Exhibit 23.(d)67
SUB-INVESTMENT MANAGEMENT AGREEMENT
AMONG
XXXX XXXXXXX VARIABLE SERIES TRUST I
XXXX XXXXXXX ADVISERS, LLC
AND
XXXX XXXXXXX LIFE INSURANCE COMPANY
SUB-INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the 1st day of May, 2003 by and among Xxxx Xxxxxxx
Variable Series Trust I, a Massachusetts business trust (the "Series"), Xxxx
Xxxxxxx Advisers, LLC, a Delaware Limited Liability Company ("Advisers"), and
Xxxx Xxxxxxx Life Insurance Company, a Massachusetts corporation ("JHLICO").
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, JHLICO and Advisers are engaged in the business of rendering
investment advice under the Investment Advisers Act of 1940; 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 Financial Industries Fund, (together with all other classes
established by the Series, the "Funds"), each of which pursues its investment
objectives through separate investment policies; and
WHEREAS, the Series has retained JHLICO to render investment management
services to the Series pursuant to an Investment Management Agreement dated as
of April 30, 2003 (the "Investment Management Agreement"), pursuant to which it
may contract with Advisers as a Sub-Manager as provided for herein;
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NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF SUB-MANAGER
(a) Subject Fund. Advisers is hereby appointed and Advisers hereby accepts
the appointment to act as investment adviser and manager to the Financial
Industries Fund (the "Subject Fund") for the period and on the terms herein set
forth, for the compensation herein provided.
(b) Additional Subject Funds. In the event that the Series and JHLICO
desire to retain Advisers to render investment advisory services hereunder for
any other Fund, they shall so notify Advisers in writing. If it is willing to
render such services, Advisers shall notify the Series in writing, whereupon
such Fund shall become a Subject Fund hereunder.
(c) Independent Contractor. Advisers shall for all purposes herein be
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.
2. PROVISION OF INVESTMENT MANAGEMENT SERVICES.
Advisers will provide for the Subject Fund a continuing and suitable
investment program consistent with the investment policies, objectives and
restrictions of said Fund. Advisers, as Sub-Manager, will manage the investment
and reinvestment of the assets in the Subject Fund, and perform the functions
set forth below, subject to the overall supervision, direction, control and
review of the Board of Trustees of the Series, JHLICO and, as in effect from
time to time, the provisions of the Series' Declaration of Trust, Bylaws,
prospectus, statement of additional information, 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 JHLICO or the Series from
time to time).
Advisers will, at its own expense:
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(a) advise the Series in connection with investment decisions to be made by
its Board of Trustees or any committee thereof regarding the Subject Fund and,
upon request, furnish the Series with research, economic and statistical data in
connection with said Fund's investments and investment policies;
(b) submit such reports relating to the valuation of the Subject Fund's
securities as the Series' Board of Trustees may reasonably request;
(c) place orders for purchases and sales of portfolio investments for the
Subject Fund;
(d) 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 Series' custodian, transfer agent or JHLICO.
The Series and JHLICO will provide timely information to the Sub-Manager
regarding such matters as purchases and redemptions of shares in the Subject
Fund and the cash requirements of, and cash available for investment in, the
Fund, and all information as may be reasonably necessary or appropriate in order
for the Sub-Manager to perform its responsibilities hereunder. On its own
initiative, the Sub-Manager will apprise JHLICO and the Series of important
developments materially affecting the Subject Fund and will furnish JHLICO and
the Series' Board of Trustees from time to time such information as is
appropriate for this purpose.
Advisers will not consult with any other sub-manager to the Subject Fund or
to any other Fund of the Series concerning transactions of the Subject Fund in
securities or other assets, except as such consultations may be reasonably
necessary in order to ensure compliance with paragraphs (a) and (b) of Rule
12d3-1 under the 1940 Act.
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:
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(i) 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;
(ii) all taxes, including issuance and transfer taxes, and reserves for
taxes payable by the Series to federal, state or other governmental agencies;
and
(iii) interest payable on the Series' borrowings.
Nothing in this Agreement shall alter the allocation of expenses and costs
agreed upon between the Series and JHLICO in the Investment Management Agreement
or any other agreement to which they are parties.
4. SUB-ADVISORY FEES.
For all of the services rendered as herein provided, JHLICO shall pay to
the Sub-Manager a fee (for payment of which the Series shall have no obligation
or liability), with respect to the Subject Fund, based on the Current Net Assets
of the Subject Fund, as set forth in Schedule I attached hereto and made a part
hereof.
The 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 Fund during any calendar month, the fee
with respect to such Fund accrued to termination shall be paid.
"Current Net Assets" of the Fund for purposes of computing the amount of
advisory fee accrued for any day shall mean the Fund's net assets as of the most
recent preceding day for which the Fund's net assets were computed.
5. FUND TRANSACTIONS.
In connection with the investment and reinvestment of the assets of the
Subject Fund, the Sub-Manager is authorized to select the brokers or dealers
that will execute purchase and sale transactions for the Fund 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
Fund. The Sub-Manager shall maintain records adequate to demonstrate compliance
with this requirement. Subject to this primary requirement, and maintaining as
its first consideration the
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benefits to the Subject Fund and its shareholders, the Sub-Manager 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
Fund or to the Sub Manager, and who charge a higher commission rate to the
Subject Fund than may result when allocating brokerage solely on the basis of
seeking the most favorable price and execution. The Sub-Manager shall determine
in good faith that such higher cost was reasonable in relation to the value of
the brokerage and research services provided.
The fees payable to the Sub-Manager by JHLICO hereunder shall be reduced by
any tender offer solicitation fees or similar payments received by the
Sub-Manager, in connection with the tender of investments of any Fund (less
direct expenses incurred by the Sub-Manager in connection with obtaining such
fees or payments). The Sub-Manager shall use its best efforts to recapture all
available tender offer solicitation fees and similar payments in connection with
tenders of the securities of any Fund, provided that neither the Sub-Manager nor
any of its affiliates shall be required to register as a broker-dealer for this
purpose. The Sub-Manager shall advise JHLICO and the Series' Board of Trustees
of any fees or payments of whatever type which it may be possible for it or
Advisers or an affiliate of it to receive in connection with the purchase or
sale of investment securities for any Subject Fund.
6. INFORMATION, RECORDS, AND CONFIDENTIALITY.
The Series shall own and control all records maintained hereunder by the
Sub-Manager on the Series' behalf and, in the event of termination of this
Agreement with respect to any Fund for any reason, all records relating to that
Fund shall be promptly returned to the Series, free from any claim or retention
of rights by the Sub-Manager except that Sub-Manager may retain such books and
records required under the 1940 Act record keeping provisions, as amended from
time to time. The Sub-Manager 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
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books and records available for inspection by representatives of regulatory
authorities or other persons reasonably designated by the Series. The
Sub-Manager 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.
The Sub-Manager 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.
The Sub-Manager shall supply the Board of Trustees and officers of the
Series and JHLICO with all statistical information regarding investments which
is reasonably required by them and reasonably available to it.
7. LIABILITY.
No provision of this Agreement shall be deemed to protect the Sub-Manager
or JHLICO 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
gross 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 gross negligence in
the performance his duties or the reckless disregard of his obligations and
duties.
8. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective with respect to the
Subject Fund on the date hereof and, with respect to any additional Subject
Fund, on the date of receipt by the Series of notice from the Sub-Manager in
accordance with
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Xxxxxxxxx 1(b) hereof that it is willing to serve with respect to such Fund.
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 Fund and, with respect to each additional Subject Fund, until two years
following the date on which such Fund becomes a Subject Fund hereunder, and
shall continue in full force and effect thereafter with respect to each Subject
Fund so long as such continuance with respect to any such Fund 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 Fund, 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 Fund shall be effective to continue this
Agreement with respect to any such Fund notwithstanding (A) that this Agreement
has not been approved by the holders of a majority of the outstanding shares of
any other Fund 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
Subject Fund at any time, without payment of any penalty, by vote of the
trustees of the Series, by vote of a majority of the outstanding shares of such
Fund, by the Sub-Manager on at least sixty days' written notice to the Series
and JHLICO, or by JHLICO on at least sixty days' written notice to the Series
and the Sub-Manager.
(c) Automatic Termination. This Agreement shall automatically and
immediately terminate in the event of its assignment or if the Investment
Management Agreement is terminated.
9. SERVICES NOT EXCLUSIVE.
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The services of the Sub-Manager 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 the Sub-Manager 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.
10. AVOIDANCE OF INCONSISTENT POSITION.
In connection with the purchase and sale of portfolio securities of the
Subject Fund, the Sub-Manager and its directors, officers and employees will not
act as principal or agent or receive any commission. Nothing in this Agreement,
however, shall preclude the combination of orders for the sale or purchase of
portfolio securities of the Subject Fund with those for other registered
investment companies or investment accounts managed by the Sub-Manager or its
affiliates, if orders are allocated in a manner deemed equitable by the
Sub-Manager 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 Fund until approved
specifically by (a) the Board of Trustees of the Series, or by vote of a
majority of the outstanding shares of that Fund, 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. GOVERNING LAW.
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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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day first set forth above.
XXXX XXXXXXX VARIABLE SERIES TRUST I
ATTEST: Xxxxxxx Xxxx Xxxxxx By: /s/ Xxxxxxx Xxx Xxxx
-------------------------------------
Title: Chairman
XXXX XXXXXXX LIFE INSURANCE COMPANY
ATTEST: Xxxxxxx Xxxx Xxxxxx By: /s/ Xxxxxxx Xxx Xxxx
-------------------------------------
Title: Sr. X.X.
XXXX XXXXXXX ADVISERS, LLC
ATTEST: By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------------------
Title: Assistant Secretary
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SCHEDULE I
FEES
Current Net Assets Under Management Sub-Advisory Fee
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On the first $50 million 70 basis points (0.70%) per annum
On the next $50 million 60 basis points (0.60%) per annum
On the next $100 million 50 basis points (0.50%) per annum
On amounts over $200 million 40 basis points (0.40%) per annum
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