Exhibit 6(q)
SUB-ADVISORY AGREEMENT
ARMADA FUNDS
SMALL CAP CORE FUND
SUB-ADVISORY AGREEMENT
AGREEMENT made as of April 1, 2004 between NATIONAL CITY INVESTMENT
MANAGEMENT COMPANY (the "Adviser"), and ALLEGIANT INVESTMENT COUNSELORS, INC.
(the "Sub-Adviser").
WHEREAS, ARMADA FUNDS, a Massachusetts business trust (the "Trust"), is
registered as an open-end, management investment company under the Investment
Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, pursuant to an Advisory Agreement dated April 1, 2004 (the
"Advisory Agreement") by and between the Trust and the Adviser, the Trust has
appointed the Adviser to furnish the investment advisory and other services to
the Trust for its Small Cap Core Fund and the Adviser has agreed thereto; and
WHEREAS, the Advisory Agreement authorizes the Adviser to subcontract
investment advisory services with respect to the Fund to the Sub-Adviser; and
WHEREAS, the Adviser desires to retain the Sub-Adviser to furnish
investment advisory services to the Trust with respect to the Small Cap Core
Fund (the "Fund") and the Sub-Adviser is willing to so furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT AND DELIVERY OF DOCUMENTS.
(a) Intending to be legally bound, the Adviser, with the approval
of the Trust, hereby appoints the Sub-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 Sub-Adviser accepts such appointment and agrees to furnish
the services herein set forth for the compensation herein
provided.
(b) The Sub-Adviser acknowledges that it has received copies of
the Trust's most recent prospectuses and statements of
additional information with respect to the Fund.
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2. SERVICES OF SUB-ADVISER. The Sub-Adviser agrees that with respect to
the Fund it shall:
(a) Subject to the supervision of the Trust's Board of Trustees,
assist the Adviser in providing a continuous investment
program for the Fund, including investment research and
management with respect to all securities, investments, cash
and cash equivalents in the Fund. The Sub-Adviser will assist
the Adviser in determining from time to time what securities
and other investments will be purchased, retained or sold by
the Fund. The Sub-Adviser will provide the services rendered
by it under this Agreement in accordance with the Fund's
investment objective, policies, and restrictions as stated in
the Prospectus and Statement of Additional Information and
resolutions of the Trust's Board of Trustees applicable to the
Fund;
(b) Transmit trades to the Trust's custodian for proper
settlement;
(c) Prepare a quarterly broker security transaction summary and
monthly security transaction listing for the Fund;
(d) Maintain all books and records with respect to the Fund's
securities transactions effected by it as required by
subparagraphs (b)(5), (6), (7), (9), (10) and (11) and
paragraph (f) of Rule 31a-1 under the 1940 Act; and
(e) Supply the Trust and its Board of Trustees with reports and
statistical data as reasonably requested.
3. OTHER COVENANTS. The Sub-Adviser agrees that it:
(a) will comply with all applicable Rules and Regulations of the
Securities and Exchange Commission 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 advisory services hereunder independently of the
commercial banking operations of any affiliated person of the
Adviser. In making investment recommendations for the Fund,
the Sub-Adviser's 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
of any affiliated person of the Adviser;
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(e) in connection with its duties under paragraph 2 of this
Agreement, 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 Sub-Adviser will use its
best efforts to seek on behalf of the Fund the best overall
terms available. In assessing the best overall terms available
for any transaction the Sub-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 Sub-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 any fund and/or
other accounts over which the Sub-Adviser or any affiliate of
the Sub-Adviser exercises investment discretion. The
Sub-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 the 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 Sub-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 Sub-Adviser with
respect to the accounts as to which it exercises investment
discretion. Notwithstanding the foregoing, no prior approval
by the Board shall be required so long as the broker or dealer
selected by the Sub-Adviser provides best price and execution
on a particular transaction. In no instance will Fund
securities be purchased from or sold to the Adviser, any
Sub-Adviser, Professional Funds Distributors, LLC ("PFD") (or
any other principal underwriter to the Trust) or an affiliated
person of either the Trust, the Adviser, Sub-Adviser, or PFD
(or such other principal underwriter) unless permitted by an
order of the SEC or applicable rules. In executing portfolio
transactions for the Fund, the Sub-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 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 Sub-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; and
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(f) 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
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).
4. SERVICES NOT EXCLUSIVE. The services furnished by the Sub-Adviser hereunder
are deemed not to be exclusive, and the Sub-Adviser shall be free to furnish
similar services to others so long as its services under this Agreement are not
impaired thereby. The Adviser acknowledges that the Sub-Adviser may give advice
and take action in the performance of its duties with respect to any of its
other clients which may differ from advice given, or the time or nature of
action taken, with respect to the Fund.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Sub-Adviser hereby agrees that all records which it maintains
for the Fund are the property of the Trust and further agrees to surrender
promptly to the Trust any of such records upon the Trust's written request;
provided, however, that the Sub-Adviser may retain a copy of such records. The
Sub-Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act any such records required to be maintained by it pursuant to
paragraph 2(d) of this Agreement.
6. EXPENSES. During the term of this Agreement, the Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities, commodities and other investments (including
brokerage commissions and other transaction costs, if any) purchased or sold for
any Fund.
7. COMPENSATION. For the services provided and the expenses assumed pursuant to
this Agreement, the Adviser will pay the Sub-Adviser and the Sub-Adviser will
accept as full compensation therefor a fee, computed daily and payable monthly,
of 0.50% of the average daily net assets of the Small Cap Core Fund.
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8. LIMITATION OF LIABILITY. The Sub-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 Sub-Adviser in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement.
9. DURATION AND TERMINATION. This Agreement will become effective with respect
to the Fund 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 September 30, 2005. Thereafter,
if not terminated, this Agreement shall automatically continue in effect as to
the Fund for successive twelve month periods ending on September 30, 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 as to the
Fund at any time, without the payment of any penalty, by the Adviser or by the
Trust (by vote of the Trust's Board of Trustees or by vote of a majority of the
outstanding voting securities of the Fund) on sixty days' written notice to the
Sub-Adviser, or by the Sub-Adviser, on sixty days' written notice to the Trust,
provided that in each such case, notice shall be given simultaneously to the
Adviser. In addition, notwithstanding anything herein to the contrary, in the
event of the termination of the Advisory Agreement with respect to the Fund for
any reason (whether by the Trust, by the Adviser or by operation of law) this
Agreement shall terminate with respect to the Fund upon the effective date of
such termination of the Advisory Agreement. 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 as such terms have in the 1940 Act.)
10. 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 as
to the Fund until approved by vote of a majority of the outstanding voting
securities of the Fund.
11. MISCELLANEOUS. During the term of this Agreement, the Adviser agrees to
furnish the Sub-Adviser at its principal office all Prospectuses, proxy
statements, reports to shareholders, sales literature or other materials
prepared for distribution to shareholders of the Fund, the Adviser,
broker-dealers or the public that refer to the Sub-Adviser. Sub-Adviser shall
consent to such materials unless it reasonably objects in writing within five
business days (or such other period as may be mutually agreed) after receipt
thereof. The Sub-Adviser's right to object to such materials is limited to the
portions of the materials that expressly relate to the Sub-Adviser, its services
and its clients. The Adviser agrees to use its reasonable best efforts to ensure
that materials prepared by its employees or agents or affiliates that refer to
the Sub-Adviser or its clients in any way are consistent with those materials
previously approved by the Sub-Adviser.
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The captions in the 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.
12. 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.
ALLEGIANT INVESTMENT COUNSELORS
By: /s/ XXXXXX X. XXXXXXX
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Name: Xxxxxx X Xxxxxxx
Title: President
NATIONAL CITY INVESTMENT MANAGEMENT COMPANY
By: /s/ XXXXXX X. XXXX
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Name: Xxxxxx X Xxxx
Title: President, IMC
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