<PAGE> 1
As filed with the Securities and Exchange Commission on April 11, 1997
Registration No. 33-488/811-4416
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [x]
POST-EFFECTIVE AMENDMENT NO. 32 [x]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [x]
Amendment No. 31 [x]
Armada Funds (formerly known as "NCC Funds")
(Exact Name of Registrant as Specified in Charter)
Oaks, Pennsylvania, 19456
(Address of Principal Executive Officers)
Registrant's Telephone Number:
1-800-622-FUND
W. Bruce McConnel, III, Esq.
DRINKER BIDDLE & REATH
1345 Chestnut Street
Philadelphia, Pennsylvania 19107-3496
(Name and Address of Agent for Service)
Copy to:
Thomas F. Harvey, Esq.
National City Bank
National City Center
P.O. Box 5756
Cleveland, Ohio 44101-0756
It is proposed that this filing will become effective (check appropriate box):
[ ] immediately upon filing pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] on date pursuant to paragraph (a)(i)
[ ] on (date) pursuant to paragraph (b)
[X] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE> 2
The Registrant has previously filed a declaration of indefinite
registration of its shares of beneficial interest pursuant to Rule 24f-2 under
the Investment Company Act of 1940, as amended. Registrant's Rule 24f-2 Notice
with respect to the Money Market, Government, Treasury, Tax Exempt, Equity,
Fixed Income, Ohio Tax Exempt, Equity Income, Mid Cap Regional, Enhanced Income
and Total Return Advantage Funds for the fiscal year ended May 31, 1996 on July
23, 1996.
The purpose of this Post-Effective Amendment is to register
Institutional Shares and Retail Shares of the Small Cap Growth Fund, a new
portfolio of the Registrant.
<PAGE> 3
CROSS REFERENCE SHEET
---------------------
Small Cap Growth Fund
<TABLE>
<CAPTION>
Form N-1A Part A Item Prospectus Caption
- --------------------- ------------------
<S> <C>
1. Cover Page......................................................... Cover Page
2. Synopsis........................................................... Expense Table
3. Condensed Financial Information.................................... Yield and Performance
Information
4. General Description of Registrant.................................. Investment Objectives and
Policies; Investment
Limitations; Description of
the Trust and Its Shares
5. Management of the Trust............................................ Management of the Trust;
Custodian and Transfer
Agent; Yield and
Performance Information;
Expenses; Miscellaneous
5A. Management's Discussion of......................................... Not Applicable
Registrant's Performance
6. Capital Stock and Other Securities................................. How to Purchase and Redeem
Shares; Dividends and
Distributions; Taxes;
Description of the Trust
and Its Shares;
Miscellaneous; Shareholder
Services Plan
7. Purchase of Securities............................................. Pricing of Shares; How
Being Offered to Purchase and Redeem
Shares; Distribution
Agreement
8. Redemption or Repurchase........................................... How to Purchase and Redeem
Shares
9. Pending Legal Proceedings.......................................... Inapplicable
</TABLE>
<PAGE> 4
CROSS REFERENCE SHEET
---------------------
Small Cap Growth Fund
<TABLE>
<CAPTION>
Form N-1A Part B Item Statement of Additional
- --------------------- -----------------------
Information Caption
-------------------
<S> <C>
10. Cover Page......................................................... Cover Page
11. Table of Contents.................................................. Table of Contents
12. General Information and History.................................... Statement of
Additional Information
13. Investment Objectives and Policies................................. Investment Objectives
and Policies
14. Management of Registrant........................................... Trustees and Officers
15. Control Persons and Principal...................................... Description of Shares
Holders of Securities
16. Investment Advisory and Other...................................... Advisory, Sub-
Advisory, Services
Management,
Administration,
Distribution, Custody
and Transfer Agency
Agreements
17. Brokerage Allocation and Other..................................... Investment Practices
Objectives and
Policies
18. Capital Stock and Other Securities................................. Additional Purchase
and Redemption
Information
19. Purchase, Redemption and Pricing................................... Additional Purchase
of Securities Being Offered........................................ and Redemption
Information
20. Tax Status......................................................... Additional Information
Concerning Taxes
21. Underwriters....................................................... Not Applicable
22. Calculation of Performance Data.................................... Performance
Information
23. Financial Statements............................................... Independent Auditors
</TABLE>
Part C
- ------
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C to this Registration Statement.
<PAGE> 5
ARMADA FUNDS
- --------------------------------------------------------------------------------
Oaks, Pennsylvania 19456 If you purchased your shares through
NatCity Investments, Inc., please
call your Investment Consultant for
information.
For current performance, Fund
information, account redemption
information, and to purchase shares,
please call 1-800-622-FUND (3863).
This Prospectus describes the Small Cap Growth Fund (the "Fund") of
Armada Funds (the "Trust"):
SMALL CAP GROWTH FUND'S investment objective is to seek longer term
capital appreciation. The Fund will normally invest at least 90% (and, in any
event, at least 65%) of its total assets in securities of companies with stock
market capitalizations of under $1.5 billion at the time of purchase.
The net asset value per share of the Fund will fluctuate as the value
of its investment portfolio changes in response to changing market prices and
other factors.
National City Bank ("National City") serves as investment adviser to
the Fund (the "adviser"). ______________________ serves as the investment
sub-adviser to the Fund (the "sub-adviser").
SEI Financial Services Company (the "Distributor"), serves as the
Trust's sponsor and distributor. The Fund pays a fee to the Distributor for
distributing its shares. See "Distribution Agreement."
This Prospectus sets forth concisely the information about the Fund
that a prospective investor should consider before investing. Investors should
carefully read this Prospectus and retain it for future reference. Additional
information about the Fund, contained in a Statement of Additional Information,
has been filed with the Securities and Exchange Commission ("SEC") and is
available upon request without charge by contacting the Trust at its telephone
number or address shown above. The Statement of Additional Information bears the
same date as this Prospectus and is incorporated by reference in its entirety
into this Prospectus.
-1-
<PAGE> 6
SHARES OF THE TRUST ARE NOT BANK DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED OR OTHERWISE SUPPORTED BY, NATIONAL CITY BANK, ITS PARENT
COMPANY OR ANY OF ITS AFFILIATES, AND ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, FEDERAL DEPOSIT INSURANCE CORPORATION, OR ANY GOVERNMENTAL
AGENCY OR STATE. INVESTMENT IN THE TRUST INVOLVES RISKS, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
___________________, 1997
-2-
<PAGE> 7
EXPENSE TABLE
<TABLE>
<CAPTION>
SMALL CAP SMALL CAP
GROWTH GROWTH
RETAIL INSTITUTIONAL
SHARES(1,2) SHARES(2)
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge
Imposed on Purchases 3.75% None
Sales Charge Imposed
on Reinvested Dividends None None
Deferred Sales Charge None None
Redemption Fee None None
Exchange Fee None None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net
assets)
Management Fees 0.75% 0.75%
12b-1 Fees(3) (after fee
waivers) 0.06%(2) 0.06%(2)
Other Expenses(4) (after fee
waivers) 0.42%(3) 0.17%(3)
---- ----
TOTAL FUND OPERATING
EXPENSES(4) (after fee
waivers) 1.23%(3) 0.98%(3)
==== ====
</TABLE>
- ---------------------------
1 The Trust has implemented a Shareholder Services Plan (the "Services
Plan") with respect to Retail shares in the Fund. Pursuant to the
Services Plan, the Trust enters into shareholder servicing agreements
with certain financial institutions under which they agree to provide
shareholder administrative services to their customers who beneficially
own Retail shares in consideration for the payment of up to .25% (on an
annualized basis) of the net asset value of such shares. For further
information concerning the Services Plan, see "Shareholder Services
Plan."
2 As of the date of this Prospectus, the Fund had not commenced
investment operations, and therefore, the expenses for this Fund are
estimates only.
3 The Fund has in effect a 12b-1 Plan pursuant to which it may bear fees
in an amount of up to .10% of average daily net assets. As a result of
the payment of sales charges and 12b-1 and certain other related fees,
long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charge permitted by the National Association of
Securities Dealers, Inc. ("NASD"). The NASD has adopted
-3-
<PAGE> 8
rules which generally limit the aggregate sales charges and payments
under the Trust's Service and Distribution Plan ("Distribution Plan")
and Services Plan to a certain percentage of total new gross share
sales, plus interest. The Trust would stop accruing 12b-1 and related
fees if, to the extent, and for as long as, such limit would otherwise
be exceeded.
4 Without fee waivers by the Administrator, Other Expenses and
Total Fund Operating Expenses would be 0.27% and 1.08% for
the Institutional shares and 0.52% and 1.33% for the Retail
shares of the Fund. Additionally, if the maximum
distribution fee permitted under the 12b-1 Plan were
imposed, Total Fund Operating Expenses would be 1.12% and
1.37%, respectively.
- ----------------------
For example, you would pay the following expenses on a hypothetical $1,000
investment, assuming: (1) a 5% annual return (a hypothetical return required by
SEC regulations); and (2) the redemption of your investment at the end of the
following time periods (the Fund does not charge a redemption fee):
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Retail Shares.............................. $50 $75
Institutional Shares....................... $10 $31
</TABLE>
THE FOREGOING SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR RATES OF RETURN. ACTUAL EXPENSES AND RATES OF RETURN MAY BE GREATER
OR LESS THAN THOSE SHOWN.
The purpose of this Expense Table is to assist an investor in
understanding the various costs and expenses that an investor in the Fund will
bear directly or indirectly. For more complete descriptions of these costs and
expenses, see "Management of the Trust" and "Distribution Agreement" in this
Prospectus. Any fees that are charged by affiliates of the adviser or other
institutions directly to their customer accounts for services related to
investments in Retail shares of the Fund are in addition to and not reflected in
the fees and expenses described above.
-4-
<PAGE> 9
INTRODUCTION
The Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"). The Fund consists of a pool of assets with investment objectives and
policies as described below under "Investment Objectives and Policies." The Fund
is classified as a diversified investment fund under the 1940 Act.
Shares of the Fund have been classified into two separate
classes -- Retail shares and Institutional shares. Retail shares and
Institutional shares represent equal pro rata interests in the Fund except that,
as described more fully below under "Shareholder Services Plan," the Trust has
implemented the Services Plan with respect to Retail shares in the Fund. Under
the Services Plan, only the beneficial owners of Retail shares bear the expenses
of shareholder administrative services which are provided by financial
institutions for their benefit (not to exceed .25% annually). See "Shareholder
Services Plan," "Dividends and Distributions" and "Description of the Trust and
Its Shares" for a description of the impact that the Services Plan may have on
holders of Retail shares.
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of the Fund is to provide longer term
capital appreciation. The Fund will normally invest at least 90% (and, in any
event, at least 65%) of its total assets in equity securities of companies with
stock market capitalizations of under $1.5 billion at the time of purchase. The
Fund's investment objective and investment policies may be changed without a
vote of shareholders. There can be no assurance that the Fund will achieve its
objective.
The Fund generally invests in common stocks of small public
companies. As discussed below, while such stocks may yield greater returns on
investment than stocks of larger, more established companies, their positions in
the market may be more tenuous, subjecting them to increased price volatility,
which can result in a fund share price with wider or more frequent fluctuations
than those of other equity portfolios. The Fund may also hold other instruments
with equity characteristics, such as preferred stocks, convertible securities,
rights, and warrants. In selecting stocks, the sub-adviser will consider the
relationship between price and book value, and other factors such as trading
volume and bid-ask spreads in an effort to allow the Fund to achieve
cost-effective diversification.
In addition to investing in equity securities, the Fund is
authorized to invest in cash equivalents to provide cash reserves. With respect
to the remaining portion of its net
-5-
<PAGE> 10
assets, the Fund may hold temporary cash balances which may be invested in U.S.
government obligations and money market instruments. The Fund may also engage in
options and futures transactions, and may enter into repurchase agreements,
reverse repurchase agreements, and lend its portfolio securities. For further
information, see "Investment Objectives and Policies" in the Statement of
Additional Information.
SPECIAL RISK FACTORS -- SMALL CAPITALIZATION STOCKS
As mentioned above, securities held by the Fund will generally
be issued by smaller companies. Smaller companies will be considered those
companies with market capitalizations that are less than the capitalization of
companies which predominate the major market indices, such as the Standard &
Poor's 500 Index or the Dow Jones Industrial Average. The market capitalization
of the issuers of securities purchased by the Fund will normally be less than $1
billion at the time of purchase. In managing the Fund, the sub-adviser seeks
smaller companies with above-average growth prospects. Factors considered in
selecting such issuers include participation in a fast growing industry, a
strategic niche position in a specialized market, and fundamental value.
The Fund has been designed to provide investors with
potentially greater long-term rewards than those provided by an investment in a
fund that seeks capital appreciation from equity securities of larger, more
established companies. Since small capitalization companies are generally not as
well-known to investors and have less of an investor following than larger
companies, they may provide opportunities for greater investment gains as a
result of inefficiencies in the marketplace.
Small capitalization companies typically are subject to a
greater degree of change in earnings and business prospects than larger, more
established companies. In addition, securities of smaller capitalized companies
are traded in lower volume than those issued by larger companies and may be more
volatile. As a result, the Fund may be subject to greater price volatility than
a fund consisting of larger capitalization stocks. By maintaining a broadly
diversified portfolio, the sub-adviser will attempt to reduce this volatility.
OTHER INVESTMENT POLICIES
Foreign Securities and American Depository Receipts ("ADRs")
The Fund may invest in securities issued by foreign issuers
either directly or indirectly through investments in ADRs. ADRs are receipts
issued by an American bank or trust company evidencing ownership of underlying
securities issued by
-6-
<PAGE> 11
foreign issuers. ADRs may be listed on a national securities exchange or may be
traded in the over-the-counter market. ADR prices are denominated in U.S.
dollars; the underlying security may be denominated in a foreign currency.
Investments in foreign securities involve certain inherent
risks, such as political or economic instability of the issuer or the country of
issue, the difficulty of predicting international trade patterns, changes in
exchange rates of foreign currencies and the possibility of adverse changes in
investment or exchange control regulations. There may be less publicly available
information about a foreign company than about a domestic company. Foreign
companies generally are not subject to uniform accounting, auditing and
financial reporting standards comparable to those applicable to domestic
companies. Further, foreign stock markets are generally not as developed or
efficient as those in the U.S., and in most foreign markets volume and liquidity
are less than in the U.S. Fixed commissions on foreign stock exchanges are
generally higher than the negotiated commissions on U.S. exchanges, and there is
generally less government supervision and regulation of foreign stock exchanges,
brokers and companies than in the U.S. With respect to certain foreign
countries, there is a possibility of expropriation or confiscatory taxation,
limitations on the removal of funds or other assets, or diplomatic developments
that could affect investment within those countries. Because of these and other
factors, securities of foreign companies acquired by the Fund may be subject to
greater fluctuation in price than securities of domestic companies. For further
information, see "Investment Objectives and Policies" in the Statement of
Additional Information.
Options
The Fund may write covered call options, buy put options, buy
call options and sell or "write" secured put options on a national securities
exchange and issued by the Options Clearing Corporation for hedging purposes.
Such transactions may be effected on a principal basis with primary reporting
dealers in U.S. government securities in an amount not exceeding 5% of a Fund's
net assets, as described further in the Statement of Additional Information.
Such options may relate to particular securities or financial instruments, or to
various stock indices or bond indices. Purchasing options is a specialized
investment technique which entails a substantial risk of a complete loss of the
amounts paid as premiums to the writer of the option.
A call option for a particular security gives the purchaser of
the option the right to buy, and a writer the obligation to sell, the underlying
security at the stated exercise price at any time prior to the expiration of the
option, regardless of the market price of the security. The premium paid
-7-
<PAGE> 12
to the writer is the consideration for undertaking the obligations under the
option contract. A put option for a particular security gives the purchaser the
right to sell the underlying security at the stated exercise price at any time
prior to the expiration date of the option, regardless of the market price of
the security. In contrast to an option on a particular security, an option on a
securities index provides the holder with the right to make or receive a cash
settlement upon exercise of the option.
The Fund may purchase and sell put options on portfolio
securities at or about the same time that it purchases the underlying security
or at a later time. By buying a put, the Fund limits its risk of loss from a
decline in the market value of the security until the put expires. Any
appreciation in the value of and yield otherwise available from the underlying
security, however, will be partially offset by the amount of the premium paid
for the put option and any related transaction costs. Call options may be
purchased by the Fund in order to acquire the underlying security at a later
date at a price that avoids any additional cost that would result from an
increase in the market value of the security. The Fund may also purchase call
options to increase its return to investors at a time when the call is expected
to increase in value due to anticipated appreciation of the underlying security.
Prior to its expiration, a purchased put or call option may be sold in a closing
sale transaction (a sale by the Fund, prior to the exercise of an option that it
has purchased, of an option of the same series), and profit or loss from the
sale will depend on whether the amount received is more or less than the premium
paid for the option plus the related transaction costs.
In addition, the Fund may write covered call and secured put
options. A covered call option means that the Fund owns or has the right to
acquire the underlying security subject to call at all times during the option
period. A secured put option means that the Fund maintains in a segregated
account with its custodian cash or U.S. government securities in an amount not
less than the exercise price of the option at all times during the option
period. Such options will be listed on a national securities exchange and issued
by the Options Clearing Corporation and may be effected on a principal basis
with primary reporting dealers in the U.S.
The aggregate value of the securities subject to options
written by the Fund will not exceed 25% of the value of its net assets. In order
to close out an option position prior to maturity, the Fund may enter into a
"closing purchase transaction" by purchasing a call or put option (depending
upon the position being closed out) on the same security with the same exercise
price and expiration date as the option which it previously wrote.
-8-
<PAGE> 13
Options trading is a highly specialized activity and carries
greater than ordinary investment risk. Purchasing options may result in the
complete loss of the amounts paid as premiums to the writer of the option. In
writing a covered call option, the Fund gives up the opportunity to profit from
an increase in the market price of the underlying security above the exercise
price (except to the extent the premium represents such a profit). Moreover, it
will not be able to sell the underlying security until the covered call option
expires or is exercised or the Fund closes out the option. In writing a secured
put option, the Fund assumes the risk that the market value of the security will
decline below the exercise price of the option. The use of covered call and
secured put options will not be a primary investment technique of the Fund.
During temporary defensive periods the Fund may invest in
various short term obligations described below.
Futures Contracts and Options
Futures contracts obligate the Fund, at maturity, to take or
make delivery of certain securities or financial instruments or the cash value
of a securities index. The Fund may sell a futures contract in order to offset a
decrease in the market value of its portfolio securities that might otherwise
result from a market decline. The Fund may do so either to hedge the value of
its portfolio of securities as a whole or to protect against declines occurring
prior to sales of securities in the value of the securities to be sold.
Conversely, the Fund may purchase a futures contract in anticipation of
purchases of securities. In addition, the Fund may utilize futures contracts in
anticipation of changes in the composition of its holdings.
The Fund may purchase and sell call and put options on futures
contracts traded on an exchange or board of trade. When the Fund purchases an
option on a futures contract, it has the right to assume a position as a
purchaser or seller of a futures contract at a specified exercise price at any
time during the option period. When the Fund sells an option on a futures
contract, it becomes obligated to purchase or sell a futures contract if the
option is exercised. In anticipation of a market advance, the Fund may purchase
call options on futures contracts to hedge against a possible increase in the
price of securities which the Fund intends to purchase. Similarly, if the value
of the Fund's securities is expected to decline, the Fund might purchase put
options or sell call options on futures contracts rather than sell futures
contracts.
The Fund intends to comply with the regulations of the
Commodity Futures Trading Commission ("CFTC") exempting it from registration as
a "commodity pool operator." The Fund's commodities transactions must constitute
bona fide hedging or
-9-
<PAGE> 14
other permissible transactions pursuant to such regulations. In addition, the
Fund may not engage in such transactions if the sum of the amount of initial
margin deposits and premiums paid for unexpired commodity options, other than
for bona fide hedging transactions, would exceed 5% of the liquidation value of
its assets, after taking into account unrealized profits and unrealized losses
on such contracts it has entered into; provided, however, that in the case of an
option that is in-the-money at the time of purchase, the in-the-money amount may
be excluded in calculating the percentage limitation. In connection with the
Fund's position in a futures contract or option thereon, it will create a
segregated account of liquid assets, such as cash, U.S. government securities or
other liquid high grade debt obligations, or will otherwise cover its position
in accordance with applicable requirements of the SEC.
The primary risks associated with the use of futures contracts
and options are:
(i) an imperfect correlation between the change in market
value of the securities or currencies held by the Fund and the price of the
futures contracts and options;
(ii) possible lack of a liquid secondary market for a futures
contract and the resulting inability to close a futures contract when desired;
(iii) losses greater than the amount of the principal invested
as initial margin due to unanticipated market movements which are potentially
unlimited; and
(iv) the sub-adviser's ability to predict correctly the
direction of securities prices, interest rates and other
economic factors.
For further information, see "Investment Objectives and
Policies - Futures Contracts and Options" and Appendix B in the Statement of
Additional Information.
Illiquid Securities
The Fund will not invest more than 15% of the value of its net
assets in securities that are illiquid. Illiquid securities include certain
securities which are subject to trading restrictions because they are not
registered under the Securities Act of 1933, as amended (the "1933 Act"). If the
Fund exceeds the limitation on the holding of illiquid securities, it will sell
illiquid securities as necessary to maintain the required liquidity when the
sub-adviser believes that it is in the best interests of the Fund to do so.
-10-
<PAGE> 15
The Fund may purchase securities which are not registered
under the 1933 Act but which can be sold to "qualified institutional buyers" in
accordance with Rule 144A under the 1933 Act. Any such security will not be
considered illiquid so long as it is determined by the Board of Trustees or the
Fund's sub- adviser, acting under guidelines approved and monitored by the
Board, that an adequate trading market exists for that security. This investment
practice could have the effect of increasing the level of illiquidity in the
Fund during any period that qualified institutional buyers become uninterested
in purchasing these restricted securities.
Short Term Obligations
During temporary defensive periods the Fund may hold or enter
into short term obligations (with maturities of 18 months or less) such as
repurchase agreements, reverse repurchase agreements, domestic commercial paper,
bankers' acceptances, certificates of deposit and demand and time deposits of
U.S. banks, foreign branches of U.S. banks and foreign banks. In the case of
repurchase agreements, default or bankruptcy of the seller may expose a Fund to
possible loss because of adverse market action or delays connected with the
disposition of the underlying obligations. Further, it is uncertain whether the
Fund would be entitled, as against a claim by such seller or its receiver or
trustee in bankruptcy, to retain the underlying securities. Reverse repurchase
agreements involve the risk that the market value of the securities held by the
Fund may decline below the price of the securities it is obligated to
repurchase. For further information, see "Investment Objectives and Policies" in
the Statement of Additional Information.
Lending Portfolio Securities
In order to generate additional income, the Fund may, from
time to time, lend its portfolio securities to broker-dealers, banks or other
institutional borrowers. The Fund must receive 100% collateral in the form of
cash or U.S. government securities. This collateral must be valued daily by the
Fund's custodian and the borrower will be required to provide additional
collateral should the market value of the loaned securities increase. During the
time portfolio securities are on loan, the borrower pays the Fund involved any
dividends or interest paid on such securities. Loans are subject to termination
by the Fund or the borrower at any time. While a Fund does not have the right to
vote securities on loan, it intends to terminate the loan and regain the right
to vote if this is considered important with respect to the investment. The Fund
will only enter into loan arrangements with broker-dealers, banks or other
institutions which its sub-adviser has determined are creditworthy under
guidelines established by the Trust's Board of Trustees.
-11-
<PAGE> 16
Securities of Other Investment Companies
Subject to 1940 Act limitations, the Fund may invest in
securities issued by other investment companies which invest in high quality,
short-term debt securities and which determine their net asset value per share
based on the amortized cost or penny-rounding method. As a shareholder of
another investment company, the Fund would bear, along with other shareholders,
its pro rata portion of that company's expenses, including advisory fees. These
expenses would be in addition to the advisory and other expenses that the Fund
bears directly in connection with its own operations. Investment companies in
which the Fund may invest may also impose a sales or distribution charge in
connection with the purchase or redemption of their shares and other types of
commissions or charges. Such charges will be payable by the Fund and, therefore,
will be borne indirectly by its shareholders. For further information, see
"Investment Objectives and Policies" in the Statement of Additional Information.
INVESTMENT LIMITATIONS
The Fund is subject to a number of investment limitations. The
following investment limitations are matters of fundamental policy and may not
be changed without the affirmative vote of the Fund's outstanding shares (as
defined under "Miscellaneous"). (Other investment limitations that also cannot
be changed without a vote of shareholders are contained in the Statement of
Additional Information under "Investment Objectives and Policies.")
The Fund may not:
1. Purchase any securities which would cause 25% or more of
the value of its total assets at the time of purchase to be invested in the
securities of one or more issuers conducting their principal business activities
in the same industry, provided that (a) there is no limitation with respect to
obligations issued or guaranteed by the U.S. government, any state, territory or
possession of the United States, the District of Columbia or any of their
authorities, agencies, instrumentalities or political subdivisions, and
repurchase agreements secured by such instruments, (b) wholly-owned finance
companies will be considered to be in the industries of their parents if their
activities are primarily related to financing the activities of the parents, (c)
utilities will be divided according to their services, for example, gas, gas
transmission, electric and gas, electric and telephone will each be considered a
separate industry, and (d) personal credit and business credit businesses will
be considered separate industries.
-12-
<PAGE> 17
2. Make loans, except that it may purchase and hold debt
instruments and enter into repurchase agreements in accordance with its
investment objective and policies and may lend portfolio securities in an amount
not exceeding one-third of its total assets.
3. Borrow money, issue securities or mortgage, pledge or
hypothecate its assets except to the extent permitted under the 1940 Act.
4. Purchase securities of any one issuer, other than
securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities if, immediately after such purchase, more than 5% of the value
of the Fund's total assets would be invested in such issuer or the Fund would
hold more than 10% of any class of securities of the issuer or more than 10% of
the outstanding voting securities of the issuer, except that up to 25% of the
value of the Fund's total assets may be invested without regard to such
limitations.
Generally, if a percentage limitation is satisfied at the time
of investment, a later increase or decrease in such percentage resulting from a
change in the value a Fund's portfolio securities will not constitute a
violation of such limitations for purposes of the 1940 Act.
For purposes of investment limitation No. 1 the Fund treats,
as a matter of non-fundamental policy that may be changed without a vote of
shareholders, all supranational organizations as a single industry and each
foreign government (and all of its agencies) as a separate industry.
PERFORMANCE INFORMATION
From time to time, the Trust may quote in advertisements or in
reports to shareholders the Fund's total return data for its Institutional
shares and Retail shares.
The Fund calculates its total return for each class of shares
on an "average annual total return" basis for various periods from the date of
commencement of investment operations and for other periods as permitted under
the rules of the SEC. Average annual total return reflects the average annual
percentage change in value of an investment in the class over the measuring
period. Total returns for each class of shares may also be calculated on an
"aggregate total return" basis for various periods. Aggregate total return
reflects the total percentage change in value over the measuring period. Both
methods of calculating total return reflect changes in the price of the shares
and assume that any dividends and capital gain distributions made by the Fund
with respect to a class during the
-13-
<PAGE> 18
period are reinvested in shares of that class. When considering average total
return figures for periods longer than one year, it is important to note that
the annual total return of a class for any one year in the period might have
been greater or less than the average for the entire period. The Fund may also
advertise, from time to time, the total returns of one or more classes of shares
on a year-by-year or other basis for various specified periods by means of
quotations, charts, graphs or schedules.
Investors may compare the performance of each class of shares
of the Fund to the performance of other mutual funds with comparable investment
objectives, to various mutual fund or market indices and to data or rankings
prepared by independent services such as Lipper Analytical Services, Inc. or
other financial or industry publications that monitor the performance of mutual
funds. Comparisons may also be made to indices or data published in Money
Magazine, Forbes, Barron's, The Wall Street Journal, The New York Times,
Business Week, U.S.A. Today, CDA/Weisenberger, The American Banker, Morningstar,
Incorporated and other publications of a local, regional or financial industry
nature.
The performance of each class of shares of the Fund is based
on historical earnings and will fluctuate and is not intended to indicate future
performance. The investment return and principal value of an investment in a
class will fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost. Performance data may not provide a basis
for comparison with bank deposits and other investments which provide a fixed
yield for a stated period of time. Changes in the net asset value of a class
should be considered in ascertaining the total return to shareholders for a
given period. Yield and total return data should also be considered in light of
the risks associated with the Fund's portfolio composition, quality, maturity,
operating expenses and market conditions. Any fees charged by financial
institutions (as described in "How to Purchase and Redeem Shares") are not
included in the computation of performance data but will reduce a shareholder's
net return on an investment in the Fund.
Further information about the performance of the Fund is
available in the annual and semi-annual reports to shareholders. Shareholders
may obtain these materials from the Trust free of charge by calling
1-800-622-FUND (3863).
PRICING OF SHARES
For purposes of pricing purchases and redemption orders, the
net asset value per share of the Fund is calculated as of the close of trading
on the New York Stock Exchange (the "Exchange") (generally, 4:00 p.m. Eastern
Time). Net asset value
-14-
<PAGE> 19
per share is determined on each business day, except those holidays which the
Exchange, or banks and trust companies which are affiliated with National City
Corporation (the "Banks"), observe (currently New Year's Day, Dr. Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Columbus Day, Veterans' Day, Thanksgiving Day and Christmas Day)
("Business Day"). Net asset value per share of a particular class in the Fund is
calculated by dividing the value of all securities and other assets belonging to
the Fund allocable to such class, less the liabilities charged to that class, by
the number of the outstanding shares of that class.
The Fund's investments in securities for which market
quotations are readily available are valued at their market values determined on
the basis of the mean between their current available bid and asked prices in
the principal market (closing sales prices if the principal market is an
exchange) in which such securities are normally traded. Securities and other
assets for which quotations are not readily available are valued at their fair
value under procedures approved by the Board of Trustees. Absent unusual
circumstances, short-term investments having maturities of 60 days or less are
valued on the basis of amortized cost unless the Trust's Board of Trustees
determines that this does not represent fair value. The net asset value per
share of each class of shares of the Fund will fluctuate as the value of its
investment fund changes.
HOW TO PURCHASE AND REDEEM SHARES
DISTRIBUTOR
Shares in the Fund are sold on a continuous basis by the
Trust's sponsor and distributor. The Distributor is a registered broker/dealer
with principal offices located at Oaks, Pennsylvania 19456.
From time to time, the Distributor, at its expense, may offer
promotional incentives to dealers. As of the date of this Prospectus, the
Distributor intends to offer certain promotional incentives to dealers,
including trips and monetary awards, to NatCity Investments, Inc. and other
affiliates of National City.
PURCHASE OF RETAIL SHARES
Retail shares are sold to the public ("Investors") primarily
through financial institutions such as banks, brokers and dealers. Investors may
purchase Retail shares directly in accordance with the procedures set forth
below or through procedures established by their financial institutions in
connection with the requirements of their accounts.
-15-
<PAGE> 20
Financial institutions may charge certain account fees
depending on the type of account the Investor has established with the
institution. (For information on such fees, the Investor should review his
agreement with the institution or contact it directly.) In addition, certain
financial institutions may enter into shareholder servicing agreements with the
Trust whereby a financial institution would perform various administrative
support services for its customers who are the beneficial owners of Retail
shares and would receive fees from the Fund for such services of up to .25% (on
an annualized basis) of the average daily net asset value of such shares. See
"Shareholder Services Plan." To purchase shares, Investors should call
1-800-622-FUND (3863) or visit their local NatCity Investments, Inc. office:
Akron 1-800-229-0295
Cleveland 1-800-624-6450
Columbus 1-800-345-0278
Dayton 1-800-755-8723
Indianapolis 1-800-826-2868
Louisville 1-800-727-5656
Pittsburgh 1-800-282-1078
Toledo 1-800-331-8275
Youngstown 1-800-742-4098
Shares may be purchased in conjunction with an individual
retirement account ("IRA") and rollover IRAs where a designated custodian acts
as custodian. Investors should contact NatCity Investments Inc., the Distributor
or their financial institutions for information as to applications and annual
fees. Investors should also consult their tax advisers to determine whether the
benefits of an IRA are available or appropriate.
The minimum investment for the initial purchase of Retail
shares in each Fund is $2,500, except for purchases for an IRA or other
retirement plan in which event the minimum initial investment is $500. All
subsequent investments for Retail shares and IRAs are subject to a minimum
investment of $250. Investments made in Retail shares through a monthly savings
program described below are not subject to the minimum initial and subsequent
investment requirements or any minimum account balance requirements described in
"Other Redemption Information." Purchases for an IRA through the monthly savings
program will be considered as contributions for the year in which the purchases
are made.
Under a monthly savings program, Investors may add to their
investment in the Retail shares of a Fund, in a consistent manner twice each
month, with a minimum amount of $50 per month. Monies may be automatically
withdrawn from a shareholder's checking or savings account available through an
Investor's financial institution and invested in additional Retail shares at
-16-
<PAGE> 21
the Public Offering Price next determined after an order is received by the
Trust. An Investor may apply for participation in a monthly program by
completing an application obtained through a financial institution, such as
banks, brokers, or dealers selling Retail shares of the Fund, or by calling
1-800- 622-FUND (3863). The program may be modified or terminated by an Investor
on 30 days written notice or by the Trust at any time.
All shareholders of record will receive confirmations of share
purchases and redemptions. Financial institutions will be responsible for
transmitting purchase and redemption orders to the Trust's transfer agent, State
Street Bank and Trust Company (the "Transfer Agent"), on a timely basis.
The Trust reserves the right to reject any purchase order.
SALES CHARGES APPLICABLE TO PURCHASES OF RETAIL SHARES
The Public Offering Price for Retail shares of the Fund is the
sum of the net asset value of the shares being purchased plus any applicable
sales charge per account, which is assessed as follows:
<TABLE>
<CAPTION>
As a % As a % Dealers'
of offering of net Reallowance
price per asset value as a % of
Amount of Transaction share per share offering price
- --------------------- ----- --------- --------------
<S> <C> <C> <C>
Less than $100,000............... 3.75 3.90 3.75
$100,000 but less
than $250,000.................. 2.75 2.83 2.75
$250,000 but less
than $500,000................... 2.00 2.04 2.00
$500,000 but less
than $1,000,000................ 1.25 1.27 1.25
$1,000,000 or more............... 0.00 0.00 0.00
</TABLE>
Under the 1933 Act, the term "underwriter" includes persons
who offer or sell for an issuer in connection with the distribution of a
security or have a direct or indirect participation in such undertaking, but
excludes persons whose interest is limited to a commission from an underwriter
or dealer not in excess of the usual and customary distributors' or sellers'
commission. The Staff of the SEC has expressed the view that persons who receive
90% or more of a sales load may be deemed to be underwriters within the meaning
of this definition. The Dealers' Reallowance may be changed from time to time.
-17-
<PAGE> 22
No sales charge will be assessed on purchases of Retail shares
made by:
(a) trustees and officers of the Trust
(b) directors, employees and participants in employee
benefit/retirement plans (annuitants) of National City Corporation or
any of its affiliates
(c) the spouses, children, grandchildren, and parents of individuals
referred to in clauses (a) and (b) above
(d) qualified retirement plans purchasing shares through NatCity
Investments, Inc.
(e) individuals investing in the Fund by way of a direct transfer or a
rollover from a qualified plan distribution and subsequent transactions
into the same account where affiliates of National City Corporation are
serving as a trustee or agent
(f) investors purchasing Fund shares through a payroll deduction plan
and
(g) individuals investing in the Fund by way of an asset allocation
program sponsored by financial institutions, although certain account
level fees may apply
REDUCED SALES CHARGES APPLICABLE TO PURCHASES OF RETAIL SHARES
The applicable sales charge may be reduced on purchases of
Retail shares of the Fund made under the Right of Accumulation or Letter of
Intent, as described below. To qualify for a reduced sales charge, Investors
must so notify their financial institutions or the Trust directly by calling
1-800-622-FUND (3863) at the time of purchase. Reduced sales charges may be
modified or terminated at any time and are subject to confirmation of an
Investor's holdings.
Right of Accumulation.
Investors may use their aggregate investments in Retail shares
in determining the applicable sales charge. An Investor's aggregate investment
in Retail shares is the total value (based on the higher of current net asset
value or any Public Offering Price originally paid) of:
(a) current purchases
(b) Retail shares that are already beneficially owned by the
Investor for which a sales charge has been paid
-18-
<PAGE> 23
(c) Retail shares that are already beneficially owned by the
Investor which were purchased prior to July 22, 1990 and
(d) Retail shares purchased by dividends or capital gains that
are reinvested.
If, for example, an Investor beneficially owns Retail shares
of the Fund with an aggregate current value of $90,000 and subsequently
purchases Retail shares of the Fund having a current value of $10,000, the sales
charge applicable to the subsequent purchase would be reduced to 2.75% of the
Public Offering Price.
Letter of Intent.
An Investor may qualify for a reduced sales charge immediately
upon signing a nonbinding Letter of Intent stating the Investor's intention to
invest during the next 13 months a specified amount which, if made at one time,
would qualify for a reduced sales charge. The Letter of Intent option is
included on the account application which may be obtained from the Investor's
financial institution or directly from the Trust by calling 1-800-622-FUND
(3863). If an Investor so elects, the 13-month period may begin up to 30 days
prior to the Investor's signing the Letter of Intent. The initial investment
under the Letter of Intent must be equal to at least 4.0% of the amount
indicated in the Letter of Intent. During the term of a Letter of Intent, the
Transfer Agent will hold Retail shares representing 4.0% of the amount indicated
in the Letter of Intent in escrow for payment of a higher sales charge if the
entire amount is not purchased. Upon completing the purchase of the entire
amount indicated in the Letter of Intent, the escrowed shares will be released.
If the entire amount is not purchased within the 13-month period or is redeemed
within one year from the time of fulfillment, the Investor will be required to
pay an amount equal to the difference in the dollar amount of sales charge
actually paid and the amount of sales charge the Investor would have had to pay
on the aggregate purchases if the total of such purchases had been made at a
single time.
PURCHASE OF INSTITUTIONAL SHARES
Institutional shares are sold primarily to Banks and NAM
customers ("Customers") that are large institutions. Institutional shares are
sold without a sales charge imposed by the Trust or the Distributor. However,
depending on the terms governing the particular account, the Banks or NAM may
impose account charges such as account maintenance fees, compensating balance
requirements or other charges based upon account transactions, assets or income
which will have the effect of reducing the shareholder's net return on his
investment in the Fund. There is no minimum investment.
-19-
<PAGE> 24
It is the responsibility of the Banks and NAM to transmit
their Customers' purchase orders to the Transfer Agent and to deliver required
funds on a timely basis, in accordance with the procedures stated above.
Institutional shares will normally be held of record by the Banks or NAM.
Confirmations of share purchases and redemptions will be sent to the Banks and
NAM. Beneficial ownership of Institutional shares will be recorded by the Banks
or NAM and reflected in the account statements provided by them to their
Customers.
The Trust reserves the right to reject any purchase order.
EFFECTIVE TIME OF PURCHASES
Purchase orders for shares of the Fund which are received by
the Transfer Agent prior to 4:00 p.m. (Eastern Time) on any Business Day are
priced according to the net asset value per share determined on that day plus
any applicable sales charge (the "Public Offering Price"). Immediately available
funds must be received by the Trust's custodian prior to 2:00 p.m. (Eastern
Time) on the third Business Day following the receipt of such order, at which
time the order will be executed. If funds are not received by such date, the
order will not be accepted and notice thereof will be given to the Bank or
financial institution placing the order. Purchase orders for which payment has
not been received or accepted will be returned after prompt inquiry to the
sending Bank or institution.
REDEMPTION OF RETAIL SHARES
Redemption orders must be placed in writing or by telephone to
the same financial institution that placed the original purchase order. It is
the responsibility of the financial institutions to transmit redemption orders
to the Transfer Agent. Investors who purchased shares directly from the Trust
may redeem shares in any amount by calling 1-800-622-FUND (3863). Redemption
proceeds are paid by check or credited to the Investor's account with his
financial institution.
REDEMPTION OF INSTITUTIONAL SHARES
Customers may redeem all or part of their Institutional shares
in accordance with instructions and limitations pertaining to their accounts at
the Banks. It is the responsibility of the Banks to transmit redemption orders
to the Transfer Agent and credit their Customers' accounts with the redemption
proceeds on a timely basis. Redemption orders are effected at the net asset
value per share next determined after receipt of the order by the Transfer
Agent. No charge for wiring redemption payments is imposed by the Trust,
although Banks may charge their Customers'
-20-
<PAGE> 25
accounts for services. Information relating to such services and charges, if
any, is available from the Banks.
If a Customer has agreed with a particular Bank to maintain a
minimum balance in his account at the Bank and the balance in such account falls
below that minimum, the Customer may be obliged to redeem all or part of his
Institutional shares to the extent necessary to maintain the required minimum
balance. Customers who have instructed that automatic purchases and redemptions
be made for their accounts receive monthly confirmations of share transactions.
WRITTEN REDEMPTION PROCEDURES
A shareholder of record may redeem shares in any amount by
sending a written request to Armada Funds, P.O. Box 8421, Boston, Massachusetts
02266-8421. Redemption requests must be signed by each shareholder, including
each joint owner on redemption requests for joint accounts, in the exact manner
as the Fund account is registered, and must state the number of shares or the
amount to be redeemed and identify the shareholder account number and tax
identification number. For a redemption amount of $10,000 or more, each
signature on the written request must be guaranteed by a commercial bank or
trust company which is a member of the Federal Reserve System or FDIC, a member
firm of a national securities exchange or a savings and loan association. A
signature guaranteed by a savings bank or notarized by a notary public is not
acceptable. For a redemption amount less than $10,000, no signature guarantee is
needed. The Trust may require additional supporting documents for redemptions
made by corporations, fiduciaries, executors, administrators, trustees,
guardians and institutional investors.
TELEPHONE REDEMPTION PROCEDURES
A shareholder of record also may redeem shares in any amount
by calling 1-800-622-FUND (3863) (provided the appropriate election was made on
the shareholder's account application).
During periods of unusual economic or market changes,
telephone redemptions may be difficult to implement. In such event, shareholders
should mail their redemption requests to their financial institutions or Armada
Funds at the address shown above. Neither the Trust nor its Transfer Agent will
be responsible for the authenticity of instructions received by telephone that
are reasonably believed to be genuine. In attempting to confirm that telephone
instructions are genuine, the Trust and its Transfer Agent will use such
procedures as are considered reasonable, including recording those instructions
and requesting information as to account registration (such as the name in which
an account is registered, the account number and recent transactions in the
account). To the extent that the
-21-
<PAGE> 26
Trust and its Transfer Agent fail to use reasonable procedures to verify the
genuineness of telephone instructions, they may be liable for such instructions
that prove to be fraudulent and unauthorized. In all other cases, shareholders
will bear the risk of loss for fraudulent telephone transactions. The Trust
reserves the right to refuse a telephone redemption if it believes it is
advisable to do so. Procedures for redeeming Retail shares by telephone may be
modified or terminated at any time by the Trust or the Transfer Agent.
OPTION TO MAKE SYSTEMATIC WITHDRAWALS
The Trust has available a Systematic Withdrawal Plan (the
"Plan") for a shareholder who owns shares of any fund of the Trust held on the
Transfer Agent's system. The Plan allows the shareholder to have a fixed minimum
sum of $250 distributed at regular intervals. The shareholder's account must
have a minimum value of $5,000 to be eligible for the Plan. Additional
information regarding this service may be obtained from an Investor's financial
institution or the Transfer Agent at 1-800-622-FUND (3863).
OTHER REDEMPTION INFORMATION
Due to the relatively high cost of maintaining small accounts,
the Trust reserves the right to redeem, at net asset value, any account
maintained by a shareholder that has a value of less than $1,000 due to
redemptions where the shareholder does not increase the amount in the account to
at least $1,000 upon 60 days' notice.
If any portion of the shares to be redeemed represents an
investment made by personal check, the Trust reserves the right to delay payment
of the redemption proceeds until the Transfer Agent is reasonably satisfied that
the check has been collected, which could take up to 15 calendar days from the
date of purchase. A shareholder who anticipates the need for more immediate
access to his investment should purchase shares by federal funds, bank wire,
certified or cashier's check. Financial institutions normally impose a charge in
connection with the use of bank wires, as well as certified checks, cashier's
checks and federal funds.
Payment to shareholders for shares redeemed will be made
within seven days after receipt of the request for redemption or such shorter
time period as may be required by the Securities Exchange Act of 1934.
EXCHANGE PRIVILEGE APPLICABLE TO RETAIL SHARES
The Trust offers an exchange program whereby Investors who
have paid a sales charge to purchase Retail shares of the
-22-
<PAGE> 27
Fund or another investment portfolio of the Trust (each a "load Fund") may
exchange those Retail shares for Retail shares of another load Fund offered by
the Trust, or another investment fund offered by the Trust without the
imposition of a sales charge (each a "no load Fund") at the net asset value per
share on the date of exchange, provided that such other Retail shares may be
legally sold in the state of the shareholder's residence. As a result, no
additional sales charge will be incurred with respect to such an exchange.
Shareholders may also exchange Retail shares of a no load Fund
for Retail shares of another no load Fund at the net asset value per share
without payment of a sales charge.
In addition, shareholders of a no load Fund may exchange
Retail shares for Retail shares of a load Fund subject to payment of the
applicable sales charge. However, shareholders exchanging Retail shares of a no
load Fund which were received in a previous exchange transaction involving
Retail shares of a load Fund will not be required to pay an additional sales
charge upon notification of the reinvestment of the equivalent amount into the
Retail shares of a load Fund.
Shareholders contemplating an exchange should carefully review
the Prospectus of the fund into which the exchange is being considered. An
Armada Funds Prospectus may be obtained from NatCity Investments Inc., an
Investor's financial institution, or by calling 1-800-622-FUND (3863).
Any Retail shares exchanged must have a value at least equal
to the minimum initial investment required by the particular investment fund
into which the exchange is being made. Investors should make their exchange
requests in writing or by telephone to the financial institutions through which
they purchased their original Retail shares. It is the responsibility of
financial institutions to transmit exchange requests to the Transfer Agent.
Investors who purchased shares directly from the Trust should transmit exchange
requests directly to the Transfer Agent. Exchange requests received by the
Transfer Agent prior to 4:00 p.m. (Eastern Time) will be processed as of the
close of business on the day of receipt; requests received by the Transfer Agent
after 4:00 p.m. (Eastern Time) will be processed on the next Business Day. The
Trust reserves the right to reject any exchange request. During periods of
unusual economic or market changes, telephone exchanges may be difficult to
implement. In such event, an Investor should mail the exchange request to his
financial institution, and an Investor who directly purchased shares from the
Trust should mail the exchange request to the Transfer Agent. The exchange
privilege may be modified or terminated at any time upon 60 days notice to
shareholders.
-23-
<PAGE> 28
SYSTEMATIC EXCHANGE PROGRAM APPLICABLE TO RETAIL SHARES
Shares of a Fund may also be purchased through automatic
monthly deductions from a shareholder's account from any Armada money market
fund. Under a systematic exchange program, a shareholder enters an agreement to
purchase shares of one or more specified funds over a specified period of time,
and initially purchases shares of one Armada money market fund in an amount
equal to the total amount of the investment. On a monthly basis, a specified
dollar amount of shares of the Armada money market fund is exchanged for shares
of the Funds specified.
The systematic exchange program of investing a fixed dollar
amount at regular intervals over time has the effect of reducing the average
cost per share of the Funds. This effect also can be achieved through the
systematic investment program described previously in this prospectus. Because
purchases of Retail Shares are subject to an initial sales charge, it may be
beneficial for an investor to execute a Letter of Intent in connection with the
systematic exchange program. A shareholder may apply for participation in this
program through his or her financial institution or by calling 1-800-622-FUND
(3863).
DISTRIBUTION AGREEMENT
Under the Trust's Distribution Agreement and related
Distribution Plan adopted pursuant to Rule 12b-1 under the 1940 Act, the Trust
compensates the Distributor monthly for the direct and indirect expenses
incurred by the Distributor for services provided and expenses assumed in
providing such fund advertising, marketing, prospectus printing and other
distribution services up to a maximum of .10% per annum of the average net
assets of the fund, inclusive of an annual base fee of $1,250,000 plus incentive
fees related to asset growth. Such fees are payable monthly and accrued daily
among the investment funds with respect to which the Distributor is distributing
shares.
SHAREHOLDER SERVICES PLAN
The Trust has implemented the Services Plan with respect to
Retail shares of the Fund. Pursuant to the Services Plan, the Trust enters into
shareholder servicing agreements with certain financial institutions pursuant to
which the institutions render shareholder administrative services to their
customers who are the beneficial owners of Retail shares of the Fund in
consideration for the payment of up to .25% (on an annualized basis) of the
average daily net asset value of such shares. Persons entitled to receive
compensation for servicing Retail shares may receive different compensation with
respect to those shares than with respect to Institutional shares in the same
-24-
<PAGE> 29
Fund. Shareholder administrative services may include aggregating and processing
purchase and redemption orders, processing dividend payments from the Trust on
behalf of customers, providing information periodically to customers showing
their position in Retail shares, and providing sub-transfer agent services or
the information necessary for subaccounting, with respect to Retail shares
beneficially owned by customers. Since financial institutions may charge their
customers fees depending on the type of customer account the Investor has
established, beneficial owners of Retail shares should read this Prospectus in
light of the terms and fees governing their accounts with financial
institutions.
DIVIDENDS AND DISTRIBUTIONS
Dividends from the net investment income of the Fund are
declared daily and paid annually. Any net realized capital gains will be
distributed at least annually. Dividends and distributions will reduce the
Fund's net asset value per share by the per share amount thereof.
Shareholders may elect to have their dividends reinvested in
additional full and fractional Fund shares of the same class or series at the
net asset value of such shares on the payment date. Shareholders must make such
election, or any revocation thereof, in writing to his Bank or financial
institution. The election will become effective with respect to dividends and
distributions paid after its receipt.
Under the Services Plan, the amount of the Fund's net
investment income available for distribution to the holders of Retail shares is
reduced by the amount of shareholder servicing fees payable to financial
institutions under the Services Plan.
TAXES
The Fund intends to qualify as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended (the "Code"). Such
qualification generally relieves the Fund of liability for federal income taxes
to the extent its earnings are distributed in accordance with the Code.
Qualification as a regulated investment company under the Code
for a taxable year requires, among other things, that the Fund distribute to its
shareholders an amount equal to at least the sum of 90% of its investment
company taxable income and 90% of its tax-exempt interest income (if any) net of
certain deductions for such year. In general, the Fund's investment company
taxable income will be its taxable income (including any dividends, interest and
short-term capital gains) subject to
-25-
<PAGE> 30
certain adjustments and excluding the excess of any net long-term capital gain
for the taxable year over the net short-term capital loss, if any, for such
year. The Fund intends to distribute substantially all of its investment company
taxable income and net tax-exempt income each taxable year. Such distributions
by the Fund will be taxable as ordinary income to its shareholders who are not
currently exempt from federal income taxes, whether such income is received in
cash or reinvested in additional shares. (Federal income taxes for distributions
to an IRA or to a qualified retirement plan are deferred under the Code.) For
corporate shareholders, the dividends received deduction will apply to such
distributions to the extent of the gross amount of qualifying dividends received
by the distributing Fund from domestic corporations for the taxable year.
Substantially all of the Fund's net realized long-term capital
gains, if any, will be distributed at least annually to Fund shareholders. The
Fund generally will have no tax liability with respect to such gains, and the
distributions will be taxable to Fund shareholders who are not currently exempt
from federal income taxes as long-term capital gains, regardless of how long the
shareholders have held Fund shares and whether such gains are received in cash
or reinvested in additional shares.
Dividends declared in December of any year payable to
shareholders of record on a specified date in such month will be deemed to have
been received by shareholders and paid by the Fund on December 31 of such year
in the event such dividends are actually paid during January of the following
year.
Prior to purchasing Fund shares, the impact of dividends or
distributions which are expected to be declared or have been declared, but not
paid, should be carefully considered. Any dividend or distribution paid shortly
after a purchase of shares prior to the record date will have the effect of
reducing the per share net asset value by the per share amount of the dividend
or distribution. All or a portion of such dividend or distribution, although in
effect a return of capital, may be subject to tax.
A taxable gain or loss may be realized by a shareholder upon
his redemption, transfer or exchange of Fund shares depending upon the tax basis
of such shares and their price at the time of redemption, transfer or exchange.
If a shareholder has held shares for six months or less and during that time
received a distribution taxable as a long-term capital gain, then any loss the
shareholder might realize on the sale of those shares will be treated as a
long-term capital loss to the extent of the earlier capital gain distribution.
Generally, a shareholder may include sales charges incurred upon the purchase of
Fund shares in his tax basis for such shares for the purpose of determining gain
or loss on a redemption, transfer or exchange
-26-
<PAGE> 31
of such shares. However, if the shareholder effects an exchange of such shares
for shares of another Fund within 90 days of the purchase and is able to reduce
the sales charges applicable to the new shares (by virtue of the Trust's
exchange privilege), the amount equal to such reduction may not be included in
the tax basis of the shareholder's exchanged shares, but may be included
(subject to this limitation) in the tax basis of the new shares.
It is expected that dividends and certain interest income
earned by the Fund from foreign securities will be subject to foreign
withholding taxes or other taxes. So long as more than 50% of the value of the
Fund's total assets at the close of any taxable year consists of stock or
securities of foreign corporations, the Fund may elect, for U.S. federal income
tax purposes, to treat certain foreign taxes paid by it, including generally any
withholding taxes and other foreign income taxes, as paid by its shareholders.
The Fund may make this election. As a consequence, the amount of such foreign
taxes paid by the Fund will be included in its shareholders' income pro rata (in
addition to taxable distributions actually received by them), and each
shareholder will be entitled either (a) to credit his proportionate amounts of
such taxes against his U.S. Federal income tax liabilities or (b) if he itemizes
his deductions, to deduct such proportionate amounts from his U.S. taxable
income.
Shareholders of the Fund will be advised at least annually as
to the federal income tax consequences of distributions made to them each year.
Shareholders are advised to consult their tax advisers concerning the
application of state and local taxes which may differ from federal tax
consequences described above.
The foregoing discussion is based on tax laws and regulations
which were in effect as of the date of this Prospectus; such laws and
regulations may be changed by legislative or administrative actions. The
foregoing summarizes some of the important tax considerations generally
affecting the Fund and its shareholders and is not intended as a substitute for
careful tax planning. Accordingly, potential investors should consult their tax
advisers with specific reference to their own tax situation.
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES
The business and affairs of the Trust are managed under the direction
of the Trust's Board of Trustees. The trustees of the Trust, their addresses,
principal occupations during the past five years, other affiliations, and the
compensation paid by the Trust and the fees and reimbursed expenses they receive
in
-27-
<PAGE> 32
connection with each meeting of the Board of Trustees they attend are included
in the Statement of Additional Information.
INVESTMENT ADVISER
National City serves as the investment adviser to the Fund.
The adviser is a wholly owned subsidiary of National City Corporation. The
adviser provides trust and banking services to individuals, corporations, and
institutions, both nationally and internationally, including investment
management, estate and trust administration, financial planning, corporate trust
and agency, and personal and corporate banking. The adviser is a member bank of
the Federal Reserve System and the Federal Deposit Insurance Corporation.
On December 31, 1996, the Trust Department of National City
had approximately $9.9 billion in assets under management, and had approximately
$18.6 billion in total trust assets. National City has its principal offices at
1900 East Ninth Street, Cleveland, Ohio 44114.
For the services provided and expenses assumed pursuant to the
Advisory Agreement relating to the Fund, the adviser is entitled to receive an
advisory fee, computed daily and payable monthly, at the annual rate of .75% of
the average net assets of the Fund. Shareholders should note that these fees are
higher than those payable by other investment companies. However, the Trust
believes that the fees are within the range of fees payable by investment funds
with comparable investment objectives and policies. The adviser may from time to
time waive all or a portion of its advisory fees to increase the net income of
the Fund available for distribution as dividends.
SUB-INVESTMENT ADVISER
_______________________ serves as the investment adviser to
the Fund under a sub-advisory agreement (the Sub-Advisory Agreement") with the
adviser.
Pursuant to the Sub-Advisory Agreement and subject to the
supervision of the adviser and of the Trust's Board of Trustees and in
accordance with the Fund's investment policies, the sub-adviser has agreed to
assist the adviser in providing a continuous investment program for the Fund and
in determining investments for the Fund. The sub-adviser will maintain the
Trust's records relating to purchases and sales effected by it. For the services
provided and expenses assumed pursuant to the Sub-Advisory Agreement, the
sub-adviser is entitled to an advisory fee, payable by the adviser, calculated
daily and payable monthly, at the annual rate of ____% of the average daily net
assets of the Fund. The sub-adviser may occasionally waive all or a portion of
its fee from the adviser.
-28-
<PAGE> 33
ADMINISTRATOR
PFPC Inc. ("PFPC"), located at 400 Bellevue Parkway,
Wilmington, Delaware 19809, serves as the administrator to the Fund. PFPC is an
indirect, wholly-owned subsidiary of PNC Bank Corp., a multi-bank holding
company.
Under its Administration and Accounting Services Agreement
with the Trust, PFPC has agreed to provide the following services with respect
to the Fund: statistical data, data processing services and accounting and
bookkeeping services; prepare tax returns and certain reports filed with the
SEC; assist in the preparation of reports to shareholders and the preparation of
the Trust's registration statement; maintain the required fidelity bond
coverage; calculate the Fund's net asset value per share, net income, and
realized capital gains (losses); and generally assist the Fund with respect to
all aspects of its administration and operation. PFPC is entitled to receive
with respect to the Fund an administrative fee, computed daily and paid monthly,
at the annual rate of .10% of the first $200,000,000 of its net assets, 0.75% of
the next $200,000,000 of its net assets, .045% of the next $200,000,000 of its
net assets and .02% of its net assets over $600,000,000 and is entitled to be
reimbursed for its out-of-pocket expenses incurred on behalf of the Fund.
DESCRIPTION OF THE TRUST AND ITS SHARES
The Trust was organized as a Massachusetts business trust on
January 28, 1986. The Trust is a series fund authorized to issue 40 separate
classes or series of shares of beneficial interest ("shares"). Two of these
classes or series, which represent interests in the Fund (Class X and Class X -
Special Series 1) are described in this Prospectus. Class X shares constitute
the Institutional class or series of shares; and Class X - Special Series 1
shares constitute the Retail class or series of shares. The other Funds of the
Trust are:
Money Market Fund (Class A and Class A - Special Series 1)
Government Fund (Class B and Class B - Special Series 1)
Treasury Fund (Class C and Class C - Special Series 1)
Tax Exempt Fund (Class D and Class D - Special Series 1)
Equity Growth Fund (Class H and Class H - Special Series 1)
Fixed Income Fund (Class I and Class I - Special Series 1)
Ohio Tax Exempt Fund (Class K and Class K - Special Series 1)
National Tax Exempt Fund (Class L and Class L - Special Series 1)
Equity Income Fund (Class M and Class M - Special Series 1)
Mid Cap Regional Fund (Class N and Class N - Special Series 1)
Enhanced Income Fund (Class O and Class O - Special Series 1)
Total Return Advantage Fund (Class P and Class P - Special Series 1)
-29-
<PAGE> 34
Pennsylvania Tax Exempt Fund (Class Q and Class Q - Special Series 1)
GNMA Fund (Class S and Class S - Special Series 1)
Pennsylvania Municipal Fund (Class T and Class T - Special Series 1)
Foreign Equity Fund (Class U and Class U - Special Series 1)
Real Return Advantage Fund (Class Y and Class Y - Special Series 1)
Core Equity Fund (Class W and Class W - Special Series 1)
Equity Index Fund (Class V and Class V - Special Series 1)
Each share has no par value, represents an equal proportionate
interest in the investment fund with other shares of the same class or series
outstanding, and is entitled to such dividends and distributions out of the
income earned on the assets belonging to such fund as are declared in the
discretion of the Trust's Board of Trustees. The Trust's Declaration of Trust
authorizes the Board of Trustees to classify or reclassify any unissued shares
into any number of additional classes of shares and to classify or reclassify
any class of shares into one or more series of shares.
Shareholders are entitled to one vote for each full share
held, and a proportionate fractional vote for each fractional share held.
Shareholders will vote in the aggregate and not by investment fund, except as
otherwise expressly required by law or when the Board of Trustees determines
that the matter to be voted on affects only the interests of shareholders of a
particular investment fund. The Statement of Additional Information gives
examples of situations in which the law requires voting by investment fund. In
addition, shareholders of each of the investment funds will vote in the
aggregate and not by class or series, except as otherwise expressly required by
law or when the Board of Trustees determines the matter to be voted on affects
only the interests of the holders of a particular class or series of shares.
Under the Services Plan, only the holders of Retail shares in an investment fund
are, or would be entitled to vote on matters submitted to a vote of shareholders
(if any) concerning the Services Plan. Voting rights are not cumulative, and
accordingly, the holders of more than 50% of the aggregate shares of the Trust
may elect all of the trustees irrespective of the vote of the other
shareholders.
As stated previously in the text of this document, the Trust
is organized as a trust under the laws of Massachusetts. Shareholders of such a
trust may, under certain circumstances, be held personally liable (as if they
were partners) for the obligations of the Trust. The Declaration of Trust of the
Trust provides for indemnification out of the Trust property for any shareholder
held personally liable solely by reason of his being or having been a
shareholder and not because of his acts or omissions or some other reason.
-30-
<PAGE> 35
The Trust does not presently intend to hold annual meetings of
shareholders except as required by the 1940 Act or other applicable law. The
Trust's Code of Regulations provides that special meetings of shareholders shall
be called at the written request of shareholders entitled to cast at least 10%
of the votes entitled to be cast at such meeting. Such meeting may be called by
shareholders to consider the removal of one or more trustees. Shareholders will
receive shareholder communication assistance with respect to such matter as
required by the 1940 Act.
CUSTODIAN AND TRANSFER AGENT
National City Bank serves as the custodian of the Trust's
assets. State Street Bank and Trust Company serves as the Trust's transfer and
dividend disbursing agent. Communications to the Transfer Agent should be
directed to P.O. Box 8421, Boston, Massachusetts 02266-8421. The fees payable by
the Trust for these services are described in the Statement of Additional
Information.
EXPENSES
Except as noted below, the Trust's advisers and sub- adviser
bear all expenses in connection with the performance of their services. The Fund
bears its own expenses incurred in its operations including: taxes; interest;
fees (including fees paid to its trustees and officers); SEC fees; state
securities qualification fees; costs of preparing and printing prospectuses for
regulatory purposes and for distribution to existing shareholders; expenses
related to the Distribution Plan; advisory fees; administration fees and
expenses; charges of the custodian and Transfer Agent; certain insurance
premiums; outside auditing and legal expenses; costs of shareholders' reports
and shareholder meetings; and any extraordinary expenses. The Fund also pays for
brokerage fees and commissions in connection with the purchase of its portfolio
securities. Under the Services Plan, the Retail shares in the Fund also bear the
expense of shareholder servicing fees.
MISCELLANEOUS
Shareholders will receive unaudited semi-annual reports and
annual financial statements audited by independent auditors.
Pursuant to Rule 17f-2, as National City serves the Trust as
both the custodian and investment adviser, a procedure has been established
requiring three annual verifications, two of which are to be unannounced, of all
investments held pursuant to
-31-
<PAGE> 36
the Custodian Services Agreement, to be conducted by the Trust's independent
auditors.
As used in this Prospectus, a "vote of the holders of a
majority of the outstanding shares" of the Trust or the Fund means, with respect
to the approval of an investment advisory agreement, a distribution plan or a
change in a fundamental investment policy, the affirmative vote of the lesser of
(a) 50% or more of the outstanding shares of the Trust or the fund or (b) 67% or
more of the shares of the Trust or the fund present at a meeting if more than
50% of the outstanding shares of the Trust or the fund are represented at the
meeting in person or by proxy.
The portfolio managers of the Funds and other investment
professionals may from time to time discuss in advertising, sales literature or
other material, including periodic publications, various topics of interest to
shareholders and prospective investors. The topics may include, but are not
limited to, the advantages and disadvantages of investing in tax-deferred and
taxable investments; Fund performance and how such performance may compare to
various market indices; shareholder profiles and hypothetical investor
scenarios; the economy; the financial and capital markets; investment strategies
and techniques; investment products and tax, retirement and investment planning.
Inquiries regarding the Trust or any of its investment funds
may be directed to 1-800-622-FUND (3863).
-32-
<PAGE> 37
ARMADA FUNDS
INVESTMENT ADVISER
AFFILIATE OF NATIONAL
CITY CORPORATION
National City Bank
1900 East Ninth Street
Cleveland, Ohio 44114
SUB-INVESTMENT ADVISER
EXPENSE TABLE...................................................... 3
INTRODUCTION....................................................... 5
INVESTMENT OBJECTIVES AND
POLICIES.................................................. 5
INVESTMENT LIMITATIONS............................................. 12
PERFORMANCE INFORMATION............................................ 13
PRICING OF SHARES.................................................. 14
HOW TO PURCHASE AND REDEEM
SHARES.................................................... 15
DISTRIBUTION AGREEMENT............................................. 24
SHAREHOLDER SERVICES PLAN.......................................... 24
DIVIDENDS AND DISTRIBUTIONS........................................ 25
TAXES.............................................................. 25
MANAGEMENT OF THE TRUST............................................ 27
DESCRIPTION OF THE TRUST AND
ITS SHARES................................................ 29
CUSTODIAN AND TRANSFER AGENT....................................... 31
EXPENSES .......................................................... 31
MISCELLANEOUS...................................................... 31
ARMADA FUNDS
PROSPECTUS
______________, 1997
Small Cap Growth Fund
-33-
<PAGE> 38
- --------------------------------------------------------------------------------
- - SHARES OF THE ARMADA FUNDS ARE NOT BANK DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED OR OTHERWISE SUPPORTED BY, NATIONAL CITY BANK; NATIONAL
CITY BANK, COLUMBUS; NATIONAL CITY BANK, KENTUCKY; NATIONAL ASSET MANAGEMENT
CORPORATION, THEIR PARENT COMPANY OR ANY OF THEIR AFFILIATES OR ANY BANK.
- - SHARES OF THE ARMADA FUNDS ARE NOT INSURED OR GUARANTEED BY THE U.S.
GOVERNMENT, FDIC, OR ANY GOVERNMENTAL AGENCY OR STATE.
- - AN INVESTMENT IN THE ARMADA FUNDS INVOLVES INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
National City Bank and certain of its affiliates serve as investment
advisers to Armada Funds for which they receive an investment advisory fee. Past
performance is not indicative of future performance, and the investment return
will fluctuate, so that you may have a gain or loss when you sell your shares.
- --------------------------------------------------------------------------------
No person has been authorized to give any information or to make any
representations not contained in this Prospectus in connection with the offering
made by this Prospectus and, if given or made, such information or
representations must not be relied upon as having been authorized by the Trust
or its Distributor. This Prospectus does not constitute an offering by the Trust
or by the Distributor in any jurisdiction in which such offering may not
lawfully be made.
-34-
<PAGE> 39
ARMADA FUNDS
STATEMENT OF ADDITIONAL INFORMATION
__________ __, 1997
SMALL CAP GROWTH FUND
This Statement of Additional Information is not a prospectus but should be read
in conjunction with the current Prospectus for the above Funds of Armada Funds
(the "Trust"), dated _________ __, 1997 (the "Prospectus"). A copy of the
Prospectus may be obtained by calling or writing the Trust at 1-800-622-FUND
(3863), Oaks, Pennsylvania 19456.
<PAGE> 40
TABLE OF CONTENTS
Page
----
STATEMENT OF ADDITIONAL INFORMATION....................................... 1
INVESTMENT OBJECTIVES AND POLICIES........................................ 1
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION............................ 7
DESCRIPTION OF SHARES..................................................... 9
ADDITIONAL INFORMATION CONCERNING TAXES................................... 11
TRUSTEES AND OFFICERS..................................................... 13
ADVISORY, ADMINISTRATION, DISTRIBUTION, CUSTODIAN
SERVICES AND TRANSFER AGENCY AGREEMENTS................................... 19
SHAREHOLDER SERVICES PLAN................................................. 23
PORTFOLIO TRANSACTIONS.................................................... 23
AUDITORS.................................................................. 24
COUNSEL................................................................... 25
PERFORMANCE INFORMATION................................................... 25
MISCELLANEOUS............................................................. 27
APPENDIX A.............................................................. A-1
APPENDIX B.............................................................. B-1
-i-
<PAGE> 41
STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------
This Statement of Additional Information should be read in
conjunction with the Prospectus of Armada Funds (the "Trust") that describes the
Small Cap Growth Fund. The information contained in this Statement of Additional
Information expands upon matters discussed in the Prospectus. No investment in
shares of the Fund should be made without first reading the Prospectus.
INVESTMENT OBJECTIVES AND POLICIES
----------------------------------
ADDITIONAL INFORMATION ON FUND MANAGEMENT
- -----------------------------------------
Further information on the advisers' or sub-adviser's
investment management strategies, techniques, policies and related matters may
be included from time to time in advertisements, sales literature,
communications to shareholders and other materials.
See also, "Performance Information" below.
Attached to this Statement of Additional Information is
Appendix A which contains descriptions of the rating symbols used by S&P, Fitch,
Duff, IBCA and Moody's for securities which may be held by the Funds.
AMERICAN DEPOSITORY RECEIPTS ("ADRS")
- -------------------------------------
The Fund may invest its assets in ADRs, which are receipts
issued by an American bank or trust company evidencing ownership of underlying
securities issued by a foreign issuer. ADRs may be listed on a national
securities exchange or may trade in the over-the-counter market. ADR prices are
denominated in United States dollars. The securities underlying an ADR will
normally be denominated in a foreign currency. The underlying securities may be
subject to foreign government taxes which could reduce the yield on such
securities. Investments in foreign securities involve certain inherent risks,
such as political or economic instability of the issuer or the country of issue
and the difficulty of predicting international trade patterns; the possible
imposition of foreign withholding taxes on interest income payable on such
instruments; the possible establishment of exchange controls; and the possible
seizure or nationalization of foreign deposits or the adoption of other foreign
branches of U.S. banks. As with any foreign security, the issuers of securities
underlying ADRs may be subject to less stringent reserve requirements and to
different accounting, auditing, reporting and recordkeeping standards than those
applicable to domestic issuers, and securities of foreign issuers may be less
liquid and their prices more volatile than those of comparable domestic issuers.
-1-
<PAGE> 42
WARRANTS
- --------
Warrants enable the owner to subscribe to and purchase a
specified number of shares of the issuing corporation at a specified price
during a specified period of time. The prices of warrants do not necessarily
correlate with the prices of the underlying securities. The purchase of warrants
involves the risk that the purchaser could lose the purchase value of the
warrant if the right to subscribe to additional shares is not exercised prior to
the warrant's expiration. Also, the purchase of warrants involves the risk that
the effective price paid for the warrant added to the subscription price of the
related security may exceed the value of the subscribed security's market price
such as when there is no movement in the level of the underlying security.
CONVERTIBLE SECURITIES
- ----------------------
Convertible securities entitle the holder to receive interest
paid or accrued on debt or the dividend paid on preferred stock until the
securities mature or are redeemed, converted or exchanged. Prior to conversion,
convertible securities have characteristics similar to ordinary debt securities
in that they normally provide a stable stream of income with generally higher
yields than those of common stock of the same or similar issuers. Convertible
securities rank senior to common stock in a corporation's capital structure and
therefore generally entail less risk than the corporation's common stock. The
value of the convertibility feature depends in large measure upon the degree to
which the convertible security sells above its value as a fixed income security.
In selecting convertible securities, the sub-adviser will
consider, among other factors, the creditworthiness of the issuers of the
securities; the interest or dividend income generated by the securities; the
potential for capital appreciation of the securities and the underlying common
stocks; the prices of the securities relative to other comparable securities and
to the underlying common stocks; whether the securities are entitled to the
benefits of sinking funds or other protective conditions; diversification of the
Fund's portfolio as to issuers; and the ratings of the securities. Since credit
rating agencies may fail to timely change the credit ratings of securities to
reflect subsequent events, the sub-adviser will consider whether such issuers
will have sufficient cash flow and profits to meet required principal and
interest payments. The Fund may retain a portfolio security whose rating has
been changed if the sub-adviser deems that retention of such security is
warranted.
VARIABLE AND FLOATING RATE OBLIGATIONS
- --------------------------------------
The Fund may purchase variable and floating rate obligations
(including variable amount master demand notes) which
-2-
<PAGE> 43
are unsecured instruments that permit the indebtedness thereunder to vary and
provide for periodic adjustments in the interest rate. Because variable and
floating rate obligations are direct lending arrangements between the Fund and
the issuer, they are not normally traded although certain variable and floating
rate obligations, such as Student Loan Marketing Association variable rate
obligations, may have a more active secondary market because they are issued or
guaranteed by the U.S. Government or its agencies or instrumentalities. Even
though there may be no active secondary market in such instruments, the Fund may
demand payment of principal and accrued interest at a time specified in the
instrument or may resell them to a third party. Such obligations may be backed
by bank letters of credit or guarantees issued by banks, other financial
institutions or the U.S. Government, its agencies or instrumentalities. The
quality of any letter of credit or guarantee will be rated high quality or, if
unrated, will be determined to be of comparable quality by the sub-adviser. In
the event an issuer of a variable or floating rate obligation defaulted on its
payment obligation, the Fund might be unable to dispose of the instrument
because of the absence of a secondary market and could, for this or other
reasons, suffer a loss to the extent of the default.
SHORT TERM OBLIGATIONS
- ----------------------
The Fund may invest in various short term obligations
including those described below.
Investments include commercial paper and other short term
promissory notes issued by corporations (including variable and floating rate
instruments).
Bank obligations include bankers' acceptances, negotiable
certificates of deposit, and non-negotiable demand and time deposits issued for
a definite period of time and earning a specified return by a U.S. bank (which
is a member of the Federal Reserve System), a foreign branch of a U.S. bank, or
a foreign bank. Bank obligations also include U.S. dollar denominated bankers'
acceptances, certificates of deposit and time deposits issued by foreign
branches of U.S. banks or foreign banks. Investment in bank obligations is
limited to the obligations of financial institutions having more than $1 billion
in total assets at the time of purchase. The Fund may also make interest bearing
savings deposits in commercial and savings banks not in excess of 5% of its
total assets. Investment in non-negotiable time deposits is limited to no more
than 5% of a Fund's total assets at the time of purchase.
The Fund may also make limited investments in Guaranteed
Investment Contracts ("GICs") issued by U.S. insurance companies. When investing
in GICs, the Fund makes cash contributions to a deposit fund or an insurance
company's general account. The
-3-
<PAGE> 44
insurance company then credits to the Fund monthly a guaranteed minimum interest
which is based on an index. The insurance company may assess periodic charges
against a GIC for expense and service costs allocable to it, and the charges
will be deducted from the value of the deposit fund. The Fund will purchase a
GIC only when its advisers or sub-adviser have determined, under guidelines
established by the Board of Trustees, that the GIC presents minimal credit risks
to the Fund and is of comparable quality to instruments that are rated high
quality by one or more rating agencies.
REPURCHASE AGREEMENTS
- ---------------------
Securities held by the Fund may be subject to repurchase
agreements. Under the terms of a repurchase agreement, the Fund purchases
securities from financial institutions such as banks and broker-dealers which
the Fund's advisers or sub-adviser deem creditworthy under guidelines approved
by the Board of Trustees, subject to the seller's agreement to repurchase such
securities at a mutually agreed-upon date and price. The repurchase price
generally equals the price paid by the Fund plus interest negotiated on the
basis of current short term rates, which may be more or less than the rate on
the underlying portfolio securities. The seller under a repurchase agreement
will be required to maintain the value of collateral held pursuant to the
agreement at not less than the repurchase price (including accrued interest). If
the seller were to default on its repurchase obligation or become insolvent, the
Fund holding such obligation would suffer a loss to the extent that the proceeds
from a sale of the underlying portfolio securities were less than the repurchase
price under the agreement, or to the extent that the disposition of such
securities by the Fund were delayed pending court action. Although there is no
controlling legal precedent confirming that a Fund would be entitled, as against
a claim by such seller or its receiver or trustee in bankruptcy, to retain the
underlying securities, the Board of Trustees of the Trust believes that, under
the regular procedures normally in effect for custody of a Fund's securities
subject to repurchase agreements and under Federal laws, a court of competent
jurisdiction would rule in favor of the Trust if presented with the question.
Securities subject to repurchase agreements will be held by the Trust's
custodian or another qualified custodian or in the Federal Reserve/Treasury
book-entry system. Repurchase agreements are considered to be loans by a Fund
under the 1940 Act.
REVERSE REPURCHASE AGREEMENTS
- -----------------------------
The Fund may borrow funds for temporary purposes by entering
into reverse repurchase agreements in accordance with its investment
restrictions. Pursuant to such agreements, the Fund would sell portfolio
securities to financial institutions such as banks and broker-dealers, and agree
to repurchase them at a
-4-
<PAGE> 45
mutually agreed-upon date and price. The Fund intends to enter into reverse
repurchase agreements only to avoid otherwise selling securities during
unfavorable market conditions to meet redemptions. At the time the Fund enters
into a reverse repurchase agreement, it will place in a segregated custodial
account assets such as U.S. Government securities or other liquid, high grade
debt securities consistent with the Fund's investment restrictions having a
value equal to the repurchase price (including accrued interest), and will
subsequently monitor the account to ensure that such equivalent value is
maintained. Reverse repurchase agreements involve the risk that the market value
of the securities sold by a Fund may decline below the price at which it is
obligated to repurchase the securities. Reverse repurchase agreements are
considered to be borrowings by the Fund under the Investment Company Act of
1940.
U.S. GOVERNMENT OBLIGATIONS
- ---------------------------
The Fund may purchase obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities. Some of these obligations
are supported by the full faith and credit of the U.S. Treasury, such as
obligations issued by the Government National Mortgage Association. Others, such
as those of the Export-Import Bank of the United States, are supported by the
right of the issuer to borrow from the U.S. Treasury; others, such as those of
the Federal National Mortgage Association, are supported by the discretionary
authority of the U.S. Government to purchase the agency's obligations; and still
others, such as those of the Student Loan Marketing Association, are supported
only by the credit of the agency or instrumentality issuing the obligation. No
assurance can be given that the U.S. Government would provide financial support
to U.S. Government-sponsored agencies or instrumentalities if it is not
obligated to do so by law. The Fund will invest in the obligations of such
agencies or instrumentalities only when the advisers believe that the credit
risk with respect thereto is minimal.
FUTURES CONTRACTS AND RELATED OPTIONS
- -------------------------------------
The Fund may purchase and sell futures contracts on particular
securities, financial instruments and stock indexes and may purchase and sell
call and put options on futures contracts. For a detailed description of futures
contracts and related options, see Appendix B to this Statement of Additional
Information.
SECURITIES OF OTHER INVESTMENT COMPANIES
- ----------------------------------------
The Fund currently intends to limit its investments in
securities issued by other investment companies so that, as determined
immediately after a purchase of such securities is made: (i) not more than 5% of
the value of the Fund's total assets will
-5-
<PAGE> 46
be invested in the securities of any one investment company; (ii) not more than
10% of the value of its total assets will be invested in the aggregate in
securities of investment companies as a group; and (iii) not more than 3% of the
outstanding voting stock of any one investment company will be owned by the Fund
or by the Trust as a whole.
PORTFOLIO TURNOVER
- ------------------
The Fund may engage in short term trading and may sell
securities which have been held for periods ranging from several months to less
than a day. Portfolio turnover will tend to rise during periods of economic
turbulence and decline during periods of stable growth. The Fund's annual
portfolio turnover is not expected to exceed 100% under normal market
conditions. The portfolio turnover rate for the Fund is calculated by dividing
the lesser of purchases or sales of portfolio securities for the year by the
monthly average value of the portfolio securities. The calculation excludes U.S.
Government securities and all securities whose maturities at the time of
acquisition were one year or less. Portfolio turnover may vary greatly from year
to year as well as within a particular year, and may also be affected by cash
requirements for redemptions of shares and by requirements which enable the Fund
to receive certain favorable tax treatment. Portfolio turnover will not be a
limiting factor in making fund decisions.
ADDITIONAL INVESTMENT LIMITATIONS
- ---------------------------------
In addition to the investment limitations disclosed in the
Prospectus, the Fund is subject to the following investment limitations which
may not be changed without approval of the holders of a majority of the
outstanding shares of the Fund (as defined under "Description of Shares" below).
The Fund may not:
1. Purchase or sell real estate, except that it may purchase
securities of issuers which deal in real estate and may purchase securities
which are secured by interests in real estate.
2. Invest in commodities, except that as consistent with its
investment objective and policies the Fund may: 1) purchase and sell options,
forward contracts, futures contracts, including without limitation those
relating to indices; 2) purchase and sell options on futures contracts or
indices; 3) purchase publicly traded securities of companies engaging in whole
or in part in such activities.
3. Act as an underwriter of securities within the
meaning of the Securities Act of 1933 except insofar as it might be
deemed to be an underwriter upon the disposition of portfolio
securities acquired within the limitation on purchases of illiquid
-6-
<PAGE> 47
securities and except to the extent that the purchase of obligations directly
from the issuer thereof in accordance with its investment objective, policies
and limitations may be deemed to be underwriting.
In addition to the above fundamental limitations, the Fund is
subject to the following non-fundamental limitations, which may be changed
without a shareholder vote:
The Fund may not:
1. Acquire any other investment company or investment company
security except in connection with a merger, consolidation, reorganization or
acquisition of assets or where otherwise permitted under the 1940 Act.
2. Write or sell put options, call options, straddles,
spreads, or any combination thereof, except as consistent with the Fund's
investment objective and policies, for transactions in options on securities or
indices of securities, futures contracts and options on futures contracts and in
similar investments.
3. Purchase securities on margin, make short sales of
securities or maintain a short position, except that (a) this investment
limitation shall not apply to its transactions in futures contracts and related
options, options on securities or indices of securities and similar instruments,
and (b) it may obtain short-term credit as may be necessary for the clearance of
purchases and sales of portfolio securities.
4. Purchase securities of companies for the purpose of
exercising control.
5. Invest more than 15% of its total assets in illiquid
securities.
The Fund does not intend to purchase securities while its
outstanding borrowings are in excess of 5% of its assets. Securities held in
escrow or separate accounts in connection with its investment practices are not
deemed to be pledging for purposes of this limitation.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
----------------------------------------------
Shares in the Trust are sold on a continuous basis by SEI
Financial Services Company (the "Distributor"), which has agreed to use
appropriate efforts to solicit all purchase orders. The issuance of shares is
recorded on the books of the Trust. To change the commercial bank or account
designated to receive redemption proceeds, a written request must be sent to an
investor's financial institution at its principal office. Such
-7-
<PAGE> 48
requests must be signed by each shareholder, with each signature guaranteed by a
U.S. commercial bank or trust company or by a member firm of a national
securities exchange. Guarantees must be signed by an authorized signatory and
"Signature Guaranteed" must appear with the signature. An investor's financial
institution may request further documentation from corporations, executors,
administrators, trustees or guardians, and will accept other suitable
verification arrangements from foreign investors, such as consular verification.
The Trust may suspend the right of redemption or postpone the
date of payment for more than seven days for shares during any period when (a)
trading on the Exchange is restricted by applicable rules and regulations of the
SEC; (b) the Exchange is closed for other than customary weekend and holiday
closings; (c) the SEC has by order permitted such suspension; or (d) an
emergency exists as determined by the SEC.
There is no sales load charged on shares acquired through the
reinvestment of dividends or distributions on such shares.
Automatic investment programs such as the monthly savings
program ("Program") described in the Prospectus offered by the Fund permit an
investor to use "dollar cost averaging" in making investments. Under this
Program, an agreed upon fixed dollar amount is invested in Fund shares at
predetermined intervals. This may help investors to reduce their average cost
per share because the Program results in more shares being purchased during
periods of lower share prices and fewer shares during periods of higher share
prices. In order to be effective, dollar cost averaging should usually be
followed on a sustained, consistent basis. Investors should be aware, however,
that dollar cost averaging results in purchases of shares regardless of their
price on the day of investment or market trends and does not ensure a profit,
protect against losses in a declining market, or prevent a loss if an investor
ultimately redeems his shares at a price which is lower than their purchase
price. An investor may want to consider his financial ability to continue
purchases through periods of low price levels. From time to time, in
advertisements, sales literature, communications to shareholders and other
materials ("Materials"), the Trust may illustrate the effects of dollar cost
averaging through use of or comparison to an index such as the Standard & Poor's
500 Composite Stock Price Index.
OFFERING PRICE PER RETAIL SHARE OF THE FUNDS
- --------------------------------------------
An illustration of the computation of the offering price per
Retail share of the Fund, based upon the estimated value of its net assets and
number of shares outstanding on its commencement date, is as follows:
-8-
<PAGE> 49
<TABLE>
<CAPTION>
TABLE
-----
<S> <C>
Net Assets of Retail Shares.............................. $10,000,000
Outstanding Retail Shares................................ $ 1,000,000
Net Asset Value Per Share................................ $ 10.00
($10,000,000 / 1,000,000)
Sales Charge, 3.75% of offering
price (3.90% of net asset value
per share)............................................. $ .39
Offering to Public....................................... $ 10.39
<FN>
* Amounts are estimates as the fund has not commenced operations.
</TABLE>
EXCHANGE PRIVILEGE
- ------------------
Investors may exchange all or part of their Retail shares as
described in the Prospectus. Any rights an Investor may have (or have waived) to
reduce the sales load applicable to an exchange, as may be provided in a Fund
Prospectus, will apply in connection with any such exchange. The exchange
privilege may be modified or terminated at any time upon 60 days' notice to
shareholders.
By use of the exchange privilege, the Investor authorizes the
Trust's Transfer Agent or his financial institution to act on telephonic or
written instructions from any person representing himself or herself to be the
shareholder and believed by the Transfer Agent or the financial institution to
be genuine. The Investor or his financial institution must notify the Transfer
Agent of his prior ownership of Retail shares and account number. The Transfer
Agent's records of such instructions are binding.
DESCRIPTION OF SHARES
---------------------
The Trust is a Massachusetts business trust. The Trust's
Declaration of Trust authorizes the Board of Trustees to issue an unlimited
number of shares of beneficial interest and to classify or reclassify any
unissued shares of the Trust into one or more additional classes or series by
setting or changing in any one or more respects their respective preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications, and terms and conditions of redemption. Pursuant to
such authority, the Board of Trustees has authorized the issuance of 40 classes
or series of shares. Two of these classes or series, which represent interests
in the Small Cap Growth Fund (Class X and Class X - Special Series 1) are
described in this Statement of Additional Information and the related
Prospectus.
-9-
<PAGE> 50
Shares have no preemptive rights and only such conversion or
exchange rights as the Board of Trustees may grant in its discretion. When
issued for payment as described in the Prospectus, the Trust's shares will be
fully paid and non-assessable. In the event of a liquidation or dissolution of
the Trust or an individual Fund, shareholders of the Fund are entitled to
receive the assets available for distribution belonging to that Fund, and a
proportionate distribution, based upon the relative asset values of the
respective Funds, of any general assets of the Trust not belonging to any
particular Fund which are available for distribution.
Rule 18f-2 under the 1940 Act provides that any matter
required by the 1940 Act, applicable state law, or otherwise, to be submitted to
the holders of the outstanding voting securities of an investment company such
as the Trust shall not be deemed to have been effectively acted upon unless
approved by the holders of a majority of the outstanding shares of each
investment fund affected by such matter. Rule 18f-2 further provides that an
investment fund is affected by a matter unless the interests of each fund in the
matter are substantially identical or the matter does not affect any interest of
the fund. Under the Rule, the approval of an investment advisory agreement or
any change in a fundamental investment policy would be effectively acted upon
with respect to an investment fund only if approved by a majority of the
outstanding shares of such fund. However, the Rule also provides that the
ratification of the appointment of independent public accountants, the approval
of principal underwriting contracts, and the election of trustees may be
effectively acted upon by shareholders of the Trust voting together in the
aggregate without regard to a particular fund. In addition, shareholders of each
class in a particular investment fund have equal voting rights except that only
Retail shares of an investment fund will be entitled to vote on matters
submitted to a vote of shareholders (if any) relating to shareholder servicing
fees that are allocable to such shares.
Although the following types of transactions are normally
subject to shareholder approval, the Board of Trustees may, under certain
limited circumstances, (a) sell and convey the assets of an investment fund to
another management investment company for consideration which may include
securities issued by the purchaser and, in connection therewith, to cause all
outstanding shares of such fund involved to be redeemed at a price which is
equal to their net asset value and which may be paid in cash or by distribution
of the securities or other consideration received from the sale and conveyance;
(b) sell and convert an investment fund's assets into money and, in connection
therewith, to cause all outstanding shares of such fund involved to be redeemed
at their net asset value; or (c) combine the assets belonging to an investment
fund with the assets belonging to another investment fund of the Trust, if the
Board of Trustees reasonably determines
-10-
<PAGE> 51
that such combination will not have a material adverse effect on shareholders of
any fund participating in such combination, and, in connection therewith, to
cause all outstanding shares of any fund to be redeemed at their net asset value
or converted into shares of another class of the Trust shares at net asset
value. In the event that shares are redeemed in cash at their net asset value, a
shareholder may receive in payment for such shares an amount that is more or
less than his original investment due to changes in the market prices of the
fund's securities.
ADDITIONAL INFORMATION CONCERNING TAXES
---------------------------------------
The following summarizes certain additional tax considerations
generally affecting the Trust and its shareholders that are not described in the
Prospectus. No attempt is made to present a detailed explanation of the tax
treatment of the Trust or its shareholders or possible legislative changes, and
the discussion here and in the Prospectus is not intended as a substitute for
careful tax planning. Potential investors should consult their tax advisers with
specific reference to their own tax situation.
Each Fund of the Trust will be treated as a separate corporate
entity under the Code and intends to qualify as a regulated investment company.
In order to qualify for tax treatment as a regulated investment company under
the Code, each Fund must satisfy, in addition to the distribution requirement
described in the Prospectus, certain requirements with respect to the source of
its income during a taxable year. At least 90% of the gross income of each Fund
must be derived from dividends, interest, payments with respect to securities
loans, gains from the sale or other disposition of stocks, securities or foreign
currencies, and other income (including but not limited to gains from options,
futures, or forward contracts) derived with respect to the Fund's business of
investing in such stock, securities or currencies. The Treasury Department may
by regulation exclude from qualifying income foreign currency gains which are
not directly related to the Fund's principal business of investing in stock or
securities, or options and futures with respect to stock or securities. Any
income derived by a Fund from a partnership or trust is treated as derived with
respect to the Fund's business of investing in stock, securities or currencies
only to the extent that such income is attributable to items of income which
would have been qualifying income if realized by the Fund in the same manner as
by the partnership or trust.
Another requirement for qualification as a regulated
investment company under the Code is that less than 30% of a Fund's gross income
for a taxable year must be derived from gains realized on the sale or other
disposition of the following investments held for less than three months: (1)
stock and securities (as defined
-11-
<PAGE> 52
in Section 2(a)(36) of the 1940 Act; (2) options, futures and forward contracts
other than those on foreign currencies; and (3) foreign currencies (and options,
futures and forward contracts on foreign currencies) that are not directly
related to a Fund's principal business of investing in stock and securities (and
options and futures with respect to stocks and securities). Interest (including
original issue discount and, with respect to taxable debt securities and non
taxable debt securities acquired after April 30, 1993, accrued market discount)
received by a Fund upon maturity or disposition of a security held for less than
three months will not be treated as gross income derived from the sale or other
disposition of such security within the meaning of this requirement. However,
any other income which is attributable to realized market appreciation will be
treated as gross income from the sale or other disposition of securities for
this purpose.
Some investments held by a Fund may be subject to special
rules which govern the federal income tax treatment of certain transactions
denominated in terms of a currency other than the U.S. dollar or determined by
reference to the value of one or more currencies other than the U.S. dollar. The
types of transactions covered by the special rules include the following: (1)
the acquisition of, or becoming the obligor under, a bond or other debt
instrument (including, to the extent provided in Treasury regulations, preferred
stock); (2) the accruing of certain trade receivables and payables; and (3) the
entering into or acquisition of any forward contract, futures contract, option
and similar financial instrument. The disposition of a currency other than the
U.S. dollar by a U.S. taxpayer is also treated as a transaction subject to the
special currency rules. With respect to transactions covered by the special
rules, foreign currency gain or loss is calculated separately from any gain or
loss on the underlying transaction and is normally taxable as ordinary gain or
loss. The Treasury Department has issued regulations under which certain
transactions subject to the special currency rules that are part of a "section
988 hedging transaction" are not subject to the mark-to-market or loss deferral
rules under the Code. Gain or loss attributable to the foreign currency
component of transactions engaged in by a Fund which are not subject to the
special currency rules (such as foreign equity investments other than certain
preferred stocks) will be treated as capital gain or loss and will not be
segregated from the gain or loss on the underlying transaction.
The Trust will designate any distribution of long-term capital
gains of a Fund as a capital gain dividend in a written notice mailed to
shareholders within 60 days after the close of the Trust's taxable year.
Shareholders should note that, upon the sale or exchange of Fund shares, if the
shareholder has not held such shares for at least six months, any loss on the
sale or exchange of those shares will be treated as long-term capital loss to
the
-12-
<PAGE> 53
extent of the capital gain dividends received with respect to the shares.
A 4% non-deductible excise tax is imposed on regulated
investment companies that fail to currently distribute an amount equal to
specified percentages of their ordinary taxable income and capital gain net
income (excess of capital gains over capital losses). Each Fund intends to make
sufficient distributions or deemed distributions of its ordinary taxable income
and capital gain net income each calendar year to avoid liability for this
excise tax.
If for any taxable year a Fund does not qualify for federal
tax treatment as a regulated investment company, all of such Fund's taxable
income will be subject to federal income tax at regular corporate rates without
any deduction for distributions to its shareholders. In such event, dividend
distributions (including amounts derived from interest on Municipal Bonds) would
be taxable as ordinary income to the Fund's shareholders to the extent of the
Fund's current and accumulated earnings and profits, and would be eligible for
the dividends received deduction for corporations.
Each Fund may be required in certain cases to withhold and
remit to the U.S. Treasury 31% of taxable dividends or gross proceeds realized
upon sale paid to shareholders who have failed to provide a correct tax
identification number in the manner required, or who are subject to withholding
by the Internal Revenue Service for failure to properly include on their return
payments of taxable interest or dividends, or who have failed to certify to the
Fund that they are not subject to backup withholding when required to do so or
that they are "exempt recipients".
TRUSTEES AND OFFICERS
---------------------
W. Bruce McConnel, III, Esq., Secretary of the Trust, is a
partner of the law firm of Drinker Biddle & Reath, which receives fees as
counsel to the Trust. Neal J. Andrews, Treasurer of the Trust, is employed by
PFPC, Inc. which receives fees as Administrator to the Trust. The Trustees and
officers of the Trust, their addresses, principal occupations during the past
five years, and other affiliations are as follows:
-13-
<PAGE> 54
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
POSITION WITH DURING PAST 5 YEARS
NAME AND ADDRESS THE TRUST AND OTHER AFFILIATIONS
- ---------------- ------------- ----------------------
<S> <C> <C>
Robert D. Neary* Chairman of the Retired Co-Chairman of
1300 Huntington Building Board, President Ernst & Young, April
925 Euclid Ave. and Trustee 1984-September 1993;
Cleveland, OH 44115 Director, Cold Metal
Age 62 Products, Inc., since
March 1994; Director,
Zurn Industries, Inc.,
plumbing products and
engineering and
construction services)
since June 1995.
Thomas R. Benua, Jr. Trustee Chairman, EBCO
564 Hackberry Drive Manufacturing Company
Westerville, OH 43081 and Subsidiaries
Age 51 (manufacture, sale and
financing of water
coolers and
dehumidifiers), since
January 1996 and
President, January 1987
to January 1996; Vice
President and Executive
Committee Member of
Ebtech Corp. (market
and sell bottled and
point-of-use water
coolers), since March
1991.
</TABLE>
-14-
<PAGE> 55
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
POSITION WITH DURING PAST 5 YEARS
NAME AND ADDRESS THE TRUST AND OTHER AFFILIATIONS
- ---------------- ------------- ----------------------
<S> <C> <C>
Leigh Carter* Trustee Retired President and
P.O. Box 13418 Chief Operating
Akron, OH 44334 Officer, BFGoodrich
Age 70 Company, August 1986
to September 1990;
Director, Adams Express
Company (closed-end
investment company),
since April 1982;
Director, Lamson &
Sessions Co. (producer
of electrical supplies
for construction,
consumer power and
communications
industry), since April
1991; Director,
Petroleum & Resources
Corp., since April
1987; Director,
Morrison Products
(manufacturer of blower
fans and air moving
equipment), since April
1983.
John F. Durkott Trustee President and Chief
8600 Allisonville Road Operating Officer,
Indianapolis, IN 46250 Kittle's Home
Age 51 Furnishings Center,
Inc., since January
1982; partner, Kittles
Bloomington Property
Company, since January
1981; partner, KK&D
(Affiliated Real Estate
Companies of Kittle's
Home Furnishings
Center), since January
1989.
</TABLE>
-15-
<PAGE> 56
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
POSITION WITH DURING PAST 5 YEARS
NAME AND ADDRESS THE TRUST AND OTHER AFFILIATIONS
- ---------------- ------------- ----------------------
<S> <C> <C>
Richard W. Furst, Dean Trustee Professor of Finance
600 Autumn Lane and Dean, Carol Martin
Lexington, KY 40502 Gatton College of
Age 57 Business and
Economics, University
of Kentucky, since
1981; Director, the
Deed Corporation
(investment group),
since 1990; Director,
Foam Design, Inc.
(manufacturer of
industrial and
commercial foam
products), since 1993;
Director, Studio Plus
Hotels, Inc., since
1994.
J. William Pullen Trustee President and Chief
Whayne Supply Company Executive Officer,
1400 Cecil Avenue Whayne Supply Co.
P.O. Box 35900 (engine and heavy
Louisville, KY 40232-5900 equipment distribution),
Age 57 since 1986; President
and Chief Executive
Officer, American
Contractors Rentals &
Sales (rental
subsidiary of Whayne
Supply Co.), since
1988.
</TABLE>
-16-
<PAGE> 57
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
POSITION WITH DURING PAST 5 YEARS
NAME AND ADDRESS THE TRUST AND OTHER AFFILIATIONS
- ---------------- ------------- ----------------------
<S> <C> <C>
Richard B. Tullis Trustee Chairman Emeritus,
5150 Three Village Drive Harris Corporation
Lyndhurst, OH 44124 (electronic
Age 82 communication and
information processing
equipment), since
October 1985; Director,
NACCO Materials
Handling Group, Inc.
(manufacturer of
industrial fork lift
trucks), since 1984;
Director, Hamilton
Beach/Proctor-Silex,
Inc. (manufacturer of
household appliances),
since 1990; Director,
Waste-Quip, Inc. (waste
handling equipment),
since 1989.
</TABLE>
-17-
<PAGE> 58
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
POSITION WITH DURING PAST 5 YEARS
NAME AND ADDRESS THE TRUST AND OTHER AFFILIATIONS
- ---------------- ------------- ----------------------
<S> <C> <C>
W. Bruce McConnel, III Secretary Partner of law firm
Philadelphia National Drinker Biddle &
Bank Building Reath, Philadelphia,
1345 Chestnut Street, Pennsylvania
Suite 1100
Philadelphia, PA 19107
Age 54
Neal J. Andrews Treasurer Vice President and
PFPC, Inc. Director of Investment
400 Bellevue Parkway Accounting, PFPC,
Wilmington, DE 19809 Inc., since 1992,
prior thereto, Senior
Auditior, Price
Waterhouse.
<FN>
- --------------------
* Messrs. Neary and Carter are considered by the Trust to be
"interested persons" of the Trust as defined in the 1940 Act.
</TABLE>
Each trustee receives an annual fee of $7,500 plus $2,500 for
each Board meeting attended and reimbursement of expenses incurred in attending
meetings. The Chairman of the Board is entitled to receive an additional $2,500
per annum for services in such capacity. For the year ended May 31, 1996, the
Trust's trustees and officers as a group received aggregate fees of $69,875. The
trustees and officers of the Trust own less than 1% of the shares of the Trust.
The following table summarizes the compensation for each of
the Trustees of the Trust for the fiscal year ended May 31, 1996:
<TABLE>
<CAPTION>
Pension or
Retirement
Benefits Accrued Total
Aggregate as Part of Estimated Compensation
Name of Compensation the Trust's Approval Benefits from the
Person, Position from the Trust Expenses Upon Retirement Trust
---------------- -------------- -------- --------------- -----
<S> <C> <C> <C> <C>
Richard B. Tullis, Chairman, $13,000 $0 $0 $13,000
President and Trustee
Thomas R. Benua, Jr., $11,375 $0 $0 $11,375
Trustee
</TABLE>
-18-
<PAGE> 59
<TABLE>
<S> <C> <C> <C> <C>
Leigh Carter, Trustee $11,375 $0 $0 $11,375
John F. Durkott, Trustee $11,375 $0 $0 $11,375
Richard W. Furst, Trustee $11,375 $0 $0 $11,375
J. William Pullen, Trustee $11,375 $0 $0 $11,375
Robert D. Neary, Trustee $ 0 $0 $0 $ 0
</TABLE>
SHAREHOLDER AND TRUSTEE LIABILITY
- ---------------------------------
Under Massachusetts law, shareholders of a business trust may,
under certain circumstances, be held personally liable as partners for the
obligations of the trust. However, the Trust's Declaration of Trust provides
that shareholders shall not be subject to any personal liability for the acts or
obligations of the Trust, and that every note, bond, contract, order, or other
undertaking made by the Trust shall contain a provision to the effect that the
shareholders are not personally liable thereunder. The Declaration of Trust
provides for indemnification out of the trust property of any shareholder held
personally liable solely by reason of his being or having been a shareholder and
not because of his acts or omissions or some other reason. The Declaration of
Trust also provides that the Trust shall, upon request, assume the defense of
any claim made against any shareholder for any act or obligation of the Trust,
and shall satisfy any judgment thereon. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Trust itself would be unable to meet its obligations.
The Declaration of Trust states further that no trustee,
officer, or agent of the Trust shall be personally liable for or on account of
any contract, debt, tort, claim, damage, judgment or decree arising out of or
connected with the administration or preservation of the trust estate or the
conduct of any business of the Trust; nor shall any trustee be personally liable
to any person for any action or failure to act except by reason of his own bad
faith, willful misfeasance, gross negligence, or reckless disregard of his
duties as trustee. The Declaration of Trust also provides that all persons
having any claim against the trustees or the Trust shall look solely to the
trust property for payment. With the exceptions stated, the Declaration of Trust
provides that a trustee is entitled to be indemnified against all liabilities
and expense, reasonably incurred by him in connection with the defense or
disposition of any proceeding in which he may be involved or with which he may
be threatened by reason of his being or having been a trustee, and that the
trustees, have the power, but not the duty, to indemnify officers and employees
of the Trust unless any such person would not be entitled to indemnification had
he been a trustee.
-19-
<PAGE> 60
ADVISORY, ADMINISTRATION, DISTRIBUTION, CUSTODIAN
SERVICES AND TRANSFER AGENCY AGREEMENTS
-------------------------------------------------
ADVISORY AGREEMENT
- ------------------
As described in the Prospectus, National City serves as
investment adviser to the Small Cap Growth Fund. The adviser is an affiliate of
National City Corporation, a bank holding company with $51 billion in assets,
and headquarters in Cleveland, Ohio and nearly 900 branch offices in three
states. Through its subsidiaries, National City Corporation has been managing
investments for individuals, pension and profit-sharing plans and other
institutional investors for over 75 years and currently manages over $38 billion
in assets. From time to time, the advisers may voluntarily waive fees or
reimburse the Trust for expenses.
The Advisory Agreement provides that 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 the Advisory 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 advisers in the performance of
their duties or from reckless disregard by it of its duties and obligations
thereunder. In addition, the adviser has undertaken in the Advisory Agreements
to maintain its policy and practice of conducting its Trust Department
independently of its Commercial Department.
The Advisory Agreement relating to the Fund was approved by
its sole shareholder prior to the Fund's commencement of investment operations.
Unless sooner terminated, the Advisory Agreement will continue in effect with
respect to the Fund until September 30, 1997 and from year to year thereafter,
subject to annual approval by the Trust's Board of Trustees, or by a vote of a
majority of the outstanding shares of the Fund (as defined in the Fund's
Prospectus) and a majority of the trustees who are not parties to the Agreement
or interested persons (as defined in the 1940 Act) of any party by votes cast in
person at a meeting called for such purpose. The Advisory Agreement may be
terminated by the Trust or the advisers on 60 days written notice, and will
terminate immediately in the event of its assignment.
AUTHORITY TO ACT AS INVESTMENT ADVISER
- --------------------------------------
Banking laws and regulations, including the Glass- Steagall
Act as presently interpreted by the Board of Governors of the Federal Reserve
System, (a) prohibit a bank holding company registered under the Federal Bank
Holding Company Act of 1956 or any affiliate thereof from sponsoring,
organizing, or controlling a registered, open-end investment company
continuously engaged in
-20-
<PAGE> 61
the issuance of its shares, but (b) do not prohibit such a bank holding company
or affiliate from acting as investment adviser, transfer agent, or custodian to
such an investment company. The adviser believes that it may perform the
services for the Fund contemplated by its Advisory Agreement with the Trust as
described in such agreement without violation of applicable banking laws or
regulations. However, there are no controlling judicial precedents and future
changes in legal requirements relating to the permissible activities of banks
and their affiliates, as well as future interpretations of present requirements,
could prevent the adviser from continuing to perform services for the Trust. If
the adviser were prohibited from providing services to the Fund, the Board of
Trustees would consider selecting another qualified firm. Any new investment
advisory agreement would be subject to shareholder approval.
Should future legislative, judicial, or administrative action
prohibit or restrict the proposed activities of the adviser, or its affiliated
and correspondent banks in connection with shareholder purchases of Fund shares,
the adviser and its affiliated and correspondent banks might be required to
alter materially or discontinue the services offered by them to shareholders. It
is not anticipated, however, that any resulting change in the Trust's method of
operations would affect its net asset value per share or result in financial
losses to any shareholder.
If current restrictions preventing a bank or its affiliates
from legally sponsoring, organizing, controlling, or distributing shares of an
investment company were relaxed, the adviser, or an affiliate of the adviser,
would consider the possibility of offering to perform additional services for
the Trust. Legislation modifying such restrictions has been proposed in past
sessions in Congress. It is not possible, of course, to predict whether or in
what form such legislation might be enacted or the terms upon which the adviser,
or such an affiliate, might offer to provide such services.
SUB-ADVISORY AGREEMENT
- ----------------------
ADMINISTRATION AND ACCOUNTING SERVICE AGREEMENT
- -----------------------------------------------
PFPC serves as the administrator and accounting agent to the
Trust. The services provided as administrator and accounting agent and current
fees are described in the Prospectus.
DISTRIBUTION PLAN AND RELATED AGREEMENT
- ---------------------------------------
The Distributor acts as distributor of the Fund's shares
pursuant to its Distribution Agreement with the Trust as described in the
Prospectus. Shares are sold on a continuous basis.
-21-
<PAGE> 62
Pursuant to Rule 12b-1 of the 1940 Act, the Trust has adopted
a Distribution Plan (the "Plan") which permits the Trust to bear certain
expenses in connection with the distribution of its shares. As required by Rule
12b-1, the Trust's 12b-1 Plan and related distribution agreement have been
approved, and are subject to annual approval by, a majority of the Trust's Board
of Trustees, and by a majority of the trustees who are not interested persons of
the Trust and have no direct or indirect interest in the operation of the Plan
or any agreement relating to the Plan, by vote cast in person at a meeting
called for the purpose of voting on the Plan and related agreement. In
compliance with the Rule, the trustees requested and evaluated information they
thought necessary to an informed determination of whether the Plan and related
agreement should be implemented, and concluded, in the exercise of reasonable
business judgment and in light of their fiduciary duties, that there is a
reasonable likelihood that the Plan and related agreement will benefit the Trust
and its shareholders.
Rule 12b-1 also requires that persons authorized to direct the
disposition of monies payable by a fund (in the Trust's case, the Distributor)
provide for the trustees' review of quarterly reports on the amounts expended
and the purposes for the expenditures.
Any change in the Plan that would materially increase the
distribution expenses of the Fund requires approval by its shareholders, but
otherwise, the Plan may be amended by the trustees, including a majority of the
disinterested trustees who do not have any direct or indirect financial interest
in the Plan or related agreement. The Plan and related agreement may be
terminated as to the Fund by a vote of the Trust's disinterested trustees or by
vote of the shareholders of the Fund, on not more than 60 days written notice.
The selection and nomination of disinterested trustees has been committed to the
discretion of such disinterested trustees as required by the Rule.
The Trust's Plan provides that each fund will compensate the
Distributor for distribution expenses in an amount not to exceed .10% of such
fund's average net assets. Distribution expenses payable by the Distributor
pursuant to the Plan include direct and indirect costs and expenses incurred in
connection with advertising and marketing a fund's shares, and direct and
indirect costs and expenses of preparing, printing and distributing its
prospectuses to other than current shareholders. The Plan provides that the
Trust will pay the Distributor an annual base fee of $1,250,000 plus incentive
fees based upon asset growth payable monthly and accrued daily by all of the
Trust's investment funds with respect to which the Distributor is distributing
shares.
The Plan has been approved, and will continue in effect for
successive one year periods, after an initial period of two years, provided that
such continuance is specifically approved by
-22-
<PAGE> 63
(1) the vote of a majority of the trustees who are not parties to the Plan or
interested persons of any such party and who have no direct or indirect
financial interest in the Plan and (2) the vote of a majority of the entire
Board of Trustees.
CUSTODIAN SERVICES AND TRANSFER AGENCY AGREEMENTS
- -------------------------------------------------
National City Bank serves as the Trust's custodian with
respect to the Fund. Under its Custodian Services Agreement, National City Bank
has agreed to: (i) maintain a separate account or accounts in the name of the
Fund; (ii) hold and disburse portfolio securities on account of the Fund; (iii)
collect and make disbursements of money on behalf of the Fund; (iv) collect and
receive all income and other payments and distributions on account of the Fund's
portfolio securities; (v) respond to correspondence by security brokers and
others relating to its duties; and (vi) make periodic reports to the Board of
Trustees concerning the Fund's operations. National City Bank is authorized to
select one or more banks or trust companies to serve as sub-custodian on behalf
of the Fund, provided that it shall remain responsible for the performance of
all of its duties under the Custodian Services Agreement and shall hold the Fund
harmless from the acts and omissions of any bank or trust company serving as
sub-custodian. The Fund reimburses National City Bank for its direct and
indirect costs and expenses incurred in rendering custodial services, except
that the costs and expenses borne by the Fund in any year may not exceed $.225
for each $1,000 of average gross assets of the Fund.
State Street Bank and Trust Company (the "Transfer Agent")
serves as the Trust's transfer agent and dividend disbursing agent with respect
to the Fund. Under its Transfer Agency Agreement, it has agreed to: (i) issue
and redeem shares of the Fund; (ii) transmit all communications by the Fund to
its shareholders of record, including reports to shareholders, dividend and
distribution notices and proxy materials for meetings of shareholders; (iii)
respond to correspondence by security brokers and others relating to its duties;
(iv) maintain shareholder accounts; and (v) make periodic reports to the Board
of Trustees concerning the Fund's operations. The Transfer Agent sends each
shareholder of record a statement (not less frequently than quarterly) showing
the total number of shares owned as of the last business day of the month (as
well as the dividends paid during the current month and year), and provides each
shareholder of record with a daily transaction report for each day on which a
transaction occurs in the shareholder's account with the Fund.
SHAREHOLDER SERVICES PLAN
-------------------------
As stated in the Prospectus, the Trust has implemented the
Services Plan with respect to Retail shares in the Fund. Pursuant to the
Services Plan, the Trust may enter into agreements
-23-
<PAGE> 64
with financial institutions pertaining to the provision of administrative
services to their customers who are the beneficial owners of Retail shares in
consideration for the payment of up to .25% (on an annualized basis) of the net
asset value of such shares. Such services may include: (i) aggregating and
processing purchase and redemption requests from customers; (ii) providing
customers with a service that invests the assets of their accounts in Retail
shares; (iii) processing dividend payments from the Funds; (iv) providing
information periodically to customers showing their position in Retail shares;
(v) arranging for bank wires; (vi) responding to customer inquiries relating to
the services performed with respect to Retail shares beneficially owned by
customers; (vii) forwarding shareholder communications; and (viii) other similar
services requested by the Trust. Agreements between the Trust and financial
institutions will be terminable at any time by the Trust without penalty.
PORTFOLIO TRANSACTIONS
----------------------
Pursuant to the Advisory Agreement with the Trust, and the
sub-advisory agreement with the adviser, _________________ is responsible for
making decisions with respect to and placing orders for all purchases and sales
of portfolio securities for the Fund. The sub-adviser purchases portfolio
securities either directly from the issuer or from an underwriter or dealer
making a market in the securities involved. Purchases from an underwriter of
portfolio securities include a commission or concession paid by the issuer to
the underwriter and purchases from dealers serving as market makers may include
the spread between the bid and asked price. Transactions on stock exchanges
involve the payment of negotiated brokerage commissions. There is generally no
stated commission in the case of securities traded in the over-the-counter
market, but the price includes an undisclosed commission or mark-up.
While the sub-adviser generally seeks competitive spreads or
commissions, it may not necessarily allocate each transaction to the underwriter
or dealer charging the lowest spread or commission available on the transaction.
Allocation of transactions, including their frequency, to various dealers is
determined by its best judgment and in a manner deemed fair and reasonable to
shareholders. The primary consideration is prompt execution of orders in an
effective manner at the most favorable price. Subject to this consideration,
dealers who provide supplemental investment research to the sub-adviser may
receive orders for transactions by the Fund. Information so received is in
addition to and not in lieu of services required to be performed by the
sub-adviser and does not reduce the fees payable to the sub-adviser or advisers
by the Fund. Such information may be useful to the advisers and sub-adviser in
serving both the Trust and other clients, and, similarly, supplemental
information obtained by the placement of
-24-
<PAGE> 65
business of other clients may be useful to the advisers and sub-adviser in
carrying out its obligations to the Trust.
Portfolio securities will not be purchased from or sold to the
Fund's advisers or sub-adviser, the Distributor, or any "affiliated person" (as
such term is defined under the 1940 Act) of any of them acting as principal,
except to the extent permitted by the SEC. In addition, the Fund will not give
preference to its advisers' or sub-adviser's correspondents with respect to such
transactions, securities, savings deposits, repurchase agreements and reverse
repurchase agreements.
Investment decisions for the Fund are made independently from
those for the other Funds and for other investment companies and accounts
advised or managed by the advisers or sub-adviser. Such other Funds, investment
companies and accounts may also invest in the same securities as such Fund. When
a purchase or sale of the same security is made at substantially the same time
on behalf of the Fund and another investment company or account, the transaction
will be averaged as to price, and available investments allocated as to amount,
in a manner which the advisers or sub-adviser believe to be equitable to the
Fund and such other investment company or account. In some instances, this
investment procedure may adversely affect the price paid or received by the Fund
or the size of the position obtained or sold by the Fund. To the extent
permitted by law, the advisers and sub-adviser may aggregate the securities to
be sold or purchased for the Fund with those to be sold or purchased for other
investment companies or accounts in order to obtain best execution.
AUDITORS
--------
Ernst & Young LLP, independent auditors, with offices at Two
Commerce Square, 2001 Market Street, Suite 4000, Philadelphia, Pennsylvania
19103, serve as independent auditors of the Trust.
COUNSEL
-------
Drinker Biddle & Reath (of which Mr. McConnel, Secretary of
the Trust, is a partner), with offices at 1345 Chestnut Street, Philadelphia,
Pennsylvania 19107, are counsel to the Trust and will pass upon the legality of
the shares offered hereby.
PERFORMANCE INFORMATION
-----------------------
The Fund computes its "average annual total return" by
determining the average annual compounded rate of return during specified
periods that would equate the initial amount invested to the ending redeemable
value of such investment by dividing the
-25-
<PAGE> 66
ending redeemable value of a hypothetical $1,000 initial payment by $1,000 and
raising the quotient to a power equal to one divided by the number of years (or
fractional portion thereof) covered by the computation and subtracting one from
the result. This calculation can be expressed as follows:
ERV 1/n
T = [(-----) - 1]
P
Where: T = average annual total return
ERV = ending redeemable value at the end of the
period covered by the computation of a
hypothetical $1,000 payment made at the
beginning of the period
P = hypothetical initial payment of $1,000
n = period covered by the computation, expressed
in terms of years
The Fund computes its aggregate total returns by determining
the aggregate rates of return during specified periods that likewise equate the
initial amount invested to the ending redeemable value of such investment. The
formula for calculating aggregate total return is as follows:
ERV
T = (---) - 1
P
The calculations of average annual total return and aggregate
total return assume the reinvestment of all dividends and capital gain
distributions on the reinvestment dates during the period and include all
recurring fees charged to all shareholder accounts, assuming an account size
equal to the Fund's mean (or median) account size for any fees that vary with
the size of the account. The maximum sales load and other charges deducted from
payments are deducted from the initial $1,000 payment (variable "P" in the
formula). The ending redeemable value (variable "ERV" in the formula) is
determined by assuming complete redemption of the hypothetical investment and
the deduction of all nonrecurring charges at the end of the measuring period
covered by the computation.
The Fund may also from time to time include in Materials a
total return figure that is not calculated according to the formulas set forth
above in order to compare more accurately the Fund's performance with other
measures of investment return. For example, in comparing a Fund's total return
with data published by
-26-
<PAGE> 67
Lipper Analytical Services, Inc., CDA Investment Technologies, Inc. or
Weisenberger Investment Company Service, or with the performance of an index,
the Fund may calculate its aggregate total return for the period of time
specified in the advertisement or communication by assuming the investment of
$10,000 in shares and assuming the reinvestment of each dividend or other
distribution at net asset value on the reinvestment date. Percentage increases
are determined by subtracting the initial value of the investment from the
ending value and by dividing the remainder by the beginning value. The Fund does
not, for these purposes, deduct from the initial value invested any amount
representing sales charges. The Fund will, however, disclose the maximum sales
charge and will also disclose that the performance data do not reflect sales
charges and that inclusion of sale charges would reduce the performance quoted.
The Fund may also from time to time include discussions or
illustrations of the effects of compounding in Materials. "Compounding" refers
to the fact that, if dividends or other distributions on the Fund investment are
reinvested by being paid in additional Fund shares, any future income or capital
appreciation of the Fund would increase the value, not only of the original Fund
investment, but also of the additional Fund shares received through
reinvestment. As a result, the value of the Fund investment would increase more
quickly than if dividends or other distributions had been paid in cash.
In addition, the Fund may also include in Materials
discussions and/or illustrations of the potential investment goals of a
prospective investor, investment management strategies, techniques, policies or
investment suitability of the Fund, high-quality investments, economic
conditions, the relationship between sectors of the economy and the economy as a
whole, various securities markets, the effects of inflation and historical
performance of various asset classes, including but not limited to, stocks,
bonds and Treasury securities. From time to time, Materials may summarize the
substance of information contained in shareholder reports (including the
investment composition of the Fund), as well as the views of the adviser as to
current market, economic, trade and interest rate trends, legislative,
regulatory and monetary developments, investment strategies and related matters
believed to be of relevance to the Fund. The Fund may also include in Materials
charts, graphs or drawings which compare the investment objective, return
potential, relative stability and/or growth possibilities of the Fund and/or
other mutual funds, or illustrate the potential risks and rewards of investment
in various investment vehicles, including but not limited to, stocks, bonds,
Treasury securities and shares of the Fund and/or other mutual funds. Materials
may include a discussion of certain attributes or benefits to be derived by an
investment in the Fund and/or other mutual funds (such as value investing,
market timing, dollar cost averaging, asset allocation, constant ratio transfer,
automatic accounting rebalancing, the advantages and disadvantages of
-27-
<PAGE> 68
investing in tax-deferred and taxable investments), shareholder profiles and
hypothetical investor scenarios, timely information on financial management, tax
and retirement planning and investment alternatives to certificates of deposit
and other financial instruments. Such Materials may include symbols, headlines
or other material which highlight or summarize the information discussed in more
detail therein.
MISCELLANEOUS
-------------
The Fund bears all costs in connection with its organization,
including the fees and expenses of registering and qualifying its shares for
distribution under federal and state securities regulations. All organization
expenses are being amortized on the straight-line method over a period of five
years from the date of commencement of operations.
As used in the Prospectus, "assets belonging to the Fund"
means the consideration received by the Trust upon the issuance of shares in
that particular Fund, together with all income, earnings, profits, and proceeds
derived from the investment thereof, including any proceeds from the sale of
such investments, any funds or payments derived from any reinvestment of such
proceeds, and a portion of any general assets of the Trust not belonging to a
particular Fund. In determining the Fund's net asset value, assets belonging to
the Fund are charged with the liabilities in respect of that Fund.
-28-
<PAGE> 69
APPENDIX A
----------
DESCRIPTION OF RATINGS
----------------------
CORPORATE LONG-TERM DEBT RATINGS
- --------------------------------
The following summarizes the four highest ratings used by
Standard & Poor's for corporate debt:
"AAA" - This designation represents the highest rating
assigned by Standard & Poor's to a debt obligation and indicates an extremely
strong capacity to pay interest and repay principal.
"AA" - Debt is considered to have a very strong capacity to
pay interest and repay principal and differs from AAA issues only in small
degree.
"A" - Debt is considered to have a strong capacity to pay
interest and repay principal although such issues are somewhat more susceptible
to the adverse effects of changes in circumstances and economic conditions than
debt in higher-rated categories.
"BBB" - Debt is regarded as having an adequate capacity to pay
interest and repay principal. Whereas such issues normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and repay principal
for debt in this category than in higher-rated categories.
PLUS (+) OR MINUS (-) - The ratings from "AA" through "BBB"
may be modified by the addition of a plus or minus sign to show relative
standing within the major rating categories.
"r" - This rating is attached to highlight derivative, hybrid,
and certain other obligations that S & P believes may experience high volatility
or high variability in expected returns due to non-credit risks. Examples of
such obligations are: securities whose principal or interest return is indexed
to equities, commodities, or currencies; certain swaps and options; and interest
only and principal only mortgage securities. The absence of an "r" symbol should
not be taken as an indication that an obligation will exhibit no volatility or
variability in total return.
The following summarizes the four highest ratings used by Moody's for
corporate debt:
"Aaa" - Bonds are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a
A-1
<PAGE> 70
large or by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of such
issues.
"Aa" - Bonds are judged to be of high quality by all
standards. Together with the "Aaa" group they comprise what are generally known
as high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in "Aaa" securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in "Aaa"
securities.
"A" - Bonds possess many favorable investment attributes and
are to be considered as upper medium-grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
"Baa" - Bonds considered medium-grade obligations, i.e., they
are neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Con. (---) - Bonds for which the security depends upon the
completion of some act or the fulfillment of some condition are rated
conditionally. These are bonds secured by (a) earnings of projects under
construction, (b) earnings of projects unseasoned in operation experience, (c)
rentals which begin when facilities are completed, or (d) payments to which some
other limiting condition attaches. Parenthetical rating denotes probable credit
stature upon completion of construction or elimination of basis of condition.
(P)... - When applied to forward delivery bonds,
indicates that the rating is provisional pending delivery of the
bonds. The rating may be revised prior to delivery if changes
occur in the legal documents or the underlying credit quality of
the bonds.
Note: Those bonds in the Aa, A and Baa groups which
Moody's believes possess the strongest investment attributes are
designated by the symbols, Aa1 and A1.
A-2
<PAGE> 71
The following summarizes the four highest ratings used by Duff
& Phelps for corporate debt:
"AAA" - Debt is considered to be of the highest credit
quality. The risk factors are negligible, being only slightly more than for
risk-free U.S. Treasury debt.
"AA" - Debt is considered of high credit quality. Protection
factors are strong. Risk is modest but may vary slightly from time to time
because of economic conditions.
"A" - Debt possesses protection factors which are average but
adequate. However, risk factors are more variable and greater in periods of
economic stress.
"BBB" - Debt possesses below average protection factors but
such protection factors are still considered sufficient for prudent investment.
Considerable variability in risk is present during economic cycles.
To provide more detailed indications of credit quality, the
"AA," "A" and "BBB" ratings may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within these major categories.
The following summarizes the four highest ratings used by
Fitch for corporate bonds:
"AAA" - Bonds considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by reasonably
foreseeable events.
"AA" - Bonds considered to be investment grade and of very
high credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated "AAA." Because bonds
rated in the "AAA" and "AA" categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is generally
rated "F-1+."
"A" - Bonds considered to be investment grade and of high
credit quality. The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.
"BBB" - Bonds considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest
and repay principal is considered to be adequate. Adverse changes
in economic conditions and circumstances, however, are more likely
A-3
<PAGE> 72
to have an adverse impact on these bonds, and therefore, impair timely payment.
The likelihood that the ratings of these bonds will fall below investment grade
is higher than for bonds with higher ratings.
To provide more detailed indications of credit quality, the
Fitch ratings from and including "AA" to "BBB" may be modified by the addition
of a plus (+) or minus (-) sign to show relative standing within these major
rating categories.
IBCA assesses the investment quality of unsecured debt with an
original maturity of more than one year which is issued by bank holding
companies and their principal bank subsidiaries. The following summarizes the
four highest rating categories used by IBCA for bonds:
"AAA" - Obligations for which there is the lowest expectation
of investment risk. Capacity for timely repayment of principal and interest is
substantial such that adverse changes in business, economic or financial
conditions are unlikely to increase investment risk substantially.
"AA" - Obligations for which there is a very low expectation
of investment risk. Capacity for timely repayment of principal and interest is
substantial, such that adverse changes in business, economic or financial
conditions may increase investment risk, albeit not very significantly.
"A" - Obligations for which there is a low expectation of
investment risk. Capacity for timely repayment of principal and interest is
strong, although adverse changes in business, economic or financial conditions
may lead to increased investment risk.
"BBB" - Obligations for which there is currently a low
expectation of investment risk. Capacity for timely repayment of principal and
interest is adequate, although adverse changes in business, economic or
financial conditions are more likely to lead to increased investment risk than
for obligations in other categories.
IBCA may append a rating of plus (+) or minus (-) to a rating
to denote relative status within major rating categories.
A-4
<PAGE> 73
COMMERCIAL PAPER RATINGS
- ------------------------
A Standard & Poor's commercial paper rating is a current
assessment of the likelihood of timely payment of debt considered short-term in
the relevant market. The following summarizes the highest rating category used
by Standard and Poor's for commercial paper:
"A-1" - Issue's degree of safety regarding timely payment
is strong. Those issues determined to possess extremely strong
safety characteristics are denoted "A-1+."
Moody's commercial paper ratings are opinions of the ability
of issuers to repay punctually promissory obligations not having an original
maturity in excess of 9 months. The following summarizes the highest rating
category used by Moody's for commercial paper:
"Prime-1" - Issuer or related supporting institutions are
considered to have a superior capacity for repayment of short-term promissory
obligations. Prime-1 repayment capacity will normally be evidenced by the
following characteristics: leading market positions in well established
industries; high rates of return on funds employed; conservative capitalization
structures with moderate reliance on debt and ample asset protection; broad
margins in earning coverage of fixed financial charges and high internal cash
generation; and well established access to a range of financial markets and
assured sources of alternate liquidity.
Duff & Phelps employs three designations, "D-1+," "D-1" and
"D-1-," within the highest rating category. The following summarizes the highest
rating category used by Duff & Phelps for commercial paper:
"D-1+" - Debt possesses highest certainty of timely
payment. Short-term liquidity, including internal operating
factors and/or access to alternative sources of funds, is
outstanding, and safety is just below risk-free U.S. Treasury
short-term obligations.
"D-1" - Debt possesses very high certainty of timely payment.
Liquidity factors are excellent and supported by good fundamental protection
factors. Risk factors are minor.
"D-1-" - Debt possesses high certainty of timely payment.
Liquidity factors are strong and supported by good fundamental protection
factors. Risk factors are very small.
Fitch short-term ratings apply to debt obligations that are
payable on demand or have original maturities of generally up to three years.
The following summarizes the highest rating
A-5
<PAGE> 74
category used by Fitch for short-term obligations such as short-term notes,
municipal notes, variable rate demand instruments and commercial paper:
"F-1+" - Securities possess exceptionally strong credit
quality. Issues assigned this rating are regarded as having the strongest degree
of assurance for timely payment.
"F-1" - Securities possess very strong credit quality. Issues
assigned this rating reflect an assurance of timely payment only slightly less
in degree than issues rated "F-1+."
IBCA assesses the investment quality of unsecured debt with an
original maturity of less than one year which is issued by bank holding
companies and their principal bank subsidiaries. The following summarizes the
highest rating category used by IBCA for short-term notes including commercial
paper:
"A1+" - Obligations which posses a particularly strong credit
feature are supported by the highest capacity for timely repayment.
"A1" - Obligations are supported by the highest capacity
for timely repayment.
A-6
<PAGE> 75
APPENDIX B
As stated in the Prospectus, the Small Cap Growth Fund (the
"Fund") may enter into certain futures transactions and options for hedging
purposes. Such transactions are described in this Appendix.
I. Index Futures Contracts
-----------------------
General. A stock index assigns relative values to the stocks
included in the index and the index fluctuates with changes in the market values
of the stocks included. Some stock index futures contracts are based on broad
market indexes, such as the Standard & Poor's Ratings Group 500 or the New York
Stock Exchange Composite Index. In contrast, certain exchanges offer futures
contracts on narrower market indexes or indexes based on an industry or market
segment, such as oil and gas stocks.
Futures contracts are traded on organized exchanges regulated
by the Commodity Futures Trading Commission. Transactions on such exchanges are
cleared through a clearing corporation, which guarantees the performance of the
parties to each contract.
The Fund may sell index futures contracts in order to offset a
decrease in market value of its portfolio securities that might otherwise result
from a market decline. The Fund may do so either to hedge the value of its Fund
as a whole, or to protect against declines, occurring prior to sales of
securities, in the value of the securities to be sold. Conversely, the Fund will
purchase index futures contracts in anticipation of purchases of securities. A
long futures position may be terminated without a corresponding purchase of
securities.
In addition, the Fund may utilize index futures contracts in
anticipation of changes in the composition of its Fund holdings. For example, in
the event that the Fund expects to narrow the range of industry groups
represented in its holdings it may, prior to making purchases of the actual
securities, establish a long futures position based on a more restricted index,
such as an index comprised of securities of a particular industry group. The
Fund may also sell futures contracts in connection with this strategy, in order
to protect against the possibility that the value of the securities to be sold
as part of the restructuring of the Fund will decline prior to the time of sale.
B-1
<PAGE> 76
II. Margin Payments
---------------
Unlike purchases or sales of portfolio securities, no price is
paid or received by the Fund upon the purchase or sale of a futures contract.
Initially, the Fund will be required to deposit with the broker or in a
segregated account with the Custodian an amount of cash or cash equivalents,
known as initial margin, based on the value of the contract. The nature of
initial margin in futures transactions is different from that of margin in
security transactions in that futures contract margin does not involve the
borrowing of funds by the customer to finance the transactions. Rather, the
initial margin is in the nature of a performance bond or good faith deposit on
the contract which is returned to the Fund upon termination of the futures
contract assuming all contractual obligations have been satisfied. Subsequent
payments, called variation margin, to and from the broker, will be made on a
daily basis as the price of the underlying instruments fluctuates making the
long and short positions in the futures contract more or less valuable, a
process known as marking-to-the-market. For example, when a particular Fund has
purchased a futures contract and the price of the contract has risen in response
to a rise in the underlying instruments, that position will have increased in
value and the Fund will be entitled to receive from the broker a variation
margin payment equal to that increase in value. Conversely, where the Fund has
purchased a futures contract and the price of the future contract has declined
in response to a decrease in the underlying instruments, the position would be
less valuable and the Fund would be required to make a variation margin payment
to the broker. At any time prior to expiration of the futures contract, the
advisers may elect to close the position by taking an opposite position, subject
to the availability of a secondary market, which will operate to terminate the
Fund's position in the futures contract. A final determination of variation
margin is then made, additional cash is required to be paid by or released to
the Fund, and the Fund realizes a loss or gain.
III. Risks of Transactions in Futures Contracts
------------------------------------------
There are several risks in connection with the use of futures
by the Fund as a hedging device. One risk arises because of the imperfect
correlation between movements in the price of the futures and movements in the
price of the instruments which are the subject of the hedge. The price of the
future may move more than or less than the price of the instruments being
hedged. If the price of the futures moves less than the price of the instruments
which are the subject of the hedge, the hedge will not be fully effective but,
if the price of the instruments being hedged has moved in an unfavorable
direction, the Fund would be in a better position than if it had not hedged at
all. If the price of the instruments being hedged has moved in a favorable
direction, this advantage will be partially offset by the loss on the futures.
If
B-2
<PAGE> 77
the price of the futures moves more than the price of the hedged instruments,
the Fund involved will experience either a loss or gain on the futures which
will not be completely offset by movements in the price of the instruments which
are the subject of the hedge. To compensate for the imperfect correlation of
movements in the price of instruments being hedged and movements in the price of
futures contracts, the Fund may buy or sell futures contracts in a greater
dollar amount than the dollar amount of instruments being hedged if the
volatility over a particular time period of the prices of such instruments has
been greater than the volatility over such time period of the futures, or if
otherwise deemed to be appropriate by the advisers. Conversely, the Fund may buy
or sell fewer futures contracts if the volatility over a particular time period
of the prices of the instruments being hedged is less than the volatility over
such time period of the futures contract being used, or if otherwise deemed to
be appropriate by the advisers. It is also possible that, where the Fund has
sold futures to hedge its Fund against a decline in the market, the market may
advance and the value of instruments held in the Fund may decline. If this
occurred, the Fund would lose money on the futures and also experience a decline
in value in its portfolio securities.
When futures are purchased to hedge against a possible
increase in the price of securities before the Fund is able to invest its cash
(or cash equivalents) in an orderly fashion, it is possible that the market may
decline instead; if the Fund then concludes not to invest its cash at that time
because of concern as to possible further market decline or for other reasons,
the Fund will realize a loss on the futures contract that is not offset by a
reduction in the price of the instruments that were to be purchased.
In addition to the possibility that there may be an imperfect
correlation, or no correlation at all, between movements in the futures and the
instruments being hedged, the price of futures may not correlate perfectly with
movement in the cash market due to certain market distortions. Rather than
meeting additional margin deposit requirements, investors may close futures
contracts through off-setting transactions which could distort the normal
relationship between the cash and futures markets. Second, with respect to
financial futures contracts, the liquidity of the futures market depends on
participants entering into off-setting transactions rather than making or taking
delivery. To the extent participants decide to make or take delivery, liquidity
in the futures market could be reduced thus producing distortions. Third, from
the point of view of speculators, the deposit requirements in the futures market
are less onerous than margin requirements in the securities market. Therefore,
increased participation by speculators in the futures market may also cause
temporary price distortions. Due to the possibility of price distortion in the
futures market, and because of the imperfect correlation between
B-3
<PAGE> 78
the movements in the cash market and movements in the price of futures, a
correct forecast of general market trends or interest rate movements by the
adviser may still not result in a successful hedging transaction over a short
time frame.
Positions in futures may be closed out only on an exchange or
board of trade which provides a secondary market for such futures. Although the
Fund intends to purchase or sell futures only on exchanges or boards of trade
where there appear to be active secondary markets, there is no assurance that a
liquid secondary market on any exchange or board of trade will exist for any
particular contract or at any particular time. In such event, it may not be
possible to close a futures investment position, and in the event of adverse
price movements, the Fund will continue to be required to make daily cash
payments of variation margin. However, in the event futures contracts have been
used to hedge portfolio securities, such securities will not be sold until the
futures contract can be terminated. In such circumstances, an increase in the
price of the securities, if any, may partially or completely offset losses on
the futures contract. However, as described above, there is no guarantee that
the price of the securities will in fact correlate with the price movements in
the futures contract and thus provide an offset on a futures contract.
Further, it should be noted that the liquidity of a secondary
market in a futures contract may be adversely affected by "daily price
fluctuation limits" established by commodity exchanges which limit the amount of
fluctuation in a futures contract price during a single trading day. Once the
daily limit has been reached in the contract, no trades may be entered into at a
price beyond the limit, thus preventing the liquidation of open futures
positions. The trading of futures contracts is also subject to the risk of
trading halts, suspensions, exchange or clearing house equipment failures,
government intervention, insolvency of a brokerage firm or clearing house or
other disruptions of normal activity, which could at times make it difficult or
impossible to liquidate existing positions or to recover excess variation margin
payments.
Successful use of futures by the Fund is also subject to the
advisers ability to predict correctly movements in the direction of the market.
For example, if the Fund has hedged against the possibility of a decline in the
market adversely affecting securities held by it and securities prices increase
instead, the Fund will lose part or all of the benefit to the increased value of
its securities which it has hedged because it will have offsetting losses in its
futures positions. In addition, in such situations, if the Fund has insufficient
cash, it may have to sell securities to meet daily variation margin
requirements. Such sales of securities may be, but will not necessarily be, at
increased prices which reflect the rising market. The Fund may
B-4
<PAGE> 79
have to sell securities at a time when it may be disadvantageous to
do so.
IV. Options on Futures Contracts
----------------------------
The Fund may purchase and write options on the futures
contracts described above. A futures option gives the holder, in return for the
premium paid, the right to buy (call) from or sell (put) to the writer of the
option a futures contract at a specified price at any time during the period of
the option. Upon exercise, the writer of the option is obligated to pay the
difference between the cash value of the futures contract and the exercise
price. Like the buyer or seller of a futures contract, the holder, or writer, of
an option has the right to terminate its position prior to the scheduled
expiration of the option by selling, or purchasing an option of the same series,
at which time the person entering into the closing transaction will realize a
gain or loss. The Fund will be required to deposit initial margin and variation
margin with respect to put and call options on futures contracts written by it
pursuant to brokers' requirements similar to those described above. Net option
premiums received will be included as initial margin deposits.
Investments in futures options involve some of the same
considerations that are involved in connection with investments in futures
contracts (for example, the existence of a liquid secondary market). In
addition, the purchase or sale of an option also entails the risk that changes
in the value of the underlying futures contract will not correspond to changes
in the value of the option purchased. Depending on the pricing of the option
compared to either the futures contract upon which it is based, or upon the
price of the securities being hedged, an option may or may not be less risky
than ownership of the futures contract or such securities. In general, the
market prices of options can be expected to be more volatile than the market
prices on the underlying futures contract. Compared to the purchase or sale of
futures contracts, however, the purchase of call or put options on futures
contracts may frequently involve less potential risk to the Fund because the
maximum amount at risk is the premium paid for the options (plus transaction
costs). The writing of an option on a futures contract involves risks similar to
those risks relating to the sale of futures contracts.
V. Other Matters
-------------
Accounting for futures contracts will be in accordance with
generally accepted accounting principles.
B-5
<PAGE> 80
FORM N-1A
---------
PART C - OTHER INFORMATION
--------------------------
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
---------------------------------
(A) FINANCIAL STATEMENTS
--------------------
(1) Included in Parts A of the Registration Statement:
None.
(2) Incorporated by reference in Parts B of the
Registration Statement:
None.
(B) EXHIBITS
--------
(1) Declaration of Trust dated January 28, 1986 is
incorporated herein by reference to Exhibit 1 to
Post-Effective Amendment No. 1 to Registrant's Registration
Statement filed on December 16, 1986.
(a) Amendment No. 1 to Declaration of Trust is
incorporated herein by reference to Exhibit 1(a) to
Post-Effective Amendment No. 6 to Registrant's
Registration Statement filed on August 1, 1989.
(b) Amendment No. 2 to Declaration of Trust is
incorporated herein by reference to Exhibit 1(b) to
Post-Effective Amendment No. 23 to Registrant's
Registration Statement filed on May 11, 1995.
(c) Certificate of Classification of Shares
reflecting the creation of the Tax Exempt Portfolio (Trust) as
filed with the Office of Secretary of State of Massachusetts
on October 16, 1989 is incorporated herein by reference to
Exhibit 1(c) to Post-Effective Amendment No. 26 to
Registrant's Registration Statement filed on May 15, 1996.
(d) Certificate of Classification of Shares
reflecting the creation of Special Series 1 in the Money
Market, Government, Treasury, Tax Exempt, Equity, Bond and
Ohio Tax Exempt Portfolios as filed with the Office of
Secretary of State of Massachusetts on December 11, 1989 is
incorporated herein by reference to Exhibit 1(d) to
Post-Effective Amendment No. 26 to
C-1
<PAGE> 81
Registrant's Registration Statement filed on May 15, 1996.
(e) Certificate of Classification of Shares
reflecting the creation of Special Series 1 in the Money
Market, Government, Treasury, Tax Exempt, Equity, Bond and
Ohio Tax Exempt Portfolios as filed with the Office of the
Secretary of State of Massachusetts on September 12, 1990 is
incorporated herein by reference to Exhibit 1(e) to
Post-Effective Amendment No. 26 to Registrant's Registration
Statement filed on May 15, 1996.
(f) Certificate of Classification of Shares
reflecting the creation of Class L and Class L-Special Series
1 shares, Class M and Class M-Special Series 1, Class N and
Class N-Special Series 1, Class O and Class O-Special Series
1, and Class P and Class P-Special Series 1 representing
interests in the National Tax Exempt Portfolio, Equity Income
Portfolio, Mid Cap Regional Equity Portfolio, Enhanced Income
Fund and Total Return Advantage Fund, respectively, as filed
with the Office of Secretary of State of Massachusetts on June
30, 1994 is incorporated herein by reference to Exhibit 1(e)
to Post-Effective Amendment No. 26 to Registrant's
Registration Statement filed on May 15, 1996.
(g) Certificate of Classification of Shares
reflecting the creation of Class Q and Class Q-Special Series
1 shares, Class R and Class R-Special Series 1, Class S and
Class S-Special Series 1 shares, and Class T and Class
T-Special Series 1 shares representing interests in the
Pennsylvania Tax Exempt, Intermediate Government, GNMA and
Pennsylvania Municipal Funds, as filed with the Office of the
Secretary of State of Massachusetts on September 10, 1996.
(h) Form of Certificate of Classification of Shares
reflecting the creation of Class U and Class USpecial Series 1
shares, Class V and Class V-Special Series 1 shares and Class
W and Class W-Special Series 1 shares representing interests
in the Foreign Equity, Equity Index and Core Equity Funds,
respectively.
(i) Form of Certificate of Classification of Shares
reflecting the creation of Class X and Class X-Special
Series 1 shares and Class Y and Class Y-Special Series 1
shares representing interests in the Small Cap Growth Fund
and Real Return Advantage Funds, respectively.
C-2
<PAGE> 82
(2) Code of Regulations as approved and adopted by
Registrant's Board of Trustees on January 28, 1986 is
incorporated herein by reference to Exhibit 2 to Pre-
Effective Amendment No. 2 to Registrant's Registration
Statement filed on January 30, 1986.
(a) Amendment No. 1 to Code of Regulations is
incorporated herein by reference to Exhibit 2(a) to
Post-Effective Amendment No. 6 to Registrant's
Registration Statement filed on August 1, 1989.
(3) None.
(4) (a) Specimen copy of share certificate for Class A units
of beneficial interest is incorporated herein by reference to
Exhibit 4(a) to Pre-Effective Amendment No. 2 to Registrant's
Registration Statement filed on January 30, 1986.
(b) Specimen copy of share certificate for Class A -
Special Series 1 units of beneficial interest is incorporated
herein by reference to Exhibit 4(b) to Post-Effective
Amendment No. 13 to the Registrant's Registration Statement
filed on July 27, 1990.
(c) Specimen copy of share certificate for Class B
units of beneficial interest is incorporated herein by
reference to Exhibit 4(b) to Pre-Effective Amendment No. 2 to
Registrant's Registration Statement filed on January 30, 1986.
(d) Specimen copy of share certificate for Class B -
Special Series 1 units of beneficial interest is incorporated
herein by reference to Exhibit 4(d) to Post-Effective
Amendment No. 13 to the Registrant's Registration Statement
filed on July 27, 1990.
(e) Specimen copy of share certificate for Class C
units of beneficial interest is incorporated herein by
reference to Exhibit 4(c) to Pre-Effective Amendment No. 2 to
Registrant's Registration Statement filed on January 30, 1986.
(f) Specimen copy of share certificate for Class C -
Special Series 1 units of beneficial interest is incorporated
herein by reference to Exhibit 4(f) to Post-Effective
Amendment No. 13 to Registrant's Registration Statement filed
July 27, 1990.
(g) Specimen copy of share certificates for Class D
units of beneficial interest is incorporated herein
C-3
<PAGE> 83
by reference to Exhibit 4(d) to Pre-Effective Amendment No. 2
to Registrant's Registration Statement filed on January 30,
1986.
(h) Specimen copy of share certificate for Class D -
Special Series 1 units of beneficial interest is incorporated
hereby by reference to Exhibit 4(h) to Post-Effective
Amendment No. 13 to Registrant's Registration Statement filed
July 27, 1990.
(i) Specimen copy of share certificate for Class E
units of beneficial interest is incorporated herein by
reference to Exhibit 4(e) to Pre-Effective Amendment No. 2 to
Registrant's Registration Statement filed on January 30, 1986.
(j) Specimen copy of share certificate for Class F
units of beneficial interest is incorporated herein by
reference to Exhibit 4(f) to Pre-Effective Amendment No. 2 to
Registrant's Registration Statement filed on January 30, 1986.
(k) Specimen copy of share certificate for Class G
units of beneficial interest is incorporated herein by
reference to Exhibit 4(g) to Pre-Effective Amendment No. 2 to
Registrant's Registration Statement filed on January 30, 1986.
(l) Specimen copy of share certificate for Class J
units of beneficial interest is incorporated herein by
reference to Exhibit 4(h) to Post-Effective Amendment No. 6 to
Registrant's Registration Statement filed on August 1, 1989.
(m) Specimen copy of share certificate for Class H
units of beneficial interest is incorporated herein by
reference to Exhibit 4(i) to Post-Effective Amendment No. 10
to Registrant's Registration Statement filed on April 17,
1990.
(n) Specimen copy of share certificate for Class H -
Special Series 1 units of beneficial interest is incorporated
herein by reference to Exhibit 4(j) to Post-Effective
Amendment No. 10 to Registrant's Registration Statement filed
on April 17, 1990.
(o) Specimen copy of share certificate for Class I
units of beneficial interest is incorporated herein by
reference to Exhibit 4(k) to Post-Effective Amendment No. 10
to Registrant's Registration Statement filed on April 17,
1990.
C-4
<PAGE> 84
(p) Specimen copy of share certificate for Class I -
Special Series 1 units of beneficial interest is incorporated
herein by reference to Exhibit 4(l) to Post-Effective
Amendment No. 10 to Registrant's Registration Statement filed
on April 17, 1990.
(q) Specimen copy of share certificate for Class K
units of beneficial interest is incorporated herein by
reference to Exhibit 4(m) to Post-Effective Amendment No. 10
to Registrant's Registration Statement filed on April 17,
1990.
(r) Specimen copy of share certificate for Class K -
Special Series 1 units of beneficial interest is incorporated
herein by reference to Exhibit 4(n) to Post-Effective
Amendment No. 10 to Registrant's Registration Statement filed
on April 17, 1990.
(5) (a) Investment Advisory Agreement for the Money Market
Portfolio, Government Portfolio, Treasury Portfolio, Tax
Exempt Portfolio, Equity Portfolio, Bond Portfolio and Ohio
Tax Exempt Portfolio among Registrant, National City Bank,
BancOhio National Bank and First National Bank of Louisville
dated September 26, 1990 is incorporated herein by reference
to Exhibit 5(f) to Post-Effective Amendment No. 14 to
Registrant's Registration Statement filed on September 5,
1990.
(b) Investment Advisory Agreement for the Money
Market Portfolio (Trust), Government Portfolio (Trust),
Treasury Portfolio (Trust) and Tax Exempt Portfolio (Trust)
among Registrant, National City Bank, BancOhio National Bank
and First National Bank of Louisville dated September 26, 1990
is incorporated herein by reference to Exhibit 5(g) to
Post-Effective Amendment No. 14 to Registrant's Registration
Statement filed on September 5, 1990.
(c) Investment Advisory Agreement for the Enhanced
Income Fund and the Total Return Advantage Fund between
Registrant and National Asset Management Corporation dated
July 5, 1994, is incorporated herein by reference to Exhibit
5(h) to Post-Effective Amendment No. 21 to Registrant's
Registration Statement filed on August 31, 1994.
(d) Investment Advisory Agreement for the Equity
Income Portfolio among Registrant, National City Bank,
National City Bank, Columbus and National City Bank, Kentucky
dated June 30, 1994, is incorporated herein by reference to
Exhibit 5(i) to Post-Effective Amendment
C-5
<PAGE> 85
No. 21 to Registrant's Registration Statement filed on August
31, 1994.
(e) Investment Advisory Agreement for the Mid Cap
Regional Equity Portfolio between Registrant and National City
Bank dated July 25, 1994, is incorporated herein by reference
to Exhibit 5(j) to Post-Effective Amendment No. 21 to
Registrant's Registration Statement filed on August 31, 1994.
(f) Investment Advisory Agreement for the National
Tax Exempt Portfolio among Registrant, National City Bank,
National City Bank, Columbus, National City Bank, Kentucky and
National City Bank, Indiana is incorporated herein by
reference to Exhibit 5(l) to Post-Effective Amendment No. 20
to Registrant's Registration Statement filed on February 11,
1994.
(g) Investment Advisory Agreement for the
Pennsylvania Tax Exempt, Intermediate Government, GNMA and
Pennsylvania Municipal Funds between Registrant and
National City Bank dated September 9, 1996.
(h) Sub-Advisory Agreement for the Pennsylvania Tax
Exempt and Pennsylvania Municipal Funds between National City
Bank and Weiss, Peck & Greer L.L.C. dated September 9, 1996.
(i) Form of Investment Advisory Agreement for the
Core Equity Fund between Registrant and National Asset
Management Corporation.
(j) Form of Investment Advisory Agreement for the
Foreign Equity and Equity Index Funds among Registrant
and National City Bank.
(k) Form of Investment Advisory Agreement for the
Small Cap Growth and Real Return Advantage Funds between
Registrant and National City Bank.
(6) Distribution Agreement between Registrant and SEI
Financial Services Company dated March 8, 1997.
(7) None.
(8) (a) Custodian Services Agreement between Registrant and
National City Bank, dated November 7, 1994, is incorporated
herein by reference to Exhibit 8(a) to Post-Effective
Amendment No. 22 to Registrant's Registration Statement filed
on December 30, 1994.
C-6
<PAGE> 86
(b) Sub-Custodian Agreement between National City
Bank and The Bank of California, National Association, dated
November 7, 1994, is incorporated herein by reference to
Exhibit 8(a) to Post-Effective Amendment No. 22 to
Registrant's Registration Statement filed on December 30,
1994.
(c) Exhibit A to the Custodian Services Agreement
between Registrant and National City Bank dated September 9,
1996.
(d) Form of Exhibit A to the Custodian Services
Agreement between Registrant and National City Bank.
(9) (a) Administration and Accounting Services Agreement
between Registrant and PFPC Inc., dated March 1, 1993 is
incorporated by reference to Exhibit 9(l) to Post-Effective
Amendment No. 16 to Registrant's Registration Statement filed
on March 1, 1993.
(b) Exhibit A to the Administration and Accounting
Services Agreement dated March 1, 1993 between Registrant and
PFPC Inc., dated September 9, 1996.
(c) Form of Exhibit A to the Administration and
Accounting Services Agreement dated March 1, 1993 between
Registrant and PFPC Inc.
(d) Transfer Agency and Service Agreement (the
"Tranfer Agency Agreement") between Registrant and State
Street Bank and Trust Company dated March 1, 1997.
(e) Revised Shareholder Services Plan and Servicing
Agreement adopted by the Board of Trustees February 10, 1997.
(f) Blue Sky Services Agreement between the
Registrant and SEI Fund Resources dated December 2, 1996.
(1)(10) Opinion and consent of counsel.
(11) (a) Consent of Drinker Biddle & Reath.
- ----------
1. To be filed under Rule 24f-2 as part of Registrant's Rule 24f-2 Notice.
C-7
<PAGE> 87
(b) Consent of Ernst & Young LLP.
(12) Inapplicable.
(13) Purchase Agreements between Registrant and McDonald &
Company Securities, Inc. are incorporated herein by reference
to Exhibit 13 to Post-Effective Amendment No. 1 to
Registrant's Registration Statement filed on December 16,
1986.
(a) Purchase Agreement between Registrant and
McDonald & Company Securities, Inc. with respect to the Tax
Exempt Portfolio dated July 19, 1988 is incorporated by
reference to Exhibit 13(a) to Post-Effective Amendment No. 5
to Registrant's Registration Statement filed on January 19,
1989.
(b) Purchase Agreement between Registrant and
McDonald & Company Securities, Inc. with respect to the Tax
Exempt Portfolio (Trust) dated October 17, 1989 is
incorporated herein by reference to Exhibit 13(b) to
Post-Effective Amendment No. 13 to Registrant's Registration
Statement filed on July 27, 1990.
(c) Purchase Agreement between Registrant and
McDonald & Company Securities, Inc. with respect to the Equity
Portfolio and Bond Portfolio dated December 20, 1989 is
incorporated herein by reference to Exhibit 13(c) to
Post-Effective Amendment No. 13 to Registrant's Registration
Statement filed on July 27, 1990.
(d) Purchase Agreement between Registrant and
McDonald & Company Securities, Inc. with respect to the Ohio
Tax Exempt Portfolio dated January 5, 1990 is incorporated
herein by reference to Exhibit 13(d) to Post-Effective
Amendment No. 13 to Registrant's Registration Statement filed
on July 27, 1990.
(e) Purchase Agreement between Registrant and
Allmerica Investments, Inc. with respect to the Enhanced
Income Fund dated July 5, 1994, is incorporated herein by
reference to Exhibit 13(e) to Post-Effective Amendment No. 21
to Registrant's Registration Statement filed on August 31,
1994.
(f) Purchase Agreement between Registrant and
Allmerica Investments, Inc. with respect to the Equity
Income Portfolio dated June 30, 1994, is incorporated
herein by reference to Exhibit 13(g) to Post-Effective
C-8
<PAGE> 88
Amendment No. 21 to Registrant's Registration Statement
filed on August 31, 1994.
(g) Purchase Agreement between Registrant and
Allmerica Investments, Inc. with respect to the Mid Cap
Regional Equity Portfolio dated July 25, 1994, is incorporated
herein by reference to Exhibit 13(h) to Post-Effective
Amendment No. 21 to Registrant's Registration Statement filed
on August 31, 1994.
(h) Purchase Agreement between Registrant and
Allmerica Investments, Inc. with respect to the Total Return
Advantage Fund dated July 5, 1994 is incorporated herein by
reference to Exhibit 13(f) to Post Effective Amendment No. 21
to Registrant's Registration Statement filed on August 31,
1994.
(i) Purchase Agreement between Registrant and
Allmerica Investments, Inc. with respect to the National Tax
Exempt Portfolio is incorporated herein by reference to
Exhibit 13(e) to Post Effective Amendment No. 20 to
Registrant's Registration Statement filed on February 8, 1994.
(j) Purchase Agreement between Registrant and 440
Financial Distributors, Inc. with respect to the Pennsylvania
Tax Exempt Fund dated September 6, 1996.
(k) Purchase Agreement between Registrant and 440
Financial Distributors, Inc. with respect to the Intermediate
Government Fund dated September 6, 1996.
(l) Purchase Agreement between Registrant and 440
Financial Distributors, Inc. with respect to the GNMA
Fund dated September 6, 1996.
(m) Purchase Agreement between Registrant and 440
Financial Distributors, Inc. with respect to the Pennsylvania
Municipal Fund dated September 6, 1996.
(n) Form of Purchase Agreement between Registrant and
SEI Financial Services Company ("SEI") with respect to the
Core Equity Fund.
(o) Form of Purchase Agreement between Registrant and
SEI with respect to the Foreign Equity Fund.
(p) Form of Purchase Agreement between Registrant and
SEI with respect to the Equity Index Fund.
C-9
<PAGE> 89
(q) Form of Purchase Agreement between Registrant and
SEI with respect to the Small Cap Growth Fund.
(r) Form of Purchase Agreement between Registrant and
SEI with respect to the Real Return Advantage Fund.
(14) None.
(15) (a) Registrant's 12b-1 Plan is incorporated herein by
reference to Exhibit 15 to Pre-Effective
Amendment No. 1 to Registrant's Registration Statement filed
on January 13, 1986.
(b) Registrant's Revised Service and Distribution Plan.
(16) (a) Schedules for Computation of Performance Quotations
are incorporated herein by reference to Exhibit 16 to
Post-Effective Amendment No. 15 to Registrant's Registration
Statement filed on September 18, 1992.
(b) Schedules for Computation of Performance Quotations
for the Treasury, Mid Cap Regional Equity and Equity Income
Portfolios and the Enhanced Income and Total Return Advantage
Funds are incorporated herein by reference to Exhibit 16 to
Post-Effective Amendment No. 22 to Registrant's
Registration Statement filed on December 30, 1994.
(17) Inapplicable.
(18) Revised Plan Pursuant to Rule 18f-3 for Operation of a
Dual-Class System.
Item 25. Persons Controlled By or Under
COMMON CONTROL WITH REGISTRANT
------------------------------
Registrant is controlled by its Board of Trustees.
McDonald & Company Securities, Inc. ("McDonald"), the
former distributor of NCC Funds, provided the initial capitalization of
Registrant.
C-10
<PAGE> 90
Item 26. NUMBER OF HOLDERS OF SECURITIES. The following information is as of
March 31, 1997:
<TABLE>
<CAPTION>
Total
Number of Record
Title of Class Holders Institutional Retail
-------------- ---------------- ------------- ------
<S> <C> <C> <C>
Class A units of
beneficial interest
(Money Market
Fund) 39,889 19,902 19,987
Class B units of
beneficial interest
(Government Fund) 4,357 2,786 1,571
Class C units of
beneficial interest
(Treasury Fund) 2,632 2,386 246
Class D units of
beneficial interest
(Tax Exempt Fund) 2,868 2,091 777
Class H units of
beneficial interest
(Equity Fund) 5,883 5,372 511
Class I units of
beneficial interest
(Fixed Income
Fund) 2,329 2,193 136
Class K units of
beneficial interest
(Ohio Tax Exempt
Fund) 933 833 100
Class M units of
beneficial interest
(Equity Income
Fund) 2,017 1,958 59
Class N units of
beneficial interest
(Mid Cap Regional
Fund) 2,226 1,640 586
Class O units of
beneficial interest
(Enhanced Income
Fund) 284 258 26
Class P units of
beneficial interest
(Total Return
Advantage Fund) 916 898 18
</TABLE>
C-11
<PAGE> 91
<TABLE>
<CAPTION>
Total
Number of Record
Title of Class Holders Institutional Retail
-------------- ---------------- ------------- ------
<S> <C> <C> <C>
Class Q units of
beneficial interest
(Pennsylvania Tax
Exempt Fund) 759 691 68
Class R units of
beneficial interest
(Intermediate
Government Fund) 2,875 2,869 6
Class S units of
beneficial interest
(GNMA Fund) 2,942 2,924 18
Class T units of
beneficial interest
(Pennsylvania
Municipal Fund) 395 386 9
Class U units of
beneficial interest
(Foreign Equity Fund) 0 0 0
Class V units of
beneficial interest
(Equity Index Fund) 0 0 0
Class W units of
beneficial interest
(Core Equity Fund) 0 0 0
Class X units of
beneficial interest
(Small Cap Growth Fund) 0 0 0
Class Y units of
beneficial interest
(Real Return Advantage
Fund) 0 0 0
</TABLE>
Item 27. INDEMNIFICATION
---------------
Indemnification of Registrant's principal underwriter,
custodian and transfer agent against certain losses is provided for,
respectively, in Article 6 of the Distribution Agreement, incorporated by
reference as Exhibit (6) hereto, and Sections 12 and 6, respectively, of the
Custodian Services and Transfer Agency Agreements, incorporated by reference as
Exhibits (8)(a) and (9)(h) hereto. In Article 6 of the Distribution Agreement,
the Trust agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the Distributor
within the meaning
C-12
<PAGE> 92
of Section 15 of the 1933 Act against any loss, liability, claim, damages or
expense (including the reasonable cost of investigating or defending any alleged
loss, liability, claim, damages or expense and reasonable counsel fees and
disbursements incurred in connection therewith), arising by reason of any person
acquiring any Shares, based upon the ground that the registration statement,
prospectus, Shareholder reports or other information filed or made public by the
Trust (as from time to time amended) included an untrue statement of a material
fact or omitted to state a material fact required to be stated or necessary in
order to make the statements made not misleading. However, the Trust does not
agree to indemnify the Distributor or hold it harmless to the extent that the
statements or omission was made in reliance upon, and in conformity with,
information furnished to the Trust by or on behalf of the Distributor.
In addition, Section 9.3 of Registrant's Declaration of Trust
dated January 28, 1986, incorporated by reference as Exhibit (1) hereto,
provides as follows:
9.3 INDEMNIFICATION OF TRUSTEES, REPRESENTATIVES AND
EMPLOYEES. The Trust shall indemnify each of its Trustees
against all liabilities and expenses (including amounts paid
in satisfaction of judgments, in compromise, as fines and
penalties, and as counsel fees) reasonably incurred by him in
connection with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal, in which he
may be involved or with which he may be threatened, while as a
Trustee or thereafter, by reason of his being or having been
such a Trustee EXCEPT with respect to any matter as to which
he shall have been adjudicated to have acted in bad faith,
willful misfeasance, gross negligence or reckless disregard of
his duties, PROVIDED that as to any matter disposed of by a
compromise payment by such person, pursuant to a consent
decree or otherwise, no indemnification either for said
payment or for any other expenses shall be provided unless the
Trust shall have received a written opinion from independent
legal counsel approved by the Trustees to the effect that if
either the matter of willful misfeasance, gross negligence or
reckless disregard of duty, or the matter of bad faith had
been adjudicated, it would in the opinion of such counsel have
been adjudicated in favor of such person. The rights accruing
to any person under these provisions shall not exclude any
other right to which he may be lawfully entitled, PROVIDED
that no person may satisfy any right of indemnity or
reimbursement hereunder except out of the property of the
Trust. The Trustees may make advance payments in connection
with the
C-13
<PAGE> 93
indemnification under this Section 9.3, PROVIDED that the
indemnified person shall have provided a secured written
undertaking to reimburse the Trust in the event it is
subsequently determined that he is not entitled to such
indemnification.
The Trustees shall indemnify representatives and employees of
the Trust to the same extent that Trustees are entitled to
indemnification pursuant to this Section 9.3.
Section 12 of Registrant's Custodian Services Agreement
provides as follows:
12. INDEMNIFICATION. The Trust, on behalf of each of the
Funds, agrees to indemnify and hold harmless the Custodian and
its nominees from all taxes, charges, expenses, assessments,
claims and liabilities (including, without limitation,
liabilities arising under the 1933 Act, the 1934 Act, the
1940 Act, the CEA, and any state and foreign securities and
blue sky laws, and amendments thereto), and expenses,
including (without limitation) reasonable attorneys' fees and
disbursements, arising directly or indirectly from any action
which the Custodian takes or does not take (i) at the request
or on the direction of or in reliance on the advice of the
Fund or (ii) upon Oral or Written Instructions. Neither the
Custodian, nor any of its nominees, shall be indemnified
against any liability to the Trust or to its shareholders (or
any expenses incident to such liability) arising out of the
Custodian's or its nominees' own willful misfeasance, bad
faith, negligence or reckless disregard of its duties and
obligations under this Agreement.
In the event of any advance of cash for any purpose made by
the Custodian resulting from Oral or Written Instructions of
the Trust, or in the event that the Custodian or its nominee
shall incur or be assessed any taxes, charges, expenses,
assessments, claims or liabilities in respect of the Trust or
any Fund in connection with the performance of this Agreement,
except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful
misconduct, any Property at any time held for the account of
the relevant Fund or the Trust shall be security therefor.
C-14
<PAGE> 94
Section 6 of Registrant's Transfer Agency Agreement provides
as follows:
6. INDEMNIFICATION
6.1 The Bank shall not be responsible for, and the Fund
shall on behalf of the applicable Portfolio indemnify
and hold the Bank harmless from and against, any and
all losses, damages, costs, charges, counsel fees,
payments, expenses and liability arising out of or
attributable to:
(a) All actions of the Bank or its agents or
subcontractors required to be taken pursuant
to this Agreement, provided that such
actions are taken in good faith and without
negligence or willful misconduct.
(b) The Fund's lack of good faith, negligence or
willful misconduct which arise out of the
breach of any representation or warranty of
the Fund hereunder.
(c) The reliance on or use by the Bank or its
agents or subcontractors of information,
records, documents or services which (i) are
received by the Bank or its agents or
subcontractors, and (ii) have been prepared,
maintained or performed by the Fund or any
other person or firm on behalf of the Fund
including but not limited to any previous
transfer agent or registrar.
(d) The reliance on, or the carrying out by the
Bank or its agents or subcontractors of any
instructions or requests of the Fund on
behalf of the applicable Portfolio.
(e) The offer or sale of Shares in violation of
any requirement under the federal securities
laws or regulations or the securities laws
or regulations of any state that such
Shares be registered in such state or in
violation of any stop order or other
determination or ruling by any federal
agency or any state with respect to the
offer or sale of such Shares in such
state.
(f) The negotiations and processing of checks
made payable to prospective or existing
Shareholders tendered to the Bank for the
C-15
<PAGE> 95
purchase of Shares, such checks are commonly
known as "third party checks."
6.2 At any time the Bank may apply to any officer of the
Fund for instructions, and may consult with legal
counsel with respect to any matter arising in
connection with the services to be performed by the
Bank tinder this Agreement, and the Bank and its
agents or subcontractors shall not be liable and
shall be indemnified by the Fund oil behalf of the
applicable Portfolio for any action taken or omitted
by it in reliance upon such instructions or upon the
opinion of such counsel (provided such counsel is
reasonably satisfactory to the Fund). The Bank, its
agents and subcontractors shall be protected and
indemnified in acting upon any paper or document,
reasonably believed to be genuine and to have been
signed by the proper person or persons, or upon any
instruction, information, data, records or documents
provided the Bank or its agents or subcontractors by
machine readable input, telex, CRT data entry or
other similar means authorized by the Fund, and shall
not be held to have notice of any change of authority
of any person, until receipt of written notice
thereof from the Fund. The Bank, its agents and
subcontractors shall also be protected and
indemnified in recognizing stock certificates which
are reasonably believed to bear the proper manual or
facsimile signatures of the officers of the Fund, and
the proper countersignature of any former transfer
agent or former registrar, or of a co-transfer agent
or co-registrar.
6.3 In the event either party is unable to perform its
obligations under the terms of this Agreement because
of acts of God, strikes, equipment or transmission
failure or damage reasonably beyond its control, or
other causes reasonably beyond its control, such
party shall not be liable for damages to the other
for any damages resulting from such failure to
perform or otherwise from such causes.
6.4 In order that the indemnification provisions
contained in this Section 6 shall apply, upon the
assertion of a claim for which the Fund may be
required to indemnify the Bank, the Bank shall
promptly notify the Fund of such assertion, and shall
keep the Fund advised with respect to all
developments concerning such claim. The Fund shall
C-16
<PAGE> 96
have the option to participate with the Bank in the
defense of such claim or to defend against said claim
in its own name or in the name of the Bank. The Bank
shall in no case confess any claim or make any
compromise in any case in which the Fund may be
required to indemnify the Bank except with the Fund's
prior written consent.
Registrant has obtained from a major insurance carrier a
directors' and officers' liability policy covering certain types of errors and
omissions. In no event will Registrant indemnify any of its trustees, officers,
employees or agents against any liability to which such person would otherwise
be subject by reason of his willful misfeasance, bad faith or gross negligence
in the performance of his duties, or by reason of his reckless disregard of the
duties involved in the conduct of his office or under his agreement with
Registrant. Registrant will comply with Rule 484 under the Securities Act of
1933 and Release No. 11330 under the Investment Company Act of 1940 in
connection with any indemnification.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of Registrant pursuant to the foregoing provisions, or otherwise,
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Registrant of expenses
incurred or paid by a trustee, officer, or controlling person of Registrant in
the successful defense of any action, suit, or proceeding) is asserted by such
trustee, officer, or controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
Item 28. BUSINESS AND OTHER CONNECTIONS
OF INVESTMENT ADVISERS
----------------------
(a) Investment Adviser: National City Bank
National City Bank performs investment advisory services for
Registrant and certain other investment advisory customers. National City Bank
has been in the business of managing the investments of fiduciary and other
accounts throughout Ohio since October 1919. In addition to its trust
C-17
<PAGE> 97
business, National City Bank provides commercial banking services.
To the knowledge of Registrant, none of the directors or
officers of National City Bank, except those set forth below, is or has been, at
any time during the past two calendar years, engaged in any other business,
profession, vocation or employment of a substantial nature, except that certain
directors and officers also hold various positions with, and engage in business
for, National City Corporation, which owns all the outstanding stock of National
City Bank, or other subsidiaries of National City Corporation. Set forth below
are the names and principal businesses of the directors and certain of the
senior executive officers of National City Bank who are engaged in any other
business, profession, vocation or employment of a substantial nature.
NATIONAL CITY BANK
<TABLE>
<CAPTION>
Position Other
with National Business Type of
Name City Bank Connections Business
- ---- ------------- ----------- --------
<S> <C> <C> <C>
Edward B. Brandon Director Retired Chairman, Bank holding
National City company
Corporation
Director, The Automobile parts
Standard Products and supplies
Company
Director, Manufacturer of
RPM, Inc. protective coatings,
roofing materials and
paint
Director, Premier Electronics
Industrial Corp. distribution
John G. Breen Director Chairman and Manufacturer
Chief Executive of paints,
Officer, The coatings, and
Sherwin-Williams containers
Company
Steve D. Bullock Director Chief Executive Non-Profit
Officer and organization
Chapter Manager,
American Red
Cross
Werner F. Bush Director Retired Executive Manufacturer
Vice President and of specialty
and Chief Oper- chemicals
ating Officer,
Ferro Corp.
</TABLE>
C-18
<PAGE> 98
<TABLE>
<CAPTION>
Position Other
with National Business Type of
Name City Bank Connections Business
- ---- ------------- ----------- --------
<S> <C> <C> <C>
Duane E. Collins Director President and Manufacturer
Chief Executive of hydraulic and
Officer, Parker and automotive
Hannifin Corp. equipment
David A. Daberko Director Chairman and Bank holding
Chief Executive company
Officer, National
City Corporation
Director, Bank
National City
Bank of Columbus
Director, Bank
National City
Bank, Northeast
Director, Bank
National City
Bank of Dayton
Director, Bank
National City
Bank, Northwest
Director,
National City Bank
Bank of Indiana
Director, Bank
National City
Bank of Kentucky
Officer and Tractor sales
Director, Hudson
Tractor Sales,
Inc.
Director,
Student Loan
Marketing
Association
Robert J. Farling Director Chairman, President Electric utility
and Chief Executive
Officer, Centerior
Energy Corporation
Russell R. Gifford Director Retired President, Natural gas
CNG Energy Services
Corporation
</TABLE>
C-19
<PAGE> 99
<TABLE>
<CAPTION>
Position Other
with National Business Type of
Name City Bank Connections Business
- ---- ------------- ----------- --------
<S> <C> <C> <C>
Henry J. Goodman Director Chairman and Furniture company
Chief Executive
Officer,
H. Goodman, Inc.
Gordon D. Harnett Director President, Manufacturer of
Chairman and engineered
Chief Executive material
Officer, Brush
Wellman, Inc.
Preston B. Director Retired Electronic
Heller, Jr. Chairman and Chief component
Executive Officer, distributor
Pioneer Standard
Electronics, Inc.
Leon J. Hendrix, Director Partner, Private
Jr. Clayton, Dubilier investment
& Rice, Inc. firm
J. Peter Kelly Director President and Manufacturer
Chief Operating of
Officer, LTV Steel steel
Company
William E. Chairman, Director and Execu-
MacDonald III President, Chief tive Vice President, Bank holding
Executive National City company
Officer and Corporation
Director
William P. Madar Director Vice Chairman and Manufacturer
Chief Executive of machinery
Officer, Nordson
Corporation
H. Gene Nau Director President and Chief Travel agency
Executive Officer,
Travel One Midwest
William F. Patient Director Chairman, PVC manufacturer
President and Chief
Executive Officer,
The Geon Company
William R. Robertson Director President, Bank holding
National City company
Corporation
Shelley B. Roth Director President, Ice cream
Pierre's French
Ice Cream Company
</TABLE>
C-20
<PAGE> 100
<TABLE>
<CAPTION>
Position Other
with National Business Type of
Name City Bank Connections Business
- ---- ------------- ----------- --------
<S> <C> <C> <C>
Thomas C. Sullivan Director Chairman of the Manufacturer
Board and Chief of protective
Executive Officer, coatings, roofing
RPM, Inc. material and paint
Dr. Jerry S. Director President, Education
Thornton Cuyahoga
Community
College
Morry Weiss Director Chairman and Greeting cards
Chief Executive
Officer, American
Greetings
Corporation
Theodore K. Zampetis Director President and Manufacturer of
Chief Operating rubber and plastic
Officer, The parts for automotive
Standard Products original equipment
Co. industry
W. Douglas Bannerman Executive Vice Senior Vice Bank holding
President, Cor- President, company
porate Banking National City
Corporation
Jeffrey M. Biggar Executive Vice Senior Vice Bank holding
President, President, company
Private Client National City
Group Corporation
Jane Grebenc Executive Vice None
President, Retail
Banking
Jeffrey D. Kelly Executive Vice Executive Vice Bank holding
President, President, company
Investments National City
Corporation
Bruce T. Muddell Executive Vice None
President, Credit
Administration
Harold B. Todd, Jr. Executive Vice Executive Vice Bank holding
President, President, company
Institutional National City
Trust and Asset Corporation
Management
</TABLE>
(b) Investment Adviser: National City Bank of Columbus
("National City") performs investment advisory services for Registrant and
certain other investment advisory customers. National City Bank of Columbus has
been in the business of
C-21
<PAGE> 101
managing the investments of fiduciary and other accounts throughout Ohio since
1915. In addition to its trust business, National City provides commercial
banking services.
To the knowledge of Registrant, none of the directors or
officers of National City, except those set forth below, is or has been, at any
time during the past two calendar years, engaged in any other business,
profession, vocation or employment of a substantial nature, except that certain
directors and officers also hold various positions with, and engage in business
for, National City Corporation, which owns all the outstanding stock of National
City. Set forth below are the names and principal businesses of the directors
and certain of the senior executive officers of National City who are engaged in
any other business, profession, vocation or employment of a substantial nature.
NATIONAL CITY BANK OF COLUMBUS
<TABLE>
<CAPTION>
Position Other
with National Business Type of
Name City Columbus Connections Business
- ---- ------------- ----------- --------
<S> <C> <C> <C>
Eric D. Chapman, III Director President and Health care
Chief Executive industry consulting
Officer, Chapman
Health International,
Inc.
David A. Daberko Director Chairman and Bank holding
Chief Executive company
Officer, National
City Corporation
Director, National Bank
City Bank, Northeast
Director, Bank
National City
Bank of Dayton
Director, Bank
National City
Bank, Northwest
Director, National Bank
City Bank of
Indiana
Director, National Bank
City Bank
Director, National Bank
City Bank of
Kentucky
</TABLE>
C-22
<PAGE> 102
<TABLE>
<CAPTION>
Position Other
with National Business Type of
Name City Columbus Connections Business
- ---- ------------- ----------- --------
<S> <C> <C> <C>
Officer and Tractor sales
Director, Hudson
Tractor Sales,
Inc.
Director, Student Loan
Marketing Association
Vincent A. DiGirolamo Director Vice Chairman, Bank holding
National City company
Corporation
Daniel E. Evans Director Chairman, Food proc-
Bob Evans Farms, essing
Inc. wholesale &
retail
Director, National Bank
City Corporation holding company
Thomas J. Fitzpatrick Director Chairman and General
Chief Executive contractor
Officer, Elford,
Inc.
James H. Gilmour Director Chairman, Credit card
National City Card company
Services
Gary A. Glaser Director, Executive Vice Bank holding
President President, company
and Chief National City
Executive Officer Corporation
Director, Bank
National City
Bank, Dayton
Arthur D. Herrmann Director Retired Chairman, Bank
National City Bank
of Columbus
William G. Kelley Director Chairman and Retail
Chief Executive
Officer, Consoli-
dated Stores Corp.
James H. Miller Director Retired, Tire manu-
Gencorp. Inc. facturer
J. Frederick Reid Director Retired Chairman, Insurance
Grange Insurance
Companies
</TABLE>
C-23
<PAGE> 103
<TABLE>
<CAPTION>
Position Other
with National Business Type of
Name City Columbus Connections Business
- ---- ------------- ----------- --------
<S> <C> <C> <C>
Carol L. Scott Director Retired, Mid- Governmental
western Regional agency
Neighborhood
Reinvestment Corp.
Dr. K. Wayne Smith Director President and Computerized
Chief Executive library
Officer, OCLC
Online Computer
Library Center, Inc.
William W. Wilkins Director President and Chief Health care
Executive Officer,
U.S. Health
Corporation
Dorothy M. Horvath Executive Vice None -
President,
Credit
Administration
Kelly E. Law Senior Vice None -
President,
Human Resources
Division
Stephen B. McLane Executive Vice None -
President,
Corporate Banking
Richard A. Ray Executive Vice None -
President,
Private Client
Group
Gregory L. Tunis Executive Vice None -
President,
Retail Banking
</TABLE>
(c) Investment Adviser: National City Bank, Kentucky
("National City Kentucky")
National City Kentucky, a member of the $32 billion National
City Corporation holding company, was chartered in 1863 and is the oldest
national bank in the South. National City Kentucky has a long history of
innovative financial services to its clients, including being the first to use
discretionary agency accounts for managing individuals' funds. In addition, it
owned the rights to the name "Master Charge" and its affiliate, National City
Processing Company (one of the largest item processing companies in the world).
The address of National City Kentucky and its affiliates is Box 36000,
Louisville, Kentucky 40233. On July 29, 1988, First Kentucky National
Corporation,
C-24
<PAGE> 104
which owned all of the stock of National City Kentucky, merged into a
wholly-owned subsidiary of National City Corporation.
To the knowledge of Registrant, none of the directors or
officers of National City Kentucky, except those set forth below, is or has been
at any time during the past two calendar years engaged in any other business,
profession, vocation or employment of a substantial nature, except that certain
directors and officers of National City Kentucky also hold positions with
National City Corporation or its subsidiaries. Set forth below are the names and
principal business of the directors and certain of the senior executive officers
of National City Kentucky who are engaged in any other business, profession,
vocation, or employment of a substantial nature.
NATIONAL CITY KENTUCKY
<TABLE>
<CAPTION>
Position Other
with National Business Type of
Name City Kentucky Connections Business
- ---- ------------- ----------- --------
<S> <C> <C> <C>
James R. Bell III Director, Executive Vice Bank holding
President and President, National company
Chief Executive City Corporation
Officer
Morton Boyd Director None
Timothy C. Brown Director Chairman, Manufacturer
President and of lighting and
Chief Executive compressor and
Officer, Thomas vacuum pumps
Industries, Inc.
Robert E. Champagne Director Chairman, Paint and
Courtaulds industrial
United States, Inc. coatings
manufacturer
David A. Daberko Director Chairman and Chief Bank holding
Executive Officer, company
National City
Corporation
Director, Bank
National City
Bank of Columbus
Director, Bank
National City
Bank, Northeast
Director, Bank
National City
Bank of Dayton
</TABLE>
C-25
<PAGE> 105
<TABLE>
<CAPTION>
Position Other
with National Business Type of
Name City Kentucky Connections Business
- ---- ------------- ----------- --------
<S> <C> <C> <C>
Director, Bank
National City
Bank, Northwest
Director, Bank
National City
Bank of Indiana
Director, Bank
National City
Bank
Officer and Tractor sales
Director, Hudson
Tractor Sales,
Inc.
Director,
Student Loan
Marketing Association
Robert R. Dawson, Jr. Director Partner, R.R. Bridge
Dawson Bridge and road
Company construction
Margaret H. Greene Director Vice President Telecommunications
and General
Counsel, BellSouth
Telecommunications
Leonard V. Hardin Director and None
Chairman of
the Board
R. Larry Jones Director Executive Vice Plastic
President, Jones manufacturer
Plastic and
Engineering
Corporation
George N. King, Sr. Director President, Maintenance
King's Management
Group, Inc.
W. Bruce Lunsford Director Chairman, Health service
President & Chief
Executive Officer,
Vencor Incorporated
Carl F. Pollard Director Hermitage Farm Commercial
thoroughbred
breeding
farm
</TABLE>
C-26
<PAGE> 106
<TABLE>
<CAPTION>
Position Other
with National Business Type of
Name City Kentucky Connections Business
- ---- ------------- ----------- --------
<S> <C> <C> <C>
James L. Rose Director and Former Chairman, Bank holding
Chairman, President and Chief company
Southeast Area Executive Officer,
United Bancorp of
Kentucky, Inc.
President and Real estate
Director, TSR
Investments, Inc.
Director, Tri-State Real estate
Realty, Inc.
Limited Partner, Real estate
Lexington Financial
Center
John H. Schnatter Director Chairman and Food industry
Chief Executive
Officer, Papa
John's
International, Inc.
Dr. John W. Shumaker Director President, Education
University of
Louisville
William M. Street Director Vice Chairman, Consumer products
Brown-Forman
Corporation
James E. Barber President, None
Bowling Green
Area
William I. Executive Vice None
Cornett, Jr. President,
Corporate Banking
Roger M. Dalton President, None
Lexington Area
Robert E. Hawkins Executive Vice None
President,
Credit Admin-
istration
Harvey E. Hensley President, None
Southeast Area
David E. Jones President, None
Ashland Area
Larry R. Mayfield President, None
Owensboro Area
</TABLE>
C-27
<PAGE> 107
<TABLE>
<CAPTION>
Position Other
with National Business Type of
Name City Kentucky Connections Business
- ---- ------------- ----------- --------
<S> <C> <C> <C>
Donna M. Paccioni Executive None
Vice President,
Retail Banking
Charles R. Stoess President, None
Crestwood Area
Lawrence A. Warner Executive None
Vice President,
Trust
</TABLE>
(d) Investment Adviser: National City Bank of Indiana
("National City Indiana")
On May 2, 1992, National City Corporation acquired National
City Indiana (formerly, Merchants National Bank and Trust Company, chartered in
1865).
To the knowledge of Registrant, none of the directors or
officers of National City Indiana, except those set forth below, is or has been
at any time during the past two calendar years engaged in any other business,
profession, vocation or employment of a substantial nature, except that certain
directors and officers of National City Indiana also hold positions with
National City Corporation or its subsidiaries. Set forth below are the names and
principal business of the directors and certain of the senior executive officers
of National City Indiana who are engaged in any other business, profession,
vocation, or employment of a substantial nature.
NATIONAL CITY, INDIANA
<TABLE>
<CAPTION>
Position Other
with National Business Type of
Name City Indiana Connections Business
- ---- ------------ ----------- --------
<S> <C> <C> <C>
Eleanor F. Bookwalter Director Member, Finance Historical
Committee, Historic landmarks
Landmarks, Indiana
Member, Indiana
State Office
Building Commission
William E. Corley Director President, Community Hospital
Hospitals of Indiana,
Inc.
President, Community Healthcare
Health Services, Inc.
</TABLE>
C-28
<PAGE> 108
<TABLE>
<CAPTION>
Position Other
with National Business Type of
Name City Indiana Connections Business
- ---- ------------ ----------- --------
<S> <C> <C> <C>
President, Voluntary Healthcare
Enterprises, Inc.
President, Indianapolis Physician
Medical Management, recruitment
Inc.
President, Healthcare
Affiliated Hospitals
Heart Institute of
Indiana, Inc.
Board Member, HMO
ProHealth Network,
President
David A. Daberko Director Chairman and Chief Bank holding
Executive Officer, company
National City
Corporation
Director, Bank
National City
Bank of Columbus
Director, Bank
National City
Bank, Northeast
Director, Bank
National City
Bank of Dayton
Director, Bank
National City
Bank, Northwest
Director, National City Bank
Bank
Director, National Bank
City Bank of Kentucky
Officer and Tractor sales
Director, Hudson
Tractor Sales,
Inc.
Director, Student Loan
Marketing Association
Vincent A. DiGirolamo Director Vice Chairman, Bank holding
National City company
Corporation
</TABLE>
C-29
<PAGE> 109
<TABLE>
<CAPTION>
Position Other
with National Business Type of
Name City Indiana Connections Business
- ---- ------------ ----------- --------
<S> <C> <C> <C>
Lawrence A. Ferger Director Director, President Utility
and Chief Executive
Officer, Indiana Gas
Company, Inc.
Director and President, Non-utility
IEI Investments Inc holding co.
Director, IGC Energy Non-utility
Inc. investments
Director and President, Utility
Richmond Gas Corp.
Director, Terre Utility
Haute Gas Corp.
Director and President, Real estate
Energy Realty, Inc. development
Otto N. Frenzel III Director Director, Indianapolis Utility
Power & Light Co.
Director, IPALCO Utility
Enterprises holding
company
Director, Indianapolis Utility
Water Company
Director, IWC Utility
Resources holding
company
Director, Indiana Utility
Gas Company
Director, Indiana Utility
Energy, Inc. holding
company
Director, American Insurance
United Life Insurance
Co.
Director, Baldwin & Insurance
Lyons, Inc.
Director, Indianapolis
Ballet
Director, Indianapolis Art museum
Museum of Art
Director, Indianapolis Non-profit
Humane Society organization
</TABLE>
C-30
<PAGE> 110
<TABLE>
<CAPTION>
Position Other
with National Business Type of
Name City Indiana Connections Business
- ---- ------------ ----------- --------
<S> <C> <C> <C>
Chairman, Riley
Memorial Association
Inc.
Edwin J. Goss Director Director, American Insurance
States Insurance Co.
Director, American Insurance
Economy Insurance Co.
Director, American Insurance
States Preferred
Insurance Co.
Director, American Insurance
States Insurance
Company of Texas
Director, American Insurance
States Life
Insurance Co.
Director, IPALCO Utility
Enterprises, Inc. holding
co.
Director, Indianapolis Utility
Power & Light Co.
J. Christopher Director, Director, Greater
Graffeo President Indianapolis Progress
and Chief Committee
Executive
Officer
Director, Corporate
Community Council
Director, Indiana
Community Business
Credit Corp.
Director, Community
Hospital Foundation
Board
Director, Indianapolis Art museum
Museum of Art
Director, Indiana
Repertory Theater
John A. Hillenbrand II Director Vice-Chairman of Manufacturing
Board, Pri-Pak Inc.
</TABLE>
C-31
<PAGE> 111
<TABLE>
<CAPTION>
Position Other
with National Business Type of
Name City Indiana Connections Business
- ---- ------------ ----------- --------
<S> <C> <C> <C>
Director, Physicians
Practices Management
Director, PSI Energy Utility
Chairman of Board,
Able Body Corp.
Director, Manufacturing
Hillenbrand
Industries, Inc.
President, Director, Investment
and Chief Executive company
Officer, Glynnadam, Inc.
Chairman of Board, Manufacturing
Nambe Mills, Inc.
Director, Southern Resort
Cross Club
Don E. Marsh Director President, Chief Retail
Executive Officer, grocery
and Chairman, Marsh
Supermarkets, Inc.
Director, Indiana Utility
Energy, Inc.
James D. Massey Director Director, Conseco Insurance
Capital Partners
Insurance, Inc.
James T. Morris Director Director, American Insurance
United Life Insurance
Co.
Director, MSA Realty Real estate
Chairman, Chief Utility
Executive Officer and holding
Director, IWC co.
Resources
Chairman, Chief Utility
Executive Officer and
Director, Indianapolis
Water Company
John M. Mutz Director Director, PSI Utility
Resources, Inc. holding
co.
Director, PSI Utility
Argentina, Inc.
</TABLE>
C-32
<PAGE> 112
<TABLE>
<CAPTION>
Position Other
with National Business Type of
Name City Indiana Connections Business
- ---- ------------ ----------- --------
<S> <C> <C> <C>
President, PSI Utility
Energy, Inc.
Director, Indianapolis Chamber of
Chamber of Commerce commerce
Director, Integrated Research and
Biotechnology Corp. development
Director, T. M. Venture
Englehart Corp. capital
Director, Security Lock manufac-
Group, Inc. turing and
security services
Director, CCP Insurance
Insurance, Inc. holding company
Director, ADESA Auto auction
Corp.
Director, PSI Utility
Resources, Inc. holding
co.
Stanley K. Paulsen Director Partner, Edinburgh Shopping
Enterprises center
Partner, Restaurant Real
Realty Co. estate
Partner, S & P Investments
Enterprises
President and Chief Leasing
Executive Officer,
Circle Business
Credit
Director, T. M.
Englehart Co.
Fred A. Poole Director General Manager, Airline company
United Airlines
Indianapolis
N. Clay Robbins Director President, Charitable
Lilly Endowment, Inc. foundation
Dr. Gene E. Sease Director Chairman, Sease, Public
Gerig & Associates relations
Director, Indianapolis Insurance
Life Insurance Co.
</TABLE>
C-33
<PAGE> 113
<TABLE>
<CAPTION>
Position Other
with National Business Type of
Name City Indiana Connections Business
- ---- ------------ ----------- --------
<S> <C> <C> <C>
Director, Indiana Trains/Rail
Hi-Rail Corp.
Director, Marine
Star, Inc.
Director, Indiana Chamber
Chamber of Commerce of commerce
Director, Chamber
Indianapolis of commerce
Chamber of Commerce
Director, Commission Building
on Downtown commission
Director, Greater
Indianapolis Progress
Committee
Stephen A. Stitle Chairman Director, Indianapolis
of the Board Chamber of Commerce
Director, Indiana
University Foundation
Director, 400 Festival
Director, Indianapolis
Festival, Inc.
Director, Indianapolis
Downtown, Inc.
Director, United Way of
Central Indiana
Director, Center for
Leadership Development
Donald W. Tanselle Director Chairman, MSA Realty Real estate
Inc.
Chairman, Indiana State fair
Fair Commission
Partner, Washington Real estate
Square Associates
Eiteljorg Museum Museum
Childrens Museum Museum
Methodist Hospital Hospital
Partner, L. H. Chaney
Associates
</TABLE>
C-34
<PAGE> 114
<TABLE>
<CAPTION>
Position Other
with National Business Type of
Name City Indiana Connections Business
- ---- ------------ ----------- --------
<S> <C> <C> <C>
Director, Pooled
Certificates Inc.
Randolph P. Wilson Director None
Michael C. Rechin Executive Vice None
President,
Corporate
Banking
Administration
Janice L. Faherty Executive Vice None
President,
Statewide Bank
Administration
Glenn R. Knific Executive Vice None
President, Credit
Administration
William H. Olds, Jr. Executive Vice None
President, Trust
Administration
John V. White Executive Vice None
President, Retail
Administration
</TABLE>
(e) Investment Adviser: National Asset Management Corporation
("National Asset Management")
To the knowledge of Registrant, none of the directors or
officers of National Asset Management, except those set forth below, is or has
been at any time during the past two calendar years engaged in any other
business, profession, vocation or employment of a substantial nature, except
that certain directors and officers of National Asset Management also hold
positions with National City Corporation or its subsidiaries. Set forth below
are the names and principal business of the directors and certain of the senior
executive officers of National Asset Management who are engaged in any other
business, profession, vocation, or employment of a substantial nature.
NATIONAL ASSET MANAGEMENT
<TABLE>
<CAPTION>
Position with Other
National Asset Business Type of
Name Management Connections Business
- ---- ---------- ----------- --------
<S> <C> <C> <C>
James R. Bell, III Director Director, President Bank
and Chief
</TABLE>
C-35
<PAGE> 115
<TABLE>
<CAPTION>
Position with Other
National Asset Business Type of
Name Management Connections Business
- ---- ---------- ----------- --------
<S> <C> <C> <C>
Executive Officer,
National City Bank of
Kentucky
Executive Vice Bank holding
President, company
National City
Corporation
William F. Director, None
Chandler, Jr. Managing Director
and Principal
Leonard V. Hardin Director Director and Bank
Chairman of the
Board, National City
Bank of Kentucky
William R. Robertson Director President, Bank holding
National City company
Corporation
Director, Chairman of Bank
Trust committee, Member
of Executive committee,
National City Bank
Harold B. Todd, Jr. Director Executive Vice Presi- Bank holding
dent, National City company
Corporation
Executive Vice Presi- Bank
dent, Institutional
Trust and Asset Manage-
ment, National City Bank
Lawrence A. Warner Director Executive Vice Bank
President, National
City Bank of Kentucky
Carl W. Hafele Director, None
Managing Director
and Principal
Michael C. Heyman Principal None
David B. Hiller Managing None
Director
and Principal
Stephen G. Mullins Principal None
Larry J. Walker Principal None
John W. Ferreby Principal None
</TABLE>
C-36
<PAGE> 116
<TABLE>
<CAPTION>
Position with Other
National Asset Business Type of
Name Management Connections Business
- ---- ---------- ----------- --------
<S> <C> <C> <C>
Catherine R. Senior None
Stodghill Investment Manager
Erik N. Evans Investment None
Manager
Brett A. Bell Investment None
Manager
Randall T. Zipfel Manager, None
Information Systems
</TABLE>
(f) Sub-Investment Adviser: Weiss, Peck & Greer, LLC
Weiss, Peck & Greer, LLC performs sub-investment advisory
services for the Registrant's Pennsylvania Tax Exempt and Pennsylvania Municipal
Funds.
To the knowledge of Registrant, none of the principals of
Weiss, Peck & Greer, except as set forth below, is or has been at any time
during the past two calendar years engaged in any other business, profession,
vocation or employment of a substantial nature. Set forth below are the names
and principal businesses of the principals of Weiss, Peck & Greer, if any, who
are engaged in any other business, profession, vocation or employment of a
substantial nature.
WEISS, PECK & GREER, LLC
<TABLE>
<CAPTION>
Position with
Weiss, Peck & Other Business Type of
Name Greer, LLC Connections Business
- ---- ---------- ----------- --------
<S> <C> <C> <C>
Samuel H. Armacost Principal Director, Oil and gas;
Chevron; scientific
Director, consulting;
Failure Group; technology
Director,
Scios Nova
Annette Bianchi Principal
</TABLE>
C-37
<PAGE> 117
<TABLE>
<CAPTION>
Position with
Weiss, Peck & Other Business Type of
Name Greer, LLC Connections Business
- ---- ---------- ----------- --------
<S> <C> <C> <C>
Gill Cogan Principal Director, Technology
Harmonic
Lightwaves;
Director,
Micro Linear;
Director,
Number Nine
Visual
Technology;
Director, P-
COM; Director,
Electronics
for Imaging;
Director,
Integrated
Packaging
Assembly Corp.
Director,
Visigenic
Software
Ellen M. Feeney Principal Director,
Heartstream
Janet Fiorenza Principal None
Margery Z. Flicker Principal None
Anthony J. Giammalva Principal None
Mitchell E. Cantor Principal None
Daniel Cardell Principal None
Philip Greer* Principal Director, Technology;
Network package
Computing delivery;
Devices; wine
Director,
Federal
Express;
Director,
Robert Mondavi
Ronald M. Hoffner* Principal None
Steven N. Hutchinson Principal Director, Technology;
Chyron Toys
Corporation;
Director,
Empire of
Carolina
James W. Kiley Principal None
A. Roy Knutsen Principal None
Alan D. Kohn Principal None
</TABLE>
C-38
<PAGE> 118
<TABLE>
<CAPTION>
Position with
Weiss, Peck & Other Business Type of
Name Greer, LLC Connections Business
- ---- ---------- ----------- --------
<S> <C> <C> <C>
Wesley W. Lang, Jr.* Principal Director, Technology;
Chyron Manufacturer
Corporation;
Director,
Durakon
Industries
Steven S. Lear Principal None
Gary R. Lisk Principal None
Marvin B. Markowitz Principal None
Howard G. Mattson Principal None
Kathleen A. McCarragher Principal None
Bradford R. Peck Principal None
Peter B. Pfister Principal Director, Toys
Empire of
Carolina
Richard S. Pollack Principal None
Steven Pomerantz Principal None
Lee McGehee Porter, III Principal None
Jay C. Nadel Principal None
Stuart W. Porter Principal None
Francis H. Powers Principal None
R. Scott Richter Principal None
Nelson Schaenen, Jr. Principal None
James S. Schainuck Principal None
Gary E. Scheier Principal None
David J. Schilder Principal None
Arthur L. Schwarz Principal None
Adam L. Starr Principal None
Melville Straus* Principal None
Kenneth Jay Tarr Principal None
Bernard J. Tew Principal None
Daniel S. Vandivort Principal None
Roger J. Weiss* Principal None
Stephen H. Weiss** Principal None
</TABLE>
C-39
<PAGE> 119
<TABLE>
<CAPTION>
Position with
Weiss, Peck & Other Business Type of
Name Greer, LLC Connections Business
- ---- ---------- ----------- --------
<S> <C> <C> <C>
Hugh S. Zurkuhlen Principal None
Craig Whiting Principal None
Laurence Zuriff Principal None
</TABLE>
* Member - Executive Committee
** Chairman - Executive Committee
Item 29. PRINCIPAL UNDERWRITER
---------------------
(a) Furnish the name of each investment company
(other than the Registrant) for which each principal
underwriter currently distributing securities of the
Registrant also acts as a principal underwriter, distributor
or investment advisor.
Registrant's distributor, SEI Financial Services
Company ("SFS"), acts as distributor for:
<TABLE>
<S> <C>
SEI Daily Income Trust July 14, 1982
SEI Liquid Asset Trust November 29, 1982
SEI Tax Exempt Trust December 3, 1982
SEI Index Funds July 10, 1985
SEI Institutional Managed Trust January 22, 1987
SEI International Trust August 30, 1988
Stepstone Funds January 30, 1991
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
CoreFunds, Inc. October 30, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
1784 Funds(R) June 1, 1993
The PBHG Funds, Inc. July 16, 1993
Marquis Funds(R) August 17, 1993
Morgan Grenfell Investment Trust January 3, 1994
The Achievement Funds Trust December 27, 1994
Bishop Street Funds January 27, 1995
CrestFunds, Inc. March 1, 1995
STI Classic Variable Trust August 18, 1995
ARK Funds November 1, 1995
Monitor Funds January 11, 1996
FMB Funds, Inc. March 1, 1996
SEI Asset Allocation Trust April 1, 1996
Turner Funds April 30, 1996
SEI Institutional Investments Trust June 14, 1996
First American Strategy Funds, Inc. October 1, 1996
High Mark Funds February 15, 1997
</TABLE>
C-40
<PAGE> 120
SFS provides numerous financial services to investment
managers, pension plan sponsors, and bank trust departments.
These services include portfolio evaluation, performance
measurement and consulting services ("Funds Evaluation") and
automated execution, clearing and settlement of securities
transactions ("MarketLink").
(b) Furnish the information required by the following
table with respect to each director, officer or partner of
each principal underwriter named in the answer to Item 21 of
Part B. Unless otherwise noted, the principal business address
of each director or officer is Oaks, PA 19456.
<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name with Underwriter with Registrant
- ---- ------------------- ---------------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman & --
Chief Executive Officer
Henry H. Greer Director, President & --
Chief Operating Officer
Carmen V. Romeo Director, Executive --
Vice President &
Treasurer
Gilbert L. Beebower Executive Vice --
President
Richard B. Lieb Executive Vice --
President, President-
Investment Services
Division
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Jerome Hickey Senior Vice President --
Larry Hutchison Senior Vice President --
Steven Kramer Senior Vice President --
David G. Lee Senior Vice President --
William Madden Senior Vice President --
Jack May Senior Vice President --
A. Keith McDowell Senior Vice President --
Dennis J. McGonigle Senior Vice President --
Hartland J. McKeon Senior Vice President --
Barbara J. Moore Senior Vice President --
James V. Morris Senior Vice President --
Steven Onofrio Senior Vice President --
Kevin P. Robins Senior Vice President, --
General Counsel &
Secretary
Robert Wagner Senior Vice President --
Patrick K. Walsh Senior Vice President --
Kenneth Zimmer Senior Vice President --
Robert Aller Vice President --
Marc H. Cahn Vice President & --
Assistant Secretary
Gordon W. Carpenter Vice President --
</TABLE>
C-41
<PAGE> 121
<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name with Underwriter with Registrant
- ---- ------------------- ---------------------
<S> <C> <C>
Todd Cipperman Vice President & --
Assistant Secretary
Robert Crudup Vice President & --
Managing Director
Ed Daly Vice President --
Jeff Drennen Vice President --
Mick Duncan Vice President and Team --
Leader
Vic Calef Vice President & --
Managing Director
Kathy Heillig Vice President --
Michael Kantor Vice President --
Samuel King Vice President --
Kim Kirk Vice President & --
Managing Director
Donald H. Korytowski Vice President --
John Krzeminski Vice President & --
Managing Director
Robert S. Ludwig Vice President and Team --
Leader
Vicki Malloy Vice President and Team --
Leader
Carolyn McLaurin Vice President & --
Managing Director
W. Kelso Morrill Vice President --
Barbara A. Nugent Vice President & --
Assistant Secretary
Sandra K. Orlow Vice President & --
Assistant Secretary
Donald Pepin Vice President & --
Managing Director
Larry Pokora Vice President --
Kim Rainey Vice President --
Paul Sachs Vice President --
Mark Samuels Vice President & --
Managing Director
Steven Smith Vice President --
Daniel Spaventa Vice President --
Kathryn L. Stanton Vice President & --
Assistant Secretary
Wayne M. Withrow Vice President & --
Managing Director
William Zawaski Vice President --
James Dougherty Director of Brokerage --
Services
</TABLE>
Item 30. LOCATION OF ACCOUNTS AND RECORDS
--------------------------------
(1) National City Bank, 1900 East Ninth Street, Cleveland,
Ohio, 44114-3484, National City Bank, Columbus, 155 East Broad
Street, Columbus, Ohio 43251,
C-42
<PAGE> 122
and National City Bank, Trust Operations, 4100 West 150th
Street, Cleveland, Ohio 44135, (records relating to their
functions as investment advisers and custodian); National City
Bank, Kentucky, 101 South 5th Street, Louisville, Kentucky
40202; National City Bank, Indiana, 101 West Washington
Street, Suite 645, Indianapolis, IN 46255; and National Asset
Management Corporation, 101 South Fifth Street, Louisville, KY
40202.
(2) SEI Financial Services company, 1 Freedom Valley Road,
Oaks, Pennsylvania 19456 (records relating to its function as
distributor).
(3) 440 Financial Distributors, Inc., 290 Donald Lynch
Boulevard, Marlboro, Massachusetts 01752 (records relating to
its former functions as distributor).
(4) Allmerica Investments, Inc., 440 Lincoln Street,
Worcester, Massachusetts 01653 (records relating to its former
functions as distributor).
(5) Drinker Biddle & Reath, 1345 Chestnut Street,
Philadelphia, Pennsylvania 19107-3496 (Registrant's
Declaration of Trust, Code of Regulations, and Minute Books).
(6) PNC Bank, National Association, 17th and Chestnut Streets,
Philadelphia, Pennsylvania 19103 (records relating to its
former functions as custodian).
(7) PFPC Inc., 400 Bellevue Parkway, Wilmington, Delaware
19809 (records relating to its functions as accounting agent
and administrator).
(8) State Street Bank and Trust Company, 225 Franklin Street,
Boston, Massachusetts 02110 (records relating to its function
as transfer agent).
(9) First Data Investor Services Group, Inc., 4400 Computer
Drive, Westboro, Massachusetts 02109 (records relating to its
former functions as transfer agent).
(10) First Data Investor Services Group (formerly The
Shareholder Services Group, Inc. d/b/a 440 Financial) 4400
Computer Drive, Westboro, Massachusetts 02109 (records
relating to its former functions as transfer agent).
C-43
<PAGE> 123
(11) Weiss, Peck & Greer, LLC, One New York Plaza, New York,
New York 10004 (records relating its functions as
sub-adviser).
Item 31. MANAGEMENT SERVICES
-------------------
Inapplicable.
Item 32. UNDERTAKINGS
------------
(a) Registrant undertakes to furnish each person to whom a
prospectus is delivered a copy of the Registrant's most recent annual report to
shareholders, upon request and without charge.
(b) Registrant undertakes to file a post-effective amendment,
using unaudited financial statements for the Registrant's Small Cap Growth Fund
which need not be certified, within four to six months from the effective date
of this PostEffective Amendment No. 32.
C-44
<PAGE> 124
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, Registrant has duly caused
this Amendment to its Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Cleveland, State of Ohio,
on the 11th day of April, 1997.
ARMADA FUNDS
Registrant
/s/Robert D. Neary
------------------
President
Robert D. Neary
---------------
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment No. 32 to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/Richard B. Tullis Trustee April 11, 1997
- ------------------------
Richard B. Tullis
/s/Thomas R. Benua, Jr. Trustee April 11, 1997
- ------------------------
Thomas R. Benua, Jr.
/s/Leigh Carter Trustee April 11, 1997
- ------------------------
Leigh Carter
/s/John F. Durkott Trustee April 11, 1997
- ------------------------
John F. Durkott
/s/Richard W. Furst Trustee April 11, 1997
- ------------------------
Richard W. Furst
/s/Robert D. Neary Trustee, Chairman of April 11, 1997
- ------------------------ the Board and President
Robert D. Neary
/s/J. William Pullen Trustee April 11, 1997
- ------------------------
J. William Pullen
</TABLE>
C-45
<PAGE> 125
Armada Funds
EXHIBIT INDEX
EXHIBIT # EXHIBIT
1 (g) Certificate of Classification of Shares with
respect to the Pennsylvania Tax Exempt,
Intermediate Government, GNMA and
Pennsylvania Municipal Funds.
(h) Form of Certificate of Classification of
Shares with respect to the Foreign Equity,
Equity Index and Core Equity Funds.
(i) Form of Certificate of Classification of
Shares with respect to the Small Cap Growth
Fund and Real Income Protection Funds.
5 (g) Investment Advisory Agreement for the
Pennsylvania Tax Exempt, Intermediate
Government, GNMA and Pennsylvania Municipal
Funds between Registrant and National City
Bank.
(h) Sub-Advisory Agreement for the Pennsylvania
Tax Exempt and Pennsylvania Municipal Funds
between National City Bank and Weiss, Peck &
Greer L.L.C.
(i) Form of Investment Advisory Agreement for
the Core Equity Fund between Registrant and
National Asset Management Corporation.
(j) Form of Investment Advisory Agreement for
the Foreign Equity and Equity Index Funds
among Registrant and National City Bank.
(k) Form of Investment Advisory Agreement for
the Small Cap Growth and Real Return
Advantage Funds between Registrant and
National City Bank.
6 Distribution Agreement between Registrant
and SEI Financial Services Company dated
March 8, 1997.
8 (c) Exhibit A to the Custodian Services
Agreement between Registrant and National
City Bank dated September 9, 1996.
<PAGE> 126
(d) Form of Exhibit A to the Custodian Services
Agreement between Registrant and National
City Bank.
9 (b) Exhibit A to the Administration and
Accounting Services Agreement dated March 1,
1993 between Registrant and PFPC Inc., dated
September 9, 1996.
(c) Form of Exhibit A to the Administration and
Accounting Services Agreement dated March 1,
1993 between Registrant and PFPC Inc.
(d) Transfer Agency and Service Agreement (the
"Tranfer Agency Agreement") between
Registrant and State Street Bank and Trust
Company dated March 1, 1997.
(e) Revised Shareholder Services Plan and
Servicing Agreement adopted by the Board of
Trustees February 15, 1997.
(f) Blue Sky Services Agreement between the
Registrant and SEI Fund Resources dated
December 2, 1996.
11 (a) Consent of Drinker Biddle & Reath.
(b) Consent of Ernst & Young LLP.
13 (j) Purchase Agreement between Registrant and
440 Financial Distributors, Inc. with
respect to the Pennsylvania Tax Exempt Fund
dated September 6, 1996.
(k) Purchase Agreement between Registrant and
440 Financial Distributors, Inc. with
respect to the Intermediate Government Fund
dated September 6, 1996.
(l) Purchase Agreement between Registrant and
440 Financial Distributors, Inc. with
respect to the GNMA Fund dated September 6,
1996.
(m) Purchase Agreement between Registrant and
440 Financial Distributors, Inc. with
respect to the Pennsylvania Municipal Fund
dated September 6, 1996.
(n) Form of Purchase Agreement between
Registrant and SEI Financial Services
Company ("SEI") with respect to the Core
Equity Fund.
C-2
<PAGE> 127
(o) Form of Purchase Agreement between
Registrant and SEI with respect to the
Foreign Equity Fund.
(p) Form of Purchase Agreement between
Registrant and SEI with respect to the
Equity Index Fund.
(q) Form of Purchase Agreement between
Registrant and SEI with respect to the
Small Cap Growth Fund.
(r) Form of Purchase Agreement between
Registrant and SEI with respect to the Real
Return Advantage Fund.
15 (b) Registrant's Revised Service and
Distribution Plan.
18 Revised Plan Pursuant to Rule 18f-3 for
Operation of a Dual-Class System.
C-3
<PAGE> 1
EXHIBIT 1(g)
ARMADA FUNDS
(A MASSACHUSETTS BUSINESS TRUST)
CERTIFICATE OF CLASSIFICATION OF SHARES
I, W. Bruce McConnel, III, do hereby certify as follows:
(1) That I am the duly elected Secretary of Armada Funds ("Armada");
(2) That in such capacity I have examined the records of actions taken
by the Board of Trustees of Armada;
(3) That the Board of Trustees of Armada duly adopted the following
resolutions at the Regular Meeting of the Board of Trustees held on February 16,
1996:
CREATION OF NEW SERIES OF SHARES.
- ---------------------------------
CREATION OF CLASS Q AND CLASS Q-SPECIAL SERIES 1 SHARES.
--------------------------------------------------------
RESOLVED, that pursuant to Section 5.1 of Armada's Declaration
of Trust, an unlimited number of authorized, unissued, and unclassified
shares of beneficial interest in Armada (no par value) be, and hereby
are, classified into an additional class of shares designated as Class
Q shares of beneficial interest;
FURTHER RESOLVED, that pursuant to Section 5.1 of the
Declaration of Trust, an unlimited number of authorized, unissued, and
unclassified shares of beneficial interest in Armada (no par value) be,
and hereby are, classified and designated as Class Q-Special Series 1
shares;
FURTHER RESOLVED, that all consideration received by Armada
for the issue or sale of Class Q shares and Class Q-Special Series 1
shares shall be invested and reinvested with the consideration received
by Armada for the issue and sale of all other shares of beneficial
interest in Armada now or hereafter designated as Class Q shares of
beneficial interest (irrespective of whether said shares have been
designated as part of a series of said class and, if so designated as
part of a series, irrespective of the particular series designation),
together with all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange, or liquidation
thereof, any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, and any general assets of
Armada allocated to Class Q shares, Class Q-Special Series 1 shares or
such other shares by the Board
<PAGE> 2
of Trustees in accordance with the Declaration of Trust, and each Class
Q share and Class Q-Special Series 1 share shall share equally with
each such other share in such consideration and other assets, income,
earnings, profits, and proceeds thereof, including any proceeds derived
from the sale, exchange or liquidation thereof, and any assets derived
from any reinvestment of such proceeds in whatever form;
FURTHER RESOLVED, that each Class Q share and each Class
Q-Special Series 1 share shall be charged in proportion to their
respective net asset values with each other share of beneficial
interest in Armada now or hereafter designated as a Class Q share of
beneficial interest (irrespective of whether said share has been
designated as part of a series of said class and, if so designated as
part of a series, irrespective of the particular series designation)
with the expenses and liabilities of Armada in respect of Class Q
shares, Class Q-Special Series 1 shares or such other shares and in
respect of any general expenses and liabilities of Armada allocated to
Class Q shares, Class Q-Special Series 1 shares or such other shares by
the Board of Trustees in accordance with the Declaration of Trust,
except that to the extent permitted by rule or order of the Securities
and Exchange Commission and as may be from time to time determined by
the Board of Trustees:
a. only the Class Q-Special Series 1 shares shall bear: (i) the
expenses and liabilities of payments to institutions under any
agreements entered into by or on behalf of Armada which
provide for services by the institutions exclusively for their
customers who beneficially own such shares; (ii) the expenses
and liabilities arising from transfer agency services that are
directly attributable to Class Q-Special Series 1 shares; and
(iii) such other expenses and liabilities as the Board of
Trustees may from time to time determine are directly
attributable to such shares and which should therefore be
borne solely by Class Q-Special Series 1 shares;
b. only the Class Q shares shall bear: (i) the expenses and
liabilities arising from transfer agency services that are
directly attributable to Class Q shares; and (ii) such other
expenses and liabilities as the Board of Trustees may from
time to time determine are directly attributable to such
shares and which should therefore be borne solely by Class Q
shares;
<PAGE> 3
c. no Class Q-Special Series 1 shares shall bear the expenses and
liabilities described in subparagraph (b) above; and
d. no Class Q shares shall bear the expenses and liabilities
described in subparagraph (a) above.
FURTHER RESOLVED, that except as otherwise provided by these
resolutions, each Class Q share and each Class Q-Special Series 1 share
shall have all the preferences, conversion and other rights, voting
powers, restrictions, limitations, qualifications and terms, and
conditions of redemption as set forth in the Declaration of Trust and
shall also have the same preferences, conversion and other rights,
voting powers, restrictions, limitations, qualifications and terms, and
conditions of redemption as each other share of beneficial interest in
Armada now or hereafter designated as a Class Q share of beneficial
interest (irrespective of whether said share has been designated as
part of a series of said class and, if so designated as part of a
series, irrespective of the particular series designation), except to
the extent permitted by rule or order of the Securities and Exchange
Commission, on any matter that pertains to the agreements or expenses
and liabilities described in clause (a) of the immediately preceding
resolution (or to any plan or other document adopted by Armada relating
to said agreements, expenses, or liabilities) and is submitted to a
vote of shareholders of Armada, only Class Q-Special Series 1 shares
shall be entitled to vote, except that: (i) if said matter affects
shares of beneficial interest in Armada other than Class Q-Special
Series 1 shares, such other affected shares of beneficial interest in
Armada shall also be entitled to vote, and in such case Class Q-Special
Series 1 shares shall be voted in the aggregate together with such
other affected shares and not by class or series except where otherwise
required by law or permitted by the Board of Trustees of Armada; and
(ii) if said matter does not affect Class Q-Special Series 1 shares,
said shares shall not be entitled to vote (except where otherwise
required by law or permitted by the Board of Trustees) even though the
matter is submitted to a vote of the holders of shares of beneficial
interest in Armada other than Class Q-Special Series 1 shares.
<PAGE> 4
CREATION OF CLASS R AND CLASS R-SPECIAL SERIES 1 SHARES.
--------------------------------------------------------
RESOLVED, that pursuant to Section 5.1 of Armada's Declaration
of Trust, an unlimited number of authorized, unissued, and unclassified
shares of beneficial interest in Armada (no par value) be, and hereby
are, classified into an additional class of shares designated as Class
R shares of beneficial interest;
FURTHER RESOLVED, that pursuant to Section 5.1 of the
Declaration of Trust, an unlimited number of authorized, unissued, and
unclassified shares of beneficial interest in Armada (no par value) be,
and hereby are, classified and designated as Class R-Special Series 1
shares;
FURTHER RESOLVED, that all consideration received by Armada
for the issue or sale of Class R shares and Class R-Special Series 1
shares shall be invested and reinvested with the consideration received
by Armada for the issue and sale of all other shares of beneficial
interest in Armada now or hereafter designated as Class R shares of
beneficial interest (irrespective of whether said shares have been
designated as part of a series of said class and, if so designated as
part of a series, irrespective of the particular series designation),
together with all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange, or liquidation
thereof, any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, and any general assets of
Armada allocated to Class R shares, Class R-Special Series 1 shares or
such other shares by the Board of Trustees in accordance with the
Declaration of Trust, and each Class R share and Class R-Special Series
1 share shall share equally with each such other share in such
consideration and other assets, income, earnings, profits, and proceeds
thereof, including any proceeds derived from the sale, exchange or
liquidation thereof, and any assets derived from any reinvestment of
such proceeds in whatever form;
FURTHER RESOLVED, that each Class R share and each Class
R-Special Series 1 share shall be charged in proportion to their
respective net asset values with each other share of beneficial
interest in Armada now or hereafter designated as a Class R share of
beneficial interest (irrespective of whether said share has been
designated as part of a series of said class and, if so designated as
part of a series, irrespective of the particular series designation)
with the expenses and liabilities of Armada in respect of Class R
shares, Class R-Special Series 1 shares or such other shares and in
respect of any general expenses and liabilities of Armada allocated
<PAGE> 5
to Class R shares, Class R-Special Series 1 shares or such other shares
by the Board of Trustees in accordance with the Declaration of Trust,
except that to the extent permitted by rule or order of the Securities
and Exchange Commission and as may be from time to time determined by
the Board of Trustees:
(a) only the Class R-Special Series 1 shares shall bear: (i) the
expenses and liabilities of payments to institutions under any
agreements entered into by or on behalf of Armada which
provide for services by the institutions exclusively for their
customers who beneficially own such shares; (ii) the expenses
and liabilities arising from transfer agency services that are
directly attributable to Class R-Special Series 1 shares; and
(iii) such other expenses and liabilities as the Board of
Trustees may from time to time determine are directly
attributable to such shares and which should therefore be
borne solely by Class R-Special Series 1 shares;
(b) only the Class R shares shall bear: (i) the expenses and
liabilities arising from transfer agency services that are
directly attributable to Class R shares; and (ii) such other
expenses and liabilities as the Board of Trustees may from
time to time determine are directly attributable to such
shares and which should therefore be borne solely by Class R
shares;
(c) no Class R-Special Series 1 shares shall bear the expenses and
liabilities described in subparagraph (b) immediately above;
and
(d) no Class R shares shall bear the expenses and liabilities
described in subparagraph (a) immediately above.
FURTHER RESOLVED, that except as otherwise provided by these
resolutions, each Class R share and each Class R-Special Series 1 share
shall have all the preferences, conversion and other rights, voting
powers, restrictions, limitations, qualifications and terms, and
conditions of redemption as set forth in the Declaration of Trust and
shall also have the same preferences, conversion and other rights,
voting powers, restrictions, limitations, qualifications and terms, and
conditions of redemption as each other share of beneficial interest in
Armada now or hereafter designated as a Class R share of beneficial
interest (irrespective of whether said share has been designated as
part of a series of said class and, if so designated as part of a
series, irrespective of the particular series designation), except to
the extent
<PAGE> 6
permitted by rule or order of the Securities and Exchange Commission,
on any matter that pertains to the agreements or expenses, and
liabilities described in clause (a) of the immediately preceding
resolution (or to any plan or other document adopted by Armada relating
to said agreements, expenses or liabilities) and is submitted to a vote
of shareholders of Armada, only Class R-Special Series 1 shares shall
be entitled to vote, except that: (i) if said matter affects shares of
beneficial interest in Armada other than Class R-Special Series 1
shares, such other affected shares of beneficial interest in Armada
shall also be entitled to vote, and in such case Class R-Special Series
1 shares shall be voted in the aggregate together with such other
affected shares and not by class or series except where otherwise
required by law or permitted by the Board of Trustees of Armada; and
(ii) if said matter does not affect Class R-Special Series 1 shares,
said shares shall not be entitled to vote (except where otherwise
required by law or permitted by the Board of Trustees) even though the
matter is submitted to a vote of the holders of shares of beneficial
interest in Armada other than Class R-Special Series 1 shares.
CREATION OF CLASS S AND CLASS S-SPECIAL SERIES 1 SHARES.
--------------------------------------------------------
RESOLVED, that pursuant to Section 5.1 of Armada's Declaration
of Trust, an unlimited number of authorized, unissued, and unclassified
shares of beneficial interest in Armada (no par value) be, and hereby
are, classified into an additional class of shares designated as Class
S shares of beneficial interest;
FURTHER RESOLVED, that pursuant to Section 5.1 of the
Declaration of Trust, an unlimited number of authorized, unissued, and
unclassified shares of beneficial interest in Armada (no par value) be,
and hereby are, classified and designated as Class S-Special Series 1
shares;
FURTHER RESOLVED, that all consideration received by Armada
for the issue or sale of Class S shares and Class S-Special Series 1
shares shall be invested and reinvested with the consideration received
by Armada for the issue and sale of all other shares of beneficial
interest in Armada now or hereafter designated as Class S shares of
beneficial interest (irrespective of whether said shares have been
designated as part of a series of said class and, if so designated as
part of a series, irrespective of the particular series designation),
together with all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange, or liquidation
thereof, any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, and any
<PAGE> 7
general assets of the Trust allocated to Class S shares, Class
S-Special Series 1 shares or such other shares by the Board of Trustees
in accordance with the Declaration of Trust, and each Class S share and
Class S-Special Series 1 share shall share equally with each such other
share in such consideration and other assets, income, earnings,
profits, and proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation thereof, and any assets derived from any
reinvestment of such proceeds in whatever form;
FURTHER RESOLVED, that each Class S share and each Class
S-Special Series 1 share shall be charged in proportion to their
respective net asset values with each other share of beneficial
interest in Armada now or hereafter designated as a Class S share of
beneficial interest (irrespective of whether said share has been
designated as part of a series of said class and, if so designated as
part of a series, irrespective of the particular series designation)
with the expenses and liabilities of Armada in respect of Class S
shares, Class S-Special Series 1 shares or such other shares and in
respect of any general expenses and liabilities of Armada allocated to
Class S shares, Class S-Special Series 1 shares or such other shares by
the Board of Trustees in accordance with the Declaration of Trust,
except that to the extent permitted by rule or order of the Securities
and Exchange Commission and as may be from time to time determined by
the Board of Trustees:
(a) only the Class S-Special Series 1 shares shall bear: (i) the
expenses and liabilities of payments to institutions under any
agreements entered into by or on behalf of Armada which
provide for services by the institutions exclusively for their
customers who beneficially own such shares; (ii) the expenses
and liabilities arising from transfer agency services that are
directly attributable to Class S-Special Series 1 shares; and
(iii) such other expenses and liabilities as the Board of
Trustees may from time to time determine are directly
attributable to such shares and which should therefore be
borne solely by Class S-Special Series 1 shares;
(b) only the Class S shares shall bear: (i) the expenses and
liabilities arising from transfer agency services that are
directly attributable to Class S shares; and (ii) such other
expenses and liabilities as the Board of Trustees may from
time to time determine are directly attributable to such
shares and which should therefore be borne solely by Class S
shares;
<PAGE> 8
(c) no Class S-Special Series 1 shares shall bear the expenses and
liabilities described in subparagraph (b) immediately above;
and
(d) no Class S shares shall bear the expenses and liabilities
described in subparagraph (a) immediately above.
FURTHER RESOLVED, that except as otherwise provided by these
resolutions, each Class S share and each Class S-Special Series 1 share
shall have all the preferences, conversion and other rights, voting
powers, restrictions, limitations, qualifications and terms, and
conditions of redemption as set forth in the Declaration of Trust and
shall also have the same preferences, conversion and other rights,
voting powers, restrictions, limitations, qualifications and terms, and
conditions of redemption as each other share of beneficial interest in
Armada now or hereafter designated as a Class S share of beneficial
interest (irrespective of whether said share has been designated as
part of a series of said class and, if so designated as part of a
series, irrespective of the particular series designation), except to
the extent permitted by rule or order of the Securities and Exchange
Commission on any matter that pertains to the agreements or expenses
and liabilities described in clause (a) of the immediately preceding
resolution (or to any plan or other document adopted by Armada relating
to said agreements, expenses, or liabilities) and is submitted to a
vote of shareholders of Armada, only Class S-Special Series 1 shares
shall be entitled to vote, except that: (i) if said matter affects
shares of beneficial interest in Armada other than Class S-Special
Series 1 shares, such other affected shares of beneficial interest in
Armada shall also be entitled to vote, and in such case Class S-Special
Series 1 shares shall be voted in the aggregate together with such
other affected shares and not by class or series except where otherwise
required by law or permitted by the Board of Trustees of Armada; and
(ii) if said matter does not affect Class S-Special Series 1 shares,
said shares shall not be entitled to vote (except where otherwise
required by law or permitted by the Board of Trustees) even though the
matter is submitted to a vote of the holders of shares of beneficial
interest in Armada other than Class S-Special Series 1 shares.
<PAGE> 9
CREATION OF CLASS T AND CLASS T-SPECIAL SERIES 1 SHARES.
--------------------------------------------------------
RESOLVED, that pursuant to Section 5.1 of Armada's Declaration
of Trust, an unlimited number of authorized, unissued, and unclassified
shares of beneficial interest in Armada (no par value) be, and hereby
are, classified into an additional class of shares designated as Class
T shares of beneficial interest;
FURTHER RESOLVED, that pursuant to Section 5.1 of the
Declaration of Trust, an unlimited number of authorized, unissued, and
unclassified shares of beneficial interest in Armada (no par value) be,
and hereby are, classified and designated as Class T-Special Series 1
shares;
FURTHER RESOLVED, that all consideration received by Armada
for the issue or sale of Class T shares and Class T-Special Series 1
shares shall be invested and reinvested with the consideration received
by Armada for the issue and sale of all other shares of beneficial
interest in Armada now or hereafter designated as Class T shares of
beneficial interest (irrespective of whether said shares have been
designated as part of a series of said class and, if so designated as
part of a series, irrespective of the particular series designation),
together with all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange, or liquidation
thereof, any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, and any general assets of
Armada allocated to Class T shares, Class T-Special Series 1 shares or
such other shares by the Board Trustees in accordance with the
Declaration of Trust, and each Class T share and Class T-Special Series
1 share shall share equally with each such other share in such
consideration and other assets, income, earnings, profits, and proceeds
thereof, including any proceeds derived from the sale, exchange, or
liquidation thereof, and any assets derived from any reinvestment of
such proceeds in whatever form;
FURTHER RESOLVED, that each Class T share and each Class
T-Special Series 1 share shall be charged in proportion to their
respective net asset values with each other share of beneficial
interest in Armada now or hereafter designated as a Class T share of
beneficial interest (irrespective of whether said share has been
designated as part of a series of said class and, if so designated as
part of a series, irrespective of the particular series designation)
with the expenses and liabilities of Armada in respect of Class T
shares, Class T-Special Series 1 shares or such other shares and in
respect of any general expenses and liabilities of Armada allocated
<PAGE> 10
to Class T shares, Class T-Special Series 1 shares or such other shares
by the Board of Trustees in accordance with the Declaration of Trust,
except that to the extent permitted by rule or order of the Securities
and Exchange Commission and as may be from time to time determined by
the Board of Trustees:
(a) only the Class T-Special Series 1 shares shall bear: (i) the
expenses and liabilities of payments to institutions under any
agreements entered into by or on behalf of Armada which
provide for services by the institutions exclusively for their
customers who beneficially own such shares; (ii) the expenses
and liabilities arising from transfer agency services that are
directly attributable to Class T-Special Series 1 shares; and
(iii) such other expenses and liabilities as the Board of
Trustees may from time to time determine are directly
attributable to such shares and which should therefore be
borne solely by Class T-Special Series 1 shares;
(b) only the Class T shares shall bear: (i) the expenses and
liabilities arising from transfer agency services that are
directly attributable to Class T shares; and (ii) such other
expenses and liabilities as the Board of Trustees may from
time to time determine are directly attributable to such
shares and which should therefore be borne solely by Class T
shares;
(c) no Class T-Special Series 1 shares shall bear the expenses and
liabilities described in subparagraph (b) immediately above;
and
(d) no Class T shares shall bear the expenses and liabilities
described in subparagraph (a) immediately above.
FURTHER RESOLVED, that except as otherwise provided by these
resolutions, each Class T share and each Class T-Special Series 1 share
shall have all the preferences, conversion and other rights, voting
powers, restrictions, limitations, qualifications and terms and
conditions of redemption as set forth in the Declaration of Trust and
shall also have the same preferences, conversion and other rights,
voting powers, restrictions, limitations, qualifications and terms and
conditions of redemption as each other share of beneficial interest in
Armada now or hereafter designated as a Class T share of beneficial
interest (irrespective of whether said share has been designated as
part of a series of said class and, if so designated as part of a
series, irrespective of the particular series designation), except to
the extent
<PAGE> 11
permitted by rule or order of the Securities and Exchange Commission,
on any matter that pertains to the agreements or expenses and
liabilities described in clause (a) of the immediately preceding
resolution (or to any plan or other document adopted by Armada relating
to said agreements, expenses, or liabilities) and is submitted to a
vote of shareholders of Armada, only Class T-Special Series 1 shares
shall be entitled to vote, except that: (i) if said matter affects
shares of beneficial interest in Armada other than Class T-Special
Series 1 shares, such other affected shares of beneficial interest in
Armada shall also be entitled to vote, and in such case Class T-Special
Series 1 shares shall be voted in the aggregate together with such
other affected shares and not by class or series except where otherwise
required by law or permitted by the Board of Trustees of Armada; and
(ii) if said matter does not affect Class T-Special Series 1 shares,
said shares shall not be entitled to vote (except where otherwise
required by law or permitted by the Board of Trustees) even though the
matter is submitted to a vote of the holders of shares of beneficial
interest in Armada other than Class T-Special Series 1 shares.
IDENTIFICATION OF SHARES WITH FUNDS.
- ------------------------------------
RESOLVED, that Armada's classes or series of shares shall represent
interests in the investment fund of Armada as follows:
<TABLE>
<CAPTION>
CLASS OF SHARES INVESTMENT FUND
--------------- ---------------
<S> <C>
Class Q and Pennsylvania Tax Exempt Fund
Class Q-Special Series 1
Class R and Intermediate Government Fund
Class R-Special Series 1
Class S and GNMA Fund
Class S-Special Series 1
Class T and Pennsylvania Municipal Fund
Class T-Special Series 1
</TABLE>
AUTHORIZATION OF ISSUANCE OF SHARES TO INVESTORS.
- -------------------------------------------------
RESOLVED, that the appropriate officers of Armada be, and each of
them hereby is, authorized, at any time after the effective date and
time of Post-Effective Amendment No. 25 to Armada's Registration
Statement relating to the Pennsylvania Tax Exempt, Intermediate
Government, GNMA, and Pennsylvania Municipal Funds to issue and redeem
from time
<PAGE> 12
to time Class Q shares and Class Q-Special Series 1 shares representing
interests in the Pennsylvania Tax Exempt Fund, Class R shares and Class
R-Special Series 1 shares representing interests in the Intermediate
Government Fund, Class S shares and Class S-Special Series 1 shares
representing interests in the GNMA Fund, and Class T shares, and Class
T-Special Series 1 shares representing interests in the Pennsylvania
Municipal Fund, in accordance with the Registration Statement under the
Securities Act of 1933, as the same may from time to time be amended,
and the requirements of the Declaration of Trust and applicable law,
and that such shares, when issued for the consideration described in
such amended Registration Statement, shall be validly issued, fully
paid, and non-assessable by Armada.
IMPLEMENTATION OF RESOLUTIONS.
- ------------------------------
RESOLVED, that the officers of Armada be, and each of them
hereby is, authorized and empowered to execute, seal, and deliver any
and all documents, instruments, papers, and writings, including but not
limited to, any instrument to be filed with the State Secretary of the
Commonwealth of Massachusetts or the Boston City Clerk, and to do any
and all other acts, including but not limited to, changing the
foregoing resolutions upon advice of Counsel prior to filing said any
and all documents, instruments, papers, and writings, in the name of
Armada and on its behalf, as may be necessary or desirable in
connection with or in furtherance of the foregoing resolutions, such
determination to be conclusively evidenced by said officers taking any
such actions.
(4) That the foregoing resolutions remain in full force and effect as
of the date hereof.
/s/ W. Bruce McConnel, III
--------------------------
W. Bruce McConnel, III
Dated: August 5, 1997
Subscribed and sworn to me this
5th day of August, 1997.
/s/ Georganna Griffith
- -------------------------------------
Notary Public
-------------
My Commission Expires:
<PAGE> 1
EXHIBIT 1(h)
FORM
ARMADA FUNDS
(A MASSACHUSETTS BUSINESS TRUST)
CERTIFICATE OF CLASSIFICATION OF SHARES
I, Bruce McConnel, III, do hereby certify as follows:
(1) That I am the duly elected Secretary of Armada Funds ("Armada");
(2) That in such capacity I have examined the records of actions taken
by the Board of Trustees of Armada;
(3) That the Board of Trustees of Armada duly adopted the following
resolutions at the Regular Meeting of the Board of Trustees held on August 30,
1996:
CREATION OF NEW SERIES OF SHARES.
- ---------------------------------
1. CREATION OF CLASS U AND CLASS U-SPECIAL SERIES 1 SHARES.
-----------------------------------------------------------
RESOLVED, that pursuant to Section 5.1 of Armada's Declaration
of Trust, an unlimited number of authorized, unissued and unclassified
shares of beneficial interest in Armada (no par value) be, and hereby
are, classified into an additional class of shares designated as Class
U shares of beneficial interest;
FURTHER RESOLVED, that pursuant to Section 5.1 of the
Declaration of Trust of the Trust, an unlimited number of authorized,
unissued and unclassified shares of beneficial interest in Armada (no
par value) be, and hereby are, classified and designated as Class
U-Special Series 1 shares;
FURTHER RESOLVED, that all consideration received by Armada
for the issue or sale of Class U shares and Class U-Special Series 1
shares shall be invested and reinvested with the consideration received
by Armada for the issue and sale of all other shares of beneficial
interest in Armada now or hereafter designated as Class U shares of
beneficial interest (irrespective of whether said shares have been
designated as part of a series of said class and, if so designated as
part of a series, irrespective of the particular series designation),
together with all income, earnings, profits and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation
thereof, any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, and any general assets of
Armada allocated to Class U shares, Class U-Special Series 1 shares or
such other shares by the Board of Trustees in accordance with the
Trust's Declaration of Trust, and each Class U share and Class
U-Special Series 1 share shall share equally with each such other share
in such consideration and other assets, income, earnings, profits and
proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation thereof, and any assets derived from any
reinvestment of such proceeds in whatever form;
<PAGE> 2
FURTHER RESOLVED, that each Class U share and each Class
U-Special Series 1 share shall be charged in proportion to their
respective net asset values with each other share of beneficial
interest in Armada now or hereafter designated as a Class U share of
beneficial interest (irrespective of whether said share has been
designated as part of a series of said class and, if so designated as
part of a series, irrespective of the particular series designation)
with the expenses and liabilities of Armada in respect of Class U
shares, Class U-Special Series 1 shares or such other shares and in
respect of any general expenses and liabilities of Armada allocated to
Class U shares, Class U-Special Series 1 shares or such other shares by
the Board of Trustees in accordance with the Declaration of Trust,
except that to the extent permitted by rule or order of the Securities
and Exchange Commission and as may be from time to time determined by
the Board of Trustees:
(a) only the Class U-Special Series 1 shares shall bear:
(i) the expenses and liabilities of payments to
institutions under any agreements entered into by or
on behalf of Armada which provide for services by the
institutions exclusively for their customers who
beneficially own such shares; (ii) the expenses and
liabilities arising from transfer agency services
that are directly attributable to Class U-Special
Series 1 shares; and (iii) such other expenses and
liabilities as the Board of Trustees may from time to
time determine are directly attributable to such
shares and which should therefore be borne solely by
Class U-Special Series 1 shares;
(b) only the Class U shares shall bear: (i) the expenses
and liabilities arising from transfer agency services
that are directly attributable to Class U shares; and
(ii) such other expenses and liabilities as the Board
of Trustees may from time to time determine are
directly attributable to such shares and which should
therefore be borne solely by Class U shares;
(c) no Class U-Special Series 1 shares shall bear the
expenses and liabilities described in subparagraph
(b) above; and
(d) no Class U shares shall bear the expenses and
liabilities described in subparagraph (a) above.
FURTHER RESOLVED, that except as otherwise provided by these
resolutions, each Class U share and each Class U-Special Series 1 share
shall have all the preferences, conversion and other rights, voting
powers, restrictions, limitations, qualifications and terms and
conditions of redemption as set forth in the Declaration of Trust and
shall also have the same preferences, conversion and other rights,
voting powers, restrictions, limitations, qualifications and terms and
conditions of redemption as each other share of beneficial interest in
Armada now or hereafter designated as a Class U share of beneficial
interest (irrespective of whether said share has been designated as
part of a series of said class and, if so designated as part of a
series, irrespective of the particular series designation), except to
the extent permitted by rule or order of the Securities and Exchange
Commission, on any matter that pertains to the agreements or expenses
and liabilities described in clause (a) of the immediately preceding
resolution (or to any plan or other document adopted by Armada relating
to said agreements, expenses or liabilities) and is submitted to a vote
of shareholders of Armada, only Class U-Special Series 1 shares shall
be entitled to vote, except that: (i) if
-2-
<PAGE> 3
said matter affects shares of beneficial interest in Armada other than
Class U-Special Series 1 shares, such other affected shares of
beneficial interest in Armada shall also be entitled to vote, and in
such case Class U-Special Series 1 shares shall be voted in the
aggregate together with such other affected shares and not by class or
series except where otherwise required by law or permitted by the Board
of Trustees of Armada; and (ii) if said matter does not affect Class
U-Special Series 1 shares, said shares shall not be entitled to vote
(except where otherwise required by law or permitted by the Board of
Trustees) even though the matter is submitted to a vote of the holders
of shares of beneficial interest in Armada other than Class U-Special
Series 1 shares.
2. CREATION OF CLASS V AND CLASS V-SPECIAL SERIES 1 SHARES.
--------------------------------------------------------
RESOLVED, that pursuant to Section 5.1 of Armada's Declaration
of Trust, an unlimited number of authorized, unissued and unclassified
shares of beneficial interest in Armada (no par value) be, and hereby
are, classified into an additional class of shares designated as Class
V shares of beneficial interest;
FURTHER RESOLVED, that pursuant to Section 5.1 of the
Declaration of Trust of the Trust, an unlimited number of authorized,
unissued and unclassified shares of beneficial interest in Armada (no
par value) be, and hereby are, classified and designated as Class
V-Special Series 1 shares;
FURTHER RESOLVED, that all consideration received by Armada
for the issue or sale of Class V shares and Class V-Special Series 1
shares shall be invested and reinvested with the consideration received
by Armada for the issue and sale of all other shares of beneficial
interest in Armada now or hereafter designated as Class V shares of
beneficial interest (irrespective of whether said shares have been
designated as part of a series of said class and, if so designated as
part of a series, irrespective of the particular series designation),
together with all income, earnings, profits and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation
thereof, any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, and any general assets of
Armada allocated to Class V shares, Class V-Special Series 1 shares or
such other shares by the Board of Trustees in accordance with the
Trust's Declaration of Trust, and each Class V share and Class
V-Special Series 1 share shall share equally with each such other share
in such consideration and other assets, income, earnings, profits and
proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation thereof, and any assets derived from any
reinvestment of such proceeds in whatever form;
FURTHER RESOLVED, that each Class V share and each Class
V-Special Series 1 share shall be charged in proportion to their
respective net asset values with each other share of beneficial
interest in Armada now or hereafter designated as a Class V share of
beneficial interest (irrespective of whether said share has been
designated as part of a series of said class and, if so designated as
part of a series, irrespective of the particular series designation)
with the expenses and liabilities of Armada in respect of Class V
shares, Class V-Special Series 1 shares or such other shares and in
respect of any general expenses and liabilities of Armada allocated to
Class V shares, Class V-Special Series 1 shares or such other shares by
the Board of Trustees in accordance with the Trust's Declaration of
Trust, except that to the extent
-3-
<PAGE> 4
permitted by rule or order of the Securities and Exchange Commission
and as may be from time to time determined by the Board of Trustees:
(a) only the Class V-Special Series 1 shares shall bear:
(i) the expenses and liabilities of payments to
institutions under any agreements entered into by or
on behalf of Armada which provide for services by the
institutions exclusively for their customers who
beneficially own such shares; (ii) the expenses and
liabilities arising from transfer agency services
that are directly attributable to Class V-Special
Series 1 shares; and (iii) such other expenses and
liabilities as the Board of Trustees may from time to
time determine are directly attributable to such
shares and which should therefore be borne solely by
Class V-Special Series 1 shares;
(b) only the Class V shares shall bear: (i) the expenses
and liabilities arising from transfer agency services
that are directly attributable to Class V shares; and
(ii) such other expenses and liabilities as the Board
of Trustees may from time to time determine are
directly attributable to such shares and which should
therefore be borne solely by Class V shares;
(c) no Class V-Special Series 1 shares shall bear the
expenses and liabilities described in subparagraph
(b) immediately above; and
(d) no Class V shares shall bear the expenses and
liabilities described in subparagraph (a) immediately
above.
FURTHER RESOLVED, that except as otherwise provided by these
resolutions, each Class V share and each Class V-Special Series 1 share
shall have all the preferences, conversion and other rights, voting
powers, restrictions, limitations, qualifications and terms and
conditions of redemption as set forth in the Declaration of Trust and
shall also have the same preferences, conversion and other rights,
voting powers, restrictions, limitations, qualifications and terms and
conditions of redemption as each other share of beneficial interest in
Armada now or hereafter designated as a Class V share of beneficial
interest (irrespective of whether said share has been designated as
part of a series of said class and, if so designated as part of a
series, irrespective of the particular series designation), except to
the extent permitted by rule or order of the Securities and Exchange
Commission, on any matter that pertains to the agreements or expenses
and liabilities described in clause (a) of the immediately preceding
resolution (or to any plan or other document adopted by Armada relating
to said agreements, expenses or liabilities) and is submitted to a vote
of shareholders of Armada, only Class V-Special Series 1 shares shall
be entitled to vote, except that: (i) if said matter affects shares of
beneficial interest in Armada other than Class V-Special Series 1
shares, such other affected shares of beneficial interest in Armada
shall also be entitled to vote, and in such case Class V-Special Series
1 shares shall be voted in the aggregate together with such other
affected shares and not by class or series except where otherwise
required by law or permitted by the Board of Trustees of Armada; and
(ii) if said matter does not affect Class V-Special Series 1 shares,
said shares shall not be entitled to vote (except where otherwise
required by law or permitted by the Board of Trustees) even though the
matter is submitted to a vote of the holders of shares of beneficial
interest in Armada other than Class V-Special Series 1 shares.
-4-
<PAGE> 5
3. CREATION OF CLASS W AND CLASS W-SPECIAL SERIES 1 SHARES.
--------------------------------------------------------
RESOLVED, that pursuant to Section 5.1 of Armada's Declaration
of Trust, an unlimited number of authorized, unissued and unclassified
shares of beneficial interest in Armada (no par value) be, and hereby
are, classified into an additional class of shares designated as Class
W shares of beneficial interest;
FURTHER RESOLVED, that pursuant to Section 5.1 of the
Declaration of Trust of the Trust, an unlimited number of authorized,
unissued and unclassified shares of beneficial interest in Armada (no
par value) be, and hereby are, classified and designated as Class
W-Special Series 1 shares;
FURTHER RESOLVED, that all consideration received by Armada
for the issue or sale of Class W shares and Class W-Special Series 1
shares shall be invested and reinvested with the consideration received
by Armada for the issue and sale of all other shares of beneficial
interest in Armada now or hereafter designated as Class W shares of
beneficial interest (irrespective of whether said shares have been
designated as part of a series of said class and, if so designated as
part of a series, irrespective of the particular series designation),
together with all income, earnings, profits and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation
thereof, any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, and any general assets of
the Trust allocated to Class W shares, Class W-Special Series 1 shares
or such other shares by the Board of Trustees in accordance with the
Trust's Declaration of Trust, and each Class W share and Class
W-Special Series 1 share shall share equally with each such other share
in such consideration and other assets, income, earnings, profits and
proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation thereof, and any assets derived from any
reinvestment of such proceeds in whatever form;
FURTHER RESOLVED, that each Class W share and each Class
W-Special Series 1 share shall be charged in proportion to their
respective net asset values with each other share of beneficial
interest in Armada now or hereafter designated as a Class W share of
beneficial interest (irrespective of whether said share has been
designated as part of a series of said class and, if so designated as
part of a series, irrespective of the particular series designation)
with the expenses and liabilities of Armada in respect of Class W
shares, Class W-Special Series 1 shares or such other shares and in
respect of any general expenses and liabilities of Armada allocated to
Class W shares, Class W-Special Series 1 shares or such other shares by
the Board of Trustees in accordance with the Trust's Declaration of
Trust, except that to the extent permitted by rule or order of the
Securities and Exchange Commission and as may be from time to time
determined by the Board of Trustees:
(a) only the Class W-Special Series 1 shares shall bear:
(i) the expenses and liabilities of payments to
institutions under any agreements entered into by or
on behalf of Armada which provide for services by the
institutions exclusively for their customers who
beneficially own such shares; (ii) the expenses and
liabilities arising from transfer agency services
that are directly attributable to Class W-Special
Series 1 shares; and (iii) such other expenses and
liabilities as the Board of Trustees may from time to
time determine are directly
-5-
<PAGE> 6
attributable to such shares and which should
therefore be borne solely by Class W-Special Series 1
shares;
(b) only the Class W shares shall bear: (i) the expenses
and liabilities arising from transfer agency services
that are directly attributable to Class W shares; and
(ii) such other expenses and liabilities as the Board
of Trustees may from time to time determine are
directly attributable to such shares and which should
therefore be borne solely by Class W shares;
(c) no Class W-Special Series 1 shares shall bear the
expenses and liabilities described in subparagraph
(b) immediately above; and
(d) no Class W shares shall bear the expenses and
liabilities described in subparagraph (a) immediately
above.
FURTHER RESOLVED, that except as otherwise provided by these
resolutions, each Class W share and each Class W-Special Series 1 share
shall have all the preferences, conversion and other rights, voting
powers, restrictions, limitations, qualifications and terms and
conditions of redemption as set forth in the Declaration of Trust and
shall also have the same preferences, conversion and other rights,
voting powers, restrictions, limitations, qualifications and terms and
conditions of redemption as each other share of beneficial interest in
Armada now or hereafter designated as a Class W share of beneficial
interest (irrespective of whether said share has been designated as
part of a series of said class and, if so designated as part of a
series, irrespective of the particular series designation), except to
the extent permitted by rule or order of the Securities and Exchange
Commission on any matter that pertains to the agreements or expenses
and liabilities described in clause (a) of the immediately preceding
resolution (or to any plan or other document adopted by Armada relating
to said agreements, expenses, or liabilities) and is submitted to a
vote of shareholders of Armada, only Class W-Special Series 1 shares
shall be entitled to vote, except that: (i) if said matter affects
shares of beneficial interest in Armada other than Class W-Special
Series 1 shares, such other affected shares of beneficial interest in
Armada shall also be entitled to vote, and in such case Class W-Special
Series 1 shares shall be voted in the aggregate together with such
other affected shares and not by class or series except where otherwise
required by law or permitted by the Board of Trustees of Armada; and
(ii) if said matter does not affect Class W-Special Series 1 shares,
said shares shall not be entitled to vote (except where otherwise
required by law or permitted by the Board of Trustees) even though the
matter is submitted to a vote of the holders of shares of beneficial
interest in Armada other than Class W-Special Series 1 shares.
IDENTIFICATION OF SHARES WITH FUNDS.
- ------------------------------------
RESOLVED, that Armada's classes or series of shares shall represent
interests in the investment fund of Armada as follows:
-6-
<PAGE> 7
<TABLE>
<CAPTION>
CLASS OF SHARES INVESTMENT FUND
--------------- ---------------
<S> <C>
Class U and Foreign Equity Fund
Class U-Special Series 1
Class V and Equity Index Fund
Class V-Special Series 1
Class W and Core Equity Fund
Class W-Special Series 1
</TABLE>
AUTHORIZATION OF ISSUANCE OF SHARES TO INVESTORS.
- -------------------------------------------------
RESOLVED, that the appropriate officers of Armada be, and each of
them hereby is, authorized, at any time after the effective date and
time of Post-Effective Amendment No. __ to Armada's Registration
Statement relating to the International Equity, Equity Index and Core
Equity Funds to issue and redeem from time to time Class U shares and
Class U-Special Series 1 shares representing interests in the
International Equity Fund, Class V shares and Class V-Special Series 1
shares representing interests in the Equity Index Fund, and Class W
shares, and Class W-Special Series 1 shares representing interests in
the Core Equity Fund, in accordance with the Registration Statement
under the Securities Act of 1933, as the same may from time to time be
amended, and the requirements of the Trust's Declaration of Trust and
applicable law, and that such shares, when issued for the consideration
described in such amended Registration Statement, shall be validly
issued, fully paid and non-assessable by Armada.
IMPLEMENTATION OF RESOLUTIONS.
- ------------------------------
RESOLVED, that the officers of Armada be, and each of them
hereby is, authorized and empowered to execute, seal, and deliver any
and all documents, instruments, papers and writings, including but not
limited to, any instrument to be filed with the State Secretary of the
Commonwealth of Massachusetts or the Boston City Clerk, and to do any
and all other acts, including but not limited to, changing the
foregoing resolutions upon advice of Counsel prior to filing said any
and all documents, instruments, papers, and writings, in the name of
Armada and on its behalf, as may be necessary or desirable in
connection with or in furtherance of the foregoing resolutions, such
determination to be conclusively evidenced by said officers taking any
such actions.
-7-
<PAGE> 8
(4) That the foregoing resolutions remain in full force and effect as
of the date hereof.
----------------------------
W. Bruce McConnel, III
Dated: , 1997
Subscribed and sworn to before me this
day of , 1997.
- --------------------------------------
Notary Public
My Commission Expires:
-8-
<PAGE> 1
EXHIBIT 1(i)
FORM
ARMADA FUNDS
(A MASSACHUSETTS BUSINESS TRUST)
CERTIFICATE OF CLASSIFICATION OF SHARES
I, W. Bruce McConnel, III, do hereby certify as follows:
(1) That I am the duly elected Secretary of Armada Funds
("Armada");
(2) That in such capacity I have examined the records of
actions taken by the Board of Trustees of Armada;
(3) That the Board of Trustees of Armada duly adopted the
following resolutions at the Regular Meeting of the Board of Trustees held on
February 10, 1997:
CREATION OF NEW SERIES OF SHARES.
- ---------------------------------
1. CREATION OF CLASS X AND CLASS X-SPECIAL SERIES 1 SHARES.
--------------------------------------------------------
RESOLVED, that pursuant to Section 5.1 of Armada's Declaration
of Trust, an unlimited number of authorized, unissued and unclassified
shares of beneficial interest in Armada (no par value) be, and hereby
are, classified into an additional class of shares designated as Class
X shares of beneficial interest;
FURTHER RESOLVED, that pursuant to Section 5.1 of the
Declaration of Trust of the Trust, an unlimited number of authorized,
unissued and unclassified shares of beneficial interest in Armada (no
par value) be, and hereby are, classified and designated as Class
X-Special Series 1 shares;
FURTHER RESOLVED, that all consideration received by Armada
for the issue or sale of Class X shares and Class X-Special Series 1
shares shall be invested and reinvested with the consideration received
by Armada for the issue and sale of all other shares of beneficial
interest in Armada now or hereafter designated as Class X shares of
beneficial interest (irrespective of whether said shares have been
designated as part of a series of said class and, if so designated as
part of a series, irrespective of the particular series designation),
together with all income, earnings, profits and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation
thereof, any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, and any general assets of
Armada allocated to Class X shares, Class X-Special Series 1 shares or
such other shares by the Board of Trustees in accordance with the
Trust's Declaration of Trust, and each Class X share and Class
X-Special Series 1 share shall share equally with each such other share
in such consideration and other assets, income, earnings, profits and
proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation thereof, and any assets derived from any
reinvestment of such proceeds in whatever form;
<PAGE> 2
FURTHER RESOLVED, that each Class X share and each Class
X-Special Series 1 share shall be charged in proportion to their
respective net asset values with each other share of beneficial
interest in Armada now or hereafter designated as a Class X share of
beneficial interest (irrespective of whether said share has been
designated as part of a series of said class and, if so designated as
part of a series, irrespective of the particular series designation)
with the expenses and liabilities of Armada in respect of Class X
shares, Class X-Special Series 1 shares or such other shares and in
respect of any general expenses and liabilities of Armada allocated to
Class X shares, Class X-Special Series 1 shares or such other shares by
the Board of Trustees in accordance with the Declaration of Trust,
except that to the extent permitted by rule or order of the Securities
and Exchange Commission and as may be from time to time determined by
the Board of Trustees:
(a) only the Class X-Special Series 1 shares shall bear:
(i) the expenses and liabilities of payments to
institutions under any agreements entered into by or
on behalf of Armada which provide for services by the
institutions exclusively for their customers who
beneficially own such shares; (ii) the expenses and
liabilities arising from transfer agency services
that are directly attributable to Class X-Special
Series 1 shares; and (iii) such other expenses and
liabilities as the Board of Trustees may from time to
time determine are directly attributable to such
shares and which should therefore be borne solely by
Class X-Special Series 1 shares;
(b) only the Class X shares shall bear: (i) the expenses
and liabilities arising from transfer agency services
that are directly attributable to Class X shares; and
(ii) such other expenses and liabilities as the Board
of Trustees may from time to time determine are
directly attributable to such shares and which should
therefore be borne solely by Class X shares;
(c) no Class X-Special Series 1 shares shall bear the
expenses and liabilities described in subparagraph
(b) above; and
(d) no Class X shares shall bear the expenses and
liabilities described in subparagraph (a) above.
FURTHER RESOLVED, that except as otherwise provided by these
resolutions, each Class X share and each Class X-Special Series 1 share
shall have all the preferences, conversion and other rights, voting
powers, restrictions, limitations, qualifications and terms and
conditions of redemption as set forth in the Declaration of Trust and
shall also have the same preferences, conversion and other rights,
voting powers, restrictions, limitations, qualifications and terms and
conditions of redemption as each other share of beneficial interest in
Armada now or hereafter designated as a Class X share of beneficial
interest (irrespective of whether said share has been designated as
part of a series of said class and, if so designated as part of a
series, irrespective of the particular series designation), except to
the extent permitted by rule or order of the Securities and Exchange
Commission, on any matter that pertains to the agreements or expenses
and liabilities described in clause (a) of the immediately preceding
resolution (or to any plan or other document adopted by Armada relating
to said agreements, expenses or liabilities) and is submitted to a vote
of shareholders of Armada, only Class X-Special Series 1 shares shall
be entitled to vote, except that: (i) if
-2-
<PAGE> 3
said matter affects shares of beneficial interest in Armada other than
Class X-Special Series 1 shares, such other affected shares of
beneficial interest in Armada shall also be entitled to vote, and in
such case Class X-Special Series 1 shares shall be voted in the
aggregate together with such other affected shares and not by class or
series except where otherwise required by law or permitted by the Board
of Trustees of Armada; and (ii) if said matter does not affect Class
X-Special Series 1 shares, said shares shall not be entitled to vote
(except where otherwise required by law or permitted by the Board of
Trustees) even though the matter is submitted to a vote of the holders
of shares of beneficial interest in Armada other than Class X-Special
Series 1 shares.
2. CREATION OF CLASS Y AND CLASS Y-SPECIAL SERIES 1 SHARES.
--------------------------------------------------------
RESOLVED, that pursuant to Section 5.1 of Armada's Declaration
of Trust, an unlimited number of authorized, unissued and unclassified
shares of beneficial interest in Armada (no par value) be, and hereby
are, classified into an additional class of shares designated as Class
Y shares of beneficial interest;
FURTHER RESOLVED, that pursuant to Section 5.1 of the
Declaration of Trust of the Trust, an unlimited number of authorized,
unissued and unclassified shares of beneficial interest in Armada (no
par value) be, and hereby are, classified and designated as Class
Y-Special Series 1 shares;
FURTHER RESOLVED, that all consideration received by Armada
for the issue or sale of Class Y shares and Class Y-Special Series 1
shares shall be invested and reinvested with the consideration received
by Armada for the issue and sale of all other shares of beneficial
interest in Armada now or hereafter designated as Class Y shares of
beneficial interest (irrespective of whether said shares have been
designated as part of a series of said class and, if so designated as
part of a series, irrespective of the particular series designation),
together with all income, earnings, profits and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation
thereof, any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, and any general assets of
Armada allocated to Class Y shares, Class Y-Special Series 1 shares or
such other shares by the Board of Trustees in accordance with the
Trust's Declaration of Trust, and each Class Y share and Class
Y-Special Series 1 share shall share equally with each such other share
in such consideration and other assets, income, earnings, profits and
proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation thereof, and any assets derived from any
reinvestment of such proceeds in whatever form;
FURTHER RESOLVED, that each Class Y share and each Class
Y-Special Series 1 share shall be charged in proportion to their
respective net asset values with each other share of beneficial
interest in Armada now or hereafter designated as a Class Y share of
beneficial interest (irrespective of whether said share has been
designated as part of a series of said class and, if so designated as
part of a series, irrespective of the particular series designation)
with the expenses and liabilities of Armada in respect of Class Y
shares, Class Y-Special Series 1 shares or such other shares and in
respect of any general expenses and liabilities of Armada allocated to
Class Y shares, Class Y-Special Series 1 shares or such other shares by
the Board of Trustees in accordance with the Trust's Declaration of
Trust, except that to the extent
-3-
<PAGE> 4
permitted by rule or order of the Securities and Exchange Commission
and as may be from time to time determined by the Board of Trustees:
(a) only the Class Y-Special Series 1 shares shall bear:
(i) the expenses and liabilities of payments to
institutions under any agreements entered into by or
on behalf of Armada which provide for services by the
institutions exclusively for their customers who
beneficially own such shares; (ii) the expenses and
liabilities arising from transfer agency services
that are directly attributable to Class Y-Special
Series 1 shares; and (iii) such other expenses and
liabilities as the Board of Trustees may from time to
time determine are directly attributable to such
shares and which should therefore be borne solely by
Class Y-Special Series 1 shares;
(b) only the Class Y shares shall bear: (i) the expenses
and liabilities arising from transfer agency services
that are directly attributable to Class Y shares; and
(ii) such other expenses and liabilities as the Board
of Trustees may from time to time determine are
directly attributable to such shares and which should
therefore be borne solely by Class Y shares;
(c) no Class Y-Special Series 1 shares shall bear the
expenses and liabilities described in subparagraph
(b) immediately above; and
(d) no Class Y shares shall bear the expenses and
liabilities described in subparagraph (a) immediately
above.
FURTHER RESOLVED, that except as otherwise provided by these
resolutions, each Class Y share and each Class Y-Special Series 1 share
shall have all the preferences, conversion and other rights, voting
powers, restrictions, limitations, qualifications and terms and
conditions of redemption as set forth in the Declaration of Trust and
shall also have the same preferences, conversion and other rights,
voting powers, restrictions, limitations, qualifications and terms and
conditions of redemption as each other share of beneficial interest in
Armada now or hereafter designated as a Class Y share of beneficial
interest (irrespective of whether said share has been designated as
part of a series of said class and, if so designated as part of a
series, irrespective of the particular series designation), except to
the extent permitted by rule or order of the Securities and Exchange
Commission, on any matter that pertains to the agreements or expenses
and liabilities described in clause (a) of the immediately preceding
resolution (or to any plan or other document adopted by Armada relating
to said agreements, expenses or liabilities) and is submitted to a vote
of shareholders of Armada, only Class Y-Special Series 1 shares shall
be entitled to vote, except that: (i) if said matter affects shares of
beneficial interest in Armada other than Class Y-Special Series 1
shares, such other affected shares of beneficial interest in Armada
shall also be entitled to vote, and in such case Class Y-Special Series
1 shares shall be voted in the aggregate together with such other
affected shares and not by class or series except where otherwise
required by law or permitted by the Board of Trustees of Armada; and
(ii) if said matter does not affect Class Y-Special Series 1 shares,
said shares shall not be entitled to vote (except where otherwise
required by law or permitted by the Board of Trustees) even though the
matter is submitted to a vote of the holders of shares of beneficial
interest in Armada other than Class Y-Special Series 1 shares.
-4-
<PAGE> 5
IDENTIFICATION OF SHARES WITH FUNDS.
- ------------------------------------
RESOLVED, that Armada's classes or series of shares shall represent
interests in the investment fund of Armada as follows:
<TABLE>
<CAPTION>
CLASS OF SHARES INVESTMENT FUND
--------------- ---------------
<S> <C>
Class X and Small Cap Growth Fund
Class X-Special Series 1
Class Y and Real Return Advantage
Class Y-Special Series 1 Fund
</TABLE>
AUTHORIZATION OF ISSUANCE OF SHARES TO INVESTORS.
- -------------------------------------------------
RESOLVED, that the appropriate officers of Armada be, and each of
them hereby is, authorized, at any time after the effective date and
time of Post-Effective Amendment No. 32 to Armada's Registration
Statement relating to the Small Cap Growth and Inflation Protected
Securities Funds to issue and redeem from time to time Class X shares
and Class X-Special Series 1 shares representing interests in the Small
Cap Growth Fund, and Class Y shares and Class Y-Special Series 1 shares
representing interests in the Inflation Protected Securities Fund, in
accordance with the Registration Statement under the Securities Act of
1933, as the same may from time to time be amended, and the
requirements of the Trust's Declaration of Trust and applicable law,
and that such shares, when issued for the consideration described in
such amended Registration Statement, shall be validly issued, fully
paid and non-assessable by Armada.
IMPLEMENTATION OF RESOLUTIONS.
- ------------------------------
RESOLVED, that the officers of Armada be, and each of them
hereby is, authorized and empowered to execute, seal, and deliver any
and all documents, instruments, papers and writings, including but not
limited to, any instrument to be filed with the State Secretary of the
Commonwealth of Massachusetts or the Boston City Clerk, and to do any
and all other acts, including but not limited to, changing the
foregoing resolutions upon advice of Counsel prior to filing said any
and all documents, instruments, papers, and writings, in the name of
Armada and on its behalf, as may be necessary or desirable in
connection with or in furtherance of the foregoing resolutions, such
determination to be conclusively evidenced by said officers taking any
such actions.
-5-
<PAGE> 6
(4) That the foregoing resolutions remain in full force and
effect as of the date hereof.
---------------------------
W. Bruce McConnel, III
Dated: , 1997
Subscribed and sworn to before me this
day of , 1997.
- ---------------------------------------
Notary Public
My Commission Expires:
-6-
<PAGE> 1
EXHIBIT 5(g)
ARMADA FUNDS
PENNSYLVANIA TAX EXEMPT FUND
INTERMEDIATE GOVERNMENT FUND
GNMA FUND and
PENNSYLVANIA MUNICIPAL FUND
ADVISORY AGREEMENT
AGREEMENT made as of September 9, 1996 between ARMADA FUNDS, a
Massachusetts business trust, located in Marlboro, Massachusetts (the "Trust")
and NATIONAL CITY BANK, located in Cleveland, Ohio (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 Pennsylvania Tax Exempt, Intermediate Government, GNMA, and Pennsylvania
Municipal Funds (individually, a "Fund" and collectively, the "Funds");
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;
1
<PAGE> 2
(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 each Fund,
including investment research and management with respect to all
securities and investments and cash equivalents in each Fund. The
Adviser will determine from time to time what securities and other
investments will be purchased, retained or sold by each Fund. The
Adviser will provide the services under this Agreement in accordance
with each Fund's investment objective, policies, and restrictions as
stated in the Prospectus and resolutions of the Trust's Board of
Trustees applicable to such Fund.
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 or the foregoing, it is agreed that
investment advisory service to any Fund may be provided by a
subcontractor agreeable to the Adviser and approved in accordance with
the provision of the 1940 Act. Any such sub-advisers are hereinafter
referred to as the "Sub-Advisers." In the event that any Sub-Adviser
-2-
<PAGE> 3
appointed hereunder is terminated, the Adviser may provide investment
advisory services pursuant to this Agreement to the Fund 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 fund; (b) review
investments in each fund on a periodic basis for compliance with its
fund's investment objective, 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. Pursuant to this paragraph, on
the date hereof, the Adviser has entered into a Sub-Advisory Agreement
with Weiss, Peck & Greer, L.L.C. with respect to Pennsylvania Tax
Exempt and Pennsylvania Municipal Funds.
4. COVENANTS BY ADVISER. The Adviser agrees with respect to the
services provided to each Fund 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 the Commercial Departments of all banking
affiliates. In making investment recommendations
for the Funds, personnel will not inquire or take
into consideration whether the issuers (or related
supporting institutions) of securities proposed
for purchase or sale for the Funds' accounts are
customers of the Commercial Department. In
dealing with commercial customers, the Commercial
Department will not inquire or take into
-3-
<PAGE> 4
consideration whether securities of those
customers are held by the Funds;
(e) will place orders pursuant to its investment
determinations for the Funds either directly with
the issuer or with any broker or dealer. In
placing orders with brokers and dealers the
Adviser will attempt to obtain the best net price
and the most favorable execution of its orders.
Consistent with this obligation, when the
execution and price offered by two or more brokers
or dealers are comparable, the Adviser may, in its
discretion, purchase and sell fund securities from
and to brokers and dealers who provide the Trust
with research advice and other services. In no
instance will fund securities be purchased from or
sold to the Adviser, any Sub-Adviser, 440
Financial Distributors, Inc. ("440 Financial") or
an affiliated person of either the Trust, the
Adviser, Sub-Adviser, or 440 Financial unless
permitted by an order of the SEC or applicable
rules;
(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.
-4-
<PAGE> 5
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 and the expenses assumed
pursuant to this Agreement, the Trust will pay the Adviser from the
assets belonging to the Funds and the Adviser will accept as full
compensation therefor fees, computed daily and paid monthly, at the
following annual rates: .40% of the average daily net assets of the
Pennsylvania Tax Exempt Fund; .55% of the average daily net assets of
the Intermediate Government Fund; .55% of the average daily net assets
of the GNMA Fund; and .55% of the average daily net assets of the
Pennsylvania Municipal Fund.
The fee attributable to each Fund shall be the several (and
not joint or joint and several) obligation of each Fund.
If in any fiscal year the aggregate expenses of a Fund (as
defined under the securities regulations of any state having
jurisdiction over the Fund) exceed the expense limitations of any such
state, the Adviser will reimburse the Trust for such excess expenses to
the extent described in any written undertaking provided by the Adviser
to such state.
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.
-5-
<PAGE> 6
10. DURATION AND TERMINATION. This Agreement will become effective with
respect to each 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
September 30, 1997. Thereafter, if not terminated, this Agreement shall
continue in effect with respect to a particular 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 any Fund at any time,
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 the particular 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 that
Fund.
12. MISCELLANEOUS. The Adviser expressly agrees that notwithstanding
the termination of or failure to continue this Agreement with respect
to a particular Fund, the Adviser shall continue to be legally bound to
provide the services required herein for the other Funds for the period
and on the terms set forth in this Agreement. 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 Delaware law.
-6-
<PAGE> 7
13. 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.
ARMADA FUNDS
By:/s/ Leigh Carter
---------------------
Title: President
-----------------
NATIONAL CITY BANK
By:/s/ Joseph C. Penko
---------------------
Title: Vice President
-----------------
-7-
<PAGE> 1
EXHIBIT 5(h)
ARMADA FUNDS
PENNSYLVANIA TAX EXEMPT FUND
PENNSYLVANIA MUNICIPAL FUND
WEISS, PECK & GREER, L.L.C.
SUB-ADVISORY AGREEMENT
AGREEMENT made as of September 9, 1996 between NATIONAL CITY BANK (the
"Adviser"), and WEISS, PECK & GREER, L.L.C. (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 of even date herewith (the
"Advisory Agreement") by and between the Trust and the Adviser, the Trust has
appointed the Adviser to furnish investment advisory and other services to the
Trust for its Pennsylvania Tax Exempt, Intermediate Government, GNMA, and
Pennsylvania Municipal Funds and the Adviser has agreed thereto; and
WHEREAS, the Advisory Agreement authorizes the Adviser to subcontract
investment advisory services with respect to the Funds 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 Pennsylvania Tax
Exempt and Pennsylvania Municipal Funds, 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
Trust's Pennsylvania Tax Exempt and Pennsylvania
Municipal Funds (the "Funds") 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.
<PAGE> 2
(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 Funds. The Trust will furnish the Sub-Adviser
from time to time with copies of all amendments of or
supplements to the foregoing.
2. SERVICES OF SUB-ADVISER. The Sub-Adviser agrees that
with respect to each 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 each such Fund,
including investment research and management with
respect to all securities, investments, cash and
cash equivalents in such Funds. 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 such Funds. The
Sub-Adviser will provide the services rendered by
it under this Agreement in accordance with each
such Fund's investment objective, policies, and
restrictions as stated in the Trust's respective
Prospectuses and Statements of Additional
Information for the Funds and resolutions of the
Trust's Board of Trustees.
(b) Maintain historical tax lots for each portfolio
security held by such Funds;
(c) Transmit trades to the Trust's custodian for
proper settlement;
(d) Prepare a quarterly broker security transaction
summary and monthly security transaction listing
for each such Fund.
(e) Maintain all books and records with respect
to each such Fund's securities transactions
effected by it; and
(f) 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;
-2-
<PAGE> 3
(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 advisory services hereunder
independently of the commercial banking operations
of any affiliated person of the Adviser. In
making investment recommendations for the Funds,
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 such Fund's
account are customers of the commercial department
of any affiliated person of the Adviser;
(e) will place orders pursuant to its investment
determinations for each Fund either directly with
the issuer or with any broker or dealer. In
placing orders with brokers and dealers, the Sub-
Adviser will attempt to obtain the best net price
and the most favorable execution of its orders.
Consistent with this obligation, when the
execution and price offered by two or more brokers
or dealers are comparable, the Sub-Adviser may, in
its discretion, purchase and sell fund securities
from and to brokers and dealers who provide the
Trust with research advice or other services. In
no instance, however, will securities be purchased
from or sold to the Adviser, any Sub-Adviser, the
Trust's principal underwriter or any affiliated
person of either the Trust, the Adviser, any Sub-
Adviser, or the principal underwriter, unless
permitted by an order of the Securities and
Exchange Commission or applicable rules; and
(f) 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 Sub-Adviser may be exposed to civil or
-3-
<PAGE> 4
criminal intent 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 Funds.
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 each 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. The Sub-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.
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, at the rate of .05% of the average
daily net assets of the Pennsylvania Tax Exempt and .18% of the average
daily net assets of the Pennsylvania Municipal Fund, minus such amount,
if any, that the Adviser has reimbursed the Trust in the event the
aggregate expenses of a Fund exceed the expense limitations of any
state having jurisdiction over the Fund.
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
-4-
<PAGE> 5
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 as of
the date hereof and, unless sooner terminated as provided herein, shall
continue in effect until September 30, 1997. Thereafter, if not
terminated, this Agreement shall automatically continue in effect as to
a particular Fund for successive annual periods, 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 as to any 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 such 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 a particular Fund
for any reason (whether by the Trust, by the Adviser or by operation of
law) this Agreement shall terminate with respect to the same 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 a particular Fund until
approved by vote of a majority of the outstanding voting securities of
such Fund.
11. MISCELLANEOUS. The Sub-Adviser expressly agrees that
notwithstanding the termination of or failure to continue this
Agreement with respect to a particular Fund, Sub-Adviser shall
continue to be legally bound to provide the
-5-
<PAGE> 6
services required herein for the other Funds for the period and on the
terms set forth in this Agreement.
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 an
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.
WEISS, PECK & GREER, L.L.C.
BY: /s/ Richard Pollack
-------------------------------
TITLE: General Counsel & Principal
-------------------------------
NATIONAL CITY BANK
BY: /s/ Joseph C. Penko
-------------------------------
TITLE: Vice President
-------------------------------
-6-
<PAGE> 1
EXHIBIT 5(i)
FORM
ARMADA FUNDS
CORE EQUITY FUND
ADVISORY AGREEMENT
AGREEMENT made as of , 1996 between ARMADA FUNDS, a
Massachusetts business trust, located in Westborough, Massachusetts (the
"Trust") and NATIONAL ASSET MANAGEMENT CORPORATION, located in Louisville,
Kentucky (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 Core Equity Fund (the "Fund");
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
<PAGE> 2
(f) The Trust's most recent prospectuses and statements
of additional information with respect to the Fund
(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 Fund 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
Fund 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 Fund,
including investment research and management with respect to all
securities and investments and cash equivalents in the Fund. The
Adviser will determine from time to time what securities and other
investments will be purchased, retained or sold by the Fund. The
Adviser will provide the services under this Agreement in accordance
with the Fund's investment objective, policies, and restrictions as
stated in the Prospectus and resolutions of the Trust's Board of
Trustees applicable to the Fund.
3. COVENANTS BY ADVISER. The Adviser agrees with respect
to the services provided to the Fund 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 Fund, or make interest-bearing
loans to the Trust or the Fund;
(d) will maintain a policy and practice of conducting
its investment management activities independently
of the Commercial Departments of all banking
-2-
<PAGE> 3
affiliates. In making investment recommendations
for the Fund, 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 accounts are
customers of the Commercial Department. In
dealing with commercial customers, the Commercial
Department will not inquire or take into
consideration whether securities of those
customers are held by the Fund;
(e) will place orders pursuant to its investment
determinations for the Fund either directly with
the issuer or with any broker or dealer. In
placing orders with brokers and dealers the
Adviser will attempt to obtain the best net price
and the most favorable execution of its orders.
Consistent with this obligation, when the
execution and price offered by two or more brokers
or dealers are comparable, the Adviser may, in its
discretion, purchase and sell fund securities from
and to brokers and dealers who provide the Trust
with research advice and other services. In no
instance will fund securities be purchased from or
sold to the Adviser, 440 Financial Distributors,
Inc. ("440 Financial") or an affiliated person of
either the Trust, the Adviser, or 440 Financial
unless permitted by an order of the SEC or
applicable rules;
(f) will maintain all books and records with respect to
the securities transactions for the Fund 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 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 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).
-3-
<PAGE> 4
4. 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.
5. 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.
6. 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 Fund.
7. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, the Trust will pay the Adviser from the
assets belonging to the Fund and the Adviser will accept as full
compensation therefor fees, computed daily and paid monthly, at the
following annual rate of % of the average daily net assets of the
Fund.
If in any fiscal year the aggregate expenses of the Fund (as
defined under the securities regulations of any state having
jurisdiction over the Fund) exceed the expense limitations of any such
state, the Adviser will reimburse the Trust for such excess expenses to
the extent described in any written undertaking provided by the Adviser
to such state.
8. 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.
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
-4-
<PAGE> 5
provided herein, shall continue in effect until September 30, 1997.
Thereafter, if not terminated, this Agreement shall continue in effect
with respect to a particular 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 at any time, 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 the 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.)
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 with respect to the Fund until
approved by vote of a majority of the outstanding voting securities of
the Fund.
11. MISCELLANEOUS. The Adviser expressly agrees that notwithstanding
the termination of or failure to continue this Agreement with respect
to the Fund, the Adviser shall continue to be legally bound to provide
the services required herein for the period and on the terms set forth
in this Agreement. 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 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
-5-
<PAGE> 6
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.
ARMADA FUNDS
By:____________________________
Title:
NATIONAL ASSET MANAGEMENT
CORPORATION
By:____________________________
Title:
-6-
<PAGE> 1
EXHIBIT 5(j)
FORM
ARMADA FUNDS
FOREIGN EQUITY FUND
EQUITY INDEX FUND
ADVISORY AGREEMENT
AGREEMENT made as of , 1996 between ARMADA FUNDS, a
Massachusetts business trust, located in Westborough, Massachusetts (the
"Trust") and NATIONAL CITY BANK, located in Cleveland, Ohio, NATIONAL CITY BANK,
COLUMBUS, located in Columbus, Ohio, and NATIONAL CITY BANK, KENTUCKY, located
in Louisville, Kentucky (the "Advisers").
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 Advisers as investment
advisers to the Foreign Equity and Equity Index Funds (individually, a "Fund"
and collectively, the "Funds");
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 Advisers acknowledge that they have
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 Advisers 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;
<PAGE> 2
(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 Advisers from time to time with
execution copies of all amendments of or supplements to the foregoing.
2. SERVICES. The Trust hereby appoints the Advisers to act as
investment advisers to the Funds for the period and on the terms set
forth in this Agreement. Intending to be legally bound, the Advisers
accept such appointment and agree 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 Advisers will provide a continuous investment program for each
Fund, including investment research and management with respect to all
securities and investments and cash equivalents in each Fund. The
Advisers will determine from time to time what securities and other
investments will be purchased, retained or sold by each Fund. The
Advisers will provide the services under this Agreement in accordance
with each Fund's investment objective, policies, and restrictions as
stated in the Prospectus and resolutions of the Trust's Board of
Trustees applicable to such Fund.
3. COVENANTS BY ADVISERS. The Advisers agree with respect to the
services provided to each Fund 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;
-2-
<PAGE> 3
(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 the Commercial Departments of all banking
affiliates. In making investment recommendations
for the Funds, personnel will not inquire or take
into consideration whether the issuers (or related
supporting institutions) of securities proposed
for purchase or sale for the Funds' accounts are
customers of the Commercial Department. In
dealing with commercial customers, the Commercial
Department will not inquire or take into
consideration whether securities of those
customers are held by the Funds;
(e) will place orders pursuant to its investment
determinations for the Funds either directly with
the issuer or with any broker or dealer. In
placing orders with brokers and dealers the
Advisers will attempt to obtain the best net price
and the most favorable execution of its orders.
Consistent with this obligation, when the
execution and price offered by two or more brokers
or dealers are comparable, the Advisers may, in
their discretion, purchase and sell fund
securities from and to brokers and dealers who
provide the Trust with research advice and other
services. In no instance will fund securities be
purchased from or sold to the Advisers, 440
Financial Distributors, Inc. ("440 Financial") or
an affiliated person of either the Trust, the
Advisers, or 440 Financial unless permitted by an
order of the SEC or applicable rules;
(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
-3-
<PAGE> 4
may not be withheld and will be deemed granted where
the Advisers 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 Advisers
hereunder are deemed not to be exclusive, and the Advisers shall be
free to furnish similar services to others so long as their services
under this Agreement are not impaired thereby.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Advisers hereby agree that all records which
they maintain for the Trust are the property of the Trust and further
agree to surrender promptly to the Trust any of such records upon the
Trust's request. The Advisers further agree 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 Advisers will pay
all expenses incurred by them in connection with their activities under
this Agreement, other than the cost of securities (including brokerage
commissions, if any) purchased for the Funds.
7. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, the Trust will pay the Advisers from the
assets belonging to the Funds and the Advisers will accept as full
compensation therefor fees, computed daily and paid monthly, at the
following annual rates: % of the average daily net assets of the
Foreign Equity Fund; and % of the average daily net assets of the
Equity Index Fund.
The fee attributable to each Fund shall be the several (and
not joint or joint and several) obligation of each Fund.
If in any fiscal year the aggregate expenses of a Fund (as
defined under the securities regulations of any state having
jurisdiction over the Fund) exceed the expense limitations of any such
state, the Advisers will reimburse the Trust for such excess expenses
to the extent described in any written undertaking provided by the
Advisers to such state.
8. LIMITATION OF LIABILITY. The Advisers shall not be liable for any
error of judgment or mistake of law or for
-4-
<PAGE> 5
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 Advisers in the performance of their duties or from
reckless disregard by them of their obligations and duties under this
Agreement.
9. DURATION AND TERMINATION. This Agreement will become effective with
respect to each 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
September 30, 1997. Thereafter, if not terminated, this Agreement shall
continue in effect with respect to a particular 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 any Fund at any time,
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 the particular Fund), or by the Advisers 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.)
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 with respect to a Fund until approved
by vote of a majority of the outstanding voting securities of that
Fund.
11. MISCELLANEOUS. The Advisers expressly agree that notwithstanding
the termination of or failure to continue this Agreement with respect
to a particular Fund, the Advisers shall continue to be legally bound
to provide the services required herein for the other Fund for the
period and on the terms set forth in this Agreement. The captions in
this Agreement are included for convenience of reference only and in no
way define or delimit any of the provisions
-5-
<PAGE> 6
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.
ARMADA FUNDS
By:____________________________
Title:
NATIONAL CITY BANK
By:____________________________
Title:
NATIONAL CITY BANK, COLUMBUS
By:____________________________
Title:
NATIONAL CITY BANK, KENTUCKY
By:____________________________
Title:
-6-
<PAGE> 1
EXHIBIT 5(k)
FORM
ARMADA FUNDS
SMALL CAP GROWTH FUND
REAL RETURN ADVANTAGE FUND
ADVISORY AGREEMENT
AGREEMENT made as of , 1997 between ARMADA FUNDS, a
Massachusetts business trust, located in Wayne, Pennsylvania (the "Trust") and
NATIONAL CITY BANK, located in Cleveland, Ohio (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 Small Cap Growth and Real Return Advantage Funds (individually,
a "Fund" and collectively, the "Funds");
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;
<PAGE> 2
(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 each Fund,
including investment research and management with respect to all
securities and investments and cash equivalents in each Fund. The
Adviser will determine from time to time what securities and other
investments will be purchased, retained or sold by each Fund. The
Adviser will provide the services under this Agreement in accordance
with each Fund's investment objective, policies, and restrictions as
stated in the Prospectus and resolutions of the Trust's Board of
Trustees applicable to such Fund.
3. COVENANTS BY ADVISER. The Adviser agrees with respect to the
services provided to each Fund 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;
-2-
<PAGE> 3
(d) will maintain a policy and practice of conducting its
investment management activities independently of the
Commercial Departments of all banking affiliates. In
making investment recommendations for the Funds,
personnel will not inquire or take into consideration
whether the issuers (or related supporting
institutions) of securities proposed for purchase or
sale for the Funds' accounts are customers of the
Commercial Department. In dealing with commercial
customers, the Commercial Department will not inquire
or take into consideration whether securities of
those customers are held by the Funds;
(e) will place orders pursuant to its investment
determinations for the Funds either directly with the
issuer or with any broker or dealer. In placing
orders with brokers and dealers the Adviser will
attempt to obtain the best net price and the most
favorable execution of its orders. Consistent with
this obligation, when the execution and price offered
by two or more brokers or dealers are comparable, the
Adviser may, in its discretion, purchase and sell
fund securities from and to brokers and dealers who
provide the Trust with research advice and other
services. In no instance will fund securities be
purchased from or sold to the Adviser, SEI Financial
Services Company ("SEI") or an affiliated person of
either the Trust, the Adviser, or SEI unless
permitted by an order of the SEC or applicable rules;
(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
-3-
<PAGE> 4
by duly constituted authorities, or when so requested
by the Trust).
4. 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.
5. 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.
6. 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.
7. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, the Trust will pay the Adviser from the
assets belonging to the Funds and the Adviser will accept as full
compensation therefor fees, computed daily and paid monthly, at the
following annual rates: % of the average daily net assets of the
Small Cap Growth Fund; and % of the average daily net assets of the
Real Return Advantage Fund.
The fee attributable to each Fund shall be the several (and
not joint or joint and several) obligation of each Fund.
If in any fiscal year the aggregate expenses of a Fund (as
defined under the securities regulations of any state having
jurisdiction over the Fund) exceed the expense limitations of any such
state, the Adviser will reimburse the Trust for such excess expenses to
the extent described in any written undertaking provided by the Adviser
to such state.
8. 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
-4-
<PAGE> 5
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.
9. DURATION AND TERMINATION. This Agreement will become effective with
respect to each 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
September 30, 1997. Thereafter, if not terminated, this Agreement shall
continue in effect with respect to a particular 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 any Fund at any time,
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 the particular 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.)
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 with respect to a Fund until approved
by vote of a majority of the outstanding voting securities of that
Fund.
11. MISCELLANEOUS. The Adviser expressly agrees that notwithstanding
the termination of or failure to continue this Agreement with respect
to a particular Fund, the Adviser shall continue to be legally bound to
provide the services required herein for the other Fund for the period
and on the terms set forth in this Agreement. 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.
-5-
<PAGE> 6
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.
ARMADA FUNDS
By:____________________________
Title:
NATIONAL CITY BANK
By:____________________________
Title:
-6-
<PAGE> 1
Exhibit 6
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of this 8th day of March, 1997 between ARMADA
FUNDS ("the Trust"), a Massachusetts business trust and SEI Financial Services
Company (the "Distributor"), a Pennsylvania corporation.
WHEREAS, the Trust is registered as an investment company with the
Securities and Exchange Commission (the "SEC") under the Investment Company Act
of 1940, as amended (the "1940 Act"), and its shares are registered with the SEC
under the Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Distributor is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the Trust and Distributor hereby agree as follows:
ARTICLE 1. SALE OF SHARES. The Trust grants to the Distributor the
right to sell units (the "Shares") of the portfolios (the "Portfolios") of the
Trust at the offering price per Share, in accordance with the current
prospectus, as agent and on behalf of the Trust, during the term of this
Agreement and subject to the registration requirements of the 1933 Act, the
rules and regulations of the SEC and the laws governing the sale of securities
in the various states ("Blue Sky Laws").
ARTICLE 2. SOLICITATION OF SALES. In consideration of these rights
granted to the Distributor, the Distributor agrees to use all reasonable
efforts, consistent with its other business, in connection with the distribution
of Shares of the Trust, and to maintain appropriate facilities to receive
purchase, redemption and exchange orders for Shares. The Distributor
additionally agrees to provide at its own expense the services designated on
Schedule A attached herewith; provided, however, that the Distributor shall not
be prevented from entering into like arrangements with other issuers. Subject to
the prior approval of the Trust the Distributor agrees further, at its own
expense (but subject to reimbursement in accordance with the Service and
Distribution Plan), to finance appropriate activities which it deems reasonable
which are primarily intended to result in the sale of shares including, but not
limited to, advertising, the printing and mailing of prospectuses to other than
current shareholders, and the printing and mailing of sales literature. The
provisions of this paragraph do not obligate the Distributor to register as a
broker or dealer under the Blue Sky Laws of any jurisdiction when it determines
it would be uneconomical for it to do so or to maintain its registration in any
jurisdiction in which it is now registered nor obligate the Distributor to sell
any particular number of Shares. The Distributor shall act as Distributor of the
Shares in compliance with all applicable laws, rules and regulations, including,
without limitation, all rules and regulations made or adopted pursuant to the
1940 Act, by the SEC or any securities association registered under the
Securities Exchange Act of 1934, as amended (the "1934 Act").
3
<PAGE> 2
ARTICLE 3. AUTHORIZED REPRESENTATIONS. The Distributor is not
authorized by the Trust to give any information or to make any representations
other than those contained in the current registration statements and
prospectuses of the Trust filed with the SEC or contained in Shareholder reports
or other material that may be prepared by or on behalf of the Trust for the
Distributor's use. The Distributor may prepare or distribute sales literature
and other material as it may deem appropriate, provided that such literature
and materials have been approved by the Trust prior to their use. The
Distributor agrees that it will be liable for all such sales literature and
materials and will file such materials with the appropriate regulatory and
self-regulatory authorities as required. The Distributor agrees to abide by the
rules of any national securities association that is registered with the SEC
pursuant to the 1934 Act and to obtain all required approvals from such
association in connection with the distribution of shares and the dissemination
of the Trust's sales literature.
All activities by the Distributor and its agents and employees as
distributor of the Trust's Shares shall comply with all applicable laws, rules
and regulations, including, without limitation all rules and regulations made or
adopted pursuant to the 1940 Act by the SEC or any securities association
registered under the 1934 Act.
ARTICLE 4. REGISTRATION OF SHARES. The Trust agrees that it will take
all action necessary to register Shares under the federal and state securities
laws so that there will be available for sale the number of Shares the
Distributor may reasonably be expected to sell and to pay all fees associated
with said registration. The Trust shall make available to the Distributor such
number of copies of its currently effective prospectus and statement of
additional information as the Distributor may reasonably request. The Trust
shall furnish to the Distributor copies of all information financial statements
and other papers which the Distributor may reasonably request for use in
connection with the distribution of Shares of the Trust.
ARTICLE 5. COMPENSATION.
(a) For the services provided and expenses assumed
pursuant to this Agreement, the Distributor shall be
entitled to receive from the Trust the following
compensation, payable monthly and computed daily:
(i) an annual base fee of $1,250,000;
(ii) an incentive fee of .02% per annum of
the average daily net assets of the Trust
attributable to assets amounting to $[ ] that were
invested in Federated Money Market Funds or Dreyfus
Money Market Funds or held in the National City
Balanced Collective Investment Fund as of the date of
this agreement ("Conversion Assets"), and
(iii) an incentive fee of .03% per annum of
the average daily net assets of the Trust in excess
of the sum of the (A) total net assets of the Trust
as of the date of this Agreement, (B) Conversion
Assets and (C) $371 million (representing the amount
deemed to be attributable to investments through the
Future Quest program, National
2
<PAGE> 3
City corporate sweep programs, retail sweep programs
and initial funding of new portfolios of the Trust).
(b) In addition the Distributor shall receive from
the Trust as compensation for providing services
under this Agreement:
(i) contingent deferred sales charges
("CDSCs"), if any, applied on redemptions of Shares
of each Portfolio of any class that are subject to
CDSCs on the terms and subject to such waivers as are
described in the Trust's Registration Statement and
current prospectuses, as amended from time to time,
or as otherwise required pursuant to applicable law;
and
(ii) front-end sales charges, if any, on
purchases of Shares of each Portfolio sold subject to
such charges as described in the Trust's Registration
Statement and current prospectuses, as amended from
time to time.
(c) The Distributor will act only on its own behalf
as principal if it chooses to enter into selling
agreements with selected dealers or others, including
selling agreements with qualified broker-dealers and
other persons with respect to the offering of Shares
to the public. Concessions by the Distributor to
broker-dealers and other persons shall be set forth
in either such selling agreements or if such
concessions are described in the then current
prospectus, shall be as so set forth. No
broker-dealer or other person that enters into a
selling agreement with the Distributor shall be
authorized to act as agent for the Trust in
connection with the offering or sale of the Shares to
the public or otherwise.
(d) In no event shall the total amount payable by any
Portfolio of the Trust under the Service and
Distribution Plan or the related Distribution
Agreement exceed 10% per annum of the Portfolio's
average net assets.
(e) The Distributor may reallow any or all of the
distribution or service fees, contingent deferred
sales charges and front-end sales charges which it is
paid by the Trust to such brokers, dealers and other
financial institutions and intermediaries as the
Distributor may from time to time determine.
ARTICLE 6. INDEMNIFICATION OF DISTRIBUTOR. The Trust agrees to
indemnify and hold harmless the Distributor and each of its directors and
officers and each person, if any, who controls the Distributor within the
meaning of Section 15 of the 1933 Act against any loss, liability, claim,
damages or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, claim, damages, or expense and reasonable counsel
fees and disbursements incurred in connection therewith), arising by reason of
any person acquiring any Shares, based upon the ground that the registration
statement, prospectus, Shareholder reports or other information filed or made
public by the Trust (as from time to time amended) included an untrue statement
of a material fact or omitted to state a material fact required to be stated or
necessary in order to make the statements made not misleading.
3
<PAGE> 4
However, the Trust does not agree to indemnify the Distributor or hold it
harmless to the extent that the statements or omission was made in reliance
upon, and in conformity with, information furnished to the Trust by or on behalf
of the Distributor.
In no case (i) is the indemnity of the Trust to be deemed to protect
the Distributor against any liability to the Trust or its Shareholders to which
the Distributor or such person otherwise would be subject by reason of willful
misfeasance, bad faith or negligence in the performance of its duties or by
reason of its reckless disregard of its obligations and duties under this
Agreement, or (ii) is the Trust to be liable to the Distributor under the
indemnity agreement contained in this paragraph with respect to any claim made
against the Distributor or any person indemnified unless the Distributor or
other person shall have notified the Trust in writing of the claim within a
reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon the
Distributor or such other person (or after the Distributor or the person shall
have received notice of service on any designated agent). However, failure to
notify the Trust of any claim shall not relieve the Trust from any liability
which it may have to the Distributor or any person against whom such action is
brought otherwise than on account of its indemnity agreement contained in this
paragraph.
The Trust shall be entitled to participate at its own expense in the
defense or, if it so elects, to assume the defense of any suit brought to
enforce any claims subject to this indemnity provision. If the Trust elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by the Trust and satisfactory to the indemnified defendants in the suit
whose approval shall not be unreasonably withheld. In the event that the Trust
elects to assume the defense of any suit and retain counsel, the indemnified
defendants shall bear the fees and expenses of any additional counsel retained
by them. If the Trust does not elect to assume the defense of a suit, it will
reimburse the indemnified defendants for the reasonable fees and expenses of any
counsel retained by the indemnified defendants.
The Trust agrees to notify the Distributor promptly of the commencement
of any litigation or proceedings against it or any of its officers or Trustees
in connection with the issuance or sale of any of its Shares.
ARTICLE 7. INDEMNIFICATION OF TRUST. The Distributor covenants and
agrees that it will indemnify and hold harmless the Trust and each of its
Trustees and officers and each person, if any, who controls the Trust within the
meaning of Section 15 of the Act, against any loss, liability, damages, claim or
expense (including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees incurred
in connection therewith) based upon the 1933 Act or any other statute or common
law and arising by reason of any person acquiring any Shares, and alleging a
wrongful act of the Distributor or any of its employees or alleging that the
registration statement, prospectus, Shareholder reports or other information
filed or made public by the Trust (as from time to time amended) included an
untrue statement of a material fact or or omitted to state a material fact
required to be stated or necessary in order to make the statements not
misleading, insofar as the statement or omission was made in reliance upon and
in conformity with information furnished to the Trust by or on behalf of the
Distributor.
4
<PAGE> 5
In no case (i) is the indemnity of the Distributor in favor of the
Trust or any other person indemnified to be deemed to protect the Trust or any
other person against any liability to which the Trust or such other person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is the
Distributor to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Trust or any person
indemnified unless the Trust or person, as the case may be, shall have notified
the Distributor in writing of the claim within a reasonable time after the
summons or other first written notification giving information of the nature of
the claim shall have been served upon the Trust or upon any person (or after the
Trust or such person shall have received notice of service on any designated
agent). However, failure to notify the Distributor of any claim shall not
relieve the Distributor from any liability which it may have to the Trust or any
person against whom the action is brought otherwise than on account of its
indemnity agreement contained in this paragraph.
The Distributor shall be entitled to participate, at its own expense,
in the defense or, if it so elects, to assume the defense of any suit brought to
enforce the claim, but if the Distributor elects to assume the defense, the
defense shall be conducted by counsel chosen by the Distributor and satisfactory
to the indemnified defendants whose approval shall not be unreasonably withheld.
In the event that the Distributor elects to assume the defense of any suit and
retain counsel, the defendants in the suit shall bear the fees and expenses of
any additional counsel retained by them. If the Distributor does not elect to
assume the defense of any suit, it will reimburse the indemnified defendants in
the suit for the reasonable fees and expenses of any counsel retained by them.
The Distributor agrees to notify the Trust promptly of the commencement
of any litigation or proceedings against it in connection with the issue and
sale of any of the Trust's Shares.
ARTICLE 8. EFFECTIVE DATE. This Agreement shall be effective upon its
execution and unless terminated as provided, shall continue in force for two
year(s) from the effective date and thereafter from year to year, provided that
such annual continuance is approved by (i) either the vote of a majority of the
Trustees of the Trust, or the vote of a majority of the outstanding voting
securities of the Trust, and (ii) the vote of a majority of those Trustees of
the Trust who are not parties to this Agreement or the Trust's Distribution Plan
or interested persons of any such party ("Qualified Trustees"), cast in person
at a meeting called for the purpose of voting on the approval. This Agreement
shall automatically terminate in the event of its assignment, the liquidation of
the Distributor, or as to any portfolio of the Trust, the liquidation of such
portfolio or the Trust. For purposes of this Article 8, the term "liquidation"
shall mean a transaction in which the assets of the Distributor, the Trust or a
portfolio are sold or otherwise disposed of and the proceeds therefrom are
distributed to the shareholders in complete liquidation of the interests of such
shareholders in the entity. As used in this paragraph the terms "vote of a
majority of the outstanding voting securities", assignment" and "interested
person" shall have the respective meanings specified in the 1940 Act. In
addition, this Agreement may at any time be terminated, without penalty, by the
Distributor, by a vote of a majority of Qualified Trustees or by vote of a
majority of the outstanding voting securities of the Trust upon not less than
sixty days prior written notice to the other party.
5
<PAGE> 6
ARTICLE 9. ENTIRE AGREEMENT. This Agreement represents the entire
agreement of the parties concerning the distribution of the Trust's Shares. The
Distributor acknowledges and agrees that the Trust has no liability to the
Distributor for the satisfaction of any obligations of its predecessor, The
Inventor Funds, Inc.
ARTICLE 10. NOTICES. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party
giving notice: if to the Trust, at Drinker, Biddle & Reath, 1100 Philadelphia
National Bank Bldg., Philadelphia, Pennsylvania 19107, Attn: W.B. McConnel
III, and if to the Distributor, I Freedom Valley Road, Oaks, Pennsylvania
19456, Attn. Legal Department.
ARTICLE 11. LIMITATION OF LIABILITY. A copy of the Declaration of Trust
of the Trust is on file with the Secretary of State of the Commonwealth of
Massachusetts, and notice is hereby given that this Agreement is executed on
behalf of the Trustees of the Trust as Trustees and not individually and that
the obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Trust individually but binding only upon the
assets and property of the Trust. 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.
ARTICLE 12. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Massachusetts and the applicable
provisions of the 1940 Act. To the extent that the applicable laws of the
Commonwealth of Massachusetts, or any of the provisions herein, conflict with
the applicable provisions of the 1940 Act, the latter shall control.
ARTICLE 13. MULTIPLE ORIGINALS. This Agreement may be executed in two
or more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
6
<PAGE> 7
IN WITNESS, the Trust and Distributor have each duly executed this
Agreement, as of the day and year above written.
ARMADA FUNDS
By: /s/ Robert D. Neary
----------------------------
President
Attest: /s/ Carole L. Kozlowski
-------------------------
SEI FINANCIAL SERVICES COMPANY
By: /s/ Kevin Robins, VP
----------------------------
Attest: /s/ Leslie Kondziela
-------------------------
<PAGE> 8
SCHEDULE A
TO THE DISTRIBUTION AGREEMENT
BETWEEN
ARMADA FUNDS AND SEI FINANCIAL SERVICES COMPANY
DISTRIBUTION SERVICES -- THE DISTRIBUTION SERVICES PROVIDED TO THE ARMADA FUNDS
BY SEI FINANCIAL SERVICES COMPANY SHALL INCLUDE THE FOLLOWING:
- - An external wholesaler for both institutional and retail distribution
channels.
- - A dedicated internal wholesaler working in the SEI Fund
Resources/Dealer Support Unit to support National City brokers and
external distribution channels.
- - Full-service broker/dealer support desk with a dedicated toll-free
telephone line for National City Investments' sales staff, including
the use of the ACS Marketing Fulfillment Tracking System.
- - An account director to coordinate the relationship between the
Distributor and the Trust and to execute any strategic plan designed to
promote the sale of shares of the Trust, including sales relating to
the conversion of assets held in collective or common trust accounts by
National City Bank and its affiliates, and other asset growth agendas.
- - A dedicated marketing account executive to manage any strategic and
tactical marketing plan, and implementation of any such plan for the
sale of shares of the Trust.
- - Primary and secondary market research.
- - Research information and "white papers" on product and distribution
trends affecting investment companies that are advised by banks or
affiliates of banks.
- - Access to mutual fund industry consulting groups, including the Optima
Group, Inc., and the SPECTRUM Group.
- - Access to regularly scheduled conferences provided by the Distributor
that relate to investment companies that be advised by banks or
affiliates of banks.
- - Access to the Distributor's quarterly wholesaler training meetings and
monthly wholesaler training conference telephone calls.
- - Full service Investor Services Support Desk with a dedicated toll-free
telephone line for potential and existing shareholders of the Trust.
8
<PAGE> 9
- - New and existing product analysis provided by the Distributor's Funds
Product Group, including access to Lipper reporting.
- - Preparation of performance materials to be used for meetings of the
Trust's Board of Trustees, including required quarterly reporting,
Lipper fee analysis, and Lipper performance analysis.
- - Regular receipt of SEI's Regulatory Update and Regulatory Alert
publications as well as memoranda prepared by the Distributor's legal
department addressing current topics affecting banks and the mutual
fund industry.
- - Assistance in delivery and preparation of presentations and training to
the staff of the Trust's investment advisers and their affiliates
encompassing Trust products and programs.
- - Support for mailing of the Trust's semi-annual and annual reports.
- - Attendance at meetings with the adviser(s) of the Trust, including
bearing all travel and lodging expenses incurred in connection
therewith.
9
<PAGE> 1
EXHIBIT 8(c)
Armada Funds
------------
This EXHIBIT A, dated September 9, 1996, is that certain Exhibit A to a
Custodian Services Agreement dated as of November 7, 1994 between the
undersigned parties. This Exhibit A supersedes all previously dated Exhibits A.
Money Market Fund
Government Fund
Treasury Fund
Tax Exempt Fund
Equity Fund
Fixed Income Fund
Ohio Tax Exempt Fund
National Tax Exempt Fund
Equity Income Fund
Mid Cap Regional Fund
Enhanced Income Fund
Total Return Advantage Fund
Pennsylvania Tax Exempt Fund
Intermediate Government Fund
GNMA Fund
Pennsylvania Municipal Fund
NATIONAL CITY BANK
By: /s/ S. McCreary
---------------------
Title: Sr. Vice President
-------------------------
ARMADA FUNDS
By: /s/ Leigh Carter
---------------------------
Title: President
-------------------------
<PAGE> 1
EXHIBIT 8(d)
FORM
Armada Funds
------------
This EXHIBIT A, dated , 1996, is that certain Exhibit A to a Custodian
Services Agreement dated as of November 7, 1994 between the undersigned parties.
This Exhibit A supersedes all previously dated Exhibits A.
Money Market Fund
Government Fund
Treasury Fund
Tax Exempt Fund
Equity Fund
Fixed Income Fund
Ohio Tax Exempt Fund
National Tax Exempt Fund
Equity Income Fund
Mid Cap Regional Fund
Enhanced Income Fund
Total Return Advantage Fund
Pennsylvania Tax Exempt Fund
Intermediate Government Fund
GNMA Fund
Pennsylvania Municipal Fund
Foreign Equity Fund
Equity Index Fund
Core Equity Fund
Small Cap Growth Fund
Real Return Advantage Fund
NATIONAL CITY BANK
By:
---------------------------
Title:
-----------------------
ARMADA FUNDS
By:
---------------------------
Title: President
-----------------------
<PAGE> 1
EXHIBIT 9(b)
Armada Funds
------------
This Exhibit A, dated September 9, 1996, is that certain Exhibit A to an
Administration and Accounting Services Agreement dated as of March 1, 1993
between the undersigned parties. This Exhibit A supersedes all previous forms
of Exhibit A.
Money Market Fund
Government Fund
Treasury Fund
Tax Exempt Fund
Equity Fund
Fixed Income Fund
Ohio Tax Exempt Fund
National Tax Exempt Fund
Equity Income Fund
Mid Cap Regional Fund
Enhanced Income Fund
Total Return Advantage Fund
Pennsylvania Tax Exempt Fund
Intermediate Government Fund
GNMA Fund
Pennsylvania Municipal Fund
PFPC INC.
By: /s/ Stephen M. Wynne
-------------------------------
Title: Executive Vice President
-----------------------------
Accepted:
ARMADA FUNDS
By: /s/ Leigh Carter
-------------------------------
Title: President
-----------------------------
<PAGE> 1
EXHIBIT 9(c)
FORM
Armada Funds
------------
This Exhibit A, dated , 1996, is that certain Exhibit A to an
Administration and Accounting Services Agreement dated as of March 1, 1993
between the undersigned parties. This Exhibit A supersedes all previous forms
of Exhibit A.
Money Market Fund
Government Fund
Treasury Fund
Tax Exempt Fund
Equity Fund
Fixed Income Fund
Ohio Tax Exempt Fund
National Tax Exempt Fund
Equity Income Fund
Mid Cap Regional Fund
Enhanced Income Fund
Total Return Advantage Fund
Pennsylvania Tax Exempt Fund
Intermediate Government Fund
GNMA Fund
Pennsylvania Municipal Fund
Foreign Equity Fund
Equity Index Fund
Core Equity Fund
Small Cap Growth Fund
Real Return Advantage Fund
PFPC INC.
By:
------------------------
Title:
--------------------
Accepted:
-----------------
ARMADA FUNDS
By:
------------------------
Title: President
--------------------
<PAGE> 1
Exhibit 9(d)
TRANSFER AGENCY AND SERVICE AGREEMENT
between
ARMADA FUNDS
and
STATE STREET BANK AND TRUST COMPANY
<PAGE> 2
TABLE OF CONTENTS
-----------------
Page
----
1. Terms of Appointment; Duties of the Bank.............................. 1
2. Fees and Expenses..................................................... 4
3. Representations and Warranties of the Bank............................ 4
4. Representations and Warranties of the Fund............................ 5
5. Data Access and Proprietary Information............................... 5
6. Indemnification....................................................... 7
7. Standard of Care...................................................... 8
8. Covenants of the Fund and the Bank.................................... 9
9. Termination of Agreement.............................................. 10
10. Additional Funds...................................................... 10
11. Assignment............................................................ 11
12. Amendment............................................................. 11
13. Massachusetts Law to Apply............................................ 11
14. Force Majeure......................................................... 11
15. Consequential Damages................................................. 12
16. Merger of Agreement................................................... 12
17. Limitations of Liability of the Trustees
or Shareholders....................................................... 12
18. Counterparts.......................................................... 12
19. Reproduction of Documents............................................. 12
<PAGE> 3
TRANSFER AGENCY AND SERVICE AGREEMENT
-------------------------------------
AGREEMENT made as of the 1ST day of March, 1997, by and between Armada Funds, a
business trust, having its principal office and place of business at 680 East
Swedesford Road, Wayne, Pennsylvania 19087 (the "Fund"), and STATE STREET BANK
AND TRUST COMPANY, a Massachusetts trust company having its principal office and
place of business at 225 Franklin Street, Boston, Massachusetts 02110 (the
"Bank").
WHEREAS, the Fund is authorized to issue shares in separate series, with each
such series representing interests in a separate portfolio of securities and
other assets; and
WHEREAS, the Fund intends to initially offer shares in Armada series, the Armada
Money Market, Fund Institutional, Armada Tax Exempt Fund Institutional, Armada
Government Fund Institutional, Armada Treasury Fund Institutional, Armada Equity
Fund Institutional, Armada Fixed Income Fund Institutional, Armada Ohio Tax
Exempt Fund Institutional, Armada Enhanced Income Fund Institutional, Armada
Equity Income Fund Institutional, Armada Total Return Advantage Fund
Institutional, Armada Mid Cap Regional Fund Institutional, Armada Treasury Fund
Retail, Armada Money Market Fund Retail, Armada Government Fund Retail, Armada
Tax Exempt Fund Retail, Armada Equity Fund Retail, Armada Fixed Income Fund
Retail, Armada Ohio Tax Exempt Fund Retail, Armada Enhanced Income Fund Retail,
Armada Equity Income Fund Retail, Armada Total Return Advantage Fund, Armada Mid
Cap Regional Fund Retail, Armada Pennsylvania Tax Exempt Fund Institutional,
Armada Pennsylvania Municipal Fund Institutional, Armada Intermediate Government
Fund Institutional, GNMA Fund Institutional, Armada Pennsylvania Tax Exempt Fund
Retail, Armada Pennsylvania Municipal Fund Retail, Armada Intermediate
Government Fund Retail, GNMA Fund Retail, Armada Core Equity Fund Institutional,
Armada Equity Index Fund Institutional, Armada Foreign Equity Fund
Institutional, Armada Small Cap Growth Fund Institutional, Armada Inflation
Protected Securities Fund Institutional, Armada Core Equity Fund Retail, Armada
Equity Index Fund Retail, Armada Foreign Equity Fund Retail, Armada Small Cap
Growth Fund Retail and Armada Inflation Protected Securities Fund Retail (each
such series, together with all other series subsequently established by the Fund
and made subject to this Agreement in accordance with Article 10, being herein
referred to as a "Portfolio", and collectively as the "Portfolios");
WHEREAS, the Fund on behalf of the Portfolios desires to appoint the Bank as its
transfer agent, dividend disbursing agent, custodian of certain retirement plans
and agent in connection with certain other activities, and the Bank desires to
accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
1. Terms of Appointment; Duties of the Bank
----------------------------------------
1.1 Subject to the terms and conditions set forth in this Agreement, the
Fund, on behalf of the
1
<PAGE> 4
Portfolios, hereby employs and appoints the Bank to act as, and the
Bank agrees to act as its transfer agent for the Fund's authorized and
issued shares of its beneficial interest, $ par value, ("Shares"),
dividend disbursing agent, custodian of certain retirement plans and
agent in connection with any accumulation, open-account or similar
plans provided to the shareholders of each of the respective Portfolios
of the Fund ("Shareholders") and set out in the currently effective
prospectus and statement of additional information ("prospectus") of
the Fund on behalf of the applicable Portfolio, including without
limitation any periodic investment plan or periodic withdrawal program.
1.2 The Bank agrees that it will perform the following services:
(a) In accordance with procedures established from time to time by
agreement between the Fund on behalf of each of the
Portfolios, as applicable and the Bank, the Bank shall:
(i) Receive for acceptance, orders for the purchase of
Shares, and promptly deliver payment and appropriate
documentation thereof to the Custodian of the Fund
authorized pursuant to the Declaration of Trust of
the Fund (the "Custodian") and make proper remittance
of any sales load received by it to the persons
entitled to the same and instructed by the Fund's
distributor;
(ii) Pursuant to purchase orders, issue the appropriate
number of Shares and hold such Shares in the
appropriate Shareholder account in the event any
check or other order for the transfer of money is
returned unpaid, take such steps as it may deem
appropriate or the Fund may instruct to protect the
Fund and the Bank of financial loss;
(iii) Receive for acceptance redemption requests and
redemption directions and deliver the appropriate
documentation thereof to the Custodian;
(iv) In respect to the transactions in items (1), (ii) and
(iii) above, the Bank shall execute transactions
directly with broker-dealers authorized by the Fund
who shall thereby be deemed to be acting on behalf of
the Fund;
(v) At the appropriate time as and when it receives
monies paid to it by the Custodian with respect to
any redemption, pay over or cause to be paid over in
the appropriate manner such monies as instructed by
the redeeming Shareholders, their prospectus or the
Fund;
(vi) Effect transfers of Shares by the registered
owners thereof upon receipt of appropriate
instructions;
(vii) Prepare and transmit payments (or where appropriate
credit a Shareholder account) for dividends and
distributions declared by the Fund on behalf of the
applicable Portfolio;
2
<PAGE> 5
(viii) Issue replacement certificates for those certificates
alleged to have been lost, stolen or destroyed upon
receipt by the Bank of indemnification satisfactory
to the Bank and protecting the Bank and the Fund, and
the Bank at its option, may issue replacement
certificates in place of mutilated stock certificates
upon presentation thereof and without such indemnity;
(ix) Maintain records of account for and advise the Fund
and its Shareholders as to the foregoing; and
(x) Record the issuance of shares of the Fund and
maintain pursuant to SEC Rule 17Ad-10(e) a record of
the total number of shares of the Fund which are
authorized, based upon data provided to it by the
Fund, and issued and outstanding. The Bank shall also
provide the Fund on a regular basis with the total
number of shares which are authorized and issued and
outstanding and shall have no obligation, when
recording the issuance of shares, to monitor the
issuance of such shares or to take cognizance of any
laws relating to the issue or sale of such Shares,
which functions shall be the sole responsibility of
the Fund; and
(xi) Perform any such other services for the Fund as are
described in Schedule A, attached herewith.
(b) In addition to and neither in lieu nor in contravention of the
services set forth in the above paragraph (a), the Bank shall:
(i) perform the customary services of a transfer agent,
dividend disbursing agent, custodian of certain retirement
plans and, as relevant, agent in connection with accumulation,
open-account or similar plans (including without limitation
any periodic investment plan or periodic withdrawal program),
including but not limited to: maintaining all Shareholder
accounts, preparing Shareholder meeting lists, mailing
proxies, mailing Shareholder reports and prospectuses to
current Shareholders, withholding taxes on U.S. resident and
non-resident alien accounts, preparing and filing U.S.
Treasury Department Forms 1099 and other appropriate forms
required with respect to dividends and distributions by
federal authorities for all Shareholders, preparing and
mailing confirmation forms and statements of account to
Shareholders for all purchases and redemptions of Shares and
other confirmable transactions in Shareholder accounts,
responding to shareholder telephone calls and Shareholder
correspondence, preparing and mailing activity statements for
Shareholders, and providing Shareholder account information
and (ii) provide a system which will enable the Fund to
monitor the total number of Shares sold in each State.
(c) In addition, the Fund shall (i) identify to the Bank in
writing those transactions and assets to be treated as exempt
from blue sky reporting for each State and (ii) verify the
establishment of transactions for each State on the system
prior to activation and thereafter monitor the daily activity
for each State. The responsibility of the Bank for the Fund's
blue sky State registration status is solely limited to the
initial
3
<PAGE> 6
establishment of transactions subject to blue sky compliance
by the Fund and the reporting of such transactions to the Fund
as provided above.
(d) Procedures as to who shall provide certain of these services
in Section 1 may be established from time to time by agreement
between the Fund on behalf of each Portfolio and the Bank per
the attached service responsibility schedule. The Bank may at
times perform only a portion of these services and the Fund or
its agent may perform these services on the Fund's behalf.
(e) The Bank shall provide additional services on behalf of the
Fund (i.e., escheatment services) which may be agreed upon in
writing between the Fund and the Bank.
2. Fees and Expenses
-----------------
2.1 For the performance by the Bank pursuant to this Agreement, the Fund
agrees on behalf of each of the Portfolios to pay the Bank an annual
maintenance fee for each Shareholder account as set out in the initial
fee schedule attached hereto. Such fees and out-of- pocket expenses and
advances identified under Section 2.2 below may be changed from time to
time subject to mutual written agreement between the Fund and the Bank.
2.2 In addition to the fee paid under Section 2.1 above, the Fund agrees on
behalf of each of the Portfolios to reimburse the Bank for
out-of-pocket expenses, including but not limited to confirmation
production, postage, forms, telephone, microfilm, microfiche,
tabulating proxies, records storage, or advances incurred by the Bank
for the items set out in the fee schedule attached hereto. In addition,
any other expenses incurred by the Bank at the request or with the
consent of the Fund, will be reimbursed by the Fund on behalf of the
applicable Portfolio.
2.3 The Fund agrees on behalf of each of the Portfolios to pay all fees and
reimbursable expenses within thirty days following the receipt of the
respective billing notice. Postage for mailing of dividends, proxies,
Fund reports and other mailings to all shareholder accounts shall be
advanced to the Bank by the Fund at least seven (7) days prior to the
mailing date of such materials.
3. Representations and Warranties of the Bank
------------------------------------------
The Bank represents and warrants to the Fund that:
3.1 It is a trust company daily organized and existing and in good standing
under the laws of the Commonwealth of Massachusetts.
3.2 It is duly qualified to carry on its business in the Commonwealth of
Massachusetts.
3.3 It is empowered under applicable laws and by its Charter and By-Laws to
enter into and perform this Agreement.
4
<PAGE> 7
3.4 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
3.5 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement.
4. Representations and Warranties of the Fund
------------------------------------------
The Fund represents and warrants to the Bank that:
4.1 It is a business trust duly organized and existing and in good standing
under the laws of Massachusetts.
4.2 It is empowered under applicable laws and by its Declaration of Trust
and Code of Regulations to enter into and perform this Agreement.
4.3 All corporate proceedings required by said Declaration of Trust and
Code of Regulations have been taken to authorize it to enter into and
perform this Agreement.
4.4 It is an open-end management investment company registered under the
Investment Company Act of 1940, as amended.
4.5 A registration statement under the Securities Act of 1933, as amended
on behalf of each of the Portfolios is currently effective and will
remain effective, and appropriate state securities law filings have
been made and will continue to be made, with respect to all Shares of
the Fund being offered for sale.
5. Data Access and Proprietary Information
---------------------------------------
5.1 The Fund acknowledges that the data bases, computer programs, screen
formats, report formats, interactive design techniques, and
documentation manuals furnished to the Fund by the Bank as part of the
Fund's ability to access certain Fund-related data ("Customer Data")
maintained by the Bank on data bases under the control and ownership of
the Bank or other third party ("Data Access Services") constitute
copyrighted, trade secret, or other proprietary information
(collectively, "Proprietary Information") of substantial value to the
Bank or other third party. It is understood that Customer Data, which
includes data provided to the Bank by or on behalf of the Fund or
records belonging to the Fund pursuant to Section 31 of the Investment
Company Act of 1940, as amended (and the rules hereunder), will not be
deemed to be Data Access Services or Proprietary Information but
rather, will be deemed to be the property of the Fund. The Fund agrees
to treat all Proprietary Information as proprietary to the Bank and
further agrees that it shall not divulge any Proprietary Information to
any person or organization except as may be provided hereunder. Without
limiting the foregoing, the Fund agrees for itself and its employees
and agents:
5
<PAGE> 8
(a) to access Customer Data solely from locations as may be
designated in writing by the Bank and solely in accordance
with the Bank's applicable user documentation;
(b) to refrain from copying or duplicating in any way the
Proprietary Information;
(c) to refrain from obtaining unauthorized access to any portion
of the Proprietary Information, and if such access is
inadvertently obtained, to inform in a timely manner of such
fact and dispose of such information in accordance with the
Bank's instructions;
(d) to refrain from causing or allowing the data acquired
hereunder from being retransmitted to any other computer
facility or other location;
(e) that the Fund shall have access only to those authorized
transactions agreed upon by the parties;
(f) to honor all reasonable written requests made by the Bank to
protect at the Bank's expense the rights of the Bank in
Proprietary Information at common law, under federal copyright
law and under other federal or state law.
Each party shall take reasonable efforts to advise its employees of their
obligations pursuant to this Section 5. The obligations of this Section shall
survive any earlier termination of this Agreement.
5.2 If the Fund notifies the Bank that any of the Data Access Services do
not operate in material compliance with the most recently issued user
documentation for such services, the Bank shall endeavor in a timely
manner to correct such failure. Organizations from which the Bank may
obtain certain data included in the Data Access Services are solely
responsible for the contents of such data and the Fund agrees to make
no claim against the Bank arising out of the contents of such
third-party data, including, but not limited to, the accuracy thereof
provided that the Bank will comply with all reasonable requests for
assistance from the Fund in resolving any claim or other discrepancy
the Fund may have with such third-party organizations. DATA ACCESS
SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE SPECIFICATIONS USED IN
CONNECTION THEREWITH ARE PROVIDED ON AN AS IS, AS AVAILABLE BASIS
(PROVIDED THAT THE BANK SHALL CONTINUE TO BE RESPONSIBLE FOR ANY DELAY
IN OR OTHER FAILURE OF PERFORMANCE THAT ARISES AS A RESULT OF A MATTER
REASONABLY WITHIN THE BANK'S CONTROL). THE BANK EXPRESSLY DISCLAIMS ALL
WARRANTIES EXCEPT THOSE EXPRESSLY STATED HEREIN INCLUDING, BUT NOT
LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
6
<PAGE> 9
5.3 If the transactions available to the Fund include the ability to
originate electronic instructions to the Bank in order to (1) effect
the transfer or movement of cash or Shares or (ii) transmit Shareholder
information or other information (such transactions constituting a
"COEFI"), then in such event the Bank shall be entitled to rely on the
validity and authenticity of such instruction without undertaking any
further inquiry as long as such instruction is undertaken in conformity
with security procedures established by the Bank from time to time.
6. Indemnification
---------------
6.1 The Bank shall not be responsible for, and the Fund shall on behalf of
the applicable Portfolio indemnify and hold the Bank harmless from and
against, any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liability arising out of or attributable to:
(a) All actions of the Bank or its agents or subcontractors
required to be taken pursuant to this Agreement, provided that
such actions are taken in good faith and without negligence or
willful misconduct.
(b) The Fund's lack of good faith, negligence or willful
misconduct which arise out of the breach of any representation
or warranty of the Fund hereunder.
(c) The reliance on or use by the Bank or its agents or
subcontractors of information, records, documents or services
which (i) are received by the Bank or its agents or
subcontractors, and (ii) have been prepared, maintained or
performed by the Fund or any other person or firm on behalf of
the Fund including but not limited to any previous transfer
agent or registrar.
(d) The reliance on, or the carrying out by the Bank or its agents
or subcontractors of any instructions or requests of the Fund
on behalf of the applicable Portfolio.
(e) The offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the
securities laws or regulations of any state that such Shares
be registered in such state or in violation of any stop order
or other determination or ruling by any federal agency or any
state with respect to the offer or sale of such Shares in such
state.
(f) The negotiations and processing of checks made payable to
prospective or existing Shareholders tendered to the Bank for
the purchase of Shares, such checks are commonly known is
"third party checks."
7
<PAGE> 10
6.2 At any time the Bank may apply to any officer of the Fund for
instructions, and may consult with legal counsel with respect to any
matter arising in connection with the services to be performed by the
Bank under this Agreement, and the Bank and its agents or
subcontractors shall not be liable and shall be indemnified by the Fund
on behalf of the applicable Portfolio for any action taken or omitted
by it in reliance upon such instructions or upon the opinion of such
counsel (provided such counsel is reasonably satisfactory to the Fund).
The Bank, its agents and subcontractors shall be protected and
indemnified in acting upon any paper or document, reasonably believed
to be genuine and to have been signed by the proper person or persons,
or upon any instruction, information, data, records or documents
provided the Bank or its agents or subcontractors by machine readable
input, telex, CRT data entry or other similar means authorized by the
Fund, and shall not be held to have notice of any change of authority
of any person, until receipt of written notice thereof from the Fund.
The Bank, its agents and subcontractors shall also be protected and
indemnified in recognizing stock certificates which are reasonably
believed to bear the proper manual or facsimile signatures of the
officers of the Fund, and the proper countersignature of any former
transfer agent or former registrar, or of a co- transfer agent or
co-registrar.
6.3 In the event either party is unable to perform its obligations under
the terms of this Agreement because of acts of God, strikes, equipment
or transmission failure or damage reasonably beyond its control, or
other causes reasonably beyond its control, such party shall not be
liable for damages to the other for any damages resulting from such
failure to perform or otherwise from such causes.
6.4 In order that the indemnification provisions contained in this Section
6 shall apply, upon the assertion of a claim for which the Fund may be
required to indemnify the Bank, the Bank shall promptly notify the Fund
of such assertion, and shall keep the Fund advised with respect to all
developments concerning such claim. The Fund shall have the option to
participate with the Bank in the defense of such claim or to defend
against said claim in its own name or in the name of the Bank. The Bank
shall in no case confess any claim or make any compromise in any case
in which the Fund may be required to indemnify the Bank except with the
Fund's prior written consent.
7. Standard of Care
----------------
The Bank shall at all times act in good faith and agrees to use its
best efforts within reasonable limits to insure the accuracy of all
services performed under this Agreement, but assumes no responsibility
and shall not be liable for loss or damage due to errors unless said
errors are caused by its negligence, bad faith, or willful misconduct
or that of its employees.
8
<PAGE> 11
8. Covenants of the Fund and the Bank
----------------------------------
8.1 The Fund shall on behalf of each of the Portfolios promptly furnish to
the Bank the following:
(a) A certified copy of the resolution of the Board of Trustees of
the Fund authorizing the appointment of the Bank and the
execution and delivery of this Agreement.
(b) A copy of the Declaration of Trust and Code of Regulations of
the Fund and all amendments thereto.
(c) Copies of each vote of the Board of Trustees of the Fund
designating authorized persons to give instructions to the
Bank.
8.2 The Bank hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices,
if any; and for the preparation or use, and for keeping account of,
such certificates, forms and devices.
8.3 The Bank shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable as required
by applicable laws, rules and regulations. To the extent required by
Section 31 of the Investment Company Act of 1940, as amended, and the
Rules thereunder, the Bank agrees that all such records prepared or
maintained by the Bank relating to the services to be performed by the
Bank hereunder are the property of the Fund and will be preserved,
maintained and made available in accordance with such Section and
Rules, and will be surrendered promptly to the Fund on and in
accordance with its request. Additionally, the Bank will make
reasonably available to the Fund and its authorized representatives
records maintained by the Bank pursuant to the Agreement for reasonable
inspection, use and audit, and will take reasonable actions to assist
the Fund's independent accountants in rendering their opinions.
8.4 The Bank and the Fund agree that all books, records, information and
data pertaining to the business of the other party which are exchanged
or received pursuant to the negotiation or the carrying out of this
Agreement shall remain confidential, and shall not be voluntarily
disclosed to any other person, except as may be required by law, and
except after prior notification and the written consent of the
non-disclosing party.
9
<PAGE> 12
8.5 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, the Bank will endeavor to notify the
Fund and to secure instructions from an authorized officer of the Fund
as to such inspection. The Bank reserves the right, however, to exhibit
the Shareholder records to any person whenever it is advised by its
counsel that it may be held liable for the failure to exhibit the
Shareholder records to such person provided, however, that in
connection with such disclosure, the Bank shall promptly notify the
Fund that such disclosure has been made or is to be made.
9. Termination of Agreement
------------------------
9.1 This Agreement may be terminated by either party upon sixty (60) days
written notice to the other and may be terminated immediately by the
Fund should the Bank cease to be qualified to act as the Fund's
transfer agent pursuant to applicable law.
9.2 Should either party terminate this Agreement the Bank agrees to
surrender promptly and without charge (except as described in this
Paragraph 9.2) upon the Fund's demand all books, records and files
maintained pursuant to this Agreement. Should the Fund exercise its
right to terminate because of the Bank's failure to materially perform
its obligations under this Agreement or because of errors caused by its
negligence, bad faith or willful misconduct as contemplated in
Paragraph 7 of this Agreement, all out-of-pocket expenses associated
with the movement of records and material will be borne by the Bank on
behalf of the applicable Portfolio(s). In all other instances in which
the Fund may terminate this Agreement, expenses associated with the
movement of records and material will be borne by the Fund on behalf of
the applicable Portfolio(s), and the Bank reserves the right to charge
for any other reasonable out-of-pocket expenses associated with such
termination.
10. Additional Funds
----------------
In the event that the Fund establishes one or more series of Shares in
addition to the Armada Money Market Fund Institutional, Armada Tax
Exempt Fund Institutional, Armada Government Fund Institutional, Armada
Treasury Fund Institutional, Armada Equity Fund Institutional, Armada
Fixed Income Fund Institutional, Armada Ohio Tax Exempt Fund
Institutional, Armada Enhanced Income Fund Institutional, Armada Equity
Income Fund Institutional, Armada Total Return Advantage Fund
Institutional, Armada Mid Cap Regional Fund Institutional, Armada
Treasury Fund Retail, Armada Money Market Fund Retail, Armada
Government Fund Retail, Armada Tax Exempt Fund Retail, Armada Equity
Fund Retail, Armada Fixed Income Fund Retail, Armada Ohio Tax Exempt
Fund Retail, Armada Enhanced Income Fund Retail, Armada Equity Income
Fund Retail, Armada Total Advantage Fund, Armada Mid Cap Regional Fund
Retail, Armada Pennsylvania Tax Exempt Fund Institutional, Armada
Pennsylvania Municipal Fund Institutional, Armada Intermediate
Government Fund Institutional, GNMA Fund Institutional, Armada
Pennsylvania Tax Exempt Fund Retail, Armada Pennsylvania Municipal Fund
Retail, Armada Intermediate Government Fund Retail, GNMA Fund
10
<PAGE> 13
Retail, Armada Core Equity Fund Institutional, Armada Equity Index Fund
Institutional, Armada Foreign Equity Fund Institutional, Armada Small
Cap Growth Fund Institutional, Armada Inflation Protected Securities
Fund Institutional, Armada Core Equity Fund Retail, Armada Equity Index
Fund Retail, Armada Foreign Equity Fund Retail, Armada Small Cap Growth
Fund Retail and Armada Inflation Protected Securities Fund Retail with
respect to which it desires to have the Bank render services as
transfer agent under the terms hereof, it shall so notify the Bank in
writing, and if the Bank agrees in writing to provide such services,
such series of Shares shall become a Portfolio hereunder.
11. Assignment
----------
11.1 Except as provided in Section 11.3 below, neither this Agreement nor
any rights or obligations hereunder may be assigned by either party
without the written consent of the other party.
11.2 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
11.3 The Bank may, without further consent on the part of the Fund,
subcontract for the performance hereof with (i) Boston Financial Data
Services, Inc., a Massachusetts corporation ("BFDS") which is duly
registered as a transfer agent pursuant to Section 17A(c)(2) of the
Securities Exchange Act of 1934, as amended ("Section 17A(c)(2)"), (ii)
a BFDS subsidiary duly registered as a transfer agent pursuant to
Section 17A(c)(2) or (iii) a BFDS affiliate duly registered as a
transfer agent pursuant to section 17-A(c)(1); provided, however, that
the Bank shall be as fully responsible to the Fund for the acts and
omissions of any subcontractor as it is for its own acts and omissions.
12. Amendment
---------
This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of
the Board of Trustees of the Fund.
13. Massachusetts Law to Apply
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the Commonwealth
of Massachusetts.
14. Force Majeure
-------------
In the event either party is unable to perform its obligations under
the terms of this Agreement because of acts of God, strikes, equipment
or transmission failure or damage reasonably beyond its control, or
other causes reasonably beyond its control, such party shall not be
liable for damages to the other for any damages resulting from such
failure to perform or otherwise from such causes.
11
<PAGE> 14
15. Consequential Damages
---------------------
Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement or for any
consequential damages arising out of any act or failure to act
hereunder.
16. Merger of Agreement
-------------------
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
17. Limitations of Liability of the Trustees and Shareholders
---------------------------------------------------------
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of the Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or Shareholders
individually but are binding only upon the assets and property of the
Fund.
18. Counterparts
------------
This Agreement may be executed by the parties hereto oil any number of
counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
19. Reproduction of Documents
-------------------------
This Agreement and all schedules, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The
parties hereto each agree that any such reproduction shall be
admissible in evidence as the original itself in any judicial or
administrative proceeding, whether or not the original is in existence
and whether or not such reproduction was made by a party in the regular
course of business, and that any enlargement, facsimile or further
reproduction shall likewise be admissible in evidence.
12
<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
ARMADA FUNDS
BY: /s/ Robert D. Neary
----------------------------------
PRESIDENT
ATTEST:
/s/ Carole L. Kozlowski
- -----------------------------
STATE STREET BANK AND TRUST COMPANY
BY: /s/ [Illegible]
----------------------------------
Executive Vice President
ATTEST:
/s/ S. Cen
- ----------------------------
-13-
<PAGE> 16
STATE STREET BANK & TRUST COMPANY
FUND SERVICE RESPONSIBILITIES*
Service Performed Responsibility
- ----------------- --------------
Bank Fund
---- ----
1. Receives orders for the purchase
of Shares.
2. Issue Shares and hold Shares in
Shareholders accounts.
3. Receive redemption requests.
4. Effect transactions 1-3 above
directly with broker-dealers.
5. Pay over monies to redeeming
Shareholders.
6. Effect transfers of Shares.
7. Prepare and transmit dividends
and distributions.
8. Issue Replacement Certificates.
9. Reporting of abandoned property.
10. Maintain records of account.
11. Maintain and keep a current and
accurate control book for each
issue of securities.
12. Mail proxies.
13. Mail Shareholder reports.
14. Mail prospectuses to current
Shareholders.
15. Withhold taxes on U.S. resident
and non-resident alien accounts.
14
<PAGE> 17
Service Performed Responsibility
- ----------------- --------------
Bank Fund
---- ----
16. Prepare and file U.S. Treasury
Department forms.
17. Prepare and mail account and
confirmation statements for
Shareholders.
18. Provide Shareholder account
information.
19. Blue sky reporting.
* Such services are more fully described in Section 1.2 (a),
(b) and (c) of the Agreement.
ARMADA FUNDS
BY: /s/ Robert D. Neary
-------------------------------------
PRESIDENT
ATTEST:
/s/ Carole L. Kozlowski
- -----------------------------
STATE STREET BANK AND TRUST COMPANY
BY: /s/ [Illegible]
-------------------------------------
Executive Vice President
ATTEST:
/s/ S. Cern
- ----------------------------
-15-
<PAGE> 1
Exhibit 9(e)
ARMADA FUNDS
SHAREHOLDER SERVICES PLAN
-------------------------
SECTION 1. Armada Funds (the "Trust") has adopted this Shareholder
Services Plan (the "Plan") in order to enable the Trust to bear certain
shareholder service and administrative expenses relating to Retail Shares of its
Money Market, Government, Treasury, Tax Exempt, Equity, Fixed Income, Ohio Tax
Exempt, Equity Income, National Tax Exempt, Mid Cap Regional, Enhanced Income,
Total Return Advantage, Pennsylvania Tax Exempt, Intermediate Government, GNMA
and Pennsylvania Municipal Funds, and any other non-discretionary investment
portfolios hereinafter established (collectively, "Retail Shares").
SECTION 2. Any officer of the Trust is authorized to execute and
deliver, in the name and on behalf of the Trust, written agreements in
substantially the form attached hereto or in any other form duly approved by the
Board of Trustees (as provided in Section 4 below) ("Servicing Agreements") with
financial institutions, broker-dealers, or other industry professionals, such as
investment advisers, accountants, and estate planning firms ("Service
Organizations"). Such Servicing Agreements are incorporated herein by reference
and shall require the Service Organizations to provide shareholder
administrative services as set forth therein to their clients who beneficially
own Retail Shares in consideration for a fee, computed daily and paid monthly in
the manner set forth in the Servicing Agreements, at the annual rate of up to
.10% (as defined in such Servicing Agreement) with respect to the Money Market,
Government, Treasury, Tax Exempt, Ohio Tax Exempt, Enhanced Income, Pennsylvania
Tax Exempt, and Pennsylvania Municipal Funds and up to .25% (as defined in such
Servicing Agreement) with respect to the Equity, Fixed Income, National Tax
Exempt, Equity Income, Mid Cap Regional, Total Return Advantage, Intermediate
Government, GNMA, Core Equity, Equity Index, Foreign Equity, Real Return
Advanatage and Small Cap Growth Funds. All expenses incurred by the Trust in
connection with the Servicing Agreements and the implementation of this Plan
shall be borne entirely by shareholders of the Trust.
SECTION 3. The Trust's Transfer Agent shall monitor the arrangements
pertaining to the Trust's Servicing Agreements with Service Organizations as
required by the Trust's Board of Trustees. The Trust's Transfer Agent shall not,
however, be obliged by this Plan to recommend, and the Trust shall not be
obliged to execute, any Servicing Agreement with any qualifying Service
Organization.
SECTION 4. So long as this Plan is in effect, the Trust's Transfer
Agent shall provide to the Trust's Board of Trustees, and the Trustees shall
review, at least quarterly, a written report of the amounts expended pursuant to
this Plan and the purposes for which such expenditures were made.
SECTION 5. This Plan shall become effective upon the date of its
adoption and following approval of the Plan (and the form of
1
<PAGE> 2
Servicing Agreement attached hereto) by (i) vote of a majority (as defined in
the Investment Company Act of 1940 ("1940 Act")) of the Trust's outstanding
Retail Shares or by (ii) vote of a majority of the Board of Trustees, including
a majority of the Trustees who are not "interested persons" of the Trust as
defined in the 1940 Act and have no direct or indirect financial interest in the
operation of this Plan or in any Servicing Agreements or other agreements
related to this Plan (the "Disinterested Trustees"), pursuant to a vote cast in
person at a meeting called for the purpose of voting on the approval of this
Plan (or form of Servicing Agreement).
SECTION 6. Unless sooner terminated, this Plan shall continue for one
year from the date of its adoption and thereafter shall continue automatically
for successive annual periods of twelve months each, provided such continuance
is approved at least annually in the manner set forth in Section 5.
SECTION 7. This Plan may be amended at any time by the Board of
Trustees, provided that any material amendments of the terms of this Plan shall
become effective only upon the approvals set forth in Section 5.
SECTION 8. This Plan is terminable at any time by vote of a majority of
the Disinterested Trustees or by vote of holders of a majority of the Trust's
Retail Shares (as defined in the Act).
SECTION 9. While this Plan is in effect, the selection and nomination
of Disinterested Trustees shall be committed to the discretion of the
Disinterested Trustees.
SECTION 10. 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.
Adopted by the Board of Trustees: January 9, 1990
Revised: February 14, 1991
November 4, 1993
July 22, 1994
February 15, 1996
August 30, 1996
February 10, 1997
2
<PAGE> 3
ARMADA FUNDS
Oaks, Pennsylvania 19456
Shareholder Services Plan
Servicing Agreement
Ladies and Gentlemen:
We wish to enter into this Servicing Agreement with you concerning the
provision of support services to your clients ("Clients") who may from time to
time beneficially own Retail shares of beneficial interest of the Portfolios
offered by Armada Funds (collectively, "Retail Shares") which are listed on
Appendix A.
The terms and conditions of this Servicing Agreement are as follows:
SECTION 1. You agree to provide support services to Clients who may
from time to time beneficially own Retail Shares which may include the
following:
(i) Aggregating and processing purchase and redemption requests for
Retail Shares from Clients and placing net purchase and redemption
orders with our distributor or transfer agent;
(ii) Providing Clients with a service that invests the assets of their
accounts in Retail Shares pursuant to specific or pre-authorized
instructions;
(iii) Processing dividend payments from us on behalf of Clients and
assisting Clients in changing dividend options, account designations
and addresses;
(iv) Providing information periodically to Clients showing their
positions in Retail Shares;
(v) Arranging for bank wires;
(vi) Responding to Client inquiries relating to the services performed
by you;
(vii) Providing subaccounting with respect to Retail Shares
beneficially owned by Clients or the information to us or our transfer
agent necessary for subaccounting;
(viii) If required by law, forwarding shareholder communications from
us (such as proxies, shareholder reports, annual and semi-annual
financial statements, and dividend, distribution, and tax notices) to
Clients; and
3
<PAGE> 4
(ix) Providing such other similar services as we may reasonably request
to the extent you are permitted to do under applicable statutes, rules,
or regulations. Upon request, you will provide to Clients a schedule of
any fees that you may charge to them relating to the investment of
their assets in Retail Shares.
SECTION 2. You will provide such office space and equipment, telephone
facilities, and personnel (which may be any part of the space, equipment, and
facilities currently used in your business, or any personnel employed by you) as
may be reasonably necessary or beneficial in order to provide the aforementioned
services to Clients.
SECTION 3. Neither you nor any of your officers, employees, or agents
are authorized to make any representations concerning us or Retail Shares except
those contained in our then current prospectus for such Retail Shares, copies of
which will be supplied by us to you, or in such supplemental literature or
advertising as may be authorized by us in writing. We agree to indemnify, defend
and hold harmless you, your officers, directors, employees, agents, and
affiliates free and harmless from and against any and all claims, demands,
liabilities and expenses, including legal expenses, which you, your officers,
directors, employees, agents, and affiliates may incur arising out of or based
upon any untrue statement, or alleged untrue statement, of material fact
contained in any registration statement, prospectus, statement of additional
information or sales material, or based upon any omission, or alleged omission,
to state a material fact required to be stated to make the statements contained
therein not misleading.
SECTION 4. For all purposes of this Agreement, you will be deemed to be
an independent contractor, and will have no authority to act as agent for us in
any matter or in any respect. By your written acceptance of this Agreement, you
agree to and do release, indemnify, and hold us harmless from and against any
and all direct or indirect liabilities or losses resulting from requests,
directions, actions, or inactions of or by you or your officers, employees, or
agents regarding your responsibilities hereunder or the purchase, redemption,
transfer, or registration of Shares by or on behalf of Clients, provided that
any such liabilities or losses are the result of willful misfeasance, bad faith
or gross negligence by you or your officers, directors or employees. You and
your employees will, upon request, be available during normal business hours to
consult with us or our designees concerning the performance of your
responsibilities under this Agreement.
SECTION 5. In consideration of the services and facilities provided by
you hereunder, we will pay to you, and you will accept as full payment therefor,
a fee at the annual rate of up
4
<PAGE> 5
to (i) .10% of the daily net asset value of the Retail Shares of the Money
Market, Government, Treasury, Tax Exempt, Pennsylvania Tax Exempt, Enhanced
Income, Ohio Tax Exempt and Pennsylvania Municipal Funds; and (ii) .25% of the
daily net asset value of the Retail Shares of the Equity Growth, Equity Income,
Mid Cap Regional, National Tax Exempt, Total Return Advantage, Fixed Income,
Intermediate Government, GNMA, Core Equity, Equity Index, Foreign Equity, Real
Return Advantage and Small Cap Growth Funds owned by shareholders for whom you
are the dealer of record or holder of record and with whom you have a servicing
relationship pursuant to this Agreement (the "Clients' Shares"), which fee will
be computed daily and payable monthly. For purposes of determining the fees
payable under this Section 5, the daily net asset value of the Clients' Retail
Shares will be computed in the manner specified in our registration statement
(as the same is in effect from time to time) in connection with the computation
of the net asset value of Retail Shares for purposes of purchases and
redemptions. The fee rate stated above may be prospectively increased or
decreased by us within the foregoing percentage limitations, in our sole
discretion, at any time upon notice to you. Further, we may, in our discretion
and without notice, suspend or withdraw the sale of Retail Shares, including the
sale of such Retail Shares to you for the account of any Client or Clients.
SECTION 6. Any person authorized to direct the disposition of monies
paid or payable by us pursuant to this Agreement will provide to our Board of
Trustees, and our Trustees will review, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
In addition, you will furnish us or our designees with such information as we or
they may reasonably request (including, without limitation, periodic
certifications confirming the provision to Clients of the Services described
herein), and will otherwise cooperate with us and our designees (including,
without limitation, any auditors designated by us), in connection with the
preparation of reports to our Board of Trustees concerning this Agreement and
the monies paid or payable by us pursuant hereto, as well as any other reports
or filings that may be required by law.
SECTION 7. We may enter into other similar Servicing Agreements with
any other person or persons without your consent.
SECTION 8. By your written acceptance of this Agreement, you represent,
warrant, and agree that: (i) to the best of your knowledge, no services provided
by you hereunder will be primarily intended to result in the sale of any Retail
Shares; (ii) the compensation payable to you hereunder, together with any other
compensation you receive from Clients for services contemplated by this
Agreement will be disclosed to clients who will authorize such compensation and
such compensation will be permitted by, and
5
<PAGE> 6
not excessive or unreasonable under, the laws and instruments governing your
relationship with Clients; (iii) in the event an issue pertaining to the Plan is
submitted for shareholder approval, you will vote any shares held for your own
account in the same proportion as the vote of those shares held for your
Clients' accounts; and (iv) with respect to the Money Market, Government and Tax
Exempt Portfolios, you agree to waive such portion of any compensation otherwise
payable to you under the Plan to the extent necessary to assure that such
compensation required to be accrued by Retail Shares of such portfolios on any
day does not exceed the income to be accrued to such shares on that day.
SECTION 9. This Agreement will become effective on the date a fully
executed copy of this Agreement is received by us or our designee. Unless sooner
terminated, this Agreement will continue until September 30, 1997 and thereafter
will continue automatically for successive annual periods ending on September
30, provided such continuance is specifically approved at least annually by us
in the manner described in Section 12 hereof. This Agreement is terminable,
without penalty, at any time by us (which termination may be by vote of a
majority of the Disinterested Trustees as defined in Section 12 hereof) or by
you upon notice to the other party hereto. Termination of this Agreement shall
terminate our obligation to pay you any compensation hereunder.
SECTION 10. ALL notices and other communications will be duly given if
mailed, telegraphed, telexed, or transmitted by similar telecommunications
device to us at the address shown above and to you at the address shown below.
SECTION 11. This Agreement will be construed in accordance with the
laws of the State of Delaware and is non-assignable by the parties hereto.
SECTION 12. This Agreement has been approved by vote of majority of (i)
our Board of Trustees and (ii) those Trustees who are not "interested persons"
(as defined in the Investment Company Act of 1940) of us and have no direct or
indirect financial interest in the operation of the Shareholder Services Plan
adopted by us regarding the provision of support services to the beneficial
owners of Retail Shares or in any agreements related thereto ("Disinterested
Trustees"), cast in person at a meeting called for the purpose of voting on such
approval.
SECTION 13. 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
6
<PAGE> 7
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, representatives of the Trust
personally, but bind only the Trust property, and all person 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.
If you agree to be legally bound by the provisions of this Agreement,
please sign a copy of this letter where indicated below and promptly return it
to us at the address shown above.
Very truly yours,
ARMADA FUNDS
Date ___________________ By
-------------------------------
Authorized Officer
Accepted and agreed to:
--------------------------------------
Name of Servicing Organization
Date ___________________ By
-----------------------------------
Authorized Officer
-----------------------------------
Account Number
-----------------------------------
Taxpayer Identification Number
-----------------------------------
Dealer Code
-----------------------------------
Address:
-----------------------------------
-----------------------------------
-----------------------------------
7
<PAGE> 8
APPENDIX A
----------
Please check the appropriate boxes to indicate the Funds of Armada Funds for
which you wish to act as Service Organization:
[ ] Money Market Fund
[ ] Government Fund
[ ] Treasury Fund
[ ] Tax Exempt Fund
[ ] Equity Fund
[ ] Fixed Income Fund
[ ] Ohio Tax Exempt Fund
[ ] National Tax Exempt Fund
[ ] Equity Income Fund
[ ] Mid Cap Regional Fund
[ ] Enhanced Income Fund
[ ] Total Return Advantage Fund
[ ] Pennsylvania Tax Exempt Fund
[ ] Intermediate Government Fund
[ ] GNMA Fund
[ ] Pennsylvania Municipal Fund
[ ] Core Equity Fund
[ ] Equity Index Fund
[ ] Foreign Equity Fund
[ ] Real Return Advantage Fund
[ ] Small Cap Growth Fund
8
<PAGE> 1
Exhibit 9(f)
BLUE SKY SERVICES AGREEMENT
THIS AGREEMENT is made as of this 2nd day of December, 1996,
by and between ARMADA FUNDS a Massachusetts business trust (the "Trust"), and
SEI Fund Resources ("SEI"), a Delaware business trust.
WHEREAS, the Trust is an open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), consisting of several series of shares of beneficial interest; and
WHEREAS, the Trust desires SEI to provide, and SEI is willing
to provide state securities registration ("Blue Sky") services to such
portfolios of the Trust as the Trust and SEI may agree on (Portfolios") and as
listed on the schedules attached hereto (Schedules") and made a part of this
Agreement, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained, the Trust and SEI hereby agree as follows:
SEI shall, for all purposes herein, be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Trust in any way and shall
not be deemed an agent of the Trust.
ARTICLE 1. BLUE SKY SERVICES. SEI shall perform or supervise
the performance by others of (i) the preparation of such reports, applications
and documents as may be necessary or desirable to register the Trust's shares
with state securities authorities, (ii) the monitoring of the sale of Trust
shares for compliance with state securities laws, and (iii) the filing with the
appropriate state securities authorities of the registration statements and such
other reports, applications and documents for the Trust and the Trust's shares,
as amy be necessary or convenient to register and keep effective the Trust and
Trust's shares with state securities authorities to enable the Trust to make a
continuous offering of its shares.
ARTICLE 2. RESPONSIBILITIES OF THE TRUST. The Trust or other
service providers shall ensure that SEI is provided with all necessary
documentation, records and any other type of information, regarding the
registration, sale and redemption of shares of the Trust, in a timely fashion.
The Trust acknowledges and agrees that SEI will not be able to perform its
obligations described in Article 1 of this Agreement in the absence of receiving
such information on a timely basis. Examples of necessary information include
but are not limited to post- effective amendments filings, current prospectuses
and statements of additional information, supplements to prospectuses and
statements of additional information, semi-annual reports, annual reports,
notification of unregistered sales and sales load redemption information.
ARTICLE 3. COMPENSATION OF SEI.
For the services to be rendered hereunder, the Trust shall pay
to SEI compensation at the rate specified in the attached Schedule. The Trust
shall also reimburse SEI for its reasonable out-of-pocket expenses. At such
times as SEI may request in connection with the filings made pursuant to Article
1 hereof, the Trust shall pay all costs, fees, and other expenses due to any
state securities commission.
<PAGE> 2
If this Agreement becomes effective subsequent to the first
day of a month or terminates before the last day of a month, SEI's compensation
for that part of the month in which this Agreement is in effect shall be
prorated in a manner consistent with the calculation of the fees as set forth
above. Payment of SEI's compensation for the preceding month shall be made
promptly.
ARTICLE 4. LIMITATION OF LIABILITY OF SEI. The duties of SEI
shall be confined to those expressly set forth herein, and no implied duties are
assumed by or may be asserted against SEI hereunder. SEI shall not be liable for
any error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in carrying out its duties hereunder,
except a loss resulting from willful misfeasance, bad faith or negligence in the
performance of its duties, or by reason of reckless disregard of its obligations
and duties hereunder, except as may otherwise be provided under provisions of
applicable law which cannot be waived or modified. (As used in this Article 5,
the term "Administrator" shall include directors, officers, employees and other
agents of SEI as well as that corporation itself.)
So long as SEI, or its agents, acts in good faith and with due
diligence the Trust assumes full responsibility and shall indemnify SEI and hold
it harmless from and against any and all actions, suits and claims, whether
groundless or otherwise, and from and against any and all losses, damages,
costs, charges, reasonable counsel fees and disbursements, payments, expenses
and liabilities (including reasonable investigation expenses) arising directly
or indirectly out of the services rendered to the Trust hereunder. The indemnity
and defense provisions set forth herein shall indefinitely survive the
termination of this Agreement.
The rights hereunder shall include the right to reasonable
advances of defense expenses in the event of any pending or threatened
litigation with respect to which indemnification hereunder may ultimately be
merited. In order that the indemnification provision contained herein shall
apply, however, it is understood that if in any case the Trust may be asked to
indemnify or hold SEI harmless, the Trust shall be fully and promptly advised of
all pertinent facts concerning the situation in question, and it is further
understood that SEI will use all reasonable care to identify and notify the
Trust promptly concerning any situation which or appears likely to present the
probability of such a claim for indemnification against the Trust, but failure
to do so in good faith shall not affect the rights hereunder.
The Trust shall be entitled to participate at its own expense
or, if it so elects, to assume the defense of any suit brought to enforce claims
subject to this indemnity provision. If the Trust elects to assume the defense
of any such claim, the defense shall be conducted by counsel hereby chosen by
the Trust and satisfactory to SEI, whose approval shall not be unreasonably
withheld. In the event that the Trust elects to assume the defense of any suit
and retain counsel, SEI shall bear the fees and expenses of any additional
counsel so retained. If the Trust does not elect to assume the defense of a
suit, it will reimburse SEI for the reasonable fees and expenses of any counsel
retained by SEI.
SEI may apply to the Trust at any time for instructions and
may consult counsel for the Trust or its own counsel and with accountants and
other experts with respect to any matter arising in connection with SEI's
duties, and SEI shall not be liable or accountable for any action taken or
omitted by it in good faith in accordance with such instruction or with the
written opinion of such counsel, accountants or other experts.
2
<PAGE> 3
Also, SEI shall be protected in acting upon any document which
it reasonably believes to be genuine and to have been signed or presented by the
proper person or persons. Nor shall SEI be held to have notice of any change of
authority of any officers, employee or agent of the Trust until receipt of
written notice thereof from the Trust.
ARTICLE 5. ACTIVITIES OF SEI. The services of SEI rendered to
the Trust are not to be deemed to be exclusive. SEI is free to render such
services to others and to have other businesses and interests. It is understood
that Trustees, officers, employees and Shareholders of the Trust are or may be
or become interested in SEI, as directors, officers, employees and shareholders
or otherwise and that directors, officers, employees and shareholders of SEI and
its counsel are or may be or become similarly interested in the Trust, and that
SEI may be or become interested in the Trust as a Shareholder or otherwise.
ARTICLE 6. CONFIDENTIALITY. SEI agrees on behalf of itself and
its employees to treat confidentially all records and other information relative
to the Trust and its prior, present or potential Shareholders and its prior,
present or potential customers, except, after prior notification to an approval
in writing by the Trust, which approval shall not be unreasonably withheld and
may not be withheld where SEI 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.
ARTICLE 7. EFFECTIVE DATE. This Agreement shall be effective
upon its execution, and unless terminated as provided, shall continue to force
for two year(s) from the effective date and thereafter from year to year,
provided that such annual continuance is approved by the vote of a majority of
the Trustees of the Trust. This Agreement shall automatically terminate in the
event of its assignment, the liquidation of SEI, or as to any portfolio of the
Trust, the liquidation of such portfolio or the Trust. For purposes of this
Article 7, the term "liquidation" shall mean a transaction in which the assets
of SEI, the Trust or a portfolio are sold or otherwise disposed of and the
proceeds therefrom are distributed to the shareholders in complete liquidation
of the interests of such shareholders in the entity. As used in this paragraph
the term "assignment" shall have the meaning specified in the 1940 Act. In
addition, this Agreement may at any time be terminated, without penalty, by SEI
or by a vote of a majority of Trustees of the Trust upon not less than sixty
days prior written notice to the other party.
ARTICLE 8. AMENDMENTS. This Agreement or any part hereof may
be changed or waived only by an instrument in writing signed by the party
against which enforcement of such change or waiver is sought.
ARTICLE 9. NOTICE. Any notice required or permitted to be
given by either party to the other shall be deemed sufficient if sent by
registered or certified mail, postage prepaid, addressed by the party giving
notice to the other party at the last address furnished by the other party to
the party giving notice: if to the Trust, at Drinker, Biddle & Reath, 1100
Philadelphia National Bank Bldg., Philadelphia, Pennsylvania 19107, Attn: W.B.
McConnel III; and if to SEI at 680 East Swedesford Road, Wayne, PA 19087-1658,
Attn: Legal Department.
3
<PAGE> 4
ARTICLE 10. GOVERNING LAW. This Agreement shall be construed
in accordance with the laws of the Commonwealth of Massachusetts and the
applicable provisions of the 1940 Act. To the extent that the applicable laws of
the Commonwealth of Massachusetts, or any of the provisions herein, conflict
with the applicable provisions of the 1940 Act, the latter shall control.
ARTICLE 11. MULTIPLE ORIGINALS. This Agreement may be executed
in two or more counterparts, each of which when so executed shall be deemed to
be an original, but such counterparts shall together constitute but one and the
same instrument.
ARTICLE 12. LIMITATION OF LIABILITY. SEI is hereby expressly
put on notice of the limitation of liability as set forth in Article IX of the
Trust's Declaration of Trust, as amended, and agrees that the obligations
pursuant to this Agreement of a particular Portfolio and of the Trust with
respect to that Portfolio shall be limited solely to the assets of that
Portfolio, the shareholders of any Portfolio, the Trustees, officers, employees
or agents of the Trust, or any of them.
ARTICLE 13. BINDING AGREEMENT. This Agreement, and the rights
and obligations of the parties and the Portfolios hereunder, shall be binding
on, and inure to the benefit of, the parties and the Portfolios and the
respective successors and assigns of each of them.
ARTICLE 14. INDEPENDENT CONTRACTOR. SEI shall, for all
purposes herein, be deemed to be an independent contractor and, unless otherwise
expressly provided or authorized, shall have no authority to act for or
represent the Trust in any way and shall not be deemed and agent of the Trust.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the day and year first above written.
ARMADA FUNDS
By: /s/ Robert D. Neary
------------------------------
Name: Robert D. Neary
Title: President
Attest: /s/ Karen A. Mieth
------------------------------
SEI FUND RESOURCES
By: /s/ Kathryn L. Stanton
------------------------------
Name: Kathryn L. Stanton
Title: Vice President
Attest: /s/ [Illegible]
------------------------------
<PAGE> 1
Exhibit 11(a)
CONSENT OF COUNSEL
------------------
We hereby consent to the use of our name and to the reference to our
Firm under the caption "Counsel" in the Statement of Additional Information that
is included in Post- Effective Amendment No. 32 to the Registration Statement on
Form N-1A under the Investment Company Act of 1940, as amended, of Armada Funds.
This consent does not constitute a consent under Section 7 of the Securities Act
of 1933, and in consenting to the use of our name and the references to our Firm
under such caption we have not certified any part of the Registration Statement
and do not otherwise come within the categories of persons whose consent is
required under Section 7 or the rules and regulations of the Securities and
Exchange Commission thereunder.
/s/ Drinker Biddle & Reath
----------------------------
DRINKER BIDDLE & REATH
Philadelphia, Pennsylvania
April 11, 1997
<PAGE> 1
EXHIBIT 11(b)
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Auditors"
in the Statement of Additional Information for the Small Cap Growth Fund in
this Post-Effective Amendment No. 32 to the Registration Statement (Form N-1A
No. 33-488/811-4416) of the Armada Funds.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
April 10, 1997
<PAGE> 1
EXHIBIT 13(j)
PURCHASE AGREEMENT
------------------
AGREEMENT dated this 6th day of September, 1996, by and between Armada
Funds (the "Trust"), a Massachusetts business trust, and 440 Financial
Distributors, Inc. ("440 Financial"), a Massachusetts corporation.
1. The Trust hereby offers 440 Financial and 440 Financial hereby
purchases one Class Q - Special Series 1 share of beneficial interest (no par
value per share) representing interests in the Trust's Pennsylvania Tax Exempt
Fund at a price of $10 per share (collectively known as "Shares").
2. 440 Financial hereby acknowledges receipt of one Share. The Trust
hereby acknowledges receipt from 440 Financial of funds in the amount of $10 for
such Share.
3. 440 Financial represents and warrants to the Trust that the Shares
are being acquired for investment purposes and not with a view to the
distribution thereof.
4. 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 as of 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 at 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 executed this Agreement as
of the 6th day of September, 1996.
ARMADA FUNDS
Attest:
By: /s/ Leigh Carter
- ------------------- ------------------------------
Leigh Carter, President
440 FINANCIAL DISTRIBUTORS, INC.
Attest:
By:/S/ Tammy Hall
- ------------------- ------------------------------
<PAGE> 1
EXHIBIT 13(k)
PURCHASE AGREEMENT
------------------
AGREEMENT dated this 6th day of September, 1996, by and between Armada
Funds (the "Trust"), a Massachusetts business trust, and 440 Financial
Distributors, Inc. ("440 Financial"), a Massachusetts corporation.
1. The Trust hereby offers 440 Financial and 440 Financial hereby
purchases one Class R - Special Series 1 share of beneficial interest (no par
value per share) representing interests in the Trust's Intermediate Government
Fund at a price of $10 per share (collectively known as "Shares").
2. 440 Financial hereby acknowledges receipt of one Share. The Trust
hereby acknowledges receipt from 440 Financial of funds in the amount of $10 for
such Share.
3. 440 Financial represents and warrants to the Trust that the Shares
are being acquired for investment purposes and not with a view to the
distribution thereof.
4. 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 as of 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 at 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 executed this Agreement as
of the 6th day of September, 1996.
ARMADA FUNDS
Attest:
By:/s/ Leigh Carter
- ------------------ ------------------------------
Leigh Carter, President
440 FINANCIAL DISTRIBUTORS, INC.
Attest:
By:/s/ Tammy Hall
- ------------------ ------------------------------
<PAGE> 1
EXHIBIT 13(l)
PURCHASE AGREEMENT
AGREEMENT dated this 6th day of September, 1996, by and between Armada
Funds (the "Trust"), a Massachusetts business trust, and 440 Financial
Distributors, Inc. ("440 Financial"), a Massachusetts corporation.
1. The Trust hereby offers 440 Financial and 440 Financial hereby
purchases one Class S - Special Series 1 share of beneficial interest (no par
value per share) representing interests in the Trust's GNMA Fund at a price of
$10 per share (collectively known as "Shares").
2. 440 Financial hereby acknowledges receipt of one Share. The Trust
hereby acknowledges receipt from 440 Financial of funds in the amount of $10 for
such Share.
3. 440 Financial represents and warrants to the Trust that the Shares
are being acquired for investment purposes and not with a view to the
distribution thereof.
4. 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 as of 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 at 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 executed this Agreement as
of the 6th day of September, 1996.
ARMADA FUNDS
Attest:
By:/s/ Leigh Carter
- ----------------------- ------------------------------
Leigh Carter, President
440 FINANCIAL DISTRIBUTORS, INC.
Attest:
By:/S/ Tammy Hall
- ----------------------- ------------------------------
<PAGE> 1
EXHIBIT 13(m)
PURCHASE AGREEMENT
------------------
AGREEMENT dated this 6th day of September, 1996, by and between Armada
Funds (the "Trust"), a Massachusetts business trust, and 440 Financial
Distributors, Inc. ("440 Financial"), a Massachusetts corporation.
1. The Trust hereby offers 440 Financial and 440 Financial hereby
purchases one Class T - Special Series 1 share of beneficial interest (no par
value per share) representing interests in the Trust's Pennsylvania Municipal
Fund at a price of $10 per share (collectively known as "Shares").
2. 440 Financial hereby acknowledges receipt of one Share. The Trust
hereby acknowledges receipt from 440 Financial of funds in the amount of $10 for
such Share.
3. 440 Financial represents and warrants to the Trust that the Shares
are being acquired for investment purposes and not with a view to the
distribution thereof.
4. 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 as of 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 at 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 executed this Agreement as
of the 6th day of September, 1996.
ARMADA FUNDS
Attest:
By:/s/ Leigh Carter
- -------------------- ------------------------------
Leigh Carter, President
440 FINANCIAL DISTRIBUTORS, INC.
Attest:
By:/S/Tammy Hall
- -------------------- ------------------------------
<PAGE> 1
Exhibit 13(n)
FORM
PURCHASE AGREEMENT
------------------
AGREEMENT dated this ___ day of __________, 1997, by and between Armada
Funds (the "Trust"), a Massachusetts business trust, and SEI Financial Services
Company ("SEI"), a Massachusetts corporation.
1. The Trust hereby offers SEI and SEI hereby purchases one Class V -
Special Series 1 share of beneficial interest (no par value per share)
representing interests in the Trust's Core Equity Fund at a price of $10 per
share (collectively known as "Shares").
2. SEI hereby acknowledges receipt of one Share. The Trust hereby
acknowledges receipt from SEI of funds in the amount of $10 for such Share.
3. SEI represents and warrants to the Trust that the Shares are being
acquired for investment purposes and not with a view to the distribution
thereof.
4. 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 as of 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 at 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 executed this Agreement as
of the ____ day of ____________, 1997.
ARMADA FUNDS
Attest:
By:
- -------------------------------- -------------------------------------
Robert D. Neary, President
SEI FINANCIAL SERVICES COMPANY
Attest:
By:
- -------------------------------- -------------------------------------
Title:
----------------------------------
(Please Print or Type)
<PAGE> 1
Exhibit 13(o)
FORM
PURCHASE AGREEMENT
------------------
AGREEMENT dated this ____ day of __________, 1997, by and between
Armada Funds (the "Trust"), a Massachusetts business trust, and SEI Financial
Services Company ("SEI"), a Massachusetts corporation.
1. The Trust hereby offers SEI and SEI hereby purchases one Class U -
Special Series 1 share of beneficial interest (no par value per share)
representing interests in the Trust's Foreign Equity Fund at a price of $10 per
share (collectively known as "Shares").
2. SEI hereby acknowledges receipt of one Share. The Trust hereby
acknowledges receipt from SEI of funds in the amount of $10 for such Share.
3. SEI represents and warrants to the Trust that the Shares are being
acquired for investment purposes and not with a view to the distribution
thereof.
4. 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 as of 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 at 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 executed this Agreement as
of the 10th day of February, 1997.
ARMADA FUNDS
Attest:
By:
- ---------------------------------- -------------------------------
Robert D. Neary, President
SEI FINANCIAL SERVICES COMPANY
Attest:
By:
- ---------------------------------- -------------------------------
Title:
----------------------------
(Please Print or Type)
<PAGE> 1
Exhibit 13(p)
FORM
PURCHASE AGREEMENT
------------------
AGREEMENT dated this ____ day of ___________, 1997, by and between
Armada Funds (the "Trust"), a Massachusetts business trust, and SEI Financial
Services Company ("SEI"), a Massachusetts corporation.
1. The Trust hereby offers SEI and SEI hereby purchases one Class W -
Special Series 1 share of beneficial interest (no par value per share)
representing interests in the Trust's Core Equity Fund at a price of $10 per
share (collectively known as "Shares").
2. SEI hereby acknowledges receipt of one Share. The Trust hereby
acknowledges receipt from SEI of funds in the amount of $10 for such Share.
3. SEI represents and warrants to the Trust that the Shares are being
acquired for investment purposes and not with a view to the distribution
thereof.
4. 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 as of 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 at 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 executed this Agreement as
of the ____ day of _________, 1997.
ARMADA FUNDS
Attest:
By:
- ------------------------ ------------------------------------
Robert D. Neary, President
SEI FINANCIAL SERVICES COMPANY
Attest:
By:
- ------------------------ ------------------------------------
Title:
---------------------------------
(Please Print or Type)
<PAGE> 1
Exhibit 13(q)
FORM
PURCHASE AGREEMENT
------------------
AGREEMENT dated this ____ day of ___________, 1997, by and between
Armada Funds (the "Trust"), a Massachusetts business trust, and SEI Financial
Services Company ("SEI"), a Massachusetts corporation.
1. The Trust hereby offers SEI and SEI hereby purchases one Class X -
Special Series 1 share of beneficial interest (no par value per share)
representing interests in the Trust's Small Cap Growth Fund at a price of $10
per share (collectively known as "Shares").
2. SEI hereby acknowledges receipt of one Share. The Trust hereby
acknowledges receipt from SEI of funds in the amount of $10 for such Share.
3. SEI represents and warrants to the Trust that the Shares are being
acquired for investment purposes and not with a view to the distribution
thereof.
4. 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 as of 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 at 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 executed this Agreement as
of the ____ day of __________, 1997.
ARMADA FUNDS
Attest:
By:
- ----------------------- -------------------------------------
Robert D. Neary, President
SEI FINANCIAL SERVICES COMPANY
Attest:
By:
- ----------------------- -------------------------------------
Title:
----------------------------------
<PAGE> 1
Exhibit 13(r)
FORM
PURCHASE AGREEMENT
AGREEMENT dated this ____ day of ___________, 1997, by and between
Armada Funds (the "Trust"), a Massachusetts business trust, and SEI Financial
Services Company ("SEI"), a Massachusetts corporation.
1. The Trust hereby offers SEI and SEI hereby purchases one Class Y -
Special Series 1 share of beneficial interest (no par value per share)
representing interests in the Trust's Real Return Advantage Fund at a price of
$10 per share (collectively known as "Shares").
2. SEI hereby acknowledges receipt of one Share. The Trust hereby
acknowledges receipt from SEI of funds in the amount of $10 for such Share.
3. SEI represents and warrants to the Trust that the Shares are being
acquired for investment purposes and not with a view to the distribution
thereof.
4. 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 as of 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 at 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 executed this Agreement as
of the ____ day of _________, 1997.
ARMADA FUNDS
Attest:
By:
- ---------------- ---------------------------------
Robert D. Neary, President
SEI FINANCIAL SERVICES COMPANY
Attest:
By:
- ---------------- ---------------------------------
Title:
------------------------------
(Please Print or Type)
<PAGE> 1
Exhibit 15(b)
ARMADA FUNDS
SERVICE AND DISTRIBUTION PLAN
-----------------------------
WHEREAS, ARMADA FUNDS, a Massachusetts business trust
registered under the Investment Company Act of 1940, as amended (the "Act"), as
an open-end management investment company (the "Trust"), adopted a Service and
Distribution Plan on December 20, 1985 with respect to each investment portfolio
of the Trust pursuant to which the Trust is permitted to pay for certain costs
and expenses incurred in connection with the distribution of its shares;
WHEREAS, under the Service and Distribution Plan, (1) the
Trust bears costs and expenses in connection with advertising and marketing its
shares, including but not limited to any advertising or marketing via radio,
television, newspapers, magazines, or direct mail solicitation, and (2) the
Trust pays for the costs and expenses of preparing, printing and distributing
its prospectuses (except those used for regulatory purposes or for distribution
to existing shareholders of the Trust, which is considered a non-12b-1 expense)
and of implementing and operating the Service and Distribution Plan;
WHEREAS, under the Service and Distribution Plan, the payments
are currently made, and/or expenses are currently incurred, by 440 Financial
Distributors, Inc. ("440 Financial"), as the Trust's distributor, which are and
have been reimbursed by the Trust in accordance with the Service and
Distribution Plan;
WHEREAS, the Trust desires to amend and restate the Service
and Distribution Plan in order to engage SEI Financial Services Company as
distributor of the shares of each of its investment portfolios in place of 440
Financial, to become effective upon the effective date of the Distribution
Agreement between the Trust and SEI Financial Services Company, and to make
certain other immaterial changes in the revised Service and Distribution Plan
(the "Plan") in connection therewith;
WHEREAS, the trustees have determined, in the exercise of
their reasonable business judgment and in light of their fiduciary duties, that
there is a reasonable likelihood that adoption of this Plan will benefit the
Trust and its shareholders.
NOW THEREFORE, in consideration of the foregoing, the Trust
hereby adopts this Plan in accordance with Rule 12b-1 under the Act on the
following terms and conditions:
<PAGE> 2
THE PLAN: The material aspects of the financing by the
Trust of distribution expenses to be incurred in connection with
securities of which it is the issuer are as follows:
1. Each investment portfolio of the Trust including both
existing portfolios and any portfolios which the Trust may organize in the
future (each, a "Fund") will reimburse the Distributor for: (a) direct and
indirect costs and expenses incurred in connection with the advertising and
marketing of the Fund's shares, including but not limited to any advertising or
marketing via radio, television, newspapers, magazines, or direct mail
solicitation, and (b) direct and indirect costs and expenses incurred in
preparing, printing and distributing the Fund's prospectus (except those used
for regulatory purposes or for distribution to existing shareholders) and in
implementing and operating the Plan.
The Distributor will be reimbursed monthly for such costs,
expenses or payments at an annual rate of up to but not more than .10% of the
average net assets of each Fund.
2. Subject to the limitations above, the Trust will pay to the
Distributor an annual distribution fee of $1,250,000 which shall be payable
monthly and shall be accrued daily by all of the Trust's Funds with respect to
which the Distributor is distributing shares in proportion to each such Fund's
relative net assets.
3. The Board of Trustees shall be provided, at least
quarterly, with a written report of all amounts expended pursuant to the Plan.
The report shall state the purpose for which the amounts were expended.
4. The Plan shall continue until September 30, 1997, unless
earlier terminated in accordance with its terms, and thereafter shall continue
automatically for successive annual periods, provided such continuance is
approved by a majority of the Board of Trustees, including a majority of
trustees who are not "interested persons" (as defined in the Act) of the Trust
and have no direct or indirect financial interest in the operation of the Plan
or in any agreements entered into in connection with the Plan ("Qualified
Trustees"), pursuant to a vote cast in person at a meeting called for the
purpose of voting on the continuation of the Plan.
5. The Plan may be amended at any time by the Board of
Trustees provided that (a) any amendment to increase materially the costs which
the Trust may bear for distribution pursuant to the Plan shall be effective only
upon approval by a vote of a majority of the outstanding voting securities of
each Fund of the Trust, and (b) any material amendments of the terms
2
<PAGE> 3
of the Plan shall become effective only upon approval as provided in paragraph 4
hereof.
6. The Plan is terminable without penalty at any time by a
vote of a majority of the Qualified Trustees, or vote of a majority of the
outstanding voting securities of the respective Funds of the Trust.
7. As long as this Plan is in effect, the selection and
nomination of trustees who are not interested persons of the Trust (as defined
in the Act) shall be committed to the discretion of the trustees then in office
who are not "interested persons" of the Trust.
8. Any distribution agreement shall provide that (a) payments
to be made by the Trust to the Distributor pursuant to the Plan as reimbursement
of expenses shall be for direct expenses of the Distributor authorized to be
incurred by the Trust pursuant to paragraph 1 of this Plan, (b) upon termination
of the Plan, the benefits inuring to the Distributor shall immediately cease,
and (c) expenses of the Distributor under the Plan in any fiscal year of the
Trust which cannot be paid by the Trust because payment of such expenses would
cause the Trust to exceed the limitation set forth in paragraph 1 of this Plan
during such fiscal year, shall not be payable to the Distributor in any
succeeding fiscal year of the Trust.
9. The Trust shall preserve copies of this Plan, any related
agreements and all reports made pursuant to paragraph 3 hereof for a period of
not less than six years from the date of this Plan, any agreement, or any
report, as the case may be, the first two years in an easily accessible place.
As adopted by the Board of Trustees on November 15, 1996
Effective: March 8, 1997
3
<PAGE> 1
EXHIBIT 18
ARMADA FUNDS
(THE "TRUST")
REVISED PLAN PURSUANT TO RULE 18F-3 FOR OPERATION OF
A DUAL-CLASS SYSTEM
----------------------------------------------------
I. INTRODUCTION
---------------
On February 23, 1995, the Securities and Exchange Commission (the
"Commission") promulgated Rule 18f-3 under the Investment Company Act of 1940,
as amended (the "1940 Act"), which permits the creation and operation of a
multi-class distribution structure without the need to obtain an exemptive order
under Section 18 of the 1940 Act. Rule 18f-3, which became effective on April 3,
1995, requires an investment company to file with the Commission, a written plan
specifying all of the differences among the classes, including the various
services offered to shareholders, the different distribution arrangements for
each class, the methods for allocating expenses relating to those differences
and any conversion features or exchange privileges. On July 20, 1995, the Board
of Trustees of the Trust authorized the Trust to operate its current dual-class
distribution structure in compliance with Rule 18f-3. This Plan is pursuant to
Rule 18f-3. This revised plan shall become effective with respect to each of the
Foreign Equity, Equity Index, Core Equity, Small Cap Growth and Real Return
Advantage Funds upon the commencement of operations of such Fund.
II. ATTRIBUTES OF CLASSES
-------------------------
A. Generally
---------
The Trust shall initially offer two classes of shares as follows:
Money Market Funds
------------------
Class A shares ("Institutional shares") and Class A-Special Series 1
shares ("Retail shares") in the Money Market Fund, Class B shares
("Institutional shares") and Class-B Special Series 1 shares ("Retail shares")
in the Government Fund, Class C shares ("Institutional shares") and Class
C-Special Series 1 shares ("Retail shares") in the Treasury Fund, Class D shares
("Institutional shares") and Class D-Special Series 1 shares ("Retail shares")
in the Tax Exempt Fund, and Class Q shares ("Institutional Shares") and Class
Q-Special Series 1 shares ("Retail shares") in the Pennsylvania Tax Exempt Fund.
Fixed Income Funds
------------------
Class I shares ("Institutional shares") and Class I-Special Series 1
shares ("Retail shares") in the Fixed Income Fund, Class
<PAGE> 2
O Shares ("Institutional shares") and Class O-Special Series 1 shares ("Retail
shares") in the Enhanced Income Fund, and Class P shares ("Institutional
shares"), Class P-Special Series 1 shares ("Retail shares") in the Total Return
Advantage Fund, Class R shares ("Institutional shares") and Class R-Special
Series 1 shares ("Retail shares") in the Intermediate Government Fund, and Class
S shares ("Institutional shares"), Class S-Special Series 1 shares ("Retail
shares") in the GNMA Fund and Class Y Shares ("Institutional shares") and Class
Y-Special Series 1 shares ("Retail shares") in the Real Return Advantage Fund.
Equity Funds
------------
Class H shares ("Institutional shares") and Class H-Special Series 1
shares ("Retail shares") in the Equity Fund, Class M shares ("Institutional
shares") and Class M-Special Series 1 shares ("Retail shares") in the Equity
Income Fund, and Class N shares ("Retail shares") and Class N-Special Series 1
shares in the Mid Cap Regional Fund, Class U shares ("Institutional Shares") and
Class U-Special Series 1 shares ("Retail Shares") in the Foreign Equity Fund,
Class V shares ("Institutional Shares") and Class V-Special Series 1 shares
("Retail Shares") in the Equity Index Fund, Class W shares ("Institutional
Shares") and Class W-Special Series 1 shares ("Retail Shares") in the Core
Equity Fund and Class X shares ("Institutional shares") and Class X-Special
Series 1 shares ("Retail shares") in the Small Cap Growth Fund.
Ohio Tax Exempt Fund
--------------------
Class K shares ("Institutional shares") and Class K-Special Series 1
shares ("Retail shares"), in the Ohio Tax Exempt Fund.
National Tax Exempt Fund
------------------------
Class L shares ("Institutional shares") and Class L-Special Series 1
shares ("Retail shares"), in the National Tax Exempt Fund.
Pennsylvania Municipal Fund
---------------------------
Class T shares ("Institutional shares") and Class T-Special Series 1
shares ("Retail shares") in the Pennsylvania Municipal Fund.
In general, shares of each class shall be identical except for
different expense variables (which will result in different returns for each
class), certain related rights and certain shareholder services. More
particularly, the Institutional and Retail shares of each Fund shall represent
interests in the same portfolio of investments of the particular Fund, and shall
be identical in all respects, except for: (a) the impact of (i) expenses
assessed to a class pursuant to the Shareholder Services Plan adopted for the
class and (ii) any other incremental expenses identified from time to time that
should be properly allocated to one class so long as any changes in expense
-2-
<PAGE> 3
allocations are reviewed and approved by a vote of the Board of Trustees,
including a majority of the independent trustees; (b) the fact that a class
shall vote separately on any matter submitted to the shareholders that pertains
to (i) the Shareholder Services Plan adopted for that class and (ii) the class
expenses borne by the class; (c) the exchange privileges of each class of
shares; (d) the legal designation of each class of shares; and (e) the different
shareholder services relating to a class of shares.
B. Shareholder Servicing Arrangements, Expenses and Sales
------------------------------------------------------
Charges
-------
1. Money Market Funds
------------------
RETAIL SHARES
Retail shares of each money market fund shall be available for
purchase by the public, primarily through financial institutions such as banks,
brokers and dealers.
Retail shares of each money market fund shall not be subject
to a sales charge. Retail shares shall be subject to a fee payable pursuant to
the Shareholder Services Plan adopted for the class which shall not initially
exceed .10% (on an annualized basis) of the average daily net asset value of
those shares beneficially owned by customers of the financial institutions who
have entered into agreements with the Trust pursuant to the Shareholder Services
Plan adopted for the class.
Services provided under the Shareholder Services Plan adopted
for the class may include (i) segregating and processing purchase and redemption
orders; (ii) processing dividend payments; (iii) providing information
periodically to customers showing their position in Retail shares and (iv)
providing subaccounting services.
INSTITUTIONAL SHARES
Institutional shares of each money market fund shall be
available for purchase by banks and National Asset Management Corporation
customers.
Institutional shares of each money market fund shall not be
subject to a sales charge or to a shareholder servicing fee under a non-12b-1
Plan.
-3-
<PAGE> 4
2. Fixed Income Funds
------------------
RETAIL SHARES
Retail shares of each fixed income fund shall be available for
purchase by the public, primarily through financial institutions such as banks,
brokers and dealers.
Retail shares of the Fixed Income, Enhanced Income, Total
Return Advantage, Intermediate Government, GNMA and Real Return Advantage Funds
shall be subject to a sales charge which shall not initially exceed 3.75%,
2.75%, 3.75%, 3.75%, 3.75% and 3.75%, respectively, of the offering price of
those shares. Retail shares also shall be subject to a fee payable pursuant to
the Shareholder Services Plan adopted for the class which shall not initially
exceed .10% (on an annualized basis) with respect to the Enhanced Income Fund
and .25% (on an annualized basis) with respect to the Fixed Income, Total
Return Advantage, Intermediate Government, GNMA and Real Return Advantage Funds
of the average daily net asset value of those shares beneficially owned by
customers of the financial institutions who have entered into agreements with
the Trust pursuant to the Shareholder Services Plan adopted for the class.
Services provided under the Shareholder Services Plan adopted
for the class may include: (i) segregating and processing purchase and
redemption orders; (ii) processing dividend payments; (iii) providing
information periodically to customers showing their position in Retail shares
and (iv) providing sub-transfer agent services.
INSTITUTIONAL SHARES
Institutional shares of each of the fixed income funds shall
be available for purchase by banks and National Asset Management Corporation
customers.
Institutional shares of each if the fixed income funds shall
not be subject to a sales charge or to a shareholder servicing fee under a
non-12b-1 Plan.
3. Equity Funds
------------
RETAIL SHARES
Retail shares of each equity fund shall be available for
purchase by the public, primarily through financial institutions such as banks,
brokers and dealers.
Retail shares of each equity fund shall be subject to a sales
charge which shall not initially exceed 3.75% of the offering price of those
shares. Retail shares of each equity fund also shall be subject to a fee payable
pursuant to the
-4-
<PAGE> 5
Shareholder Services Plan adopted for the class which shall not initially exceed
.25% (on an annualized basis) of the average daily net asset value of those
shares beneficially owned by customers of the financial institutions who have
entered into agreements with the Trust pursuant to the Shareholder Services Plan
adopted for the class.
Services provided under the Shareholder Services Plan adopted
for the class may include (i) segregating and processing purchase and redemption
orders; (ii) processing dividend payments; (iii) providing information
periodically to customers showing their position in Retail shares and (iv)
providing sub-transfer agent services.
INSTITUTIONAL SHARES
Institutional shares of each equity fund shall be available
for purchase by banks and National Asset Management Corporation customers.
Institutional shares of each equity fund shall not be subject
to a sales charge or to a shareholder servicing fee under a non-12b-1 Plan.
4. Ohio Tax Exempt Fund
--------------------
RETAIL SHARES
Retail shares of the Ohio Tax Exempt Fund shall be available
for purchase by the public, primarily through financial institutions such as
banks, brokers and dealers.
Retail shares of the Ohio Tax Exempt Fund shall be subject to
a sales charge which shall not initially exceed 3.00% of the offering price of
those shares. Retail shares of the Ohio Tax Exempt Fund also shall be subject to
a fee payable pursuant to the Shareholder Services Plan adopted for the class
which shall not initially exceed .10% (on an annualized basis) of the average
daily net asset value of the Retail shares of the Ohio Tax Exempt Fund
beneficially owned by customers of the financial institutions who have entered
into agreements with the Trust pursuant to the Shareholder Services Plan adopted
for the class.
Services provided under the Shareholder Services Plan adopted
for the class may include (i) segregating and processing purchase and redemption
orders; (ii) processing dividend payments; (iii) providing information
periodically to customers showing their position in Retail shares and (iv)
providing sub- transfer agent services.
-5-
<PAGE> 6
INSTITUTIONAL SHARES
Institutional shares of the Ohio Tax Exempt Fund shall be
available for purchase by banks and National Asset Management Corporation
customers.
Institutional shares of the Ohio Tax Exempt Fund shall not be
subject to a sales charge or a shareholder servicing fee under a non-12b-1 Plan.
6. National Tax Exempt Fund
------------------------
RETAIL SHARES
Retail shares of the National Tax Exempt Fund shall be
available for purchase by the public, primarily through financial institutions
such as banks, brokers and dealers.
Retail shares of the National Tax Exempt Fund shall be subject
to a sales charge which shall not initially exceed 3.75% of the offering price
of those shares. Retail shares of the National Tax Exempt Fund also shall be
subject to a fee payable pursuant to the Shareholder Services Plan adopted for
the class which shall not initially exceed .25% (on an annualized basis) of the
average daily net asset value of the Retail shares of the National Tax Exempt
Fund beneficially owned by customers of the financial institutions who have
entered into agreements with the Trust pursuant to the Shareholder Services Plan
adopted for the class.
Services provided under the Shareholder Services Plan adopted
for the class may include (i) segregating and processing purchase and redemption
orders; (ii) processing dividend payments; (iii) providing information
periodically to customers showing their position in Retail shares and (iv)
providing sub- transfer agent services.
INSTITUTIONAL SHARES
Institutional shares of the National Tax Exempt Fund shall be
available for purchase by banks and National Asset Management Corporation
customers.
Institutional shares of the National Tax Exempt Fund shall not
be subject to a sales charge or a shareholder servicing fee under a non-12b-1
Plan.
-6-
<PAGE> 7
7. Pennsylvania Municipal Fund
---------------------------
RETAIL SHARES
Retail shares of the Pennsylvania Municipal Fund shall be
available for purchase by the public, primarily through financial institutions
such as banks, brokers and dealers.
Retail shares of the Pennsylvania Municipal Fund shall be
subject to a sales charge which shall not initially exceed 3.00% of the offering
price of those shares. Retail shares of the Pennsylvania Municipal Fund also
shall be subject to a fee payable pursuant to the Shareholder Services Plan
adopted for the class which shall not initially exceed .10% (on an annualized
basis) of the average daily net asset value of the Retail shares of the
Pennsylvania Municipal Fund beneficially owned by customers of the financial
institutions who have entered into agreements with the Trust pursuant to the
Shareholder Services Plan adopted for the class.
Services provided under the Shareholder Services Plan adopted
for the class may include (i) segregating and processing purchase and redemption
orders; (ii) processing dividend payments; (iii) providing information
periodically to customers showing their position in Retail shares and (iv)
providing sub-transfer agent services.
INSTITUTIONAL SHARES
Institutional shares of the Pennsylvania Municipal Fund shall
be available for purchase by banks and National Asset Management Corporation
customers.
Institutional shares of the Pennsylvania Municipal Fund shall
not be subject to a sales charge or a shareholder servicing fee under a
non-12b-1 Plan.
C. Exchange Privileges
-------------------
RETAIL SHARES
Holders of Retail shares who paid a sales charge to purchase Retail
shares of a Fund (each a "Load Fund") generally shall be permitted to exchange
those shares for shares of another Load Fund, or another investment fund offered
by the Trust without paying a sales charge (a "No Load Fund") at the net asset
value per share on the date of exchange. Holders of Retail shares of a No Load
Fund shall generally be permitted to exchange those shares for Retail shares of
another No Load Fund offered by the Trust. Holders of Retail shares of a No Load
Fund shall generally be permitted to exchange those shares for Retail shares of
a Load Fund but shall be subject to the sales load applicable
-7-
<PAGE> 8
to the Load Fund. However, holders of Retail shares of a No Load Fund who
acquired those shares through a previous exchange involving shares on which a
load was paid, generally shall not be required to pay an additional sales charge
upon notification of the reinvestment of the equivalent amount into the Retail
shares of a Load Fund.
INSTITUTIONAL SHARES
Holders of Institutional shares generally shall be permitted to
exchange those shares for Institutional shares of another Fund of the Trust.
D. Methodology for Allocating Expenses Between Classes
---------------------------------------------------
On a daily basis, expenses are attributable to each class of shares
depending on the nature of the expenditures. These fall into two categories: (1)
shareholder service payments attributable to only Retail shares; and (2) other
expenses which are attributable and allocated to both classes.
Prior to determining the day's net asset value or
dividends/distributions, the following expense items must be calculated as
indicated:
Money Market Funds
------------------
ADVISORY, CUSTODY AND ADMINISTRATION FEES
Using the current day's total Fund net assets, calculate the current
day's accrual and allocate to the respective classes based upon relative settled
shares outstanding.
SHAREHOLDER SERVICE PAYMENTS
Using the current day's Retail class net assets, calculate the current
day's accrual.
ALL OTHER EXPENSES
Determine the daily accrual from the Fund's expense budget and allocate
to each class based upon relative settled shares outstanding.
Daily Distribution Floating NAV Funds
-------------------------------------
ADVISORY, CUSTODY AND ADMINISTRATION FEES
Using the beginning of day total Fund net assets, calculate the current
day's accrual and allocate to the respective classes based upon the relative
value of settled shares.
-8-
<PAGE> 9
SHAREHOLDER SERVICE PAYMENTS
Using the beginning of day Retail class net assets, calculate the
current day's accrual.
ALL OTHER EXPENSES
Determine the daily accrual from the Fund's expense budget and allocate
to each class based upon relative values of settled shares.
Periodic Distribution Floating NAV Funds
----------------------------------------
ADVISORY, CUSTODY AND ADMINISTRATION FEES
Using the beginning of day total Fund net assets, calculate the current
day's accrual and allocate to the respective classes based upon relative net
assets.
SHAREHOLDER SERVICE PAYMENTS
Using the beginning of day Retail class net assets, calculate the
current day's accrual.
ALL OTHER EXPENSES
Determine the daily accrual from the Fund's expense budget and allocate
to each class based upon relative net assets.
Approved by the Board of Trustees
February 10, 1997
-9-
