ATTACHMENT B
THE PILLAR FUNDS
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this __ day of _____ 1996, by and between The Pillar Funds,
a Massachusetts business trust (the "Trust"), and Summit Bank Investment
Management Division, a division of Summit Bank, (the "Adviser").
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"),
consisting of several series of shares, each having its own investment policies;
and
WHEREAS, the Trust has retained SEI Financial Management Corporation (the
"Administrator") to provide administration of the Trust's operations, subject to
the control of the Board of Trustees;
WHEREAS, the Trust desires to retain the Adviser to render investment
advisory services with respect to its International Growth Portfolio and such
other portfolios as the Trust and the Adviser may hereafter agree upon from time
to time (the "Portfolios"), and the Adviser is willing to render such services;
NOW, THEREFORE, in consideration of mutual covenants herein contained, and
intending to be legally bound, the parties hereto agree as follows:
1. Appointment and Duties of Adviser. The Trust hereby appoints the
Adviser to provide investment advisory services to the Portfolio for
the period and on the terms set forth in this Agreement.
A. The Adviser accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein provided. In the
event that the Trust establishes one or more additional portfolios in
the future with respect to which it desires that the Adviser furnish
investment advisory services hereunder, the Trust so shall notify the
Adviser in writing. If the Adviser is willing to render such services
under this Agreement, it shall notify the Trust in writing whereupon
such portfolio shall become a Portfolio hereunder and shall be subject
to the provisions of this Agreement to the same extent as the
Portfolio named above in the recitals except to the extent that said
provisions (including those relating to the compensation payable by
the Trust to the Adviser) are modified with respect to such Portfolio
in writing by Trust and the Adviser.
B. Subject to supervision by the Trust's Board of Trustees, the
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 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 Adviser shall act in conformity with the Trust's
Declaration of Trust and By-Laws and the Prospectus and with the
instructions and directions 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.
The Adviser agrees, at its own expense, to render the services and to
provide the office space, furnishings and equipment and the personnel
required by it to perform the services on the terms and for the
compensation provided herein.
C. 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 any person providing
investment advisory services to the Portfolio shall be approved in
accordance with the provisions of the 1940 Act. Each such sub-adviser
is hereinafter referred to as a "Sub-Adviser".
Notwithstanding the approval of any such Sub-Adviser(s), however, in
carrying out its obligations hereunder the Adviser shall in all
events:
(a) determine, either in its sole discretion or jointly with the Sub-
Adviser(s), country and regional investment allocation guidelines
for the Portfolio, as well as investment hedging guidelines, if
any;
(b) establish and monitor general investment criteria and policies
for the Portfolio;
(c) review investments in the Portfolio on a periodic basis for
compliance with the Portfolio's investment objective, policies
and restrictions as stated in the Prospectus;
(d) review on a periodic basis the policies established by the
Sub-Adviser(s) for the Portfolio with respect to the placement of
orders for the purchase and sale of portfolio securities;
(e) review, monitor, analyze and report to the Board of Trustees on
the performance of the Sub-Adviser(s);
(f) furnish to the Board of Trustees or the Sub-Adviser(s), reports,
statistics and economic information as may be requested; and
(g) recommend, either in its sole discretion or in conjunction with
the Sub-Adviser(s), potential changes in investment policy.
2. Portfolio Transactions. The 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 and
Prospectus or as the Board of Trustees may direct from time to time,
in conformity with federal securities laws. In providing the Portfolio
with investment advisory services, the Adviser shall give primary
consideration to securing the most favorable price and efficient
execution. Within the framework of this policy, the 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 Adviser's other clients may be a party. It is understood
that it is desirable for the Portfolio that the 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 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 Adviser (or a Sub-Adviser) in connection with the
Adviser's (or Sub-Adviser's) services to other clients.
On occasions when the 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 Adviser, the 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, shall be made by the 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.
3. Compensation of the Adviser. For the services rendered by the Adviser
as provided in Sections 1 and 2 of this Agreement, the Trust shall pay
to the Adviser, and the Adviser agrees to accept as full compensation
therefor, an advisory fee at an annual rate of 1.00% of the
Portfolio's average daily net assets. The fee shall be computed daily
and paid to the Adviser monthly. Should it be determined that the
Investment Advisory Agreement between the Trust and the Adviser dated
April 28, 1995, terminated as a result of the assignment thereof prior
to the effective date of this Agreement, compensation hereunder shall
commence as of the date of such termination.
All rights of compensation under this Agreement for services performed
as of the termination date shall survive the termination of this
Agreement.
4. Other Expenses. The Adviser shall pay all expenses of preparing
(including typesetting), printing and mailing reports, prospectuses,
statements of additional information, and sales literature to
prospective clients to the extent these expenses are not borne by the
Trust under a distribution plan adopted pursuant to Rule 12b-1.
5. Excess Expenses. If the expenses for the Portfolio for any fiscal year
(including fees and other amounts payable to the Adviser, but
excluding interest, taxes, brokerage costs, litigation, and other
extraordinary costs) as calculated every business day would exceed the
expense limitations imposed on investment companies by any applicable
statute or regulatory authority of any jurisdiction in which Shares of
the Portfolio are qualified for offer and sale, the Adviser shall bear
such excess cost.
However, the Adviser shall not bear expenses of the Portfolio which
would result in the Portfolio's inability to qualify as a regulated
investment company under provisions of the Internal Revenue Code.
Payment of expenses by the Adviser pursuant to this Section 5 shall be
settled on a monthly basis (subject to fiscal year end reconciliation)
by a reduction in the fee payable to the Adviser for such month
pursuant to Section 3 and, if such reduction shall be insufficient to
offset such expenses, by reimbursing the Trust.
6. Reports. The Trust and the Adviser agree to furnish to each other, if
applicable, current prospectuses, proxy statements, reports to
shareholders, certified copies of their financial statements, and such
other information with regard to their affairs as each may reasonably
request.
7. Status of Adviser. The services of the Adviser to the Trust are not to
be deemed exclusive,
and the Adviser shall be free to render similar services to others so
long as its services to the Trust are not impaired thereby. The
Adviser shall be deemed to be an independent contractor and shall,
unless otherwise expressly provided or authorized, have no authority
to act for or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
8. Certain Records. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated
under the Investment Company Act of 1940 which are prepared or
maintained by the Adviser on behalf of the Trust are the property of
the Trust and shall be surrendered promptly to the Trust on request.
9. Limitation of Liability of Adviser. The duties of the Adviser shall be
confined to those expressly set forth herein, and no implied duties
are assumed by or may be asserted against the Adviser hereunder. The
Adviser shall not be liable for any error of judgment or mistake of
law or for any loss arising out of any investment or for any act or
omission by the Adviser or by any Sub-Adviser in carrying out its
duties hereunder or under any sub-investment advisory agreement,
except a loss resulting from the Adviser's own willful misfeasance,
bad faith or gross negligence in the performance of its duties, or by
reason of reckless disregard by the Adviser of its obligations and
duties hereunder, except as may otherwise be provided under provisions
of applicable state law which cannot be waived or modified hereby, (As
used in this Paragraph 9, the term "Adviser" shall include directors,
officers, employees and other corporate agents (but not the Sub-
Adviser) of the Adviser as well as that corporation itself).
10. Permissible Interests. Trustees, agents, and shareholders of the Trust
are or may be interested in the Adviser (or any successor thereof) as
directors, partners, officers, or shareholders, or otherwise;
directors, partners, officers, agents, and shareholders of the Adviser
are or may be interested in the Trust as Trustees, shareholders or
otherwise; and the Adviser (or any successor) is or may be interested
in the Trust as a shareholder or otherwise. In addition, brokerage
transactions for the Trust may be effected through affiliates of the
Adviser if approved by the Board of Trustees, subject to the rules and
regulations of the Securities and Exchange Commission.
11. Duration and Termination. This Agreement shall become effective as of
the date hereof with respect to the Portfolio listed in the recitals,
and with respect to any additional Portfolio added pursuant to Section
1 hereof, on the date of receipt by the Trust of notice from the
Adviser in accordance with said Section that the Adviser is willing to
serve as Investment adviser with respect to such Portfolio, provided
that this Agreement (as supplemented by the terms specified in any
notice and agreement pursuant to Section 1 hereof) has been approved
by the shareholders of the Portfolio in accordance with the
requirements of the 1940 Act, and, unless sooner terminated as
provided herein, shall continue in effect with respect to each
Portfolio until ________, 1998. Thereafter, if not terminated, this
Agreement shall automatically continue in effect as to a particular
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, cash in person at a
meeting called for the purpose of voting on such approval, and (b) by
the Trust's Board of Trustees or by vote of a majority of the
outstanding voting securities of such Portfolio; provided, however,
that if the Shareholders of the Portfolio fail to approve the
continuation of its Agreement as provided herein, the Adviser may
continue to serve hereunder in the manner and to the extent permitted
by the 1940 Act and 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.
This Agreement may be terminated as to any Portfolio at any time,
without the payment of any penalty, by vote of a majority of the
Trustees of the Trust or by vote of a majority of the outstanding
voting securities of the Portfolio on 60 days written notice to the
Adviser, or by the Adviser at any time, without the payment of any
penalty, on 60 days written notice to the Trust. This Agreement will
automatically and immediately terminate in the event of its
assignment.
As used in this Section 11, the terms "assignment", "interested
persons", and a "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
exemptions as may be granted by the Securities and Exchange Commission
under said Act.
12. Amendment. 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 affirmative vote or action by written
consent of the Board of Trustees of the Trust and by the 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.
13. Notice. Any notice required or permitted to be given by either party
to the other shall be delivered or mailed: if to the Trust, at 000
Xxxx Xxxxxxxxxx Xxxx, Xxxxx, XX 00000, and if to the Adviser at 000
Xxxx Xxxxxx, Xxxxxxxxxx, XX 00000. Either party may change its address
for notices hereunder by giving notice of such change to the other
party in - accordance with this Section 13.
14. Severability. 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.
15. Governing Law. This Agreement shall be construed in accordance with
laws of the Commonwealth of Massachusetts and the applicable
provisions of the 1940 Act. To the extent that the applicable laws of
the Commonwealth of Massachusetts, or any of the provisions herein,
conflict with the applicable provisions of the 1940 Act, the latter
shall control.
A copy of the Declaration of Trust of the Trust is on file with the Secretary of
The Commonwealth of Massachusetts, and notice is hereby given that this
instrument is executed on behalf of the Trustees of the Trust as Trustees, and
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 Trust.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the day and year first written above.
The Pillar Funds Summit Bank Investment Management
Division, a division of Summit Bank
By: By:
----------------------------- -----------------------------
