PIC TECHNOLOGY PORTFOLIO
MANAGEMENT AGREEMENT
AGREEMENT made this _____ day of_________, 2000, by and between PIC
TECHNOLOGY PORTFOLIO (the "Trust"), a trust organized under the laws of the
State of New York, and PROVIDENT INVESTMENT COUNSEL (the "Advisor"), a
California corporation.
WITNESSETH:
In consideration of the mutual promises and agreements herein contained and
other good and valuable consideration, the receipt of which is hereby
acknowledged, it is hereby agreed by and between the parties hereto as follows:
l. In General
The Trust hereby appoints the Advisor to act as investment adviser to the
Trust. The Advisor agrees, all as more fully set forth herein, to provide
professional investment management with respect to the investment of the assets
of the Trust and to supervise and arrange the purchase and sale of securities
held in the portfolio of the Trust.
2. Duties and Obligations of the Advisor with respect to Management of the
Trust
(a) Subject to the succeeding provisions of this section and subject to the
direction and control of the Board of Trustees of the Trust, the Advisor shall:
(i) Decide what securities shall be purchased or sold by the Trust and
when; and
(ii) Arrange for the purchase and the sale of securities held in the
portfolio of the Trust by placing purchase and sale orders for the Trust.
(b) Any investment purchases or sales made by the Advisor shall at all
times conform to, and be in accordance with, any requirements imposed by: (l)
the provisions of the Investment Company Act of 1940 (the "Act") and of any
rules or regulations in force thereunder; (2) any other applicable provisions of
law; (3) the provisions of the Declaration of Trust and By-Laws of the Trust as
amended from time to time; (4) any policies and determinations of the Board of
Trustees of the Trust; and (5) the fundamental policies of the Trust, as
reflected in its registration statement under the Act, or as amended by the
shareholders of the Trust.
(c) The Advisor shall give the Trust the benefit of its best judgment and
effort in rendering services hereunder. In the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of obligations or duties
("disabling conduct") hereunder on the part of the Advisor (and its officers,
directors, agents, employees, controlling persons, shareholders and any other
person or entity affiliated with the Advisor) the Advisor shall not be subject
to liability to the Trust or to any shareholder of the Trust for any act or
1
omission in the course of, or connected with rendering services hereunder,
including without limitation, any error of judgment or mistake of law or for any
loss suffered by any of them in connection with the matters to which this
Agreement related, except to the extent specified in Section 36(b) of the Act
concerning loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services. Except for such disabling conduct, the
Trust shall indemnify the Advisor (and its officers, directors, agents,
employees, controlling persons, shareholders and any other person or entity
affiliated with the Advisor) from any liability arising from the Advisor's
conduct under this Agreement to the extent permitted by the Declaration of Trust
and applicable law.
(d) Nothing in this Agreement shall prevent the Advisor or any affiliated
person (as defined in the Act) of the Advisor from acting as investment adviser
or manager and/or principal underwriter for any other person, firm or
corporation and shall not in any way limit or restrict the Advisor or any such
affiliated person from buying, selling or trading any securities for its or
their own accounts or the accounts of others for whom it or they may be acting,
provided, however, that the Advisor expressly represents that it will undertake
no activities which, in its judgment, will adversely affect the performance of
its obligations to the Trust under this Agreement.
(e) It is agreed that the Advisor shall have no responsibility or liability
for the accuracy or completeness of the Trust's Registration Statement under the
Act except for information supplied by the Advisor for inclusion therein.
3. Broker-Dealer Relationships
In connection with its duties set forth in Section 2(a)(ii) of this
Agreement to arrange for the purchase and the sale of securities held by the
Trust by placing purchase and sale orders for the Trust, the Advisor shall
select such broker-dealers ("brokers") as shall, in the Advisor's judgment,
implement the policy of the Trust to achieve "best execution", i.e., prompt and
efficient execution at the most favorable securities price. In making such
selection, the Advisor is authorized to consider the reliability, integrity and
financial condition of the broker. The Advisor is also authorized to consider
whether the broker provides brokerage and/or research services to the Trust
and/or other accounts of the Advisor. The commissions paid to such brokers may
be higher than another broker would have charged if a good faith determination
is made by the Advisor that the commission is reasonable in relation to the
services provided, viewed in terms of either that particular transaction or the
Advisor's overall responsibilities as to the accounts as to which it exercises
investment discretion. The Advisor shall use its judgment in determining that
the amount of commissions paid are reasonable in relation to the value of
brokerage and research services provided and need not place or attempt to place
a specific dollar value on such services or on the portion of commission rates
reflecting such services. To demonstrate that such determinations were in good
faith, and to show the overall reasonableness of commissions paid, the Advisor
shall be prepared to show that commissions paid (i) were for purposes
contemplated by this Agreement; (ii) provide lawful and appropriate assistance
to the Advisor in the performance of its decision-making responsibilities; and
(iii) were within a reasonable range as compared to the rates charged by
2
qualified brokers to other institutional investors as such rates may become
known from available information. The Trust recognizes that, on any particular
transaction, a higher than usual commission may be paid due to the difficulty of
the transaction in question. The Advisor also is authorized to consider sales of
shares as a factor in the selection of brokers to execute brokerage and
principal transactions, subject to the requirements of "best execution", as
defined above.
4. Allocation of Expenses
The Advisor agrees that it will furnish the Trust, at the Advisor's
expense, with all office space and facilities, and equipment and clerical
personnel necessary for carrying out its duties under this Agreement. The
Advisor will also pay all compensation of all Trustees, officers and employees
of the Trust who are affiliated persons of the Advisor. All costs and expenses
not expressly assumed by the Advisor under this Agreement shall be paid by the
Trust, including, but not limited to (i) interest and taxes; (ii) brokerage
commissions; (iii) insurance premiums; (iv) compensation and expenses of its
Trustees other than those affiliated with the Advisor or its Administrator; (v)
legal and audit expenses; (vi) fees and expenses of the Trust's custodian,
transfer agent and accounting services agent; (vii) expenses incident to the
issuance of its shares, including stock certificates and issuance of shares on
the payment of, or reinvestment of, dividends; (viii) fees and expenses incident
to the registration under Federal or state securities laws of the Trust or its
shares; (ix) expenses of preparing, printing and mailing reports, notices, proxy
material and prospectuses to shareholders of the Trust; (x) all other expenses
incidental to holding meetings of the Trust's shareholders; (xi) dues or
assessments of or contributions to the Investment Company Institute or any
successor or other industry association; (xii) such non-recurring expenses as
may arise, including litigation affecting the Trust and the legal obligations
which the Trust may have to indemnify its officers and Trustees with respect
thereto; (xiii) fees of the Trust's Administrator and (xiii) the organization
costs of the Trust.
5. Compensation of the Advisor
(a) The Trust agrees to pay the Advisor and the Advisor agrees to accept as
full compensation for all services rendered by the Advisor as such, an annual
management fee, payable monthly and computed on the value of the net assets of
the Trust as of the close of business each business day at the annual rate of
0.80 of 1% of such net assets of the Trust.
(b) In the event the expenses of the Trust (including the fees of the
Advisor and the Administrator and amortization of organization expenses but
excluding interest, taxes, brokerage commissions, extraordinary expenses and
sales charges and distribution fees) for any fiscal year exceed the limits set
by applicable regulations of state securities commissions in states where the
Trust's shares are registered or qualified for sale, the Advisor will reduce its
fee by the amount of such excess. Any such reductions are subject to
readjustment during the year. The payment of the management fee at the end of
any month will be reduced or postponed or, if necessary, a refund will be made
to the Trust so that at no time will there be any accrued but unpaid liability
under this expense limitation.
3
6. Duration and Termination
(a) This Agreement shall go into effect on the date set forth above and
shall, unless terminated as hereinafter provided, remain in effect for a period
of two years. This Agreement shall continue in effect thereafter for additional
periods not exceeding one year so long as such continuance is specifically
approved at least annually by the Trust's Board of Trustees, including the vote
of a majority of the Trustees who are not parties to this Agreement or
"interested persons" (as defined in the Act) of any such party cast in person at
a meeting called for the purpose of voting on such approval, or by the vote of
the holders of a "majority" (as so defined) of the outstanding voting securities
of the Trust.
(b) This Agreement may be terminated by the Advisor at any time without
penalty upon giving the Trust sixty (60) days' written notice (which notice may
be waived by the Trust) and may be terminated by the Trust at any time without
penalty upon giving the Advisor sixty (60) days' written notice (which notice
may be waived by the Advisor), provided that such termination by the Trust shall
be directed or approved by the vote of a majority of all of its Trustees in
office at the time or by the vote of the holders of a majority (as defined in
the Act) of the voting securities of the Trust. This Agreement shall
automatically terminate in the event of its assignment (as so defined).
IN WITNESS WHEREOF, the parties hereto have caused the foregoing instrument
to be executed by duly authorized persons and their seals to be hereunto
affixed, all as of the day and year first above written.
PIC TECHNOLOGY PORTFOLIO
By
-----------------------------------
ATTEST:
By
-----------------------------
PROVIDENT INVESTMENT COUNSEL
By
-----------------------------------
ATTEST:
By
-----------------------------
4
