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EXHIBIT 5(f)
Investment Sub-Advisory Agreement
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SUB-ADVISORY AGREEMENT
AGREEMENT dated as of March 12, 1997, between AmSouth Bank of Alabama, an
Alabama banking association with its principal place of business in Alabama
(herein called the "Investment Adviser") and Rockhaven Asset Management, LLC, a
Delaware limited liability corporation with its principal place of business in
Pennsylvania (herein called the "Sub-Adviser").
WHEREAS, the Investment Adviser is the investment adviser 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 ("40 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 as provided for in the Investment Advisory
Agreement between the Investment Adviser and the Trust dated as of August 1,
1988 (such Agreement or the most recent successor advisory agreement between
such parties is herein called the "Advisory Agreement"). 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 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
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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 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.
(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.
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 attempt 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 of
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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-Adviser determines in good
faith that such transaction is reasonable in terms either of the transaction or
the overall responsibility of the Sub-Adviser 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 Adviser or any affiliate thereof (as the term "affiliate" is defined
in the 40 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-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
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.
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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 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 Adviser and shall in no way be an obligation of
the Fund or of the Trust.
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 40 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-Adviser 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-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.
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(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. This Agreement shall become effective as of
the date hereof 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 January 31,
1998. Thereafter, if not terminated, this Agreement shall continue in effect for
successive 12-month periods ending on January 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 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.
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 40 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. 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
Massachusetts 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 Agreement
and Declaration of Trust dated as of June 25, 1993 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
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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 Bank of Alabama
By: /s/ Xxxxxxx Xxxxx
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Title:
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(SEAL) Rockhaven Asset Management, LLC
By: /s/ Xxxxx Xxxxx
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Title:
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SCHEDULE A
TO SUB-ADVISORY AGREEMENT DATED AS OF MARCH 12, 0000 XXXXXXX XXXXXXX XXXX XX
XXXXXXX AND ROCKHAVEN ASSET MANAGEMENT, LLC.
NAME OF FUND COMPENSATION
AmSouth Equity Income Fund Annual rate of
forty-eight one-hundredths of one
percent (.48%) of the AmSouth Equity
Income Fund's average daily net
assets
Consented to by:
Date ---------------- AmSouth Bank of Alabama
By: /s/ Xxxxxxx Xxxxx
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Date: 3/12/97 Rockhaven Asset Management, LLC
By: /s/ Xxxxx Xxxxx
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