INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, dated as of August 4, 2000 by and between Pitcairn Trust
Company, a Pennsylvania corporation (the "Adviser"), and Xxxxxxx International
Advisors, LLC., a Delaware limited liability company] (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 International
Equity 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 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 or 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 such 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 such Fund's currently effective
Prospectus and SAI 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 Adviser or 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 such 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) provide 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 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 maintain records
adequate to demonstrate compliance with this requirement.
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 and Exchange Act of 1934, cause the Fund to pay a broker or dealer
that provides brokerage or 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 or research services provided viewed in terms of that particular
transaction or the Manager's overall responsibilities to the Fund or 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 the securities to be purchased or
sold to attempt to obtain a more favorable price or lower
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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.
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 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 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.
4. LIABILITY OF MANAGER
Neither the Manager nor any of its controlling persons, managing
principals, members, officers, employees or its agents 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 controlling persons, managing principals, members], officers,
employees or its agents 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.
5. INDEMNIFICATIONS
A. The Adviser shall indemnify the Manager and its controlling persons,
managing principals, members, 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 and reasonable expenses, including attorneys' fees
(collectively
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"Losses"), incurred by the Manager or Manager Related Persons arising from or in
connection with this Agreement or the performance by the Manager or Manager
Related Persons of its or their duties hereunder so long as such Losses arise
out of the Adviser's, or any of its agents', gross negligence, willful
misconduct or bad faith, in performing its responsibilities hereunder or under
its agreements with the Trust, including, without limitation, such Losses
arising under any applicable law or that may be based upon any untrue statement
of a material fact contained in the Trust's Registration Statement, or any
amendment thereof or any supplement thereto, or the omission to state therein a
material fact known or which should have been known and was required to be
stated therein or necessary to make the statements therein not misleading,
unless such statement or omission was made in reasonable reliance upon
information furnished to the Adviser or the Trust by the Manager or an Manager
Related Person specifically for inclusion in the Registration Statement or any
amendment or supplement thereto, except to the extent any such Losses referred
to in this paragraph A result from willful misfeasance, bad faith, gross
negligence or reckless disregard on the part of the Manager or an Manager
Related Person in the performance of any of its duties under, or in connection
with, this Agreement.
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 arising from or in connection with this Agreement or the
performance by the Adviser or Adviser Related Persons of its or their duties
hereunder so long as such Losses arise out of the Manager's gross negligence,
willful misconduct or bad faith in performing its responsibilities hereunder,
including, without limitation, such Losses arising under any applicable law or
that may be based upon any untrue statement of a material fact contained in the
Trust's Registration Statement, or any amendment thereof or any supplement
thereto or the omission to state therein a material fact known or which should
have been known and was required to be stated therein or necessary to make the
statements therein not misleading, in any case only to the extent that such
statement or omission was made in reasonable reliance upon written information
furnished by the Manager or Manager Related Person to the Adviser or the Trust
specifically for inclusion in the Registration Statement or any amendment or
supplement thereto, except to the extent any such Losses referred to in this
paragraph (I.E., paragraph B) result from willful misfeasance, bad faith, gross
negligence or reckless disregard on the part of the Adviser or a Adviser Related
Person in the performance of any of its duties under, or in connection with,
this Agreement.
C. The indemnifications provided in this Section 5 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
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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 request or require pursuant to applicable laws and regulations.
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 or
requested by applicable federal or state regulatory authorities. Notwithstanding
the preceding sentence, the Manager shall not be liable for the use, duplication
or disclosure of the Trust's or the Fund's information that is:
a. now or at the time of the disclosure in the public domain (other
than as a result of disclosure by the Manager),
b. shown by the Manager to have been known or developed by it prior
to the disclosure of the information,
c. shown to have been received from the Trust by a third party on a
non-confidential basis,
d. disclosed in response to requests from governmental agencies or
bodies or required by law to be disclosed,
e. information about the performance or holdings of Fund in
composite data relating to the Manager's performance; provided
however, no such report or
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document that includes such information will disclose the Fund as
a holder of such securities or identify the performance as that
of the Fund
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;
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.
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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 L. Xxxx Xxxxx, Managing Principal
with a copy to the Manager's General Counsel and with respect to the Adviser
shall be its Corporate Counsel, unless another person is specified in 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.
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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. 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
XXXXXXX INTERNATIONAL ADVISORS, LLC
By: Oechsle Group, LLC
Its Member Manager
By:
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Name:
Title: Managing Principal
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