(Money Market)
SUB-INVESTMENT MANAGEMENT AGREEMENT
AMONG
XXXX XXXXXXX VARIABLE SERIES TRUST I
WELLINGTON MANAGEMENT COMPANY, LLP
AND
XXXX XXXXXXX LIFE INSURANCE COMPANY
SUB-INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the first day of May 2001 by and among Xxxx Xxxxxxx
Variable Series Trust I, a Massachusetts business trust (the "Trust"),
Wellington Management Company, LLP, a Massachusetts limited liability
partnership ("Wellington Management"), 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, as amended (the "1940 Act"); and
WHEREAS, JHLICO 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 Trust 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 Trust offers shares in several classes, one of which is
designated as the Money Market Fund (together with all other classes 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 12,1988 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 Fund. Wellington Management is hereby appointed and Wellington
Management hereby accepts the appointment to act as sub-investment manager to
the Money Market Fund (the "Subject Fund") effective May 1, 2001 for the period
and on the terms herein set forth, and for the compensation herein provided.
(b) Additional Subject Funds. In the event that the Trust and JHLICO
desire to retain Wellington Management to render investment advisory services
hereunder for any other Fund, they shall so notify Wellington Management in
writing. If it is willing to render such services, Wellington Management shall
notify the Trust in writing, whereupon such Fund shall become a Subject Fund
hereunder.
(c) Incumbency Certificates. Wellington Management shall furnish to
JHLICO, 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 Fund pursuant to the provisions of this
Agreement. Wellington Management shall promptly provide supplemental
certificates in connection with each additional Subject Fund (if any) and
further supplemental certificates, as needed, to reflect all changes with
respect to such authorized officers for any 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 Wellington
Management so named.
1
(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 Trust.
(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 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 Wellington Management, or of any change in
the identity of the personnel who manage the Subject Fund, (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 Trust and to JHLICO, and has adopted procedures designed to prevent
violations of such code, and (v) that it has furnished the Trust and JHLICO 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 Fund a continuing and
suitable investment program consistent with the investment objectives, policies,
guidelines and restrictions of said Fund, as established by the Trust and
JHLICO. From time to time, JHLICO or the Trust 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 Fund, and perform the functions set
forth below, (i) subject to the overall supervision, direction, control and
review of JHLICO and the Board of Trustees of the Trust, and (ii) consistent
with the applicable investment objectives, policies, guidelines and
restrictions, the provisions of the Trust's 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 JHLICO or the Trust from time to time). By its
signature below, Wellington Management acknowledges receipt of a copy of the
Trust's Declaration of Trust, By-laws, prospectus, and statement of additional
information, each as in effect on the date of this Agreement.
2
Wellington Management will, at its own expense:
(a) advise the Trust in connection with investment policy decisions to be
made by its Board of Trustees or any committee thereof regarding the Subject
Fund and, upon request, furnish the Trust with research, economic and
statistical data in connection with said Fund's investments and investment
policies;
(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 Fund;
(c) place orders for purchases and sales of portfolio investments for
the Subject Fund;
(d) give instructions to the Subject Fund's custodian concerning the
delivery of securities and transfer of cash for the Subject Fund;
(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 or prior to the close of business each day, provide JHLICO and the
custodian with trade information for each transaction effected for the Subject
Fund, 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 JHLICO with 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 its receipt of all necessary voting materials, vote all proxies
with respect to investments of the Subject Fund in accordance with Wellington
Management's proxy voting policy as most recently provided to JHLICO.
On its own initiative, Wellington Management will apprise JHLICO and the
Trust of important political and economic developments materially affecting the
marketplace or the Subject Fund, and will furnish JHLICO and the Trust's 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 Fund and Wellington Management's management thereof, to educate JHLICO
sales personnel with respect thereto, and for such other purposes as the Trust
or JHLICO may reasonably request.
3
The Trust and JHLICO will provide timely information to Wellington
Management 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 Wellington Management with monthly
accounting statements for the Subject Fund, and such other information
(including, without limitation, reports concerning the classification of Subject
Fund 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 Trust specifically
agrees to assume the expense of:
(a) brokerage commissions for transactions in the portfolio investments of
the Trust 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-ADVISORY FEES.
For all of the services rendered with respect to each Subject Fund as
herein provided, JHLICO shall pay to Wellington Management a fee (for the
payment of which the Trust shall have no obligation or liability), based on the
Current Net Assets of that Subject Fund, as set forth in Schedule I attached
hereto and made a part hereof, and as may be amended from time to time with
respect to additional Subject Funds. 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 a Subject Fund during
any calendar month, the fee with respect to such Fund 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 a Subject Fund's net assets as of the most recent
preceding day for which that Subject Fund's net assets were computed.
4
5. FUND TRANSACTIONS.
In connection with the investment and reinvestment of the assets of the
Subject Fund, Wellington Management is authorized to select the brokers or
dealers that will execute purchase and sale transactions for said Fund and to
use its best efforts to obtain the best available price and most favorable
execution with respect to all such purchases and sales of portfolio securities
for said Fund. 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 Fund 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 Fund or to Wellington
Management, and who charge a higher commission rate to the Subject Fund than may
result when allocating brokerage solely on the basis of seeking the most
favorable price and execution. 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 Fund.
6. OWNERSHIP OF INFORMATION, RECORDS, AND CONFIDENTIALITY.
The Trust shall own and control all records maintained hereunder by
Wellington Management on the Trust's behalf and, in the event of termination of
this Agreement with respect to any Fund for any reason, all records relating to
that Fund shall be promptly returned to the Trust, 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 Trust, promptly
to surrender such books and records or, at its expense, copies thereof, to the
Trust or to make such books and records available for audit or inspection by
representatives of regulatory authorities, or other persons reasonably
designated by the Trust. 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 JHLICO, 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 Trust and JHLICO 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 Trust has authorized such disclosure, or
if such disclosure is expressly required by applicable federal or state
regulatory authorities.
5
7. LIABILITY; STANDARD OF CARE.
No provision of this Agreement shall be deemed to protect Wellington
Management 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 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 Trust 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. Wellington Management shall employ only
qualified personnel to manage the Subject Fund; 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 Fund and with the
provisions of the Trust's Declaration of Trust, By-laws, prospectus and
statement of additional information or any supplements thereto; shall manage the
Subject Fund (subject to the receipt of, and based upon the information
contained in, periodic reports from JHLICO or the custodian concerning the
classification of Fund 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 Trust; 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 Fund on May 1, 2001 and, with respect to any additional Subject Fund, on
the date of receipt by the Trust of notice from Wellington Management in
accordance with Paragraph 1(b) hereof that it is willing to serve with respect
to such Fund. Unless terminated as herein provided, this Agreement shall remain
in full force and effect for two years from the date hereof with respect to the
initial Subject Fund and, with respect to each additional Subject Fund, until
two years following the date on which such Fund becomes a Subject Fund
hereunder, and shall continue in full force and effect thereafter with respect
to each Subject Fund only so long as such continuance with respect to any such
Fund is specifically approved at least annually (i) by either the Board of
Trustees of the Trust or by vote of a majority of the outstanding voting shares
of such Fund, and (ii) in either event by the vote of a majority of the Board of
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 any Subject Fund shall be effective to continue this
Agreement with respect to any such Fund notwithstanding (A) that this Agreement
has not been approved by the holders of a majority of the outstanding shares of
any other Fund affected hereby, and (B) that this Agreement has not been
approved by the vote of a majority of the outstanding shares of the 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.
6
(b) Termination. This Agreement may be terminated with respect to any
Subject Fund at any time, without payment of any penalty, by the Trust pursuant
to a vote of the Trustees of the Trust or a vote of a majority of the
outstanding shares of such Fund, which termination shall be effective
immediately upon delivery of written notice thereof to Wellington Management and
JHLICO. This Agreement may be terminated by Wellington Management on at least
ninety days' prior written notice to the Trust and JHLICO, and may be terminated
by JHLICO on at least ninety days' prior written notice to the Trust 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 Trust 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),
JHLICO and the Trust shall have the non-exclusive and non-transferrable right to
use Wellington Management'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
printing or distributing of any materials which refer to Wellington Management,
JHLICO shall consult with Wellington Management and shall furnish to Wellington
Management a copy of such materials. Wellington Management agrees to cooperate
with JHLICO and to review such materials promptly. JHLICO 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 Fund, 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 Fund 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.
7
11. AMENDMENT.
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing. No amendment of this
Agreement shall be effective with respect to any Fund until approved
specifically by (a) the Board of Trustees of the Trust, or by vote of a majority
of the outstanding shares of that Fund, and (b) by vote of a majority of those
trustees of the 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.
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-INVESTMENT MANAGER: Wellington Management Company, LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Regulatory Affairs
Fax #: 000-000-0000
JHLICO: Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Fax #: 000-000-0000
8
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.
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/ XXXXXX X. XXXXXXX
---------------------
Xxxxxx X. Xxxxxxx
Counsel By:/s/ XXXXXX X. XXX
--------------------------
Xxxxxx X. Xxx
Vice Chairman and President
ATTEST: XXXX XXXXXXX LIFE
INSURANCE COMPANY
/s/ XXXXXX X. XXXXXXX
---------------------
Xxxxxx X. Xxxxxxx
Counsel By:/s/ XXXXXXX X. XXX XXXX
------------------------
Xxxxxxx X. Xxx Xxxx
Senior Vice President
ATTEST: WELLINGTON MANAGEMENT
/s/ KATY X. XXXXX COMPANY, LLP
-----------------
Katy X. Xxxxx
Assistant Vice President
By:/s/ XXXXXXXXX X. XXXXXX
--------------------------
Name: Xxxxxxxxx X. Xxxxxx
Title: Senior Vice President
9
SCHEDULE I
FEES
----
For the Money Market Fund:
Current Net Assets Under Management Sub-Advisory Fee
----------------------------------- ----------------
On the first $250,000,000 9 basis points (0.09%) per annum
On the next $500,000,000 5 basis points (0.05%) per annum
On amounts over $750,000,000 2 basis points (0.02%) per annum
10
(Large/Mid Cap Value II)
INTERIM
SUB-INVESTMENT MANAGEMENT AGREEMENT
AMONG
XXXX XXXXXXX VARIABLE SERIES TRUST I
WELLINGTON MANAGEMENT COMPANY, LLP
AND
XXXX XXXXXXX LIFE INSURANCE COMPANY
11
INTERIM
SUB-INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the 1st day of January 2001 by and among Xxxx Xxxxxxx
Variable Series Trust I, a Massachusetts business trust (the "Trust"),
Wellington Management Company, LLP, a Massachusetts limited liability
partnership ("Wellington Management"), 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, as amended (the "1940 Act"); and
WHEREAS, JHLICO 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 Trust 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 Trust offers shares in several classes, one of which is
designated as the Large/Mid Cap Value II Fund (the "Fund" and, together with all
other classes established by the Trust, collectively referred to as the
"Portfolios"), 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
March 14, 1996, 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:
12
1. APPOINTMENT OF SUB-INVESTMENT MANAGER
(a) Appointment as Investment Adviser and Manager. Wellington Management
is hereby appointed and Wellington Management hereby accepts the appointment to
act as sub-investment manager to the Fund effective January 1, 2001 for the
period and on the terms herein set forth, and for the compensation herein
provided.
(b) Incumbency Certificates. Wellington Management shall furnish to
JHLICO, 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 Fund pursuant to the provisions of this Agreement.
On behalf of the Trust, JHLICO shall instruct the custodian for the Fund to
accept instructions with respect to the Fund from the officers of Wellington
Management so named.
(c) 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 Trust.
(d) 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 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 Wellington Management, or of any change in
the identity of the personnel who manage the Fund, (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
Trust and to JHLICO, and has adopted procedures designed to prevent violations
of such code, and (v) that it has furnished the Trust and JHLICO 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 Fund a continuing and suitable
investment program consistent with the investment objectives, policies,
guidelines and restrictions of the Fund, as established by the Trust and JHLICO.
From time to time, JHLICO or the Trust 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 Fund, and perform the functions set forth
below, (i) subject to the overall supervision, direction, control and review of
JHLICO and the Board of Trustees of the Trust, and (ii) consistent with the
applicable investment objectives, policies, guidelines and restrictions, the
13
provisions of the Trust's 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 JHLICO or the Trust from time to time). By its signature below, Wellington
Management acknowledges receipt of a copy of the Trust's 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 Trust in connection with investment policy decisions to be
made by its Board of Trustees or any committee thereof regarding the Fund and,
upon request, furnish the Trust with research, economic and statistical data in
connection with said Fund's investments and investment policies;
(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 Fund;
(c) place orders for purchases and sales of portfolio investments for
the Fund;
(d) give instructions to the Fund's custodian concerning the delivery
of securities and transfer of cash for the Fund;
(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 or prior to the close of business each day, provide JHLICO and the
custodian with trade information for each transaction effected for the Fund, 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 JHLICO with information on all transactions effected for the 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 Fund; and
14
(h) absent specific instructions to the contrary provided to it by JHLICO
and subject to its receipt of all necessary voting materials, vote all proxies
with respect to investments of the Fund in accordance with Wellington
Management's proxy voting policy as most recently provided to JHLICO.
On its own initiative, Wellington Management will apprise JHLICO and the
Trust of important political and economic developments materially affecting the
marketplace or the Fund, and will furnish JHLICO and the Trust's 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
Fund and Wellington Management'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 Wellington
Management regarding such matters as purchases and redemptions of shares in the
Fund and the cash requirements of, and cash available for investment in, the
Fund. JHLICO will timely provide Wellington Management with monthly accounting
statements for the Fund, and such other information (including, without
limitation, reports concerning the classification of Fund 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 Trust specifically
agrees to assume the expense of:
(a) brokerage commissions for transactions in the portfolio investments of
the Trust 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.
15
4. SUB-ADVISORY FEES.
For all of the services rendered with respect to the Fund as herein
provided, JHLICO shall pay to Wellington Management a fee (for the payment of
which the Trust shall have no obligation or liability), based on the Current Net
Assets of the Fund, 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 Fund 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 Fund's net assets as of the most recent preceding day for
which the Fund's net assets were computed.
5. PORTFOLIO TRANSACTIONS.
In connection with the investment and reinvestment of the assets of the
Fund, Wellington Management is authorized to select the brokers or dealers that
will execute purchase and sale transactions for the Fund and to use its best
efforts to obtain the best available price and most favorable execution with
respect to all such purchases and sales of portfolio securities for the Fund.
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 Fund 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 Fund or to Wellington Management, and who charge a higher
commission rate to the Fund 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 the Fund.
6. OWNERSHIP OF INFORMATION, RECORDS, AND CONFIDENTIALITY.
The Trust shall own and control all records maintained hereunder by
Wellington Management on the Trust's behalf and, in the event of termination of
this Agreement with respect to the Fund for any reason, all records relating to
the Fund shall be promptly returned to the Trust, 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 Trust, promptly
to surrender such books and records or, at its expense, copies thereof, to the
Trust or to make such books and records available for audit or inspection by
representatives of regulatory authorities, or other persons reasonably
designated by the Trust. Wellington Management further agrees to maintain,
16
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 JHLICO, 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 Trust and JHLICO 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 Trust 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 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 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 Trust 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. Wellington Management shall employ only
qualified personnel to manage the Fund; 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 Fund and with the provisions of the Trust's
Declaration of Trust, By-laws, prospectus and statement of additional
information or any supplements thereto; shall manage the Fund (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 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 Trust; 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.
17
8. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective on the date hereof
and, unless terminated as herein provided, shall remain in full force and effect
until the earlier of (i) 150 days from the date hereof; (ii) the date a
superseding agreement which has been approved by vote of a majority of the
outstanding voting shares of the Fund becomes effective; or (iii) such other
time as may be mutually agreed to by the parties hereto.
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 a vote of a majority of the outstanding shares of the Fund, which
termination shall be effective immediately upon delivery of written notice
thereof to Wellington Management and JHLICO. This Agreement may be terminated by
Wellington Management on at least ninety days' prior written notice to the Trust
and JHLICO, and may be terminated by JHLICO on at least ninety days' prior
written notice to the Trust 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 Trust 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),
JHLICO and the Trust shall have the non-exclusive and non-transferrable right to
use Wellington Management's name and logo in all materials relating to the 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 printing or distributing of any
18
materials which refer to Wellington Management, JHLICO shall consult with
Wellington Management and shall furnish to Wellington Management a copy of such
materials. Wellington Management agrees to cooperate with JHLICO and to review
such materials promptly. JHLICO 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
Fund, 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 Fund 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 until approved specifically by (a) the Board
of Trustees of the Trust, or by vote of a majority of the outstanding shares of
the 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.
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:
19
SUB-INVESTMENT MANAGER: Wellington Management Company, LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Regulatory Affairs
Fax #: 000-000-0000
JHLICO: Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Fax #: 000-000-0000
TRUST: Xxxx Xxxxxxx Variable Trust 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.
20
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
/s/ XXXXXX X. XXXXXXX TRUST I
---------------------
Xxxxxx X. Xxxxxxx
Counsel
By: /s/XXXXXX X. XXX
----------------
Xxxxxx X. Xxx
Title: President and Vice Chairman
ATTEST: XXXX XXXXXXX LIFE
INSURANCE COMPANY
/s/ XXXXXX X. XXXXXXX
---------------------
Xxxxxx X. Xxxxxxx
Counsel By:/s/ XXXXXX X. XXX
-----------------------
Name: Xxxxxx X. Xxx
Title: Vice President
ATTEST: WELLINGTON MANAGEMENT
COMPANY, LLP
/s/ KATY X. XXXXX
-----------------
Katy X. Xxxxx
Assistant Vice President By:/s/ XXXXXXXX X XXXXXX
-------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Senior Vice President
21
SCHEDULE I
FEES
----
Current Net Assets Under Management Sub-Advisory Fee
On the first $100,000,000 50 basis points (0.50%) per annum
On the next $150,000,000 47.5 basis points (0.475%) per annum
On the next $250,000,000 45 basis points (0.45%) per annum
On the next $250,000,000 42.5 basis points (0.425%) per annum
On amounts over $750,000,000 40 basis points (0.40%) per annum
22
