Exhibit (d)(16)
ARMADA FUNDS
ADVISORY AGREEMENT
AGREEMENT made as of April 2, 2004, between ARMADA FUNDS, a
Massachusetts business trust, located in King of Prussia, Pennsylvania (the
"Trust") and NATIONAL CITY INVESTMENT MANAGEMENT COMPANY, located in Cleveland,
Ohio (the "Adviser").
WHEREAS, the Trust is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Trust desires to retain the Adviser as investment adviser
to the Small Cap Core Fund (the "Fund");
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed among the parties hereto as follows:
1. DELIVERY OF DOCUMENTS. The Adviser acknowledges that it has received
copies of each of the following:
(a) The Trust's Declaration of Trust, as filed with the State
Secretary of the Commonwealth of Massachusetts on January 29,
1986 and all amendments thereto (such Declaration of Trust, as
presently in effect and as it shall from time to time be
amended, is herein called the "Declaration of Trust");
(b) The Trust's Code of Regulations, and amendments thereto (such
Code of Regulations, as presently in effect and as it shall
from time to time be amended, is herein called the "Code of
Regulations");
(c) Resolutions of the Trust's Board of Trustees authorizing the
appointment of the Adviser and approving this Agreement;
(d) The Trust's Notification of Registration on Form N-8A under
the 1940 Act as filed with the Securities and Exchange
Commission ("SEC") on September 26, 1985 and all amendments
thereto;
(e) The Trust's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended ("1933 Act") (File No.
33-488) and under the 1940 Act as filed with the SEC on
September 26, 1985 and all amendments thereto; and
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(f) The Trust's most recent prospectuses and statements of
additional information with respect to the Fund (such
prospectuses and statements of additional information, as
presently in effect and all amendments and supplements thereto
are herein called individually, a "Prospectus", and
collectively, the "Prospectuses").
The Trust will furnish the Adviser from time to time with execution
copies of all amendments of or supplements to the foregoing.
2. SERVICES. The Trust hereby appoints the Adviser to act as investment
adviser to the Fund for the period and on the terms set forth in this Agreement.
Intending to be legally bound, the Adviser accepts such appointment and agrees
to furnish the services required herein to the Fund for the compensation
hereinafter provided.
Subject to the supervision of the Trust's Board of Trustees, the
Adviser will provide a continuous investment program for the Fund, including
investment research and management with respect to all securities and
investments and cash equivalents in the Fund. The Adviser will determine from
time to time what securities and other investments will be purchased, retained
or sold by the Fund. The Adviser will provide the services under this Agreement
in accordance with the Fund's investment objectives, policies, and restrictions
as stated in the Prospectus and resolutions of the Trust's Board of Trustees
applicable to the Fund.
3. SUBCONTRACTORS. It is understood that the Adviser may from time
to time employ or associate with itself such person or persons as the Adviser
may believe to be particularly fitted to assist in the performance of this
Agreement; provided, however, that the compensation of such person or persons
shall be paid by the Adviser and that the Adviser shall be as fully responsible
to the Trust for the acts and omissions of any subcontractor as it is for its
own acts and omissions. Without limiting the generality of the foregoing, it is
agreed that investment advisory services to the Fund may be provided by a
sub-adviser agreeable to the Adviser and approved in accordance with the
provisions of the 1940 Act. Any such sub-advisers are hereinafter referred to as
the "Sub-Advisers." In the event that any Sub-Adviser appointed hereunder is
terminated, the Adviser may provide investment advisory services pursuant to
this Agreement to the Fund involved without further shareholder approval.
Notwithstanding the employment of any Sub-Adviser, the Adviser shall in all
events: (a) establish and monitor general investment criteria and policies for
the Fund; (b) review investments in the Fund on a periodic basis for compliance
with its investment objective, policies and restrictions as stated in the
Prospectus; (c) review periodically any Sub-Adviser's policies with respect to
the placement of orders for the purchase and sale of portfolio securities; (d)
review, monitor, analyze and report to the Board of Trustees on the performance
of any Sub-Adviser; (e) furnish to the Board of Trustees or any Sub-Adviser,
reports, statistics and economic information as may be reasonably requested; and
(f) recommend, either in its sole discretion or in conjunction with any
Sub-Adviser, potential changes in investment policy.
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4. COVENANTS BY ADVISER. The Adviser agrees with respect to the
services provided to the Fund that it:
(a) will comply with all applicable Rules and Regulations of the
SEC and will in addition conduct its activities under this
Agreement in accordance with other applicable law;
(b) will use the same skill and care in providing such services as
it uses in providing services to similar fiduciary accounts
for which it has investment responsibilities;
(c) will not make loans to any person to purchase or carry shares
in the Fund, or make interest-bearing loans to the Trust or
the Fund;
(d) will maintain a policy and practice of conducting its
investment management activities independently of the
Commercial Departments of all banking affiliates. In making
investment recommendations for the Fund, personnel will not
inquire or take into consideration whether the issuers (or
related supporting institutions) of securities proposed for
purchase or sale for the Fund's account are customers of the
Commercial Department. In dealing with commercial customers,
the Commercial Department will not inquire or take into
consideration whether securities of those customers are held
by the Fund;
(e) will 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 for
executing portfolio transactions, the Adviser will use its
best efforts to seek on behalf of the Trust and the Fund the
best overall terms available. In assessing the best overall
terms available for any transaction the Adviser shall consider
all factors 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 or dealer to execute a particular transaction, the
Adviser may also consider the brokerage and research services
(as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934, as amended) provided to the Fund and/or
other accounts over which the Adviser or any affiliate of the
Adviser exercises investment discretion. The Adviser is
authorized, subject to the prior approval of the Board, to
negotiate and pay to a broker or dealer who provides such
brokerage and research services a commission for executing a
portfolio transaction for a Fund which is in excess of the
amount of commission another broker or dealer would have
charged for effecting that transaction if, but only if, the
Adviser 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 Adviser with respect to the
accounts as to which it exercises investment discretion. In no
instance will Fund securities be purchased from or sold to the
Adviser, any Sub-Adviser, or any principal underwriter to the
Trust or an affiliated person of either the Trust, the
Adviser, Sub-Adviser, or principal underwriter unless
permitted by an order of the SEC or applicable rules. In
executing portfolio transactions for the Fund, the Adviser
may, but shall not be obligated to, to the extent permitted by
applicable laws and regulations, aggregate the securities to
be sold or purchased with those of other investment portfolios
of Armada Funds and its other clients where such aggregation
is not inconsistent with the policies set forth in the Trust's
registration statement. In such event, the Adviser will
allocate the securities so purchased or sold, and the expenses
incurred in the transaction, in the manner it considers to be
the most equitable and consistent with its fiduciary
obligations to the Fund and such other clients;
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(f) will maintain all books and records with respect to the
securities transactions for the Fund and furnish the Trust's
Board of Trustees such periodic and special reports as the
Board may request; and
(g) will treat confidentially and as proprietary information of
the Trust all records and other information relative to the
Fund 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 and will be deemed granted where the
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).
5. SERVICES NOT EXCLUSIVE. The services furnished by the Adviser
hereunder are deemed not to be exclusive, and the Adviser shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby.
6. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Adviser 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 of such records upon the Trust's request.
The Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act.
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7. EXPENSES. During the term of this Agreement, the Adviser will pay
all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage commissions, if
any) purchased for the Fund.
8. COMPENSATION. For the services provided to the Fund and the expenses
assumed pursuant to this Agreement, the Trust will pay the Adviser from the
assets belonging to the Fund and the Adviser will accept as full compensation
therefor fees, computed daily and paid monthly, at the annual rate of 1.00% of
the average daily net assets of the Fund;
9. LIMITATION OF LIABILITY. The Adviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust in connection
with the performance of this Agreement, except a loss resulting from a breach of
fiduciary duty 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 the Adviser in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement.
10. DURATION AND TERMINATION. This Agreement will become effective upon
approval of this Agreement by vote of a majority of the outstanding voting
securities of the Fund, and, unless sooner terminated as provided herein, shall
continue in effect until April _______, 2006. Thereafter, if not terminated,
this Agreement shall continue in effect for successive twelve month periods
ending on April ______, PROVIDED such continuance is specifically approved at
least annually (a) by the vote of a majority of those members of the Trust's
Board of Trustees who are not interested persons of any party to this Agreement,
cast in person at a meeting called for the purpose of voting on such approval,
and (b) by the Trust's Board of Trustees or by vote of a majority of the
outstanding voting securities of the Fund. Notwithstanding the foregoing, this
Agreement may be terminated at any time, without the payment of any penalty, by
the Trust (by the Trust's Board of Trustees or by vote of a majority of the
outstanding voting securities of the Fund), or by the Adviser on 60 days'
written notice. This Agreement will immediately terminate in the event of its
assignment. (As used in this Agreement, the terms "majority of the outstanding
voting securities," "interested persons" and "assignment" shall have the same
meaning of such terms in the 1940 Act.)
11. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Agreement shall be
effective until approved by vote of a majority of the outstanding voting
securities of the Fund.
12. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
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 hereto and their respective successors and shall be
governed by Delaware law.
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13. NAMES. The names "ARMADA FUNDS" and "Trustees of ARMADA FUNDS" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated January 28, 1986 which is hereby referred to and a copy of which is
on file at the office of the State Secretary of the Commonwealth of
Massachusetts and the principal office of the Trust. The obligations of "ARMADA
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 Trust property, and all persons dealing
with any class of shares of the Trust must look solely to the Trust property
belonging to such class 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.
ARMADA FUNDS
By: XXXXXXX X. XXXXXXX
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Title: President and Chief Executive Officer
NATIONAL CITY INVESTMENT
MANAGEMENT COMPANY
By: XXXXXXX X. XXXXXXXXX
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Title: Managing Director
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