<PAGE> 1
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SCHEDULE 14A
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE
ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY
[ ] Definitive Proxy Statement (AS PERMITTED BY RULE 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
</TABLE>
ARMADA FUNDS
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FILE NOS. 33-488;811-4416
------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies: ........
2) Aggregate number of securities to which transaction applies: ...........
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): .............
4) Proposed maximum aggregate value of transaction: .......................
5) Total fee paid: ........................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11 (a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
1) Amount Previously Paid: ................................................
2) Form, Schedule or Registration Statement No.: ..........................
3) Filing Party: ..........................................................
4) Date Filed: ............................................................
================================================================================
<PAGE> 2
ARMADA FUNDS
ONE FREEDOM VALLEY DRIVE
OAKS, PA 19456
IMPORTANT INFORMATION ABOUT YOUR PROXY PACKAGE
May 18, 1998
Dear ARMADA FUNDS Shareholder,
As part of our commitment to continually improve the operations of ARMADA FUNDS,
we are pleased to announce several proposed changes to certain Funds you
currently hold. The ARMADA FUNDS Board of Trustees has unanimously approved
these changes. However, your votes are necessary in order for these measures to
become effective. This package contains the information you need to assist you
in making an informed decision about these proposed changes.
In summary, these proposed changes would affect the adviser relationship for
specific ARMADA FUNDS (Enhanced Income Fund, Total Return Advantage Fund, and
Core Equity Fund). Pending approval, 1) National City Bank will serve as
investment adviser to all three funds, and 2) National Asset Management
Corporation will serve as sub-adviser to the Core Equity and Total Return
Advantage Funds.
THE ARMADA FUNDS BOARD OF TRUSTEES RECOMMENDS THAT YOU APPROVE THESE PROPOSALS.
IT IS VERY IMPORTANT THAT YOU PUT FORTH YOUR VOTE REGARDING THESE PROPOSITIONS.
A SPECIAL SHAREHOLDER MEETING WILL BE HELD ON JUNE 29, 1998 AT (INSERT LOCATION
AND TIME). AS AN ARMADA FUNDS SHAREHOLDER, YOU MAY EITHER CAST YOUR BALLOTS IN
PERSON AT THIS MEETING OR VOTE BY PROXY.
Please note that you may have received one ballot for each ARMADA FUND you own:
all ballots must be voted and returned. IT IS CRITICAL THAT WE RECEIVE YOUR
VOTE(S) AS QUICKLY AS POSSIBLE. Please send your voted ballot(s) to (insert
instructions). A postage-paid envelope is included in this package for your
convenience. YOU MAY ALSO FAX YOUR VOTED BALLOT(S) TO (INSERT FAX NUMBER) OR
CALL (INSERT PHONE NUMBER) TO REGISTER YOUR VOTE(S).
If you have any questions, please do not hesitate to contact your investment
representative or call 1-800-622-FUND(3863). Thank you in advance for your
cooperation in this matter. We appreciate your continued confidence in ARMADA
FUNDS as your choice for investment solutions.
Sincerely,
/s/ Robert D. Neary
Robert D. Neary
Chairman
ARMADA FUNDS
Enclosures
[Armada Logo]
<PAGE> 3
ARMADA FUNDS
One Freedom Valley Drive
Oaks, Pennsylvania 19456
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
June 29, 1998
To the Shareholders of Armada Funds:
Enhanced Income Fund
Total Return Advantage Fund
Core Equity Fund
NOTICE IS HEREBY GIVEN that a special meeting of shareholders of the
Enhanced Income Fund, the Total Return Advantage Fund and the Core Equity Fund
(each a "Fund" and collectively the "Funds") of the Armada Funds (the "Trust")
will be held on Monday, June 29, 1998, at 11 a.m. local time, at One Freedom
Valley Drive, Boardroom B, Oaks, Pennsylvania 19456, for the following purposes:
1. Each Fund will vote upon a proposal to approve an interim advisory
agreement between the Trust and National Asset Management Corporation ("NAM").
2. Each Fund will vote upon a proposal to approve a new advisory agreement
between the Trust and National City Bank ("National City").
3. The Total Return Advantage Fund and the Core Equity Fund will vote upon
a proposal to approve a new sub-advisory agreement between National City and
NAM.
4. The transaction of such other business as may properly be brought before
the meeting.
Shareholders of record at the close of business on May 11, 1998 will be
entitled to vote at the meeting.
It is hoped that you will attend the meeting, but if you cannot do so,
please fill in and sign the enclosed proxy, and return it in the accompanying
envelope as promptly as possible. Any shareholder attending can vote in person
even though a proxy has already been returned.
/s/ W. Bruce McConnel, III
W. Bruce McConnel, III
Secretary
Oaks, Pennsylvania
May 18, 1998
<PAGE> 4
ARMADA FUNDS
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation by
and on behalf of the Board of Trustees of Armada Funds (the "Trust") for use at
the Special Meeting of Shareholders of the Enhanced Income Fund, the Total
Return Advantage Fund and the Core Equity Fund (each a "Fund" and collectively,
the "Funds") of the Trust (the "Meeting") to be held at One Freedom Valley
Drive, Boardroom B, Oaks, Pennsylvania 19456 on Monday, June 29, 1998 at 11
a.m., local time. The address of the principal office of the Fund is One Freedom
Valley Drive, Oaks, Pennsylvania 19456. This proxy statement and form of proxy
were first sent to shareholders on or about May 18, 1998.
PROXY SOLICITATION
All proxies in the enclosed form which are properly executed and returned
to the Trust will be voted as provided therein at the Meeting or at any
adjournments thereof. A shareholder executing and returning a proxy has the
power to revoke it at any time before it is exercised by giving written notice
of such revocation to the Secretary of the Trust. Signing and mailing the proxy
will not affect your right to give a later proxy or to attend the Special
Meeting and vote your shares in person.
The Board of Trustees intends to bring before the meeting the matters set
forth in items 1, 2 and 3 in the foregoing notice. The persons named in the
enclosed proxy and acting thereunder will vote with respect to items 1, 2 and 3
in accordance with the directions of the shareholders as specified on the proxy
card; if no choice is specified, the shares will be voted IN FAVOR of approval
of the interim advisory agreement with National Asset Management Corporation
("NAM") described in item 1, IN FAVOR of approval of the new investment advisory
agreement with National City Bank ("National City") described in item 2 and IN
FAVOR of approval of the sub-advisory agreement between National City and NAM
described in item 3. If any other matters are properly presented to the meeting
for action, it is intended that the persons named in the enclosed proxy and
acting thereunder will vote in accordance with the views of management thereon.
Abstentions and broker non-votes are counted for quorum purposes. Abstentions
and broker non-votes will have the effect of a negative vote on the proposal to
approve the interim advisory agreement, the new investment advisory agreement
and the proposal to approve the sub-advisory agreement because each requires the
vote of a majority of the outstanding voting securities, as defined in the
Investment Company Act of 1940 (the "1940 Act") and described below.
The affirmative vote of the lesser of (i) more than 50% of the respective
Fund's outstanding shares entitled to vote at the meeting or (ii) 67% of the
shares present at the meeting if the holders of more than 50% of the outstanding
shares entitled to vote at the meeting are present in person or by proxy, is
required for approval of the investment advisory agreement (Item 3).
In the event a quorum is not present at the meeting or in the event that a
quorum is present but sufficient votes to approve the proposed item are not
received, the persons named as proxies may propose one or more adjournments of
the meeting to permit further solicitation of proxies. Any such adjournment will
require the affirmative vote of a majority of those shares represented at such
meeting in person or by proxy. The persons named as proxies will vote those
proxies that they are entitled to vote FOR any such proposal, in favor of such
an
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<PAGE> 5
adjournment, and will vote those proxies required to be voted AGAINST any such
proposal, against any such adjournment.
National City Corporation and its bank subsidiaries hold shares for the
benefit of their customers and may be considered controlling persons of the
Trust for purposes of certain federal securities laws. National City Corporation
and its subsidiaries intend to vote Shares over which they have voting authority
pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA") in the
best interests of the plan participants. With respect to Shares over which
National City Corporation and its subsidiaries possess voting authority, but
which are not subject to ERISA, National City Corporation and its subsidiaries
will vote such shares in the same proportion as the votes cast by other
shareholders.
National City and NAM will bear the costs of preparing, printing and
mailing this proxy statement, the proxies and any additional materials which may
be furnished to shareholders. Solicitation may be undertaken by mail, telephone,
telegraph, facsimile and personal contact. Management Information Services
("MIS") has been retained to assist in the solicitation of proxies primarily by
contacting shareholders by telephone and telegram. Authorizations to execute
proxies may be obtained by telephonic or electronically transmitted instructions
in accordance with procedures designed to authenticate the shareholder's
identity. In all cases where a telephonic proxy is solicited, the shareholder
will be asked to provide his or her address, social security number (in the case
of an individual) or taxpayer identification number (in the case of an entity)
and the number of shares owned and to confirm that the shareholder has received
the Proxy Statement and proxy card in the mail. Within 72 hours of receiving a
shareholder's telephonic or electronically transmitted voting instructions, a
confirmation will be sent to the shareholder to ensure that the vote has been
taken in accordance with the shareholder's instructions and to provide a
telephone number to call immediately if the shareholder's instructions are not
correctly reflected in the confirmation. Shareholders requiring further
information with respect to telephonic or electronically transmitted voting
instructions or the proxy generally should contact . The Annual
Report of the Funds has been mailed to shareholders and is available by calling
1-800-622-FUND (3863).
The following table summarizes the proposals to be voted on at the Special
Meeting and indicates those shareholders who are being solicited with respect to
each proposal:
<TABLE>
<CAPTION>
PROPOSALS
-------------------------------------------------------------
PROPOSAL #3:
PROPOSAL #1: PROPOSAL #2: SUB-ADVISORY
INTERIM ADVISORY ADVISORY AGREEMENT AGREEMENT BETWEEN
AGREEMENT BETWEEN BETWEEN TRUST AND NATIONAL CITY
FUND SHAREHOLDERS SOLICITED TRUST AND NAM NATIONAL CITY AND NAM
--------------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C>
Enhanced Income Fund..................... X X
Total Return Advantage Fund.............. X X X
Core Equity Fund......................... X X X
</TABLE>
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Holders of Shares of Beneficial Interests of the Funds ("Shares") of record
at the close of business on May 11, 1998 will be entitled to vote at the Meeting
or any adjournment thereof. Each full share is entitled to one vote and each
fractional share is entitled to a proportionate fractional vote on all business
of the meeting.
3
<PAGE> 6
The total outstanding shares of the Funds and beneficial owners of more
than 5% of the outstanding Beneficial Interests of the Fund as of the record
date are as follows:
<TABLE>
<CAPTION>
% OF TOTAL
OUTSTANDING SHAREHOLDER NUMBER OF OUTSTANDING
FUND SHARES NAME AND ADDRESS SHARES SHARES
- -------------------------------------- ----------- ---------------- --------- -----------
<S> <C> <C> <C> <C>
Enhanced Income Fund..................
Institutional Shares................
Retail Shares.......................
Total Return Advantage Fund...........
Institutional Shares................
Retail Shares.......................
Core Equity Fund......................
Institutional Shares................
Retail Shares.......................
B Shares............................
</TABLE>
All of these Shares were beneficially owned by the record owners named
above because they possessed or shared investment or voting power with respect
to them while owning the Shares or while acting in a fiduciary, advisory,
custodial, or other similar capacity on behalf of their customers.
For purposes of the 1940 Act, any person who owns directly or through one
or more controlled companies more than 25 percent of the voting securities of a
company is presumed to "control" such company. Under this definition, National
City Corporation and its affiliates may be deemed to be controlling persons of
the Trust.
The officers and trustees of the Trust as a group beneficially own in the
aggregate less than 1% of the outstanding Shares of the Trust and of each Fund.
4
<PAGE> 7
I. ENHANCED INCOME FUND, TOTAL RETURN ADVANTAGE FUND AND CORE EQUITY FUND:
APPROVAL OF THE INTERIM NEW
INVESTMENT ADVISORY AGREEMENTS FOR THE FUNDS
BACKGROUND
National City is a wholly-owned subsidiary of National City Corporation
("NCC"), a publicly held, regional multibank holding company registered under
the Bank Holding Company Act of 1956, as amended. NAM was formerly a
wholly-owned subsidiary of NCC. Under an Agreement dated as of March 6, 1998 by
and among NCC, NAM and certain individuals, NCC agreed to divest control of NAM
by selling all of the issued and outstanding capital stock of NAM, comprised of
100 shares of common stock owned by NCC, to its principal management team in
exchange for one share of NAM's Class A Preferred Stock (the "Preferred Stock"),
which constitutes 100% of NAM's authorized Class A Preferred Stock (the
"Transaction"). The Preferred Stock was issued to NCC on March 6, 1998 for
consideration of $1.00. The Preferred Stock has a stated value of $32 million.
As a result of the Transaction, NAM is no longer a wholly-owned subsidiary of
NCC. The Transaction closed on March 6, 1998.
The Transaction, by operation of law, resulted in an assignment of the two
existing advisory agreements between the Trust and NAM relating to each Fund
(the "Existing Advisory Agreements"). As required by the 1940 Act, the Existing
Advisory Agreements provide for their automatic termination upon "assignment".
At a meeting held by the Board of Trustees of the Trust on March 6, 1998, the
Trustees, (including the non-interested Trustees who are not parties to the
existing, interim or new advisory or sub-advisory agreements, or interested
persons of such parties) approved interim investment advisory agreements with
NAM, which are identical in substance to the Existing Agreements, except for
their effective and termination dates and certain escrow provisions (the
"Interim Advisory Agreements"). The description of the Interim Advisory
Agreements is qualified in its entirety by reference to the forms of agreement
attached as Exhibits A and B to this proxy statement. The total contractual rate
chargeable for investment advisory services under each of the Existing
Agreements and the Interim Advisory Agreements is .75% of average daily net
assets for the Core Equity Fund, .55% of average daily net assets for the Total
Return Advantage Fund and .45% of average daily net assets for the Enhanced
Income Fund. If the Interim Advisory Agreements had been in effect during the
most recent fiscal year, total Fund operating expenses for each Fund would have
been the same as the expenses at the end of the most recent fiscal year. As of
May 11, 1998, the Funds had net assets as follows:
<TABLE>
<CAPTION>
FUND NET ASSETS
- --------------------------------------------- ----------
<S> <C>
Enhanced Income Fund.........................
Total Return Advantage Fund..................
Core Equity Fund.............................
</TABLE>
The Trust and NAM have requested an Order from the Securities and Exchange
Commission ("SEC"), which if granted, would permit the implementation, without
shareholder approval, of new investment advisory agreements for a period
beginning on the date of the issuance of the requested Order and continuing, in
respect of each Fund, through the date on which each new agreement is approved
or disapproved by the respective Fund's shareholders (the "Interim Period"). The
Interim Period will terminate no later than July 6, 1998. The Order would permit
NAM to receive actual out-of-pocket costs to NAM for providing advisory services
to the Funds from the closing date of the Transaction on March 6, 1998 to the
date of the issuance of the requested Order, and
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<PAGE> 8
to receive all fees earned under the new advisory agreements during the Interim
Period, (the "Interim Period Advisory Fees"), following shareholder approval of
the Interim Advisory Agreements. The Interim Period Advisory Fees will be paid
into an interest-bearing escrow account maintained by an independent escrow
agent. The escrow agent will release the amounts held in the escrow account
(including any interest earned): (a) to NAM upon approval of the Interim
Advisory Agreements by shareholders at this Meeting; or (b) to the Fund which
paid the fees if the Interim Period ends and the Interim Advisory Agreements
have not received the requisite shareholder approval.
NAM is a SEC registered investment adviser, with its principal place of
business located at 101 South Fifth Street, Louisville, Kentucky 40202. NAM
currently manages approximately $9.2 billion in assets for a diverse group of
clients. The officers and directors of NAM, and their principal occupations are
described below. Each of them may be contacted at NAM's address above.
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
- --------------------------- ---------------------------------
<S> <C>
Carl W. Hafele President, CEO and Principal, NAM
William F. Chandler, Jr. Principal, NAM
Randall T. Zipfel COO and Principal, NAM
Brent A. Bell Principal, NAM
David B. Chick Principal, NAM
Erik N. Evans Principal, NAM
John W. Ferreby Secretary and Principal, NAM
Michael C. Heyman Principal, NAM
David B. Hiller Principal, NAM
Stephen G. Mullins Principal, NAM
Catherine R. Stodghill Principal, NAM
Larry J. Walker Principal, NAM
</TABLE>
No individual or entity owns in excess of 25% of the outstanding voting
stock of NAM. Mr. Hafele owns 20% of the outstanding voting stock of NAM.
Messrs. Hiller and Ferreby each own 10.5% of the outstanding voting stock of NAM
and Mr. Chandler owns 10% of the outstanding voting stock of NAM.
NAM received no advisory fees from any of the Funds for the most recent
fiscal year. Core Equity Fund had not commenced operations at May 31, 1997; NAM
waived $1,530,963 in advisory fees for the Total Return Advantage Fund; and NAM
waived $236,026 for the Enhanced Income Fund. Currently, NAM also serves as
sub-adviser to the Long-term Bond Investments portfolio of the Consulting Group
Capital Markets Fund, a registered investment company with approximately $200
million in assets. For its services as sub-adviser, NAM receives a fee of .20%
of average daily net assets.
In connection with the Trust's approval of the Interim Advisory Agreements,
the Board considered that the terms of the Transaction do not require a change
in the Funds' investment objective or policies, NAM's investment management or
operation of the Funds, the investment personnel managing the Funds, the
investment advisory fees or other business activities of the Funds.
Section 15(f) of the 1940 Act provides that when a change in the control of
an investment adviser occurs, the investment adviser or any of its affiliated
persons may receive any amount or benefit in connection therewith as long as two
conditions are satisfied. First, no "unfair burden" may be imposed on the
investment company as a
6
<PAGE> 9
result of the transaction relating to the change of control, or any express or
implied terms, conditions or understandings applicable thereto. The term "unfair
burden," as defined in the 1940 Act, includes any arrangement during the
two-year period after the change in control whereby the investment adviser (or
predecessor or successor adviser), or any interested person of any such adviser,
receives or is entitled to receive any compensation, directly or indirectly,
from the investment company or its security holders (other than fees for bona
fide investment advisory or other services) or from any person in connection
with the purchase or sale of securities or other property to, from, or on behalf
of the investment company (other than fees for bona fide principal underwriting
services). No such compensation arrangements are in effect or contemplated
insofar as the Fund is concerned.
The second condition is that, during the three-year period immediately
following consummation of the transaction, at least 75% of the investment
company's board of directors must not be "interested persons" of the Adviser
within the meaning of the 1940 Act. The Trust expects to comply with Section
15(f).
The Trustees of the Trust unanimously approved the Interim Advisory
Agreements and recommended that they be submitted for approval to the
shareholders of the respective Funds. If the Board's approval of the Interim
Advisory Agreements is ratified by either more than 50% of a Fund's outstanding
shares entitled to vote at the meeting, or by 67% of the shares present at such
meeting if the holders of more than 50% of the outstanding shares entitled to
vote at the meeting are present in person or by proxy, the Interim Advisory
Agreement will be approved for such Fund.
The proposed Interim Advisory Agreements between the Trust and NAM are
Exhibits A and B of this proxy statement. In the event the Interim Advisory
Agreement is not approved by a Fund's shareholders, the Trustees will promptly
seek to enter into a new advisory arrangement for the Fund, subject to approval
by the Fund's shareholders.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE TO APPROVE THE INTERIM ADVISORY
AGREEMENTS.
II. ENHANCED INCOME FUND, TOTAL RETURN ADVANTAGE FUND AND CORE EQUITY FUND:
APPROVAL OF THE
NEW ADVISORY AGREEMENT FOR THE FUNDS
The Board of Trustees approved a new investment advisory agreement between
the Trust and National City for the Enhanced Income Fund, the Total Return
Advantage Fund and the Core Equity Fund (the "New Advisory Agreement") at its
meeting held on March 6, 1998, to be effective upon shareholder approval of the
agreement. The Board also approved a new sub-advisory agreement between National
City and NAM for the Total Return Advantage Fund and the Core Equity Fund, to be
effective upon shareholder approval as described below, in Item III.
The Existing Advisory Agreements and the proposed New Advisory Agreement
are identical in all material substantive respects. The Agreements differ only
in their effective and termination dates and, in the case of the Core Equity
Fund, the Agreements differ also in the description of the obligations of
brokers and dealers utilized by the Fund. The description of the New Advisory
Agreement is qualified in its entirety by reference to the form of Agreement
attached as Exhibit C to this proxy statement.
7
<PAGE> 10
The Existing Advisory Agreements and the New Advisory Agreement provide
that National City shall "use its best efforts to seek on behalf of the Trust
and each Fund the best overall terms available, in placing portfolio transaction
orders." In assessing the best overall terms available for any transaction, the
Existing Advisory Agreements and the New Advisory Agreement require NAM and
National City, respectively, to consider all factors deemed relevant, including
the breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the specific transaction and
on a continuing basis. Moreover, in evaluating the best overall terms available
and selecting brokers or dealers to execute portfolio transactions, the Existing
Advisory Agreements and the New Advisory Agreement provides that NAM and
National City, respectively, may consider brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) provided to any Fund and/or other accounts over
which the adviser or any of its affiliates exercise investment discretion.
In addition, as permitted by Section 28(e) of the Exchange Act, subject to
the prior approval of the Trust's Board of Trustees, the Existing Advisory
Agreements and the New Advisory Agreement authorize NAM and National City,
respectively, to negotiate and pay to a broker or dealer providing such
brokerage and research services a commission for executing a portfolio
transaction which is higher than the amount of commission another broker or
dealer would have charged for effecting the same transaction if, but only if,
NAM or National City, respectively, determines in good faith that such
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer (also, as stated in the Existing
Advisory Agreement for the Enhanced Income Fund and the Total Return Advantage
Fund, and the New Advisory Agreement for the Funds, as viewed in terms of that
particular transaction or in terms of the overall responsibilities of the
advisers with respect to the Fund and other accounts as to which they exercise
investment discretion).
This new provision relating to the Core Equity Fund is intended to provide
National City additional flexibility to negotiate, to the extent legally
permitted, the amount of brokerage commissions payable to a Fund in
consideration for brokerage and research services.
Pursuant to the terms of the Existing Advisory Agreements and the New
Advisory Agreement, NAM and National City, respectively, 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, and determine from time to time what securities and other investments will
be purchased, retained or sold by each Fund. National City or its affiliates
paid the fees, salaries or other remuneration of Trustees and officers of the
Trust who also served as directors, officers or employees of National City, or
any of their affiliated companies and National City will continue to do so. In
return for services provided under the Existing Advisory Agreements and the New
Advisory Agreement, the Funds pay advisory fees as follows:
<TABLE>
<CAPTION>
FEE AS % OF
AVERAGE DAILY
FUND NET ASSETS
- --------------------------------------------- -------------
<S> <C>
Enhanced Income Fund......................... .45
Total Return Advantage Fund.................. .55
Core Equity Fund............................. .75
</TABLE>
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<PAGE> 11
National City would have earned the same fees if the New Advisory Agreement
had been in effect during the fiscal year ended May 31, 1997. NAM did not
receive fees during this period because of voluntary fee waivers and Core Equity
Fund had not commenced operations. National City intends to waive a portion of
its fees under the New Advisory Agreement, although it is not required to do so,
in the following manner: waiver of .25% of Enhanced Income Fund fee and .20% of
Total Return Advantage Fund fee.
National City also serves as custodian for the assets of the Trust. The
Funds reimburse National City for its direct and indirect costs and expenses
incurred in rendering custodial services. For the most recent fiscal year, the
Funds paid custody fees to National City as follows:
<TABLE>
<CAPTION>
CUSTODIAN
FUND FEES
- --------------------------------------------- ---------
<S> <C>
Enhanced Income Fund......................... $13,516
Total Return Advantage Fund.................. $38,762
Core Equity Fund............................. $ 0
</TABLE>
The Existing Advisory Agreements provide that the adviser will 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 Agreement, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the
adviser's part in the performance of its duties under the Agreement, reckless
disregard by the adviser of its obligation and duties, or a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services. The New Advisory Agreement contains identical provisions.
The Existing Advisory Agreements were approved by the Board of Trustees on
July 17, 1997 and September 17, 1997 for both Enhanced Income Fund and Total
Return Advantage Fund, and on July 17, 1997 for the Core Equity Fund, for an
initial term ending September 30, 1998. Shareholders of the Enhanced Income and
Total Return Advantage Funds approved the Existing Advisory Agreement relating
to these Funds on November 19, 1997. The Existing Agreement relating to the Core
Equity Fund was last approved by its initial Shareholder in connection with the
commencement of the Fund's operations. The proposed New Advisory Agreement will
become effective on the date of shareholder approval and continue in force until
September 30, 1999 unless sooner terminated. The Existing Advisory Agreements
and the New Advisory Agreement provide that the respective Agreement will
continue for successive twelve month periods ending on September 30 so long as
such continuance is specifically approved at least annually by (1) the Board of
Trustees of the Trust or (2) the vote of a majority of the outstanding voting
securities of a Fund; provided, however, that in either event the continuance
also is required to be approved by the vote of a majority of the Trustees of the
Trust who are not "interested persons" (as defined in the 1940 Act) of the Trust
or the adviser, cast in person at a meeting called for the purpose of voting
upon such approval. The Existing Advisory Agreements and the New Advisory
Agreement provide for automatic termination of the respective Agreement in the
event of its assignment. In addition, each Agreement is terminable at any time,
without penalty, by the Board of Trustees of the Trust or by the vote of a
majority of the outstanding voting securities of a Fund or by the adviser on 60
days' written notice to the Trust.
Annual Fund Operating Expenses. If the proposed New Advisory Agreement had
been in effect during the most recent fiscal year, total Fund operating expenses
for each of the Funds would not have differed.
9
<PAGE> 12
National City is a wholly-owned subsidiary of NCC. In addition to the
Funds, National City serves as investment adviser to the following Armada funds:
MONEY MARKET FUND
GOVERNMENT MONEY MARKET FUND
TREASURY MONEY MARKET FUND
TAX EXEMPT MONEY MARKET FUND
INTERMEDIATE BOND FUND
OHIO TAX EXEMPT FUND
NATIONAL TAX EXEMPT FUND
EQUITY GROWTH FUND
EQUITY INCOME FUND
SMALL CAP VALUE FUND
PENNSYLVANIA TAX EXEMPT MONEY MARKET FUND
BOND FUND
GNMA FUND
PENNSYLVANIA MUNICIPAL FUND
INTERNATIONAL EQUITY FUND
EQUITY INDEX FUND
SMALL CAP GROWTH FUND
REAL RETURN ADVANTAGE FUND
TAX MANAGED EQUITY FUND
BALANCED ALLOCATION FUND
National City 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. It is a member bank of the
Federal Reserve System and the Federal Deposit Insurance Corporation. As of
April 30, 1998, the Trust Department of National City had approximately $11.1
billion in assets under management and approximately $23.0 billion in trust
assets.
10
<PAGE> 13
The principal executive officers and directors of National City and their
principal occupations are set forth below. Unless otherwise noted, the address
of the officers and directors of National City is 1900 East Ninth Street,
Cleveland, Ohio 44114.
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS TYPE OF
NAME NATIONAL CITY BANK CONNECTIONS BUSINESS
---- ------------------ -------------- --------
<S> <C> <C> <C>
George R. Berlin Director President and Chief
Executive Officer, Berco,
Inc.
Thomas G. Breitenbach Director President and Chief Health Care
Executive Officer,
MedAmerica Health Systems
Steven D. Bullock Director Chief Executive Officer and Non-Profit organization
Chapter Manager,
American Red Cross
David A. Daberko Director Chairman and Chief Bank holding company
Executive Officer, National
City Corporation
Director, National City Bank
Bank of Columbus
Director, National City Bank
Bank of Dayton
Director, National City Bank
Bank of Indiana
Director, National City Bank
Bank of Kentucky
Officer and Director, Tractor sales
Hudson Tractor Sales, Inc.
Director, Student Loan Financing company
Marketing Association
Vincent A. DiGirolamo Director Vice Chairman, National Bank holding company
City Corporation
Daniel W. Duval Director President and Chief
Executive Officer, Robbins
& Myers, Inc.
Thomas J. Fitzpatrick Director Chairman and Chief
Executive Officer, Elford,
Inc.
</TABLE>
11
<PAGE> 14
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS TYPE OF
NAME NATIONAL CITY BANK CONNECTIONS BUSINESS
---- ------------------ -------------- --------
<S> <C> <C> <C>
Gary A. Glaser Director Chairman, National City Bank
Bank of Columbus
Gordon D. Harnett Director President, Chairman and Manufacturer of engineering
Chief Executive Officer, material
Brush Wellman, Inc.
Donald V. Kellermeyer Director President, Kellermeyer Co.
William G. Kelley Chairman and
Chief Executive Officer,
Consolidated Stores
Corporation
J. Peter Kelly Director President and Chief Manufacturer of steel
Operating Officer, LTV
Steel Company
William E. MacDonald III Chairman, Executive Vice President, Bank holding company
President, Chief National City Corporation
Executive Officer
and Director
William P. Madar Director Vice Chairman and Manufacturer of machinery
Chief Executive Officer,
Nordson Corporation
Paul A. Ormond Director Chairman, President and
Chief Executive Officer,
Health Care & Retirement
Corp.
William F. Patient Director Chairman, President and PVC manufacturer
Chief Executive Officer,
The Geon Company
Shelley B. Roth Director President, Pierre's French Ice cream
Ice Cream Company
Dr. K. Wayne Smith President and Chief
Executive Officer, OCLC
Online Computer Library,
Inc.
Thomas C. Sullivan Director Chairman of the Board and Manufacturer of protective
Chief Executive Officer, coatings, roofing material
RPM, Inc. and paint
</TABLE>
12
<PAGE> 15
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS TYPE OF
NAME NATIONAL CITY BANK CONNECTIONS BUSINESS
---- ------------------ -------------- --------
<S> <C> <C> <C>
Dr. Jerry S. Thornton Director President, Cuyahoga Education
Community College
John R. Werren Director Partner, Day, Ketterer, Law firm
Raley, Wright & Rybollt
W. Douglas Bannerman Senior Executive Senior Vice President, Bank holding company
Vice President, National City Corporation
Corporate Banking
Jeffrey M. Biggar Executive Vice Senior Vice President, Bank holding company
President, Private National City Corporation
Client Group
Jane Grebenc Executive Vice None
President, Retail
Banking
Robert K. Healey, Jr. Executive Vice None
President
Thomas R. Hollern Area President, None
Northeast Region
Katherine B. Hollingsworth Executive Vice None
President/Southwest
Dorothy M. Horvath Executive Vice None
President/Central
James Hughes Executive Vice None
President/Northcoast
Jeffrey D. Kelly Executive Vice Executive Vice President, Bank holding company
President, National City Corporation
Investments
Kenneth R. Knutson Area President, None
Northeast Region
Stephen McLane Executive Vice None
President/Central
</TABLE>
13
<PAGE> 16
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS TYPE OF
NAME NATIONAL CITY BANK CONNECTIONS BUSINESS
---- ------------------ -------------- --------
<S> <C> <C> <C>
Bruce T. Muddell Executive Vice None
President, Credit
Administration
Richard A. Ray Executive Vice None
President/Central
Philip L. Rice Executive Vice None
President/Northcoast
David W. Ridenour Executive Vice None
President/Northwest
Robert A. Robinson Executive Vice None
President/Northwest
Jeffrey T. Siler Executive Vice None
President/Southwest
William F. Smith Executive Vice None
President/Central
Harold E. Todd, Jr. Executive Vice Executive Vice President, Bank holding company
President, National City Corporation
Institutional
Trust and Asset
Management
Gregory L. Tunis Senior Executive
Vice President
</TABLE>
The following officer of NCC also serves as an officer and director of the
Trust:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
OFFICER POSITION WITH DURING PAST 5 YEARS
NAME AND ADDRESS SINCE THE TRUST AND OTHER AFFILIATIONS
---------------- ------- ------------- ----------------------
<S> <C> <C> <C>
Herbert R. Martens, Jr. July 1997 President and Executive Vice President, National City
c/o NatCity Investments, Inc. Trustee Corporation (bank holding company), since
1965 East Sixth Street July 1997; Chairman and Chief Executive
Cleveland, OH 44114 Officer, NatCity Investments, Inc.
(investment banking), since July 1995;
President and Chief Executive Officer,
Raffensberger, Hughes & Co.
(broker-dealer), from 1993 until 1995;
President, Reserve Capital Group, from
1990 until 1993.
</TABLE>
14
<PAGE> 17
The Trustees of the Trust unanimously approved the New Advisory Agreement
and recommended that it be submitted for approval to the shareholders of the
respective Funds. If the Board's approval of the New Advisory Agreement is
ratified by either more than 50% of a Fund's outstanding shares entitled to vote
at the meeting, or by 67% of the shares present at such meeting if the holders
of more than 50% of the outstanding shares entitled to vote at the meeting are
present in person or by proxy, the New Advisory Agreement will be approved for
such Fund.
The proposed New Advisory Agreement between the Trust and National City is
Exhibit B of this proxy statement. In the event the New Advisory Agreement is
not approved by a Fund's shareholders, the Trustees will promptly seek to enter
into a new advisory agreement for the Fund, subject to approval by the Fund's
shareholders.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE TO APPROVE THE NEW
ADVISORY AGREEMENT.
III. CORE EQUITY FUND AND TOTAL RETURN ADVANTAGE FUND:
APPROVAL OF THE SUB-ADVISORY AGREEMENT FOR THE FUNDS
Shareholders of the Core Equity Fund and the Total Return Advantage Fund
are being asked to approve a new sub-advisory agreement between National City
and NAM for the benefit of the Funds (the "Sub-Advisory Agreement"). Pursuant to
the terms of the SubAdvisory Agreement, NAM: assists National City in providing
a continuous investment program for each Fund, including investment research and
management with respect to all securities, investments, cash and cash
equivalents in the Funds; assists National City in determining from time to time
what securities and other investments will be purchased, retained or sold by
each Fund; transmits trades to the Trust's custodian for proper settlement;
prepares a quarterly broker security transaction summary and monthly security
transaction listing for the Funds; maintains all books and records with respect
to the Funds' securities transactions effected by it; and supplies the Trust and
the Trustees with reports and statistical data as reasonably requested. NAM pays
all expenses incurred by it in connection with its activities under the Sub-
Advisory Agreement other than the cost of securities, commodities and other
investments purchased or sold for any Fund. For its services and expenses
assumed, NAM will receive a fee from National City of .32% and .16% of the
average net assets of the Core Equity Fund and the Total Return Advantage Fund,
respectively.
The Sub-Advisory Agreement provides that NAM will 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 Sub-Advisory Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or loss resulting from willful misfeasance, bad faith
or gross negligence on the part of NAM in the performance of its duties or from
reckless disregard by it of its obligations and duties under the SubAdvisory
Agreement.
The proposed Sub-Advisory Agreement will become effective on the date of
shareholder approval and continue in force until September 30, 1999 unless
sooner terminated. It will continue for successive twelve month periods ending
on September 30, so long as such continuance is specifically approved at least
annually by (1) the Board of Trustees of the Trust or (2) the vote of a majority
of the outstanding voting securities of a Fund; provided, however, that in
either event the continuance also is required to be approved by the vote of a
majority of the Trustees of the Trust who are not "interested persons" (as
defined in the 1940 Act) of the Trust or NAM cast in person at a meeting called
for the purpose of voting upon such approval. The Sub-Advisory Agreement
provides for automatic termination of the Agreement in the event of its
assignment. In addition, the Agreement is
15
<PAGE> 18
terminable at any time, without penalty, by National City or the Board of
Trustees of the Trust or by vote of a majority of the outstanding voting
securities of the particular Fund on 60 days' written notice to NAM, or by NAM
on 60 days' written notice to the Trust. In addition, if National City's New
Advisory Agreement with the Trust terminates with respect to a particular Fund
for any reason (whether by the Trust, by National City or by operation of law),
the Sub-Advisory Agreement will terminate with respect to the same Fund upon the
effective date of such termination of the New Advisory Agreement.
The Trustees of the Trust unanimously approved the Sub-Advisory Agreement
and recommended that it be submitted for approval to the shareholders of the
respective Funds. If the Board's approval of the Sub-Advisory Agreement is
ratified by either more than 50% of a Fund's outstanding shares entitled to vote
at the meeting, or by 67% of the shares present at such meeting if the holders
of more than 50% of the outstanding shares entitled to vote at the meeting are
present in person or by proxy, the Sub-Advisory Agreement will be approved for
such Fund.
The proposed Sub-Advisory Agreement between National City and NAM is
Exhibit D of this proxy statement. In the event the Sub-Advisory Agreement is
not approved by a Fund's shareholders, the Trustees will meet to determine what
course of action to pursue and may seek to enter into a new sub-advisory
agreement for the Fund, subject to approval by the Fund's shareholders. The New
Advisory Agreement provides that in the absence of a Sub-adviser, the adviser,
National City, may provide investment advisory services to a Fund without
further shareholder approval.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE TO APPROVE THE
SUBADVISORY AGREEMENT.
16
<PAGE> 19
GENERAL INFORMATION
SEI Investments Distribution Co. serves as the Trust's distributor (the
"Distributor"). SEI Fund Resources serves as the Trust's Administrator (the
"Administrator"). The address of the Distributor and the Administrator is One
Freedom Valley Drive, Oaks, Pennsylvania 19456.
Ernst & Young LLP, independent auditors, with offices at Two Commerce
Square, 2001 Market Street, Suite 4000, Philadelphia, Pennsylvania 19103, serves
as independent auditors of the Trust and audited the Trust's operations for the
fiscal year ended May 31, 1997. The Board of Trustees selected Ernst & Young LLP
at its meeting on July 17, 1997 to serve in such capacity for the fiscal year
ending May 31, 1998. Shareholders are not herein requested to approve the
selection of Ernst & Young LLP. Nevertheless, a representative of Ernst & Young
LLP is expected to be available by telephone at the Meeting should any matter
arise requiring consultation with the auditors, and Ernst & Young LLP will be
given the opportunity to make a statement if it chooses.
SHAREHOLDER PROPOSALS
The Trust is organized as a Massachusetts business trust. The Trust's
Declaration of Trust does not require that an annual meeting of shareholders be
held each year. The Trust does not 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,
including meetings to consider the removal of trustees, shall be called at the
written request of the shareholders entitled to vote at least 10% of the
outstanding shares of the Trust entitled to be voted at such meetings. Any
shareholder desiring to present a proposal for consideration at a future meeting
of shareholders of the Trust will be required to submit such proposal in writing
so that it is received by the Trust, at least 120 days before the date of the
meeting. Mere submission of a shareholder proposal does not guarantee inclusion
of the proposal in the proxy statement or presentation of the proposal at the
meeting since such inclusion and presentation are subject to compliance with
certain federal regulations.
The management of the Trust does not know of any matters to be presented at
the Meeting, other than those set forth in this Proxy Statement.
/s/ W. Bruce McConnel, III
W. Bruce McConnel, III
Secretary
May 18, 1998
17
<PAGE> 20
EXHIBIT A
INTERIM ADVISORY AGREEMENT
ARMADA FUNDS
ENHANCED INCOME FUND
TOTAL RETURN ADVANTAGE FUND
ADVISORY AGREEMENT
AGREEMENT made as of March 6, 1998 between ARMADA FUNDS, a Massachusetts
business trust, located in Oaks, Pennsylvania (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 Enhanced Income and Total 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;
(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").
A-1
<PAGE> 21
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 of 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 appointed hereunder is
terminated, the Adviser may provide investment advisory services pursuant to
this Agreement to the Fund without further shareholder approval. Not-
withstanding 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.
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
A-2
<PAGE> 22
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 selecting brokers or dealers for executing portfolio
transactions, the Adviser will use its best efforts to seek on
behalf of the Trust and each Fund the best overall terms
available. In assessing the best overall terms available for any
transaction the Adviser shall consider all factors it deems
relevant, including the breadth of the market in the security, the
price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a
continuing basis. In evaluating the best overall terms available,
and in selecting the broker or dealer to execute a particular
transaction, the Adviser may also consider the brokerage and
research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934, as amended) provided to any
Fund and/or other accounts over which the Adviser or any affiliate
of the Adviser exercises investment discretion. The Adviser is
authorized, subject to the prior approval of the Board, to
negotiate and pay to a broker or dealer who provides such
brokerage and research services a commission for executing a
portfolio transaction for any Fund which is in excess of the
amount of commission another broker or dealer would have charged
for effecting that transaction if, but only if, the Adviser
determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services
provided by such broker or dealer viewed in terms of that
particular transaction or in terms of the overall responsibilities
of the Adviser with respect to the accounts as to which it
exercises investment discretion. In no instance will fund
securities be purchased from or sold to the Adviser, any
Sub-Adviser, SEI Investments Distribution Co. ("SEI") (or any
other principal underwriter to the Trust) or an affiliated person
of either the Trust, the Adviser, Sub-Adviser, or SEI (or such
other principal underwriter) unless permitted by an order of the
SEC or applicable rules. In executing portfolio transactions for
any Fund, the Adviser may, but shall not be obligated to, to the
extent permitted by applicable laws and regulations, aggregate the
securities to be sold or purchased with those of other Funds and
its other clients where such aggregation is not inconsistent with
the policies set forth in the Trust's registration statement. In
such event, the Adviser will allocate the securities so purchased
or sold, and the expenses incurred in the transaction, in the
manner it considers to be the most equitable and consistent with
its fiduciary obligations to the Funds and such other clients;
(f) will maintain all books and records with respect to the securities
transactions for the Funds and furnish the Trust's Board of
Trustees such periodic and special reports as the Board may
request; and
(g) will treat confidentially and as proprietary information of the
Trust all records and other information relative to the Funds and
prior, present or potential shareholders, and will not use such
records and information for any purpose other than performance of
its responsibilities and duties hereunder (except after prior
notification to and approval in writing by the Trust, which
approval shall not be unreasonably withheld and may not be
withheld and will be deemed granted where the Adviser may be
exposed to civil or criminal contempt proceedings for failure to
comply, when
A-3
<PAGE> 23
requested to divulge such information by duly constituted authorities,
or when so requested by the Trust).
5. SERVICES NOT EXCLUSIVE. The services furnished by the Adviser hereunder
are deemed not to be exclusive, and the Adviser shall be free to furnish similar
services to others so long as its services under this Agreement are not impaired
thereby.
6. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Adviser hereby agrees that all records which it
maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's request.
The Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act.
7. EXPENSES. During the term of this Agreement, the Adviser will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities (including brokerage commissions, if any)
purchased for the Funds.
8. COMPENSATION. For the services provided 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: .45% of
the average daily net assets of the Enhanced Income Fund; and .55% of the
average daily net assets of the Total Return Advantage Fund.
The fee attributable to each Fund shall be the several (and not joint or
joint and several) obligations of each Fund.
The fees payable under this Section 8 shall be maintained in an
interest-bearing escrow account until such Fund's shareholders' approve the
payment of such fees to the Adviser. If a Fund's shareholders do not approve the
payment to the Adviser of such fees for such period, on or before July 6, 1998,
the balance in the escrow account shall be paid to such Fund.
The Funds will not pay the Adviser any fees other than compensation
permitted by the Order issued to the Trust and the Adviser from the Securities
and Exchange Commission related to such compensation.
9. LIMITATION OF LIABILITY. The Adviser shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Trust in
connection with the performance of this Agreement, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement.
10. DURATION AND TERMINATION. This Agreement will become effective with
respect to each Fund on March 6, 1998, subject to approval of this Agreement by
vote of a majority of the outstanding voting securities of each such Fund, and,
unless sooner terminated as provided herein, shall continue in effect until June
29, 1998. Thereafter, if not terminated, this Agreement shall continue in effect
with respect to a particular Fund for successive twelve month periods ending on
June 29, 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
A-4
<PAGE> 24
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.
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.
A-5
<PAGE> 25
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:
----------------------------------------
A-6
<PAGE> 26
EXHIBIT B
INTERIM ADVISORY AGREEMENT
ARMADA FUNDS
CORE EQUITY FUND ADVISORY AGREEMENT
AGREEMENT made as of March 6, 1998 between ARMADA FUNDS, a Massachusetts
business trust, located in Oaks, Pennsylvania (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
(f) The Trust's most recent prospectus and statement of additional
information with respect to the Fund (such prospectus and
statement of additional information, as presently in effect and
all amendments and supplements thereto are herein called a
"Prospectus").
The Trust will furnish the Adviser from time to time with execution copies
of all amendments of or supplements to the foregoing.
B-1
<PAGE> 27
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. 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 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 the 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.
4. 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 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
B-2
<PAGE> 28
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 executing portfolio transactions and selecting brokers
or dealers, the Adviser will use its best efforts to seek on
behalf of the Trust and the Fund the best overall terms available.
In assessing the best overall terms available for any transaction
the Adviser shall consider all factors it deems relevant,
including the breadth of the market in the security, the price of
the security, the financial condition and execution capability of
the broker or dealer, and the reasonableness of the commission, if
any, both for the specific transaction and on a continuing basis.
In evaluating the best overall terms available, and in selecting
the broker or dealer to execute a particular transaction, the
Adviser may also consider the brokerage and research services (as
those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934, as amended) provided to any Fund and/or
other accounts over which the Adviser or any affiliate of the
Adviser exercises investment discretion. The Adviser is
authorized, subject to the prior approval of the Board, to
negotiate and pay to a broker or dealer who provides such
brokerage and research services a commission for executing a
portfolio transaction for any Fund which is in excess of the
amount of commission another broker or dealer would have charged
for effecting that transaction if, but only if, the Adviser
determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services
provided by such broker or dealer viewed in terms of that
particular transaction or in terms of the overall responsibilities
of the Adviser to the particular Fund and to the Trust. In no
instance will fund securities be purchased from or sold to the
Adviser, any Sub-Adviser, SEI Investments Distribution Co. ("SEI")
(or any other principal underwriter to the Trust) or an affiliated
person of either the Trust, the Adviser, Sub-Adviser, or SEI (or
such other principal underwriter) unless permitted by an order of
the SEC or applicable rules. In executing portfolio transactions
for any Fund, the Adviser may, but shall not be obligated to, to
the extent permitted by applicable laws and regulations, aggregate
the securities to be sold or purchased with those of other Funds
and its other clients where such aggregation is not inconsistent
with the policies set forth in the Trust's registration statement.
In such event, the Adviser will allocate the securities so
purchased or sold, and the expenses incurred in the transaction,
in the manner it considers to be the most equitable and consistent
with its fiduciary obligations to the Fund and such other clients;
(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
B-3
<PAGE> 29
requested to divulge such information by duly constituted authorities,
or when so requested by the Trust).
5. SERVICES NOT EXCLUSIVE. The services furnished by the Adviser hereunder
are deemed not to be exclusive, and the Adviser shall be free to furnish similar
services to others so long as its services under this Agreement are not impaired
thereby.
6. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Adviser hereby agrees that all records which it
maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's request.
The Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act.
7. EXPENSES. During the term of this Agreement, the Adviser will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities (including brokerage commissions, if any)
purchased for the Fund.
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 Fund and the Adviser will accept as full compensation therefor
fees, computed daily and paid monthly, at the following annual rate: .75% of the
average daily net assets of the Fund.
The fee attributable to the Fund shall be the several (and not joint and
several) obligations of the Fund.
The fees payable under this Section 8 shall be maintained in an
interest-bearing escrow account until the Fund's shareholders' approve the
payment of such fees to the Adviser. If the Fund's shareholders do not approve
the payment to the Adviser of such fees for such period, the balance in the
escrow account shall be paid to such Fund.
The Fund will not pay the Adviser any fees other than compensation
permitted by the Order issued to the Trust and the Adviser from the Securities
and Exchange Commission related to such compensation.
9. LIMITATION OF LIABILITY. The Adviser shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Trust in
connection with the performance of this Agreement, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement.
10. DURATION AND TERMINATION. This Agreement will become effective with
respect to the Fund on March 6, 1998, subject to approval of this Agreement by
vote of a majority of the outstanding voting securities of the Fund, and, unless
sooner terminated as provided herein, shall continue in effect until June 29,
1998. Thereafter, if not terminated, this Agreement shall continue in effect
with respect to the Fund for successive twelve month periods ending on June 29,
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 the
Fund at any time, without the
B-4
<PAGE> 30
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 the Fund until approved by vote of a majority of the
outstanding voting securities of the Fund.
12. 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 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.
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.
B-5
<PAGE> 31
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:
--------------------------------------
B-6
<PAGE> 32
EXHIBIT C
NEW ADVISORY AGREEMENT
ARMADA FUNDS
CORE EQUITY FUND, ENHANCED INCOME FUND AND
TOTAL RETURN ADVANTAGE FUND ADVISORY AGREEMENT
AGREEMENT made as of March 6, 1998 between ARMADA FUNDS, a Massachusetts
business trust, located in Oaks, 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 Core Equity, Enhanced Income and Total Return Advantage Funds (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;
(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.
C-1
<PAGE> 33
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 of 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 appointed hereunder with
respect to a Fund 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 with respect to a
Fund, the Adviser shall in all events: (a) establish and monitor general
investment criteria and policies for the Fund; (b) review investments in the
Fund on a periodic basis for compliance with its 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 National Asset Management
Corporation with respect to the Core Equity Fund and Total Return Advantage
Fund.
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
C-2
<PAGE> 34
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 selecting brokers or dealers for executing portfolio
transactions, the Adviser will use its best efforts to seek on
behalf of the Trust and each Fund the best overall terms
available. In assessing the best overall terms available for any
transaction the Adviser shall consider all factors it deems
relevant, including the breadth of the market in the security, the
price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a
continuing basis. In evaluating the best overall terms available,
and in selecting the broker or dealer to execute a particular
transaction, the Adviser may also consider the brokerage and
research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934, as amended) provided to any
Fund and/or other accounts over which the Adviser or any affiliate
of the Adviser exercises investment discretion. The Adviser is
authorized, subject to the prior approval of the Board, to
negotiate and pay to a broker or dealer who provides such
brokerage and research services a commission for executing a
portfolio transaction for any Fund which is in excess of the
amount of commission another broker or dealer would have charged
for effecting that transaction if, but only if, the Adviser
determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services
provided by such broker or dealer viewed in terms of that
particular transaction or in terms of the overall responsibilities
of the Adviser with respect to the accounts as to which it
exercises investment discretion. In no instance will fund
securities be purchased from or sold to the Adviser, any
Sub-Adviser, SEI Investments Distribution Co. ("SEI") (or any
other principal underwriter to the Trust) or an affiliated person
of either the Trust, the Adviser, Sub-Adviser, or SEI (or such
other principal underwriter) unless permitted by an order of the
SEC or applicable rules. In executing portfolio transactions for
any Fund, the Adviser may, but shall not be obligated to, to the
extent permitted by applicable laws and regulations, aggregate the
securities to be sold or purchased with those of other Funds and
its other clients where such aggregation is not inconsistent with
the policies set forth in the Trust's registration statement. In
such event, the Adviser will allocate the securities so purchased
or sold, and the expenses incurred in the transaction, in the
manner it considers to be the most equitable and consistent with
its fiduciary obligations to the Funds and such other clients;
(f) will maintain all books and records with respect to the securities
transactions for the Funds and furnish the Trust's Board of
Trustees such periodic and special reports as the Board may
request; and
(g) will treat confidentially and as proprietary information of the
Trust all records and other information relative to the Funds and
prior, present or potential shareholders, and will not use such
records and information for any purpose other than performance of
its responsibilities and duties hereunder (except after prior
notification to and approval in writing by the Trust, which
approval shall not be unreasonably withheld and may not be
withheld and will be deemed granted where the Adviser may be
exposed to civil or criminal contempt proceedings for failure to
comply, when
C-3
<PAGE> 35
requested to divulge such information by duly constituted authorities,
or when so requested by the Trust).
5. SERVICES NOT EXCLUSIVE. The services furnished by the Adviser hereunder
are deemed not to be exclusive, and the Adviser shall be free to furnish similar
services to others so long as its services under this Agreement are not impaired
thereby.
6. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Adviser hereby agrees that all records which it
maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's request.
The Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act.
7. EXPENSES. During the term of this Agreement, the Adviser will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities (including brokerage commissions, if any)
purchased for the Funds.
8. COMPENSATION. For the services provided 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 rates: .75% of
the average daily net assets of the Core Equity Fund; .45% of the average daily
net assets of the Enhanced Income Fund; and .55% of the average daily net assets
of the Total Return Advantage Fund.
The fee attributable to each Fund shall be the several (and not joint or
joint and several) obligation of each Fund.
9. LIMITATION OF LIABILITY. The Adviser shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Trust in
connection with the performance of this Agreement, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement.
10. DURATION AND TERMINATION. This Agreement will become effective with
respect to each Fund upon approval of this Agreement by vote of a majority of
the outstanding voting securities of the Fund, and, unless sooner terminated as
provided herein, shall continue in effect until September 30, 1999. Thereafter,
if not terminated, this Agreement shall continue in effect with respect to the
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
Funds. Notwithstanding the foregoing, this Agreement may be terminated as to the
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.)
C-4
<PAGE> 36
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 the Fund until approved by vote of a majority of the
outstanding voting securities of the Fund.
12. MISCELLANEOUS. The Adviser expressly agrees that notwithstanding the
termination of or failure to continue this Agreement with respect to a the 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.
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:
--------------------------------------
Title:
--------------------------------------
NATIONAL CITY BANK
By:
--------------------------------------
Title:
--------------------------------------
C-5
<PAGE> 37
EXHIBIT D
SUB-ADVISORY AGREEMENT
ARMADA FUNDS
CORE EQUITY FUND
TOTAL RETURN ADVANTAGE FUND
NATIONAL ASSET MANAGEMENT CORPORATION
SUB-ADVISORY AGREEMENT
AGREEMENT made as of March 6, 1998 between NATIONAL CITY BANK (the
"Adviser"), and NATIONAL ASSET MANAGEMENT CORPORATION (the "SubAdviser").
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 dated March 6, 1998 (the
"Advisory Agreement") by and between the Trust and the Adviser, the Trust has
appointed the Adviser to furnish the investment advisory and other services to
the Trust for its Core Equity and Total Return Advantage 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 Core Equity and
Total Return Advantage Funds (the "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 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.
(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.
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 the Funds. The Sub-Adviser will assist the Adviser
in determining from time to time what securities and other
investments will
D-1
<PAGE> 38
be purchased, retained or sold by each such Fund. The Sub-Adviser will
provide the services rendered by it under this Agreement in accordance
with each Fund's investment objective, policies, and restrictions as
stated in the Prospectus and Statement of Additional Information and
resolutions of the Trust's Board of Trustees applicable to such Fund;
(b) Transmit trades to the Trust's custodian for proper settlement;
(c) Prepare a quarterly broker security transaction summary and
monthly security transaction listing for the Funds;
(d) Maintain all books and records with respect to the Funds'
securities transactions effected by it as required by
subparagraphs (b)(5), (6), (7), (9), (10) and (11) and paragraph
(f) of Rule 31a-1 under the 1940 Act; and
(e) 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;
(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 each such Fund's account are
customers of the commercial department of any affiliated person of
the Adviser;
(e) in connection with its duties under paragraph 2 of this Agreement,
will place orders pursuant to its investment determinations for
the Funds either directly with the issuer or with any broker or
dealer. In selecting brokers or dealers for executing portfolio
transactions, the Sub-Adviser will use its best efforts to seek on
behalf of the Funds the best overall terms available. In assessing
the best overall terms available for any transaction the
Sub-Adviser shall consider all factors it deems relevant,
including the breadth of the market in the security, the price of
the security, the financial condition and execution capability of
the broker or dealer, and the reasonableness of the commission, if
any, both for the specific transaction and on a continuing basis.
In evaluating the best overall terms available, and in selecting
the broker or dealer to execute a particular transaction, the
Sub-Adviser may also consider the brokerage and research services
(as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934, as amended) provided to any Fund and/or
other accounts over which the Sub-Adviser or any affiliate of the
Sub-Adviser exercises investment discretion. The Sub-Adviser is
authorized, subject to the prior approval of the Board, to
negotiate
D-2
<PAGE> 39
and pay to a broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction for the
Funds which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if, but only
if, the Sub-Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer viewed in terms of that
particular transaction or in terms of the overall responsibilities of
the Sub-Adviser with respect to the accounts as to which it exercises
investment discretion. Notwithstanding the foregoing, no prior
approval by the Board shall be required so long as the broker or
dealer selected by the Sub-Adviser provides best price and execution
on a particular transaction. In no instance will Fund securities be
purchased from or sold to the Adviser, any Sub-Adviser, SEI
Investments Distribution Co. ("SEI") (or any other principal
underwriter to the Trust) or an affiliated person of either the Trust,
the Adviser, Sub-Adviser, or SEI (or such other principal underwriter)
unless permitted by an order of the SEC or applicable rules. In
executing portfolio transactions for the Funds, the Sub-Adviser may,
but shall not be obligated to, to the extent permitted by applicable
laws and regulations, aggregate the securities to be sold or purchased
with those of other Funds and its other clients where such aggregation
is not inconsistent with the policies set forth in the Trust's
registration statement. In such event, the Sub-Adviser will allocate
the securities so purchased or sold, and the expenses incurred in the
transaction, in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Funds and such other
clients; 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 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 the Funds 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; provided, however, that the Sub-Adviser may retain a copy of such
records. The Sub-Adviser further agrees to preserve for the periods prescribed
by Rule 31a-2 under the 1940 Act any such records required to be maintained by
it pursuant to paragraph 2(d) of this Agreement.
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 Funds.
D-3
<PAGE> 40
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, of .32% and .16% of the average daily net assets of the Core
Equity Fund and the Total Return Advantage Fund, respectively.
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 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 with
respect to each Fund upon approval of this Agreement by vote of a majority of
the outstanding voting securities of each such Fund, and, unless sooner
terminated as provided herein, shall continue in effect until September 30,
1999. Thereafter, if not terminated, this Agreement shall automatically continue
in effect as 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 particular 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 the
particular Fund) on sixty days' written notice to the Sub-Adviser, or by the
SubAdviser, 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
services required herein for any other Funds to which it is Sub-Adviser pursuant
to this Agreement for the period and on the terms set forth in this Agreement.
During the term of this Agreement, the Adviser agrees to furnish the
SubAdviser at its principal office all Prospectuses, proxy statements, reports
to shareholders, sales literature or other materials prepared for distribution
to shareholders of the Funds, the Adviser, broker-dealers or the public that
refer to the Sub-Adviser. Sub-Adviser shall consent to such materials unless it
reasonably objects in writing within five business days (or
D-4
<PAGE> 41
such other period as may be mutually agreed) after receipt thereof. The
Sub-Adviser's right to object to such materials is limited to the portions of
the materials that expressly relate to the Sub-Adviser, its services and its
clients. The Adviser agrees to use its reasonable best efforts to ensure that
materials prepared by its employees or agents or affiliates that refer to the
SubAdviser or its clients in any way are consistent with those materials
previously approved by the Sub-Adviser.
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.
NATIONAL CITY BANK
By:
----------------------------------------
Title:
----------------------------------------
NATIONAL ASSET MANAGEMENT CORPORATION
By:
----------------------------------------
Title:
----------------------------------------
D-5
<PAGE> 42
ARMADA FUNDS
P.O. Box 8421
Boston, MA
02266-8421
1-800-622-FUND(3863)
[ARMADA FUNDS LOGO]
<PAGE> 43
FUND NAME PRINTS HERE ARMADA FUNDS
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE TRUST
FOR THE SPECIAL MEETING OF SHAREHOLDERS, JUNE 29, 1998
The undersigned hereby constitutes and appoints Kathryn Stanton and Michael
Bellopede or either of them, with full power of substitution, as attorneys and
proxies to appear and vote all of the shares of beneficial interests standing
in the name of the undersigned at the Special Meeting of Shareholders of Armada
Funds to be held at One Freedom Valley Drive, Boardroom B, Oaks, Pennsylvania
19456 on the 29th day of June, 1998 at 11:00 a.m., local time, and at any and
all adjournments thereof, and the undersigned hereby instructs said attorneys
to vote as indicated on the reverse side. If any other matters properly come
before the meeting about which the proxy holders were not aware prior to the
time of solicitation, authorization is given the proxy holders to vote in
accordance with the views of the management thereto. The management is not
aware of any such matters.
Date:_____________________ , 1998
PLEASE SIGN IN BOX BELOW
AND RETURN THIS PROXY CARD
IN THE ENCLOSED ENVELOPE.
Signature of all joint owners is
required. Fiduciaries please
indicate your full title.
_________________________________
| |
| |
| |
|________________________________|
Signature(s) Title(s), if
applicable NAM
<PAGE> 44
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED IN THE
FOLLOWING ITEMS 1, 2 AND 3 BUT IF NO CHOICE IF SPECIFIED, THEY WILL BE
VOTED FOR THE INTERIM ADVISORY AGREEMENTS ATTACHED AS EXHIBITS A AND B TO
THE PROXY STATEMENT, FOR THE NEW ADVISORY AGREEMENT ATTACHED AS EXHIBIT C
TO THE PROXY STATEMENT AND FOR THE SUB-ADVISORY AGREEMENT ATTACHED AS
EXHIBIT D TO THE PROXY STATEMENT.
PLEASE VOTE BY FILLING IN THE APPROPRIATE BOX(ES) BELOW.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
1. FOR ALL FUNDS: The approval of the Interim Advisory [ ] [ ] [ ]
Agreement between Armada Funds and National Asset Management
Corporation ("NAM")
2. FOR ALL FUNDS: The approval of the New Advisory Agreement [ ] [ ] [ ]
between Armada Funds and National City Bank
3. FOR CORE EQUITY AND TOTAL RETURN ADVANTAGE FUNDS ONLY: The [ ] [ ] [ ]
approval of the Sub-Advisory Agreement between National City
Bank and NAM
|_ |_ |_
Upon any other business which may properly come before the
meeting or any adjournment thereof. The management knows of
no such other business.
</TABLE>
NAM
