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Exhibit (d)(3)
SUB-ADVISORY AGREEMENT
AGREEMENT dated May 12, 2001, between AMSOUTH INVESTMENT MANAGEMENT
COMPANY, LLC, a corporation with its principal place of business in Alabama
(herein called the "Investment Adviser") and PEACHTREE ASSET MANAGEMENT, a
division of Xxxxx Xxxxxx Mutual Funds Management Inc., (herein called the
"Sub-Advisor").
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 as 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
therein 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 May
12, 2001 (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 all supplements 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 perform the following services: (i) provide investment research
and credit analysis concerning the Fund's investments; (ii) conduct a continual
program of investment of the Fund's assets; (iii) place orders for all purchases
and sales of the investments made for the Funds; (iv) maintain the
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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 other accounts for
which it has investment responsibilities; provided that, not withstanding 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 has been 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-Advisor 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
purchasers), all within a reasonable time after receipt thereof from the Trust
and will promptly report any errors or discrepancies in such reports of which it
is aware to the Trust or its designee.
4. BROKERAGE.
(a) 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 selecting brokers or dealers through which to place
orders, the Sub-Adviser will consider the factors it considers relevant,
including, but not limited to 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 is authorized to 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
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reasonable in relation to the benefits in the Fund over the long term. In no
instance will portfolio securities be purchased from or sold, on a principal
basis, to the Trust's principal underwriter, the Investment Adviser or any
affiliated person thereof (as the term "affiliated person" is defined in the 40
Act), except to the extent permitted by SEC exemptive order or by applicable
law.
(b) Pursuant to the provisions of Section 11 (a) of the
Securities Exchange Act of 1934, certain transactions effected by Xxxxx Xxxxxx
Inc. ("SB") for certain clients on a national or regional securities exchange
may be executed with SB only upon receipt of the client's consent. The
Investment Adviser, on behalf of the Trust, specifically consents, in the
absence of contrary instructions, to SB acting as broker for the Fund and
retaining compensation in connection therewith.
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 (other than information that
has been made public by the Trust or Investment Adviser), 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.
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. BOOKS AND RECORDS. The Sub-Adviser shall maintain and preserve such
records related to the Funds' portfolio transactions as required under the 40
Act. The Investment Adviser shall maintain and preserve all books and other
records not related to the Funds' portfolio transactions as required under the
40 Act. The Sub-Adviser agrees that all records that it
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maintains for the Funds are the property of the Trust and further agrees to
surrender copies of such records to the Trust promptly upon the Trust's request.
8. 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, brokerage
commissions, custodian fees, auditors' fees, taxes, interest, extraordinary
expense items, and other expenses related to the operation of the Trust or any
Fund.
9. 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 Funds' 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.
10. LIMITATION OF LIABILITY.
(a) The Sub-Adviser shall not be liable for any error of
judgment 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 this Agreement
relates, except that Sub-Adviser shall be liable to the Investment Adviser for 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.
(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.
11. 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
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with respect to the Fund until July 31, 2002. Thereafter, if not terminated,
this Agreement shall continue in effect for successive 12-month periods ending
on July 31 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 upon 60 days' prior notice without the payment
of any penalty by the Board of Trustees of the Trust; (ii) by the vote of the
majority of the outstanding voting securities of the Fund upon 60 days' prior
notice, (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.)
12. 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.
13. 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 New York
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 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: ______________________
Title: _____________________
(SEAL) PEACHTREE ASSET MANAGEMENT,
a division of Xxxxx Xxxxxx
Mutual Funds Management
Inc.
By: ______________________
Title: _____________________
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Dated: May 12, 2001
SCHEDULE A
To Sub-Advisory Agreement
dated as of May 12, 2001
between AmSouth Investment Management Company, LLC and Peachtree Asset
Management, a division of Xxxxx Xxxxxx Mutual Funds Management Inc.
NAME OF FUND COMPENSATION
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Growth Fund Annual rate of 48 one-hundredths of
one percent (.48%) of the Capital Growth
Fund's average daily net assets
Consented to by:
AMSOUTH INVESTMENT
MANAGEMENT COMPANY, LLC
Date: ____________ By: _________________________
Date: ____________ PEACHTREE ASSET MANAGEMENT,
a division of Xxxxx Xxxxxx Mutual Funds
Management Inc.
By: _________________________
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