Exhibit (d)(1)
ALLEGIANT FUNDS
INTERIM ADVISORY AGREEMENT
AGREEMENT made as of September 30, 2009 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.
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;
(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.
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.
During the term of this Agreement, any such compensation
payable to the Adviser shall be held in an interest bearing escrow account with
the Trust's custodian, PFPC Trust Company, pursuant to the terms of an Escrow
Agreement approved by the Board of Trustees of the Trust. If, during the term of
this Agreement, a new advisory agreement with the Adviser is approved by a
majority of each Fund's outstanding voting securities, then the amount held in
the escrow account (plus interest and income earned thereon and proceeds
thereof) shall be paid to the Adviser with respect to the approved Fund. If,
however, a new advisory agreement is not approved by a majority of the Funds'
outstanding voting securities (as defined in the 1940 Act), then the Adviser
shall be entitled to the lesser of: (i) any costs incurred in performing this
Agreement (plus interest and income earned thereon and proceeds thereof) or (ii)
the total amount held in the escrow account (plus interest and income earned
thereon and proceeds thereof).
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 on the date hereof. Unless terminated as herein provided and
subject to all of the other terms and conditions hereof, this Agreement shall
remain in full force and effect until the first of the following to occur: the
effective date of a new advisory agreement relating to the Adviser's management
of the Funds which has been approved by a majority of the Funds' outstanding
voting securities, or the 151st calendar day following the date hereof.
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.
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: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: President
PNC CAPITAL ADVISORS, LLC
BY: /s/ Xxxxx XxXxxxxxx
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Name: Xxxxx XxXxxxxxx
Title: President
SCHEDULE 1
ALLEGIANT FUNDS
INTERIM 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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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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