THE PILLAR FUNDS
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made as of April 2, 2001 between FLEET INVESTMENT ADVISORS
INC., a New York corporation (the "Adviser"), and XXXXXXX INTERNATIONAL
ADVISORS, LLC, a Delaware limited liability company (the "Sub-adviser").
WHEREAS, The International Equity Fund (the "Fund") is registered as an
open-end, management investment company under the Investment Company Act of
1940, as amended (the "1940 Act") and is an individual investment portfolio of
The Pillar Funds (the "Trust");
WHEREAS, the Adviser has been appointed investment adviser to the Fund;
WHEREAS, the Adviser desires to retain the Sub-adviser to assist it in
the provision of a continuous investment program for the Fund, and the
Sub-adviser is willing to do so;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Adviser hereby appoints the Sub-adviser
to act as sub-adviser to the Fund as permitted by the
Adviser's Advisory Agreement with the Fund pertaining to the
Fund. Intending to be legally bound, the Sub-adviser accepts
such appointment and agrees to render the services herein
set forth for the compensation herein provided.
2. SUB-ADVISORY SERVICES. Subject to the supervision of the
Trust's Board of Trustees, the Sub-adviser will assist the
Adviser in providing a continuous investment program for the
Fund, including research and management with respect to all
securities and investments and cash equivalents in the Fund.
The Sub-adviser will provide services under this Agreement in
accordance with the Fund's investment objective, policies and
restrictions as stated in the Fund's prospectuses and
statements of additional information and resolutions of the
Trust's Board of Trustees applicable to the Fund.
Without limiting the generality of the foregoing, the
Sub-adviser further agrees that it will:
(a) prepare, subject to the Adviser's approval, lists of
foreign countries for investment by the Fund and
determine from time to time what securities and other
investments will be purchased, retained or sold for
the Fund, including, with the assistance of the
Adviser, the Fund's investments in futures and
forward currency contracts;
(b) manage in consultation with the Adviser the Fund's
temporary investments in securities;
(c) place orders for the Fund either directly with the
issuer or with any broker or dealer;
(c) provide the Adviser with foreign broker research, a
quarterly review of Asian economic and investment
developments, and occasional reports on Asian
investment issues;
(d) attend regular business and investment-related meet-
ings with the Fund's Board of Trustees and the
Adviser if requested to do so by the Fund and/or the
Adviser; and
(e) maintain books and records with respect to the
securities transactions for the Fund, furnish to the
Adviser and the Trust's Board of Trustees such
periodic and special reports as they may request with
respect to the Fund, and provide in advance to the
Adviser all reports to the Board of Trustees for
examination and review within a reasonable time prior
to the Trust's Board meetings.
3. COVENANTS BY SUB-ADVISER. The Sub-adviser agrees with respect
to the services provided to the Fund that:
(a) the Sub-adviser will conform with all Rules and
Regulations of the Securities and Exchange Commission
("SEC") applicable to it.
(b) the Sub-adviser will use the same skill and care in
providing such services as it uses in providing
services to other investment companies.
(c) the Sub-adviser will telecopy trade information
to the Adviser on the first business day following
the day of the trade and cause broker confirmations
to be sent directly to the Adviser. In executing
portfolio transactions and selecting brokers or
dealers, the Sub-adviser 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-adviser shall
consider all factors 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 or dealer to
execute a particular transaction, the Sub-adviser
may also consider the brokerage and research
services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934)
provided to the Fund and/or other accounts over
which the Sub-adviser or any affiliate of the
Sub-adviser exercises investment discretion. The
Sub-adviser is authorized, subject to the prior
approval of the Trust's Board of Trustees, to pay to
a broker or dealer who provides such brokerage and
research services a commission for executing a
portfolio 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-adviser
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 in terms of the overall
responsibilities of the Sub-adviser to the Fund and
to the Trust.
(d) the Sub-adviser will treat confidentially and as
proprietary information of the Fund all records and
other information relative to the Fund and prior,
present or potential shareholders, 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 Fund, which approval shall
not be unreasonably withheld and may not be withheld
and will be deemed granted where the Sub-adviser may
be exposed to civil or criminal contempt proceedings
for failure to comply, when requested to divulge such
information by duly constituted authorities, or when
so requested by the Fund).
(e) the Sub-adviser will notify the Fund of any change in
its membership within a reasonable time after such
change.
4. SERVICES NOT EXCLUSIVE. (a) The services furnished by the
Sub-adviser hereunder are deemed not to be exclusive, and
nothing in this Agreement shall (i) prevent the Sub-adviser or
any affiliated person (as defined in the 0000 Xxx) of the
Sub-adviser from acting as investment adviser or manager for
any other person or persons, including other management
investment companies with investment objectives and policies
the same as or similar to those of the Fund or (ii) limit or
restrict the Sub-adviser or any such affiliated person from
buying, selling or trading any securities or other investments
(including any securities or other investments which the Fund
is eligible to buy) for its or their own accounts or for the
accounts of others for whom it or they may be acting;
PROVIDED, HOWEVER, that the Sub-adviser agrees that it will
not undertake any activities which, in its judgment, will
adversely affect the performance of its obligations to the
Fund under this Agreement.
(b) Nothing contained herein, however, shall prohibit the
Sub-adviser from advertising or soliciting the public
generally with respect to other products or services,
regardless of whether such advertisement or solicitation may
include prior, present or potential shareholders of the Fund.
5. PORTFOLIO TRANSACTIONS. (a) Investment decisions for the Fund
shall be made by the Sub-adviser independently from those for
any other investment companies and accounts advised or managed
by the Sub-adviser. The Fund and such investment companies and
accounts may, however, invest in the same securities. When a
purchase or sale of the same security is made at substantially
the same time on behalf of the Fund and/or another investment
company or account, the transaction will be averaged as to
price, and available investments allocated as to amount, in a
manner which the Sub-adviser believes to be equitable to the
Fund and such other investment company or account. In some
instances, this investment procedure may adversely affect the
price paid or received by the Fund or the size of the position
obtained or sold by the Fund. To the extent permitted by law,
the Sub-adviser may aggregate the securities to be sold or
purchased for the Fund with those to be sold or purchased for
other investment companies or accounts in order to obtain best
execution.
(b) Except to the extent permitted by the SEC or by applicable
law, portfolio securities will not be purchased from or sold
to the Adviser, the Sub-adviser, the Fund's
distributor (the "Distributor"), or any affiliated person of
either the Fund, the Adviser, the Sub-adviser, or the
Distributor.
6. BOOKS AND RECORDS. In compliance with the requirements of Rule
31a-3 under the 1940 Act, the Sub-adviser hereby agrees that
all records which it maintains for the Fund are the property
of the Fund and further agrees to surrender promptly to the
Fund any of such records upon the Fund's request. The
Sub-adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records
required to be maintained by Rule 31a-1 under the 1940 Act.
7. EXPENSES. During the term of this Agreement, the Sub-adviser
will pay all expenses incurred by it in connection with its
activities under this Agreement other than the cost of
securities, commodities and other investments (including
brokerage commissions and other transaction charges, if any)
purchased for the Fund.
8. COMPENSATION. For the services provided and the expenses
assumed with respect to the Fund pursuant to this Agreement,
the Adviser will pay the Sub-adviser and the Sub-adviser will
accept as full compensation therefor fees, computed daily and
paid monthly, at the annual rate of 0.60% of the average daily
net assets of the Fund up to and including $50 million; 0.45%
of the average daily net assets of the Fund in excess of $50
million up to and including $150 million; and 0.30% of the
average daily net assets of the Fund in excess of $150
million.
9. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-adviser
shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Fund or the Adviser,
except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services or a loss
resulting from willful misfeasance, bad faith or gross
negligence on the part of the Sub-adviser in the performance
of its duties or from reckless disregard of its obligations
and duties under this Agreement.
10. REFERENCE TO THE SUB-ADVISER. Neither the Adviser nor any
affiliate or agent of it shall make reference to or use the
name of the Sub-adviser or any of its affiliates, or any of
their clients, except references concerning the identity of
and services provided by the Sub-adviser to the Fund, which
references shall not differ in substance from those included
in the current registration statement pertaining to the Fund,
this Agreement and the Advisory Agreement between the Adviser
and the Fund with respect to the Fund, in any advertising or
promotional materials without the prior approval of the
Sub-adviser, which approval shall not be unreasonably withheld
or delayed. The Adviser hereby agrees to make all reasonable
efforts to cause the Fund and any affiliate thereof to satisfy
the foregoing obligation.
11. DURATION AND TERMINATION. This Agreement shall become
effective on the date of the commencement of the Fund,
provided that the Board of Trustees of the Trust has
previously approved the Agreement in accordance with the
requirements of the 1940 Act. Unless sooner terminated as
provided herein, this Agreement shall continue in effect until
April 1, 2003. Thereafter if not terminated, this Agreement
shall continue in effect for successive twelve-month periods
ending on April 1, 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
parties to this Agreement, or interested persons of any such
party, 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 the vote of a majority of the outstanding
voting securities of the Fund. Notwithstanding the foregoing,
this Agreement may be terminated at any time, without the
payment of any penalty, by the Adviser or by the Fund (by the
Trust's Board of Trustees or by vote of a majority of the
outstanding voting securities of the Fund) on 60 days' written
notice to the Sub-adviser (which notice may be waived by the
party entitled to receive the same) and will automatically
terminate upon the termination of the Advisory Agreement
between the Adviser and the Fund with respect to the Fund.
This Agreement may be terminated by the Sub-adviser at any
time, without payment of any penalty, on 60 days' written
notice to the Fund and the Adviser (which notice may be waived
by the party entitled to receive the same). This Agreement
will automatically terminate in the event of its assignment or
sale of the Fund of substantially all of its assets to another
investment company registered under the 1940 Act. (As used in
this Agreement, the terms "majority of the outstanding voting
securities," "interested persons" and "assignment" shall have
the same meanings as such terms in the 1940 Act.)
12. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement
may be changed, waived, discharged or terminated orally. A
provision of this Agreement may only be changed, waived,
discharged or terminated by an instrument in writing signed by
the party against which enforcement of the change, waiver,
discharge or termination is sought. No amendment of this
Agreement shall be effective with respect to the Fund until
approved by the vote of a majority of the outstanding voting
securities of the Fund.
13. NOTICE. Any notice, advice or report to be given pursuant to
this Agreement shall be delivered or mailed:
To the Sub-adviser at:
Xxxxxxx International Advisors, LLC
Xxx Xxxxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
To the Adviser at:
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
To the Fund at:
The Pillar Funds
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
14. 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 binding upon and shall inure to the
benefit of the parties hereto and their respective successors
and shall be governed by Massachusetts law.
15. LIMITATION OF LIABILITY. The obligations of the Fund and the
Trust entered into in the name or on behalf thereof by any of
the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon
any of the Trustees, shareholders, or representatives of the
Fund personally, but bind only the property of the Fund, and
all persons dealing with any class of shares of the Fund must
look solely to the property of the Fund belonging to such
class for the enforcement of any claims against the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
FLEET INVESTMENT ADVISORS INC.
By: /S/ XXXXX X. XXXXX
----------------------------
Name: Xxxxx X. Xxxxx
Title: President
XXXXXXX INTERNATIONAL ADVISORS, LLC
By: Oechsle Group, LLC
Its Member Manager
By: /S/ XXXXXXX XXXXXX
----------------------------
Name: Xxxxxxx Xxxxxx
Title: Managing Principal
