ATTACHMENT C
THE PILLAR FUNDS
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made this _____day of ________, 1996, by and among Summit Bank
Investment Management Division, a division of Summit Bank, (the "Adviser"),
Wellington Management Company, a Massachusetts general partnership (the
"Sub-Adviser") and The Pillar Funds, a Massachusetts business trust (the
"Trust").
WHEREAS, the Trust is registered as an open-end management investment
company under the investment Company Act of 1940, as amended (the"1940 Act");
and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement of
even date herewith (the "Advisory Agreement") with the Trust, pursuant to which
the Adviser will act as Investment adviser to the International Growth Portfolio
(the "Portfolio"); and
WHEREAS, the Adviser and the Trust each desire to retain the Sub-Adviser
to provide Investment sub-advisory services to the Trust in connection with the
management of the Portfolio and such other portfolios as the Trust, the Adviser
and the Sub-Adviser may agree upon by written addenda to this Agreement, and the
Sub-Adviser is willing to render such investment advisory services.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and intending to be legally bound, the parties hereto agree as
follows:
1.(a) Subject to supervision by the Adviser and the Trust's Board of Trustees,
the Sub-Adviser shall manage the investment operations of the Portfolio
and the composition of the Portfolio, including the purchase, retention
and disposition thereof, in accordance with the Portfolio's investment
objectives, policies and restrictions as stated in the Portfolio's
Prospectus (such Prospectus and the Statement of Additional Information,
as currently in effect and as amended or supplemented from time to time,
being herein called the "Prospectus"), and subject to the following:
(1) The Sub-Adviser shall determine from time to time what investments
and securities will be purchased, retained or sold by the Portfolio,
and what portion of the assets will be invested or held uninvested
in cash.
(2) In the performance of its duties and obligations under this
Agreement, the Sub-Adviser shall act in conformity with the Trust's
Declaration of Trust and By-Laws (as defined herein) and the
Prospectus and with the instructions and directions of the Adviser
and of the Board of Trustees of the Trust and will conform to and
comply with the requirements of the 1940 Act, the Internal Revenue
Code of 1986, and all other applicable federal and state laws and
regulations, as each is amended from time to time.
(3) The Sub-Adviser shall place orders with or through such persons,
brokers or dealers to carry out the policy with respect to brokerage
set forth in the Portfolio's Registration Statement (as defined
herein) and Prospectus or as the Board of Trustees or the Adviser
may direct from time to time, in conformity with federal securities
laws. In providing the Portfolio with Investment sub-advisory
services, the Sub-Adviser will give primary consideration to
securing the most favorable price and efficient execution. Within
the framework of this policy, the Sub-Adviser may consider the
financial responsibility, research and investment information and
other services provided by brokers or dealers who may effect or be a
party to any such transaction or other transactions to which the
Sub-Adviser's other clients may be a party. It is understood that it
is desirable for the Portfolio that the Sub-Adviser have access to
supplemental investment and market research and security and
economic analysis provided by brokers who may execute brokerage
transactions at higher cost to the Portfolio than may result when
allocating brokerage to other brokers on the
basis of seeking the most favorable price and efficient execution.
Therefore, the Sub-Adviser is authorized to place orders for the
purchase and sale of securities for the Portfolio with such brokers,
subject to review by the Trust's Board of Trustees from time to time
with respect to the extent and continuation of this practice. It is
understood that the services provided by such brokers may be useful
to the Sub-Adviser in connection with the Sub-Adviser's services to
other clients.
On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interest of the Portfolio as well as
other clients of the Sub-Adviser, the Sub-Adviser, to the extent
permitted by applicable laws and regulations, may, but shall be
under no obligation to, aggregate the securities to be so purchased
or sold in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In such event,
allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Sub-
Adviser in the manner it considers to be the most equitable and
consistent with its fiduciary obligation to the Portfolio and to
such other clients.
(4) The Sub-Adviser shall maintain all books and records with respect to
the Portfolio's portfolio transactions required by subparagraphs
(b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1
under the 1940 Act and shall render to the Board of Trustees such
periodic and special reports as the Board of Trustees may reasonably
request.
(5) The Sub-Adviser shall provide the Portfolio's Custodian on each
business day with information relating to all transactions
concerning the Portfolio's assets and shall provide the Adviser with
such information upon request of the Adviser.
(6) The investment sub-advisory services provided by the Sub-Adviser
under this Agreement are not to be deemed exclusive and the Sub-
Adviser shall be free to render similar services to others, as long
as such services do not impair the services rendered to the Adviser
or the Trust.
(7) The Sub-Adviser shall provide such reports and data in hard copy and
machine readable form as are requested by the Adviser and which are
consistent with the Sub-Adviser's normal data production
capabilities.
(8) The Sub-Adviser shall prepare a quarterly broker security
transaction summary and monthly security transaction listing for
the Portfolio.
(9) Unless the Board of Trustees of the Trust or the Adviser directs
otherwise in a particular instance or generally, the Sub-Adviser
shall take reasonable measures to vote, give and withhold consents
with respect to, and take all other similar actions relating to, the
securities and other investments owned by the Portfolio.
(10) The Sub-Adviser shall report regularly to the Adviser and shall make
appropriate persons available for the purpose of reviewing at
reasonable times with representatives of the Adviser and the Board
of Trustees of the Trust the management of the Portfolio, including,
without limitation, review of the general investment strategy of the
Portfolio, the performance of the Portfolio in relation to standard
industry indices, interest rate considerations and general
conditions affecting the marketplace and shall provide various other
reports from time to time as reasonably requested by the Adviser.
(11) The Sub-Adviser shall treat confidentially and as proprietary
information of the Trust all such records and other information
relative to the Trust maintained by the Sub-Adviser, and shall 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 where the
Sub-Adviser may be exposed to civil or criminal contempt proceeding
for failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by the Trust.
(b) Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners,
officers or employees.
(c) The Sub-Adviser shall keep the Portfolio's books and records required to
be maintained by the Sub-Adviser pursuant to paragraph 1(a) of this
Agreement and shall timely furnish to the Adviser all information
relating to the Sub-Adviser's services under this Agreement needed by the
Adviser to keep the other books and records of the Portfolio required by
Rule 31a-1 under the 1940 Act. The Sub-Adviser agrees that all records
that it maintains on behalf of the Portfolio are property of the
Portfolio and the Sub-Adviser shall surrender promptly to the Portfolio
any of such records upon the Portfolio's 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 as are required to be maintained by it
pursuant to paragraph 1(a) of this Agreement.
2. For all purposes of this Agreement the Sub-Adviser shall be deemed to be
an independent contractor, and shall have no authority to act as agent
for the Adviser or the Trust in any manner or in any respect.
3. The Adviser has delivered to the Sub-Adviser copies of each of the
following documents and shall deliver to it all future amendments and
supplements, if any:
(a) The Trust's Declaration of Trust, as filed with the Secretary of
State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and
as amended from time to time, herein called the "Declaration of
Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Certified resolutions of the Board of Trustees of the Trust
authorizing the appointment of the Adviser and the Sub-Adviser with
respect to the Portfolio, and approving the form of this Agreement;
(d) Registration Statement under the 1940 Act and the Securities Act of
1933, as amended, on Form N-1A (the "Registration Statement"), as
filed with the Securities and Exchange Commission (the "Commission")
relating to the Portfolio and shares of the Portfolio, and all
amendments thereto;
(e) Notification of Registration of the Trust under the 1940 Act on Form
N-8A as filed with the Commission, and all amendments thereto; and
(f) Prospectus(es) of the Portfolio.
4. During the term of this Agreement, the Sub-Adviser shall 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 Portfolio. For the services provided and the
expense assumed by the Sub-Adviser pursuant to this Agreement, the
Adviser shall pay the Sub-Adviser, and the Sub-Adviser agrees to accept
as full compensation therefor, a sub-advisory fee at
an annual rate of .60% on the first $50 million, .45% on the next $100
million and .30% over $150 million of the Portfolio's average daily net
assets. This fee shall be computed daily and paid to the Sub-Adviser
monthly. The Sub-Adviser may, in its discretion and from time to time,
waive a portion of its fee. Should it be determined that the Investment
Sub-Advisory Agreement among the Trust, the Adviser and the Sub-Adviser
dated April 28, 1995, terminated as a result of termination of the
Advisory Agreement of the same date prior to the effective date of this
Agreement, compensation hereunder shall commence as of the date of such
termination.
5. The Sub-Adviser shall not be liable for any error of judgment or for any
loss suffered by the Portfolio or the Adviser in connection with
performance of its obligations under this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services (in which case any award of damages shall be
limited to the period and the amount set forth in Section 36(b)(3) of the
1940 Act), or a loss resulting from willful misfeasance, bad faith or
gross negligence on the Sub-Adviser's part in the performance of its
duties or from reckless disregard of its obligations and duties under
this Agreement, except as may otherwise be provided under provisions of
applicable state law which cannot be waived or modified hereby.
6. This Agreement shall become effective as of the date hereof with respect
to the Portfolio and, unless sooner terminated as provided herein, shall
continue in effect with respect to the Portfolio until ________, 1998.
Thereafter, if not terminated, this Agreement shall automatically
continue in effect as to the Portfolio for successive annual periods,
provided such continuance is specifically approved at least annually (a)
by the vote of a majority of those members of the Trust's Board of
Trustees who are not interested persons of any party to this Agreement,
cast in person at a meeting called for the purpose of voting on such
approval, and (b) by the Trust's Board of Trustees or by vote of a
majority of the outstanding voting securities of the Portfolio; provided,
however, that if the shareholders of the Portfolio fail to approve the
continuance of this Agreement as provided herein, the Sub-Adviser may
continue to serve hereunder in the manner and to the extent permitted
under the 1940 Act and the rules and regulations thereunder. The
foregoing requirement that continuance of this Agreement be "specifically
approved at least annually" shall be construed in a manner consistent
with the 1940 Act and the rules and regulations thereunder.
Notwithstanding the foregoing, this Agreement may be terminated as to the
Portfolio at any time, without the payment of any penalty, by the Trust
(by vote of the Trust's Board of Trustees or by vote of a majority of the
outstanding securities of the Portfolio), by the Adviser, or by the Sub-
Adviser on sixty days' written notice to each of the other parities
hereto. This Agreement shall terminate automatically and immediately in
the event of its assignment, and shall also terminate automatically and
immediately upon the termination of the Advisory Agreement.
As used in this Section 6, the terms "assignment," "interested persons"
and "vote of a majority of the outstanding voting securities" shall have
the respective meanings set forth in the 1940 Act and the rules and
regulations thereunder, subject to such exceptions as may be granted by
the Commission under the 1940 Act.
7. As long as the services to the Adviser and the Trust under this Agreement
are not impaired, nothing in this Agreement shall limit or restrict the
right of any of the Sub-Adviser's partners, officers, or employees to
engage in any other business or to devote his or her time and attention
in part to the management or other aspect of any business, whether of a
similar or dissimilar nature, nor limit or restrict the Sub-Adviser's
right to engage in any other business or to render services of any kind
to any other corporation, firm, individual or association.
8. During the term of this Agreement, the Trust agrees to furnish the Sub-
Adviser at its principal office all prospectuses, proxy statements,
reports to stockholders, sales literature or other materials prepared for
distribution to stockholders of the Portfolio or the public that refer
to the Sub-Adviser or its clients in any way prior to use thereof and not
to use material if the Sub-Adviser reasonably
objects in writing within five business days (or 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 such materials
that expressly relate to the Sub-Adviser, its services and its clients.
The Trust agrees to use its reasonable best efforts to ensure that
materials prepared by its employees or agents or its affiliates that
refer to the Sub-Adviser or its clients in any way are consistent with
those materials previously approved by the Sub-Adviser as referenced in
the first sentence of this paragraph. Sales literature may be furnished
to the Sub-Adviser by first class or overnight mail, facsimile
transmission equipment or hand delivery.
9. The terms or provisions of this Agreement may be amended, modified or
waived in writing if such amendment, modification or waiver is approved
by the affirmation vote or action by written consent of the Board of
Trustees of the Trust and by the Adviser and Sub-Adviser in accordance
with the 1940 Act; provided, that an amendment, modification or waiver
shall also be approved by the shareholders of the Trust if shareholder
approval is required by the 1940 Act and the rules and regulations
thereunder.
10. This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts; provided, however, that nothing herein shall be construed
as being inconsistent with the 1940 Act.
11. This Agreement embodies the entire agreement and understanding among the
parties hereto with respect to the services to be provided by the Sub-
Adviser, and supersedes all prior agreements and understandings relating
to this Agreement's subject matter. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original,
but such counterparts shall, together, constitute only one instrument.
12. Should any part of this Agreement be held 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.
13. Any notice, advice or report to be given pursuant to this Agreement shall
be delivered or mailed:
To the Adviser at:
Summit Bank
000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: President
To the Sub-Adviser at:
Wellington Management Company
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Legal Department
To the Trust or the Portfolio at:
The Pillar Funds
c/o SEI Corporation
000 Xxxx Xxxxxxxxxx Xxxx
Xxxxx, XX 00000
Attention: Legal Department
Any party may change its address for notices, advices or reports
hereunder by giving notice of such change to the other parties in
accordance with this Section 13.
14. When the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order
of the Commission, whether of special or general application, such
provision shall be deemed to incorporate the effect of such rule,
regulation or order.
A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of State of the Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees, and is not binding upon any of the Trustees, officers, or
shareholders of the Trust individually but binding only upon the assets and
property of the Portfolio of the Trust. No portfolio of the Trust shall be
liable for any other portfolio of the Trust. Without limiting the generality of
the foregoing, the Sub-Adviser shall look only to the assets of the Portfolio
for payment of fees for services rendered to the Portfolio.
In the event that there is a change in the partners of the Sub-Adviser, the
Sub-Adviser shall notify the Adviser and the Trust within a reasonable period of
time.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first
written above.
Summit Bank Investment Management Wellington Management Company
Division, a division of Summit Bank
By: By:
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Title: Title:
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The Pillar Funds
By:
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Title:
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