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EXHIBIT (d)(2)
SUB-ADVISORY AGREEMENT
THIS AGREEMENT is made as of August 1, 2001, between ▇▇▇▇▇▇▇ Asset
Management, Inc., a Michigan corporation ("LAMI" or the "Adviser"), and
CastleArk Management, LLC, an Illinois limited liability company ("CastleArk" or
the "Sub-Adviser").
WHEREAS, the Adviser has entered into an Investment Management
Agreement, dated as of August 1, 2001 (the "Management Agreement"), with ▇▇▇▇▇▇▇
Investments (the "Trust"), a Massachusetts business trust and a diversified,
open-end management investment company registered under the Investment Company
Act of ▇▇▇▇ (▇▇▇ ▇▇▇▇ ▇▇▇), pursuant to which LAMI acts as Adviser of the
Trust's separate series of shares of beneficial interest one of which is the
▇▇▇▇▇▇▇ Large-Cap Growth Fund (the "Fund"); and
WHEREAS, LAMI desires to retain the Sub-Adviser to provide investment
advisory services to the Fund and to manage such portion of the Fund as the
Adviser shall from time to time direct, and the Sub-Adviser is willing to render
such investment advisory services;
NOW, THEREFORE, the Parties agree as follows:
1. Subject to the supervision of the Adviser and the Board of Trustees
of the Trust, the Sub-Adviser shall manage such portion of the investment
operations of the Fund as the Adviser shall direct and shall manage the
composition of the Fund's portfolio, including the purchase, retention and
disposition thereof, in accordance with the Fund's investment objectives,
policies and restrictions as stated in the Prospectus and Statement of
Additional Information (such Prospectus and Statement of Additional Information
as currently in effect and as amended or supplemented from time to time, being
herein called the Prospectus), and subject to the following understandings:
(a) The Sub-Adviser shall provide supervision of such portion
of the Fund's investments as the Adviser shall direct and shall
determine from time to time what investments and securities will be
purchased, retained, sold or loaned by the Fund, and what portion of
the assets will be invested or held uninvested as cash.
(b) In the performance of its duties and obligations under
this Agreement, the Sub-Adviser shall act in conformity with the
Declaration of Trust, By-Laws and Prospectus of the Fund and with the
instructions and directions of the Adviser and of the Board of Trustees
of the Trust, co-operate with the Adviser's (or its designee's)
personnel responsible for monitoring the Fund's compliance, and will
conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986 and all other applicable federal and
state laws and regulations. In connection therewith, the Sub-Adviser
shall, among other things, prepare and file such reports as are, or may
in the future be, required by the Securities and Exchange Commission.
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(c) The Sub-Adviser shall determine the securities to be
purchased or sold by such portion of the Fund, and will place orders
with or through such persons, brokers or dealers (including but not
limited to any broker or dealer affiliated with the Sub-Adviser) to
carry out the policy with respect to brokerage as set forth in the
Fund's Prospectus or as the Board of Trustees may direct from time to
time. In providing the Fund with investment supervision, it is
recognized that the Sub-Adviser will give primary consideration to
securing the most favorable price and efficient execution. Within the
framework of this policy, the Sub-Adviser may consider the financial
responsibility, research and investment information and other services
provided by brokers or dealers who may effect or be a party to any such
transaction or other transactions to which the Sub-Adviser's other
clients may be a party. It is understood that any broker or dealer
affiliated with the Sub-Adviser may be used as principal broker for
securities transactions, but that no formula has been adopted for
allocation of the Fund's investment transaction business. It is also
understood that it is desirable for the Fund that the Sub-Adviser have
access to supplemental investment and market research and security and
economic analysis provided by brokers who may execute brokerage
transactions at a higher cost to the Fund than may result when
allocating brokerage to other brokers on the basis of seeking the most
favorable price and efficient execution. Therefore, the Sub-Adviser is
authorized to place orders for the purchase and sale of securities for
the Fund with such brokers, subject to review by the Trust's Board of
Trustees from time to time with respect to the extent and continuation
of this practice. It is understood that the services provided by such
brokers may be useful to the Sub-Adviser in connection with the
Sub-Adviser's services to other clients.
On occasions when the Sub-Adviser 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-Adviser, the Sub-Adviser, to the extent permitted by
applicable laws and regulations, may, but shall be under no obligations
to, aggregate the securities to be sold or purchased in order to obtain
the most 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-Adviser in the manner the Sub-Adviser considers to be the
most equitable and consistent with its fiduciary obligations to the
Fund and to such other clients.
(d) The Sub-Adviser shall maintain all books and records with
respect to the Fund's portfolio transactions required by subparagraphs
(b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1
under the 1940 Act, and shall render to the Trust's Board of Trustees
such periodic and special reports as the Trustees may reasonably
request. The Sub-Adviser shall make reasonably available its employees
and officers for consultation with any of the Trustees or officers or
employees of the Fund with respect to any matter discussed herein,
including, without limitation, the valuation of the Fund's securities.
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(e) The Sub-Adviser shall provide the Fund's Custodian on each
business day with information relating to all transactions concerning
the portion of the Fund's assets it manages, and shall provide the
Adviser with such information upon request of the Adviser.
(f) The investment management services provided by the
Sub-Adviser hereunder are not to be deemed exclusive, and the
Sub-Adviser shall be free to render similar services to others.
Conversely, the Sub-Adviser and Adviser understand and agree that if
the Adviser manages the Fund in a "manager-of-managers" style, the
Adviser will, among other things, (i) continually evaluate the
performance of the Sub-Adviser to the Fund through quantitative and
qualitative analysis and consultations with the Sub-Adviser, (ii)
periodically make recommendations to the Trust's Board of Trustees as
to whether the contract with the Sub-Adviser should be renewed,
modified, or terminated and (iii) periodically report to the Trust's
Board of Trustees regarding the results of its evaluation and
monitoring functions. The Sub-Adviser recognizes that its services may
be terminated or modified pursuant to this process.
2. The Sub-Adviser may authorize and permit any of its directors,
officers and employees who may be elected as Trustees or officers of the Fund to
serve in the capacities in which they are elected. Services to be furnished by
the Sub-Adviser under this Agreement may be furnished through the medium of any
of such directors, officers or employees.
3. The Sub-Adviser shall keep the Fund's books and records required to
be maintained by the Sub-Adviser pursuant to paragraph 1(a) hereof and shall
timely furnish to the Adviser all information relating to the Sub-Adviser's
services hereunder needed by the Adviser to keep the other books and records of
the Fund required by Rule 31a-1 under the 1940 Act. The Sub-Adviser agrees that
all records which it maintains for the Fund are the property of the Fund and the
Sub-Adviser will surrender promptly to the Fund any of such records upon the
Fund's request, provided, however, that the Sub-Adviser may retain a copy of
such records. The Sub-Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are required to
be maintained by it pursuant to paragraph 1(a) hereof.
4. The Sub-Adviser agrees to maintain adequate compliance procedures to
ensure its compliance with the 1940 Act, the Investment Advisers Act of 1940
(the "Advisers Act") and other applicable state and federal regulations.
5. The Sub-Adviser shall furnish to the Adviser copies of all records
prepared in connection with (i) the performance of this Agreement and (ii) the
maintenance of compliance procedures pursuant to paragraph 1(d) hereof as the
Adviser may reasonably request.
6. The Adviser shall continue to have responsibility for all services
to be provided to the Fund pursuant to the Management Agreement and, as more
particularly discussed above, shall oversee and review the Sub-Adviser's
performance of its duties under this Agreement.
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7. For the services provided and the expenses assumed pursuant to this
Agreement, the Adviser shall pay the Sub-Adviser as full compensation therefor,
a fee equal to 50% of the monthly management fee paid to the Adviser.
8. The Sub-Adviser shall not be liable for any error of judgment or for
any loss suffered by the Fund or the Adviser in connection with the matters to
which this Agreement relates, except a loss resulting from willful misfeasance,
bad faith or gross negligence on the Sub-Adviser's part in the performance of
its duties or from its reckless disregard of its obligations and duties under
this Agreement.
9. This Agreement shall continue in effect for a period of more than
two years from the date hereof only so long as such continuance is specifically
approved at least annually in conformity with the requirements of the 1940 Act;
provided, however, that this Agreement may be terminated by the Fund at any
time, without the payment of any penalty, by the Board of Trustees of the Trust
or by vote of a majority of the outstanding voting securities (as defined in the
▇▇▇▇ ▇▇▇) of the Fund, or by the Adviser or the Sub-Adviser at any time, without
the payment of any penalty, on not more than 60 days' nor less than 30 days
written notice to the other party. This Agreement shall terminate automatically
in the event of its assignment (as defined in the ▇▇▇▇ ▇▇▇) or upon the
termination of the Management Agreement.
10. Nothing in this Agreement shall limit or restrict the right of any
of the Sub-Adviser's directors, officers or employees who may also be a Trustee,
officer or employee of the Fund 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
business, whether of a similar or dissimilar nature, nor limit or restrict the
Sub-Adviser's right to engage in any other business or to render services of any
kind to any other corporation, firm, individual or association.
11. During the term of this Agreement, the Adviser agrees to furnish
the Sub-Adviser 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-Adviser in any way, prior to use thereof and not to use material if the
Sub-Adviser reasonably objects in writing five business days (or such other time
as may be mutually agreed) after receipt thereof. Sales literature may be
furnished to the Sub-Adviser hereunder by first-class or overnight mail,
facsimile transmission equipment or hand delivery.
12. This Agreement may be amended by mutual consent, but the consent of
the Fund must be obtained in conformity with the requirements of the 1940 Act.
13. 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 or the Advisers Act shall be resolved by reference to such term
or provision of the 1940 Act or the Advisers 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 issued
pursuant to said Acts.
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In addition, where the effect of a requirement of the 1940 Act or the Advisers
Act reflected in any provision of the Agreement is revised by rule, regulation
or order of the SEC, such provision shall be deemed to incorporate the effect of
such rule, regulation or order. Subject to the foregoing, this Agreement shall
be governed by and construed in accordance with the laws (without reference to
conflicts of law provisions) of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the Parties hereto have caused this instrument to
be executed by their officers designed below as of the day and year first above
written.
▇▇▇▇▇▇▇ ASSET MANAGEMENT, INC.
By: _______________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman
CASTLEARK MANAGEMENT, LLC
By: _______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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