EXHIBIT (d)(b)(22)
FRANKLIN XXXXXXXXX SMALL CAP GROWTH PORTFOLIO
SUB-INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this 1st day of May 2001, among Metropolitan Series
Fund, Inc., a Maryland corporation (the "Fund"), MetLife Advisers, LLC (the
"Investment Manager"), a Delaware limited liability company, and Franklin
Advisers, Inc., a California corporation (the "Sub-Investment Manager");
W I T N E S S E T H :
WHEREAS, the Fund is engaged in business as a diversified open-end
management investment company and is registered as such under the Investment
Company Act of 1940 (the "Investment Company Act");
WHEREAS, the Fund, a series type of investment company, issues separate
classes (or series) of stock, each of which represents a separate portfolio of
investments;
WHEREAS, the Fund is currently comprised of various portfolios, each of
which pursues its investment objectives through separate investment policies,
and the Fund may add or delete portfolios from time to time;
WHEREAS, the Sub-Investment Manager is engaged principally in the
business of rendering advisory services and is registered as an investment
adviser under the Investment Advisers Act of 1940; and
WHEREAS, the Fund has employed the Investment Manager to act as
investment manager of the Franklin Xxxxxxxxx Small Cap Growth Portfolio as set
forth in the Investment Management Agreement dated May 1, 2001 relating to the
Franklin Xxxxxxxxx Small Cap Portfolio between the Fund and the Investment
Manager (the "Franklin Xxxxxxxxx Small Cap
Portfolio Investment Management Agreement"); and the Fund and the Investment
Manager
1
desire to enter into a separate sub-investment management agreement with respect
to the Franklin Xxxxxxxxx Small Cap Portfolio of the Fund with the
Sub-Investment Manager;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Fund, the Investment Manager and the Sub-Investment
Manager hereby agree as follows:
ARTICLE 1.
Duties of the Sub-Investment Manager.
Subject to the supervision and approval of the Investment Manager and
the Fund's Board of Directors, the Sub-Investment Manager will manage the
investment and reinvestment of the assets of the Fund's Franklin Xxxxxxxxx Small
Cap Growth Portfolio (the "Portfolio") for the period and on the terms and
conditions set forth in this Agreement. In acting as Sub-Investment Manager to
the Fund with respect to the Portfolio, the Sub-Investment Manager shall
determine which securities shall be purchased, sold or exchanged and what
portion of the assets of the Portfolio shall be held in the various securities
or other assets in which it may invest, subject always to any restrictions of
the Fund's Articles of Incorporation and By-Laws, as amended or supplemented
from time to time, the provisions of applicable laws and regulations including
the Investment Company Act, and the statements relating to the Portfolio's
investment objectives, policies and restrictions as the same are set forth in
the prospectus and statement of additional information of the Fund then
currently effective under the Securities Act of 1933 (the "Prospectus"). Should
the Board of Directors of the Fund or the Investment Manager at any time,
however, make any definite determination as to investment policy and notify in
writing the Sub-Investment Manager thereof, the Sub-Investment Manager shall be
bound by such determination for the period, if any, specified in such notice or
until similarly notified in writing
2
that such determination has been revoked. The Sub-Investment Manager shall
exercise its discretion to take, on behalf of the Fund, all actions which it
deems necessary to implement the investment policies of the Portfolio,
determined as provided above, and in particular to place all orders for the
purchase or sale of portfolio securities for the Portfolio with brokers or
dealers selected by it.
The Sub-Investment Manager shall have no responsibility with respect to
maintaining custody of the Fund's assets. The Fund shall instruct its custodian
to provide the Sub-Investment Manager with such information as the
Sub-Investment Manager may reasonably request relating to daily cash levels held
by the Fund.
In connection with the selection of such brokers or dealers and the
placing of such orders, the Sub-Investment Manager is directed at all times to
follow the policies of the Fund set forth in the Prospectus. Nothing herein
shall preclude the "bunching" of orders for the sale or purchase of portfolio
securities with other Fund portfolios or with other accounts managed by the
Sub-Investment Manager. The Sub-Investment Manager shall not favor any account
over any other and any purchase or sale orders executed contemporaneously shall
be allocated in a manner it deems equitable among the accounts involved and at a
price that is approximately averaged.
In selecting brokers or dealers to execute orders on behalf of the
Fund, the Sub-Investment Manager is expressly authorized to consider the fact
that a broker or dealer has furnished statistical, research or other information
or services which enhances the Sub-investment Manager's investment research and
portfolio management capability generally. It is further understood that, in
accordance with Section 28(e) of the Securities Exchange Act of 1934, as
amended, the Sub-Investment Manager may negotiate with and assign to a broker a
commission which may exceed the commission which another broker would have
charged for
3
effecting the transaction of the Sub-Investment Manager determines in good faith
that the amount of commission charged was reasonable in relation to the value of
brokerage and/or research services (as defined in Section 28(e) provided by such
broker, viewed in terms either of the Fund or the Sub-Investment Manager's
overall responsibilities to its discretionary accounts.
In connection with these services the Sub-Investment Manager will
conduct investment research as to the Portfolio's investments and conduct a
continuous program of evaluation of its assets. The Sub-Investment Manager will
have the responsibility to monitor the investments of the Portfolio to the
extent necessary for the Sub-Investment Manager to manage the Portfolio in a
manner that is consistent with the investment objective and policies of the
Portfolio set forth in the Prospectus, as from time to time amended, and
communicated in writing to the Sub-Investment Manager, and consistent with
applicable law, including, but not limited to, the Investment Company Act and
the rules and regulations thereunder and the applicable provisions of the
Internal Revenue Code and the rules and regulations thereunder (including,
without limitation, subchapter M of the Code and the investment diversification
aspects of Section 817(h) of the Code).
The Sub-Investment Manager will furnish the Investment Manager and the
Fund such statistical information, including prices of securities in situations
where a fair valuation determination is required or when a security cannot be
priced by the Fund's accountants, with respect to the investments it makes for
the Portfolio as the Investment Manager and the Fund may reasonably request. On
its own initiative, the Sub-Investment Manager will apprise the Investment
Manager and the Fund of important developments materially affecting the
Portfolio, including but not limited to any change in the personnel of the
Sub-Investment Manager responsible for the day to day investment decisions made
by the Sub-Investment Manager for the
4
Portfolio and any material legal proceedings against the Sub-Investment Manager
by the Securities and Exchange Commission relating to violations of the federal
securities laws by the Sub-Investment Manager, and will furnish the Investment
Manager and the Fund from time to time with similar material information that is
believed appropriate for this purpose. In addition, the Sub-Investment Manager
will furnish the Investment Manager and the Fund's Board of Directors such
periodic and special reports as either of them may reasonably request.
The Sub-Investment Manager will make decisions on proxy voting unless
such decisions are expressly reserved by the Fund. However, the Sub-Investment
Manager will not be expected or required to take any action other than the
rendering of investment-related advice with respect to lawsuits involving
securities presently or formerly held in the Fund, or the issuers thereof,
including actions involving bankruptcy. Should the Sub-Investment Manger
undertake litigation against an issuer on behalf of accounts which it manages
that are shareholders of such issuer, the Fund agrees to pay its portion of any
applicable legal fees associated with the action or to forfeit any claim to any
assets Sub-Investment Manager may recover and, in such case, agrees to hold
Sub-Investment Manager harmless for excluding the Fund from such action. In the
case of class action suits involving issuers held by the Fund, Sub-Investment
Manager may include information about the Fund for purposes of participating in
any settlements.
The Sub-Investment Manager will exercise its best judgment in rendering
the services provided for in this Article 1, and the Fund and the Investment
Manager agree, as an inducement to the Sub-Investment Manager's undertaking so
to do, that the Sub-Investment Manager will not be liable under this Agreement
for any mistake of judgment or in any other event whatsoever, except as
hereinafter provided. The Sub-Investment Manager shall for all purposes herein
be deemed to be an independent contractor and shall, unless otherwise provided
or authorized, have
5
no authority to act for or represent the Fund or the Investment Manager in any
way or otherwise be deemed an agent of the Fund or the Investment Manager other
than in furtherance of its duties and responsibilities as set forth in this
Agreement.
Notwithstanding any other provision of this Agreement, the Fund, the
Investment Manager and the Sub-Investment Manager may agree to the employment of
a Sub-Sub-Investment Manager to the Fund for the purpose of providing investment
management services with respect to the Portfolio, provided that the
compensation to be paid to such Sub-Sub-Investment Manager shall be the sole
responsibility of the Sub-Investment Manager and the duties and responsibilities
of the Sub-Sub-Investment Manager shall be as set forth in a sub-sub-investment
management agreement among the Investment Manager, the Sub-Investment Manager,
the Sub-Sub-Investment Manager and the Fund on behalf of the Portfolio.
ARTICLE 2.
Sub-Investment Management Fee.
The payment of advisory fees and the allocation of charges and expenses
between the Fund and the Investment Manager with respect to the Portfolio are
set forth in the Franklin Xxxxxxxxx Small Cap Growth Investment Management
Agreement. Nothing in this Franklin Xxxxxxxxx Small Cap Growth Portfolio
Sub-Investment Management Agreement shall change or affect that arrangement. The
payment of advisory fees and the apportionment of any expenses related to the
services of the Sub-Investment Manager under this Agreement shall be the sole
concern of the Investment Manager and the Sub-Investment Manager and shall not
be the responsibility of the Fund.
In consideration of services rendered pursuant to this Agreement, the
Investment Manager will pay the Sub-Investment Manager on the first business day
of each month the fee at
6
the annual rate specified by the schedule of fees in the Appendix to this
Agreement. The fee for any period from the date the Portfolio commences
operations to the end of the month will be prorated according to the proportion
which the period bears to the full month, and, upon any termination of this
Agreement before the end of any month, the fee for the part of the month during
which the Sub-Investment Manager acted under this Agreement will be prorated
according to the proportion which the period bears to the full month and will be
payable upon the date of termination of this Agreement.
For the purpose of determining the fees payable to the Sub-Investment
Manager, the value of the Portfolio's net assets will be computed in the manner
specified in the Fund's Prospectus. The Sub-Investment Manager will bear all of
its own expenses (such as research costs) in connection with the performance of
its duties under this Agreement except for those that the Investment Manager
agrees to pay.
Other Matters.
The Fund and the Investment Manager acknowledge that the performance of
the Fund may differ from the performance of other accounts or investment
companies managed by the Sub-Investment Manager and that the Sub-Investment
Manager is not expected to replicate the holdings or returns of any other
account or fund that it manages. The Sub-Investment Manager may from time to
time employ or associate with itself any person or persons believed to be
particularly fitted to assist in its performance of services under this
Agreement. The Sub-Investment Manager will pay the compensation of any such
persons, and no obligation will be incurred by, or on behalf of, the Fund or the
Investment Manager with respect to them.
The Fund and the Investment Manager understand that the Sub-Investment
Manager now acts and will continue to act as investment manager to various
investment companies and
7
fiduciary or other managed accounts, and the Fund and the Investment Manager
have no objection to the Sub-Investment Manager's so acting. In addition, the
Fund understands that the persons employed by the Sub-Investment Manager to
assist in the performance of the Sub-Investment Manager's duties hereunder will
not devote their full time to such service, and nothing herein contained shall
be deemed to limit or restrict the Sub-Investment Manager's right or the right
of any of the Sub-Investment Manager's affiliates to engage in and devote time
and attention to other businesses or to render other services of whatever kind
or nature. The Fund and the Investment Manager understand that Sub-Investment
Manager may give advice and take action with respect to any of its other clients
or for its own account which may differ from the timing or nature of action
taken by the Sub-Investment Manager with respect to the Fund. Nothing in this
Agreement shall impose upon the Sub-Investment Manager any obligation to
purchase or sell or to recommend for purchase or sale, with respect to the Fund,
any security which the Sub-Investment Manager, or its shareholders, directors,
officers, employees or affiliates may purchase or sell for its or their own
accounts(s) or for the account of any other client.
The Sub-Investment Manager also agrees upon the reasonable request of
the Investment Manager or the Fund, to provide copies of the books and records
relating to the Fund which the Sub-Investment Manager maintains to the requester
or make the books and records available for inspection by representatives of
regulatory authorities. The Sub-Investment Manager further agrees to maintain
and preserve the Fund's books and records in accordance with the Investment
Company Act rules thereunder.
The Sub-Investment Manager will not be liable for any error of judgment
or mistake of law or for any loss suffered by the Fund in connection with the
matters to which this Agreement
8
relates, except for a loss resulting from willful misfeasance, bad faith or
gross negligence of the Sub-Investment Manager in the performance of its duties
or from reckless disregard of its obligations and duties under this Agreement.
The Investment Manager has herewith furnished the Sub-Investment
Manager copies of the Fund's Prospectus, Articles of Incorporation and By-Laws
as currently in effect and agrees during the continuance of this Agreement to
furnish the Sub-Investment Manager copies of any amendments or supplements
thereto before or at the time the amendments or supplements become effective.
The Sub-Investment Manager will be entitled to rely on all documents furnished
to it by the Investment Manager or the Fund.
The Sub-Investment Manager hereby gives the Fund, for the term of this
Agreement, a royalty free, nonexclusive, nontransferable right to use the name
"Franklin Xxxxxxxxx" (hereinafter referred to as the "Marks") in the U.S. as
part of the name of the Fund as follows: "Franklin Xxxxxxxxx Small Cap Growth
Portfolio" in connection with the activities of the Fund contemplated by this
Agreement. Such right does not include the right to allow third parties to use
the Marks except as specifically provided in this Agreement. Neither the Fund
nor the Investment Manager shall retain any right to use of the Marks after the
termination of this Agreement. Upon termination of this Agreement, the Fund will
immediately terminate all use of the Marks and destroy any remaining unused
sales documentation, promotional, marketing, advertising or other written,
printed or electronic material or performance information that contains the
Marks. The Fund agrees to use its best efforts to ensure that the nature and
quality of the services rendered in connection with the Marks shall confirm to
the terms of this Agreement, and any amendments thereto.
All sales documentation, promotional, marketing, advertising or other
written, printed or
9
electronic material or performance information or data which includes the Marks
which is prepared, controlled and/or issued by or on behalf of the Fund and/or
the Investment Manager, and/or their agents or affiliates, shall require the
written approval of Sub-Investment Manager prior to distribution. Such written
or printed material may be distributed only in the U.S. and shall bear the
following legend: "`Franklin Xxxxxxxxx' is a trademark of Franklin Resources,
Inc. and/or its subsidiaries."
ARTICLE 3.
Duration and Termination of this Agreement.
This Agreement shall become effective as of the date first above
written and shall remain in force until May 16, 2002 and thereafter shall
continue in effect, but only so long as such continuance is specifically
approved at least annually by (i) the Board of Directors of the Fund, or by the
vote of a majority of the outstanding shares of the Portfolio, and (ii) a
majority of those directors who are not parties to this Agreement or interested
persons of any such party cast in person at a meeting called for the purpose of
voting on such approval.
This Agreement may be terminated with respect to the Portfolio at any
time, without the payment of any penalty, by the Board of Directors of the Fund,
or by vote of a majority of the outstanding shares of the Portfolio, on sixty
days' written notice to the Investment Manager and Sub-Investment Manager, or by
the Investment Manager on thirty days' written notice to the Sub-Investment
Manager and the Fund, or by the Sub-Investment Manager on sixty days' written
notice to the Investment Manager and the Fund. This Agreement shall
automatically terminate in the event of its assignment or in the event of the
termination of the Franklin Xxxxxxxxx Small Cap Growth Portfolio Investment
Management Agreement.
10
ARTICLE 4.
Definitions.
The terms "assignment," "interested person," and "majority of the
outstanding shares," when used in this Agreement, shall have the respective
meanings specified under the Investment Company Act.
ARTICLE 5.
Amendments of this Agreement.
This Agreement may be amended by the parties only if such amendment is
specifically approved by (i) the Board of Directors of the Fund, to the extent
permitted by the Investment Company Act, or by the vote of a majority of the
outstanding shares of the Portfolio, and (ii) by the vote of a majority of those
directors of the Fund who are not parties to this Agreement or interested
persons of any such party cast in person at a meeting called for the purpose of
voting on such approval.
ARTICLE 6.
Governing Law.
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of New York as at the time in effect and
the applicable provisions of the Investment Company Act. To the extent that the
applicable law of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the Investment Company Act, the
latter shall control.
ARTICLE 7.
Notices.
Notices to be given hereunder shall be addressed to:
Fund: Xxxxxxxxxxx X. Xxxxxxxx
11
President and Chief Operating Officer
Metropolitan Series Fund, Inc.
Xxx Xxxxxxx Xxxxxx, Xxxx 0X
Xxx Xxxx, Xxx Xxxx 00000
Investment Manager: Xxxx X. Xxxxxxx, Xx.
Senior Vice-President
MetLife Advisers, LLC
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Sub-Investment Manager: Franklin Advisers, Inc.
000 Xxxxxxxx Xxxxxx Xxxx.
Xxx Xxxxx, XX 00000
Attn: General Counsel
Changes in the foregoing notice provisions may be made by notice in
writing to the other parties at the addresses set forth above. Notice shall be
effective upon delivery.
12
METROPOLITAN SERIES FUND, INC.
By /s/ Xxxxxxxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxxxxxxx X. Xxxxxxxx
President
Attest:
/s/ Xxxxx X. Xxxxxxx
------------------------------
Xxxxx X. Xxxxxxx
Secretary
METLIFE ADVISERS, LLC
By /s/ Xxxx X. Xxxxxxx, Xx
--------------------------------
Xxxx X. Xxxxxxx, Xx
Senior Vice-President
Attest:
/s/ Xxxxxx X. Xxxx
------------------------------
Xxxxxx X. Xxxx
XXXXXXXX ADVISERS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------
Xxxxxx X. Xxxxxxxx
Executive Vice President
Attest:
/s/ Xxxxxxx X.X. Xxxxxx
------------------------------
Xxxxxxx X.X. Xxxxxx
00
Xxxxxxxx
XXXXXXXX ADVISERS, INC.
Metropolitan Series Fund Fee Schedule
Franklin Xxxxxxxxx Small Cap Growth Portfolio
first $200 million 0.60%
next $300 million 0.52%
over $500 million 0.50%
of the average daily value of the net assets of the Portfolio
14