Exhibit (6)(c)
ADVISORY AGREEMENT
between
REGIONS XXXXXX XXXXXX SELECT FUNDS
and
XXXXXX ASSET MANAGEMENT, INC.
ADVISORY AGREEMENT made this 18th day of February, 2005 (the "Agreement"),
by and between Regions Xxxxxx Xxxxxx Select Funds, a Massachusetts business
trust (the "Trust"), and Xxxxxx Asset Management, Inc., a corporation organized
under the laws of the State of Tennessee (the "Adviser").
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended ("1940 Act") as an open-end management investment company, and offers
for sale those series of shares of beneficial interest designated as Regions
Xxxxxx Xxxxxx Select LEADER Growth Equity Fund, Regions Xxxxxx Xxxxxx Select
LEADER Growth & Income Fund, Regions Xxxxxx Xxxxxx Select LEADER Balanced Fund,
Regions Xxxxxx Xxxxxx Select LEADER Tax-Exempt Bond Fund, Regions Xxxxxx Xxxxxx
Select LEADER Intermediate Bond Fund, Regions Xxxxxx Xxxxxx Select LEADER
Tax-Exempt Money Market Fund and Regions Xxxxxx Xxxxxx Select LEADER Money
Market Fund (each, a "Fund" and collectively, the "Funds") and
WHEREAS, the Trust desires to avail itself of the services, information,
advice, assistance and facilities of an investment adviser on behalf of the
Funds, and to have that investment adviser provide or perform for each Fund
certain research, statistical and investment services;
NOW, THEREFORE, in consideration of the promises and the mutual covenants
herein contained, it is agreed between the parties as follows:
1. EMPLOYMENT OF THE ADVISER. The Trust hereby employs the Adviser to
invest and reinvest the assets of each Fund in the manner set forth in Section 2
of this Agreement subject to the direction of the Board of Trustees (the
"Board") and the officers of the Trust, for the period, in the manner, and on
the terms set forth hereinafter. The Adviser hereby accepts such employment and
agrees during such period to render the services and to assume the obligations
set forth herein. The Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, except as expressly provided or authorized
(whether herein or otherwise), have no authority to act for or represent the
Trust in any way or otherwise be deemed an agent of the Trust.
2. OBLIGATIONS OF, AND SERVICES TO BE PROVIDED BY, THE ADVISER. The
Adviser undertakes to provide the services set forth hereinafter and to assume
the following obligations:
A. INVESTMENT ADVISORY SERVICES.
(i) The Adviser shall direct the investments of each
Fund, subject to and in accordance with each Fund's investment objective,
policies and limitations as provided in its Prospectus and Statement of
Additional Information and other governing instruments, as amended from time to
time, and any other directions and policies which the Board may issue to the
Adviser from time to time.
(ii) The Adviser is authorized, in its discretion and
without prior consultation with the Trust, to purchase and sell securities and
other investments for each Fund.
B. CORPORATE MANAGEMENT SERVICES.
(i) The Adviser shall furnish for the use of the Trust,
office space and all necessary office facilities, equipment and personnel for
servicing the investments of the Trust.
(ii) The Adviser shall pay the salaries of all personnel
of the Adviser, performing services relating to research, statistical and
investment activities of each Fund.
C. PROVISION OF INFORMATION NECESSARY FOR PREPARATION OF
REGISTRATION STATEMENT, AMENDMENTS AND OTHER MATERIALS. The Adviser will make
available and provide such information as the Trust or its administrator
reasonably may request for use in the preparation of the Trust's registration
statement, reports and other documents required by any applicable federal,
foreign or state statutes or regulations.
D. CODE OF ETHICS. The Adviser will adopt a written
code of ethics complying with the requirements of Rule 17j-1 under the 1940 Act
and Section 204A of the Investment Advisers Act of 1940 and will provide the
Trust and its administrator with a copy of such code of ethics and evidence of
its adoption. Within forty-five (45) days after the end of the last calendar
quarter of each year that this Agreement is in effect, an executive officer of
the Adviser shall certify to the Board that the Adviser has complied with the
requirements of Rule 17j-1 and Section 204A during the previous year and that
there has been no violation of the Adviser's code of ethics or, if such a
violation has occurred, that appropriate action was taken in response to such
violation. Upon the written request of the Trust or its administrator, the
Adviser shall permit the Trust or its administrator to examine the reports
required to be made to the Adviser by Rule 17j-l(c)(l).
E. DISQUALIFICATION. The Adviser immediately shall notify
the Board of the occurrence of any event which would disqualify the Adviser from
serving as an investment adviser of an investment company pursuant to Section 9
of the 1940 Act or any other applicable statute or regulation.
F. OTHER OBLIGATIONS AND SERVICES. The Adviser shall make
its officers and employees available to the Board and officers of the Trust for
consultation and discussion regarding the management of each Fund and its
investment activities.
2
3. EXECUTION AND ALLOCATION OF FUND BROKERAGE.
A. The Adviser, subject to the control and direction of the
Board, shall have authority and discretion to select brokers and dealers to
execute transactions for each Fund, and for the selection of the markets on or
in which the transactions will be executed.
B. In acting pursuant to the foregoing Section 3.A, the
Adviser will place orders through such brokers or dealers in conformity with the
policies with respect to transactions for each Fund set forth in the Trust's
registration statement.
C. Neither the Trust nor the Adviser will adopt a formula for
allocation of the Funds' brokerage.
D. The Adviser may, to the extent permitted by applicable
laws and regulations, aggregate securities to be sold or purchased for any Fund
and for other clients in order to obtain the most favorable price and efficient
execution. In that event, the Adviser may allocate the securities purchased or
sold, as well as expenses incurred in the transaction, in the manner the Adviser
considers to be the most equitable and consistent with its fiduciary duties to
the Trust and to the Adviser's other clients.
E. The Adviser may, in its discretion, use brokers who provide
the Funds with research, analysis, advice and similar services to execute
transactions on behalf of the Funds, and the Adviser may pay to those brokers in
return for brokerage and research services a higher commission than may be
charged by other brokers, subject to the Adviser determining in good faith that
such commission is reasonable in terms either of the particular transaction or
of the overall responsibility of the Adviser to the Funds and its other clients
and that the total commissions paid by a Fund will be reasonable in relation to
the benefits to a Fund's shareholders over the long term.
F. The Adviser may use brokers who are affiliated with the
Adviser provided that no such broker will be utilized in any transaction in
which such broker acts as principal; and the commissions, fees or other
remuneration received by such brokers is reasonable and fair compared to the
commissions, fees or other remuneration paid to other brokers in connection with
comparable transactions involving similar securities being purchased or sold
during a comparable period of time.
G. The Adviser shall provide such reports as the Board may
reasonably request with respect to each Fund's total brokerage and transaction
activities and the manner in which that business was allocated.
4. EXPENSES OF THE TRUST. During the term of this Agreement, each Fund
will bear all expenses, not specifically assumed by the Adviser, incurred in its
operations and the offering of its shares. Expenses borne by the Funds will
include but not be limited to the following (or each Fund's proportionate share
of the following): legal and audit expenses, organizational expenses; interest;
taxes; governmental fees; fees, voluntary assessments and other expenses
incurred in connection with membership in investment company organizations; the
cost (including brokerage commissions or charges, if any) of securities
purchased or sold by each Fund and any losses incurred in connection therewith;
fees of custodians, transfer agents, registrars or other agents; distribution
3
fees; expenses of preparing share certificates; expenses relating to the
redemption or repurchase of shares; expenses of registering and qualifying
shares for sale under applicable federal and state law and maintaining such
registrations and qualifications; expenses of preparing, setting in print,
printing and distributing prospectuses, statements of additional information,
proxy statements, reports, notices and dividends to shareholders; cost of
stationery; costs of stockholders' and other meetings of the Trust; compensation
and expenses of the independent trustees of the Trust; and the Trust's pro rata
portion of premiums of any fidelity bond and other insurance covering the Trust
and its officers and trustees.
5. COMPENSATION OF THE ADVISER. For the services and facilities to be
furnished and expenses assumed hereunder, the Adviser shall receive from each
Fund an advisory fee at the annual rate listed along with the Fund's name in
Schedule A attached hereto. This advisory fee shall be payable monthly as soon
as practicable after the last day of each month based on the average of the
daily values of the net assets of each Fund as determined at the close of
business on each day throughout the month. The assets of each Fund will be
valued separately as of the close of regular trading on the New York Stock
Exchange (currently 4:00 p.m., Eastern time) on each business day throughout the
month or, if the Trust lawfully determines the value of the net assets of any
Fund as of some other time on each business day, as of such time with respect to
that Fund. The first payment of such fee shall be made as promptly as possible
at the end of the month next succeeding the effective date of this Agreement. In
the event that the Adviser's right to such fee commences on a date other than
the last day of the month, the fee for such month shall be based on the average
daily assets of the Fund in that period from the date of commencement to the
last day of the month. If the Trust determines the value of the net assets of
any Fund more than once on any business day, the last such determination on that
day shall be deemed to be the sole determination on that day. The value of net
assets shall be determined pursuant to the applicable provisions of the Trust's
Amended and Restated Declaration of Trust, its By-Laws and the 1940 Act. If,
pursuant to such provisions, the determination of the net asset value of any
Fund is suspended for any particular business day, then the value of the net
assets of such Fund on such day shall be deemed to be the value of its net
assets as determined on the preceding business day. If the determination of the
net asset value of any Fund has been suspended for more than one month, the
Adviser's compensation payable at the end of that month shall be computed on the
basis of the value of the net assets of the Fund as last determined (whether
during or prior to such month).
6. ACTIVITIES AND AFFILIATES OF THE ADVISER.
A. Nothing in this Agreement shall limit or restrict the right
of any director, officer, or employee of the Adviser who may also be a trustee,
officer, or employee of the Trust, to engage in any other business or to devote
his time and attention in part to the management or other aspects of any other
business, whether of a similar nature or a dissimilar nature, nor to limit or
restrict the right of the Adviser to engage in any other business or to render
services of any kind, including investment advisory and management services, to
any other corporation, firm, individual or association.
B. The Trust acknowledges that the Adviser or one or more of its
"affiliated persons" may have investment responsibilities or render investment
advice to or perform other investment advisory services for other individuals or
4
entities and that the Adviser, its "affiliated persons" or any of its or their
directors, officers, agents or employees may buy, sell or trade in securities
for its or their respective accounts ("Affiliated Accounts"). Subject to the
provisions of paragraph 3, the Trust agrees that the Adviser or its "affiliated
persons" may give advice or exercise investment responsibility and take such
other action with respect to Affiliated Accounts which may differ from the
advice given or the timing or nature of action with respect to the Funds,
provided that the Adviser acts in good faith. The Trust acknowledges that one or
more of the Affiliated Accounts may at any time hold, acquire, increase,
decrease, dispose of or otherwise deal with positions in investments in which a
Fund may have an interest. The Adviser shall have no obligation to recommend for
any Fund a position in any investment which an Affiliated Account may acquire,
and the Trust shall have no first refusal, co-investment or other rights in
respect of any such investment, either for any Fund or otherwise.
C. Subject to and in accordance with the Amended and Restated
Declaration of Trust ("Declaration of Trust") and By-Laws of the Trust as
currently in effect and the 1940 Act and the rules thereunder, it is understood
that certain Trustees, officers and agents of the Trust and shareholders of the
Trust are or may be interested in the Adviser or its "affiliated persons," or
that directors, officers, agents and shareholders of the Adviser or its
"affiliated persons" are or may be interested in the Trust; and that the effect
of any such interests shall be governed by said Declaration of Trust, By-Laws
and the 1940 Act and the rules thereunder.
7. LIABILITIES OF THE ADVISER.
A. Except as provided below, in the absence of willful misfeasance,
bad faith, gross negligence, or reckless disregard of obligations or duties
hereunder on the part of the Adviser, the Adviser shall not be subject to
liability to the Trust or to any shareholder of the Trust or any Fund for any
act or omission in the course of, or in connection with, rendering services
hereunder or for any losses that may be sustained in the purchase, holding or
sale of any security or the making of any investment for or on behalf of the
Trust.
B. No provision of this Agreement shall be construed to protect
any Trustee or officer of the Trust, or any director or officer of the Adviser,
from liability in violation of Sections 17(h), 17(i), 36(a) or 36(b) of the 1940
Act.
8. EFFECTIVE DATE; TERM. The term of this Agreement shall begin on the
date first written above and, unless sooner terminated as provided herein, shall
continue in effect through August 31, 2006 and from year to year thereafter only
so long as specifically approved annually (i) by vote of a majority of the
Trustees of the Board who are not parties to this Agreement or interested
persons of such parties, cast in person at a meeting called for that purpose,
and (ii) by vote of a majority of the Board, or with respect to any Fund, by a
vote of a majority of the outstanding voting securities of each Fund.
9. ASSIGNMENT. No "assignment" of this Agreement shall be made by the
Adviser, and this Agreement shall terminate automatically in the event of any
such assignment. The Adviser shall notify the Trust in writing in advance of any
proposed change of "control" to enable the Trust to take the steps necessary to
enter into a new advisory agreement, if necessary.
5
10. AMENDMENT. This Agreement may be amended at any time, but only by
written agreement between the Adviser and the Trust, which amendment is subject
to the approval of the Board and, where required by the 1940 Act, the
shareholders of an affected Fund in the manner required by the 1940 Act and the
rules thereunder.
11. TERMINATION. This Agreement: (i) may at any time be terminated
without payment of any penalty by the Trust with respect to any Fund (by vote of
the Board or by "vote of a majority of the outstanding voting securities") on
sixty (60) days' written notice to the Adviser; (ii) shall immediately terminate
in the event of its "assignment"; and (iii) may be terminated with respect to
any Fund by the Adviser on sixty (60) days' written notice to the Trust.
12. NAME. In the event this Agreement is terminated by either party or
upon written notice from the Adviser at any time, the Trust hereby agrees that
it will eliminate from its name, or the name of any of its series, any reference
to the name "Regions Xxxxxx Xxxxxx" or "LEADER." The Trust shall have the
non-exclusive use of the name "Regions Xxxxxx Xxxxxx" or "LEADER" in whole or in
part so long as this Agreement is effective or until such notice is given.
13. DEFINITIONS. As used in this Agreement, the terms "affiliated
person," "assignment," "control," "interested person" and "vote of a majority of
the outstanding voting securities" shall have the meanings set forth in the 1940
Act and the rules and regulations thereunder, subject to any applicable orders
of exemption issued by the Securities and Exchange Commission.
14. NOTICE. Any notice under this Agreement shall be given in writing
addressed and delivered or mailed postage prepaid to the other party to this
Agreement at its principal place of business.
15. SEVERABILITY. 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.
16. GOVERNING LAW. To the extent that state law has not been preempted
by the provisions of any law of the United States, this Agreement shall be
administered, construed and enforced according to the laws of the Commonwealth
of Massachusetts.
17. MATTERS RELATING TO THE TRUST AS A MASSACHUSETTS BUSINESS TRUST.
It is expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust personally, but shall bind only the trust property of the
Trust. The execution and delivery of this Agreement have been authorized by the
Board, and this Agreement has been signed and delivered by an authorized officer
of the Trust, acting as such, and neither such authorization by the Board nor
such execution and delivery by such officer shall be deemed to have been made by
any of them individually or to impose any liability on any of them personally,
but shall bind only the trust property of the Trust as provided in the
Declaration of Trust.
6
IN WITNESS WHEREOF the parties have caused this Agreement to be signed on
their behalf by their respective officers thereunto duly authorized, all as of
the date first written above.
REGIONS XXXXXX XXXXXX SELECT FUNDS
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Secretary and Assistant Treasurer
XXXXXX ASSET MANAGEMENT, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Secretary and Treasurer
7
SCHEDULE A
REGIONS XXXXXX XXXXXX SELECT FUNDS
FEE SCHEDULE
Fund Percentage of Average
---- Daily Net Assets
----------------
Regions Xxxxxx Xxxxxx Select LEADER 0.75%
Growth Equity Fund
Regions Xxxxxx Xxxxxx Select LEADER 0.75%
Growth & Income Fund
Regions Xxxxxx Xxxxxx Select LEADER 0.80%
Balanced Fund
Regions Xxxxxx Xxxxxx Select LEADER 0.50%
Tax-Exempt Bond Fund
Regions Xxxxxx Xxxxxx Select LEADER 0.50%
Intermediate Bond Fund
Regions Xxxxxx Xxxxxx Select LEADER 0.40%
Tax-Exempt Money Market Fund
Regions Xxxxxx Xxxxxx Select LEADER 0.40%
Money Market Fund
8
