Exhibit (d)(4)
AMENDED AND RESTATED
SUB-ADVISORY AGREEMENT
AGREEMENT dated as of the 16th day of October, 2002, and amended and
restated as of October 1, 2003, between AmSouth Asset Management Inc., a
corporation with its principal place of business in Alabama (herein called the
"Investment Advisor") and OakBrook Investments, LLC, a limited liability
corporation with its principal place of business in Illinois (herein called the
"Sub-Advisor").
WHEREAS, the Investment Advisor is the investment advisor to AmSouth
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 ("1940 Act");
WHEREAS, AmSouth Investment Management Company, LLC (AIMCO) is a separate
wholly-owned subsidiary of AmSouth Bank, which formerly served as investment
advisor to the Trust;
WHEREAS, the Investment Advisor is a separate wholly-owned subsidiary of
AmSouth Bank;
WHEREAS, AmSouth Bank reorganized its investment advisory subsidiaries so
that management and investment advisory personnel that formerly provided
investment management services as personnel of AIMCO now do so as the personnel
of the Investment Advisor;
WHEREAS, the reorganization of the investment advisory subsidiaries of
AmSouth Bank does not effect an actual change in management or control of the
investment advisor within the meaning of Rule 2a-6 under the 1940 Act, and,
therefore, did not constitute an assignment of this Agreement for purposes of
Section 15(a)(4) of the 1940 Act;
WHEREAS, the Investment Advisor wishes to retain the Sub-Advisor to assist
the Investment Advisor in providing investment advisory services in connection
with such portfolios of 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 Board of Trustees of the Trust has duly approved this
Agreement upon consideration of the Trust's existing contractual arrangements
and applicable law; and
WHEREAS, the Sub-Advisor is willing to provide such services to the
Investment Advisor upon the terms and conditions and for the compensation set
forth below;
-1-
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, it is agreed between
the parties hereto as follows:
1. APPOINTMENT. The Investment Advisor hereby appoints the Sub-Advisor
its sub-advisor with respect to the Fund and the Sub-Advisor accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Investment Advisor shall provide to the
Sub-Advisor copies of the Trust's most recent prospectus and statement of
additional information (including supplement 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 Advisor, the
Sub-Advisor will provide a continual investment program for such portion, if
any, of the Fund's assets, that is allocated to the Sub-Advisor by the
Investment Advisor from time to time. With respect to such assets, the
Sub-Advisor will (i) provide investment research and credit analysis concerning
the Fund's investments; (ii) place orders for all purchases and sales of the
investments made for the Fund; (iii) maintain the books and records required in
connection with its duties hereunder; and (iv) keep the Investment Advisor
informed of developments materially affecting the Fund.
(b) The Sub-Advisor will use the same skill and care in providing
such services as it uses in providing services to fiduciary accounts for which
it has investment responsibilities; provided that, notwithstanding this
Paragraph 3(b), the liability of the Sub-Advisor 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-Advisor will communicate to the Investment Advisor and
to the Trust's custodian and Fund accountants as instructed by the Investment
Advisor 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
will be affected, (iv) the CUSIP number of the security, if any, and (v) such
other information as the Investment Advisor may reasonably require for purposes
of fulfilling its obligations to the Trust under the Advisory Agreement.
(d) The Sub-Advisor 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, and such other guidelines as the Board of Trustees of the Trust
("Board") or the Investment Advisor may establish.
-2-
(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-Advisor 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
purchases), all within a reasonable time after receipt thereof from the Trust
and will report any errors or discrepancies in such reports to the Trust or its
designee within three (3) business days after discovery of such discrepancies.
(g) At such times as reasonably requested by the Board or the
Investment Advisor, the Sub-Advisor will provide economic and investment
analysis and reports, and make available to the Board and the Investment Advisor
such economic, statistical, or investment services normally available to similar
investment company clients of the Sub-Advisor.
(h) The Sub-Advisor will make its portfolio managers and other
appropriate personnel available to the Board and the Investment Advisor at
reasonable times to review the Fund's investment policies and to consult with
the Board and the Investment Advisor regarding the investment affairs of the
Fund, including economic and statistical and investment matters relevant to the
Sub-Advisor's duties hereunder, and the portfolio strategies employed.
(i) The Sub-Advisor will provide the Investment Advisor with
quarterly compliance reports and certifications in the forms requested by the
Investment Advisor.
(j) The Sub-Advisor will provide the Trust with reasonable
evidence that, with respect to its activities on behalf of the Fund, the
Sub-Advisor is maintaining (i) adequate fidelity bond insurance; and (ii) an
appropriate Code of Ethics and related reporting procedures.
4. BROKERAGE. The Sub-Advisor may place orders pursuant to its
investment determinations for the Fund either directly with the issuer or with
any broker or dealer. In placing orders, the Sub-Advisor will consider the
experience and skill of the firm's securities traders, as well as the firm's
financial responsibility and administrative efficiency. The Sub-Advisor will use
its best efforts to obtain the best price and the most favorable execution of
its orders. Consistent with these obligations, the Sub-Advisor may, subject to
the approval of the Board, 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-Advisor
determines in good faith that the amount of such commission is reasonable in
relation to the value of the brokerage or research services provided, viewed
either in terms of a particular transaction or the overall responsibility of the
Sub-Advisor to the Fund and its other clients. In no instance will portfolio
-3-
securities be purchased from or sold to the Trust's principal distributor, the
Investment Advisor or any affiliate thereof (as the term "affiliate" is defined
in the 1940 Act), except to the extent permitted by Securities and Exchange
Commission exemptive order or by applicable law.
5. COMPLIANCE WITH LAWS: CONFIDENTIALITY: CONFLICTS OF INTEREST.
(a) The Sub-Advisor agrees that it will comply with all
applicable laws, rules and regulations of all federal and state regulatory
agencies having jurisdiction over the Sub-Advisor in performance of its
duties hereunder (herein called the "Rules").
(b) The Sub-Advisor will treat confidentially and as
proprietary information of the Trust all records and information relative to
the Trust and prior, present or potential shareholders, 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-Advisor 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-Advisor 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-Advisor'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-Advisor's affiliates unless so
required by applicable law. In dealing with their bank customers, affiliates
of Sub-Advisor will not inquire or take into consideration whether securities
of those customers are held by the Fund.
6. CONTROL BY TRUST'S BOARD OF TRUSTEES. Any recommendations concerning
the Fund's investment program proposed by the Sub-Advisor to the Fund and the
Investment Advisor pursuant to this Agreement, as well as any other activities
undertaken by the Sub-Advisor 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. SERVICES NOT EXCLUSIVE. The Sub-Advisor's services hereunder are not
deemed to be exclusive, and the Sub-Advisor shall be free to render similar or
dissimilar services to others so long as its services under this Agreement are
not impaired thereby.
8. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, and any other applicable Rule, the Sub-Advisor 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 such records upon the
Trust's request. The Sub-Advisor further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act and any other applicable Rule, the
-4-
records required to be maintained by the Sub-Advisor hereunder pursuant to Rule
31a-1 under the 1940 Act and any other applicable Rule.
9. EXPENSES. During the term of this Agreement, the Sub-Advisor will
bear all expenses incurred by it in connection with the performance of its
services under this Agreement other than the cost of securities (including
brokerage commissions, if any) purchased for the Fund. Notwithstanding the
foregoing, the Sub-Advisor shall not bear expenses related to the operation of
the Trust or any Fund including, but not limited to, taxes, interest, brokerage
fees and commissions and any extraordinary expense items.
10. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, the Investment Advisor will pay the Sub-Advisor and
the Sub-Advisor 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 Advisor and the Sub-Advisor. If the fee payable to the
Sub-Advisor 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 Fund's net assets shall be computed in the manner specified in the
Prospectus and the Statement of Additional Information 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 Advisor and shall in no way be an
obligation of the Fund or of the Trust.
11. LIMITATION OF LIABILITY.
(a) The Sub-Advisor shall not be liable for any error of
judgement or mistake of law or for any loss suffered by the Investment
Advisor, the Trust or the Fund in connection with the matters to which
Agreement relates, except that Sub-Advisor shall be liable to the Investment
Advisor for a loss resulting from a breach of fiduciary duty by Sub-Advisor
under the 1940 Act and other Rules with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of Sub-Advisor in the performance of
its duties or from reckless disregard by it of its obligations or duties
under this Agreement. The Sub-Advisor shall indemnify and hold harmless the
Investment Advisor, the Trust, the Fund, their Trustees, officers and
shareholders, from any and all claims, losses, expenses, obligations and
liabilities (including reasonable attorneys fees) which arise or result from
the Sub-Advisor's willful misfeasance, bad faith or gross negligence in the
performance of its duties or from the Sub-Advisor's reckless disregard of its
obligations or duties under this Agreement. In no case shall the Sub-Advisor
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-Advisor by the Investment Advisor.
-5-
(b) The Investment Advisor shall be responsible at all times
for supervising the Sub-Advisor, and this Agreement does not in any way limit
the duties and responsibilities that the Investment Advisor has agreed to
under the Advisory Agreement.
12. DURATION AND TERMINATION. This Agreement shall become effective as
of the date first written above provided that it shall have been approved (a) by
a vote of a majority of the members of the Board who are not parties to this
Agreement or interested persons of the Trust, the Investment Advisor or the
Sub-Advisor ("Independent Trustees"), cast in person at a meeting called for the
purposes of voting on such approval; and (b) by a vote of a majority of the
outstanding voting securities of the Fund. Unless sooner terminated as provided
herein, this Agreement shall continue with respect to the Fund until October 16,
2004. Thereafter, if not terminated, this Agreement shall continue in effect for
successive 12-month periods ending on October 15 of each year, provided such
continuance is specifically approved at least annually (a) by the vote of a
majority of Independent Trustees, cast in person at a meeting called for the
purpose of voting on such approval, and (b) by the Board 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 without the payment of any penalty by the Board, (ii) by vote of a
majority of the outstanding voting securities of the Fund, (iii) by the
Investment Advisor on 60 days written notice to the Sub-Advisor or (iv) by the
Sub-Advisor on 60 days written notice to the Investment Advisor. Any notice of
termination served on the Sub-Advisor by the Trust or the Investment Advisor
shall be without prejudice to the obligation of the Sub-Advisor to complete
transactions already initiated or acted upon with respect to the Fund. 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 1940 Act.)
13. 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.
14. NOTIFICATION OF INVESTMENT ADVISOR. The Sub-Advisor will promptly
notify the Investment Advisor in writing of the occurrence of any of the
following events: (a) the Sub-Advisor shall fail to be registered as an
investment advisor under the Investment Advisors Act of 1940, as amended; (b)
the Sub-Advisor shall have been served or otherwise have notice of any action,
suit, proceeding, inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of the Fund or the Trust;
or (c) any other occurrence that reasonably could have a material adverse impact
on the ability of the Sub-Advisor to provide the services provided for in this
Agreement.
15. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding among the parties hereto, and supersedes all prior agreements and
understandings relating to the subject matter hereof.
-6-
16. PRIVACY POLICY. The Sub-Advisor acknowledges that nonpublic customer
information (as defined in Regulation S-P, including any amendments thereto) of
customers of the Fund received from the Investment Advisor is subject to the
limitations on redisclosure and reuse set forth in Section 248.11 of Regulation
S-P, and agrees that such information: (i) shall not be disclosed to any third
party for any purpose without the written consent of the Investment Advisor
unless permitted by exceptions set forth in Sections 248.14 or 248.15 of
Regulation S-P; and (ii) shall be safeguarded pursuant to procedures adopted
under Section 248.30 of Regulation S-P if so required.
17. ANTI-MONEY LAUNDERING COMPLIANCE. The Sub-Advisor acknowledges that,
in compliance with the Bank Secrecy Act, as amended, and implementing
regulations ("BSA"), the Trust has adopted an Anti-Money Laundering Policy. The
Sub-Advisor agrees to comply with the Trust's Anti-Money Laundering Policy and
the BSA, as the same may apply to the Sub-Advisor, now or in the future. The
Sub-Advisor further agrees to provide to the Trust such reports, certifications
and contractual assurances as may be requested by the Trust or the Investment
Advisor.
18. 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 affected 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 Alabama
law.
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 an Amended and
Restated Declaration of Trust dated as of March 19, 2003 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 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.
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 ASSET MANAGEMENT INC.
-7-
/s/ Xxxxxx X. Xxxxxxx
---------------------------------
By: Xxxxxx X. Xxxxxxx
Title: Chairman
(SEAL) OAKBROOK INVESTMENTS, LLC
/s/ Xxxxx X. Xxxxxxx
---------------------------------
By: Xxxxx X. Xxxxxxx
Title: Director
-8-
Dated: October 1, 2003
SCHEDULE A
To Sub-Advisory Agreement
dated as of October 1, 2003
between AmSouth Asset Management Inc.
and OakBrook Investments, LLC
NAME OF FUND ANNUAL FEE AS A PERCENTAGE OF
------------ AVERAGE DAILY NET ASSETS
------------------------
AmSouth Mid Cap Fund .30% on the first $50 million of average
aggregate daily net assets and .20% on
assets in excess of $50 million
Consented to by:
Date _______________ AMSOUTH ASSET MANAGEMENT INC.
/s/ Xxxxxx X. Xxxxxxx
-----------------------------------
By: Xxxxxx X. Xxxxxxx
Title: Chairman
Date: _______________ OAKBROOK INVESTMENTS, LLC
/s/ Xxxxx X. Xxxxxxx
-----------------------------------
By: Xxxxx X. Xxxxxxx
Title: Director
A-1
