Exhibit 23(d)(2)
SUB-ADVISORY AGREEMENT
THIS SUB-ADVISORY AGREEMENT is made as of the 13th day of May, 2002
between First Financial Capital Advisors LLC ("Investment Advisor"), an Ohio
limited liability company, and Munder Capital Management ("Sub-Advisor"), a
general partnership organized and existing under the laws of the State of
Delaware.
WHEREAS, the Investment Advisor, a registered investment advisor under the
Investment Advisers Act of 1940, as amended ("Advisors Act"), has entered into
an Investment Advisory Agreement dated as of the 13th day of May, 2002
("Advisory Agreement") with Legacy Funds Group (the "Trust"), a Massachusetts
business trust which is engaged in business as an open-end management investment
company registered under the Investment Company Act of 1940, as amended ("1940
Act"); and
WHEREAS, the Trust is authorized to issue shares of The Federal Money Fund
(the "Fund"), a separate series of the Trust;
WHEREAS, the Sub-Advisor is engaged principally in the business of
rendering investment advisory services and is registered as an investment
advisor under the Advisors Act; and
WHEREAS, the Investment Advisor desires and is authorized by the Trust to
retain the Sub-Advisor to furnish certain investment advisory services to the
Investment Advisor with respect to the Fund and the Sub-Advisor is willing to
furnish such services.
NOW, THEREFORE, in consideration of the foregoing and the following
premises and conditions, the parties agree as follows:
1. APPOINTMENT.
Investment Advisor hereby appoints the Sub-Advisor as its investment
sub-advisor with respect to the Fund for the period and on the terms set forth
in this Agreement. The Sub-Advisor accepts such appointment and agrees to render
the services described in this Agreement.
2. DUTIES OF THE SUB-ADVISOR.
A. Investment Sub-Advisory Services. Subject to the supervision of
the Trust's Board of Trustees ("Board") and the Investment Advisor, the
Sub-Advisor shall act as the investment sub-advisor and shall supervise and
direct the investments of the Fund in accordance with the Fund's investment
objective, policies, and restrictions as provided in the Trust's Prospectus and
Statement of Additional Information, as currently in effect and as amended or
supplemented from time to time (collectively, the "Prospectus"), and such other
limitations as directed by the appropriate officers of the Investment Advisor or
the Trust by notice in writing to the Sub-Advisor. The Sub-Advisor shall obtain
and evaluate such information relating to the economy, industries, businesses,
securities markets, and securities as it may deem necessary or
useful in the discharge of its obligations hereunder and shall formulate and
implement a continuing program for the management of the assets and resources of
the Fund in a manner consistent with the Fund's investment objective, policies,
and restrictions. In furtherance of this duty, the Sub-Advisor, on behalf of the
Fund, is authorized, in its discretion and without prior consultation with the
Fund or the Investment Advisor, to:
(1) buy, sell, exchange, convert, lend, and otherwise trade in any
securities or other assets; and
(2) place orders and negotiate the commissions (if any) for the
execution of transactions in securities or other assets with or
through such brokers, dealers, underwriters or issuers as the
Sub-Advisor may select.
B. Additional Responsibilities. In addition, the Sub-Advisor shall:
(1) furnish continuous investment information, advice and
recommendations to the Trust as to the acquisition, holding or
disposition of any or all of the securities or other assets which the
Fund may own or contemplate acquiring from time to time;
(2) cause its representatives to attend meetings of the Trust and
furnish oral or written reports, as the Trust may reasonably require,
in order to keep the Trust and its officers and Board fully informed
as to the condition of the investment securities of the Fund, the
investment recommendations of the Sub-Advisor, and the investment
considerations which have given rise to those recommendations;
(3) furnish such statistical and analytical information and
reports as may reasonably be required by the Trust from time to
time;
(4) act in conformity with the Trust's Declaration of Trust and
By-Laws, as each may be amended or supplemented; and
(5) comply with the requirements of the 1940 Act, the Advisors Act,
the rules thereunder, and all other applicable federal and state laws
and regulations.
3. COMPENSATION.
For the services provided and the expenses assumed by the Sub-Advisor
pursuant to this Agreement, the Sub-Advisor shall receive an annual investment
management fee as specified in Schedule A of this Agreement. The investment
management fee shall be computed daily and paid monthly. If this Agreement
becomes effective or terminates before the end of any month, the investment
management fee for the period from the effective 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 pro-rated according to the pro-ration which such period bears to
the full month in which such effectiveness or termination occurs.
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4. DUTIES OF THE INVESTMENT ADVISOR.
A. The Investment Advisor shall continue to have responsibility for
all services to be provided to the Fund pursuant to the Advisory Agreement and
shall oversee and review the Sub-Advisor's performance of its duties under this
Agreement.
B. The Investment Advisor has furnished or will furnish the
Sub-Advisor with copies of each of the following documents and will furnish to
the Sub-Advisor at its principal office all future amendments and supplements to
such documents, if any, as soon as practicable after such documents become
available:
(1) The Trust's Declaration of Trust, as filed with the State of
Massachusetts, as in effect on the date hereof and as amended from
time to time;
(2) The By-Laws of the Trust as in effect on the date hereof and
as amended from time to time;
(3) Certified resolutions of the Board of Trustees of the Trust and
the initial shareholder of the Fund authorizing the appointment of
the Investment Advisor and the Sub-Advisor and approving the form of
the Advisory Agreement and this Agreement;
(4) The Trust's Registration Statement under the 1940 Act and the
Securities Act of 1933, as amended, on Form N-1A, as filed with the
Securities and Exchange Commission ("SEC") relating to the Fund and
its shares and all amendments to such Registration Statement
("Registration Statement");
(5) The Notification of Registration of the Trust under the 1940 Act
on Form N-8A as filed with the SEC and any amendments to such
Notification of Registration;
(6) The Trust's Prospectus (as defined above);
(7) Copies of any publicly available financial statement or report
prepared for the Trust by certified or independent public
accountants, and copies of any financial statements or reports made
by the Fund to its shareholders or to any governmental body or
securities exchange;
(8) A copy of each of the Fund's Code of Ethics, liquidity
procedures, cross-trade procedures, repurchase agreement procedures,
directed brokerage procedures, 10f-3, 17a-7 and 17e-1 procedures,
any SEC exemptive orders applicable to the Fund, the Investment
Advisor's Code of Ethics and compliance checklist, and other
procedures of the Fund or the Investment Advisor that may affect the
duties of Sub-Advisor with respect to the Fund; and
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(9) A list of affiliated brokers of the Investment Advisor, if any,
with explanations of each affiliation and a list of all securities
issued by the Investment Advisor or any of its affiliates, or, if
either list is not applicable, a written statement to that effect.
The Investment Advisor shall furnish the Sub-Advisor with any further
documents, materials or information that the Sub-Advisor may reasonably request
to enable it to perform its duties pursuant to this Agreement.
C. During the term of this Agreement, the Investment Advisor shall
furnish to the Sub-Advisor at its principal office all Prospectuses, proxy
statements, reports to shareholders, sales literature, or other material
prepared for distribution to shareholders of the Fund or the public, which refer
to the Sub-Advisor or investment companies or other advisory accounts advised or
sponsored by the Sub-Advisor in any way, prior to the use thereof, and the
Investment Advisor shall not use any such materials if the Sub-Advisor
reasonably objects in writing fifteen business days (or such other time as may
be mutually agreed) after receipt thereof.
5. BROKERAGE.
A. The Sub-Advisor agrees that, in placing orders with
broker-dealers for the purchase or sale of portfolio securities, it shall
attempt to obtain quality execution at favorable security prices (best price and
execution); provided that, on behalf of the Fund, the Sub-Advisor may, in its
discretion, agree to pay a broker-dealer that furnishes brokerage or research
services as such services are defined under Section 28(e) of the Securities
Exchange Act of 1934, as amended ("1934 Act"), a higher commission than that
which might have been charged by another broker-dealer for effecting the same
transactions, if the Sub-Advisor determines in good faith that such commission
is reasonable in relation to the brokerage and research services provided by the
broker-dealer, viewed in terms of either that particular transaction or the
overall responsibilities of the Sub-Advisor with respect to the accounts as to
which it exercises investment discretion (as such term is defined under Section
3(a)(35) of the 1934 Act). In no instance will portfolio securities be purchased
from or sold to the Sub-Advisor, or any affiliated person thereof, except in
accordance with the federal securities laws and the rule and regulations
thereunder. The Investment Advisor represents that the Board of Trustees of the
Trust has been made aware of the Sub-Advisor's policies with respect to
selection of brokers and dealers.
B. On occasions when the Sub-Advisor deems the purchase or sale of a
security to be in the best interest of the Fund, as well as other clients of the
Sub-Advisor, the Sub-Advisor, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be purchased or sold to attempt to obtain a more favorable price or lower
brokerage commissions and efficient execution. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Sub-Advisor in the manner the Sub-Advisor
considers to be the most equitable and consistent with its fiduciary obligations
to the Trust and to its other clients.
C. Neither the Trust nor the Investment Advisor shall have the right
to direct the placement of any securities transactions in the Fund. The
Sub-Advisor is also authorized to
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consider sales of Fund shares (which shall be deemed to include also shares of
other registered investment companies with the same investment advisor) by a
broker-dealer or the recommendation of a broker-dealer to its customers that
they purchase Fund shares as a factor in selecting broker-dealers to execute the
Fund's securities transactions, provided that in placing fund business with such
broker-dealers, the Sub-Advisor shall seek the best execution of each
transaction and all such brokerage placement shall be consistent with the
Conduct Rules of the National Association of Securities Dealers, Inc.
6. OWNERSHIP OF RECORDS.
The Sub-Advisor shall maintain all books and records required to be
maintained by the Sub-Advisor pursuant to the 1940 Act and the rules and
regulations promulgated thereunder with respect to transactions on behalf of the
Trust. In compliance with the requirements of Rule 31a-3 under the 1940 Act, the
Sub-Advisor hereby agrees: (i) that all records that it maintains for the Trust
are the property of the Trust, (ii) to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any records that it maintains for the Trust and
that are required to be maintained by Rule 31a-1 under the 1940 Act and (iii)
agrees to surrender promptly to the Trust any records that it maintains for the
Trust upon request by the Trust; provided, however, the Sub-Advisor may retain
copies of such records.
7. REPORTS.
The Sub-Advisor shall furnish to the Board or the Investment Advisor, or
both, as appropriate, such information, reports, evaluations, analyses and
opinions as the Sub-Advisor and the Board or the Investment Advisor, as
appropriate, may mutually agree upon from time to time.
8. SERVICES TO OTHERS CLIENTS.
Nothing contained in this Agreement shall limit or restrict (i) the
freedom of the Sub-Advisor, or any affiliated person thereof, to render
investment management and corporate administrative services to other investment
companies, to act as investment manager or investment counselor to other
persons, firms, or corporations, or to engage in any other business activities,
or (ii) the right of any director, officer, or employee of the Sub-Advisor, who
may also be a director, officer, or employee of the Trust, to engage in any
other business or to devote his or her time and attention in part to the
management or other aspects of any other business, whether of a similar nature
or a dissimilar nature.
9. SUB-ADVISOR'S USE OF THE SERVICES OF OTHERS.
The Sub-Advisor may (at its cost except as contemplated by Paragraph 5 of
this Agreement) employ, retain, or otherwise avail itself of the services or
facilities of other persons or organizations for the purpose of obtaining such
statistical and other factual information, such advice regarding economic
factors and trends, such advice as to occasional transactions in specific
securities, or such other information, advice, or assistance as the Sub-Advisor
may deem necessary, appropriate, or convenient for the discharge of its
obligations hereunder or otherwise
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helpful to the Sub-Advisor, as appropriate, or in the discharge of Sub-Advisor's
overall responsibilities with respect to the other accounts that it serves as
investment manager or counselor, provided that the Sub-Advisor shall at all
times retain responsibility for making investment recommendations with respect
to the Fund.
10. INDEMNIFICATION.
The Sub-Advisor shall exercise its reasonable business judgment in
rendering the services in accordance with the terms of this Agreement. The
Sub-Advisor shall not be liable for any error of judgment or mistake of law or
for any act or omission or any loss suffered by the Fund in connection with the
matters to which this Agreement relates, provided that nothing contained in this
Agreement shall be deemed to protect or purport to protect the Sub-Advisor
against any liability to the Fund or its shareholders, or the Investment
Advisor, to which the Sub-Advisor would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement ("disabling conduct"). The Investment Advisor
will indemnify the Sub-Advisor against, and hold harmless from, any and all
losses, claims, damages, liabilities or expenses (including reasonable counsel
fees and expenses), including any amount paid in satisfaction of judgments, in
compromise or as fines or penalties, not resulting from disabling conduct by the
Sub-Advisor. The Sub-Advisor shall be entitled to advances from the Investment
Advisor for payment of reasonable expenses incurred in connection with the
matter as to which it is seeking indemnification in the manner and to the
fullest extent permissible under law.
11. REPRESENTATIONS OF SUB-ADVISOR.
The Sub-Advisor represents, warrants, and agrees as follows:
A. The Sub-Advisor: (i) is registered as an investment advisor under
the Advisors Act and will continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by the 1940 Act or the
Advisors Act from performing the services contemplated by this Agreement; (iii)
has met, and will continue to meet for so long as this Agreement remains in
effect, any applicable federal or state requirements, or the applicable
requirements of any regulatory or industry self-regulatory agency, necessary to
be met in order to perform the services contemplated by this Agreement; (iv) has
the authority to enter into and perform the services contemplated by this
Agreement; and (v) will immediately notify the Investment Advisor of the
occurrence of any event that would disqualify the Sub-Advisor from serving as an
investment advisor of an investment company pursuant to Section 9 (a) of the
1940 Act or otherwise.
B. The Sub-Advisor has adopted a written code of ethics complying
with the requirements of Rule 17j-1 under the 1940 Act and, if it has not
already done so, will provide the Investment Advisor and the Trust with a copy
of such code of ethics, together with evidence of its adoption.
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C. The Sub-Advisor has provided the Investment Advisor and the Trust
with a copy of its Form ADV as most recently filed with the SEC and will,
promptly after filing any amendment to its Form ADV with the SEC, furnish a copy
of such amendment to the Investment Advisor.
12. TERM OF AGREEMENT.
This Agreement shall become effective upon the date first above written,
provided that this Agreement shall not take effect unless it has first been
approved (i) by a vote of a majority of those Trustees of the Trust who are not
parties to this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such approval, and (ii)
by vote of a majority of the Fund's outstanding voting securities. Unless sooner
terminated as provided in Section 13, this Agreement shall continue in effect
for an initial term ending May 13, 2004. Thereafter, this Agreement shall
continue in effect from year to year, with respect to the Fund, subject to the
termination provisions and all other terms and conditions hereof, so long as
such continuation shall be specifically approved at least annually (a) by either
the Board, or by vote of a majority of the outstanding voting securities of the
Fund; and (b) in either event, by the vote, cast in person at a meeting called
for the purpose of voting on such approval, of a majority of the Trustees of the
Trust who are not parties to this Agreement or interested persons of any such
party. The Sub-Advisor shall furnish to the Trust, promptly upon its request
such information as may reasonably be necessary to evaluate the terms of this
Agreement or any extension, renewal, or amendment hereof.
13. TERMINATION OF AGREEMENT.
Notwithstanding the foregoing, this Agreement may be terminated at any
time, without the payment of any penalty, by vote of the Board or by a vote of a
majority of the outstanding voting securities of the Fund on at least 60 days'
prior written notice to the Sub-Advisor. This Agreement may also be terminated
by the Investment Advisor: (i) on at least 60 days' prior written notice to the
Sub-Advisor, without the payment of any penalty; or (ii) if the Sub-Advisor
becomes unable to discharge its duties and obligations under this Agreement. The
Sub-Advisor may terminate this Agreement at any time, or preclude its renewal
without the payment of any penalty, on at least 60 days' prior notice to the
Investment Advisor. This Agreement shall terminate automatically in the event of
its assignment or upon termination of the Advisory Agreement.
14. AMENDMENT OF 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, and no amendment of this Agreement shall be effective until approved by
vote of a majority of the Fund's outstanding voting securities and a vote of a
majority of those Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on such amendment, unless otherwise permitted in accordance
with the 1940 Act.
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15. MISCELLANEOUS.
A. Governing Law. This Agreement shall be construed in accordance
with the laws of the State of Massachusetts without giving effect to the
conflicts of laws principles thereof, and the 1940 Act. To the extent that the
applicable laws of the State of Massachusetts conflict with the applicable
provisions of the 1940 Act, the latter shall control.
B. Captions. The captions contained 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.
C. Entire Agreement. This Agreement represents the entire
agreement and understanding of the parties and shall supersede any prior
agreements between the parties relating to the subject matter hereof, and all
such prior agreements shall be deemed terminated upon the effectiveness of
this Agreement.
D. Interpretation. Nothing contained in this Agreement shall be
deemed to require the Trust to take any action contrary to its Declaration of
Trust or By-Laws, or any applicable statutory or regulatory requirement to
which it is subject or by which it is bound, or to relieve or deprive the
Board of its responsibility for and control of the conduct of the affairs of
the Trust.
E. Definitions. Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise derived from a
term or provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretations thereof, if any, by the United
States courts or, in the absence of any controlling decision of any such court,
by rules, regulations, or orders of the SEC validly issued pursuant to the 1940
Act. As used in this Agreement, the terms "majority of the outstanding voting
securities," "affiliated person," "interested person," "assignment," "broker,"
"investment advisor," "net assets," "sale," "sell," and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the SEC by any rule, regulation, or order. Where the effect
of a requirement of the federal securities laws reflected in any provision of
this Agreement is made less restrictive by a rule, regulation, or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation, or order, unless the
Investment Advisor and the Sub-Advisor agree to the contrary.
F. Notices. Any notice that is required to be given to wither party
under this Agreement shall be in writing, personally delivered, sent by first
class mail, postage prepaid, or transmitted by facsimile with acknowledgment of
receipt, to the parties at the following addresses, which may be changed from
time to time by written notice:
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If to the Investment Advisor:
First Financial Capital Advisors LLC
000 Xxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxx, Xxxx 00000
Attention: _________________
Facsimile: _________________
If to the Sub-Advisor:
Munder Capital Management
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
IN WITNESS WHEREOF, the parties have caused this instrument to be executed
by their duly authorized signatories as of the date and year first above
written.
Attest: FIRST FINANCIAL CAPITAL ADVISORS LLC
/s/ Xxxx Xxxxxx By: /s/ Xxxx X. Xxxxxx
------------------------ -------------------------------------
Name: Xxxx X. Xxxxxx
Title: President and CEO
Attest: MUNDER CAPITAL MANAGEMENT
/s/ Xxxx Xxxxxx By /s/ Xxxxxxx X. Xxxxxxxxxxx
------------------------ --------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Exec. Vice President & Gen. Counsel
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SUB-ADVISORY AGREEMENT
SCHEDULE A
ANNUAL PERCENTAGE OF
FUND AVERAGE DAILY NET ASSETS REAPPROVAL DATE
THE FEDERAL MONEY FUND 0.05% May 13, 2004
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