EXHIBIT 99.B5-20
EXHIBIT (D)(21)
FORM OF SUB-ADVISORY AGREEMENT ON BEHALF OF
WRL PILGRIM XXXXXX GROWTH
WRL SERIES FUND
SUB-ADVISORY AGREEMENT
BETWEEN
WRL INVESTMENT MANAGEMENT, INC.
AND
PILGRIM XXXXXX AND ASSOCIATES, LTD.
This Agreement is entered into as of May 1, 1999 between WRL
MANAGEMENT, INC., a Florida corporation (referred to herein as "WRL
Management"), and Pilgrim Xxxxxx and Associates, Ltd. a Delaware corporation
(referred to herein as "Pilgrim Xxxxxx").
WHEREAS, WRL Management entered into a Management and Investment
Advisory Agreement (referred to herein as the "Advisory Agreement"), dated as of
January 1, 1997 with WRL Series Fund, Inc, a Maryland corporation (referred to
herein as the "Fund"), an open-end management investment company registered
under The Investment Company Act of 1940 (the "1940 Act"), on behalf of WRL
Pilgrim Xxxxxx Mid Cap Growth (the "Portfolio"), under which WRL Management has
agreed, among other things, to act as investment adviser to the Portfolio.
WHEREAS, the Advisory Agreement provides that WRL Management may engage
a Sub-Adviser to furnish investment information and advice to assist WRL
Management in carrying out its responsibilities under the Advisory Agreement as
investment adviser to the Fund.
WHEREAS, it is the purpose of this Agreement to express the mutual
agreements of the parties hereto with respect to the services to be provided by
Pilgrim Xxxxxx to WRL Management and the terms and conditions under which such
services will be rendered.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties hereto agree as follows:
1. SERVICES OF PILGRIM XXXXXX. Pilgrim Xxxxxx shall act as investment
adviser to WRL Management with respect to the Portfolio. In this capacity,
Pilgrim Xxxxxx shall have the following responsibilities:
(a) to provide a continuous investment program for the Portfolio
including management of the acquisition, holding or disposition of
any or all of the securities or other assets which the Portfolio
may own or contemplate acquiring from time to time;
(b) Pilgrim Xxxxxx will place orders for the purchase and sale of
securities primarily with or through such persons, brokers or
dealers whom it believes will provide the most favorable price and
efficient execution. Within the framework of this policy, in
accordance with the Advisory Agreement, and in accordance with
Section 28(e) of the Securities & Exchange Act of 1934, Pilgrim
Xxxxxx 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 Pilgrim Xxxxxx'x other clients may be
a party. It is understood that it is desirable for the Portfolio
that Pilgrim Xxxxxx 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 Portfolio that may result when allocating brokerage to other
brokers solely on the basis of seeking the most favorable price.
Therefore, Pilgrim Xxxxxx is authorized to place orders for the
purchase and sale of securities for the Portfolio with such
brokers, subject to review by WRL Management and the Fund'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 also may be useful to Pilgrim Xxxxxx in
connection with Pilgrim Xxxxxx'x services to other clients.
On occasions when Pilgrim Xxxxxx xxxxx the purchase or sale of a
security to be in the best interest of the Portfolio as well as
other clients of Pilgrim Xxxxxx, to the extent permitted by
applicable laws and regulations, Pilgrim Xxxxxx 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
Pilgrim Xxxxxx in the manner it considers to be the most equitable
and consistent with its fiduciary obligations to the Portfolio and
to such other clients.
(c) to cause its officers to attend meetings of WRL Management or the
Fund and furnish oral or written reports, as WRL Management may
reasonably require, in order to keep WRL Management and its
officers and the Directors of the Fund and appropriate officers of
the Fund fully informed as to the condition of the investment
portfolio of the Portfolio, the investment recommendations of
Pilgrim Xxxxxx, and the investment considerations which have given
rise to those recommendations;
(d) to furnish such statistical and analytical information and reports
as may reasonably be required by WRL Management from time to time;
and
(e) to supervise the purchase and sale of securities.
2. OBLIGATIONS OF WRL MANAGEMENT. WRL Management shall have the
following obligations under this Agreement:
(a) to keep Pilgrim Xxxxxx continuously and fully informed as to the
composition of the Portfolio's investment portfolio and the nature
of the Portfolio's assets and liabilities from time to time;
(b) to furnish Pilgrim Xxxxxx with a certified copy of the Fund's
By-laws and with a certified copy of any financial statement or
report prepared for the Portfolio by certified or independent
public accountants, and with copies of any financial statements or
reports made by the Fund to its shareholders or to any
governmental body or securities exchange;
(c) to promptly furnish Pilgrim Xxxxxx with copies of the Fund's
current prospectus and statement of additional information,
together with any investment restrictions or limitations imposed
upon the management of the assets of the Portfolio by the Fund's
Board of Directors or officers, or those imposed by WRL
Management, and copies of any or all Exemptive Orders or no-action
letters received by the Fund from the Securities and Exchange
Commission which may apply to the Portfolio.
(d) to furnish Pilgrim Xxxxxx with any further materials or
information which Pilgrim Xxxxxx may reasonably request to enable
it to perform its functions under this Agreement;
(e) to compensate Pilgrim Xxxxxx for its services provided and the
expenses assumed under this Agreement, by (i) the payment of a
monthly fee as set forth on schedule A attached to this Agreement,
as it may be amended from time to time in accordance with Section
10 below. (The fees payable to Pilgrim Xxxxxx with respect to the
WRL Pilgrim Xxxxxx Mid Cap Growth portfolio will be based upon the
average daily net assets, on a combined basis, of both the IDEX
Pilgrim Xxxxxx Mid Cap Growth fund and the WRL Pilgrim Xxxxxx Mid
Cap Growth portfolio.) In the event that this Agreement shall be
effective for only part of a period to which any such fee received
by WRL Management is attributable, then an appropriate pro-ration
of the fee that would have been payable hereunder if this
Agreement had remained in effect until the end of such period
shall be made, based on the number of calendar days in such period
and the number of calendar days during the period in which this
Agreement was in effect. The fees payable to Pilgrim Xxxxxx
hereunder shall be payable upon receipt by WRL Management from the
Portfolio of fees payable to WRL Management under Section 6 of the
Advisory Agreement; and
3. TREATMENT OF INVESTMENT ADVICE. WRL Management may direct Pilgrim
Xxxxxx to furnish its investment information, advice and recommendations
directly to officers of the Fund.
4. PURCHASES BY AFFILIATES. Neither Pilgrim Xxxxxx nor any of its
officers or Directors shall take a long or short position in the securities
issued by the Portfolio. This prohibition, however, shall not prevent the
purchase from the Portfolio of shares issued by the Portfolio on behalf of the
Portfolio by the officers and Directors of Pilgrim Xxxxxx (or deferred benefit
plans established for their benefit) at the current price available to the
public, or at such price with reductions in sales charge as may be permitted in
the Fund's current prospectus in accordance with Section 22(d) of the Investment
Company Act of 1940, as amended (the "1940 Act").
5. LIABILITY OF PILGRIM XXXXXX. Pilgrim Xxxxxx may rely on information
provided to it by WRL Management or the Fund reasonably believed by it to be
accurate and reliable. Except as may otherwise be provided by the 1940 Act,
neither Pilgrim Xxxxxx nor its officers, directors, employees or agents shall be
subject to any liability to the Portfolio or any shareholders of the Portfolio
or to WRL Management for any error of judgment, mistake of law or any loss
arising out of any investment or other act or omission in the course of,
connected with or arising out of any service to be rendered hereunder, except by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of reckless disregard of its obligations and duties
under this Agreement.
6. COMPLIANCE WITH LAWS. Pilgrim Xxxxxx represents that it is, and will
continue to be throughout the term of this Agreement, an investment adviser
registered under all applicable federal and state laws. In all matters relating
to the performance of this Agreement, Pilgrim Xxxxxx will act in conformity with
the Fund's Articles of Incorporation, Bylaws, and current prospectus and with
the instructions and direction of WRL Management and Fund's Directors, and will
conform to and comply with the 1940 Act and all other applicable federal or
state laws and regulations.
7. TERMINATION. This Agreement shall terminate automatically with
respect to the Portfolio upon the termination of the Advisory Agreement with
respect to such Portfolio. This Agreement may be terminated at any time with
respect to the Portfolio, without penalty, by WRL Management or by the Fund's
Board by giving 60 days' written notice of such termination to Pilgrim Xxxxxx at
its principal place of business, provided that, if terminated by the Fund, such
termination is approved by the Board of Directors of the Fund or by vote of a
majority of the outstanding voting securities (as that phrase is defined in
Section 2(a)(42) of the 0000 Xxx) of the Portfolio, or per the terms of the
exemptive order - Release No. 23379 - under section 6(c) of the Act from section
15(a) and rule 18f-2 under the Act. This Agreement may be terminated at any time
by Pilgrim Xxxxxx by giving 60 days' written notice of such termination to the
Fund's Board and WRL Management at their respective principal places of
business.
8. ASSIGNMENT. This Agreement shall terminate automatically in the
event of any assignment (as that term is defined in Section 2(a)(4) of the 0000
Xxx) of this Agreement.
9. TERM. This Agreement shall continue in effect, unless sooner
terminated in accordance with its terms, for an initial term ending April 30,
2001, and shall continue in effect from year to year thereafter so long as such
continuance is specifically approved at least annually by the vote of a majority
of the Directors of WRL who are not parties hereto or interested persons (as
that term is defined in Section 2(a)(19) of the 0000 Xxx) of any such party,
cast in person at a meeting called for the purpose of voting on the approval of
the terms of such renewal, and by either the Directors of the Fund or the
affirmative vote of a majority of the outstanding voting securities of the
Portfolio (as that phrase is defined in Section 2(a)(42) of the 1940 Act).
10. AMENDMENTS. This Agreement may be amended with respect to the
Portfolio only with the approval by the affirmative vote of a majority of the
outstanding voting securities (as that phrase is defined in Section 2(a)(42) of
the 0000 Xxx) of such Portfolio and the approval by the vote of a majority of
the Directors of the Fund who are not parties hereto or interested persons (as
that term is defined in Section 2(a)(19) of the 0000 Xxx) of any such party,
cast in person at a meeting called for the purpose of voting on the approval of
such amendment, unless otherwise permitted by the 1940 Act.
11. PRIOR AGREEMENTS. This agreement supersedes all prior agreements
between the parties relating to the subject matter hereof, and all such prior
agreements are deemed terminated upon the effectiveness of this agreement.
12. MISCELLANEOUS
(a) Pilgrim Xxxxxx shall not be required to pay any expenses of the Portfolio.
In particular, but without limiting the generality of the foregoing, Pilgrim
Xxxxxx shall not be responsible for the following expenses of the Portfolio:
organization and certain offering expenses of the Portfolio, 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 Portfolio in
connection with membership in investment company trade organization; costs of
insurance relating to fidelity coverage for the Fund's officers and employees;
fees and expenses of the Fund's custodian, any subcustodian, transfer agent
registrar, or dividend disbursing agent; maintaining the Fund's financial books
and records and calculating the daily net asset value; 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 Portfolio; expenses relating to investor
and public relations; expenses of registering and qualifying shares of the
Portfolio for sale; freight, insurance and other charges in connection with the
shipment of the Portfolio's portfolio securities; brokerage commissions or other
costs of acquiring or disposing of any portfolio securities or other assets of
the Portfolio, or of entering into other transactions or engaging in any
investment practices with respect to the Portfolio; expenses of printing and
distributing prospectuses, Statements of Additional Information, reports,
notices and dividends to stockholders; costs of stationery; any litigation
expenses; and costs of stockholders' meetings; costs relating to meetings of the
Board of Directors of the Fund except for travel expenses for representatives of
Pilgrim Xxxxxx 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
Portfolio, or any committees thereof or advisers thereto.
(b) It is understood that the services of Pilgrim Xxxxxx are not
exclusive, and that nothing in this Agreement shall prevent Pilgrim Xxxxxx 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 Pilgrim Xxxxxx'x ability to meet its obligations to the
Portfolio hereunder. When Pilgrim Xxxxxx recommends the purchase or sale of the
same security for the Portfolio, it is understood that in light of its fiduciary
duty to the Portfolio, such transactions will be executed on a basis that is
fair and equitable to the Portfolio. In connection with purchases or sales of
portfolio securities for the account of the Portfolio, neither Pilgrim Xxxxxx
nor any of its directors, officers or employees shall act as principal or agent
or receive any commission, provided that portfolio transactions for the
Portfolio may be executed through firms affiliated with Pilgrim Xxxxxx in
accordance with applicable legal requirements, and procedures adopted by the
Directors of the Fund.
(c) During the term of this Agreement, WRL Management agrees to
furnish Pilgrim Xxxxxx, at is principal office, all prospectuses, proxy
statements, reports to shareholders, sales literature or other materials
prepared for distribution to shareholders of the Portfolio, the Fund or the
public that refer to Pilgrim Xxxxxx or its clients in any way.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
ATTEST: THE PILGRIM XXXXXX & ASSOCIATES, LTD.
______________________________ By:_________________________________
Secretary Title:
ATTEST: WRL MANAGEMENT, INC.
______________________________ By:_________________________________
Assistant Secretary Xxxx X. Xxxxxx
Chairman, Director & President
Sub-Advisory Agreement
SCHEDULE A
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FUND ANNUAL PERCENTAGE OF MONTHLY AVERAGE TERMINATION DATE
DAILY NET ASSETS
------------------------------------------ --------------------------------------- --------------------------
WRL PILGRIM XXXXXX MID CAP GROWTH 0.50% of the first $100 million of April 30, 2001
the Portfolio's average daily net
assets; 0.40% of assets in excess of
$100 million (from first dollar)*
------------------------------------------ --------------------------------------- --------------------------
*The fees payable for this portfolio will be based upon the average daily net
assets, on a combined basis, for both the WRL Pilgrim Xxxxxx Mid Cap Growth
portfolio and the IDEX Pilgrim Xxxxxx Mid Cap Growth fund.
