Exhibit 6
INVESTMENT MANAGEMENT AGREEMENT
PILGRIM SMALLCAP OPPORTUNITIES FUND
AGREEMENT made this ___ day of September 2000, by and between PILGRIM
SMALLCAP OPPORTUNITIES FUND a Massachusetts business trust, (the "Fund") and
PILGRIM INVESTMENTS, INC., a Delaware business corporation (the "Adviser").
The Fund is an open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act").
The Fund desires to retain the Adviser to render investment advisory
services to the Fund, and the Adviser is willing to render such investment
advisory on the terms set forth below.
The parties agree as follows:
1. The Fund hereby appoints the Adviser to act as investment adviser to the
Fund for the period and on the terms set forth in this Agreement. The Adviser
accepts such appointment and agrees to render the services described, for the
compensation provided, in this Agreement.
2. Subject to the supervision of the Trustees, the Adviser shall manage the
investment operations of the Fund and the composition of the Fund's portfolio,
including the purchase and retention and disposition of portfolio securities, in
accordance with the Fund's investment objectives, policies and restrictions as
stated in the Fund's Prospectus and Statement of Additional Information (as
defined below) subject to the following understandings:
(a) The Adviser shall provide supervision of the Fund's investments and
determine from time to time what investments will be made, held or disposed of
or what securities will be purchased and retained, sold or loaned by the Fund,
and what portion of the assets will be invested or held uninvested as cash.
(b) The Adviser shall use its best judgment in the performance of its
duties under this Agreement.
(c) The Adviser, in the performance of its duties and obligations under
this Agreement, shall (i) act in conformity with the Declaration of Trust, By-
Laws, Prospectus and Statement of Additional Information of the Fund, with the
instructions and directions of the Trustees and (ii) conform to and comply with
the requirements of the Investment Company Act and all other applicable federal
and state laws and regulations.
(d) (i) The Adviser shall determine the securities to be purchased or sold
by the Fund and will place orders pursuant to its determinations with or through
such persons, brokers or dealers to carry out the policy with respect to
brokerage as set forth in the Fund's Prospectus and Statement of Additional
Information or as the Trustees may direct from time to time. In providing the
Fund with investment supervision, the Adviser will give primary consideration to
securing the most favorable price and efficient execution. The Adviser may also
consider the financial responsibility, research and investment information and
other services and research related products provided by brokers or dealers who
may effect or be a party to any such transactions or other transactions to which
other clients of the Adviser may be a party. The Fund recognize that the
services and research related products provided by such brokers may be useful to
the Adviser in connection with its services to other clients.
(ii) When the Adviser deems the purchase or sale of a security to be in the
best interest of the Fund as well as other clients, the Adviser, to the extent
permitted by applicable laws and regulations, may aggregate the securities to be
sold or purchased in order to obtain the most 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 transactions, will
be made by the Adviser in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Fund and to such other clients.
(e) The Adviser shall maintain, or cause to be maintained, all books and
records required under the Investment Company Act to the extent not maintained
by the custodian of the Fund. The Adviser shall render to the Trustees such
periodic and special reports as the Trustees may reasonably request.
(f) The Adviser shall provide the Fund's custodian on each business day
information relating to all transactions concerning the Fund's assets.
(g) The investment management services of the Adviser to the Fund under
this Agreement are not to be deemed exclusive, and the Adviser shall be free to
render similar services to others.
3. The Fund has delivered to the Adviser copies of each of the following
documents and will deliver to it all future amendments and supplements, if any:
(a) Declaration of Trust, as amended, as filed with the Secretary of the
Commonwealth of Massachusetts (such Declaration of Trust, as in effect on the
date hereof and as further amended from time to time, is herein called the
"Declaration of Trust");
(b) By-Laws of the Fund (such By-Laws, as in effect on the date hereof and
as amended from time to time, are herein called the "By-Laws");
(c) Certified resolutions of the Trustees authorizing the appointment of
the Adviser and approving this Agreement on behalf of the Fund;
(d) Registration Statement on Form N-lA under the Investment Company Act
and the Securities Act of 1933, as amended from time to time (the "Registration
Statement"), as filed with the Securities and Exchange Commission (the
"Commission"), relating to the Fund and shares of beneficial interest of the
Fund and all amendments thereto.
(e) Notification of Registration of the Fund under the Investment Company
Act on Form N-8A as filed with the Commission and all amendments thereto;
(f) Prospectus and Statement of Additional Information included in the
Registration Statement, as amended from time to time. All references to this
Agreement, the Prospectus and the Statement of Additional Information shall be
to such documents as most recently amended or supplemented and in effect.
4. The Adviser shall authorize and permit any of its directors, officers
and employees who may be elected as trustees or officers of the Fund to serve in
the capacities in which they are elected. All services to be furnished by the
Adviser under this Agreement may be furnished through such directors, officers
or employees of the Adviser.
2
5. The Adviser agrees that all records which it maintains for the Fund are
property of the Fund. The Adviser will surrender promptly to the Fund any such
records upon the Fund's request. The Adviser further agrees to preserve such
records for the periods prescribed in Rule 3la-2 of the Commission under the
Investment Company Act.
6. In connection with the services rendered by the Adviser under this
Agreement, the Adviser will pay all of the following expenses:
(a) the salaries and expenses of all personnel of the Fund and the Adviser
required to perform the services to be provided pursuant to this
Agreement, except the fees of the Trustees who are not affiliated
persons of the Adviser, and
(b) all expenses incurred by the Adviser or the Fund in connection the
performance of the Adviser's responsibilities hereunder, other than
brokers' commissions and any issue or transfer taxes chargeable to the
Fund in connection with its securities transactions.
7. In the event the expenses of the Fund for any fiscal year (including the
fees payable to the Adviser but excluding interest, taxes, brokerage
commissions, distribution fees and litigation and indemnification expenses and
other extraordinary expenses not incurred in the ordinary course of the Fund's
business) exceed the lowest applicable annual expense limitation established
pursuant to the statutes or regulations of any jurisdictions in which shares of
the Fund are then qualified for offer and sale, the compensation due the Adviser
will be reduced by the amount of such excess, or, if such reduction exceeds the
compensation payable to the Adviser, the Adviser will pay the Fund, whose
expenses exceed such expense limitation, the amount of such reduction which
exceeds the amount of such compensation.
8. For the services provided and the expenses assumed pursuant to this
Agreement, the Fund will pay to the Adviser as compensation a fee accrued daily
and paid monthly at the annual rate of 1.00% of the Fund's aggregate average
daily net assets.
9. The Adviser may rely on information reasonably believed by it to be
accurate and reliable. Neither the Adviser nor its officers, directors,
employees or agents or controlling persons shall be liable for any error of
judgment or mistake of law, or for any loss suffered by the Fund in connection
with or arising out of the matters to which this Agreement relates, except a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of the Adviser in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement.
10. This Agreement shall continue in effect for a period of two years from
the date hereof and shall continue automatically for successive annual periods ,
provided that such continuance is specifically approved at least annually by the
affirmative vote of (i) a majority of the Trustees of the Fund , who are not
interested persons of the Fund, cast in person at a meeting called for the
purpose of voting on such approval, and (ii) a majority of the Trustees of the
Fund or the holders of a majority of the outstanding voting securities of the
Fund; provided however, that this Agreement may be terminated by the Fund, at
any time, without the payment of any penalty, by the majority of the Trustees
acting on behalf of the Fund or by vote of a majority of the outstanding voting
securities (as defined in the Investment Company Act) of a Fund, or by the
Adviser at any time, without the payment of any penalty, on not more than 60
days' nor less than 30 days' written notice to the other party.
3
11. This agreement shall terminate automatically in the event of its
assignment; the term "assignment" for this purpose shall have the meaning
defined in Section 2(a)(4) of the Investment Company Act of 1940.
12. Nothing in this Agreement shall limit or restrict the right of any
director, officer or employee of the Adviser who may also be a Trustee, officer
or employee of the Fund to engage in any other business or to devote his time
and attention in part to the management or other aspect of any business, whether
of a similar or dissimilar nature, nor limit or restrict the right of the
Adviser to engage in any other business or to render services of any kind to any
other person or entity.
13. During the term of this Agreement, the Fund agrees to furnish the
Adviser at its principal office all prospectuses, proxy statements, reports to
shareholders, sales literature, or other material prepared for distribution to
shareholders of the Fund or the public, which refer in any way to the Adviser,
prior to use thereof and not to use such material if the Adviser reasonably
objects in writing within five business days (or such other time as may be
mutually agreed) after receipt. In the event of termination of the Agreement,
the Fund will continue to furnish to the Adviser such other information relating
to the business affairs of the Fund as the Adviser at any time, or from time to
time, reasonably requests in order to discharge its obligations hereunder.
14. This Agreement may be amended by mutual agreement, but only after
authorization of such amendments by the affirmative vote of (i) the holders of
the majority of the outstanding voting securities of the Fund and ( ii) a
majority of the members of the Board of Trustees who are not interested persons
of the Fund or the Adviser, cast in person at a meeting called for the purpose
of voting on such approval.
15. The Adviser and the Fund each agree that the name "Pilgrim" is
proprietary to, and a property right of, the Adviser. The Fund agrees and
consents that (i) it will only use the name "Pilgrim" as part of its name and
for no other purpose, (ii) it will not purport to grant any third party the
right to use the name "Pilgrim" and (iii) upon the termination of this
Agreement, the Fund shall, upon the request of the Adviser, cease to use the
name "Pilgrim", and shall use its best efforts to cause its officers, Trustees
and shareholders to take any and all actions which the Adviser may request to
effect the foregoing.
16. Any notice or other communications required to be given pursuant to
this Agreement shall be deemed to be given if delivered or mailed by registered
mail, postage paid, (1) to the Adviser at 00 X. Xxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxx 00000, Attention: Secretary; or (2) to the Fund, 00 X. Xxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, Attention: Secretary.
17. This Agreement shall be governed by and construed in accordance with
the laws of the State of Arizona. The terms "interested person", "assignment",
and "vote of the majority of the outstanding securities" shall have the meaning
set forth in the Investment Company Act.
18. The Declaration of Trust, establishing the Fund, dated March 1, 1988, a
copy of which, together with all amendments thereto (the "Declaration"), is on
file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name "Pilgrim SmallCap Opportunities Fund" refers to the
Trustees under the Declaration collectively as trustees, but not individually or
4
personally; and no Trustee, shareholder, officer, employee or agent of the Fund
may be held to any personal liability, nor may resort be had to their private
property for the satisfaction of any obligation or claim or otherwise in
connection with the affairs of the Fund, but the Fund property only shall be
liable.
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 written
above.
PILGRIM SMALLCAP OPPORTUNITIES FUND
By:
------------------------------------
Senior Vice President
PILGRIM INVESTMENTS, INC.
By:
------------------------------------
Senior Executive Vice President
5
