EXHIBIT (h)(1)
MANAGEMENT AND ADMINISTRATION AGREEMENT
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AS OF JANUARY 1, 2001
ASO SERVICES COMPANY, INC.
0000 XXXXXXX XXXX
XXXXXXXX, XXXX 00000
Gentlemen:
AmSouth Funds, a Massachusetts business trust (the "Trust"), herewith
confirms its Agreement with ASO Services Company, Inc. ("Administrator") as
follows:
The Trust desires to employ a portion of its capital by investing and
reinvesting the same in investments of the type and in accordance with the
limitations specified in its Declaration of Trust and in the Prospectuses and
Statement of Additional Information relating to each of the investment
portfolios and any additional investment portfolios of the Trust, as each are or
will be identified on Schedule A hereto (such investment portfolios and any
additional investment portfolios together called the "Funds"), copies of which
have been or will be submitted to Administrator, and in resolutions of the
Trust's Board of Trustees. The Trust desires to engage Administrator to serve as
the manager and administrator for the Funds upon the following terms and
conditions.
1. SERVICES AS MANAGER AND ADMINISTRATOR.
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Subject to the direction and control of the Board of Trustees of the Trust,
Administrator will assist in supervising all aspects of the operations of the
Funds except those performed by the investment adviser for the Funds under its
Investment Advisory Agreements, the custodian for the Funds under its Custodial
Services Agreement, the transfer agent for the Funds under its Transfer Agency
Agreement and the fund accountant for the Funds under its Fund Accounting
Agreement.
Administrator will maintain office facilities (which may be in the office
of Administrator or an affiliate but shall be in such location as the Trust
shall reasonably determine); furnish statistical and research data, clerical and
certain bookkeeping services and stationery and office supplies; prepare the
periodic reports to the Securities and Exchange Commission (the "Commission") on
Form N-SAR or any replacement forms therefor; compile data for, assist the Trust
or its designee in the preparation of, and file all the Funds' federal and state
tax returns and required tax filings other than those required to be made by the
Funds' custodian and transfer agent; prepare compliance filings pursuant to
state securities laws with the advice of the Trust's counsel; respond to fund
audits from both independent accountants and regulatory agencies and coordinate
Commission inspections; provide support and review of periodic Commission and
Internal Revenue Service qualification and compliance measurement tests; assist
to the extent requested by the Trust with the Trust's preparation of its Annual
and Semi-Annual Reports to Shareholders and its Registration Statements (on Form
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N-1A or any replacement therefor); maintain fund and director insurance as
directed by the Trust; assist to the extent requested by the Trust in the
Trust's Shareholder Meeting and proxy solicitation process; compile data for,
prepare and file timely Notices to the Commission required pursuant to Rule
24f-2 under the Investment Company Act of 1940 (the "1940 Act"); keep and
maintain Fund agreements with service providers and broker-dealers; review and
file all Fund advertising and sales material; keep and maintain the financial
accounts and records of the Funds, including calculation of daily expense
accruals; in the case of money market funds, periodically review the amount of
deviation, if any, of the current net asset value per share (calculated using
available market quotations or an appropriate substitute that reflects current
market conditions) from each money market fund's amortized cost price per share;
and generally assist in all aspects of the operations of the Funds. In
compliance with the requirements of Rule 31a-3 under the 1940 Act, Administrator
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 of such
records upon the Trust's request. Administrator further agrees to preserve for
the periods prescribed by Rule 31a-2 under the 1940 Act the records required to
be maintained by Rule 31a-1 under the 1940 Act. Administrator may delegate some
or all of its responsibilities under this Agreement.
Administrator may, at its expense, subcontract with any entity or person
concerning the provision of the services contemplated hereunder; provided,
however, the Administrator shall not be relieved of any of its obligations under
this Agreement by the appointment of such subcontractor and provided further,
that Administrator shall be responsible, to the extent provided in Section 4
hereof, for all acts of such subcontractor as if such acts were its own.
2. FEES; EXPENSES.
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In consideration of the services rendered and expenses assumed by
Administrator pursuant to this Agreement and by Administrator pursuant to the
Fund Accounting Agreement, dated January 1, 2001 between Administrator and the
Trust, each of the Funds will pay Administrator on the first business day of
each month, or at such time(s) as Administrator shall request and the parties
hereto shall agree, a fee, computed daily and paid as specified below, equal to
the applicable annual rate set forth on Schedule A hereto. The fee for the
period from the day of the month this Agreement is entered into until the end of
that month shall be prorated according to the proportion which such period bears
to the full monthly period. Upon any termination of this Agreement before the
end of any month, the fee for such part of a month shall be prorated according
to the proportion which such period bears to the full monthly period and shall
be payable upon the date of termination of this Agreement.
For the purpose of determining fees payable to Administrator, the value of
the net assets of a particular Fund shall be computed in the manner described in
the Trust's Declaration of Trust or in the Prospectus or Statement of Additional
Information respecting that Fund as from time to time is in effect for the
computation of the value of such net assets in connection with the determination
of the liquidating value of the shares of such Fund.
Administrator will from time to time employ or associate with itself such
person or persons as Administrator may believe to be particularly fitted to
assist it in the performance of this Agreement. Such person or persons may be
officers or employees who are employed by both Administrator and the Trust. The
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compensation of such person or persons shall be paid by Administrator and no
obligation may be incurred on behalf of the Funds in such respect. Other
expenses to be incurred in the operation of the Funds including taxes, interest,
brokerage fees and commissions, if any, fees of Trustees who are not partners,
officers, directors, shareholders or employees of Administrator or the
investment adviser or distributor for the Funds, commission fees and state Blue
Sky qualification and renewal fees and expenses, investment advisory fees,
custodian fees, transfer and dividend disbursing agents' fees, fund accounting
fees including pricing of portfolio securities, certain insurance premiums,
outside auditing and legal expenses, costs of maintenance of corporate
existence, typesetting and printing prospectuses for regulatory purposes and for
distribution to current Shareholders of the Funds, costs of Shareholders' and
Trustees' reports and meetings and any extraordinary expenses will be borne by
the Funds; provided, however, that the Funds will not bear, directly or
indirectly, the costs of any activity which is primarily intended to result in
the distribution of shares of the Funds.
3. PROPRIETARY AND CONFIDENTIAL INFORMATION.
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Administrator agrees on behalf of itself and its officers and employees to
treat confidentially and as proprietary information of the Trust all records and
other information relative to the Trust and prior, present, or potential
Shareholders, and not to 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 Administrator 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.
4. LIMITATION OF LIABILITY.
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Administrator shall not be liable for any loss suffered by the Funds in
connection with the matters to which this Agreement relates, except for a loss
resulting from willful misfeasance, bad faith or negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement. Any person, even though also an officer,
employee, or agent of Administrator, who may be or become an officer, Trustee,
employee, or agent of the Trust or the Funds shall be deemed, when rendering
services to the Trust or the Funds, or acting on any business of that party, to
be rendering such services to or acting solely for that party and not as a
partner, employee, or agent or one under the control or direction of
Administrator even though paid by it.
5. TERM.
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The term of this Agreement shall commence on the date first written above
(the "Effective Date") and shall remain in effect, unless earlier terminated by
either party hereto as provided hereunder, until December 31, 2006 (the "Initial
Term"). Thereafter, unless otherwise terminated as provided herein, this
Agreement shall be renewed automatically for successive two-year periods
("Rollover Periods"). This Agreement may be terminated without penalty (i) by
provision of a notice of nonrenewal in the manner set forth below, (ii) by
mutual agreement of the parties or (iii) for "cause," as defined below, upon the
provision of sixty (60) days advance written notice by the party alleging cause.
Written notice of nonrenewal must be provided at least sixty (60) days prior to
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the end of the Initial Term or any Rollover Period, as the case may be.
For purposes of this Agreement, "cause" shall mean (a) willful misfeasance,
bad faith, gross negligence or reckless disregard on the part of the party to be
terminated with respect to its obligations and duties set forth herein; (b) a
final, unappealable judicial, regulatory or administrative ruling or order in
which the party to be terminated has been found guilty of criminal or unethical
behavior in the conduct of its business; (c) financial difficulties on the part
of the party to be terminated which is evidenced by the authorization or
commencement of, or involved by way of pleading, consent, or acquiescence in, a
voluntary case under Title 11 of the United States Code, as from time to time is
in effect, or any applicable law, other than said Title 11, of any jurisdiction
relating to the liquidation or reorganization of debtors or to the modification
or alteration of the rights of creditors; or (d) any circumstance which
substantially impairs the performance of the obligations and duties of the party
to be terminated, or the ability to perform those obligations and duties, as
contemplated herein.
Notwithstanding the foregoing, after such termination, for so long as
Administrator, with the written consent of the Trust, in fact continues to
perform any one or more of the services contemplated by this Agreement or any
schedule or exhibit hereto, the provisions of this Agreement, including without
limitation the provisions dealing with indemnification, shall continue in full
force and effect. Compensation due Administrator and unpaid by the Trust upon
such termination shall be immediately due and payable upon and notwithstanding
such termination. Administrator shall be entitled to collect from the Trust, in
addition to the compensation described in Schedule A hereto, the amount of all
of Administrator's cash disbursements for services in connection with
Administrator's activities in effecting such termination, including without
limitation, the delivery to the Trust and/or its designees of the Trust's
property, records, instruments and documents.
If, during the Initial Term, for any reason other than nonrenewal, mutual
agreement of the parties or "cause," as defined above, Administrator is replaced
as administrator, or if a third party is added to perform all or a part of the
services provided by Administrator under this Agreement (excluding any
sub-administrator appointed by Administrator as provided in Article 7 hereof),
then the Company shall make a one-time cash payment, in consideration of the fee
structure and services to be provided under this Agreement, and not as a
penalty, to Administrator equal to the fees that are due and payable under this
Agreement (excluding that portion of such fees attributable to
Sub-Administration fees payable to AmSouth Bank pursuant to a Sub-Administration
Agreement, dated January 1, 2001, between ASO Services Company, Inc. and AmSouth
Bank) for the lesser of (i) the remainder of the Initial Term of this Agreement
or (ii) a two-year period, assuming for purposes of calculation of the payment
that such balance shall be based upon the average amount of the Company's assets
for the twelve months prior to the date the Administrator is replaced or a third
party is added.
In the event the Company is merged into another legal entity in part or in
whole pursuant to any form of business reorganization or is liquidated in part
or in whole prior to the expiration of the then-current term of this Agreement,
the parties acknowledge and agree that the liquidated damages provision set
forth above shall be applicable in those instances in which Administrator is not
retained to provide administration services consistent with this Agreement. The
one-time cash payment referenced above shall be due and payable on the day prior
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to the first day in which Administrator is replaced or a third party is added.
The parties further acknowledge and agree that, in the event Administrator
is replaced, or a third party is added, as set forth above, (i) a determination
of actual damages incurred by Administrator would be extremely difficult, and
(ii) the liquidated damages provision contained herein is intended to adequately
compensate Administrator for damages incurred and is not intended to constitute
any form of penalty.
6. REPRESENTATIONS OF THE TRUST.
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The Trust certifies to Administrator that this Agreement has been duly
authorized by the Trust and, when executed and delivered by the Trust, will
constitute a legal, valid and binding obligation of the Trust, enforceable
against the Trust in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured parties.
7. REPRESENTATIONS OF ADMINISTRATOR.
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Administrator represents and warrants that: (1) the various procedures and
systems which Administrator has implemented with regard to safeguarding from
loss or damage attributable to fire, theft, or any other cause of the records
and other data of the Trust and Administrator's records, data, equipment
facilities and other property used in the performance of its obligations
hereunder are adequate and that it will make such changes therein from time to
time as are required for the secure performance of it obligations hereunder, and
(2) this Agreement has been duly authorized by Administrator and, when executed
and delivered by Administrator, will constitute a legal, valid and binding
obligation of Administrator, enforceable against Administrator in accordance
with its terms, subject to bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting the rights and remedies of
creditors and secured parties.
8. INSURANCE.
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Administrator shall notify the Trust should any of its insurance coverage
be cancelled or reduced. Such notification shall include the date of change and
the reasons therefor. Administrator shall notify the Trust of any material
claims against it with respect to services performed under this Agreement,
whether or not they may be covered by insurance, and shall notify the Trust from
time to time as may be appropriate of the total outstanding claims made by
Administrator under its insurance coverage.
9. GOVERNING LAW AND MATTERS RELATING TO THE TRUST AS A MASSACHUSETTS
BUSINESS TRUST.
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This Agreement shall be governed by the law of the Commonwealth of
Massachusetts. 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 the Declaration of
Trust dated as of October 1, 1987, as amended June 25, 1993, to which reference
is hereby made and a copy of which is on file at the office of the Secretary of
the Commonwealth of Massachusetts and elsewhere as required by law, and to any
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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. If the foregoing is in accordance with your
understanding, kindly so indicate by signing and returning to us the enclosed
copy hereof.
Very truly yours,
AMSOUTH FUNDS
By: __________________________
Title: Vice President
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Accepted:
ASO SERVICES COMPANY, INC.
By: ____________________________
Title: President
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SCHEDULE A
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TO THE
MANAGEMENT AND ADMINISTRATION AGREEMENT
BETWEEN
AMSOUTH FUNDS
AND
ASO SERVICES COMPANY, INC.
FEES
NAME OF FUND
------------ Compensation*
------------
Institutional Funds
Annual Rate of ten one-hundredths of
one percent (0.10%) of each such
Fund's average daily net assets
All Other Funds
Annual Rate of twenty one-
hundredths of one percent (0.20%) of
each such Fund's average daily net
assets
AMSOUTH FUNDS
By: __________________________________
Title: Vice President
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ASO SERVICES COMPANY, INC.
By:
Title: President
---------------------------------
__________________________
*All fees are computed daily and paid periodically.
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