THE PILLAR FUNDS
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made this 28th day of April, 1996, by and among United Jersey
Bank Investment Management Division, a division of United Jersey Bank, a
wholly-owned subsidiary of Summit Bancorp (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.
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(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.
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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.
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
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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 April 28, 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 aspects 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
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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 affirmative 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:
United Jersey 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
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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. 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 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.
United Jersey Bank Investment Wellington Management Company
Management Division,
a division of United Jersey Bank
By: /s/ Xxxxxxxx Xxxxx By: /s/ Xxxxxx X. XxXxxxxxx
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Title: V.P. Reg. Mgr. Title: President
--------------------------- ----------------------------
The Pillar Funds
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Title: V.P.
---------------------------
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