Exhibit (d)(2)
ALLEGIANT FUNDS
FORM OF ADVISORY AGREEMENT
AGREEMENT made as of _________________ between ALLEGIANT FUNDS, a
Massachusetts business trust, located in King of Prussia, Pennsylvania (the
"Trust") and PNC CAPITAL ADVISORS, LLC, located in Baltimore, Maryland (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 series of the Trust listed on Schedule 1 to this Agreement (the
"Fund(s)");
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
(f) The Trust's most recent prospectuses and statements of
additional information with respect to the Funds (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 Funds 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 Funds 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 Funds, including
investment research and management with respect to all securities and
investments and cash equivalents in the Funds. The Adviser will determine from
time to time what securities and other investments will be purchased, retained
or sold by the Funds. The Adviser will provide the services under this Agreement
in accordance with the Funds' investment objectives, policies, and restrictions
as stated in the Prospectus and resolutions of the Trust's Board of Trustees
applicable to the Funds.
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 Funds 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 Funds 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 Funds; (b) review investments in the Funds on a periodic basis for
compliance with their investment objectives, 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 Funds 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 Funds, or make interest-bearing loans to the Trust or
the Funds;
(d) will maintain a policy and practice of conducting its
investment management activities independently of all
affiliates;
(e) will place orders pursuant to its investment determinations
for the Funds 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 Funds 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 Funds 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 any of the Funds 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 any of the Funds' 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
Funds, 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 the Trust 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 Funds and such other clients;
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(f) will maintain all books and records with respect to the
securities transactions for the Funds 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
Funds 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.
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 Funds.
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8. Compensation. For the services provided to the Funds and the
expenses assumed pursuant to this Agreement, the Trust will pay the Adviser from
the assets belonging to each Fund and the Adviser will accept as full
compensation therefore fees, computed daily and paid monthly, at annual rates
based on the average daily net assets of each Fund as stated on Schedule 1 of
this Agreement.
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 with
respect to a Fund upon approval of this Agreement by vote of a majority of the
outstanding voting securities of such Fund, and, unless sooner terminated as
provided herein, shall continue in effect until August 31, 2011. Thereafter, if
not terminated, this Agreement shall continue in effect with respect to a Fund
for successive twelve month periods ending on August 31, 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
such Fund. Notwithstanding the foregoing, this Agreement may be terminated at
any time with respect to a Fund, 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 such 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 with respect to a Fund until approved by vote of a majority of the
outstanding voting securities of such 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 Ohio law.
13. Names. The names "ALLEGIANT FUNDS" and "Trustees of ALLEGIANT
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
"ALLEGIANT 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.
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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.
ALLEGIANT FUNDS
BY: ____________________
Name:
Title:
PNC CAPITAL ADVISORS, LLC
BY: ____________________
Name:
Title:
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SCHEDULE 1
ALLEGIANT FUNDS
ADVISORY AGREEMENT
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INVESTMENT ADVISORY FEE
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EQUITY FUNDS
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Allegiant Balanced Allocation Fund 0.75%
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Allegiant International Equity Fund 1.00%
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Allegiant Large Cap Core Equity Fund 0.75% of $0 to less than $1
billion, 0.70% of $1 billion to less than $1.5 billion,
and 0.65% of $1.5 billion and over
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Allegiant Large Cap Growth Fund 0.75% of $0 to less than $1 billion,
0.70% of $1 billion to less than $1.5 billion, and 0.65%
of $1.5 billion and over
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Allegiant Large Cap Value Fund 0.75% of $0 to less than $1 billion,
0.70% of $1 billion to less than $1.5 billion, and 0.65%
of $1.5 billion and over
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Allegiant Mid Cap Value Fund 0.75%
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Allegiant Multi-Factor Small Cap Core Fund 1.00% of $0 to less than
$500 million, 0.95% of $500 million to less than $1
billion, and 0.90% of $1 billion and over
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Allegiant Multi-Factor Small Cap Growth Fund 1.00% of $0 to less
than $500 million, 0.95% of $500 million to less than $1
billion, and 0.90% of $1 billion and over
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Allegiant Multi-Factor Small Cap Value Fund 1.00% of $0 to less than
$500 million, 0.95% of $500 million to less than $1
billion, and 0.90% of $1 billion and over
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Allegiant S&P 500 Index Fund 0.15% of $0 to less than $50 million, 0.10% of $50
million to less than $150 million, and 0.075% of $150
million and over
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Allegiant Small Cap Core Fund 1.00% of $0 to less than $500 million,
0.95% of $500 million to less than $1 billion, and 0.90%
of $1 billion and over
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INVESTMENT ADVISORY FEE
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FIXED INCOME FUNDS
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Allegiant Bond Fund 0.45%
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Allegiant Government Mortgage Fund 0.40%
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Allegiant High Yield Bond Fund 0.50%
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Allegiant Intermediate Bond Fund 0.40%
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Allegiant Limited Maturity Bond Fund 0.35%
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Allegiant Total Return Advantage Fund 0.40%
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Allegiant Ultra Short Bond Fund 0.20%
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TAX EXEMPT BOND FUNDS
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Allegiant Intermediate Tax Exempt Bond Fund 0.40%
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Allegiant Michigan Intermediate Municipal Bond Fund 0.40%
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Allegiant Ohio Intermediate Tax Exempt Bond Fund 0.40%
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Allegiant Pennsylvania Intermediate Municipal Bond Fund 0.40%
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Allegiant Maryland Tax Exempt Bond Fund 0.40%
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Allegiant Tax Exempt Limited Maturity Bond Fund 0.40%
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MONEY MARKET FUNDS
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Allegiant Government Money Market Fund 0.25%
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Allegiant Money Market Fund 0.25%
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Allegiant Ohio Municipal Money Market Fund 0.20%
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Allegiant Pennsylvania Tax Exempt Money Market Fund 0.20%
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Allegiant Tax Exempt Money Market Fund 0.20%
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Allegiant Treasury Money Market Fund 0.25%
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