INTERIM INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 23rd day of November , 2004 between PACIFIC INVESTMENT
MANAGEMENT COMPANY LLC, a Delaware limited liability company having its
principal place of business in Newport Beach, California (the "Adviser") and
CIGNA VARIABLE PRODUCTS GROUP, a Massachusetts business trust having its
principal place of business in Newton, Massachusetts (the "Trust").
WHEREAS, the Trust 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, the Adviser is engaged in the business of rendering investment
management services and is so registered under the Investment Advisers Act of
1940; and
WHEREAS, the Trust operates as a "series company" as contemplated by Rule 18f-2
under the 1940 Act and is authorized to issue shares of beneficial interest
("Shares") in separate series with each such series representing interest in a
separate portfolio of securities and other assets; and
WHEREAS, the Trust desires to engage the Adviser to serve as the investment
adviser for the TimesSquare VP Core Plus Bond Fund, a series of the Trust (the
"Series"), and the Adviser has agreed to serve in that capacity.
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties hereto
as follows:
1. The Trust hereby appoints the Adviser to act as manager and investment
adviser to the Series for the period and on the terms herein set forth, subject
to the control of the Board of Trustees of the Trust. The Adviser hereby accepts
such appointment and agrees during such period, at its own expense, to render
the services and to assume the obligations herein set forth for the compensation
herein provided.
2. (a) The Adviser, at its expense, and subject to the supervision of the
Board of Trustees of the Trust, will (i) provide a program of continuous
investment management for the Series with regard to the investments by the
Series in fixed income securities and other assets in accordance with the
investment objectives, policies and limitations applicable to the Series as
stated in the prospectus and Statement of Additional Information included as
part of the Trust's Registration Statement filed with the Securities and
Exchange Commission ("SEC"), as they may be amended from time to time
("Registration Statement"), copies of which shall be provided to the Adviser by
the Trust; and (ii) place orders to purchase and sell fixed income securities
and other assets for the Series. The Adviser is authorized on behalf of the
Trust to enter into agreements and execute any documents required to make
investments permitted by this Section.
The Adviser's investment authority shall include the authority to
purchase, sell, cover open positions, and generally to deal in financial futures
contracts and options thereon, in accordance with the investment objective,
policies and restrictions applicable to the Series as stated in the Registration
Statement.
The Adviser will assist the Trust in: (i) opening and maintaining
brokerage accounts for
financial futures and options (such accounts hereinafter referred to as
"brokerage accounts") on behalf of and in the name of the Series and (ii)
executing for and on behalf of the Series, standard customer agreements with a
broker or brokers. The Adviser may, using such of the securities and other
property of the Series as the Adviser deems necessary or desirable, direct the
custodian to deposit on behalf of the Series, original and maintenance brokerage
deposits and otherwise direct payments of cash, cash equivalents and securities
and other property into such brokerage accounts and to such brokers as the
Adviser deems desirable or appropriate.
The Adviser has delivered to the Trust a copy of its Disclosure Document
dated September 1, 2004, on file with the Commodity Futures Trading Commission.
The Trust hereby acknowledges receipt of such copy.
(b) The Adviser, at its own expense, shall place orders for the
purchase and sale of portfolio securities for the account of the Series with
brokers or dealers selected by the Adviser. In executing portfolio transactions
for the Series and selecting brokers or dealers, the Adviser will use its best
efforts to seek on behalf of the Series the best overall terms available. In
assessing the best overall terms available for any transaction, the Adviser
shall consider all factors it deems relevant, including the breadth of the
market in the security, the price of the security, the financial condition and
execution capability of the broker or dealer, and the reasonableness of the
commission, if any (for the specific transaction and on a continuing basis). In
evaluating the best overall terms available, and in selecting the broker or
dealer to execute a particular transaction, the Adviser may also consider the
brokerage and research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934) provided to the Series and/or other
accounts over which the Adviser or an affiliate of the Adviser exercises
investment discretion. The Adviser is authorized to pay to a broker or dealer
who provides such brokerage and research services a commission for executing a
Series portfolio transaction which is in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction if,
but only if, the Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer--viewed in terms of that particular
transaction or in terms of all of the accounts over which investment discretion
is so exercised.
(c) Provided the investment objectives of the Series are adhered to,
the Trust agrees that the Adviser may aggregate sales and purchase orders of
securities, commodities and other investments held in the portfolio of the
Series with similar orders being made simultaneously for other accounts managed
by the Adviser or with accounts of the affiliates of Adviser, if in the
Adviser's reasonable judgment such aggregation shall result in an overall
economic benefit to the Series taking into consideration the advantageous
selling or purchase price, brokerage commission and other expenses. The Trust
acknowledges that the determination of such economic benefit to the Series by
the Adviser represents the Adviser's evaluation that the Series is benefited by
relatively better purchase or sales prices, lower commission expenses and
beneficial timing of transactions or a combination of these and other factors.
(d) The Trust agrees that the Adviser shall be solely responsible for
voting all proxies solicited by or with respect to the issuers of securities in
which assets of the Series may be invested by the Adviser. The Adviser shall
maintain a record of how the Adviser voted and such record shall be available to
the Trust upon its request. It is further understood that Adviser need not and
is not required to accept any direction concerning the voting of proxies from
the Trust. The right of adviser to vote proxies shall continue until the earlier
of the termination of the Agreement or such time as the Trust specifically
revokes Adviser's authority to vote proxies and specifically reserves such right
to the Trust or to another.
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3. In addition to performing at its own expense the obligations set forth
in paragraph 2 hereof, the Adviser shall furnish at its own expense or pay the
expenses of the Trust for office space in the offices of the Adviser or in such
other place as may be agreed upon from time to time, and all necessary office
facilities and equipment;
4. Except as otherwise agreed by the Adviser, nothing in paragraph 3
hereof shall require the Adviser to bear, or to reimburse the Trust for:
(a) any of the costs of printing and mailing proxy materials
relating to the Series;
(b) the costs of printing and mailing of sales literature,
prospectuses and offering circulars required by regulatory authorities;
(c) compensation of Trustees of the Trust who are not directors,
officers or employees of the Adviser, CIGNA Corporation or any of its
affiliates;
(d) registration, filing and other fees in connection with
requirements of regulatory authorities;
(e) the charges and expenses of the Custodian appointed by the Trust
for custodial, paying agent, transfer agent and plan agent services;
(f) charges and expenses of independent accountants retained by the
Trust;
(g) charges and expenses of any transfer agents and registrars
appointed-by the Trust;
(h) issue and transfer taxes, brokers' commissions and dealers'
concessions chargeable to the Trust in connection with securities transactions
to which the Trust is a party, including any portion of such commissions
attributable to research and brokerage services as defined by Section 28(e) of
the Securities Exchange Act of 1934, as amended from time to time;
(i) taxes and corporate fees payable by the Trust to federal, state
or other governmental agencies;
(j) the cost of share certificates (if any) representing shares of
the Series;
(k) legal fees and expenses in connection with the affairs of the
Trust, including registering and qualifying its shares with federal and state
regulatory authorities; and
(1) expenses of shareholders' and trustees' meetings.
5. Notwithstanding the provisions of Paragraphs 3 and 4, Adviser shall
indemnify the Trust against any expense of personnel of the Adviser, or any
affiliate of the Adviser, which might otherwise have been charged to the Trust
under any provision of this Agreement or of the Distribution Agreement between
the Trust and its principal underwriter.
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6. The Adviser agrees to hold the Trust harmless with respect to any and
all damages the Trust may sustain resulting from any dishonest act of any
employee or agent of the Adviser. This Paragraph 6 is in addition to, and not by
way of limitation of, any other rights of indemnification which the Trust may
have hereunder or otherwise.
The Adviser and its officers, directors, employees, agents,
representatives or persons controlling or controlled by it shall not be liable
to the Trust or any shareholder of the Trust for any error of judgement or
mistake of law or for any loss arising out of any investment or for any act or
omission in the management of the Series, except for willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties hereunder and Adviser agrees to
indemnify and hold the Trust and the Series harmless against any and all losses,
claims, damages, liabilities or litigation (including reasonable legal and other
expenses) with respect to any and all damages the Trust or Series may sustain
directly resulting from the Adviser's willful misfeasance, bad faith, gross
negligence, reckless disregard of its obligations hereunder or a material breach
of this agreement.
7. The services of the Adviser to the Trust hereunder are not to be deemed
exclusive and the Adviser shall be free to render similar service to others so
long as its services hereunder are not impaired or interfered with thereby.
8. The Trust shall pay the Adviser as full compensation for all services
rendered and all facilities furnished hereunder as to the Series a management
fee for the Series determined in accordance with Schedule A attached hereto.
9. It is understood that trustees, officers, agents and shareholders of
the Trust are or may be interested in the Adviser as directors, officers,
shareholders or otherwise, that directors, officers, agents and shareholders of
the Adviser are or may be interested in the Trust as trustees, officers,
shareholders or otherwise, that the Adviser may be interested in the Trust as a
shareholder or otherwise, and that the existence of any such dual interest shall
not affect the validity hereof or of any transactions hereunder except as
otherwise provided in the Declaration of Trust of the Trust and the Certificate
of Incorporation of the Adviser, respectively, or by specific provision of
applicable law.
10. (a) This Agreement will take effect on the date hereof. This Agreement
shall thereafter continue in full force and effect from year to year, if its
continuance is specifically approved each subsequent year by vote of a majority
of the outstanding shares (as defined in the 0000 Xxx) of the Series or by the
Board of Trustees of the Trust, and in either event by a majority of the
Trustees of the Trust who are not parties to the Agreement or interested persons
(within the meaning of the 0000 Xxx) of the Trust or the Adviser, such Trustees
voting in person at a meeting called for such purpose; provided, however, that:
(b) This Agreement may at any time be terminated without the payment
of any penalty on 60 days' written notice to the Adviser either by vote of the
Board of Trustees of the Trust or by vote of a majority of the outstanding
voting securities of the Series.
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(c) This Agreement shall immediately terminate in event of its
assignment (as that term is defined in the 1940 Act).
(d) This Agreement may be terminated by the Adviser on 90 days'
written notice to the Trust.
11. INTERIM CONTRACT PROVISIONS. Notwithstanding any other provision of
this Agreement:
(a) Prior to this Agreement being approved by a vote of a majority
of the Trust's outstanding voting securities in accordance with the Investment
Company Act of 1940, as amended (the "1940 Act"): (i) in no event shall
compensation paid to the Adviser hereunder exceed the amount permitted by Rule
15a-4 under the 1940 Act; (ii) all fees payable to the Adviser hereunder shall
be held in an interest-bearing escrow account with the Trust's custodian or a
bank (the "Escrow Account"); and (iii) this Agreement may be terminated at any
time without the payment of any penalty, by vote of the Trustees of the Trust or
by a vote of a majority of the outstanding voting securities of the Series on 10
days' prior written notice to the Adviser. Funds held in the Escrow Account,
including interest earned, shall be paid to the Adviser promptly after approval
of this Agreement by the vote of a majority of the Company's outstanding voting
securities in accordance with the 1940 Act, provided that such approval is
obtained no later than 150 days after the date of this Agreement.
(b) If this Agreement is not approved by a vote of a majority of the
Trust's outstanding voting securities within the time period stated above in
(a), (i) this Agreement shall immediately terminate; and (ii) the Adviser shall
receive from the Escrow Account the lesser of: (A) the sum of the amount of any
costs incurred by the Adviser in performing its duties under this Agreement
prior to such termination plus any interest earned on that amount, and (B) the
sum of the amount deposited in the Escrow Account plus any interest earned on
that amount.
12. (a) Any notice under this Agreement shall be in writing, addressed and
delivered or mailed postage prepaid to the other party at such address as such
other party may designate for the receipt of such notices. Until further notice
to the other party, it is agreed for this purpose that the address of the
Adviser and the Trust shall be the address stated below.
Adviser:
Pacific Investment Management Company LLC
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Fax: 000-000-0000
Attention: Chief Legal Officer
cc: Xxxxx Xxxxx
Trust:
c/o TimesSquare Capital Management, Inc.
000 Xxxxxxxx Xxxxxx, X00X, Xxxxxxxx, XX 00000
Fax: 000.000.0000
Attention: Xxxxxxx X. Xxxxx
cc: Xx Xxxxxxx
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(b) The Adviser is expressly authorized to rely upon any and all
instructions, approvals and notices given on behalf of the Trust by any one or
more of those persons designated as representatives of the Trust whose names,
titles and specimen signatures appear in Schedule "B" attached hereto. The Trust
may amend such Exhibit B from time to time by written notice to the Adviser. The
Adviser shall continue to rely upon these instructions until notified by the
Trust to the contrary.
13. Copies of the Master Trust Agreement, as amended, establishing CIGNA
Variable Products Group (the "Trust") are on file with the Secretary of the
Commonwealth of Massachusetts, and notice is hereby given that this Master
Investment Advisory Agreement is executed on behalf of the Trust by officers of
the Trust as officers and not individually and that the obligations of or
arising out of this Master Investment Advisory Agreement are not binding upon
any of the Trustees, officers, shareholders, employees or agents of the Trust
individually but are binding only upon the assets and property of the Trust.
14. Concurrently with the execution of this Agreement, the Adviser is
delivering to the Trust a copy of Part II of its Form ADV, as revised, on file
with the Securities and Exchange Commission. The Trust acknowledges receipt of
such copy.
15. This Agreement shall be governed by the laws of the State of
California, 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate as of the day and year first above written.
CIGNA VARIABLE PRODUCTS GROUP
By
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
PACIFIC INVESTMENT MANAGEMENT COMPANY LLC
By
---------------------------------
Name: Xxxxxxx X. Benz
Title: Managing Director
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Compensation Schedule for the Series:
Schedule A
The Trust shall pay the Adviser as full compensation for all services
rendered and all facilities furnished hereunder, a management fee for the Series
by applying the annual rate of 0.50% to the average daily net asset value of the
Series for the calendar year, computed in the manner used for the determination
of the offering price of Shares of the Series. The fee accrued as of the end of
each month shall be paid no later than the 15th of the following month.
SCHEDULE B
DESIGNATED REPRESENTATIVES
OF THE
TRUST
(PIMCO ACCOUNT #____)
November 23, 2004
Name/Title Signature
Xxxxxxx X. Xxxxx, Vice Pres. and Secretary
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Xxxxxx X. Xxxxxxx, Vice Pres. and Treasurer
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Xxxxxxx X. Xxxxx, President
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