AMENDMENT AND RESTATEMENT
OF
INVESTMENT ADVISORY AGREEMENT BETWEEN
SUMMIT MUTUAL FUNDS, INC. AND SUMMIT INVESTMENT PARTNERS, INC.
THIS IS AN AMENDMENT AND RESTATEMENT of the Investment
Advisory Agreement ("Agreement") dated March 22, 1984 by and
between SUMMIT MUTUAL FUNDS, INC. ("Fund") and SUMMIT INVESTMENT
PARTNERS, INC. ("Adviser").
WHEREAS, on September 26, 2001, the Fund's Board of
Directors approved an amendment to the Agreement to 1) eliminate
certain administrative responsibilities enumerated in the
Agreement and include those responsibilities in a separate
administrative services agreement between the Fund and the
Adviser, and 2) eliminate the reduction in the investment
advisory fees paid by the Everest Fund, Bond Fund, Zenith
Portfolio and Bond Portfolio when asset levels grow beyond
certain specified asset levels;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the parties agree to the
following amendment and restatement of the Agreement:
(1) The Fund hereby employs the Adviser to manage the investment
and reinvestment of the assets of the Fund subject to the control
and direction of the board of directors of the Fund, for the
period and on the terms herein set forth. The Adviser hereby
accepts such employment and agrees during such period to render
the services and to assume the obligations herein set forth for
the compensation herein provided. The Adviser shall for all
purposes herein be deemed to be an independent contractor and
shall, except as expressly provided or authorized, have no
authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
(2) In carrying out its obligations to manage the investments
and reinvestments of the assets of the Fund, the Adviser shall:
(a) obtain and evaluate pertinent economic, statistical and
financial data and other information relevant to the
investment policies and objectives of the Fund, affecting
the economy generally and individual companies or
industries, the securities of which are included in the
Fund's investment portfolios or under consideration for
inclusion therein;
(b) conduct a continuous program of investment and
evaluation with respect to the composition of the Fund's
portfolios, including the placing of orders for purchases
and sales; and
(c) regularly report to the board of directors of the Fund
with respect to implementation of the investment objectives
and policies of the Fund.
(3) In providing the services and assuming the obligations set
forth herein, the Adviser may at its expense employ one or more
Sub-Advisers. Reference herein to the Adviser shall include any
Sub-Adviser employed by the Adviser. Any agreement between the
Adviser and any Sub-Adviser shall be subject to the terms for
renewal, termination and amendment as provided herein with
respect to the Adviser, and such Sub-Adviser shall at all times
be subject to the direction of the board of directors of the Fund
and any duly constituted committee thereof or any officer of the
Fund acting pursuant to like authority. The procedure required in
paragraph (9) must be followed with respect to approval of one or
more Sub-Advisers.
(4) (a) The services of the Adviser to the Fund are not to be
deemed exclusive and the Adviser shall be free to render
similar services to others so long as the services hereunder
are not impaired or interfered with thereby.
(b) The Adviser and any persons performing executive,
administrative or trading functions for the Fund, whose
services are made available to the Fund by the Adviser, are
specifically authorized to allocate brokerage and principal
business to firms that provide brokerage and economic
research services or facilities and to cause the Fund to pay
a member of a securities exchange or any other broker or
dealer an amount of commission for effecting a securities
transaction in excess of the amount another member of an
exchange, broker or dealer would have charged for effecting
that transaction if the Adviser or such person determines in
good faith that such amount of commission is reasonable in
relationship to the value of the brokerage and research
services (as such services are defined in Section 28(e) of
the Securities Exchange Act of 1934) provided by such
member, broker or dealer viewed in terms of either that
particular transaction or the overall responsibilities of
the Adviser with respect to any accounts as to which the
Adviser exercises investment discretion (as the term is
defined in Section 3(a)(35) of the Securities Exchange Act
of 1934).
(5) The Fund shall pay the Adviser as full compensation for all
facilities and services furnished hereunder a fee computed
separately for each portfolio at an annual rate, as set forth in
Attachment A. Expense limitations are also set forth in
Attachment A.
Such fee shall be payable at such intervals not more
frequently than monthly nor less
frequently than quarterly as the board of directors of the Fund
may from time to time determine
and specify in writing to the Adviser. Such fee shall be
calculated on the basis of the average of
all valuations of net assets of each portfolio made at the close
of business on each valuation day
during the period for which such fee is paid.
(6) (a) If, in any calendar quarter, the total of all ordinary
business expenses applicable to the Fund should exceed the
expense limitations as required by any applicable state or
federal law, the Adviser shall pay such excess, unless the
Adviser applies for and obtains waivers to remove such
expense reimbursement requirements. It is the intention of
the Adviser to apply for such waivers. For the purposes of
this paragraph, the term "calendar quarter" shall include
the portion of any calendar quarter which shall be lapsed at
the date of termination of this Agreement and the expense
limitation shall be that part of the rate proportional to
that proportion of a full calendar quarter lapsed.
(b) The Adviser reserves the right to waive all or part of
its fee.
(7) It is understood that:
(a) directors, officers, agents and stockholders of the Fund
are or may be interested in the Adviser as directors,
officers, stockholders or otherwise;
(b) directors, officers, agents and stockholders of the
Adviser are or may be interested in the Fund as directors,
officers, stockholders or otherwise;
(c) the Adviser may be interested in the Fund; and
(d) the existence of any such interest will not affect the
validity hereof or of any transaction hereunder except as
otherwise provided in the Articles of Incorporation of the
Fund or the Adviser respectively or by specific provision of
applicable law.
(8) Neither the Adviser nor any of its directors, officers or
employees, nor any persons performing executive, administrative
or trading functions shall be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in connection
with the matters to which this Agreement relates except for
losses resulting from willful misfeasance, bad faith or gross
negligence in the performance of it or his duties on behalf of
the Fund or from reckless disregard by the Adviser or any such
person of the Adviser's duties under this Agreement. Without
limiting the generalities of the foregoing, neither the Adviser
nor any such person shall be deemed to have acted unlawfully or
to have breached any duty to the Fund under state or federal law
solely by reason of having caused the Fund to pay a member of any
securities exchange or any other securities broker or dealer an
amount of commission for effecting a securities transaction in
excess of the commissions another member of a securities exchange
or another securities broker or dealer would have charged for
effecting that transaction if the Adviser or such other persons
determined in good faith that such amount of commission was
reasonable in relationship to the value of the brokerage and
research provided by such member, broker or dealer viewed in
terms of either that particular transaction or the overall
responsibility of the Adviser with respect to any account to
which the Adviser exercises investment discretion, as provided
for in Section 28(e) of the Securities Exchange Act of 1934.
(9) This Agreement shall continue in effect from year to year
hereafter, only so long as such continuation is specifically
approved, at least annually, by either the board of directors of
the Fund or by a vote of the majority of the outstanding voting
securities of each portfolio of the Fund. In either event,
however, such continuation shall also be approved by a vote of a
majority of the directors who are not interested persons of the
Fund, as defined in Section 2(a)(19) of the Investment Company
Act of 1940, as amended, cast by them in person at a meeting
called for the purpose of voting on such continuation.
Notwithstanding the foregoing provisions of this paragraph (9) to
the contrary:
(a) This Agreement may be terminated at any time without the
payment of any penalty on 60 days' notice to the Adviser,
either by a vote of the board of directors of the Fund or by
vote of a majority of the outstanding voting securities of
any portfolio of the Fund.
(b) This Agreement shall immediately terminate in the event
of its assignment (as that term is defined in the Investment
Company Act of 1940, as amended).
(c) This Agreement may be terminated by the Adviser on sixty
days' written notice to the Fund.
(10) Any notice under this Agreement shall be in writing,
addressed and delivered or mailed postage pre-paid to the other
party at such address as such other party may designate for the
receipt of such notice. Until further notice to the other party,
it is agreed that the address of the Fund and that of the Adviser
for this purpose shall be 000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxx,
Xxxx 00000.
IN WITNESS THEREOF, the parties hereto have caused this
Agreement to be executed in duplicate on November 9, 2001.
Summit Mutual Funds, Inc. Summit Investment Partners, Inc.
By: /s/ Xxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxxxx
Xxxx X. Xxxxxxxx Xxxxxx X. Xxxxxxxxxxxx
Vice President President
Attachment A
Investment Advisory Agreement
between
Summit Mutual Funds, Inc. and
Summit Investment Partners, Inc.
ADVISORY FEE
The Fund shall pay the Adviser, as full compensation for all
facilities and services furnished, a monthly fee computed
separately for each portfolio on a daily basis, at an annual
rate, as follows:
Portolio Advisory Fee
SUMMIT APEX SERIES
S&P 500 Index Fund .30% of the current value of the net assets
S&P MidCap 400 Index
Fund .30% of the current value of the net assets.
Xxxxxxx 2000 Small Cap
Index Fund .35% of the current value of the net assets.
Nasdaq-100 Index Fund .35% of the current value of the net assets.
EAFE International Index
Fund .56% of the current value of the net assets.
Total Social Impact Fund .45% of the current value of the net assets.
Balanced Index Fund .30% of the current value of the net assets.
Xxxxxx Aggregate Bond
Index Fund .30% of the current value of the net assets.
Everest Fund .64% of the current value of the net assets.
Bond Fund .47% of the current value of the net assets.
Short-term Government
Fund .45% of the current value of the net assets.
Money Market Fund .35% of the current value of the net assets.
High Yield Bond Fund .65% of the current value of the net assets.
Emerging Markets Bond
Fund .75% of the current value of the net assets.
SUMMIT PINNACLE SERIES
S&P 500 Index Portfolio .30% of the current value of the net assets.
S&P MidCap 400 Portfolio .30% of the current value of the net assets.
Xxxxxxx 2000 Small Cap
Index Portfolio .35% of the current value of the net assets.
Nasdaq-100 Index
Portfolio .35% of the current value of the net assets.
Balanced Index Portfolio .30% of the current value of the net assets.
Zenith Portfolio .64% of the current value of the net assets.
Bond Portfolio .47% of the current value of the net assets.
EXPENSE LIMITATIONS
The Adviser will also pay any expenses of the Money Market Fund,
other than the advisory fee for that Fund, to the extent that
such expenses exceed .10% of that Fund's net assets.
The Adviser will also pay any expenses of the Short-term
Government Fund, other than the advisory fee for that Fund, to
the extent that such expenses exceed .28% of that Fund's net
assets.
The Adviser will pay any expenses of the S&P 500 Index Fund, S&P
MidCap 400 Index Fund, Balanced Index Fund, Nasdaq-100 Index
Fund, Xxxxxx Aggregate Bond Index Fund, Total Social Impact Fund,
S&P 500 Index Portfolio, S&P MidCap 400 Index Portfolio, Nasdaq-
100 Index Portfolio, and Balanced Index Portfolio, other than the
advisory fee for that Fund, to the extent that such expenses
exceed .30% of that Fund's net assets. The Adviser will pay any
expenses of the Xxxxxxx 2000 Small Cap Index Fund and Xxxxxxx
2000 Small Cap Index Portfolio, other than the advisory fee for
that Fund, to the extent that such expenses exceed .40% of that
Fund's net assets. The Adviser will also pay any expenses of the
EAFE International Index Fund, other than the advisory fee for
that Fund, to the extent that such expenses exceed .69% of that
Fund's net assets.
