INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, dated as of August 4, 2000 by and between Pitcairn Trust
Company, a Pennsylvania corporation (the "Adviser"), and Sands Capital
Management, Inc., a Virginia corporation (the "Manager").
WHEREAS, the Pitcairn Funds (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "Investment Company Act");
WHEREAS, the Trust is and will continue to be a series fund having two or
more investment portfolios, each with its own investment objectives, policies
and restrictions;
WHEREAS, the Adviser is the investment adviser to the Trust;
WHEREAS, the Manager is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended ("Advisers Act");
WHEREAS, the Investment Company Act prohibits any person from acting as an
investment adviser to a registered investment company except pursuant to a
written contract (the "Agreement"); and
WHEREAS, the Board of Trustees of the Trust and the Adviser desire to
retain the Manager to render investment advisory services to the Select Growth
Fund portfolio (the "Fund") in the manner and on the terms hereinafter set
forth;
NOW, THEREFORE, in consideration of the promises and covenants hereinafter
contained, the Adviser and Manager agree as follows:
1. APPOINTMENT OF MANAGER
The Adviser hereby appoints the Manager to act as investment adviser to the
Fund and to furnish the investment advisory services described below, subject to
the supervision of the Trustees of the Trust and the Adviser and the terms and
conditions of this Agreement. The Manager will be an independent contractor and
will have no authority to act for or represent the Trust or Adviser in any way
or otherwise be deemed an agent of the Trust or Adviser except as expressly
authorized in this Agreement or another writing by the Trust, Adviser and the
Manager.
2. SERVICES TO BE RENDERED BY THE MANAGER TO THE TRUST
A. The Manager will manage the investment and reinvestment of the assets
of the Fund and determine the composition of the assets of the Fund, subject
always to the direction and control of the Trustees of the Trust and the Adviser
and in accordance with the provisions of the Trust's registration statement, as
amended from time to time. In fulfilling its obligations to manage the
investment and reinvestment of the assets of the Fund, the Manager will:
(i) furnish investment research and advice and formulate and implement
a continuous investment program for the Fund (a) consistent with the
investment objectives, policies and restrictions of the Fund as stated in
the Trust's Agreement and Declaration of Trust, By-Laws, and the Fund's
currently effective Prospectus and Statement of Additional Information
("SAI"), as amended from time to time and provided to the Manager pursuant
to Section 2.B of this Agreement, and (b) in compliance with the
requirements applicable to regulated investment companies accounts under
Subchapter M of the Internal Revenue Code of 1986, as amended;
(ii) take whatever steps are necessary to implement the investment
program for the Fund by the purchase, sale and exchange of securities and
other investments, including cash, authorized under the Trust's Agreement
and Declaration of Trust, By-Laws, and the Fund's currently effective
Prospectus and SAI, as amended from time to time and provided to the
Manager pursuant to Section 2.B of this Agreement, including the placing of
orders for such purchases, sales and exchanges for the account of the Trust
on behalf of the Fund with such brokers and dealers as the Manager shall
have selected; to this end, the Manager is expressly authorized as the
agent of the Trust on behalf of the Fund to give instructions to the
Custodian of the Trust as to deliveries of securities and payments of cash
for the account of the Trust on behalf of the Fund;
(iii) regularly report to the Trustees of the Trust and the Adviser
with respect to the implementation of the investment program and, in
addition, will provide such statistical information and special reports
concerning the Fund and/or important developments materially affecting the
investments held, or contemplated to be purchased, by the Fund, as may
reasonably be requested by the Adviser or the Trustees of the Trust, and
will attend Board of Trustees' meetings, as reasonably requested, to
present such information and reports to the Board;
(iv) assist in determinations of the fair value of certain portfolio
securities when market quotations are not readily available for the purpose
of calculating the Fund's net asset value in accordance with procedures and
methods established by the Trustees of the Trust; and
(v) establish appropriate interfaces with the Trust's administrator
and Adviser in order to provide such administrator and Adviser with all
information reasonably requested by the administrator and Adviser necessary
to the provision of the Manager's services hereunder to the Fund.
B. To facilitate the Manager's fulfillment of its obligations under this
Agreement, the Adviser will undertake the following:
(i) the Adviser agrees promptly to provide the Manager with all
amendments or supplements to the Fund's Prospectus, SAI, the Trust's
registration statement on Form N-1A ("Registration Statement"), the Trust's
Agreement and Declaration of Trust, and By-Laws;
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(ii) the Adviser agrees to notify the Manager expressly in writing of
each change in the fundamental and nonfundamental investment policies of
the Fund;
(iii) the Adviser agrees to provide, directly or indirectly, the
Manager with such assistance as may be reasonably requested by the Manager
in connection with its activities pertaining to the Fund under this
Agreement, including information as to the general condition of the Fund's
affairs; and
(iv) the Adviser will promptly provide the Manager with any guidelines
and procedures applicable to the Manager or the Fund adopted from time to
time by the Board of Trustees of the Trust and agrees to promptly provide
the Manager with copies of all amendments thereto.
C. The Manager, at its expense, will furnish: all necessary investment
and management facilities, overhead expenses and investment personnel, including
salaries, expenses and fees of any personnel required for it to faithfully
perform its duties under this Agreement.
D. The Manager will select brokers and dealers to effect all portfolio
transactions subject to the conditions set forth herein. The Manager will place
all necessary orders with brokers, dealers, or issuers. The Manager is directed
at all times to seek to execute brokerage transactions for the Fund in
accordance with such policies or practices as may be established by the Board of
Trustees and described in the Trust's currently effective Prospectus and SAI, as
amended from time to time and provided to the Manager pursuant to Section 2.B of
this Agreement, including in particular, if applicable, policies and procedures
in accordance with Section 17(e) and Rule 17e-1 under the Investment Company
Act. In placing orders for the purchase or sale of investments for the Fund, in
the name of the Trust on behalf of the Fund or its nominees, the Manager shall
use its best efforts to obtain for the Fund the most favorable net price and
best execution available, considering all of the circumstances, and shall
provide such information and reports regarding compliance with this requirement
as may reasonably be requested by the Board of Trustees.
Subject to the appropriate policies and procedures approved by the Board of
Trustees, the Manager may, to the extent authorized by Section 28(e) of the
Securities Exchange Act of 1934, cause the Fund to pay a broker or dealer that
provides brokerage and research services to the Adviser, the Manager, and the
Fund an amount of commission for effecting a portfolio transaction in excess of
the amount of commission another broker or dealer would have charged for
effecting that transaction if the Manager determines, in good faith, that such
amount of commission is reasonable in relationship to the value of such
brokerage and research services provided viewed in terms of that particular
transaction or the Manager's overall responsibilities to the Fund and its other
advisory clients. To the extent authorized by Section 28(e) and the Trust's
Board of Trustees, the Manager shall not be deemed to have acted unlawfully or
to have breached any duty created by this Agreement or otherwise solely by
reason of such action.
E. On occasions when the Manager deems the purchase or sale of a security
to be in the best interest of the Fund as well as other clients of the Manager,
the Manager, to the extent permitted by applicable laws and regulations, may,
but shall be under no obligation to, aggregate
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the securities to be purchased or sold to attempt to obtain a more 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 Manager in the manner the
Manager considers to be the most equitable and consistent with its fiduciary
obligations to the Fund and to its other clients.
F. The Manager will maintain all accounts, books and records generated by
it with respect to the Fund as are required of an investment adviser of a
registered investment company pursuant to the Investment Company Act and
Advisers Act and the rules thereunder.
G. The Manager will, unless and until otherwise directed by the Adviser
or the Board of Trustees, vote proxies with respect to the Fund's securities,
and exercise rights in corporate actions or otherwise. The Adviser shall
instruct the Fund's custodian to forward or cause to be forwarded to the Manager
all relevant proxy solicitation materials.
3. COMPENSATION OF MANAGER
The Adviser will pay the Manager, with respect to the Fund, compensation at
the annual rate of 40 basis points (0.40%) of the Fund's net assets. Payments
shall be made to the Manager on the first day of each month for the preceding
month or portion thereof, however this advisory compensation will be calculated
based on the average daily value of the Fund's net assets, as calculated in
accordance with the computation of net asset value included in the Trust's
Registration Statement, and accrued on a daily basis. In the event the
calculation of any Fund's net asset value is suspended, the net asset value used
for any day will be that for the last business day prior to such suspension
until net asset value calculations are resumed.
3.1 REPRESENTATIONS OF THE ADVISER.
The Adviser represents, warrants and agrees that::
A. The Adviser has been duly authorized by the Board of Trustees of the
Trust to engage the Manager to provide investment services to the Fund as
contemplated by this Agreement.
B. The Adviser (i) is not prohibited by the 1940 Act, the Advisers Act or
other law, regulation or order from performing the services contemplated by this
Agreement; and (ii) has met and will seek to continue to meet for so long as
this Agreement remains in effect, any other applicable federal or state
requirements, or the applicable requirements of any regulatory or industry
self-regulatory agency necessary to be met in order to perform the services
contemplated by this Agreement.
3.2 REPRESENTATIONS OF THE MANAGER.
A. The Manager (i) is registered as an investment adviser under the
Advisers Act; (ii) is not prohibited by the 1940 Act, the Advisers Act or other
law, regulation or order from performing the services contemplated by this
Agreement; (iii) has met and will seek to continue
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to meet for so long as this Agreement remains in effect, any other applicable
federal or state requirements, or the applicable requirements of any regulatory
or industry self-regulatory agency necessary to be met in order to perform the
services contemplated by this Agreement; and (v) will promptly notify the
Adviser of the occurrence of any event that would disqualify the Manager from
serving as an investment adviser of an investment company pursuant to Section
9(a) of the 1940 Act or otherwise.
B. The written information furnished to the Adviser or the Trust by or on
behalf of the Manager specifically for use in the preparation of the
Registration Statement or any amendment or supplement thereto does not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
4A. LIABILITY OF MANAGER
Neither the Manager nor any of its directors, officers, or employees shall
be liable to the Adviser or the Trust for any loss suffered by the Adviser or
the Trust resulting from its acts or omissions as Manager to a Fund, except for
losses to the Adviser or the Trust resulting from willful misconduct, bad faith,
or gross negligence in the performance of, or from reckless disregard of, the
duties hereunder of the Manager or any of its directors, officers or employees.
The Manager, its directors, officers or employees shall not be liable to the
Adviser or the Trust for any loss suffered as a consequence of any action or
inaction of other service providers to the Trust in failing to observe the
instructions of the Manager, unless such action or inaction of such other
service providers to the Trust is a result of the willful misconduct, bad faith
or gross negligence in the performance of, or from reckless disregard of, the
duties of the Manager, its directors, officers or employees under this
Agreement.
4B. LIABILITY OF ADVISER
Neither the Adviser nor any of its directors, officers, or employees shall
be liable to the Manager for any loss suffered by the Manager resulting from its
acts or omissions as Adviser to a Fund, except for losses to the Manager
resulting from willful misconduct, bad faith, or gross negligence in the
performance of, or from reckless disregard of, the duties hereunder of the
Adviser or any of its directors, officers or employees. The Adviser, its
directors, officers or employees shall not be liable to the Manager for any loss
suffered as a consequence of any action or inaction of other service providers
to the Trust in failing to observe the instructions of the Adviser, unless such
action or inaction of such other service providers to the Trust is a result of
the willful misconduct, bad faith or gross negligence in the performance of, or
from reckless disregard of, the duties of the Adviser, its directors, officers
or employees under this Agreement.
5. INDEMNIFICATIONS
A. The Adviser shall indemnify the Manager and its controlling persons,
officers, directors, employees, agents, legal representatives and persons
controlled by it (which shall not include the Trust or any Fund) (collectively,
"Manager Related Persons") to the fullest extent permitted by law against any
and all loss, damage, judgments, fines, amounts paid in settlement
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and reasonable expenses, including attorneys' fees (collectively "Losses"),
incurred by the Manager or Manager Related Persons by reason of or arising out
of any act or omission by the Adviser under this Agreement, or any breach of
warranty, representation or agreement by the Adviser hereunder, subject to
Section 4B of this Agreement, except to the extent that such Losses arise as a
result of the negligence of the Manager or the Manager Related Persons or the
Manager's breach of fiduciary duty to the Adviser or the Trust.
B. The Manager shall indemnify the Adviser and its controlling persons,
officers, directors, employees, agents, legal representatives and persons
controlled by it (collectively, "Adviser Related Persons") to the fullest extent
permitted by law against any and all Losses incurred by the Adviser or Adviser
Related Persons by reason of or arising out of any act or omission by the
Manager under this Agreement, or any breach of warranty, representation or
agreement by the Manager hereunder, subject to Section 4A of this Agreement,
except to the extent that such Losses arise as a result of the negligence of the
Adviser or the Adviser Related Persons.
C. The right of indemnification provided under this Section 10 shall not
be construed to protect any person against any liability to the Fund or its
security holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence, in the performance of his duties, or
by reason of his reckless disregard of his obligations and duties under this
Agreement. The indemnifications provided in this Section 10 shall survive the
termination of this Agreement.
6. NON-EXCLUSIVITY
The services of the Manager to the Fund and the Trust are not to be deemed
to be exclusive, and the Manager shall be free to render investment advisory or
other services to others (including other investment companies) and to engage in
other activities. It is understood and agreed that the directors, officers, and
employees of the Manager are not prohibited from engaging in any other business
activity or from rendering services to any other person, or from serving as
partners, officers, directors, trustees, or employees of any other firm or
corporation, including other investment companies.
7. SUPPLEMENTAL ARRANGEMENTS
The Manager may enter into arrangements with other persons affiliated with
the Manager for the provision of certain personnel and facilities to the Manager
to better enable it to fulfill its duties and obligations under this Agreement.
As used in this Agreement, any reference to the "Manager" refers also to such
affiliate.
8. REGULATION
The Manager shall submit to all regulatory and administrative bodies having
jurisdiction over the services provided pursuant to this Agreement any
information, reports, or other material which any such body by reason of this
Agreement may require pursuant to applicable laws and regulations.
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9. RECORDS
The records relating to the services provided under this Agreement shall be
the property of the Trust and shall be under its control; however, the Trust
shall furnish to the Manager such records and permit it to retain such records
(either in original or in duplicate form) as it shall reasonably require in
order to carry out its duties. In the event of the termination of this
Agreement, such records shall promptly be returned to the Trust by the Manager
free from any claim or retention of rights therein. The Manager shall keep
confidential any information obtained in connection with its duties hereunder
and disclose such information only if the Trust has authorized such disclosure
or if such disclosure is expressly required by applicable federal or state
regulatory authorities.
10. DURATION OF AGREEMENT
This Agreement shall become effective with respect to the Fund on the later
of the date of its execution or the date of the commencement of operations of
the Fund. This Agreement will continue in effect for a period more than two
years from the date first set forth above only so long as such continuance is
specifically approved at least annually by the Board of Trustees or majority of
outstanding voting securities, provided that in such event such continuance
shall also be approved by the vote of a majority of the Trustees who are not
"interested persons" (as defined in the Investment Company Act) ("Independent
Trustees") of any party to this Agreement, cast in person at a meeting called
for the purpose of voting on such approval.
11. TERMINATION OF AGREEMENT
This Agreement may be terminated at any time, without the payment of any
penalty, (A) by the Adviser at the direction of the Board of Trustees, including
a majority of the Independent Trustees, (B) by the vote of a majority of the
outstanding voting securities of the Fund, on thirty (30) days' written notice
to the Adviser and the Manager, or (C) by the Adviser or Manager on thirty (30)
days' written notice to the Trust and the other party. This Agreement will
automatically terminate, without the payment of any penalty, in the event of its
assignment (as defined in the Investment Company Act) or in the event the
Investment Management Agreement between the Adviser and the Trust is assigned or
terminates for any other reason. This Agreement will also terminate upon written
notice to the other party that the other party is in material breach of this
Agreement, unless the other party in material breach of this Agreement cures
such breach to the reasonable satisfaction of the party alleging the breach
within ten (10) days after written notice.
12. PROVISION OF CERTAIN INFORMATION BY MANAGER
The Manager will promptly notify the Adviser in writing of the occurrence
of any of the following events:
A. the Manager fails to be registered as an investment adviser under the
Advisers Act or under the laws of any jurisdiction in which the Manager is
required to be registered as an investment adviser in order to perform its
obligations under this Agreement;
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B. the Manager is served or otherwise receives notice of any action,
suit, proceeding, inquiry, or investigation, at law or in equity, before or by
any court, public board, or body, involving the affairs of the Manager as they
relate to the Manager's responsibilities under this Agreement; and/or
C. the portfolio manager or managers of the Fund change or there occurs
any actual change in control or management of the Manager.
13. USE OF MANAGER'S NAME
The Adviser will not use the Manager's name (or that of any affiliate) in
Trust literature without prior review and approval by the Manager, which may not
be unreasonably withheld or delayed.
14. AMENDMENTS TO THE AGREEMENT
Except to the extent permitted by the Investment Company Act or the rules
or regulations thereunder or pursuant to any exemptive relief granted by the
Securities and Exchange Commission ("SEC"), this Agreement may be amended by the
parties only if such amendment, if material, is specifically approved by the
vote of a majority of the outstanding voting securities of the Fund (unless such
approval is not required by Section 15 of the Investment Company Act as
interpreted by the SEC or its staff or the Trust has obtained an exemption from
the voting requirements of Section 15) and by the vote of a majority of the
Independent Trustees cast in person at a meeting called for the purpose of
voting on such approval. The required shareholder approval shall be effective
with respect to the Fund if a majority of the outstanding voting securities of
the Fund vote to approve the amendment, notwithstanding that the amendment may
not have been approved by a majority of the outstanding voting securities of any
other portfolio affected by the amendment or all the portfolios of the Trust.
15. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement of the
parties with respect to the Fund .
16. HEADINGS
The headings in the sections of this Agreement are inserted for convenience
of reference only and shall not constitute a part hereof.
17. NOTICES
All notices required to be given pursuant to this Agreement shall be
delivered or mailed to the last known business address of each applicable party
in person or by registered mail or a private mail or delivery service providing
the sender with notice of receipt. The specific person to whom notice shall be
provided with respect to the Manager shall be its President; and with respect to
the Adviser shall be its Corporate Counsel, unless another person is specified
in
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writing to the other party. Notice shall be deemed given on the date delivered
or mailed in accordance with this paragraph.
18. SEVERABILITY
Should any portion of this Agreement for any reason be held to be void in
law or in equity, the Agreement shall be construed, insofar as is possible, as
if such portion had never been contained herein.
19. GOVERNING LAW
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of Delaware, or any of the applicable
provisions of the Investment Company Act and the Advisers Act. To the extent
that the laws of the State of Delaware, or any of the provisions in this
Agreement, conflict with applicable provisions of the Investment Company Act,
the latter shall control.
Any question of interpretation of any term or provision of this Agreement
having a counterpart in or otherwise derived from a term or provision of the
Investment Company Act shall be resolved by reference to such term or provision
of the Investment Company Act and to interpretations thereof, if any, by the
United States courts or, in the absence of any controlling decision of any such
court, by rules, regulations or orders of the SEC validly issued pursuant to the
Investment Company Act. Specifically, the terms "vote of a majority of the
outstanding voting securities," "interested persons," "assignment," and
"affiliated persons," as used herein shall have the meanings assigned to them by
Section 2(a) of the Investment Company Act. In addition, where the effect of a
requirement of the Investment Company Act reflected in any provision of this
Agreement is relaxed by a rule, regulation or order of the SEC, whether of
special or of 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 under seal by their duly authorized officers as of the date first
mentioned above.
PITCAIRN TRUST COMPANY
By:
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Name: Xxxxxxxx X. Xxxxxxxx
Title: Executive Vice President and Corporate Counsel
SANDS CAPITAL MANAGEMENT, INC.
By:
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Name: Xxxxx X. Xxxxx
Title: President
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