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Exhibit 23(d)23
(Real Estate Equity Fund)
SUB-MANAGEMENT AGREEMENT
AMONG
XXXX XXXXXXX VARIABLE SERIES TRUST I
RREEF AMERICA L.L.C.
AND
XXXX XXXXXXX LIFE INSURANCE COMPANY
SUB-MANAGEMENT AGREEMENT
AGREEMENT made as of the first day of August, 2003 by and among Xxxx
Xxxxxxx Variable Series Trust I, a Massachusetts business trust (the "Trust"),
RREEF America L.L.C., a Delaware limited liability company ("RREEF"), and Xxxx
Xxxxxxx Life Insurance Company, a Massachusetts corporation ("JHLICO").
WHEREAS, the Trust 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 RREEF are each engaged in the business of rendering
investment advice under the Investment Advisers Act of 1940; and
WHEREAS, the Trust offers shares in several series, one of which is
designated as the Real Estate Equity Fund (together with all other series
established by the Trust, collectively referred to as the "Funds"), each of
which pursues its investment objectives through separate investment policies;
and
WHEREAS, the Trust has retained JHLICO to render investment management
services to the Trust pursuant to an Investment Management Agreement dated as of
April
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12, 1988 (the "Investment Management Agreement"), pursuant to which it may
contract with one or more sub-managers with respect to the assets of the Real
Estate Equity Fund (the "Subject Fund"), one of the Funds of the Trust.
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF SUB-MANAGER
(a) Subject Fund. RREEF is hereby appointed and RREEF hereby accepts the
appointment to act as an investment adviser and manager to the Subject Fund for
the period and on the terms herein set forth, for the compensation herein
provided.
(b) Incumbency Certificates. RREEF shall furnish to JHLICO, immediately
upon execution of this Agreement, a certificate of a senior officer of RREEF
setting forth (by name and title, and including specimen signatures) those
officers of RREEF who are authorized to make investment decisions for the
Subject Fund pursuant to the provisions of this Agreement. RREEF shall promptly
provide supplemental certificates, as needed, to reflect all changes with
respect to such authorized officers for the Subject Fund. On behalf of the
Trust, JHLICO shall instruct the custodian for the Subject Fund to accept
instructions with respect to the Subject Fund from the officers of RREEF so
named.
(c) Independent Contractor. RREEF 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 Trust.
(d) RREEF's Representations. RREEF 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 JHLICO
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 JHLICO of any material change in the ownership of RREEF, or
of any change in the identity of the personnel who manage the Subject Assets,
(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 will amend such code, or
adopt a supplementary code of ethics, to the extent required under Section 406
of the Xxxxxxxx-Xxxxx Act of 2002 and the rules promulgated thereunder, and has
and will provide true and complete copies of each such code to the Trust and to
JHLICO, and has and will adopt procedures designed to prevent violations of any
such codes, (v) that it has furnished the Trust and JHLICO each with a copy of
RREEF's Form ADV, as most recently filed with the SEC, and will promptly furnish
updated copies at least annually, and (vi) that it presently maintains, and
shall continue to maintain as long as this Agreement is in effect, sufficient
Errors & Omissions and fidelity bond insurance coverages to provide coverage to
JHLICO, the Trust and the Subject Fund for any
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claims or losses arising from, or in connection with, the activities of RREEF
and its officers and employees with respect to the Subject Fund.
2. PROVISION OF INVESTMENT MANAGEMENT SERVICES.
RREEF will provide for the Subject Fund's assets as may be designated to it
by JHLICO from time to time (the "Subject Assets") a continuing and suitable
investment program consistent with the investment policies, objectives and
restrictions of said Fund, as set forth in the Subject Fund's current Prospectus
and Statement of Additional Information. From time to time, JHLICO or the Trust
may provide RREEF in writing (including, without limit, electronic
communication) with additional or amended investment policies, guidelines and
restrictions. RREEF, as a sub-manager, will manage the investment and
reinvestment of the Subject Assets, and perform the functions set forth below,
subject to the overall supervision, direction, control and review of JHLICO and
the Board of Trustees of the Trust, consistent with the applicable investment
policies, guidelines and restrictions, the provisions of the Trust's Declaration
of Trust, Bylaws, prospectus, statement of additional information (each as in
effect and provided to RREEF 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 directions
or instructions, each as delivered to RREEF in writing by JHLICO or the Trust
from time to time). In the event that, in addition to RREEF, other investment
advisers or sub-managers are appointed by the Trust or JHLICO to render
investment advisory services to the Subject Fund, JHLICO and the Trust each
acknowledges and agrees that RREEF will not be held responsible for such other
investment advisers' or sub-managers' compliance with policies and limitations
applicable to the Subject Fund. By its signature below, RREEF acknowledges
receipt of a copy of the Trust's Declaration of Trust, Bylaws, prospectus, and
statement of additional information, each as listed on Schedule II hereto and as
in effect on the date of this Agreement.
RREEF will, at its own expense:
(a) advise the Subject Fund in connection with investment policy decisions
regarding the Subject Assets and, upon request, furnish the Trust with research,
economic and statistical data in connection with investments and investment
policies for the Subject Assets;
(b) submit such reports and information as JHLICO or the Trust's Board of
Trustees may reasonably request, to assist the custodian in its determination of
the market value of securities held in the Subject Assets;
(c) place orders for purchases and sales of portfolio investments for the
Subject Assets;
(d) give instructions to the Subject Fund's custodian concerning the
delivery of securities and transfer of cash for the Subject Assets;
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(e) maintain and preserve the records relating to its activities hereunder
required by the 1940 Act to be maintained and preserved by the Trust, to the
extent not maintained by the custodian, transfer agent or JHLICO;
(f) at the close of business each day, provide JHLICO and the custodian
with copies of trade tickets, and a daily summary sufficient to verify trade
data received by the custodian from third parties for each transaction effected
for the Subject Assets;
(g) as soon as practicable following the end of each calendar month,
provide JHLICO with written information on all transactions effected for the
Subject Fund during the month, a summary listing all investments held in such
Fund as of the last day of the month, and such other information as JHLICO may
reasonably request in connection with the accounting services that JHLICO
provides for the Subject Fund; and
(h) absent specific instructions to the contrary provided to it by JHLICO
and subject to RREEF's receipt of all necessary voting materials, vote all
proxies with respect to investments of the Subject Assets in accordance with
RREEF's proxy voting policy as most recently provided to JHLICO.
On its own initiative, RREEF will apprise JHLICO and the Trust of important
political and economic developments materially affecting the marketplace or the
Subject Assets, and will furnish JHLICO and the Trust's Board of Trustees from
time to time such information as is appropriate for this purpose. RREEF will
also make its personnel available in Boston or other reasonable locations as
often as annually, and at reasonable times, to discuss the Subject Assets and
RREEF's management thereof, to educate JHLICO sales personnel with respect
thereto, and for such other purposes as the Trust or JHLICO may reasonably
request.
The Trust and JHLICO will provide timely information to RREEF 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 Subject Fund.
JHLICO will timely provide RREEF with copies of monthly accounting statements
for the Subject Fund, and such other information (including, without limitation,
reports concerning the classification of portfolio securities for purposes of
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), and
Treasury Regulations Section 1.817) as may be reasonably necessary or
appropriate in order for RREEF to perform its responsibilities hereunder.
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3. ALLOCATION OF EXPENSES.
Each party to this Agreement shall bear the costs and expenses of
performing its obligations hereunder. In this regard, the Trust specifically
agrees to assume the expense of:
(a) brokerage commissions for transactions in the portfolio investments of
the Trust, including the Subject Assets, 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 Trust to federal, state or other governmental agencies; and
(d) interest payable on the Trust's borrowings.
Nothing in this Agreement shall alter the allocation of expenses and costs
agreed upon between the Trust and JHLICO in the Investment Management Agreement
or any other agreement to which they are parties.
4. SUB-MANAGEMENT FEES.
For all of the services rendered with respect to the Subject Assets as
herein provided, JHLICO shall pay to RREEF a fee (for the payment of which the
Trust shall have no obligation or liability), based on the Current Net Assets
(as defined below) of the Subject Assets, 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 Assets
during any calendar month, the fee with respect to the Subject Assets accrued to
but excluding the date of termination shall be paid promptly following such
termination. For purposes of computing the amount of sub-management fee accrued
for any day, "Current Net Assets" shall mean the net assets of the Subject
Assets as of the most recent preceding day for which the Subject Fund's net
assets were computed.
5. PORTFOLIO TRANSACTIONS.
In connection with the investment and reinvestment of the Subject Assets,
RREEF is authorized to select the brokers or dealers that will execute purchase
and sale transactions for the Subject Assets and to use its best efforts to
obtain the most favorable price and execution with respect to all such purchases
and sales of portfolio securities for said Subject Assets. Such brokers or
dealers may be affiliates of RREEF, provided such transactions comply with the
1940 Act and the procedures approved by the Trust's Board of Trustees. RREEF
shall maintain records adequate to demonstrate compliance with this requirement.
Subject to this primary requirement, and maintaining as its first
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consideration the benefits to the Subject Fund and its shareholders, RREEF 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 and RREEF, and who may 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. RREEF shall determine in good faith that any
such higher cost was reasonable in relation to the value of the brokerage and
research services provided to RREEF with respect to the Subject Assets.
RREEF will not retain, but shall pay over or credit to the Subject Fund,
any tender offer solicitation fees or similar payments received in connection
with the tender of investments of the Subject Fund. The foregoing sentence,
however, shall not prevent affiliates of RREEF from receiving fees or payments
in connection with transactions in which such affiliates have been retained to
act as financial adviser, dealer, manager or other capacity. In addition, RREEF
is hereby authorized to purchase securities from an unaffiliated syndicate
member in an underwriting in which an affiliated broker or dealer participates
in the management activities of such syndicate, provided such transactions
comply with the 1940 Act and the procedures approved by the Trust's Board of
Trustees. RREEF shall maintain records adequate to demonstrate compliance with
this requirement.
6. OWNERSHIP OF INFORMATION, RECORDS, AND CONFIDENTIALITY.
The Trust shall own and control all records maintained hereunder by RREEF
on the Trust's behalf and, in the event of termination of this Agreement with
respect to the Subject Assets for any reason, all records relating to the
Subject Fund shall be promptly returned to the Trust, free from any claim or
retention of rights by RREEF, provided that (subject to the last paragraph of
this Section 6) RREEF may retain copies of such records. RREEF also agrees, upon
request of the Trust, promptly to surrender such books and records or, at its
expense, copies thereof, to the Trust or make such books and records available
for audit or inspection, during normal business hours, by representatives of
regulatory authorities or other persons reasonably designated by the Trust.
RREEF 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, and to supply all information requested by
any insurance regulatory authorities to determine whether applicable insurance
laws and regulations are being complied with. RREEF shall supply the Board of
Trustees and officers of the Trust and JHLICO with all statistical information
regarding investments made on behalf of the Subject Assets which is reasonably
required and requested by them and reasonably available to RREEF.
RREEF shall not disclose or use any records or non-public information
obtained pursuant hereto in any manner whatsoever except as expressly authorized
herein, and will keep confidential any non-public information obtained pursuant
hereto, and disclose such non-public information only if the Trust has
authorized such
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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 RREEF or JHLICO
against any liability to the Trust 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; or any failure to comply with section 1(d)(i), (ii), (iii), (iv) or
(vi) of this Agreement. Nor shall any provision hereof be deemed to protect any
trustee or officer of the Trust against any such liability to which he or she
might otherwise be subject by reason of any willful misfeasance, bad faith or
gross negligence in the performance of his or her duties or the reckless
disregard of his or her obligations and duties. RREEF shall employ only
qualified personnel to manage the Subject Assets; 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
policies, guidelines and restrictions of the Subject Fund and with the
provisions of the Trust's Declaration of Trust, Bylaws, prospectus and statement
of additional information; shall manage the Subject Assets (subject to the
receipt of, and based upon the information contained in, periodic reports from
JHLICO or the custodian concerning the classification of portfolio securities
for such purposes) as a regulated investment company in accordance with
Subchapter M of the Code and Treasury Regulations Section 1.817-5(b); shall act
at all times in the best interests of the Subject Fund; 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, RREEF
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 by the Subject Assets or the Subject Fund.
8. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective on the date hereof and,
unless terminated as herein provided, this Agreement shall remain in full force
and effect for two years from the date hereof and shall continue in full force
and effect thereafter so long as such continuance is approved at least annually
(a) by either the Board of Trustees of the Trust 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 Trust 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 the Subject Fund shall be
effective to continue this Agreement with respect to any such Fund
notwithstanding (i) that this Agreement has not been approved by the holders of
a majority of the outstanding shares of any other Fund affected hereby, and (ii)
that this Agreement has not been approved by
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the vote of a majority of the outstanding shares of the Trust, 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 at any time, without
payment of any penalty, by the Trust pursuant to a vote of the trustees of the
Trust or by a vote of a majority of the outstanding shares of the Subject Fund,
which termination shall be effective immediately upon delivery of notice thereof
to RREEF and JHLICO. This Agreement may be terminated by RREEF on at least sixty
days' prior written notice to the Trust and JHLICO, or by JHLICO on at least
sixty days' prior written notice to the Trust and RREEF.
(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 RREEF'S NAME AND LOGO.
The services of RREEF to the Trust hereunder 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, managers, officers and employees of RREEF 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 to other
investment advisory clients.
During the term of this Agreement, JHLICO and the Trust shall have the
non-exclusive and non-transferable right to use RREEF's name and logo in all
materials relating to the Subject Fund, including all prospectuses, proxy
statements, reports to shareholders, sales literature and other written
materials prepared for distribution to shareholders of the Trust or the public.
However, prior to distribution of any materials which refer to RREEF, JHLICO
shall consult with RREEF and shall furnish to RREEF a copy of such materials.
RREEF agrees to cooperate with JHLICO and to review such materials promptly.
JHLICO shall not distribute such materials if RREEF 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 used.
10. AVOIDANCE OF INCONSISTENT POSITION.
Except as permitted by the 1940 Act, the rules promulgated thereunder, and
the procedures adopted by the Trust's Board of Trustees (as provided in writing
to RREEF), RREEF and its directors, managers, officers and employees will not
act as principal or agent or receive any commission in connection with the
purchase and sale of portfolio securities of the Subject Fund. Nothing in this
Agreement, however, shall preclude the
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combination of orders for the sale or purchase of portfolio securities of the
Subject Fund with those for other registered investment companies and portfolios
or accounts of other advisory clients managed by RREEF or its affiliates, if
such orders are allocated among the accounts in a manner deemed equitable by
RREEF; provided however, that RREEF will not consult with any other sub-manager
to the Subject Fund or to any other Fund of the Trust concerning transactions of
the Subject Assets 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.
11. ENTIRE AGREEMENT; AMENDMENT.
This Agreement constitutes the entire agreement between the parties and
supersedes in their entirety all prior agreements between the parties with
respect to the subject matter hereof. 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 until approved
specifically by (a) the Board of Trustees of the Trust, or by vote of a majority
of the outstanding shares of the Subject Fund, and (b) by vote of a majority of
those trustees of the Trust 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, unless otherwise permitted by the SEC, the 1940 Act or the rules
promulgated thereunder.
12. LIMITATION OF LIABILITY.
It is expressly agreed that the obligations of the Trust hereunder shall
not be binding upon any of the trustees, shareholders, officers, agents or
employees of the Trust personally, but only bind the trust property of the
Trust, as provided in the Trust's 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-MANAGER: RREEF America L.L.C.
000 Xxxxx Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Fax #: 000-000-0000
JHLICO: Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
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X.X. Xxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Fax #: 000-000-0000
TRUST: 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, without the prior written consent of the other parties; provided, however,
that any assignment that results in a change of actual control or management of
RREEF or of the investment manager of the Subject Fund (within the meaning of
Rule 2a-6 under the 0000 Xxx) shall terminate this Agreement.
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 X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxx Xxxx
------------------------------------- ------------------------------------
Title: Chairman
ATTEST: XXXX XXXXXXX LIFE INSURANCE COMPANY
/s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------- ------------------------------------
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Title: Senior Vice President and Chief
Investment Strategist
ATTEST: RREEF AMERICA L.L.C.
/s/ Xxxxx Xxxxxxxx By: /s/ Xxxx Xxxxxxxxx
------------------------------------- ------------------------------------
Managing Director & General Counsel Title: /s/ Managing Director & Principal
SCHEDULE I
(Effective August 1, 2003)
FEES
For the Real Estate Equity Fund:
Current Net Assets Under Management Sub-Management Fee
----------------------------------- ------------------
On all Subject Assets 45 basis points (0.45%) per annum
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SCHEDULE II
DECLARATION OF TRUST, BY-LAWS, PROSPECTUS AND STATEMENT OF
ADDITIONAL INFORMATION
Xxxx Xxxxxxx Variable Series Trust I
Declaration of Trust dated February 21, 1988
Restated and Amended By-Laws dated September 27, 2000
Prospectus dated May 1, 2003
Statement of Additional Information dated May 1, 2003
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