Exhibit (d)(ii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
INVESTMENT ADVISORY AGREEMENT
This Agreement is made as of the 1st day of July, 1999, between The
Riverfront Funds, an Ohio business trust (the "Trust"), and Provident Investment
Advisors, Inc., an Ohio corporation (the "Investment Adviser").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Trust desires to retain the Investment Adviser to provide, or
arrange for the provision of, investment advisory services to one or more
investment portfolios of the Trust (the "Portfolios"), and the Investment
Adviser represents that it is willing and possesses legal authority to so
furnish such services without violation of applicable laws (including the
Xxxxx-Xxxxxxxx Act); and
WHEREAS, the Investment Adviser is engaged in the business of rendering
investment advisory services to others and desires to provide the services
described herein to the Trust.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the Trust and the Investment Adviser hereby agree as follows:
1. APPOINTMENT. The Trust hereby appoints the Investment Adviser to act as
investment adviser to the Portfolios identified on Schedule A hereto for the
period and on the terms set forth in this Agreement. The Investment Adviser
accepts such appointment and agrees to furnish the services herein set forth for
the compensation herein provided. Additional investment portfolios may from time
to time be added to those covered by this Agreement by the parties executing a
new Schedule A which shall become effective upon its execution and shall
supersede any Schedule A having an earlier date.
2. DELIVERY OF DOCUMENTS. The Trust has furnished the Investment Adviser
---------------------- with copies properly certified or authenticated of each
of the following:
(a) the Trust's Declaration of Trust (the "Declaration");
(b) the Trust's By-Laws;
(c) resolutions of the Trust's Board of Trustees authorizing the
appointment of the Investment Adviser and approving this Agreement;
(d) Post-Effective Amendment No. 19 to the Trust's Registration Statement
on Form N-1A filed under the Securities Act of 1933, as amended ("1933
Act") (File No. 33-34154), and under the 1940 Act, as filed with the
Securities and Exchange Commission; and
(e) each Portfolio's most recent Prospectus and Statement of Additional
Information (such Prospectus and Statement of Additional Information, as
presently in effect, and all amendments and supplements thereto are herein
collectively called the "Prospectus").
The Trust will furnish the Investment Adviser from time to time with
copies of all amendments of or supplements to the foregoing.
3. MANAGEMENT. Except as specifically provided in the following paragraph,
subject to the supervision of the Trust's Board of Trustees, the Investment
Adviser will provide, or arrange for the provision of, a continuous investment
program for each of the Portfolios, including investment research and management
with respect to all securities and investments and cash equivalents in the
Portfolios. The Investment Adviser will determine, or arrange for others to
determine, from time to time what securities and other investments will be
purchased, retained or sold by the Trust with respect to the Portfolios and will
implement, or arrange for others to implement, such determinations through the
placement, in the name of the Portfolios, of orders for the execution of
portfolio transactions with or through such brokers or dealers as it may select.
The Investment Adviser will provide, or arrange for the provision of, the
services under this Agreement in accordance with each of the Portfolios'
investment objectives, policies and restrictions as stated in the Prospectus and
resolutions of the Trust's Board of Trustees.
With respect to The Riverfront Income Equity Fund, the Investment Adviser
shall directly provide and make the determinations set forth in the immediately
preceding paragraph with respect to that portion of such Portfolio's portfolio
as the Trust's Board of Trustees determines to allocate to the Investment
Adviser from time to time. The Board of Directors may, from time to time, make
additions to and withdrawals from the assets of The Riverfront Income Equity
Fund allocated to the Investment Adviser.
Subject to the provisions of this Agreement, the Declaration and the 1940
Act, the Investment Adviser directly and indirectly may select and enter into
contracts with one or more qualified investment advisers ("Sub-Advisers") to
provide to the Trust some or all of the services required by this Agreement.
With respect to any such appointment by the Investment Adviser of any of the
Sub-Advisers, the Investment Adviser will, as appropriate:
(a) advise the Sub-Advisers with respect to economic conditions and
trends;
(b) assist Sub-Advisers with the placement of orders for the purchase and
sale of securities;
(c) assist and consult with the Sub-Advisers in connection with the
Portfolios' continuous investment programs; and
(d) periodically review, evaluate and report to the Trust's Board of
Trustees with respect to the performance of the Sub-Advisers.
In fulfilling its responsibilities hereunder, the Investment Adviser
agrees that it will, or, with respect to services provided to the Trust by any
of the Sub-Advisers appointed by the Investment Adviser, that it will require
that each of the Sub-Advisers:
(a) use the same skill and care in providing such services as it uses in
providing services to fiduciary accounts for which it has investment
responsibilities;
(b) conform with all applicable Rules and Regulations of the Securities
and Exchange Commission and in addition will conduct its activities under
this Agreement (or any applicable sub-investment advisory agreement) in
accordance with any applicable regulations of any governmental authority
pertaining to the investment advisory activities of the Investment Adviser
or Sub-Advisers;
(c) not make loans to any person to purchase or carry shares of beneficial
interest in the Trust or make loans to the Trust;
(d) place orders pursuant to investment determinations for the Trust
either directly with the issuer or with an underwriter, market maker or
broker or dealer. In placing orders with brokers and dealers, the
Investment Adviser will use its reasonable best efforts to obtain, or
require that each of the Sub-Advisers obtain, prompt execution of orders
in an effective manner at the most favorable price. In assessing the best
execution available for any transaction, the Investment Adviser or any of
the Sub-Advisers 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-dealer and the
reasonableness of the commission, if any (for the specific transaction and
on a continuing basis). Consistent with this obligation, the Investment
Adviser and any of the Sub-Advisers may, to the extent permitted by law,
purchase and sell portfolio securities to and from brokers and dealers who
provide brokerage and research services (within the meaning of Section
28(e) of the Securities Exchange Act of 1934) to or for the benefit of the
Portfolios and/or other accounts over which the Investment Adviser or any
of the Sub-Advisers or any of their respective affiliates exercises
investment discretion. Subject to the review of the Trust's Board of
Trustees from time to time with respect to the extent and continuation of
the policy, the Investment Adviser and any of the Sub-Advisers are
authorized to pay a broker or dealer who provides such brokerage and
research services a commission for effecting a securities transaction for
any of the Portfolios 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 Investment Adviser or Sub-Advisers determine 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 either that particular transaction or the overall
responsibilities of the Investment Adviser or Sub-Advisers with respect to
the accounts as to which it exercises investment discretion. In no
instance will portfolio securities be purchased from or sold to Edgewood
Services, Inc., the Investment Adviser or any Sub-Adviser, or any
affiliated person of the Trust, except as may be permitted by the 1940
Act;
(e) maintain all books and records with respect to the Trust's securities
transactions and will furnish the Trust's Board of Trustees such periodic
and special reports as the Board reasonably may request;
(f) treat confidentially and as proprietary information of the Trust all
records and other information relative to the Trust 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 that, subject to prompt notification of the Trust, the
Investment Adviser and any of the Sub-Advisers may divulge such
information to duly constituted authorities, or when so requested by the
Trust, PROVIDED, HOWEVER, that nothing contained herein shall prohibit the
Investment Adviser or any of the Sub-Advisers from advertising or
soliciting the public generally with respect to other products or services
regardless of whether such advertisement or solicitation may include
prior, present or potential shareholders of the Portfolios; and
(g) maintain its policy and practice of conducting its fiduciary functions
independently. In making investment recommendations for the Trust, the
Investment Adviser's or Sub-Adviser's personnel will not inquire or take
into consideration whether the issuers of securities proposed for purchase
or sale for the Trust's account are customers of the Investment Adviser or
Sub-Adviser or of their respective parents, subsidiaries or affiliates. In
dealing with such customers, the Investment Adviser or Sub-Adviser and
their respective parents, subsidiaries, and affiliates will not inquire or
take into consideration whether securities of those customers are held by
the Trust.
4. SERVICES NOT EXCLUSIVE. The services furnished by the Investment
Adviser and any Sub-Adviser hereunder are not to be deemed exclusive, and the
Investment Adviser and any Sub-Adviser shall be free to furnish similar services
to others so long as its services under this Agreement or any sub-advisory
agreement are not impaired thereby. It is understood that the action taken by
the Investment Adviser under this Agreement may differ from the advice given or
the timing or nature of action taken with respect to other clients of the
Investment Adviser, and that a transaction in a specific security may not be
accomplished for all clients of the Investment Adviser at the same time or at
the same price.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Investment Adviser hereby agrees that all records, if
any, which it maintains for the Trust are the property of the Trust and further
agrees to surrender promptly, and to require each of the Sub-Advisers to
surrender promptly, to the Trust any of such records upon the Trust's request.
The Investment Adviser further agrees to preserve, and to require each of the
Sub-Advisers 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.
6. EXPENSES. During the term of this Agreement, the Investment Adviser
will pay all expenses, including, as applicable, the compensation of any
Sub-Advisers directly appointed by it, 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 Trust.
7. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, each of the Portfolios will pay the Investment
Adviser and the Investment Adviser will accept as full compensation therefor a
fee set forth on Schedule A hereto. Each of the Portfolios' obligations to pay
the above-described fee to the Investment Adviser will begin as of the date of
the initial public sale of shares in that Portfolio. Except as permitted by
applicable law, the Investment Adviser shall not be compensated on the basis of
a share of capital gains upon or capital appreciation of any of the Portfolios
or any portion thereof.
If in any fiscal year the aggregate expenses of any of the Portfolios (as
defined under the securities regulations of any state having jurisdiction over
the Trust) exceed the expense limitations of any such state, the Investment
Adviser will reimburse the Portfolio for a portion of such excess expenses equal
to such excess times the ratio of the fees otherwise payable by the Portfolio to
the Investment Adviser hereunder to the aggregate fees otherwise payable by the
Portfolio to the Investment Adviser hereunder and to Federated Services Company
under the Administration Agreement between Federated Services Company and the
Trust. The obligation of the Investment Adviser to reimburse the Portfolios
hereunder is limited in any fiscal year to the amount of its fee hereunder for
such fiscal year, PROVIDED, HOWEVER, that notwithstanding the foregoing, the
Investment Adviser shall reimburse the Portfolios for such proportion of such
excess expenses regardless of the amount of fees paid to it during such fiscal
year to the extent that the securities regulations of any state having
jurisdiction over the Trust so require. Such expense reimbursement, if any, will
be estimated daily and reconciled and paid on a monthly basis.
8. LIMITATION OF LIABILITY. The Investment Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the
Portfolios 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 Investment Adviser in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement. Any person, even though also an officer,
Director, partner, employee, or agent of the Investment Adviser, who may be or
become an officer, Trustee, employee or agent of the Trust, shall be deemed,
when rendering services to the Trust or acting on any business of the Trust
(other than services or business in connection with the Investment Adviser's
duties hereunder or under any other agreements between the Investment Adviser
and the Trust), to be rendering such services to or acting solely for the Trust
and not as an officer, Director, partner, employee, or agent or one under the
control or direction of the Investment Adviser even though paid by it. The Trust
agrees to indemnify and hold the Investment Adviser harmless from all taxes,
charges, expenses, assessments, claims and liabilities (including, without
limitation, liabilities arising under the Securities Act of 1933, the 1934 Act,
the 1940 Act and any state and foreign securities and blue sky laws, as amended
from time to time) and expenses, including (without limitation) attorneys' fees
and disbursements, arising directly or indirectly from any action or thing which
the Investment Adviser takes or does or omits to take or do hereunder; provided
that the Investment Adviser shall not be indemnified against any liability to
the Trust or to its shareholders (or any expenses incident to such liability)
arising out of a breach of fiduciary duty with respect to the receipt of
compensation for services, willful misfeasance, bad faith, or gross negligence
on the part of the Investment Adviser in the performance of its duties, or from
reckless disregard by it of its obligations and duties under this Agreement.
9. COMPLIANCE WITH ORDER. The Investment Adviser agrees that it will
comply with and be bound by the terms of the Order under Section 6(c) of the
1940 Act, Release No. 19949, December 13, 1993 (the "Order"), insofar as the
Order imposes obligations upon an investment adviser to a fund offering class
shares under the authority of the Order and for so long as compliance with the
Order is required by the 1940 Act.
10. DURATION AND TERMINATION. This Agreement will become effective as to a
particular Portfolio as of the date first written above (or, if a particular
Portfolio is not in existence on that date, on the date a registration statement
relative to that Portfolio becomes effective with the Securities and Exchange
Commission and Schedule A hereto is amended to add such Portfolio thereto),
provided that it shall have been approved by a vote of a majority of the votes
attributable to the outstanding voting securities of such Portfolio, in
accordance with the requirements under the 1940 Act, and, unless sooner
terminated as provided herein, shall continue in effect until December 31, 1999.
Thereafter, if not terminated, this Agreement shall continue in effect as
to a particular Portfolio for successive periods of one year each ending on
December 31 of each year, 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 parties to this Agreement or 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 vote of a majority of the Trust's
Board of Trustees or by the vote of a majority of all votes attributable to the
outstanding Shares of such Portfolio. Notwithstanding the foregoing, this
Agreement may be terminated as to a particular Portfolio at any time on sixty
days' written notice, without the payment of any penalty, by the Trust (by vote
of the Trust's Board of Trustees or by vote of a majority of the votes
attributable to the outstanding voting securities of such Portfolio) or by the
Investment Adviser. This Agreement will immediately terminate in the event of
its assignment. No assignment of this Agreement shall be made by the Investment
Adviser without the consent of the Board of Trustees of the Trust. (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.
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 the law of the State of Ohio.
The Riverfront Funds is a business trust organized under Chapter 1746,
Ohio Revised Code and under a Declaration of Trust, to which reference is hereby
made and a copy of which is on file at the office of the Secretary of State of
Ohio as required by law, and to any and all amendments thereto so filed or
hereafter filed. The obligations of "The Riverfront Funds" entered into in the
name or on behalf thereof by any of the Trustees, officers, employees or agents
are made not individually, but in such capacities, and are not binding upon any
of the Trustees, officers, employees, agents or shareholders of the Trust
personally, but bind only the assets of the Trust, as set forth in Section
1746.13(A), Ohio Revised Code, and all persons dealing with any of the
Portfolios of the Trust must look solely to the assets of the Trust belonging to
such Portfolio 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.
THE RIVERFRONT FUNDS
By /S/ XXXXXXX X. XXXXXXXX
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
PROVIDENT INVESTMENT ADVISORS, INC.
By /S/ XXXX X. XXXXX
Name: Xxxx X. Xxxxx
Title:
Dated: July 1, 1999
SCHEDULE A
to the Investment Advisory Agreement
between The Riverfront Funds and
Provident Investment Advisors, Inc.
NAME OF PORTFOLIO COMPENSATION DATE
The Riverfront U.S. Annual rate of 0.15% July 1, 1999
Government Securities of the average daily
Money Market Fund net assets of such Portfolio
The Riverfront U.S. Annual rate of 0.40% of July 1, 1999
Government Income the average daily net
Fund assets of such Portfolio
The Riverfront Income Annual rate of 0.95% of July 1, 1999
Equity Fund the average daily net
assets of such Portfolio
The Riverfront Annual rate of 0.90% of July 1, 1999
Balanced Fund the average daily net
assets of such Portfolio
The Riverfront Small Annual rate of 0.80% of July 1, 1999
Company Select Fund the average daily net
assets of such Portfolio
The Riverfront Large Annual rate of 0.80% of July 1, 1999
Company Select Fund the average daily net
assets of such Portfolio
THE RIVERFRONT FUNDS
By /S/ XXXXXXX X. XXXXXXXX
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
PROVIDENT INVESTMENT ADVISORS, INC.
By /S/ XXXX X. XXXXX
Name: Xxxx X. Xxxxx
Title:
All fees are computed daily and paid monthly.
