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Exhibit 5(f)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this ___ day of __________, 1996 between THE PILOT FUNDS, a
Massachusetts business trust (the "Trust"), on behalf of the Pilot Growth Fund,
and BOATMEN'S TRUST COMPANY, a Trust Company organized under the laws of
Missouri (the "Adviser").
W I T N E S S E T H:
WHEREAS, the Trust is an open-end management investment company registered under
the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Trust is authorized to issue Units of beneficial interest
(hereafter referred to as "Shares") in separate series with each such series
representing the interests in a separate portfolio of securities and other
assets;
WHEREAS, the Trust has established and presently offers (or intends to offer)
Shares of beneficial interest in a portfolio currently known as the Pilot Growth
Fund (the "Fund"); and
WHEREAS, the Trust desires to retain the Adviser to render investment advisory
services to the Trust with respect to the Fund as indicated herein and the
Adviser is willing to so render such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Appointment of Adviser. The Trust hereby appoints the Adviser
to act as investment adviser to the Trust and the Fund for the
periods and on the terms herein set forth. The Adviser accepts
such appointment and agrees to render the services herein set
forth, for the compensation herein provided.
2. Delivery of Documents. The Trust has delivered (or will
deliver as soon as is possible) to the Adviser copies of each
of the following documents:
(a) Agreement and Declaration of Trust of the Trust dated
as of July 15, 1982 (such Agreement and Declaration
of Trust, as presently in effect and as amended from
time to time, is herein called the "Trust
Agreement"), copies of which are also on file with
the Secretary of the Commonwealth of Massachusetts;
(b) By-Laws of the Trust (such By-Laws, as presently in
effect and as amended from time to time, are herein
called the "By-Laws");
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(c) Certified resolutions of the Shareholder(s) and the
Trustees of the Trust approving the terms of this
Agreement;
(d) Custodian Agreement (including related fee schedule)
dated May 4, 1996 between the Trust and State Street
Bank and Trust Company (such Agreement, as presently
in effect and as amended and/or superseded from time
to time, is herein called the "Custodian Agreement");
(e) Prospectus and Statement of Additional Information of
the Trust with respect to the Fund as currently in
effect (such Prospectus and Statement of Additional
Information, as currently in effect and as amended,
supplemented and/or superseded from time to time, is
herein called the "Prospectus"); and
(f) Registration Statement of the Trust under the
Securities Act of 1933, as amended (the "1933 Act"),
and the 1940 Act on Form N-1 as filed with the
Securities and Exchange Commission (the "Commission")
on July 16, 1982, and as amended on Form N-1A (such
Registration Statement, as presently in effect and as
amended from time to time, is herein called the
"Registration Statement").
The Trust agrees to promptly furnish the Adviser from time to time with copies
of all amendments of or supplements to or otherwise current versions of any of
the foregoing documents not heretofore furnished.
3. Duties of Adviser.
(a) Subject to the general supervision of the Trustees of
the Trust, the Adviser shall manage the investment
operations of the Fund and the composition of the
Fund's assets, including the purchase, retention and
disposition thereof. In this regard, the Adviser:
(i) shall provide supervision of the Fund's
assets, furnish a continuous investment
program for the Fund, determine from time
to time what investments or securities
will be purchased, retained or sold by
the Fund, and what portion of the assets
will be invested or held uninvested as
cash;
(ii) shall place orders with broker-dealers,
foreign currency dealers, futures
commissions merchants or others pursuant
to the Adviser's determinations in
accordance with the Fund's policies as
expressed in the Registration Statement;
and
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(iii) may, on occasions when it deems the
purchase or sale of a security to be in
the best interests of the Fund as well as
its other customers (including any other
Fund or any other investment company or
trust or advisory account for which the
Adviser acts as adviser), aggregate, to
the extent permitted by applicable laws
and regulations, the securities to be
sold or purchased in order to obtain the
best net price and the most favorable
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 Adviser
in the manner it considers to be the most
equitable and consistent with its
fiduciary obligations to the Fund and to
such other customers.
(b) The Adviser, in the performance of its duties
hereunder, shall act in conformity with the Trust
Agreement, By-Laws, Registration Statement and
Prospectus and with the instructions and directions
of the Trustees of the Trust, and will use its best
efforts to conform to the requirements of the 1940
Act, the Investment Advisers Act of 1940 (to the
extent applicable), the Internal Revenue Code of
1986, as amended, relating to regulated investment
companies and all rules and regulations thereunder,
the Xxxxxxx Xxxxxxx and Securities Fraud Enforcement
Act of 1988 (to the extent applicable) and all other
applicable federal and state laws, regulations and
rulings.
(c) The Adviser shall render to the Trustees of the Trust
such periodic and special reports as the Trustees may
reasonably request.
(d) The Adviser shall notify the Trust of any material
change in the management of the Adviser within a
reasonable time after such change.
(e) The Adviser shall immediately notify the Trust in the
event that the Adviser or any of its affiliates: (1)
becomes aware that it is subject to a statutory
disqualification that prevents the Adviser from
serving as investment adviser pursuant to this
Agreement; or (2) becomes aware that it is the
subject of an administrative proceeding or
enforcement action by the Securities and Exchange
Commission or other regulatory authority. The Adviser
further agrees to notify the Trust immediately of any
material fact known to the Adviser respecting or
relating to the Adviser that is not contained in the
Trust's Registration Statement regarding the Trust,
or any amendment or supplement thereto, but that is
required to be disclosed therein, and of any
statement contained therein that becomes untrue in
any material respect.
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(f) The services of the Adviser hereunder are not deemed
exclusive and the Adviser shall be free to render
similar services to others so long as its services
under this Agreement are not impaired thereby.
4. Expenses
(a) During the term of this Agreement, the Adviser will
pay all costs incurred by it in connection with the
performance of its duties under paragraph 3 hereof,
other than the cost (including taxes and brokerage
commissions, if any) of securities purchased for the
Fund.
(b) The Adviser agrees that its gross compensation for
any fiscal year shall not be greater than an amount
which, when added to the other expenses of the Fund,
shall cause the aggregate expenses of the Fund to
equal the maximum expenses under the lowest
applicable expense limitation established pursuant to
the statutes or regulations of any jurisdiction in
which the Shares of the Fund may be qualified for
offer and sale. Except to the extent that such amount
has been reflected in reduced payments to the
Adviser, the Adviser shall refund to the Fund the
amount of any payment received in excess of the
limitation pursuant to this section as promptly as
practicable after the end of such fiscal year,
provided that the Adviser shall not be required to
pay the Fund an amount greater than the fee paid to
the Adviser in respect of such year pursuant to this
Agreement. As used in this section, "expenses" shall
mean those expenses included in the applicable
expense limitation having the broadest specifications
thereof, and "expense limitation" means a limit of
the maximum annual expenses which may be incurred by
the Fnud determined (i) by multiplying a fixed
percentage by the average, or by multiplying more
than one such percentage by different specified
amounts of the average, of the values of the Fund's
net assets for a fiscal year or (ii) by multiplying a
fixed percentage by the Fund's net investment income
for a fiscal year. The words "lowest applicable
expense limitation" shall be construed to result in
the largest reduction of the Adviser's compensation
for any fiscal year of the Fund; provided, however,
that nothing in this Agreement shall limit the
Adviser's fees if not required by an applicable
statute or regulation referred to above in this
section.
The Adviser may waive all or a portion of its fees
provided for hereunder and such waiver shall be
treated as a reduction in purchase price of the
Adviser's services. The Adviser shall be
contractually bound hereunder by the terms of any
publicly announced waiver of its fee, or any
limitation of the Fund's expenses, as if such waiver
or limitation were fully set forth herein.
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5. Compensation
(a) For the services provided and the expenses assumed by
the Adviser pursuant to this Agreement, the Trust
will pay to the Adviser as full compensation therefor
a fee at an annual rate of .75% of the Fund's average
net assets.
(b) The fee will be computed based on net assets on each
day and will be paid to the Adviser monthly.
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6. Books and Records. The Adviser shall maintain all of the
Trust's records relating to the Adviser's duties with respect
to the Fund. The Adviser agrees that all records so maintained
are the property of the Trust and it will surrender promptly
to the Trust any of such records upon the Trust's request. The
Adviser further agrees to preserve for the periods, and in the
manner, prescribed by the Rules of the Commission under the
1940 Act any such records as are required to be maintained by
such Rules. To the extent required by law, the Adviser shall
furnish to regulatory authorities having the requisite
authority such records which may be requested in order to
ascertain whether the operations of the Trust with respect to
the Fund are being conducted in a manner consistent with
applicable laws and regulations.
7. Indemnification
(a) Subject to Section 36 of the 1940 Act to the extent
applicable, 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 matters
to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or
gross negligence in the performance of its
obligations and duties, or by reason of its reckless
disregard of its obligations and duties, under this
Agreement.
(b) The Trust, on behalf of the Fund, hereby agrees to
indemnify and hold harmless the Adviser, its
directors, officers and employees and each person, if
any, who controls the Adviser (collectively, the
"Indemnified Parties") against any and all losses,
claims, damages or liabilities, joint or several,
relating to the Fund, to which any such Indemnified
Party may become subject under the 1933 Act, the
Securities Exchange Act of 1934, the Advisers Act,
the 1940 Act or other federal or state statutory law
or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based
upon
(i) any untrue statement or alleged untrue
statement of a material fact or any
omission or alleged omission to state a
material fact required to be stated or
necessary to make the statements made not
misleading in (x) the Registration
Statement or the Prospectus, (y) any
advertisement or sales literature
authorized by the Trust for use in the
offer and sale of Shares of the Fund, or
(z) any application or other document
filed in connection with the qualification
of the Trust or Shares of the Fund under
the Blue Sky or securities laws of any
jurisdiction, except insofar as such
losses,
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claims, damages or liabilities (or actions
in respect thereof) arise out of or are
based upon any such untrue statement or
omission or alleged untrue statement or
omission (1) in a document prepared by the
Adviser, or (2) made in reliance upon and
in conformity with information furnished
to the Trust by or on behalf of the
Adviser pertaining to or originating with
the Adviser for use in connection with any
document referred to in clauses (x), (y)
or (z), or
(ii) subject in each case to clause (i) above,
the Adviser acting as investment adviser
to the Trust with respect to the Fund;
and the Trust, from the assets of the Fund, will
reimburse each Indemnified Party for any legal or
other expenses incurred by such Indemnified Party in
connection with investigating or defending any such
loss, claim, damage, liability or action.
(c) If the indemnification provided for in paragraph 7(b)
is available in accordance with the terms of such
paragraph but is for any reason held by a court in a
final adjudication to be unavailable from the Trust,
then the Trust, from the assets of the Fund, shall
contribute to the aggregate amount paid or payable by
the Trust and such Indemnified Party as a result of
such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits
received by the Fund and such Indemnified Party in
connection with the operations of the Fund, (ii) the
relative fault of the Trust with respect to the Fund
and such Indemnified Party, and (iii) any other
relevant equitable considerations. The Trust and the
Adviser agree that it would not be just and equitable
if contribution pursuant to this subparagraph (c)
were determined by pro rata allocation or any other
method of allocation which does not take account of
the equitable considerations referred to above in
this subparagraph (c). The amount paid or payable as
a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred
to above in this subparagraph (c) shall be deemed to
include any legal or other expenses incurred by the
Trust and the Indemnified Party in connection with
investigating or defending any such loss, claim,
damage, liability or action. No person guilty of
fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to
contribution from any person who was not guilty of
such fraudulent misrepresentation.
(d) It is understood, however, that nothing in this
paragraph 7 shall protect any Indemnified Party
against, or entitle any Indemnified Party to
indemnification against, or contribution with respect
to, any liability to the Trust or its Shareholders to
which such Indemnified Party is subject, by
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reason of its willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by
reason of any reckless disregard of its obligations
and duties, under this Agreement or otherwise to an
extent or in a manner inconsistent with Section 17(i)
of the 1940 Act.
8. Duration and Termination. This Agreement, shall continue,
unless sooner terminated as provided herein, until May 31,
1997, and thereafter shall continue automatically for periods
of one year so long as each such latter continuance is
approved at least annually (a) by the vote of a majority of
the Trustees of the Trust who are not parties to this
Agreement or interested persons (as defined by the 0000 Xxx)
of any such party, cast in person at a meeting called for the
purpose of voting on such approval, and (b) by the Trustees of
the Trust or by vote of a majority of the outstanding Shares
(as defined with respect to voting securities in the 1940 Act)
representing the interests in the Fund; provided, however,
that this Agreement may be terminated by the Trust 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 Shares (as so defined) representing the
interests in the Fund affected thereby 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 defined by the
1940 Act).
9. Status of Adviser as Independent Contractor. The Adviser shall
for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided
herein or authorized by the Trustees of the Trust from time to
time, have no authority to act for or represent the Trust or
Fund in any way or otherwise be deemed an agent of the Trust
or Fund.
10. Amendment of Agreement. This Agreement may be amended, changed
or waived only by an instrument in writing and by mutual
consent, but the consent of the Trust must be approved (a) by
vote of a majority of those Trustees of the Trust who are not
parties to this Agreement or interested persons (as defined in
the 0000 Xxx) of any such party, cast in person at a meeting
called for the purpose of voting on such amendment, and (b) by
vote of a majority of the outstanding Shares (as defined with
respect to voting securities by the 1940 Act) representing the
interests in the Fund.
11. Limitation of Liability. The name "The Pilot Funds" refers to
the Trustees under the Declaration collectively as trustees
and not as individuals. The Declaration, a copy of which,
together with all amendments thereto, is on file in the Office
of the Secretary of the Commonwealth of Massachusetts,
provides that no shareholder, Trustee, officer, employee or
agent of the Trust, shall be subject to claims against or
obligations of the Trust to any extent whatsoever, but that
the Trust estate only shall be liable.
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The Adviser is hereby expressly put on notice of the
limitation of liability as set forth in the Declaration and
agrees that the obligations assumed by the Trust pursuant to
this Agreement shall be limited in all cases to the Fund's
assets, and the Adviser shall not seek satisfaction of any
such obligation from the shareholders or any shareholder of
the Trust or Fund or any other series of the Trust, or from
any Trustee, officer, employee or agent of the Trust. The
Adviser understands that the rights and obligations of each
series under the Declaration are separate and distinct from
those of any and all other series.
12. Miscellaneous. 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 construed in
accordance with applicable federal law and the laws of the
Commonwealth of Massachusetts and shall be binding upon and
shall inure to the benefit of the parties hereto and their
respective successors subject to the last sentence of
paragraph 8, and, to the extent provided in paragraph 7
hereof, each Indemnified Party. Anything herein to the
contrary notwithstanding, this Agreement shall not be
construed in a manner inconsistent with the 1940 Act, or in a
manner which would cause the Trust to fail to comply with the
requirements of Subchapter M of the Internal Revenue Code of
1986, as amended, nor shall this Agreement be construed to
require, or to impose any duty upon, either of the parties to
do anything in violation of any applicable laws or
regulations. This Agreement may be executed simultaneously in
two counterparts, each of which shall be deemed an original,
but both of which together shall constitute one and the same
instrument. This Agreement shall supersede all prior
investment advisory or management agreements entered into
between the parties. This Agreement shall not apply to the
management of assets allocated to any series of the Trust
other than the Fund.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
THE PILOT FUNDS
Attest:
--------------------- By:
------------------------------
Title:
BOATMEN'S TRUST COMPANY
Attest:
--------------------- By:
------------------------------
Title:
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