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EXHIBIT 5(g)
INVESTMENT SUB-ADVISORY AGREEMENT
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SUB-ADVISORY AGREEMENT
AGREEMENT dated as July 31, 1997, between AMSOUTH BANK, an Alabama
banking association 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
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 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
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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 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
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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 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.
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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 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
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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 with respect to the Fund until
July 31, 1998. 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
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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 BANK
By: /s/
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Title: Sr. Executive Vice President
(SEAL) PEACHTREE ASSET MANAGEMENT,
a division of Xxxxx Xxxxxx
Mutual Funds Management
Inc.
By: /s/ Xxxxxx X. Xxxxxxx
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Title: President and Chief Investment Officer
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SCHEDULE A
To Sub-Advisory Agreement
dated as of July 31, 1997
between AmSouth Bank and Peachtree Asset Management,
a division of Xxxxx Xxxxxx Mutual Funds Management Inc.
NAME OF FUND COMPENSATION
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Capital Growth Annual rate of 48 one-hundredths of one percent (.48%)
of the Capital Growth Fund's average daily net assets
Consented to by:
Date: 7/28/97 AMSOUTH BANK
By: /s/
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Date: 7/23/97 PEACHTREE ASSET MANAGEMENT, a division of
Xxxxx Xxxxxx Mutual Funds Management Inc.
By: /s/ Xxxxxx X. Xxxxxxx
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