Exhibit (d)(5)(a)
INTERIM SUB-ADVISORY AGREEMENT
AGREEMENT dated as of the 18th day of June, 2002, between AmSouth
Investment Management Company, LLC, a corporation with its principal place of
business in Alabama (herein called the "Investment Adviser") and OakBrook
Investments, LLC, a limited liability corporation with its principal place of
business in Illinois (herein called the "Sub-Adviser").
WHEREAS, the Investment Adviser is the investment adviser to AmSouth
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"); and
WHEREAS, the Investment Adviser wishes to retain the Sub-Adviser to
assist the Investment Adviser 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 Sub-Adviser is willing to provide such services to the
Investment Adviser 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 Adviser hereby appoints the Sub-Adviser
its sub-adviser with respect to the Fund and the Sub-Adviser accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Investment Adviser shall provide to the
Sub-Adviser 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 Adviser, the
Sub-Adviser will provide a continual investment program for such portion, if
any, of the Fund's assets, that is allocated to the Sub-Adviser by the
Investment Adviser from time to time. With respect to such assets, the
Sub-Adviser will (i) provide investment research and credit analysis concerning
the Fund's investments; (ii) place orders for all purchases and sales of the
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investments made for the Fund; (iii) maintain the books and records required in
connection with its duties hereunder; and (iv) keep the Investment Adviser
informed of developments materially affecting the Fund.
(b) The Sub-Adviser 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-Adviser 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-Adviser will communicate to the Investment Adviser and
to the Trust's custodian and Fund accountants as instructed by the Investment
Adviser 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 Adviser may reasonably require for purposes
of fulfilling its obligations to the Trust under the Advisory Agreement.
(d) The Sub-Adviser 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, and such other guidelines as the Board of Trustees of the Trust
("Board") or the Investment Adviser may establish.
(e) The Sub-Adviser will maintain records of the information set
forth in Paragraph 3(c) hereof with respect to the securities transactions of
the Fund and will furnish the Trust's Board of Trustees with such periodic and
special reports as the Board may reasonably request.
(f) The Sub-Adviser 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.
(g) At such times as reasonably requested by the Board or the
Investment Adviser, the Sub-Adviser will provide economic and investment
analysis and reports, and make available to the Board and the Investment Adviser
such economic, statistical, or investment services normally available to similar
investment company clients of the Sub-Adviser.
(h) The Sub-Adviser will make its portfolio managers and other
appropriate personnel available to the Board and the Investment Adviser at
reasonable times to review the Fund's investment policies and to consult with
the Board and the Investment Adviser regarding the investment affairs of the
Fund, including economic and statistical and investment matters relevant to the
Sub-Adviser's duties hereunder, and the portfolio strategies employed.
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(i) The Sub-Adviser will provide the Investment Adviser with
quarterly compliance reports and certifications in the forms requested by the
Investment Adviser.
(j) The Sub-Adviser will provide the Trust with reasonable evidence
that, with respect to its activities on behalf of the Fund, the Sub-Adviser is
maintaining (i) adequate fidelity bond insurance; and (ii) an appropriate Code
of Ethics and related reporting procedures.
4. BROKERAGE. The Sub-Adviser 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-Adviser 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-Adviser will use
its best efforts to obtain the best price and the most favorable execution of
its orders. Consistent with these obligations, the Sub-Adviser may, subject to
the approval of the Board, 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-Adviser
determines in good faith that the amount of such commission is reasonable in
relation to the value of the brokerage or research services provided, viewed
either in terms of a particular transaction or the overall responsibility of the
Sub-Adviser to the Fund and its other clients. In no instance will portfolio
securities be purchased from or sold to the Trust's principal distributor, the
Investment Adviser or any affiliate thereof (as the term "affiliate" is defined
in the 1940 Act), except to the extent permitted by Securities and Exchange
Commission ("SEC") exemptive order or by applicable law.
5. COMPLIANCE WITH LAWS: CONFIDENTIALITY: CONFLICTS OF INTEREST.
(a) The Sub-Adviser agrees that it will comply with all applicable
laws, rules and regulations of all federal and state regulatory agencies having
jurisdiction over the Sub-Adviser in performance of its duties hereunder (herein
called the "Rules").
(b) The Sub-Adviser 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-Adviser 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-Adviser 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-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 bank customers of the Sub-Adviser's affiliates unless so required by
applicable law. In dealing with their bank customers, affiliates of Sub-Adviser
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will not inquire or take into consideration whether securities of those
customers are held by the Fund.
6. CONTROL BY TRUST'S BOARD OF TRUSTEES. Any recommendations concerning
the Fund's investment program proposed by the Sub-Adviser to the Fund and the
Investment Adviser pursuant to this Agreement, as well as any other activities
undertaken by the Sub-Adviser 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-Adviser's services hereunder are not
deemed to be exclusive, and the Sub-Adviser 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 Rules, and any other applicable Rule, 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 such records upon the
Trust's request. The Sub-Adviser 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-Adviser hereunder pursuant to Rule 31a-1 and any other
applicable Rule.
9. EXPENSES. During the term of this Agreement, the Sub-Adviser 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-Adviser 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 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 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 Adviser and the Sub-Adviser. If the fee payable to the
Sub-Adviser 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
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 Statement of Additional Information 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 Adviser and shall in no way be an
obligation of the Fund or of the Trust.
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11. LIMITATION OF LIABILITY.
(a) The Sub-Adviser shall not be liable for any error of judgement
or mistake of law or for any loss suffered by the Investment Adviser, the Trust
or the Fund in connection with the matters to which Agreement relates, except
that Sub-Adviser shall be liable to the Investment Adviser for a loss resulting
from a breach of fiduciary duty by Sub-Adviser under the 1940 Act and other
Rules 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-Adviser in the performance of its duties or from reckless disregard by it of
its obligations or duties under this Agreement. The Sub-Adviser shall indemnify
and hold harmless the Investment Adviser, the Trust, the Fund, their Trustees,
officers and shareholders, from any and all claims, losses, expenses,
obligations and liabilities (including reasonable attorneys fees) which arise or
result from the Sub-Adviser's willful misfeasance, bad faith or gross negligence
in the performance of its duties or from the Sub-Adviser's reckless disregard of
its obligations or duties under this Agreement. In no case shall the Sub-Adviser
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-Adviser by the Investment Adviser.
(b) The Investment Adviser shall be responsible at all times for
supervising the Sub-Adviser, and this Agreement does not in any way limit the
duties and responsibilities that the Investment Adviser has agreed to under the
Advisory Agreement.
12. DURATION AND TERMINATION. Unless sooner terminated as
provided herein, this Agreement shall continue until the sooner of (a) 150 days
from the date this Agreement is entered into, or (b) the date upon which Fund
shareholders approve the retention of the Sub-Adviser in accordance with Section
15(a) of the 1940 Act and the Investment Adviser executes a Sub-Advisory
Agreement with the Sub-Adviser; provided, however, that this Agreement may
continue for a period in excess of 150 days upon the written agreement of the
parties and consistent with SEC or SEC staff action or interpretation of
applicable law. This Agreement may be terminated: (i) by the Trust at any time
without the payment of penalty by the Board; (ii) by vote of a majority of the
outstanding voting securities of the Fund; (iii) by the Investment Adviser on 60
days written notice to the Sub-Adviser; or (iv) by the Sub-Adviser on 60 days
written notice to the Investment Adviser. Any notice of termination served on
the Sub-Adviser by the Trust or the Investment Adviser shall be without
prejudice to the obligation of the Sub-Adviser to complete transactions already
initiated or acted upon with respect to the Fund. This Agreement shall terminate
automatically 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.
14. NOTIFICATION OF INVESTMENT ADVISER. The Sub-Adviser will promptly
notify the Investment Adviser in writing of the occurrence of any of the
following events: (a) the Sub-Adviser shall fail to be registered as an
investment adviser under the Investment Advisers Act of 1940, as amended; (b)
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the Sub-Adviser shall have been served or otherwise have notice of any action
suit, proceeding, inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of the Fund or the Trust;
or (c) any other occurrence that reasonably could have a material adverse impact
on the ability of the Sub-Adviser to provide the services provided for in this
Agreement.
15. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding among the parties hereto, and supersedes all prior agreements and
understandings relating to the subject matter hereof.
16. PRIVACY POLICY. The Sub-Adviser acknowledges that nonpublic
customer information (as defined in Regulation S-P, including any amendments
thereto) of customers of the Fund received from the Investment Adviser is
subject to the limitations on redisclosure and reuse set forth in Section 248.11
of Regulation S-P, and agrees that such information: (i) shall not be disclosed
to any third party for any purpose without the written consent of the Investment
Adviser unless permitted by exceptions set forth in Sections 248.14 or 248.15 of
Regulation S-P; and (ii) shall be safeguarded pursuant to procedures adopted
under Section 248.30 of Regulation S-P if so required.
17. ANTI-MONEY LAUNDERING COMPLIANCE. The Sub-Adviser acknowledges
that, in compliance with the Bank Secrecy Act, as amended, and implementing
regulations ("BSA"), the Trust has adopted an Anti-Money Laundering Policy. The
Sub-Adviser agrees to comply with the Trust's Anti-Money Laundering Policy and
the BSA, as the same may apply to the Sub-Adviser, now or in the future. The
Sub-Adviser further agrees to provide to the Trust such reports, certifications
and contractual assurances as may be requested by the Trust or the Investment
Adviser.
18. 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 effected 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 Funds" and "Trustees of AmSouth 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 Agreement and Declaration of Trust dated as of December 3, 1999 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 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.
(SEAL) AMSOUTH INVESTMENT MANAGEMENT COMPANY, LLC
By:
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Title:
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(SEAL) OAKBROOK INVESTMENTS, LLC
By:
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Title:
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Dated:
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SCHEDULE A
To Interim Sub-Advisory Agreement
dated as of June 18, 2002
between AmSouth Investment Management Company, LLC
and OakBrook Investments, LLC
NAME OF FUND ANNUAL FEE AS A PERCENTAGE OF
------------ ------------------------------
AVERAGE DAILY NET ASSETS
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AmSouth Mid Cap Fund .30% on the first $50 million of
average aggregate daily net assets
and .20% on assets in excess of $50
million
Consented to by:
Date AMSOUTH INVESTMENT MANAGEMENT
--------------- COMPANY, LLC
By:
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Date: OAKBROOK INVESTMENTS, LLC
---------------
By:
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