INVESTMENT ADVISORY AGREEMENT
This Investment Advisory Agreement (the "Agreement") is made and entered
into effective as of August 31, 2006, by and between The Piedmont Investment
Trust, a Delaware statutory trust (the "Trust") on behalf of The Piedmont Select
Value Fund, a series of shares of the Trust (the "Fund"), and Sheets, Xxxxx &
Associates, Inc., a North Carolina corporation (hereinafter referred to as
"Advisor").
WHEREAS, the Trust is an open-end management investment company,
registered under the Investment Company Act of 1940, as amended (the "Act");
WHEREAS, the Trust has designated the Fund as a series of interests in the
Trust;
WHEREAS, the Advisor is registered as an investment advisor under the
Investment Advisers Act of 1940, as amended ("Advisers Act"), and engages in the
business of asset management; and
WHEREAS, the Trust desires to retain the Advisor to render certain
investment management services to the Fund, and the Advisor is willing to render
such services.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. OBLIGATIONS OF INVESTMENT ADVISOR
(A) SERVICES. The Advisor agrees to perform the following
services (the "Services") for the Trust:
(1) manage the investment and reinvestment of the assets
of the Fund;
(2) continuously review, supervise, and administer the
investment program of the Fund;
(3) determine, in its discretion, the securities to be
purchased, retained or sold (and implement those decisions)
with respect to the Fund;
(4) provide the Trust and the Fund with records
concerning the Advisor's activities under this Agreement which
the Trust and the Fund are required to maintain;
(5) render regular reports to the Trust's trustees and
officers concerning the Advisor's discharge of the foregoing
responsibilities; and
(6) perform such other services as agreed by the Advisor
and the Trust from time to time.
The Advisor shall discharge the foregoing responsibilities subject to the
control of the trustees and officers of the Trust and in compliance with
(i) such policies as the trustees may from time to time establish; (ii)
the Fund's objectives, policies, and limitations as set forth in its
prospectus ("Prospectus") and statement of additional information
("Statement of Additional Information"), as the same may be amended from
time to time; and (iii) with all applicable laws and regulations. All
Services to be furnished by the Advisor under this Agreement may be
furnished through the medium of any directors, officers or employees of
the Advisor or through such other parties as the Advisor may determine
from time to time.
(B) EXPENSES AND PERSONNEL. The Advisor agrees, at its own expense
or at the expense of one or more of its affiliates, to render the Services
and to provide the office space, furnishings, equipment and personnel as
may be reasonably required in the judgment of the trustees and officers of
the Trust to perform the Services on the terms and for the compensation
provided herein. The Advisor shall authorize and permit any of its
officers, directors and employees, who may be elected as trustees or
officers of the Trust, to serve in the capacities in which they are
elected. Except to the extent expressly assumed by the Advisor herein and
except to the extent required by law to be paid by the Advisor, the Trust
shall pay all costs and expenses in connection with its operation.
(C) BOOKS AND RECORDS. All books and records prepared and maintained
by the Advisor for the Trust and the Fund under this Agreement shall be
the property of the Trust and the Fund and, upon request therefor, the
Advisor shall surrender to the Trust and the Fund such of the books and
records so requested.
2. FUND TRANSACTIONS. The Advisor is authorized to select the brokers or
dealers that will execute the purchases and sales of portfolio securities for
the Fund. With respect to brokerage selection, the Advisor shall seek to obtain
the best overall execution for fund transactions, which is a combination of
price, quality of execution and other factors. The Advisor may, in its
discretion, purchase and sell portfolio securities from and to brokers and
dealers who provide the Advisor with brokerage, research, analysis, advice and
similar services, and the Advisor may pay to these brokers and dealers, in
return for such services, a higher commission or spread than may be charged by
other brokers and dealers, provided that the Advisor determines in good faith
that such commission is reasonable in terms either of that particular
transaction or of the overall responsibility of the Advisor to the Fund and its
other clients and that the total commission paid by the Fund will be reasonable
in relation to the benefits to the Fund and its other clients over the
long-term. The Advisor will promptly communicate to the officers and the
trustees of the Trust such information relating to portfolio transactions as
they may reasonably request.
3. COMPENSATION OF THE ADVISOR. The Fund will pay monthly to the Advisor
an investment advisory fee (the "Fee") equal to an annualized rate of 0.90% of
the average daily net
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assets of the Fund. The Fee shall be calculated as of the last business day of
each month based upon the average daily net assets of the Fund determined in the
manner described in the Fund's Prospectus and/or Statement of Additional
Information, and shall be paid to the Advisor by the Fund within five (5) days
after such calculation.
4. STATUS OF INVESTMENT ADVISOR. The services of the Advisor to the Trust
and the Fund are not to be deemed exclusive, and the Advisor shall be free to
render similar services to others so long as its Services to the Trust and the
Fund are not impaired thereby. The Advisor shall be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Trust or the Fund in any way or otherwise
be deemed an agent of the Trust or the Fund. Nothing in this Agreement shall
limit or restrict the right of any director, officer or employee of the Advisor,
who may also be a trustee, officer or employee of the Trust, to engage in any
other business or to devote his or her time and attention in part to the
management or other aspects of any other business, whether of a similar nature
or a dissimilar nature.
5. PERMISSIBLE INTERESTS. Trustees, agents, and stockholders of the Trust
are or may be interested in the Advisor (or any successor thereof) as directors,
partners, officers, or stockholders, or otherwise; and directors, partners,
officers, agents, and stockholders of the Advisor are or may be interested in
the Trust as trustees, stockholders or otherwise; and the Advisor (or any
successor) is or may be interested in the Trust as a stockholder or otherwise.
6. LIMITS OF LIABILITY; INDEMNIFICATION. The Advisor assumes no
responsibility under this Agreement other than to render the Services called for
hereunder. The Advisor shall not be liable for any error of judgment or for any
loss suffered by the Trust or the Fund in connection with the matters to which
this Agreement relates, except a loss resulting from a breach of fiduciary duty
with respect to receipt of compensation for services (in which case any award of
damages shall be limited to the period and the amount set forth in Section
36(b)(3) of the Act) or a loss resulting from willful misfeasance, bad faith,
gross negligence, or reckless disregard on its part in the performance of, or
from reckless disregard by it of its obligations and duties under, this
Agreement. It is agreed that the Advisor shall have no responsibility or
liability for the accuracy or completeness of the Trust's registration statement
under the Act or the Securities Act of 1933, as amended ("1933 Act"), except for
information supplied by the Advisor for inclusion therein. The Trust agrees to
indemnify the Advisor to the full extent permitted by the Trust's Declaration of
Trust.
7. TERM. This Agreement shall remain in effect for an initial term of two
years from the date hereof, and from year to year thereafter provided such
continuance is approved at least annually by the vote of a majority of the
trustees of the Trust who are not "interested persons" (as defined in the Act)
of the Trust, which vote must be cast in person at a meeting called for the
purpose of voting on such approval; provided, however, that:
(a) the Trust may, at any time and without the payment of any
penalty, terminate this Agreement upon 60 days written notice of a
decision to terminate this Agreement by (i)
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the Trust's trustees; or (ii) the vote of a majority of the outstanding
voting securities of the Fund;
(b) the Agreement shall immediately terminate in the event of its
assignment (within the meaning of the Act and the Rules thereunder);
(c) the Advisor may, at any time and without the payment of any
penalty, terminate this Agreement upon 60 days written notice to the Trust
and the Fund; and
(d) the terms of paragraph 6 of this Agreement shall survive the
termination of this Agreement.
8. AMENDMENTS. 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, and no amendment of this Agreement shall be effective
until approved by vote of the holders of a majority of the Trust's outstanding
voting securities.
9. APPLICABLE LAW. This Agreement shall be construed in accordance with,
and governed by, the substantive laws of the State of Delaware without regard to
the principles of the conflict of laws or the choice of laws.
10. REPRESENTATIONS AND WARRANTIES.
(A) REPRESENTATIONS AND WARRANTIES OF THE ADVISOR. The Advisor
hereby represents and warrants to the Trust as follows: (i) the Advisor is
a corporation duly organized, validly existing, and in good standing under
the laws of the State of North Carolina and is fully authorized to enter
into this Agreement and carry out its duties and obligations hereunder;
and (ii) the Advisor is registered as an investment advisor with the
Securities and Exchange Commission ("SEC") under the Advisers Act, and
shall maintain such registration in effect at all times during the term of
this Agreement.
(B) REPRESENTATIONS AND WARRANTIES OF THE TRUST. The Trust hereby
represents and warrants to the Advisor as follows: (i) the Trust has been
duly organized as a statutory trust under the laws of the State of
Delaware and is authorized to enter into this Agreement and carry out its
terms; (ii) the Trust is registered as an investment company with the SEC
under the Act; (iii) shares of each Fund are (or will be) registered for
offer and sale to the public under the 1933 Act; and (iv) such
registrations will be kept in effect during the term of this Agreement.
11. STRUCTURE OF AGREEMENT. The Trust is entering into this Agreement
solely on behalf of the Fund. No breach of any term of this Agreement shall
create a right or obligation with respect to any series of the Trust other than
the Fund; (b) under no circumstances shall the Advisor
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have the right to set off claims relating to the Fund by applying property of
any other series of the Trust; and (c) the business and contractual
relationships created by this Agreement, consideration for entering into this
Agreement, and the consequences of such relationship and consideration relate
solely to the Trust and the Fund.
12. 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 and, to this extent, the provisions of
this Agreement shall be deemed to be severable.
13. NOTICE. Notices of any kind to be given to the Trust hereunder by the
Advisor shall be in writing and shall be duly given if mailed or delivered to
The Piedmont Investment Trust at 000 Xxxx Xxxx Xxxxx, Xxxxx 000, Xxxxxxx Xxxxx
XX 00000, Attention: Xxxx X. Xxxxxxx, with a copy to The Nottingham Company at
000 Xxxxx Xxxxxxxx Xxxxxx, Post Xxxxxx Xxx 00, Xxxxx Xxxxx, XX 00000-0000,
Attention: Xxxxxx X. Xxxxxxx or to such other address or to such individual as
shall be so specified by the Trust to the Advisor. Notices of any kind to be
given to the Advisor hereunder by the Trust shall be in writing and shall be
duly given if mailed or delivered to Sheets, Xxxxx & Associates, Inc., 000 Xxxx
Xxxx Xxxxx, Xxxxx 000, Xxxxxxx Xxxxx XX 00000, Attention: Xxxx X. Xxxxxx, or at
such other address or to such individual as shall be so specified by the Advisor
to the Trust. Notices shall be deemed received when delivered in person or
within four (4) days after being deposited in the United States mail, postage
prepaid, registered or certified mail, return receipt requested or upon receipt
of proof of delivery when sent by overnight mail or overnight courier, addressed
as stated above.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and the year first written above.
THE PIEDMONT INVESTMENT TRUST SHEETS, XXXXX & ASSOCIATES, INC.
/s/ Xxxxxxx X. Xxxx /s/ Xxxx X. Xxxxxx
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By: Xxxxxxx X. Xxxx By: Xxxx X. Xxxxxx
Title: Chairman Title: President
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