THE PILLAR FUNDS
FORM OF INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made this 1st day of March, 2001, between Fleet Investment
Advisors Inc. (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 March 1, 2001 (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 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.
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.
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: Fleet Investment Advisors Inc.
Attn: Xxxxxx X. Xxx
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
To the Sub-Advisor at: Vontobel USA Inc.
Attn: Xxxxx Xxxxxxxx, President & CEO
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.
Fleet Investment Advisors Inc. Vontobel USA Inc.
By: /s/ Xxxxxx X. Xxx By: /s/ Xxxxxx Xxxxxxxxx
----------------------------------- ----------------------------------
Name: Xxxxxx X. Xxx. Name: Xxxxxx Xxxxxxxxx
-------------------------------- ----------------------------
Title: Chief Operating Officer Title: VP/Compliance Officer
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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.
