Exhibit (d)44
SUB-INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the 12th day of August 1999 by and among Xxxx Xxxxxxx
Variable Series Trust I, a Massachusetts business trust (the "Series"),
Wellington Management Company, LLP, a Massachusetts limited liability
partnership ("Wellington Management"), 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, as amended (the "1940 Act"); and
WHEREAS, JHMLICO and Wellington Management are each engaged in the
business of rendering investment advice under the Investment Advisers Act of
1940, as amended; and
WHEREAS, the Series is authorized to issue its shares 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 Large/Mid Cap Value 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 July 28, 1999, as amended (the "Investment Management Agreement"), pursuant
to which it may contract with Wellington Management as a sub-investment manager
as provided for herein.
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF SUB-INVESTMENT MANAGER
(a) Subject Portfolio. Wellington Management is hereby appointed and
Wellington Management hereby accepts the appointment to act as investment
adviser and manager to the Large/Mid Cap Value Portfolio (the "Subject
Portfolio") effective August 1, 1999 for the period and on the terms herein set
forth, and for the compensation herein provided.
(b) Additional Subject Portfolios. In the event that the Series and
JHMLICO desire to retain Wellington Management to render investment advisory
services hereunder for any other Portfolio, they shall so notify Wellington
Management in writing. If it is willing to render such services, Wellington
Management shall notify the Series in writing, whereupon such Portfolio shall
become a Subject Portfolio hereunder.
(c) Incumbency Certificates. Wellington Management shall furnish to
JHMLICO, immediately upon execution of this Agreement, a certificate of a senior
officer of Wellington Management setting forth (by name and title, and including
specimen signatures) those officers of Wellington Management who are authorized
to give instructions for the Subject Portfolio pursuant to the provisions of
this Agreement. Wellington Management 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
Wellington Management so named.
(d) Independent Contractor. Wellington Management 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.
(e) Wellington Management's Representations. Wellington Management
represents, warrants and agrees (i) that it is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended, and that it will
remain so registered and will comply with the requirements of said Act, and the
rules and regulations thereunder, at all times while this Agreement remains in
effect, (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 ownership of Wellington Management, or of
any change in the identity of the personnel who manage the Subject Portfolio,
(iv) that it has adopted a code of ethics complying with the requirements of
Section 17(j) and Rule 17j-1 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, and (v) that it has
furnished the Series and JHMLICO each with a copy of Wellington Management's
Form ADV, as most recently filed with the Securities and Exchange Commission
("SEC"), and will promptly furnish copies of each future amendment thereto.
2. PROVISION OF INVESTMENT MANAGEMENT SERVICES.
Wellington Management will provide for the Subject Portfolio a continuing
and suitable investment program consistent with the investment objectives,
policies, guidelines and restrictions of said Portfolio, as established by the
Series and JHMLICO. From time to time, JHMLICO or the Series may provide
Wellington Management with additional or amended investment policies, guidelines
and restrictions. Wellington Management, as sub-investment manager, will manage
the investment and reinvestment of the assets in the Subject Portfolio, and
perform the functions set forth below, (i) subject to the overall supervision,
direction, control and review of JHMLICO and the Board of Trustees of the
Series, and (ii) consistent with the applicable investment objectives, policies,
guidelines and restrictions, the provisions of the Series' Declaration of Trust,
By-laws, 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 other directions or instructions delivered to
Wellington Management in writing by JHMLICO or the Series from time to time). By
its signature below, Wellington Management acknowledges receipt of a copy of the
Series' Declaration of Trust, By-laws, prospectus, and statement of additional
information, each as in effect on the date of this Agreement.
Wellington Management 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 or prior to the close of business each day, provide JHMLICO and the
custodian with trade information for each transaction effected for the Subject
Portfolio, and promptly provide to the custodian information on all brokerage or
dealer confirmations;
(g) as soon as practicable following the end of each calendar month,
provide JHMLICO with information on 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
(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
Wellington Management's proxy voting policy as most recently provided to
JHMLICO.
On its own initiative, Wellington Management 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. Wellington Management will also make its personnel available in Boston,
Massachusetts or other reasonable locations as often as quarterly to discuss the
Subject Portfolio and Wellington Management's 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 Wellington
Management 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 Subject Portfolio. JHMLICO will timely provide Wellington
Management with monthly accounting statements for the Subject Portfolio, and
such other information (including, without limitation, reports concerning the
classification of Subject 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 Wellington Management 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 Wellington Management a fee (for the
payment of which the Series shall have no 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, Wellington Management 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. Wellington Management 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, Wellington Management 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 Wellington Management, 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. Wellington Management
shall determine in good faith that such higher cost was reasonable in relation
to the value of the brokerage and research services provided.
Wellington Management 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
Wellington Management 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 Wellington Management, provided that
(subject to the last paragraph of this Section 6) Wellington Management may
retain copies of such records. Wellington Management also agrees, upon request
of the Series, promptly to surrender such books and records or, at its expense,
copies thereof, to the Series or to make such books and records available for
audit or inspection by representatives of regulatory authorities, or other
persons reasonably designated by the Series. Wellington Management 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 Section 31
and Rules 31a-1 and 31a-2, to the extent such records are not maintained by the
custodian, transfer agent or JHMLICO, and to supply all information requested by
any securities and insurance regulatory authorities to determine whether all
securities and insurance laws and regulations are being complied with.
Wellington Management 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 Wellington
Management.
Wellington Management 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 Wellington
Management 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 or she might
otherwise be subject by reason of any willful misfeasance, bad faith or
negligence in the performance of his or her duties or the reckless disregard of
his or her 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 objectives, policies,
guidelines and restrictions of the Subject Portfolio and with the provisions of
the Series' Declaration of Trust, By-laws, prospectus and
statement of additional information or any supplements thereto; 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,
Wellington Management 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
Subject Portfolio on August 1, 1999 and, with respect to any additional Subject
Portfolio, on the date of receipt by the Series of notice from Wellington
Management 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 becomes a Subject Portfolio hereunder, and shall continue in full
force and effect thereafter with respect to each Subject Portfolio only so long
as such continuance with respect to any such Portfolio is specifically 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 Board of 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
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 written notice thereof to Wellington Management and JHMLICO. This
Agreement may be terminated by Wellington Management 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 Wellington
Management.
(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; USE OF WELLINGTON MANAGEMENT'S NAME AND LOGO.
The services of Wellington Management 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 partners, officers and employees of Wellington Management 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, subject to Wellington Management's
consent (which consent shall not be unreasonably withheld and which may be
presumed unless an objection is made to a proposed use as hereinafter provided),
JHMLICO and the Series shall have the non-exclusive and non-transferrable right
to use Wellington Management's 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
printing or distributing of any materials which refer to Wellington Management,
JHMLICO shall consult with Wellington Management and shall furnish to Wellington
Management a copy of such materials. Wellington Management agrees to cooperate
with JHMLICO and to review such materials promptly. JHMLICO shall not print or
distribute such materials if Wellington Management 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 to be used.
10. AVOIDANCE OF INCONSISTENT POSITION.
In connection with the purchase and sale of portfolio securities of the
Subject Portfolio, Wellington Management and its partners, 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 Portfolio with those for
other accounts managed by Wellington Management or its affiliates, if orders are
allocated in a manner deemed equitable by Wellington Management 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 the 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:
SUB-INVESTMENT MANAGER: Wellington Management Company, LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Regulatory Affairs
Fax #: 000-000-0000
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.
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
/s/ Xxxxx Xxxxxx By: /s/ Xxxxxxx X. Xxx Xxxx
------------------------ -----------------------------
Xxxxx Xxxxxx Name: Xxxxxxx X. Xxx Xxxx
Secretary Title: Chairman
ATTEST: XXXX XXXXXXX MUTUAL LIFE
INSURANCE COMPANY
/s/ Xxxxxxxxxx Xxxxx By: /s/ Xxxxxx X. Xxxxxxx
------------------------ ----------------------------
Xxxxxxxxxx Xxxxx Name: Xxxxxx X. Xxxxxxx
Assistant Secretary Title: Vice President
ATTEST: WELLINGTON MANAGEMENT COMPANY, LLP
/s/ Xxxxxx Xxxxxxx By: /s/ Xxxxxxxx Xxxxxx
------------------------ --------------------------------
Xxxxxx Xxxxxxx Name: Xxxxxxxx Xxxxxx
Vice President Title: Senior Vice President
SCHEDULE I
FEES
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Current Net Assets Under Management Sub-Advisory Fee
----------------------------------- ----------------
On the first $25,000,000 60 basis points (0.60%) per annum
On the next $25,000,000 50 basis points (0.50%) per annum
On the next $50,000,000 40 basis points (0.40%) per annum
On amounts over $100,000,000 30 basis points (0.30%) per annum
