
Trust as a broker-dealer and of its officers as agents and salesmen under
federal and state laws and
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regulations; interest expense, taxes, fees and commissions of every kind;
expenses of issue (including cost of Share certificates), purchase, repurchase
and redemption of Shares, including expenses attributable to a program of
periodic issue; charges and expenses of custodians, transfer agents, dividend
disbursing agents, shareholder servicing agents and registrars; printing and
mailing costs, auditing, accounting and legal expenses; reports to shareholders
and governmental officers and commissions; expenses of meetings of Trustees and
shareholders and proxy solicitations therefor; insurance expenses; association
membership dues; and such nonrecurring items as may arise, including all losses
and liabilities incurred in administering the Trust and the Funds. The Trust
will also pay each Fund's allocable share of such extraordinary expenses as may
arise, including expenses incurred in connection with litigation, proceedings,
and claims and the legal obligations of the Trust to indemnify its officers and
Trustees and agents with respect thereto.
iv. The Trust, on behalf of each of the Funds shall pay to Heartland, for all
services rendered to such Funds by Heartland hereunder, the fees set forth in
the exhibits attached hereto.
v. Heartland may from time to time and for such periods as it deems appropriate
reduce its compensation (and, if appropriate, assume expenses of one or more of
the Funds); (i) to the extent that any Fund's expenses exceed such lower expense
limitation; (ii) for any other reason, as Heartland may, by notice to the Fund,
voluntarily declare to be effective.
vi. This Contract shall begin for each Fund on the date that the Trust executes
an exhibit to this Contract relating to such Fund. This Contract shall remain in
effect for each Fund until the first meeting of Shareholders held after the
execution date of an exhibit relating to the respective Fund, and if approved at
such meeting by the shareholders of a particular Fund, shall continue in effect
for such Fund for two years from the date of its execution and from year to year
thereafter, subject to the provisions for termination and all of the other terms
and conditions hereof if: (a) such continuation shall be specifically approved
at least annually by the vote of a majority of the Trustees of the Trust,
including a majority of the Trustees who are not parties to this Contract or
interested persons of any such party (other than as Trustees of the Trust) cast
in person at a meeting called for that purpose; and (b) Heartland shall not have
notified the Trust in writing at least sixty (60) days prior to the anniversary
date of this Contract in any year thereafter that it does not desire such
continuation with respect to that Fund.
vii. Notwithstanding any provision in this Contract, it may be terminated at any
time with respect to any Fund, without the payment of any penalty, by the
Trustees of the Trust or by a vote of the shareholders of that Fund on sixty
(60) days' written notice to Heartland.
viii. This Contract may not be assigned by Heartland and shall automatically
terminate in the event of any assignment. Heartland may employ or contract with
such other person, persons, corporation or corporations at its own cost and
expense as it shall determine in order to assist it in carrying out this
Contract, provided that no delegation of advisory responsibilities shall occur
which would require approval under the Investment Company Act of 1940.
ix. In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties under this Contract on the part of
Heartland, Heartland shall not be liable to
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the Trust or to any of the Funds or to any shareholder for any act or omission
in the course of or connected in any way with rendering services or for any
losses that may be sustained in the purchase, holding or sale of any security.
x. Subject to the conditions set forth below, the Trust agrees to indemnify and
hold harmless Heartland and each person, if any, who controls Heartland within
the meaning of Section 15 of the 1933 Act and Section 20 of the Securities
Exchange Act of 1934, as amended, against any and all loss, liability, claim,
damage and expense whatsoever, (including but not limited to any and all expense
whatsoever reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever) arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the Prospectus (as from time to
time amended and supplemented) or the omission or alleged omission there from of
a material fact required to be stated therein or necessary to make statements
therein not misleading, unless such statement or omission was made in reliance
upon and conformity with written information furnished to the Trust with respect
to Heartland by or on behalf of Heartland expressly for use in the Registration
Statement or Prospectus, or any amendment or supplement thereof.
If any action is brought against Heartland or any controlling person
thereof in respect of which indemnity may be sought against the Trust pursuant
to the foregoing paragraph, Heartland shall promptly notify the Trust in writing
of the institution of such action and the Trust shall assume the defense of such
action, including the employment of counsel selected by the Trust and payment of
expenses. Heartland or any such controlling person thereof shall have the right
to employ separate counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of Heartland or such controlling person unless
the employment of such counsel shall have been authorized in writing by the
Trust in connection with the defense of such action or the Trust shall not have
employed counsel to have charge of the defense of such action, in any of which
events such fees and expenses shall be borne by the Trust. Anything in this
paragraph to the contrary notwithstanding, the Trust shall not be liable for any
settlement of any such claim or action effected without its written consent. The
Trust agrees promptly to notify Heartland of the commencement of any litigation
or proceeding against the Trust or any of its officers or Trustees or
controlling persons in connection with the issue and sale of shares or in
connection with such Registration Statement or Prospectus.
(1) Heartland agrees to indemnify and hold harmless the Trust, each of
its Trustees, each of its officers who have signed the Registration
Statement and each other person, if any, who controls the Trust within
the meaning of Section 15 of the 1933 Act, to the same extent as the
foregoing indemnity from the Trust to Heartland but only with respect
to statements or omissions, if any, made in the Registration Statement
or Prospectus or any amendment or supplement thereof in reliance upon,
and in conformity with, information furnished to the Trust with respect
to Heartland by or on behalf of Heartland expressly for use in the
Registration Statement or Prospectus or any amendment or supplement
thereof. In case any action shall be brought against the Trust or any
other person so indemnified based on the Registration Statement or
Prospectus, or any amendment or supplement thereof, and in respect of
which indemnity may be sought against Heartland, Heartland shall have
the rights and duties given to the Trust, and the Trust and each other
person so
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indemnified shall have the rights and duties given to Heartland by the
provisions of subsection (a) above.
(2) Nothing herein contained shall be deemed to protect any person
against liability to the Trust or its shareholders to which such person
would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of the duties of such person or
by reason of the reckless disregard by such person of the obligations
and duties of such person under this Contract.
xi. This Contract may be amended at any time by agreement of the parties
provided that the amendment shall be approved both by the vote of a majority of
the Trustees of the Trust, including a majority of Trustees who are not parties
to this Contract or interested persons of any such party to this Contract (other
than as Trustees of the Trust), cast in person at a meeting called for that
purpose, and on behalf of a Fund by a majority of the outstanding voting
securities of such Fund.
xii. Heartland acknowledges that all sales literature for investment companies
(Such as the Trust) are subject to strict regulatory oversight. Heartland agrees
to submit any proposed sales literature for the Trust (or any Fund) or for
itself or its affiliates which mentions the Trust (or any Fund) to the Trust's
distributor for review and filing with the appropriate regulatory authorities
prior to the public release of any such sales literature. The Trust agrees to
cause its distributors to promptly review all such sales literature to ensure
compliance with relevant requirements, to promptly advise Heartland of any
deficiencies contained in such sales literature, to promptly file complying
sales literature with the relevant authorities, and to cause such sales
literature to be distributed to prospective investors in the Trust.
xiii. Heartland is hereby expressly put on notice of the limitation of liability
as set forth in Article XI of the Declaration of Trust and agrees that the
obligations pursuant to this Contract of a particular Fund and of the Trust with
respect to that particular Fund be limited solely to the assets of that
particular Fund, and Heartland shall not seek satisfaction of any such
obligation form the assets of any other Fund, the shareholders of any Fund, the
Trustees, officers, employees or agents of the Trust, or any of them.
xiv. This Contract shall be construed in accordance with and governed by the
laws of the State of Ohio.
xv. This Contract will become binding on the parties hereto upon their execution
of the attached exhibits to this Contract.
HEARTLAND CAPITAL MANAGEMENT, INC.
/s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx
Executive Vice President
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FIFTH THIRD FUNDS
/s/ Xxxxxx X. Xxxxxx
----------------------------------
Xxxxxx X. Xxxxxx
Vice President
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Exhibit A
to the
Investment Advisory Contract
between
Heartland Capital Management, Inc.
and
Fifth Third Funds
FIFTH THIRD FUNDS
LARGE CAP OPPORTUNITY FUND
For all services rendered by Heartland hereunder, the Trust shall pay
to Heartland and Heartland agrees to accept as full compensation for all
services rendered hereunder, an annual investment advisory fee equal to 0.80 of
1% of the average daily net assets of the Fund.
The fee shall be accrued daily at the rate of 1/365th of 0.80 of 1%
applied to the daily net assets of the Fund.
The advisory fee so accrued shall be paid to Heartland daily.
Witness the due execution hereof this first day of August, 2002.
HEARTLAND CAPITAL MANAGEMENT, INC.
/s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx
Executive Vice President
FIFTH THIRD FUNDS
/s/ Xxxxxx X. Xxxxxx
----------------------------------
Xxxxxx X. Xxxxxx
Vice President
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