INVESTMENT ADVISORY AGREEMENT
AGREEMENT, entered into as of this 25th day of January, between Pilgrim
Xxxxxx & Associates, Ltd. (the "Adviser") and PBHG Insurance Series Fund, Inc.
(the "Fund").
WHEREAS, the Fund is a Maryland corporation, and is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end,
management investment company;
WHEREAS, the Fund wishes to retain the Adviser to render investment
advisory services to the Fund and the Adviser is willing to furnish such
services to the portfolios listed on Schedule A hereto (the "Portfolios"); and
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act").
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between the Fund and the Adviser as follows:
1. APPOINTMENT. The Fund hereby appoints the Adviser to act as investment
adviser to the Fund for the periods and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to furnish the
services herein set forth, for the compensation herein provided.
2. INVESTMENT ADVISORY DUTIES. Subject to the supervision of the Directors of
the Fund, the Adviser will, (a) provide a program of continuous investment
management for the Portfolios in accordance with the Portfolios' investment
objectives, policies and limitations as stated in each Portfolio's Prospectus
and Statement of Additional Information included as part of the Fund's
Registration Statement filed with the Securities and Exchange Commission, as
they may be amended from time to time, copies of which shall be provided to the
Adviser by the Fund; (b) make investment decisions for the Portfolios; and (c)
place orders to purchase and sell securities for the Portfolios.
In performing its investment management services to the Portfolios
hereunder, the Adviser will provide the Portfolios with ongoing investment
guidance and policy direction, including oral and written research, analysis,
advice, statistical and economic data, and judgments regarding individual
investments, general economic conditions and trends and long-range investment
policy. The Adviser will determine the securities, instruments, repurchase
agreements, options, futures and other investments and techniques that the
Portfolios will purchase, sell, enter into or use, and will provide an ongoing
evaluation of the Portfolios' investments. The Adviser will determine what
portion of the Portfolios' investments shall be invested in securities and other
assets, and what portion, if any, should be held uninvested. The Adviser shall
furnish to the Fund adequate (i) office space, which may be space within the
offices of the Adviser or in such other places as may be agreed upon from time
to time, and (ii) office furnishings, facilities and equipment as may be
reasonably required for managing the corporate affairs and conducting the
business of the Fund, including complying with the corporate reporting
requirements of the various states in which the Fund does business, and
conducting correspondence and other communications with the stockholders of the
Fund. The Adviser shall employ or provide and compensate the executive,
secretarial and clerical personnel necessary to provide such services. Subject
to the approval of the Fund's Board of Directors (including a majority of the
Directors who are not "interested persons" of the Fund as defined in the 0000
Xxx) and of the shareholders of the Fund, the Adviser may delegate to a
sub-adviser its duties enumerated in Section 2 hereof. The Adviser shall
continue to supervise the performance of any such sub-adviser and shall report
regularly thereon to the Fund's Board of Directors. The Adviser further agrees
that, in performing its duties hereunder, it will:
(a) comply with the 1940 Act and all rules and regulations thereunder, the
Advisers Act, the Internal Revenue Code (the "Code"), and all other applicable
federal and state laws and regulations, and with any applicable procedures
adopted by the Directors;
11
(b) use reasonable efforts to manage each Portfolio so that it will
qualify, and continue to qualify, as a regulated investment company under
Subchapter M of the Code and regulations issued thereunder;
(c) place orders pursuant to its investment determinations for each
Portfolio directly with the issuer, or with any broker or dealer, in accordance
with applicable policies expressed in each Portfolio's Prospectus and/or
Statement of Additional Information and in accordance with applicable legal
requirements;
(d) furnish to the Fund whatever statistical information the Fund may
reasonably request with respect to each Portfolio's assets or contemplated
investments. In addition, the Adviser will keep the Fund and the Directors
informed of developments materially affecting each Portfolio's investments and
shall, on the Adviser's own initiative, furnish to the Fund from time to time
whatever information the Adviser believes appropriate for this purpose;
(e) make available to the Fund, promptly upon its request, such copies of
the Adviser's investment records and ledgers with respect to the Portfolios as
may be required to assist the Fund in its compliance with applicable laws and
regulations. The Adviser will furnish the Directors with such periodic and
special reports regarding each Portfolio as they may reasonably request; and
(f) immediately notify the Fund in the event that the Adviser or any of its
affiliates: (1) becomes aware that it is subject to a statutory disqualification
that prevents the Adviser from serving as investment adviser pursuant to this
Agreement; or (2) becomes aware that it is the subject of an administrative
proceeding or enforcement action by the Securities and Exchange Commission
("SEC") or other regulatory authority. The Adviser further agrees to notify the
Fund immediately of any material fact known to the Adviser respecting or
relating to the Adviser that is not contained in the Fund's Registration
Statement, or any amendment or supplement thereto, but that is required to be
disclosed therein, and of any statement contained therein that becomes untrue in
any material respect.
3. ADDITIONAL SERVICES. If the Fund so requests, the Adviser shall also maintain
all internal bookkeeping, accounting and auditing services and records in
connection with maintaining the Fund's financial books and records, and shall
calculate each Portfolio's daily net asset value. For these services, each
Portfolio shall pay to the Adviser a monthly fee, which shall be in addition to
the fees payable pursuant to Section 5 hereof, to reimburse the Adviser for its
costs, without profit, for performing such services.
4. ALLOCATION OF CHARGES AND EXPENSES. Except as otherwise specifically provided
in this Section 4, the Adviser shall pay the compensation and expenses of all
its directors, officers and employees who serve as officers and executive
employees of the Fund (including the Fund's share of payroll taxes for such
persons), and the Adviser shall make available, without expense to the Fund, the
service of its directors, officers and employees who may be duly-elected
officers of the Fund, subject to their individual consent to serve and to any
limitations imposed by law.
The Adviser shall not be required to pay any expenses of the Fund other
than those specifically allocated to the Adviser in this Section 4. In
particular, but without limiting the generality of the foregoing, the Adviser
shall not be responsible, except to the extent of the reasonable compensation of
such of the Fund's employees as are officers or employees of the Adviser whose
services may be involved, for the following expenses of the Fund: organization
and certain offering expenses of the Fund (including out-of-pocket expenses, but
not including the Adviser's overhead and employee costs); fees payable to the
Adviser and to any other Fund advisers or consultants; legal expenses; auditing
and accounting expenses; interest expenses, telephone, telex, facsimile, postage
and other communications expenses; taxes and governmental fees; fees, dues and
expenses incurred by or with respect to the Fund in connection with membership
in investment company trade organizations; costs of insurance relating to
fidelity coverage for the Fund's officers and employees; fees and expenses of
the Fund's custodian, any sub-custodian, transfer agent, registrar, or dividend
disbursing agent; payments to the Adviser for maintaining the Fund's financial
books and records and calculating the daily net asset value pursuant to Section
3 hereof; other payments for portfolio pricing or valuation services to pricing
agents, accountants, bankers and other specialists, if any; expenses of
preparing share certificates; other expenses in connection with the issuance,
offering, distribution, sale or redemption of securities issued by the Fund;
expenses relating to investor and public relations; expenses of registering and
qualifying shares of the Fund for sale, freight, insurance and other charges in
connection with the
12
shipment of the Fund's portfolio securities; brokerage commissions or other
costs of acquiring or disposing of any portfolio securities or other assets of
the Fund, or of entering into other transactions or engaging in any investment
practices with respect to the Fund; expenses of printing and distributing
Prospectuses, Statements of Additional Information, reports, notices and
dividends to stockholders; costs of stationery; any litigation expenses; costs
of stockholders' meetings; the compensation and all expenses (specifically
including travel expenses relating to the Fund's business) of officers,
directors and employees of the Fund who are not interested persons of the
Adviser; and travel expenses (or an appropriate portion thereof) of officers or
directors of the Fund who are officers, directors or employees of the Adviser to
the extent that such expenses relate to attendance at meetings of the Board of
Directors of the Fund with respect to matters concerning the Fund, or any
committees thereof or advisers thereto.
5. COMPENSATION. As compensation for the services provided and expenses assumed
by the Adviser under this Agreement, except for any additional services provided
by the Adviser pursuant to Section 3 hereof, each Portfolio will pay the Adviser
at the end of each calendar month an advisory fee as set forth in Schedule A
hereto. The advisory fee is computed daily as a percentage of each portfolio's
average daily net assets. The "average daily net assets" of a Portfolio shall
mean the average of the values placed on the Portfolio's net assets as of 4:00
p.m. (Eastern time) on each day on which the net asset value of the Portfolio is
determined consistent with the provisions of Rule 22c-1 under the 1940 Act or,
if the Portfolio lawfully determines the value of its net assets as of some
other time on each business day, as of such other time. The value of net assets
of the Portfolio shall always be determined pursuant to the applicable
provisions of the Fund's Articles of Incorporation and the Registration
Statement. If, pursuant to such provisions, the determination of net asset value
is suspended for any particular business day, then for the purposes of this
Section 5, the value of the net assets of the Portfolio as last determined shall
be deemed to be the value of its net assets as of the close of regular trading
on the New York Stock Exchange, or as of such other time as the value of the net
assets of the Portfolio's securities may lawfully be determined, on that day. If
the determination of the net asset value of the shares of a Portfolio has been
so suspended for a period including any month and when the Adviser's
compensation is payable at the end of such month, then such value shall be
computed on the basis of the value of the net assets of the Portfolio as last
determined (whether during or prior to such month). If the Portfolio determines
the value of the net assets more than once on any day, then the last such
determination thereof on that day shall be deemed to be the sole determination
thereof on that day for the purposes of this Section 5.
6. BOOKS AND RECORDS. The Adviser agrees to maintain such books and records with
respect to its services to the Fund as are required by Section 31 under the 1940
Act, and rules adopted thereunder, and by other applicable legal provisions, and
to preserve such records for the periods and in the manner required by that
Section, and those rules and legal provisions. The Adviser also agrees that
records it maintains and preserves pursuant to Rules 31a-1 and 31a-2 under the
1940 Act and otherwise in connection with its services hereunder are the
property of the Fund and will be surrendered promptly to the Fund upon its
request. And the Adviser further agrees that it will furnish to regulatory
authorities having the requisite authority, any information or reports in
connection with its services hereunder which may be requested in order to
determine whether the operations of the Fund are being conducted in accordance
with applicable law and regulations.
7. STANDARD OF CARE AND LIMITATION OF LIABILITY. The Adviser shall exercise its
best judgment in rendering the services provided by it under this Agreement. The
Adviser shall not be liable for any error of judgment or mistake of law or for
any loss suffered by the Fund or the holders of the Fund's shares in connection
with the matters to which this Agreement relates, provided that nothing in this
Agreement shall be deemed to protect or purport to protect the Adviser against
any liability to the Fund or to the holders of the Fund's shares to which the
Adviser would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence on its part in the performance of its duties or by reason of
the Adviser's reckless disregard of its obligations and duties under this
Agreement. As used in this Section 7, the term "Adviser" shall include any
officers, directors, employees or other affiliates of the Adviser performing
services with respect to the Fund.
8. SERVICES NOT EXCLUSIVE. It is understood that the services of the Adviser are
not exclusive, and that nothing in this Agreement shall prevent the Adviser from
providing similar services to other investment companies or to other series of
investment companies, or from engaging in other activities, provided such other
services and activities do not, during the term of the Agreement, interfere in a
material manner with the Adviser's ability to meet its obligations to the Fund
hereunder. When the Adviser recommends the purchase or sale of the same security
for a Portfolio, it is understood that in light of its fiduciary duty to the
Portfolio, such transactions will be executed on a
13
basis that is fair and equitable to the Portfolio. In connection with purchases
or sales of portfolio securities for the account of a Portfolio, neither the
Adviser nor any of its directors, officers, or employees shall act as principal
or agent or receive any commission provided that portfolio transactions for a
Portfolio may be executed through firms affiliated with the Adviser, in
accordance with applicable legal requirements. If the Adviser provides any
advice to its clients concerning the shares of the Fund, the Adviser shall act
solely as investment counsel for such clients and not in any way on behalf of
the Fund.
9. DURATION AND TERMINATION. This Agreement shall continue until January
25,2003, and thereafter shall continue automatically for successive annual
periods, provided such continuance is specifically approved at least annually by
(i) the Directors or (ii) a vote of a "majority" (as defined in the 0000 Xxx) of
each Portfolio's outstanding voting securities (as defined in the 1940 Act),
provided that in either event the continuance is also approved by a majority of
the Directors who are not "interested persons" (as defined in the 0000 Xxx) of
any party to this Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval. Notwithstanding the foregoing, this
Agreement may be terminated as to a Portfolio (a) at any time without penalty by
the Fund upon the vote of a majority of the Directors or by vote of the majority
of the Portfolio's outstanding voting securities, upon sixty (60) days' written
notice to the Adviser or (b) by the Adviser at any time without penalty, upon
sixty (60) days' written notice to the Fund. This Agreement will also terminate
automatically in the event of its assignment (as defined in the 1940 Act).
10. AMENDMENTS. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective
until approved by an affirmative vote of (i) a majority of the outstanding
voting securities of the Fund, and (ii) a majority of the Directors, including a
majority of Directors who are not interested persons of any party to this
Agreement, cast in person at a meeting called for the purpose of voting on such
approval, if such approval is required by applicable law.
11. MISCELLANEOUS.
(a) This Agreement shall be governed by the laws of the State of Maryland,
provided that nothing herein shall be construed in a manner inconsistent with
the 1940 Act, the Advisers Act, or rules or orders of the SEC thereunder.
(b) The captions of this Agreement are included for convenience only and in
no way define or limit any of the provisions hereof or otherwise affect their
construction or effect.
(c) If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected hereby and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
(d) Nothing herein shall be construed as constituting the Adviser as an
agent of the Fund.
IN WITNESS WHEREFORE, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the 25th day of January, 2001.
PBHG INSURANCE SERIES PILGRIM XXXXXX & ASSOCIATES, LTD.
FUND, INC.
By: /s/ Xxx X. Xxxxxxxx By:/s/ Xxxx X. Xxxxxxxxx
Title: Chief Financial Officer Title: Chief Financial Officer
14
INVESTMENT ADVISORY AGREEMENT
SCHEDULE A
Pursuant to Section 5 of this Agreement, each Portfolio shall pay the
Adviser, at the end of each calendar month, compensation computed daily at an
annual rate of the Portfolio's average daily net assets as follows:
PBHG Insurance Series Fund, Inc.
PBHG Growth II Portfolio 0.85%
PBHG Large Cap Growth Portfolio 0.75%
PBHG Small Cap Value Portfolio 1.00%
PBHG Select Value Portfolio 0.65%
PBHG Technology & Communications Portfolio 0.85%
PBHG Select 20 Portfolio 0.85%
PBHG Mid-Cap Value Portfolio 0.85%
1
SCHEDULE A TO THE
INVESTMENT ADVISORY AGREEMENT
THIS SCHEDULE A to the Investment Advisory Agreement dated January 25, 2001 (the
Agreement") between PBHG Insurance Series Fund, Inc. and Pilgrim, Xxxxxx &
Associates, Ltd., amended as of the ___ day of _______, 2001 to add PBHG Small
Cap Growth Portfolio, sets forth, pursuant to Section 5 of the Agreement, the
compensation each Portfolio shall pay the Adviser, at the end of each calendar
month, which is computed daily at an annual rate of the Portfolio's average
daily net assets.
PBHG INSURANCE SERIES FUND, INC.
Date on which the Annual Fee
Portflio Effective for the Portfolio (as a percentage of average
daily net assets)
PBHG Growth II Portfolio January 25, 2001 0.85%
PBHG Large Cap Growth Portfolio January 25, 2001 0.75%
PBHG Small Cap Value Portfolio January 25, 2001 1.00%
PBHG Select Value Portfolio January 25, 2001 0.65%
PBHG Technology & Communication
Portfolio January 25, 2001 0.85%
PBHG Select 20 Portfolio January 25, 2001 0.85%
PBHG Mid-Cap Portfolio January 25, 2001 0.85%
PBHG Small Cap Growth Portfolio January 25, 2001 0.85%
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made as of this 25th day of January, 2001 by and among Pilgrim
Xxxxxx & Associates, Ltd. (the "Adviser"), Pilgrim Xxxxxx Value Investors, Inc.
(the "Sub-Adviser"), and PBHG Insurance Series Fund, Inc., a Maryland
corporation (the "Company").
WHEREAS, the Company is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, pursuant to the Investment Advisory Agreement dated January 25,
2001 and Schedule A dated January 25, 2001 (as such Schedule may be amended from
time to time to add or delete new portfolios) between the Adviser and the
Company, the Adviser will act as investment adviser to the separate portfolios
of the Company (the "Portfolios") specified in Schedule A; and
WHEREAS, the Adviser and the Company each desire to retain the Sub-Adviser
to provide investment advisory services to the Company in connection with the
management of the Portfolios, and the Sub-Adviser is willing to render such
investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
(a) Subject to supervision by the Adviser and the Company's Board of Directors,
the Sub-Adviser shall manage the investment operations of the Portfolios and the
composition of the Portfolios' investment portfolios, including the purchase,
retention and disposition thereof, in accordance with the Portfolios' investment
objectives, policies and restrictions as stated in such Portfolios' Prospectus
(such Prospectus and Statement of Additional Information as currently in effect
and as amended or supplemented from time to time, being herein called the
"Prospectus"), and subject to the following understandings:
o The Sub-Adviser shall provide supervision of the Portfolios' investments
and determine from time to time what investments and securities will be
purchased, retained or sold by the Portfolios, and what portion of the assets
will be invested or held uninvested in cash.
o In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Company's Articles of
Incorporation and the Prospectus and with the instructions and directions of the
Adviser and of the Board of Directors and will conform and comply with the
requirements of the 1940 Act, the Internal Revenue Code of 1986, as amended, and
all other applicable federal and state laws and regulations, as each is amended
from time to time.
o The Sub-Adviser shall determine the securities to be purchased or sold by
the Portfolios and will place orders with or through such persons, brokers or
dealers to carry out the policy with respect to brokerage set forth in such
Portfolios' Registration Statement (as defined herein) and Prospectus or as the
Board of Directors or the Adviser may direct from time to time, in conformity
with federal securities laws. In providing the Portfolios with investment
supervision, the Sub-Adviser will give primary consideration to securing the
most favorable price and efficient execution. Within the framework of this
policy, the Sub-Adviser may consider the financial responsibility, research and
investment information and other services provided by brokers or dealers who may
effect or be a party to any such transaction or other transactions to which the
Sub-Adviser's other clients may be a party. It is understood that it is
desirable for the Portfolios that the Sub-Advisor have access to supplemental
investment and market research and security and economic analysis provided by
brokers who may execute brokerage transactions at a higher cost to the
Portfolios than may result when allocating brokerage to other brokers on the
basis of seeking the
2
most favorable price and efficient execution. Therefore, the Sub-Adviser is
authorized to place orders for the purchase and sale of securities for the
Portfolios with brokers, subject to review by the Company's Board of Directors
from time to time with respect to the extent and continuation of this practice.
It is understood that the services provided by such brokers may be useful to the
Sub-Adviser in connection with the Sub-Adviser's services to other clients.
On occasions when the Sub-Adviser deems the purchase or sale of a security
to be in the best interest of a Portfolio as well as other clients of the
Sub-Adviser, the Sub-Adviser, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be so purchased or sold 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
transaction, will be made by the Sub-Adviser in the manner it considers to be
the most equitable and consistent with its fiduciary obligations to the
Portfolio in question and to such other clients.
o The Sub-Adviser shall maintain all books and records with respect to the
Portfolios' portfolio transactions required by subparagraphs (b)(5), (6), (7),
(9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act and shall
render to the Company's Board of Directors such periodic and special reports as
the Company's Board of Directors may reasonably request.
o The Sub-Adviser shall provide the Portfolios' Custodian on each business
day with information relating to all transactions concerning the Portfolios'
assets and shall provide the Adviser with such information upon request of the
Adviser.
o (a) The investment management services provided by the Sub-Adviser under
this Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services do not impair the
services rendered to the Adviser or the Company.
o Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's officers or employees.
It is understood that the Sub-Adviser may obtain certain administrative
services, including, without limitation, services relating to trade
reconciliation and the production of client reports, from its parent company in
carrying out its obligations under this Agreement.
o The Sub-Adviser shall keep the Portfolios' books and records required to
be maintained by the Sub-Adviser pursuant to paragraph 1(a) of this Agreement
and shall timely furnish to the Adviser all information relating to the
Sub-Adviser's services under this Agreement needed by the Adviser to keep the
other books and records of the Portfolios required by Rule 31a-1 under the 1940
Act. The Sub-Adviser agrees that all records that it maintains on behalf of the
Portfolios are property of the Portfolios and the Sub-Adviser will surrender
promptly to a Portfolio any of such records upon that Portfolio's request;
provided, however, that the Sub-Adviser may retain a copy of such records. The
Sub-Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act any such records as are required to be maintained by it
pursuant to paragraph 1(a) of this Agreement.
The Adviser shall continue to have responsibility for all services to be
provided to the Portfolios pursuant to the Advisory Agreement and shall oversee
and review the Sub-Adviser's performance of its duties under this Agreement.
3
The Adviser has delivered to the Sub-Adviser copies of each of the
following documents and will deliver to it all future amendments and
supplements, if any:
Articles of Incorporation, as filed with the Secretary of State of Maryland
(such Articles of Incorporation as in effect on the date of this Agreement, and
as amended from time to time, are herein called the "Articles of
Incorporation");
By-Laws of the Company (such By-Laws, as in effect on the date of this
Agreement, and as amended from time to time, are herein called the "By-Laws");
Certified resolutions of the Company's Board of Directors authorizing the
appointment of the Sub-Adviser and approving the form of this Agreement;
Registration Statement under the 1940 Act and the Securities Act of 1933,
as amended, on Form N-1A (the "Registration Statement"), as filed with the
Securities and Exchange Commission (the "Commission") relating to the Portfolios
and shares of the Portfolios' beneficial shares, and all amendments thereto;
Notification of Registration of the Portfolios under the 1940 Act on Form
N-8A as filed with the Commission, and all amendments thereto; and Prospectus of
the Portfolios.
For the services to be provided by the Sub-Adviser pursuant to this
Agreement for the Portfolios, the Adviser will pay to the Sub-Adviser as full
compensation therefor a fee at an annual rate specified in Schedule A. This fee
will be paid to the Sub-Adviser from the Adviser's advisory fee for such
Portfolios.
The Sub-Adviser shall not be liable for any error of judgment or for any
loss suffered by a Portfolio or the Adviser in connection with performance of
its obligations under this Agreement, except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the 1940 Act), or a loss resulting from willful
misfeasance, bad faith or gross negligence on the Sub-Adviser's part in the
performance of its duties or from reckless disregard of its obligations and
duties under this Agreement, except as may otherwise be provided under
provisions of applicable state law which cannot be waived or modified hereby.
This Agreement shall continue in effect for a period of more than two years
from the date hereof only so long as continuance is specifically approved at
least annually in conformance with the 1940 Act provided, however, that this
Agreement may be terminated (a) by a Portfolio at any time, without the payment
of any penalty, by the vote of a majority of Directors of the Company or by the
vote of a majority of the outstanding voting securities of a Portfolio, (b) 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 parties, or (c) by the
Sub-Adviser at any time, without the payment of any penalty, on 90 days' written
notice to the other parties. This Agreement shall terminate automatically and
immediately in the event of its assignment. As used in this Section 6, the terms
"assignment" and "vote of a majority of the outstanding voting securities" shall
have the respective meanings set forth in the 1940 Act and the rules and
regulations thereunder, subject to such exceptions as may be granted by the
Commission under the 1940 Act.
Nothing in this Agreement shall limit or restrict the right of any of the
Sub-Adviser's directors, officers, or employees to engage in any other business
or to devote his or her time and attention in part to the management or other
aspects of any business, whether of a similar or dissimilar nature, nor limit or
4
restrict the Sub-Adviser's right to engage in any other business or to render
services of any kind to any other corporation, firm, individual or association.
During the term of this Agreement, the Adviser agrees to furnish the
Sub-Adviser at its principal office all prospectuses, proxy statements, reports
to shareholders, sales literature or other materials prepared for distribution
to shareholders of the Portfolios, the Company or the public that refers to the
Sub-Adviser or its clients in any way prior to use thereof and not to use
material if the Sub-Adviser reasonably objects in writing within five business
days (or such other period as may be mutually agreed upon) after receipt
thereof. The Sub-Adviser's right to object to such materials is limited to the
portions of such materials that expressly relate to the Sub-Adviser, its
services and its clients. The Adviser agrees to use its reasonable best efforts
to ensure that materials prepared by its employees or agents or its affiliates
that refer to the Sub-Adviser or its clients in any way are consistent with
those materials previously approved by the Sub-Adviser as referenced in the
first sentence of this paragraph. Sales literature may be furnished to the
Sub-Adviser by first-class or overnight mail, facsimile transmission equipment
or hand delivery.
No provisions of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, and no amendment of this Agreement shall be effective until approved by
the vote of the majority of the outstanding voting securities of a Portfolio.
This Agreement shall be governed by the laws of the state of Maryland;
provided, however that nothing herein shall be construed as being inconsistent
with the 1940 Act.
This Agreement embodies the entire agreement and understanding among the
parties hereto, and supersedes all prior agreements and understandings relating
to this Agreement's subject matter. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
Should any part of this Agreement be held invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
Any notice, advice or report to be given pursuant to this Agreement shall
be delivered or mailed:
To the Adviser at:
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxx, XX 00000
To the Sub-Adviser at:
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxx, XX 00000
To the Company or a Portfolio at:
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxx, XX 00000
5
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
Commission, whether of special or general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
PILGRIM XXXXXX & ASSOCIATES, LTD. PBHG INSURANCE SERIES FUND, INC.
By: /s/ Xxxx X. Xxxxxxxxx By: /s/ Xxx X. Xxxxxxxx
Title: Chief Financial Officer Title: Chief Financial Officer
PILGRIM XXXXXX VALUE INVESTORS, INC.
By: /s/ Xxxx X. Xxxxxxxxx
Title: Chief Financial Officer
7
SCHEDULE A
SUB-ADVISED PORTFOLIOS
PBHG Insurance Series Fund, Inc. Fee
-------------------------------- ---
PBHG Mid-Cap Value Portfolio 0.50%
PBHG Small Cap Value Portfolio 0.65%
PBHG Select Value Portfolio 0.40%
