Exhibit 99B.D
PIC INVESTMENT TRUST
INVESTMENT ADVISORY AGREEMENT
PIC Twenty Portfolio Institutional Class
THIS INVESTMENT ADVISORY AGREEMENT is made as of the day of , 2001, by and
between PIC INVESTMENT TRUST, a Delaware business trust (hereinafter called the
"Trust"), on behalf of it separate, designated series, PIC Twenty Portfolio,
Institutional Class (the "Portfolio") and PROVIDENT INVESTMENT COUNSEL
(hereinafter called the "Advisor").
WITNESSETH:
WHEREAS, the Trust is an open-end management investment company, registered
as such under the Investment Company Act of 1940 (the "Investment Company Act");
and
WHEREAS, the Portfolio is a series of the Trust having separate assets and
liabilities; and
WHEREAS, the Advisor is registered as an investment adviser under the
Investment Advisers Act of 1940 (the "Advisers Act") (or is exempt from
registration) and is engaged in the business of supplying investment advice as
an independent contractor; and
WHEREAS, the Trust desires to retain the Advisor to render advice and
services to the Portfolio pursuant to the terms and provisions of this
Agreement, and the Advisor desires to furnish said advice and services;
NOW, THEREFORE, in consideration of the covenants and the mutual promises
hereinafter set forth, the parties to this Agreement, intending to be legally
bound hereby, mutually agree as follows:
1. Appointment of Advisor. The Trust hereby employs the Advisor and the
Advisor hereby accepts such employment, to render investment advice and related
services with respect to the assets of the Portfolio for the period and on the
terms set forth in this Agreement, subject to the supervision and direction of
the Trust's Board of Trustees.
2. Duties of Advisor.
(a) General Duties. The Advisor shall act as investment adviser to the
Portfolio and shall supervise investments of the Portfolio on behalf of the
Portfolio in accordance with the investment objectives, policies and
restrictions of the Portfolio as set forth in the Portfolio's and Trust's
governing documents, including, without limitation, the Trust's Agreement and
Declaration of Trust and By-Laws; the Portfolio's prospectus, statement of
additional information and undertakings; and such other limitations, policies
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and procedures as the Trustees may impose from time to time in writing to the
Advisor. In providing such services, the Advisor shall at all times adhere to
the provisions and restrictions contained in the federal securities laws,
applicable state securities laws, the Internal Revenue Code, the Uniform
Commercial Code and other applicable law.
Without limiting the generality of the foregoing, the Advisor shall:
(i) furnish the Portfolio with advice and recommendations with respect to the
investment of the Portfolio's assets and the purchase and sale of portfolio
securities for the Portfolio, including the taking of such steps as may be
necessary to implement such advice and recommendations (I.E., placing the
orders); (ii) manage and oversee the investments of the Portfolio, subject to
the ultimate supervision and direction of the Trust's Board of Trustees; (iii)
vote proxies for the Portfolio, file ownership reports under Section 13 of the
Securities Exchange Act of 1934 for the Portfolio, and take other actions on
behalf of the Portfolio; (iv) maintain the books and records required to be
maintained by the Portfolio except to the extent arrangements have been made for
such books and records to be maintained by the administrator or another agent of
the Portfolio; (v) furnish reports, statements and other data on securities,
economic conditions and other matters related to the investment of the
Portfolio's assets which the Portfolio's administrator or distributor or the
officers of the Trust may reasonably request; and (vi) render to the Trust's
Board of Trustees such periodic and special reports with respect to each
Portfolio's investment activities as the Board may reasonably request, including
at least one in-person appearance annually before the Board of Trustees.
(b) Brokerage. The Advisor shall be responsible for decisions to buy
and sell securities for the Portfolio, for broker-dealer selection, and for
negotiation of brokerage commission rates, provided that the Advisor shall not
direct order to an affiliated person of the Advisor without general prior
authorization to use such affiliated broker or dealer for the Trust's Board of
Trustees. The Advisor's primary consideration in effecting a securities
transaction will be execution at the most favorable price. In selecting a
broker-dealer to execute each particular transaction, the Advisor may take the
following into consideration: the best net price available; the reliability,
integrity and financial condition of the broker-dealer; the size of and
difficulty in executing the order; and the value of the expected contribution of
the broker-dealer to the investment performance of the Portfolio on a continuing
basis. The price to the Portfolio in any transaction may be less favorable than
that available from another broker-dealer if the difference is reasonably
justified by other aspects of the portfolio execution services offered.
Subject to such policies as the Board of Trustees of the Trust may
determine, the Advisor shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by reason of its
having caused the Portfolio to pay a broker or dealer that provides (directly or
indirectly) brokerage or research services to the Advisor 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 Advisor determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the Advisor's overall responsibilities with respect to
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the Trust. The Advisor is further authorized to allocate the orders placed by it
on behalf of the Portfolio to such brokers or dealers who also provide research
or statistical material, or other services, to the Trust, the Advisor, or any
affiliate of either. Such allocation shall be in such amounts and proportions as
the Advisor shall determine, and the Advisor shall report on such allocations
regularly to the Trust, indicating the broker-dealers to whom such allocations
have been made and the basis therefor. The Advisor is also authorized to
consider sales of shares as a factor in the selection of brokers or dealers to
execute portfolio transactions, subject to the requirements of best execution,
I.E., that such brokers or dealers are able to execute the order promptly and at
the best obtainable securities price.
On occasions when the Advisor deems the purchase or sale of a security to
be in the best interest of the Portfolio as well as of other clients, the
Advisor, to the extent permitted by applicable laws and regulations, may
aggregate the securities to be so purchased or sold in order to obtain the most
favorable price or lower brokerage commissions and the most 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 Advisor in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to the Portfolio and to such other clients.
3. Representations of the Advisor.
(a) The Advisor shall use its best judgment and efforts in rendering
the advice and services to the Portfolio as contemplated by this Agreement.
(b) The Advisor shall maintain all licenses and registrations
necessary to perform its duties hereunder in good order.
(c) The Advisor shall conduct its operations at all times in
conformance with the Advisers Act, the Investment Company Act , and any other
applicable state and/or self-regulatory organization regulations.
(d) The Advisor shall maintain errors and omissions insurance in an
amount at least equal to that disclosed to the Board of Trustees in connection
with their approval of this Agreement.
4. Independent Contractor. The Advisor shall, for all purposes herein, be
deemed to be an independent contractor, and shall, unless otherwise expressly
provided and authorized to do so, have no authority to act for or represent the
Trust or the Portfolio in any way, or in any way be deemed an agent for the
Trust or for the Portfolio. It is expressly understood and agreed that the
services to be rendered by the Advisor to the Portfolio under the provisions of
this Agreement are not to be deemed exclusive, and the Advisor shall be free to
render similar or different services to others so long as its ability to render
the services provided for in this Agreement shall not be impaired thereby.
5. Advisor's Personnel. The Advisor shall, at its own expense, maintain
such staff and employ or retain such personnel and consult with such other
persons as it shall from time to time determine to be necessary to the
performance of its obligations under this Agreement. Without limiting the
generality of the foregoing, the staff and personnel of the Advisor shall be
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deemed to include persons employed or retained by the Advisor to furnish
statistical information, research, and other factual information, advice
regarding economic factors and trends, information with respect to technical and
scientific developments, and such other information, advice and assistance as
the Advisor or the Trust's Board of Trustees may desire and reasonably request.
6. Expenses.
(a) With respect to the operation of the Portfolio, the Advisor shall
be responsible for (i) providing the personnel, office space and equipment
reasonably necessary for the operation of the Portfolio, (ii) the expenses of
printing and distributing extra copies of the Portfolio's prospectus, statement
of additional information, and sales and advertising materials (but not the
legal, auditing or accounting fees attendant thereto) to prospective investors
(but not to existing shareholders), and (iii) the costs of any special Board of
Trustees meetings or shareholder meetings convened for the primary benefit of
the Advisor. If the Advisor has agreed to limit the operating expenses of the
Portfolio, the Advisor shall also be responsible on a monthly basis for any
operating expenses that exceed the agreed upon expense limit.
(b) The Portfolio is responsible for and has assumed the obligation
for payment of all of its expenses, other than as stated in Subparagraph 6(a)
above, including but not limited to: fees and expenses incurred in connection
with the issuance, registration and transfer of its shares; brokerage and
commission expenses; all expenses of transfer, receipt, safekeeping, servicing
and accounting for the cash, securities and other property of the Trust for the
benefit of the Portfolio including all fees and expenses of its custodian,
shareholder services agent and accounting services agent; interest charges on
any borrowings; costs and expenses of pricing and calculating its daily net
asset value and of maintaining its books of account required under the
Investment Company Act; taxes, if any; a pro rata portion of expenditures in
connection with meetings of the Portfolio's shareholders and the Trust's Board
of Trustees that are properly payable by the Portfolio; salaries and expenses of
officers and fees and expenses of members of the Trust's Board of Trustees or
members of any advisory board or committee who are not members of, affiliated
with or interested persons of the Advisor; insurance premiums on property or
personnel of each Portfolio which inure to its benefit, including liability and
fidelity bond insurance; the cost of preparing and printing reports, proxy
statements, prospectuses and statements of additional information of the
Portfolio or other communications for distribution to existing shareholders;
legal, auditing and accounting fees; trade association dues; fees and expenses
(including legal fees) of registering and maintaining registration of its shares
for sale under federal and applicable state and foreign securities laws; all
expenses of maintaining and servicing shareholder accounts, including all
charges for transfer, shareholder recordkeeping, dividend disbursing,
redemption, and other agents for the benefit of the Portfolio, if any; and all
other charges and costs of its operation plus any extraordinary and
non-recurring expenses, except as herein otherwise prescribed.
(c) The Advisor may voluntarily absorb certain Portfolio expenses or
waive the Advisor's own advisory fee.
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(d) To the extent the Advisor incurs any costs by assuming expenses
which are an obligation of the Portfolio as set forth herein, the Portfolio
shall promptly reimburse the Advisor for such costs and expenses, except to the
extent the Advisor has otherwise agreed to bear such expenses. To the extent the
services for which the Portfolio is obligated to pay are performed by the
Advisor, the Advisor shall be entitled to recover from the Portfolio to the
extent of the Advisor's actual costs for providing such services. In determining
the Advisor's actual costs, the Advisor may take into account an allocated
portion of the salaries and overhead of personnel performing such services.
7. Investment Advisory and Management Fee.
(a) The Portfolio shall pay to the Advisor, and the Advisor agrees to
accept, as full compensation for all investment management and advisory services
furnished or provided to such Portfolio pursuant to this Agreement, a management
fee at the annual rate of 0.90% of the Portfolio's average daily net assets.
(b) The management fee shall be accrued daily by the Portfolio and
paid to the Advisor on the first business day of the succeeding month.
(c) The initial fee under this Agreement shall be payable on the first
business day of the first month following the effective date of this Agreement
and shall be prorated as set forth below. If this Agreement is terminated prior
to the end of any month, the fee to the Advisor shall be prorated for the
portion of any month in which this Agreement is in effect which is not a
complete month according to the proportion which the number of calendar days in
the month during which the Agreement is in effect bears to the number of
calendar days in the month, and shall be payable within ten (10) days after the
date of termination.
(d) The fee payable to the Advisor under this Agreement will be
reduced to the extent of any receivable owed by the Advisor to the Portfolio and
as required under any expense limitation applicable to the Portfolio.
(e) The Advisor voluntarily may reduce any portion of the compensation
or reimbursement of expenses due to it pursuant to this Agreement and may agree
to make payments to limit the expenses which are the responsibility of the
Portfolio under this Agreement. Any such reduction or payment shall be
applicable only to such specific reduction or payment and shall not constitute
an agreement to reduce any future compensation or reimbursement due to the
Advisor hereunder or to continue future payments. Any such reduction will be
agreed to prior to accrual of the related expense or fee and will be estimated
daily and reconciled and paid on a monthly basis.
(f) Any such reductions made by the Advisor in its fees or payment of
expenses which are the Portfolio's obligation are subject to reimbursement by
the Portfolio to the Advisor, if so requested by the Advisor, in subsequent
fiscal years if the aggregate amount actually paid by the Portfolio toward the
operating expenses for such fiscal year (taking into account the reimbursement)
does not exceed the applicable limitation on Portfolio expenses. Under the
expense limitation agreement, the Advisor may recoup reimbursements made in the
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Portfolio's first fiscal year in any of the five succeeding fiscal years,
reimbursements made in the Portfolio's second fiscal year in any of the four
succeeding fiscal years, and reimbursements in any subsequent fiscal year over
the following three fiscal years. Any such reimbursement is also contingent upon
Board of Trustees review and approval at time the reimbursement is made. Such
reimbursement may not be paid prior to the Portfolio's payment of current
ordinary operating expenses.
(g) The Advisor may agree not to require payment of any portion of the
compensation or reimbursement of expenses otherwise due to it pursuant to this
Agreement. Any such agreement shall be applicable only with respect to the
specific items covered thereby and shall not constitute an agreement not to
require payment of any future compensation or reimbursement due to the Advisor
hereunder.
8. No Shorting; No Borrowing. The Advisor agrees that neither it nor any of
its officers or employees shall take any short position in the shares of the
Portfolio. This prohibition shall not prevent the purchase of such shares by any
of the officers or employees of the Advisor or any trust, pension,
profit-sharing or other benefit plan for such persons or affiliates thereof, at
a price not less than the net asset value thereof at the time of purchase, as
allowed pursuant to rules promulgated under the Investment Company Act. The
Advisor agrees that neither it nor any of its officers or employees shall borrow
from the Portfolio or pledge or use the Portfolio's assets in connection with
any borrowing not directly for the Portfolio's benefit. For this purpose,
failure to pay any amount due and payable to the Portfolio for a period of more
than thirty (30) days shall constitute a borrowing.
9. Conflicts with Trust's Governing Documents and Applicable Laws. Nothing
herein contained shall be deemed to require the Trust or the Portfolio to take
any action contrary to the Trust's Agreement and Declaration of Trust, By-Laws,
or any applicable statute or regulation, or to relieve or deprive the Board of
Trustees of the Trust of its responsibility for and control of the conduct of
the affairs of the Trust and Portfolio. In this connection, the Advisor
acknowledges that the Trustees retain ultimate plenary authority over the
Portfolio and may take any and all actions necessary and reasonable to protect
the interests of shareholders.
10. Reports and Access. The Advisor agrees to supply such information to
the Portfolio's administrator and to permit such compliance inspections by the
Portfolio's administrator as shall be reasonably necessary to permit the
administrator to satisfy its obligations and respond to the reasonable requests
of the Trustees.
11. Advisor's Liabilities and Indemnification.
(a) The Advisor shall have responsibility for the accuracy and
completeness (and liability for the lack thereof) of the statements in the
Portfolio's offering materials (including the prospectus, the statement of
additional information, advertising and sales materials), except for information
supplied by the administrator or the Trust or another third party for inclusion
therein.
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(b) The Advisor shall be liable to the Portfolio for any loss
(including brokerage charges) incurred by the Portfolio as a result of any
improper investment made by the Advisor.
(c) In the absence of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the obligations or duties hereunder on the
part of the Advisor, the Advisor shall not be subject to liability to the Trust
or the Portfolio or to any shareholder of the Portfolio for any act or omission
in the course of, or connected with, rendering services hereunder or for any
losses that may be sustained in the purchase, holding or sale of any security by
the Portfolio.
(d) Each party to this Agreement shall indemnify and hold harmless the
other party and the shareholders, directors, officers and employees of the other
party (any such person, an "Indemnified Party") against any loss, liability,
claim, damage or expense (including the reasonable cost of investigating and
defending any alleged loss, liability, claim, damage or expenses and reasonable
counsel fees incurred in connection therewith) arising out of the Indemnified
Party's performance or non-performance of any duties under this Agreement
provided, however, that nothing herein shall be deemed to protect any
Indemnified Party against any liability to which such Indemnified Party would
otherwise be subject by reason of willful misfeasance, bad faith or negligence
in the performance of duties hereunder or by reason of reckless disregard of
obligations and duties under this Agreement.
(e) No provision of this Agreement shall be construed to protect any
Trustee or officer of the Trust, or officer of the Advisor, from liability in
violation of Sections 17(h) and (i) of the Investment Company Act.
12. Non-Exclusivity; Trading for Advisor's Own Account. The Trust's
employment of the Advisor is not an exclusive arrangement. The Trust may from
time to time employ other individuals or entities to furnish it with the
services provided for herein. Likewise, the Advisor may act as investment
adviser for any other person, and shall not in any way be limited or restricted
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
will adversely affect the performance of its obligations to the Portfolio under
this Agreement; and provided further that the Advisor will adhere to a code of
ethics governing employee trading and trading for proprietary accounts that
conforms to the requirements of the Investment Company Act and the Advisers Act
and has been approved by the Trust's Board of Trustees.
13. Term.
(a) This Agreement shall become effective on the date specified herein
and shall remain in effect for a period of two (2) years, unless sooner
terminated as hereinafter provided. This Agreement shall continue in effect
thereafter for additional periods not exceeding one (l) year so long as such
continuation is approved for the Portfolio at least annually by (i) the Board of
Trustees of the Trust or by the vote of a majority of the outstanding voting
securities of the Portfolio and (ii) the vote of a majority of the Trustees of
the Trust who are not parties to this Agreement nor interested persons thereof,
cast in person at a meeting called for the purpose of voting on such approval.
The terms "majority of the outstanding voting securities" and "interested
persons" shall have the meanings as set forth in the Investment Company Act.
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(b) The Portfolio may use the name PIC Twenty Portfolio or any name
derived from or using the name PIC Twenty Portfolio only for so long as this
Agreement or any extension, renewal or amendment hereof remains in effect.
Within sixty (60) days from such time as this Agreement shall no longer be in
effect, the Portfolio shall cease to use such a name or any other name connected
with the Advisor.
14. Termination; No Assignment.
(a) This Agreement may be terminated by the Trust on behalf of the
Portfolio at any time without payment of any penalty, by the Board of Trustees
of the Trust or by vote of a majority of the outstanding voting securities of
the Portfolio, upon sixty (60) days' written notice to the Advisor, and by the
Advisor upon sixty (60) days' written notice to the Portfolio. In the event of a
termination, the Advisor shall cooperate in the orderly transfer of the
Portfolio's affairs and, at the request of the Board of Trustees, transfer any
and all books and records of the Portfolio maintained by the Advisor on behalf
of the Portfolio.
(b) This Agreement shall terminate automatically in the event of any
transfer or assignment thereof, as defined in the Investment Company Act.
15. Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, statute or rule, or shall be otherwise rendered
invalid, the remainder of this Agreement shall not be affected thereby.
16. Captions. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
17. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware without giving effect to the
conflict of laws principles thereof; provided that nothing herein shall be
construed to preempt, or to be inconsistent with, any federal law, regulation or
rule, including the Investment Company Act and the Advisers Act and any rules
and regulations promulgated thereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers, all on the day and year first
above written.
PIC INVESTMENT TRUST PROVIDENT INVESTMENT COUNSEL
on behalf of the
PIC Twenty Portfolio,
Institutional Class
By:________________________________ By:________________________________
Name: __________________________ Name: __________________________
Title: _______________________ Title: _______________________