EXHIBIT 99.(d)(i)
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AMENDED INVESTMENT ADVISORY AGREEMENT
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This Investment Advisory Agreement is made as of the first day of
March, 1999, as amended as of the 30th day of September, 2004, between WILSHIRE
VARIABLE INSURANCE TRUST, a Delaware statutory trust (herein called the
"Company"), and WILSHIRE ASSOCIATES INCORPORATED, a California corporation
(herein called the "Advisor").
WHEREAS, the Company is registered as an open-end management investment
company under the Investment Company Act of 1940 (the "1940 Act"); and
WHEREAS, the Company wishes to retain the Advisor under this Agreement
to render investment advisory services to the portfolios of the Company known as
the Equity Fund, Balanced Fund, Income Fund, Short-Term Investment Fund, Small
Cap Growth Fund, International Equity Fund and Socially Responsible Fund (the
"Initial Fund(s)", together with any other Company portfolios which may be
established later and served by the Advisor hereunder, being herein referred to
collectively as the "Funds" and each individually as a "Fund"), and Advisor
wishes to render such services;
NOW THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the parties hereto agree as follows:
1. Appointment of Advisor.
(A) The Company hereby appoints the Advisor as the investment
adviser of each Fund on the terms and for the period set forth in this Agreement
and the Advisor hereby accepts such appointment and agrees to perform the
services and duties set forth herein on the terms herein provided. The Advisor
may, in its discretion, provide such services through its own employees or the
employees of one or more affiliated companies that are qualified to provide such
services to the Trust under applicable law and are under common control with the
Advisor provided (i) that all persons, when providing services hereunder, are
functioning as part of an organized group of persons, and (ii) that such
organized group of persons is managed at all times by authorized officers of the
Advisor.
(B) In the event that the Company establishes one or more portfolios
other than the Initial Fund(s) with respect to which it desires to retain the
Advisor to render investment advisory services hereunder, it shall notify the
Advisor in writing. If the Advisor is willing to render such services, it shall
notify the Company in writing whereupon such portfolio or portfolios shall
become a Fund or Funds hereunder.
2. Investment Services and Duties. The Advisor shall recommend to the
Board of Trustees one or more investment advisers who are not affiliated with
the Advisor (herein referred to collectively as the "Sub-Advisors" and each
individually as a "Sub-Advisor) to provide a continuous investment program for
each Fund or a portion thereof designated from time to time by the Advisor,
including investment, research, and management with respect to all securities
and investments and cash equivalents for the Fund or designated portion thereof.
Upon approval of a Sub-Advisor by the Board of Trustees, the Advisor shall enter
into an agreement with such
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Sub-Advisor, in a form approved by the Board of Trustees, for the provision of
such services, subject to the supervision of the Board of Trustees and the
Advisor.
(A) The Advisor shall review, monitor and report to the Board of
Trustees regarding the performance and investment procedures of each Sub-Advisor
and shall assist and consult with each Sub-Advisor in connection with the Fund's
continuous investment program. The Advisor shall provide its services under this
Section 2 in accordance with the Funds' investment objectives, policies and
restrictions as stated in the Funds' then current registration statement and
resolutions of the Company's Board of Trustees.
The Advisor shall also review, monitor and report to the Board of
Trustees regarding each Sub-Advisor's compliance with Fund policies and legal
requirements as directed by the Board of Trustees from time to time.
(B) Each Sub-Advisor shall determine from time to time what
securities and other investments will be purchased, retained or sold by the
Company with respect to the Fund or portion thereof served by such Sub-Advisor.
The Company acknowledges and agrees that, subject to the provisions of paragraph
(A) hereof, the Advisor shall not be responsible for any such determinations by
any Sub-Advisor. Each Sub-Advisor shall provide services to the Funds in
accordance with the Funds' investment objectives, policies and restrictions as
stated in the Funds' then current registration statement and resolutions of the
Company's Board of Trustees.
(C) Each Sub-Advisor shall select brokers or dealers that will
execute the purchases and sales of portfolio securities for the Fund or portion
thereof managed by such Sub-Advisor. In making such selection, each Sub-Advisor
shall use its best efforts to obtain best execution, which includes most
favorable net results and execution of such Sub-Advisor's orders, taking into
account all appropriate factors, including price, dealer spread or commission,
size and difficulty of the transaction and research or other services provided.
It is understood that no Sub-Advisor will be deemed to have acted unlawfully, or
to have breached a fiduciary duty to the Fund or in respect of Fund assets,
solely by reason of its having caused the Fund to pay a member of a securities
exchange, a broker or a dealer a commission for effecting a securities
transaction of the Fund in excess of the amount of commission another member of
an exchange, broker or dealer would have charged, if such Sub-Advisor determined
in good faith that the commission paid was reasonable in relation to the
brokerage and research services provided by such member, broker or dealer,
viewed in terms of that particular transaction or the Sub-Advisor's overall
responsibilities with respect to its accounts, including the Fund, as to which
it exercises investment discretion.
Each Sub-Advisor is authorized to consider for investment by the Fund
or portion thereof managed by such Sub-Advisor securities that may also be
appropriate for other funds and/or clients serviced by such Sub-Advisor. To
assure fair treatment of the Funds and all other clients of a Sub-Advisor in
situations in which two or more clients' accounts participate simultaneously in
a buy or sell program involving the same security, such transactions shall be
allocated among the Fund and other clients in a manner deemed equitable by the
Sub-Advisor.
Notwithstanding the previous paragraphs, to the extent directed by
management of the Fund in writing, the Advisor shall direct one or more of the
Sub-Advisors to execute purchases
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and sales of portfolio securities for the Fund through brokers or dealers
designated by management of the Fund to Advisor for the purpose of providing
direct benefits to the Fund, provided that such Sub-Advisor determines that such
brokers or dealers will provide reasonable execution in view of such other
benefits. The Fund understands that the brokerage commissions or transaction
costs in such transactions may be higher, and that the Fund may receive less
favorable prices, than those which any such Sub-Advisor could obtain from
another broker or dealer, in order to obtain such benefits for the Fund. The
Advisor is responsible for overseeing any such directed brokerage arrangements.
(D) With respect to any assets of a Fund that are not being managed
by a Sub-Advisor, the Advisor shall determine from time to time what securities
and other investments will be purchased, retained or sold by the Company with
respect to the Fund or portion thereof not served by such Sub-Advisor. The
Advisor shall provide services to the Funds in accordance with the Funds'
investment objectives, policies and restrictions as stated in the Funds' then
current registration statement and resolutions of the Company's Board of
Trustees. This shall be subject to paragraph (C) hereof in the same manner as a
Sub-Advisor.
(E) The Advisor shall maintain books and records with respect to its
services hereunder and furnish the Company's Board of Trustees such periodic
special reports as the Board may request. The Company acknowledges and agrees
that the Sub-Advisors will be responsible for maintenance of books and records
with respect to the securities transactions of the Funds.
(F) Subject to the supervision and control of the Company's Board of
Trustees, the Advisor shall provide certain administrative services in
connection with the investment of Company assets, as directed by the Board of
Trustees from time to time.
3. Administrative Services and Duties. Subject to the supervision and
control of the Company's Board of Trustees, the Advisor shall provide to the
Company facilities, equipment and personnel to carry out all management services
required for operation of the business and affairs of the Funds other than those
services to be performed by a distributor of the Funds' shares pursuant to an
Underwriting Agreement, those services to be performed by the Funds' custodian
pursuant to the Company's Custodian Contract, those services to be performed by
the Funds' transfer agent pursuant to the Company's Transfer Agency Agreement,
those accounting services to be provided pursuant to an accounting agreement or
custody agreement, those administrative services to be performed by the Funds'
administrator pursuant to an administration agreement and those services
normally performed by the Company's counsel and auditors.
(A) The Advisor's oversight responsibilities shall include
overseeing the performance of the Funds' third party service providers,
including, but not limited to, the Custodian, Transfer Agent, distributor and
administrator.
(B) The Advisor shall participate in the periodic updating of the
Funds' prospectuses and statements of additional information and in the
preparation of reports to the Funds' shareholders and the Securities and
Exchange Commission (the "Commission"),
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including but not limited to annual reports and semi-annual reports, notices
pursuant to Rule 24f-2 and proxy materials pertaining to the Funds.
(C) The Advisor shall pay all costs and expenses of maintaining the
offices of the Company, wherever located.
(D) The Advisor shall assist the Custodian, Transfer Agent,
distributor, administrator, counsel and auditors as required to carry out the
business and operations of the Funds.
4. Compliance with Governing Instruments and Laws. In performing its
duties as Advisor for the Funds, the Advisor shall act in conformity with the
Company's Declaration of Trust, By-Laws, prospectuses and statements of
additional information, and the instructions and directions of the Board of
Trustees of the Company. In addition, the Advisor shall conform to and comply
with the requirements of the 1940 Act, the Rules and Regulations of the
Commission, the requirements of subchapter M and Section 817(h) of the Internal
Revenue Code of 1986, as amended (with respect to assets not managed by a
Sub-Advisor), and all other applicable federal or state laws and regulations.
5. Services Not Exclusive. The Advisor shall for all purposes herein be
deemed to be an independent contractor and shall, unless otherwise expressly
provided herein or authorized by the Board of Trustees from time to time, have
no authority to act for or represent the Company in any way or otherwise be
deemed its agent. The services furnished by the Advisor hereunder are not deemed
exclusive, and the Advisor shall be free to furnish similar services to others
so long as its services under this Agreement are not impaired thereby.
6. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Advisor hereby agrees that all records which it
maintains for the Company are the property of the Company and further agrees to
surrender promptly to the Company any such records upon the Company's request.
The Advisor further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by it in connection
with its services hereunder by Rule 31a-1 under the 1940 Act.
7. Expenses Assumed as Advisor. Except as otherwise stated in this
Agreement, the Advisor shall pay all expenses incurred by it in performing its
services and duties hereunder as Advisor (including without limitation all
compensation of Sub-Advisors to the Funds pursuant to its agreements with such
Sub-Advisors). The Company shall bear all other expenses incurred in the
operation of the Funds, including without limitation taxes, interest, brokerage
fees and commissions, if any, fees of trustees who are not officers, directors,
partners, employees or holders of 5 percent or more of the outstanding voting
securities of the Advisor or any Sub-Advisor or any of their affiliates,
Commission fees and state blue sky registration and qualification fees, charges
of custodians, transfer and dividend disbursing agents' fees, certain insurance
premiums, outside auditing and legal expenses, costs of maintaining trust
existence, costs of preparing and printing prospectuses or any supplements or
amendments thereto necessary for the continued effective registration of the
Funds' shares ("Shares") under federal or state securities laws, costs of
printing and distributing any prospectus, supplement or amendment thereto for
existing shareholders of the Funds, costs of shareholders' reports and meetings,
and
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any extraordinary expenses. It is understood that certain advertising,
marketing, shareholder servicing, administration and/or distribution expenses to
be incurred in connection with the Shares may be paid by the Company as provided
in any plan which may in the sole discretion of the Company be adopted in
accordance with Rule 12b-1 under the 1940 Act, and that such expenses shall be
paid apart from any fees paid under this Agreement.
8. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, the Company shall pay the Advisor a fee, computed
daily and payable monthly, at the annual rate as set forth in the attached fee
schedule based on the average daily net assets of each Fund determined as set
forth in the current prospectus and statement of additional information of the
Company with respect to the Fund as amended from time to time. Such fee as is
attributable to each Fund shall be a separate (and not joint or joint and
several) obligation of each such Fund. The Company shall reduce the advisory fee
to be paid by each Fund to the Advisor by the amount of any advisory fees paid
indirectly by such Fund to other investment companies as a result of the Fund's
investment in such investment companies' securities.
9. Affiliated Broker. The Advisor or an affiliated person of the
Advisor may act as broker for the Funds or any portion thereof in connection
with the purchase or sale of securities or other investments for the Funds or
any portion thereof, subject to: (a) the requirement that the Advisor seek to
obtain best execution as set forth above; (b) the provisions of the Investment
Advisers Act of 1940, as amended (the "Advisers Act"); (c) the provisions of the
Securities Exchange Act of 1934, as amended; and (d) other applicable provisions
of law. Subject to the requirements of applicable law and any procedures adopted
by the Company's Board of Trustees, the Advisor or its affiliated persons may
receive brokerage commissions, fees or other remuneration from the Funds for
such services in addition to the Advisor's fees for services under this
Agreement.
10. Confidentiality. The Advisor shall treat confidentially and as
proprietary information of the Company all records and other information
relative to the Company and prior or present shareholders or those persons or
entities who respond to the Distributor's inquiries concerning investment in the
Company, as applicable, and shall not use such records and information for any
purpose other than performance of its responsibilities and duties hereunder or
under any other agreement with the Company except after prior notification to
and approval in writing by the Company, which approval shall not be unreasonably
withheld and may not be withheld where the Advisor may be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to divulge
such information by duly constituted authorities, or when so requested by the
Company. Nothing contained herein, however, shall prohibit the Advisor from
advertising to or soliciting the public generally with respect to other products
or services, including, but not limited to, any advertising or marketing via
radio, television, newspapers, magazines or direct mail solicitation, regardless
of whether such advertisement or solicitation may coincidentally include prior
or present Company shareholders or those persons or entities who have responded
to inquiries with respect to the Funds.
11. Limitations of Liability; Indemnification.
(A) The Advisor shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Company or by any Fund in
connection with the matters to which
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this Agreement relates, except a loss resulting from a breach of the Advisor's
fiduciary duty with respect to the receipt of compensation for services or a
loss resulting from the Advisor's willful misfeasance, bad faith or negligence
on its part in the performance of its duties or from reckless disregard by it of
its obligations and duties under this Agreement. Any person, even though also an
officer, director, employee or agent of the Advisor, who may be or become an
officer, director, employee or agent of the Company, shall be deemed when
rendering services to the Company or to any Fund, or acting on any business of
the Company or of any Fund (other than services or business in connection with
the Advisor's duties as Advisor hereunder or under any other agreement with the
Company), to be rendering such services to or acting solely for the Company or
Fund and not as an officer, director, employee or agent or one under the control
or direction of the Advisor even though paid by the Advisor.
(B) The Company shall indemnify and hold harmless the Advisor from
and against all liabilities, damages, costs and expenses that the Advisor may
incur in connection with any action, suit, investigation or proceeding arising
out of or otherwise based on any action actually or allegedly taken or omitted
to be taken by the Advisor with respect to the performance of its duties or
obligations hereunder or otherwise as an investment adviser of the Company and
the Funds; provided, however, that the Advisor will not be entitled to
indemnification with respect to any liability to the Company or its shareholders
by reason of the Advisor's breach of fiduciary duty with respect to the receipt
of compensation for services or the willful misfeasance, bad faith or gross
negligence on the part of the Advisor in the performance of its duties, or by
reason of the Advisor's reckless disregard of its obligations and duties under
this Agreement.
(C) The Advisor acknowledges and agrees that the Declaration of
Trust of the Company provides that the Trustees of the Company and the officers
of the Company executing this Agreement on behalf of the Company shall not be
personally bound hereby or liable hereunder, nor shall resort be had to their
private property or the private property of the shareholders of the Company for
the satisfaction of any claim or obligation under this Agreement.
12. Duration or Termination. This Agreement shall become effective as
of the date first written above and, unless sooner terminated as provided
herein, shall continue until October 31, 2004. Thereafter, this Agreement will
be extended with respect to each Fund for successive one-year periods ending on
October 31st of each year provided each such extension is specifically approved
at least annually (a) by vote of a majority of those members of the Company's
Board of Trustees 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,
and (b) by the Company's Board of Trustees or by vote of a majority of the
outstanding voting securities of such Fund. This Agreement may be terminated by
the Company at any time with respect to any Fund, without the payment of any
penalty, by vote of a majority of the entire Board of Trustees of the Company or
by a vote of a majority of the outstanding voting securities of such Fund on 60
days' written notice to the Advisor, or by the Advisor at any time, without
payment of penalty, on 60 days' written notice to the Company. This Agreement
will immediately terminate in the event of its assignment. As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested persons" and "assignment" shall have the same meanings as such terms
have in the 1940 Act.
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13. Representations and Warranties.
(A) The Company represents and warrants to the Advisor that: (i) it
is a statutory trust duly organized and existing and in good standing under the
laws of the State of Delaware and is duly qualified to conduct its business in
the State of Delaware and in such other jurisdictions wherein the nature of its
activities or its properties owned or leased makes such qualification necessary;
(ii) it is a registered open-end management investment company under the 1940
Act; (iii) a registration statement on Form N-1A under the Securities Act of
1933, as amended, on behalf of the Funds is currently effective and will remain
effective, and appropriate state securities law filings have been made and will
continue to be made, with respect to all shares of the Funds being offered for
sale; (iv) it is empowered under applicable laws and by its Declaration of Trust
and By-Laws to enter into and perform this Agreement; and (iv) all requisite
trust proceedings have been taken to authorize it to enter into and perform this
Agreement.
(B) The Advisor represents and warrants to the Company that: (i) it
is a corporation duly organized and existing and in good standing under the laws
of the State of California and is duly qualified to conduct its business in the
State of California and in such other jurisdictions wherein the nature of its
activities or its properties owned or leased makes such qualification necessary;
(ii) it is a registered investment adviser under the Advisers Act; (iii) it is
empowered under applicable laws to enter into and perform this Agreement; and
(iv) all requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
14. Arbitration of Disputes. Any claim or controversy arising out of or
relating to this Agreement which is not settled by agreement of the parties
shall be settled by arbitration in Santa Monica, California before a panel of
three arbitrators in accordance with the commercial arbitration rules of the
American Arbitration Association then in effect. The parties agree that such
arbitration shall be the exclusive remedy hereunder, and each party expressly
waives any right it may have to seek redress in any other forum. Any arbitrator
acting hereunder shall be empowered to assess no remedy other than payment of
fees and out-of-pocket damages. Each party shall bear its own expenses of
arbitration, and the expenses of the arbitrators and of a transcript of any
arbitration proceeding shall be divided equally between the parties. Any
decision and award of the arbitrators shall be binding upon the parties, and
judgment thereon may be entered in the Superior Court of the State of California
or any other court having jurisdiction. If litigation is commenced to enforce
any such award, the prevailing party will be entitled to recover reasonable
attorneys' fees and costs.
15. Names. The name "Wilshire Variable Insurance Trust" refers to the
trust created and the trustees, as trustees but not individually or personally,
acting from time to time under a Declaration of Trust dated November 7, 1996, as
amended, which is hereby referred to and a copy of which is on file at the
principal office of the Company. The trustees, officers, employees and agents of
the Company shall not personally be bound by or liable under any written
obligation, contract, instrument, certificate or other interest or undertaking
of the Company made by the trustees or by any officer, employee or agent of the
Company, in his or her capacity as such, nor shall resort be had to their
private property for the satisfaction of any obligation or claim thereunder. All
persons dealing with any series or class of shares of the Company may enforce
claims against the Company only against the assets belonging to such series or
class.
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16. Notices. Notices of any kind to be given to the Company hereunder
by the Advisor shall be in writing and shall be duly given if mailed or
delivered to the Company at the following:
With a copy to:
Xxxxx X. X'Xxxxx, Esq. Vedder, Price,
Xxxxxxx & Kammholz, P.C. 000 Xxxxx XxXxxxx
Xxxxxx, 00xx Xxxxx Xxxxxxx, Xxxxxxxx 00000
or at such other address or to such individual as shall be so specified by the
Company to the Advisor. Notices of any kind to be given to the Advisor hereunder
by the Company shall be in writing and shall be duly given if mailed or
delivered to the Advisor at:
Wilshire Associates Incorporated
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxx
or at such other address or to the attention of such other individual as shall
be so specified by the Advisor to the Company.
17. Miscellaneous. This Agreement sets forth the entire understanding
of the parties with respect to the subject matter hereof and may be amended only
by written consent of both parties. The captions in this Agreement are included
for convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. 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 thereby. Subject to the provisions of Section 11 hereof, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and shall be governed by Delaware law (without
regard to principles of conflicts of law); provided, however, that nothing
herein shall be construed in a manner inconsistent with the 1940 Act or any rule
or regulation of the Commission thereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
WILSHIRE VARIABLE INSURANCE TRUST
By:____________________________
(name)______________________
(title)_____________________
Attest:____________________________
(name)______________________
(title)_____________________
WILSHIRE ASSOCIATES INCORPORATED
By:____________________________
(name)______________________
(title)_____________________
Attest:____________________________
(name)______________________
(title)_____________________
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FEE SCHEDULE
The Company shall pay Advisor, with respect to each Fund each calendar month
during the term of this Agreement, a fee based on the average daily net assets
of each Fund, at the following annual rate:
ON THE FIRST BILLION ON THE BALANCE
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GROWTH FUND 0.55% OF NET ASSETS 0.45% OF NET ASSETS
BALANCED FUND 0.55% OF NET ASSETS 0.45% OF NET ASSETS
INCOME FUND 0.55% OF NET ASSETS 0.45% OF NET ASSETS
SHORT-TERM INVESTMENT FUND 0.275% OF NET ASSETS 0.175% OF NET ASSETS
SMALL CAP GROWTH FUND 1.15% OF NET ASSETS 1.15% OF NET ASSETS
INTERNATIONAL EQUITY FUND 1.00% OF NET ASSETS 0.90% OF NET ASSETS
SOCIALLY RESPONSIBLE FUND 0.85% OF NET ASSETS 0.75% OF NET ASSETS
Advisor's fee shall be accrued daily at 1/365th of the annual rate set forth
above. For the purpose of accruing compensation, the net assets of each Fund
will be determined in the manner and on the dates set forth in the current
prospectus of the Fund with respect to each Fund and, on days on which the net
assets are not so determined, the net asset value computation to be used will be
as determined on the immediately preceding day on which the net assets were
determined. Upon the termination of this Agreement, all compensation due through
the date of termination will be calculated on a pro-rata basis through the date
of termination and paid within thirty business days of the date of termination.
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