INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made this 31st day of August, 1998, between Summit Bank
Investment Management Division, a division of Summit Bank (the "Advisor") and
Vontobel USA Inc. (the "Sub-Advisor").
WHEREAS, The Pillar 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 (the "1940 Act"); and
WHEREAS, the Advisor has entered into an Investment Advisory Agreement
dated April 28, 1995 (the "Advisory Agreement") with the Trust, pursuant to
which the Advisor will act as investment advisor to the investment portfolio
identified on Schedule A hereto (the "Fund"), which is a series of the Trust;
and
WHEREAS, the Advisor, with the approval of the Trust, desires to retain the
Sub-Advisor to provide investment advisory services to the Advisor in connection
with the management of the Fund, and the Sub-Advisor is willing to render such
investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. Duties of the Sub-Advisor. Subject to supervision by the Advisor and the
Trust's Board of Trustees, the Sub-Advisor shall manage all of the
securities and other assets of the Fund entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the Assets,
in accordance with the Fund's investment objective, policies and
restrictions as stated in the Fund's prospectus and statement of additional
information, as currently in effect and as amended or supplemented from
time to time (referred to collectively as the "Prospectus"), and subject to
the following:
(a) The Sub-Advisor shall, in consultation with and subject to the direction of
the Advisor, determine from time to time what Assets will be purchased,
retained or sold by the Fund, and what portion of the Assets will be
invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Advisor shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Advisor 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.
(c) The Sub-Advisor shall determine the Assets to be purchased or sold by the
Fund as provided in subparagraph (a) and will place orders with or through
such persons, brokers or dealers to carry out the policy with respect to
brokerage set forth in the Fund's Registration Statement (as defined
herein) and Prospectus or as the Board of Trustees or the Advisor may
direct from time to time, in conformity with federal securities laws. In
executing Fund
transactions and selecting brokers or dealers, the Sub-Advisor will use its
best efforts to seek on behalf of the Fund the best overall terms
available. In assessing the best overall terms available for any
transaction, the Sub-Advisor shall consider all factors that 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-dealer to execute
a particular transaction, the Sub-Advisor may also consider the brokerage
and research services provided (as those terms are defined in Section 28(e)
of the Securities Exchange Act of 1934). Consistent with any guidelines
established by the Board of Trustees of the Trust, the Sub-Advisor is
authorized to pay to a broker or dealer who provides such brokerage and
research services a commission for executing a Fund transaction for the
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 Sub-Advisor 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 terms of the overall responsibilities of the Sub-Advisor to
the Fund. In addition, the Sub-Advisor is authorized to allocate purchase
and sale orders for securities to brokers or dealers (including brokers and
dealers that are affiliated with the Advisor, Sub-Advisor or the Trust's
principal underwriter) to take into account the sale of shares of the Trust
if the Sub-Advisor believes that the quality of the transaction and the
commission are comparable to what they would be with other qualified firms.
In no instance, however, will the Fund's Assets be purchased from or sold
to the Advisor, Sub-Advisor, the Trust's principal underwriter, or any
affiliated person of either the Trust, Advisor, the Sub-Advisor or the
principal underwriter, acting as principal in the transaction, except to
the extent permitted by the Securities and Exchange Commission ("SEC") and
the 1940 Act.
(d) The Sub-Advisor shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act.
The Sub-Advisor shall provide to the Advisor or the Board of Trustees such
periodic and special reports, balance sheets or financial information, and
such other information with regard to its affairs as the Advisor or Board
of Trustees may reasonably request.
The Sub-Advisor shall keep the books and records relating to the Assets
required to be maintained by the Sub-Advisor under this Agreement and shall
timely furnish to the Advisor all information relating to the Sub-Advisor's
services under this Agreement needed by the Advisor to keep the other books
and records of the Fund required by Rule 31a-1 under the 1940 Act. The
Sub-Advisor shall also furnish to the Advisor any other information
relating to the Assets that is required to be filed by the Advisor or the
Trust with the SEC or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Advisor or the Trust obtains from the SEC. The Sub-Advisor agrees that all
records that it maintains on behalf of the Fund are property of the Fund
and the Sub- Advisor will surrender promptly to the Fund any of such
records upon the Fund's request; provided, however, that the Sub-Advisor
may retain a copy of such records. In addition, for
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the duration of this Agreement, the Sub-Advisor shall 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 this Agreement, and shall
transfer said records to any successor sub-advisor upon the termination of
this Agreement (or, if there is no successor sub-advisor, to the Advisor).
(e) The Sub-Advisor shall report regularly to the Advisor and will make
appropriate persons available for the purpose of reviewing at reasonable
times with representatives of the Advisor and the Board of Trustees of the
Trust the management of the Fund, including, without limitation, review of
the general investment strategy of the Fund, the performance of the Fund in
relation to standard industry indices, interest rate considerations and
general conditions affecting the marketplace and will provide various other
reports from time to time as reasonably requested by the Advisor;
(f) The Sub-Advisor shall treat confidentially and as proprietary information
of the Trust all such records and other information relative to the Trust
maintained by the Sub-Advisor, 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 where the Sub-Advisor 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.
(g) The Sub-Advisor shall provide the Fund's custodian on each business day
with information relating to all transactions concerning the Fund's Assets
and shall provide the Advisor with such information upon request of the
Advisor.
(h) The investment management services provided by the Sub-Advisor under this
Agreement are not to be deemed exclusive and the Sub-Advisor shall be free
to render similar services to others, as long as such services do not
impair the services rendered to the Advisor or the Trust.
(i) The Sub-Advisor shall promptly notify the Advisor of any financial
condition that is likely to impair the Sub-Advisor's ability to fulfill its
commitment under this Agreement.
(j) The Sub-Advisor shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held in the Fund. The Advisor shall instruct the custodian and
other parties providing services to the Fund to promptly forward
misdirected proxies to the Sub-Advisor.
Services to be furnished by the Sub-Advisor under this Agreement may be
furnished through the medium of any of the Sub-Advisor's directors,
officers or employees.
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For all purposes of this Agreement, the Sub-Advisor shall be deemed to be
an independent contractor, and shall have no authority to act as an agent
for the Advisor or Trust in any manner or in any respect.
2. Duties of the Advisor. The Advisor shall continue to have responsibility
for all services to be provided to the Fund pursuant to the Advisory
Agreement and shall oversee and review the Sub-Advisor's performance of its
duties under this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve the
Sub-Advisor of responsibility for compliance with the Trust's Declaration
of Trust (as defined herein), the Prospectus, the instructions and
directions of the Board of Trustees of the Trust, 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. Delivery of Documents. The Advisor has furnished the Sub-Advisor with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and 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) Prospectus(es) of the Fund.
4. Compensation to the Sub-Advisor. For the services to be provided and the
expense assumed by the Sub-Advisor pursuant to this Agreement, the Advisor
will pay the Sub-Advisor, and the Sub-Advisor agrees to accept as full
compensation therefor, a sub-advisory fee at the rate specified in the
Schedule(s) which is attached hereto and made part of this Agreement. The
fee will be calculated based on the average daily net assets of the Fund
and will be paid to the Sub-Advisor monthly. Except as may otherwise be
prohibited by law or regulation (including any then current SEC staff
interpretation), the Sub-Advisor may, in its discretion and from time to
time, waive a portion of its fee.
5. Liability. The Sub-Advisor shall not be liable for any error of judgment or
for any loss suffered by the Fund or the Advisor in connection with the
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-Advisor'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.
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6. Duration and Termination. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Fund. This Agreement shall
continue in effect for a period of more than two years from the date hereof
only so long as continuance is specifically approved at least annually in
conformance with the 1940 Act; provided, however, that this Agreement may
be terminated with respect to the Fund (a) by the Fund at any time, without
the payment of any penalty, by the vote of a majority of Trustees of the
Trust or by the vote of a majority of the outstanding voting securities of
the Fund, (b) by the Advisor at any time, without the payment of any
penalty, on not more than 60 days' nor less than 30 days' written notice to
the Sub-Advisor, or (c) by the Sub-Advisor at any time, without the payment
of any penalty, on 90 days' written notice to the Advisor. This Agreement
shall terminate automatically and immediately in the event of its
assignment, or in the event of a termination of the Advisor's agreement
with the Trust. As used in this Section 6, the terms "assignment" 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 SEC under
the 1940 Act.
7. Governing Law. This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
8. Severability. 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.
9. Amendment. The terms or provisions of this Agreement may be amended,
modified or waived in writing if such amendment, modification or waiver is
signed by both parties hereto; provided that an amendment, modification or
waiver shall not become effective until approved by vote of a majority of
the (a) Trust's Trustees, including by a majority of the Independent
Trustees, and (b) Fund's outstanding voting securities if shareholder
approval is required by the 1940 Act and/or the rules and regulations
thereunder.
10. Notice. Any notice, advice or report to be given pursuant to this Agreement
shall be deemed sufficient if delivered or mailed by registered, certified
or overnight mail, postage prepaid addressed by the party giving notice to
the other party at the last address furnished by the other party:
To the Advisor at: Summit Bank
Attn: Pillar Funds' Product Manager
000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
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To the Sub-Advisor at: Vontobel USA Inc.
Attn: Xxxxx Xxxxxxxx, President &
Chief Executive Officer
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
11. Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto, 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.
A copy of the Declaration of Trust is on file with the Secretary of State
of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Fund or the Trust.
Where 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
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
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 Vontobel USA Inc.
Division
By: /s/ Xxxxxxx X. Xxxxxxxxx Xx. By: /s/ Xxxxx Xxxxxxxx
---------------------------- --------------------------
Name: Xxxxxxx X. Xxxxxxxxx Xx. Name: Xxxxx Xxxxxxxx
---------------------------- --------------------------
Title: Senior Vice President Title: President & CEO
---------------------------- --------------------------
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Schedule A
to the
Sub-Advisory Agreement
between
Summit Bank Investment Management Division
and
Vontobel USA. Inc.
Pursuant to Article 4, the Advisor shall pay the Sub-Advisor compensation at an
annual rate as follows:
International Equity Fund .60% of the average daily net assets of the Fund
up to and including $50 million; .45% of the
average daily net assets of the Fund in excess of
$50 million up to and including $150 million; and
.30% of the average daily net assets of the Fund
in excess of $150 million.
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