Exhibit 5.u.
SUB-INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the 18th day of March, 1997 by and among Xxxx
Xxxxxxx Variable Series Trust I, a Massachusetts business trust (the "Series"),
State Street Bank and Trust Company, a Massachusetts corporation
("Advisers"), and Xxxx Xxxxxxx Mutual Life Insurance Company, a Massachusetts
corporation ("JHMLICO").
WHEREAS, the Series is organized and is engaged in business as an open-end
management investment company and is so registered under the Investment Company
Act of 1940 (the "1940 Act"); and
WHEREAS, JHMLICO and Advisers are each engaged in the business of rendering
investment advice; and
WHEREAS, the Series is authorized to issue shares of capital stock in
separate classes with each such class representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Series offers shares in several classes, one of which is
designated as the Equity Index Portfolio (together with all other classes
established by the Series, collectively referred to as the "Portfolios"), each
of which pursues its investment objectives through separate investment policies;
and
WHEREAS, the Series has retained JHMLICO to render investment management
services to the Series pursuant to an Investment Management Agreement dated as
of March 14, 1996 (the "Investment Management Agreement"), pursuant to which it
may contract with Advisers as a sub-manager as provided for herein;
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF SUB-MANAGER
(a) Subject Portfolio. Advisers is hereby appointed and Advisers hereby
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accepts the appointment, on the terms herein set forth and for the
compensation herein provided, to act as investment adviser and manager to
the Equity Index Portfolio (the "Subject Portfolio") for the period
commencing May 1, 1997, subject to the approval of the relevant shareholders
of the Series.
(b) Additional Subject Portfolios. In the event that the Series and JHMLICO
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desire to retain Advisers to render investment advisory services hereunder for
any other Portfolio, they shall so notify Advisers in writing. If it is willing
to render such services, Advisers shall notify the Series in writing, whereupon
such Portfolio shall become a Subject Portfolio hereunder.
(c) Incumbency Certificates. Advisers shall furnish to JHMLICO, immediately
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upon execution of this Agreement, a certificate of a senior officer of Advisers
setting forth (by name and title, and including specimen signatures) those
officers of Advisers who are authorized to make investment decisions for the
Subject Portfolio pursuant to the provisions of this Agreement. Advisers shall
promptly provide supplemental certificates in connection with each additional
Subject Portfolio (if any) and further supplemental certificates, as needed, to
reflect all changes with respect to such authorized officers for any Subject
Portfolio. On behalf of the Series, JHMLICO shall instruct the custodian for
the Subject Portfolio to accept instructions with respect to the Subject
Portfolio from the officers of Advisers so named.
(d) Independent Contractor. Advisers shall for all purposes herein be
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deemed to be an independent contractor and shall, unless otherwise expressly
provided or authorized, have no authority to act for or be deemed an agent of
the Series.
(e) Advisers' Representations. Advisers represents, warrants and agrees (i)
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that it is a "bank" as defined in the Investment Advisers Act of 1940, (ii) that
it will promptly notify JHMLICO if the foregoing representation and agreement
shall cease to be true (in any material respect) at any time during the term of
this Agreement, (iii) that it will promptly notify JHMLICO of any material
change in the senior management or ownership of Advisers, or of any change in
the identity of the personnel who manage the Subject Portfolio, and (iv) that it
has adopted a code of ethics complying with the requirements of Rule 17j-1 of
the Securities and Exchange Commission (the "SEC") under the 1940 Act and has
provided true and complete copies of such code to the Series and to JHMLICO, and
has adopted procedures designed to prevent violations of such code.
(f) JHMLICO's Representations. JHMLICO represents, warrants and
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agrees that it has all requisite power and authority to enter into and perform
its obligations under this Agreement, and has taken all necessary corporate
action to authorize its execution, delivery and performance of this Agreement.
(g) The Series' Representations. The Series represents, warrants and
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agrees that it has all requisite power and authority to enter into and perform
its obligations under this Agreement, and has taken all necessary corporate
action to authorize its execution, delivery and performance of this
Agreement.
2. PROVISION OF INVESTMENT MANAGEMENT SERVICES.
Advisers will provide for the Subject Portfolio a continuing and suitable
investment program consistent with the investment policies, objectives and
restrictions of said Portfolio, as established by the Series and JHMLICO, and
as contained in the Prospectus and Statement of Additional Information of the
Subject Portfolio, as in effect from time to time. From time
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to time, JHMLICO or the Series may provide Advisers with additional or amended
investment policies, guidelines and restrictions. Advisers, as sub-manager,
will manage the investment and reinvestment of the assets in the Subject
Portfolio, and perform the functions set forth below, subject to the overall
supervision, direction, control and review of JHMLICO and the Board of Trustees
of the Series, consistent with the applicable investment policies, guidelines
and restrictions, the provisions of the Series' Declaration of Trust, Bylaws,
prospectus, statement of additional information (each as in effect from time to
time), the 1940 Act and all other applicable laws and regulations (including any
applicable investment restrictions imposed by state insurance laws and
regulations or any directions or instructions delivered to Advisers in writing
by JHMLICO or the Series from time to time). By its signature below, Advisers
acknowledges receipt of a copy of the Series' Declaration of Trust, Bylaws,
prospectus, and statement of additional information, each as in effect on the
date of this Agreement.
Advisers will, at its own expense:
(a) advise the Series in connection with investment policy decisions to be
made by its Board of Trustees or any committee thereof regarding the Subject
Portfolio and, upon request, furnish the Series with research, economic and
statistical data in connection with said Portfolio's investments and investment
policies;
(b) submit such reports and information as JHMLICO or the Series' Board of
Trustees may reasonably request, to assist the custodian in its determination of
the market value of securities held in the Subject Portfolio;
(c) place orders for purchases and sales of portfolio investments for the
Subject Portfolio;
(d) give instructions to the Subject Portfolio's custodian concerning the
delivery of securities and transfer of cash for the Subject Portfolio;
(e) maintain and preserve the records relating to its activities hereunder
required by the 1940 Act to be maintained and preserved by the Series, to the
extent not maintained by the custodian, transfer agent or JHMLICO;
(f) at the close of business each day, provide JHMLICO and the custodian
with copies of trade tickets for each transaction effected for the Subject
Portfolio, and promptly forward to the custodian copies of all brokerage or
dealer confirmations;
(g) as soon as practicable following the end of each calendar month, provide
JHMLICO with written statements showing all transactions effected for the
Subject Portfolio during the month, a summary listing all investments held in
such Portfolio as of the last day of the month, and such other information as
JHMLICO may reasonably request in connection with the accounting services that
JHMLICO provides for the Subject Portfolio; and
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(h) absent specific instructions to the contrary provided to it by JHMLICO
and subject to its receipt of all necessary voting materials, vote all proxies
with respect to investments of the Subject Portfolio in accordance with
Advisers' proxy voting policy as most recently provided to JHMLICO.
On its own initiative, Advisers will apprise JHMLICO and the Series of
important political and economic developments materially affecting the
marketplace or the Subject Portfolio, and will furnish JHMLICO and the Series'
Board of Trustees from time to time such information as is appropriate for this
purpose. Advisers will also make its personnel available in Boston or other
reasonable locations as often as quarterly to discuss the Subject Portfolio and
Advisers' management thereof, to educate JHMLICO sales personnel with respect
thereto, and for such other purposes as the Series or JHMLICO may reasonably
request.
The Series and JHMLICO will provide timely information to Advisers regarding
such matters as purchases and redemptions of shares in the Subject Portfolio and
the cash requirements of, and cash available for investment in, the Portfolio.
JHMLICO will timely provide Advisers with copies of monthly accounting
statements for the Subject Portfolio, and such other information (including,
without limitation, reports concerning the classification of Portfolio
securities for purposes of Subchapter M of the Internal Revenue Code and
Treasury Regulations Section 1.817) as may be reasonably necessary or
appropriate in order for Advisers to perform its responsibilities hereunder.
3. ALLOCATION OF EXPENSES.
Each party to this Agreement shall bear the costs and expenses of performing
its obligations hereunder. In this regard, the Series specifically agrees to
assume the expense of:
(a) brokerage commissions for transactions in the portfolio investments of
the Series and similar fees and charges for the acquisition, disposition,
lending or borrowing of such portfolio investments;
(b) custodian fees and expenses;
(c) all taxes, including issuance and transfer taxes, and reserves for
taxes payable by the Series to federal, state or other governmental agencies;
and
(d) interest payable on the Series' borrowings.
Nothing in this Agreement shall alter the allocation of expenses and costs
agreed upon between the Series and JHMLICO in the Investment Management
Agreement or any other agreement to which they are parties.
4. SUB-ADVISORY FEES.
For all of the services rendered with respect to the Subject Portfolio as
herein provided, JHMLICO shall pay to Advisers a fee (for the payment of which
the Series shall have no
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obligation or liability), based on the Current Net Assets of the Subject
Portfolio, as set forth in Schedule I attached hereto and made a part hereof.
Such fee shall be accrued daily and payable monthly, as soon as practicable
after the last day of each calendar month. In the case of termination of this
Agreement with respect to the Subject Portfolio during any calendar month, the
fee with respect to such Portfolio accrued to but excluding the date of
termination shall be paid promptly following such termination. For purposes of
computing the amount of advisory fee accrued for any day, "Current Net Assets"
shall mean the Subject Portfolio's net assets as of the most recent preceding
day for which the Subject Portfolio's net assets were computed.
5. PORTFOLIO TRANSACTIONS.
In connection with the investment and reinvestment of the assets of the
Subject Portfolio, Advisers is authorized to select the brokers or dealers that
will execute purchase and sale transactions for the Portfolio and to use its
best efforts to obtain the best available price and most favorable execution
with respect to all such purchases and sales of portfolio securities for said
Portfolio. Advisers shall maintain records adequate to demonstrate compliance
with this requirement. Subject to this primary requirement, and maintaining as
its first consideration the benefits to the Subject Portfolio and its
shareholders, Advisers shall have the right subject to the control of the Board
of Trustees, and to the extent authorized by the Securities Exchange Act of
1934, to follow a policy of selecting brokers who furnish brokerage and research
services to the Subject Portfolio or to Advisers, and who charge a higher
commission rate to the Subject Portfolio than may result when allocating
brokerage solely on the basis of seeking the most favorable price and execution.
Advisers shall determine in good faith that such higher cost was reasonable in
relation to the value of the brokerage and research services provided.
Advisers will not receive any tender offer solicitation fees or similar
payments in connection with the tender of investments of any Portfolio.
6. OWNERSHIP OF INFORMATION, RECORDS, AND CONFIDENTIALITY.
The Series shall own and control all records maintained hereunder by Advisers
on the Series' behalf and, in the event of termination of this Agreement with
respect to any Portfolio for any reason, all records relating to that Portfolio
shall be promptly returned to the Series, free from any claim or retention of
rights by Advisers, provided that (subject to the last paragraph of this Section
6) Advisers may retain copies of such records. Advisers also agrees, upon
request of the Series, promptly to surrender such books and records or, at its
expense, copies thereof, to the Series or make such books and records available
for audit or inspection by representatives of regulatory authorities or other
persons reasonably designated by the Series. Advisers further agrees to
maintain, prepare and preserve such books and records in accordance with the
1940 Act and rules thereunder, including but not limited to Rules 31a-1 and 31a-
2, and to supply all information requested by any insurance regulatory
authorities to determine whether all insurance laws and regulations are being
complied with.
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Advisers shall supply the Board of Trustees and officers of the Series and
JHMLICO with all statistical information regarding investments which is
reasonably required by them and reasonably available to Advisers.
Advisers shall not disclose or use any records or information obtained
pursuant hereto in any manner whatsoever except as expressly authorized herein,
and will keep confidential any information obtained pursuant hereto, and
disclose such information only if the Series has authorized such disclosure, or
if such disclosure is expressly required by applicable federal or state
regulatory authorities.
7. LIABILITY; STANDARD OF CARE.
No provision of this Agreement shall be deemed to protect Advisers or JHMLICO
against any liability to the Series or its shareholders to which it might
otherwise be subject by reason of any willful misfeasance, bad faith or
negligence in the performance of its duties or the reckless disregard of its
obligations and duties under this Agreement or the Investment Management
Agreement. Nor shall any provision hereof be deemed to protect any trustee or
officer of the Series against any such liability to which he might otherwise be
subject by reason of any willful misfeasance, bad faith or negligence in the
performance his duties or the reckless disregard of his obligations and duties.
Adviser shall employ only qualified personnel to manage the Subject Portfolio;
shall comply with all applicable laws and regulations in the discharge of its
duties under this Agreement; shall (as provided in Section 2 above) comply with
the investment policies, guidelines and restrictions of the Subject Portfolio
and with the provisions of the Series' Declaration of Trust, Bylaws, prospectus
and statement of additional information; shall manage the Subject Portfolio
(subject to the receipt of, and based upon the information contained in,
periodic reports from JHMLICO or the custodian concerning the classification of
Portfolio securities for such purposes) as a regulated investment company in
accordance with subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"), and Treasury Regulations Section 1.817-5(b); shall act at all
times in the best interests of the Series; and shall discharge its duties with
the care, skill, prudence and diligence under the circumstances then prevailing
that a prudent person acting in a like capacity and familiar with such matters
would use in the conduct of a similar enterprise. However, Advisers shall not
be obligated to perform any service not described in this Agreement, and shall
not be deemed by virtue of this Agreement to have made any representation or
warranty that any level of investment performance or level of investment results
will be achieved.
8. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective with respect to the
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Subject Portfolio as provided in Section 1(a) hereof and, with respect to
any additional Subject Portfolio, on the date of receipt by the Series of notice
from Advisers in accordance with Paragraph 1(b) hereof that it is willing to
serve with respect to such Portfolio. Unless terminated as herein provided,
this Agreement shall remain in full force and effect for two years from the date
hereof with respect to the initial Subject Portfolio and, with respect to each
additional Subject Portfolio, until two years following the date on which such
Portfolio
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becomes a Subject Portfolio hereunder, and shall continue in full force and
effect thereafter with respect to each Subject Portfolio so long as such
continuance with respect to any such Portfolio is approved at least annually (a)
by either the Board of Trustees of the Series or by vote of a majority of the
outstanding voting shares of such Portfolio, and (b) in either event by the vote
of a majority of the trustees of the Series 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.
Any approval of this Agreement by the holders of a majority of the
outstanding shares of any Subject Portfolio shall be effective to continue this
Agreement with respect to any such Portfolio notwithstanding (A) that this
Agreement has not been approved by the holders of a majority of the outstanding
shares of any other Portfolio affected hereby, and (B) that this Agreement has
not been approved by the vote of a majority of the outstanding shares of the
Series, unless such approval shall be required by any other applicable law or
otherwise. The terms "assignment," "vote of a majority of the outstanding
shares" and "interested person," when used in this Agreement, shall have the
respective meanings specified in the 1940 Act and rules thereunder.
(b) Termination. This Agreement may be terminated with respect to any
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Subject Portfolio at any time, without payment of any penalty, by the Series
pursuant to a vote of the trustees of the Series or a vote of a majority of the
outstanding shares of such Portfolio, which termination shall be effective
immediately upon delivery of notice thereof to Advisers and JHMLICO. This
Agreement may be terminated by Advisers on at least ninety days' prior written
notice to the Series and JHMLICO, and may be terminated by JHMLICO on at least
ninety days' prior written notice to the Series and Advisers.
(c) Automatic Termination. This Agreement shall automatically and
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immediately terminate in the event of its assignment (other than as permitted
pursuant to Section 15 below) or if the Investment Management Agreement is
terminated.
9. SERVICES NOT EXCLUSIVE; USE OF ADVISERS' NAME AND LOGO.
The services of Advisers to the Series are not to be deemed exclusive and it
shall be free to render similar services to others so long as its services
hereunder are not impaired thereby. It is specifically understood that
directors, officers and employees of Advisers and of its subsidiaries and
affiliates may continue to engage in providing portfolio management services and
advice to other investment companies, whether or not registered, and other
investment advisory clients.
During the term of this Agreement, JHMLICO and the Series shall have the non-
exclusive and non-transferable right to use Advisers' name and logo in
all materials relating to the Subject Portfolio, including all prospectuses,
proxy statements, reports to shareholders, sales literature and other written
materials prepared for distribution to shareholders of the Series or the public.
However, prior to distribution of any materials which refer to Advisers, JHMLICO
shall consult with Advisers and shall furnish to Advisers a copy of such
materials. Advisers agrees to cooperate with JHMLICO and to review such
materials promptly.
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XXXXXXX shall not distribute such materials if Advisers reasonably objects in
writing, within five (5) business days of its receipt of such copy (or such
other time as may be mutually agreed), to the manner in which its name and logo
are used.
10. AVOIDANCE OF INCONSISTENT POSITION.
In connection with the purchase and sale of portfolio securities of the
Subject Portfolio, Advisers and its directors, officers and employees will not
act as principal or agent or receive any commission; except that, in compliance
with procedures adopted by the Series pursuant to Rule 17e-1 under the 1940 Act,
an affiliate of Adviser, State Street Brokerage Services, Inc., may be so
employed and may receive a commission. Nothing in this Agreement, however, shall
preclude the combination of orders for the sale or purchase of portfolio
securities of the Subject Portfolio with those for other registered investment
companies managed by Advisers or its affiliates, if orders are allocated in a
manner deemed equitable by Advisers among the accounts and at a price
approximately averaged.
11. AMENDMENT.
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing. No amendment of this
Agreement shall be effective with respect to any Portfolio until approved
specifically by (a) the Board of Trustees of the Series, or by vote of a
majority of the outstanding shares of that Portfolio, and (b) by vote of a
majority of those trustees of the Series 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.
12. LIMITATION OF LIABILITY.
It is expressly agreed that the obligations of the Series hereunder shall
not be binding upon any of the trustees, shareholders, officers, agents or
employees of Series personally, but only bind the trust property of the Series,
as provided in the Series' Declaration of Trust.
13. NOTICES
Notices and other communications required or permitted under this Agreement
shall be in writing, shall be deemed to be effectively delivered when actually
received, and may be delivered by US mail (first class, postage prepaid), by
facsimile transmission, by hand or by commercial overnight delivery service,
addressed as follows:
ADVISERS: State Street Bank and Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx
00xx Xxxxx
Xxxxxx, XX 00000
Attn: Compliance Officer
Fax #: (000) 000-0000
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JHMLICO: Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Fax #: (000) 000-0000
SERIES: Xxxx Xxxxxxx Variable Series Trust I
000 Xxxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Fax #: (000) 000-0000
14. GOVERNING LAW.
This agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts and the applicable provisions of the 1940 Act and
rules thereunder.
15. ASSIGNMENT.
This Agreement may not be assigned by any party, either in whole or in part,
without the prior written consent of each other party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day first set forth above.
ATTEST: XXXX XXXXXXX VARIABLE SERIES
TRUST I
By:
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Name: Xxxxx X. Xxxx
Title: Chairman
ATTEST: XXXX XXXXXXX MUTUAL LIFE
INSURANCE COMPANY
By:
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Name: Xxxxxx X. Xxxxxxx
Title: Vice President
ATTEST: STATE STREET BANK AND TRUST
COMPANY
By:
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Name:
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Title:
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SCHEDULE I
FEES
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Current Net Assets Under Management Sub-Investment Management Fee
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On the first $75,000,000 Seven (7) basis points (0.07%)
On the next $50,000,000` Six (6) basis points (0.06%)
On amounts over $125,000,000 Five (5) basis points (0.05%)
