EX.99.D.4.
INVESTMENT SUBADVISORY AGREEMENT
AGREEMENT made as of the 19th day of November, 2004, between Trusco Capital
Management, Inc. (the "Adviser") and Xxxxxxxxxxx Capital Investments LLC (the
"Subadviser").
WHEREAS, the STI Classic Funds (the "Trust"), a Massachusetts business
trust, is registered as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into investment advisory agreements with
the Trust (the "Advisory Agreements") pursuant to which the Adviser acts as
investment adviser to the series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Subadviser to provide investment advisory services to the Adviser in connection
with the management of the series of the Trust set forth on Schedule A attached
hereto (each a "Fund," and collectively, the "Funds"), as such schedule may be
amended by mutual agreement of the parties hereto, and the Subadviser is willing
to render such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. Duties of the Subadviser. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Subadviser shall manage all of the
securities and other assets of each Fund entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the Assets
in accordance with the Fund's investment objectives, policies, and
restrictions as stated in each Fund's then current prospectus and statement
of additional information, as may be amended or supplemented from time to
time (referred to collectively as the "Prospectus"), and subject to the
following:
(a) The Subadviser will provide investment advisory services to the Fund
and shall, in such capacity, determine from time to time what Assets
will be purchased, retained, or sold by the Fund, and what portion of
the Assets will be invested or held uninvested in cash, subject to the
direction of the Adviser and the Board of Trustees of the Trust.
(b) In the performance of its duties and obligations under this Agreement,
the Subadviser shall act in conformity with the Trust's Declaration of
Trust (as defined herein), the Prospectus, and the instructions and
directions of the Adviser and of the Board of Trustees of the Trust
and will conform to and comply with the requirements of the 1940 Act,
the Internal Revenue Code of 1986 (the "Code"), and all other
applicable federal and state laws and regulations, as each is amended
from time to time.
(c) The Subadviser shall determine the Assets to be purchased or sold by
each Fund as provided in subparagraph (a) above and will place orders
with or through such persons, brokers or dealers to carry out the
policy with respect to brokerage set forth in each Fund's Prospectus
or as the Board of Trustees or the Adviser may direct in writing from
time to time, in conformity with all federal securities laws. In
executing Fund transactions and selecting brokers or dealers, the
Subadviser will use its best efforts to seek on behalf of each Fund
the best overall terms available. In assessing the best overall terms
available for any transaction, the Subadviser shall consider all
factors that it deems relevant, including the breadth of the market in
the security, the price of the security, the financial condition and
execution capability of the broker or dealer, and the reasonableness
of the commission, if any, both for the specific transaction and on a
continuing basis. In evaluating the best overall terms available, and
in selecting the broker-dealer to execute a particular transaction,
the Subadviser may also consider the brokerage and research services
provided (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934 (the "Exchange Act")). Consistent with
any guidelines established by the Board of Trustees of the Trust and
Section 28(e) of the Exchange Act, the Subadviser is authorized to pay
to a broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction for each
Fund that is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if, but only
if, the Subadviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer viewed in terms of that
particular transaction or in terms of the overall responsibilities of
the Subadviser to its discretionary clients, including the Funds. In
addition, the Subadviser is authorized to allocate purchase and
1
EX.99.D.4.
sale orders for securities to brokers or dealers (including brokers
and dealers that are affiliated with the Adviser, Subadviser, or the
Trust's principal underwriter) if the Subadviser believes that the
quality of the transaction and the commission are comparable to what
they would be with other qualified firms. In no instance, however,
will the Funds' Assets be purchased from or sold to the Adviser,
Subadviser, the Trust's principal underwriter, or any affiliated
person of either the Trust, Adviser, the Subadviser, or the principal
underwriter, acting as principal in the transaction, except to the
extent permitted by the Securities and Exchange Commission ("SEC") and
the 1940 Act.
(d) The Subadviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5),
(b)(6), (b)(7), (b)(9), (b)(10), and (b)(11) and paragraph (f) of Rule
31a-1 under the 1940 Act. The Subadviser shall provide to the Adviser
or the Board of Trustees such periodic and special reports, balance
sheets or financial information, and such other information with
regard to its affairs as the Adviser or Board of Trustees may
reasonably request.
The Subadviser shall keep the books and records relating to the Assets
required to be maintained by the Subadviser under this Agreement and
shall timely furnish to the Adviser all information relating to the
Subadviser's services under this Agreement needed by the Adviser to
keep the other books and records of the Funds required by Rule 31a-1
under the 1940 Act. The Subadviser shall also furnish to the Adviser
any other information relating to the Assets that is required to be
filed by the Adviser or the Trust with the SEC or sent to shareholders
under the 1940 Act (including the rules adopted thereunder) or any
exemptive or other relief that the Adviser or the Trust obtains from
the SEC. The Subadviser agrees that all records that it maintains on
behalf of the Funds are property of the Funds and the Subadviser will
surrender promptly to the Funds any of such records upon the Funds'
request; provided, however, that the Subadviser may retain a copy of
such records. In addition, for the duration of this Agreement, the
Subadviser shall 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 this Agreement, and shall transfer said records to
any successor subadviser upon the termination of this Agreement (or,
if there is no successor subadviser, to the Adviser).
(e) The Subadviser shall provide the Funds' custodian on each business day
with information relating to all transactions concerning the Funds'
Assets and shall provide the Adviser with such information upon
request by the Adviser.
(f) The investment management services provided by the Subadviser under
this Agreement are not to be deemed exclusive and the Subadviser shall
be free to render similar services to others as long as such services
do not impair the services rendered to the Adviser or the Trust.
(g) The Subadviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Subadviser's ability to fulfill
its commitment under this Agreement.
(h) The Subadviser shall not be responsible for reviewing proxy
solicitation materials or voting and handling proxies in relation to
the securities held as Assets in the Funds. If the Subadviser receives
a misdirected proxy, it shall promptly forward such misdirected proxy
to the Adviser.
(i) In performance of its duties and obligations under this Agreement, the
Subadviser shall not consult with any other subadviser to the Funds or
a subadviser to a portfolio that is under common control with the
Funds concerning the Assets, except as permitted by the policies and
procedures of the Funds. The Subadviser shall not provide investment
advice to any assets of the Funds other than the Assets.
Services to be furnished by the Subadviser under this Agreement may be
furnished through the medium of any of the Subadviser's control
affiliates, partners, officers or employees.
2. Duties of the Adviser. The Adviser shall continue to have responsibility
for all services to be provided to the Funds pursuant to the Advisory
Agreements and shall oversee and review the Subadviser's performance of its
duties under this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve the
Subadviser of responsibility for compliance with the Trust's Declaration of
Trust (as defined herein), the Prospectus, the instructions and directions
of the Board of Trustees of the Trust,
2
EX.99.D.4.
the requirements of the 1940 Act, the Code, and all other applicable
federal and state laws and regulations, as each is amended from time to
time.
3. Delivery of documents. The Adviser has furnished the Subadviser with copies
of each of the following documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such
Agreement and Declaration of Trust, as in effect on the date of this
Agreement and as amended from time to time, herein called the
"Declaration of Trust");
(b) By-Laws of the Trust as in effect on the date of this Agreement and as
amended from time to time; and
(c) Prospectus of each Fund.
4. Compensation to the Subadviser. For the services to be provided by the
Subadviser pursuant to this Agreement, the Adviser will pay the Subadviser,
and the Subadviser agrees to accept as full compensation therefor, a
subadvisory fee at the rate specified in Schedule B attached hereto and
made part of this Agreement. The fee will be calculated based on the
average daily value of the Assets under the Subadviser's management and
will be paid to the Subadviser quarterly. Except as may otherwise be
prohibited by law or regulation (including any then current SEC staff
interpretation), the Subadviser may, in its discretion and from time to
time, waive a portion of its fee.
5. Indemnification. The Subadviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities, or
damages (including reasonable attorney's fees and other related expenses)
howsoever arising from or in connection with the performance of the
Subadviser's obligations under this Agreement; provided, however, that the
Subadviser's obligation under this Paragraph 5 shall be reduced to the
extent that the claim against, or the loss, liability, or damage
experienced by the Adviser, is caused by or is otherwise directly related
to the Adviser's own willful misfeasance, bad faith, or negligence, or to
the reckless disregard of its duties under this Agreement.
The Adviser shall indemnify and hold harmless the Subadviser from and
against any and all claims, losses, liabilities, or damages (including
reasonable attorney's fees and other related expenses) howsoever arising
from or in connection with the performance of the Adviser's obligations
under this Agreement; provided, however, that the Adviser's obligation
under this Paragraph 5 shall be reduced to the extent that the claim
against, or the loss, liability, or damage experienced by the Subadviser,
is caused by or is otherwise directly related to the Subadviser's own
willful misfeasance, bad faith, or negligence, or to the reckless disregard
of its duties under this Agreement.
6. Duration and termination. With respect to a Fund, this Agreement shall
become effective upon approval by the Trust's Board of Trustees and its
execution by the parties hereto, and approval of the Agreement by a
majority of the outstanding voting securities of that Fund.
This Agreement shall continue in effect for a period of more than two years
from the date hereof only so long as continuance is specifically approved
at least annually in conformance with the 1940 Act; provided, however, that
this Agreement may be terminated with respect to the Funds (a) by the Funds
at any time, without the payment of any penalty, by the vote of a majority
of Trustees of the Trust or by the vote of a majority of the outstanding
voting securities of the Funds, (b) by the 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 Subadviser, or (c) by the Subadviser at any time,
without the payment of any penalty, on 90 days written notice to the
Adviser. This Agreement shall terminate automatically and immediately in
the event of its assignment or in the event of a termination of the
relevant Advisory Agreement with the Trust. As used in this Paragraph 6,
the terms "assignment" and "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the 1940 Act
and the rules and regulations thereunder, subject to such exceptions as may
be granted by the SEC under the 1940 Act.
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EX.99.D.4.
7. Governing Law. This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
8. Severability. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
9. Notice: Any notice, advice, or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by registered,
certified, or overnight mail, postage prepaid, and addressed by the party
giving notice to the other party at the last address furnished by the other
party:
To the Adviser at: Trusco Capital Management, Inc. 00
Xxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx, III
To the Subadviser at: Xxxxxxxxxxx Capital Investments LLC
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxxx
00. Xxx-xxxx/xxx-xxxxxxxxxxxx. The Subadviser hereby agrees that so long as the
Subadviser provides services to the Adviser or the Trust and for a period
of one year following the date on which the Subadviser ceases to provide
services to the Adviser and the Trust, the Subadviser shall not for any
reason, directly or indirectly, on the Subadviser's own behalf or on behalf
of others, hire any person employed by the Adviser, whether or not such
person is a full-time employee or whether or not any person's employment is
pursuant to a written agreement or is at-will. The Subadviser further
agrees that, to the extent that the Subadviser breaches the covenant
described in this paragraph, the Adviser shall be entitled to pursue all
appropriate remedies in law or equity.
11. Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
In the event the terms of this Agreement are applicable to more than one
Fund, the Adviser is entering into this Agreement with the Subadviser on
behalf of the respective Funds severally and not jointly, with the express
intention that the provisions contained in each numbered paragraph hereof
shall be understood as applying separately with respect to each Fund as if
contained in separate agreements between the Adviser and Subadviser for
each such Fund. In the event that this Agreement is made applicable to any
additional Funds by way of a schedule executed subsequent to the date first
indicated above, provisions of such schedule shall be deemed to be
incorporated into this Agreement as it relates to such Fund so that, for
example, the execution date for purposes of Paragraph 6 of this Agreement
with respect to such Fund shall be the execution date of the relevant
schedule.
12. Miscellaneous.
(a) A copy of the Declaration of Trust is on file with the Secretary of
State of the Commonwealth of Massachusetts and notice is hereby given
that the obligations of this instrument are not binding upon any of
the Trustees, officers or shareholders of the Fund or the Trust.
(b) Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered 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.
4
EX.99.D.4.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
TRUSCO CAPITAL MANAGEMENT, INC XXXXXXXXXXX CAPITAL INVESTMENTS LLC
By: /s/ Xxxx X. Xxxxxxxxx III By: /s/ Xxxxx X. Xxxxxxxxxxx
--------------------------------- ------------------------------------
Name: Xxxx X. Xxxxxxxxx III Name: Xxxxx X. Xxxxxxxxxxx
Title: Executive Vice President Title: President
5
EX.99.D.4.
SCHEDULE A
TO THE
INVESTMENT SUBADVISORY AGREEMENT
BETWEEN
TRUSCO CAPITAL MANAGEMENT, INC.
AND
XXXXXXXXXXX CAPITAL INVESTMENTS LLC
AS OF NOVEMBER 19, 2004
STI CLASSIC FUNDS
AGGRESSIVE GROWTH STOCK FUND
EMERGING GROWTH STOCK FUND
6
EX.99.D.4.
SCHEDULE B
TO THE
INVESTMENT SUBADVISORY AGREEMENT
BETWEEN
TRUSCO CAPITAL MANAGEMENT, INC.
AND
XXXXXXXXXXX CAPITAL INVESTMENTS LLC
AS OF NOVEMBER 19, 2004
Pursuant to Paragraph 4, the Adviser shall pay the Subadviser compensation at an
annual rate as follows:
STI CLASSIC FUNDS
Aggressive Growth Stock Fund......... .625% of the average daily value of the
assets under the Subadviser's
management, except that for any
compensation period during which the
Adviser waives any portion of the
management fee that the Fund is required
to pay, the Adviser will pay to the
Subadviser 55% of the amount of
compensation the Adviser receives from
the Fund during that compensation
period.
Emerging Growth Stock Fund........... .625% of the average daily value of the
assets under the Subadviser's
management, except that for any
compensation period during which the
Adviser waives any portion of the
management fee that the Fund is required
to pay, the Adviser will pay to the
Subadviser 55% of the amount of
compensation the Adviser receives from
the Fund during that compensation
period.
The management fee will be paid to the Subadviser quarterly.
Agreed and Accepted:
TRUSCO CAPITAL MANAGEMENT, INC XXXXXXXXXXX CAPITAL INVESTMENTS LLC
By: /s/ Xxxx X. Xxxxxxxxx III By: /s/ Xxxxx X. Xxxxxxxxxxx
--------------------------------- ------------------------------------
Name: Xxxx X. Xxxxxxxxx III Name: Xxxxx X. Xxxxxxxxxxx
Title: Executive Vice President Title: President
7
