Exhibit 5(a)(vii)
LIBERTY VARIABLE INVESTMENT TRUST
[SOGEN] OVERSEAS FUND, VARIABLE SERIES
MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT ("Agreement"), made this __ day of January, 1999,
between LIBERTY VARIABLE INVESTMENT TRUST, a business trust organized under the
laws of The Commonwealth of Massachusetts (the "Trust"), on its own behalf and
on behalf of the [SoGen] Overseas Fund, Variable Series (the "Fund"), and
LIBERTY ADVISORY SERVICES CORP., a corporation organized under the laws of The
Commonwealth of Massachusetts (the "Manager").
WHEREAS, the Trust has been organized as an open-end management
investment company registered as such under the Investment Company Act of 1940,
as amended ("Investment Company Act"), and is authorized to issue shares of
beneficial interest in one or more separate series (each representing interests
in a separate portfolio of securities and other assets), including the Fund,
which shares are to be issued and sold to and held by various separate accounts
of Keyport Life Insurance Company ("Keyport"), Independence Life & Annuity
Company ("Independence") and Liberty Life Assurance Company of Boston ("Liberty
Life") or separate accounts of other insurance companies that are affiliated or
are not affiliated with Keyport (collectively, "Participating Insurance
Companies");
WHEREAS, the Trust heretofore has created ten other separate funds
which are covered by Management Agreements among the Trust, on its own behalf
and on behalf of such other funds, and the Manager; and the Trust may in the
future create additional fund(s) that may be covered by other separate
agreements;
WHEREAS, the Trust desires the Manager to render certain administrative
services and to render total investment management services to the Trust and the
Fund, all in the manner and on the terms and conditions hereinafter set forth;
WHEREAS, the Trust authorizes the Manager to enter into sub-advisory
agreements with one or more firms registered as investment advisers under the
Investment Advisors Act of 1940, as amended (the "Investment Adviser's Act"), or
qualifying as a "bank" within the meaning of the Investment Adviser's Act and
thereby exempted from the requirement to be so registered, to manage all or a
portion of a Fund's assets, as determined by the Manager from time to time (a
"Sub-Adviser"); and
WHEREAS, the Manager is registered as an investment adviser under the
Investment Adviser's Act, and desires to provide services to the Trust and the
Fund in consideration of and on the terms and conditions hereinafter set forth;
NOW, THEREFORE, the Trust, on its own behalf and on behalf of the Fund,
and the Manager hereby agree as follows:
1. Employment of the Investment Adviser.
The Trust hereby employs the Manager (i) to provide certain
administrative and limited oversight services and (ii) to provide investment
management and related services to the Trust and the Fund, all in the manner set
forth in Section 2 of this Agreement, subject to the direction of the Trustees,
and for the period, in the manner, and on the terms set forth hereinafter. The
Manager hereby accepts such employment and agrees during such period to render
the services and to assume the obligations herein set forth. The Manager shall
for all purposes herein be deemed to be an independent contractor and, except as
expressly provided or authorized (whether herein or otherwise), shall have no
authority to act for or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
2. Obligations of, and Services to be Provided by, the Manager.
The Manager undertakes to provide the services hereinafter set
forth and to assume the following obligations:
A. Administrative Services.
(a) The Manager will provide general administrative services as
hereinafter set forth ("Administrative Services"), all subject to the overall
direction and control of the Board of Trustees of the Trust (the "Board").
(b) Such Administrative Services shall not include investment
advisory, custodian, underwriting and distribution, transfer agency or pricing
and bookkeeping services, but shall include; (i) provision of office space,
equipment and facilities necessary in connection with the services to be
performed hereunder and the maintenance of the headquarters of the Trust; (ii)
maintenance of the corporate books and records of the Trust (other than those of
its records maintained by the Sub-Advisers referred to in paragraph 2(B)(c)
below, the transfer agent, the custodian and the pricing and bookkeeping agent);
(iii) administration of all dealings and relationships with the Trustees for
meetings of the Board, the scheduling of such meetings and the conduct thereof;
(iv) preparation and filing of proxy materials and administration of
arrangements for meetings of shareholders or beneficial owners of the Funds; (v)
preparation and filing of all required reports and all updating and other
amendments to the Trust's Registration Statement under the Investment Company
Act, the Securities Act of 1933, as amended (the "Securities Act"), and the
rules and regulations thereunder; (vi) calculation of distributions required or
advisable under the Investment Company Act and the Internal Revenue Code of
1986, as amended (the "Code"); (vii) periodic computation and reporting to the
Trustees of each Fund's compliance with diversification and other portfolio
requirements of the Investment Company Act and the Code; (viii) development and
implementation of general shareholder and beneficial owner correspondence and
communications relating to the Funds, including the preparation and filing of
shareholder and beneficial owner reports as are required or deemed
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advisable; and (ix) general oversight of the custodial, net asset value
computation, portfolio accounting, financial statement preparation, legal, tax
and accounting services performed for the Trust or the Funds by others.
It is understood that the Manager may, in its discretion and at its
expense, delegate some or all of its administrative duties and responsibilities
under this subsection 2A to its affiliate, Liberty Financial Companies, Inc.
("LFC"), or any majority or greater owned subsidiaries of LFC.
B. Investment Advisory Services.
(a) The Manager shall have responsibility for the management and
investment of the assets of the Fund, subject to and in accordance with the
separate investment objectives, policies and limitations of the Fund, as
provided in the Trust's Prospectus and Statement of Additional Information and
governing instruments, as amended from time to time, and any directions and
policies which the Trustees may issue to the Manager from time to time.
(b) The Manager shall provide a continuous investment program for
the Fund, shall revise each such program as necessary, and shall monitor
implementation of the program.
(c) The Manager may delegate its investment responsibilities under
paragraph 2B(a) with respect to the Fund to one or more persons or companies
registered as investment advisers under the Investment Adviser's Act or
qualifying as a "bank" within the meaning of the Investment Adviser's Act and
thereby exempted from the requirement to be so registered ("Sub-Advisers")
pursuant to an agreement among the Trust, such Fund and each Sub-Adviser
("Sub-Advisory Agreement"). Each Sub-Advisory Agreement may provide that the
Sub-Adviser, subject to the control and supervision of the Trustees and the
Manager, shall have full investment discretion for the Fund and shall make all
determinations with respect to the investment of the Fund's assets or any
portion thereof specified by the Manager. Any delegation of duties pursuant to
this paragraph shall comply with any applicable provisions of Section 15 of the
Investment Company Act, except to the extent permitted by any exemptive order of
the Securities and Exchange Commission or similar relief.
(d) The Manager shall be solely responsible for paying the fees of
each Sub-Adviser from the fees it collects as provided in paragraph 6 below.
(e) The Manager shall evaluate possible Sub-Advisers and shall
advise the Trustees of the candidates which the Manager believes are best suited
to invest the assets of each Fund; shall monitor and evaluate the investment
performance of each Sub-Adviser; shall recommend changes of or additions of
Sub-Advisers when appropriate; and shall coordinate the investment activities of
the Sub-Advisers.
(f) It is understood that the Manager may seek advice with respect
to the performance of any or all of its duties under paragraphs 2B(b) and (c)
from a person or company ("Consultant") pursuant to an agreement among the
Manager, the Trust and the Consultant (a
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"Fund Consulting Agreement"). A Fund Consulting Agreement may provide that the
Consultant, subject to the control and supervision of the Trustees and the
Manager, shall provide assistance to the Manager with respect to each Fund's
investment program, the selection, monitoring and evaluation of Sub-Advisers and
the allocation of each Fund's assets to the Sub-Advisers.
(g) The Funds shall be solely responsible for paying the fees of
any Consultant.
(h) The Manager shall render regular reports to the Trustees
relating to the performance of its duties specified in paragraphs 2B(a), (b) and
(c).
C. Expenses Borne By Manager.
To the extent necessary to perform its obligations under this
Agreement, the Manager, at its own expense, shall furnish executive and other
personnel and office space, equipment and facilities, and shall pay any other
expenses incurred by it, in connection with the performance of its duties
hereunder, except that the Trust or the Fund, as appropriate, shall reimburse
the Manager for its out-of-pocket costs, including telephone, postage and
supplies, incurred by it in connection with communications with shareholders and
beneficial owners of the Fund. The Manager shall pay all salaries, fees and
expenses of Trustees or officers of the Trust who are employees of the Manager.
The Manager shall not be obligated to bear any other expenses incidental to the
operations and business of the Trust. The Manager shall not be required to pay
or provide any credit for services provided by the Trust's custodian, transfer
agent or other agents.
D. Provision of Information Necessary for Preparation of Registration
Statement Amendments and Other Materials.
The Manager will make available and provide such information as
the Trust may reasonably request for use in the preparation of its Registration
Statement, reports and other documents required by federal laws and any
securities and insurance laws of the other states and other jurisdictions in
which the Trust's shares are sold.
E. Code of Ethics.
The Manager has adopted a written code of ethics complying with
the requirements of Rule 17j-1 under the Investment Company Act and has provided
the Trust with a copy of the code of ethics and evidence of its adoption. Within
forty-five (45) days of the end of the last calendar quarter of each year while
this Agreement is in effect, an executive officer of the Manager shall verify to
the Trustees that the Manager has complied with the requirements of Rule 17j-1
during the previous year and that there has been no violation of the Manager's
code of ethics or, if such a violation has occurred, that appropriate action was
taken in response to such violation. Upon the written request of the Trust, the
Manager shall permit the Trust to examine the reports required to be made to the
Manager by Rule 17j-1(c)(1).
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F. Disqualification.
The Manager shall immediately notify the Trustees of the
occurrence of any event which would disqualify the Manager from serving as an
investment adviser of an investment company pursuant to Section 9(a) of the
Investment Company Act or any other applicable statute or regulation.
G. Other Obligations and Service.
The Manager shall make its officers and employees available to the
Trustees and officers of the Trust for consulting and discussions regarding the
management of the Trust and its investment activities.
3. Execution and Allocation of Portfolio Brokerage.
A. The Manager, subject to the control and direction of the
Trustees, and any Sub-Advisers, subject to the control and direction of the
Trustees and the Manager, shall have authority and discretion, as appropriate,
to select brokers and dealers to execute portfolio transactions for each Fund,
and for the selection of the markets on or in which the transactions will be
executed.
B. In acting pursuant to paragraph 3A, the Manager and the
Sub-Advisers may place orders through such brokers and dealers in conformity
with the policy with respect to brokerage set forth in the Trust's then
effective Registration Statement.
C. It is understood that the Manager or a Sub-Adviser may, to the
extent permitted by applicable laws and regulations, aggregate securities to be
sold or purchased for a Fund and for other clients in order to obtain the most
favorable price and efficient execution. In that event, allocation of the
securities purchased or sold, as well as expenses incurred in the transaction,
will be made by the Manager or Sub-Adviser, as the case may be, in the manner it
considers to be the most equitable and consistent with its fiduciary obligations
to the Trust and to its other clients, and in conformity with any applicable
policies adopted by the Board of Trustees.
D. The Manager shall provide such reports as the Trustees may
reasonably request with respect to each Fund's total brokerage and the manner in
which that brokerage was allocated.
4. Expenses of the Trust.
It is understood that the Trust (or each of its funds (including
the Fund), where applicable) will pay, or will enter into arrangements that
require third parties to pay, all of the expenses of the Trust or such funds,
other than those expressly assumed by the Manager herein, including without
limitation:
A. Advisory, sub-advisory and administrative fees;
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B. Fees for services of independent public accountants;
C. Legal and consulting fees;
D. Fees for transfer agent, custodian and portfolio
recordkeeping and tax information services;
E. Expenses of periodic calculations of the funds' net asset
values and of equipment for communication among the funds'
custodian, transfer agent and others;
F. Taxes and the preparation of the funds' tax returns;
G. Brokerage fees and commissions;
H. Interest;
I. Costs of Board of Trustees and shareholder meetings;
J. Updates and printing of prospectuses and reports to
shareholders;
K. Fees for filing reports with regulatory bodies and the
maintenance of the Trust's existence;
L. Membership dues for industry trade associations;
M. Fees to federal authorities for the registration of the
shares of the funds;
N. Fees and expenses of Trustees who are not directors,
officers, employees or stockholders of the Manager of its
affiliates;
O. Distribution fees of the Fund under a distribution plan
adopted pursuant to Rule 12b-1 under the Investment Company
Act;
P. Insurance and fidelity bond premiums; and
Q. Litigation and other extraordinary expenses of a
non-recurring nature.
5. Activities and Affiliates of the Manager.
A. The Trust acknowledges that the Manager or one or more of its
affiliates may have investment or administrative responsibilities or render
investment advice to or perform other investment advisory services for other
individuals or entities, and that the Manager, its affiliates or any of its or
their directors, officers, agents or employees may buy, sell or trade in
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securities for its or their respective accounts ("Affiliated Accounts"). Subject
to the provisions of paragraph 3, the Trust agrees that the Manager or its
affiliates may give advice or exercise investment responsibility and take such
other action with respect to Affiliated Accounts which may differ from the
advice given or the timing or nature of action with respect to the Fund,
provided that the Manager acts in good faith. The Trust acknowledges that one or
more of the Affiliated Accounts may at any time hold, acquire, increase,
decrease, dispose of or otherwise deal with positions in investments in which
the Fund may have an interest. The Manager shall have no obligation to recommend
for the Fund a position in any investment which an Affiliated Account may
acquire, and the Trust shall have no first refusal, co-investment or other
rights in respect of any such investment, either for the Fund or otherwise.
B. Subject to and in accordance with the Declaration of Trust and
By-Laws of the Trust as currently in effect and the Investment Company Act and
the rules thereunder, it is understood that Trustees, officers and agents of the
Trust and shareholders of the Trust are or may be interested persons as defined
by the Investment Company Act ("Interested Persons") of the Manager or its
affiliates as directors, officers, agents and shareholders of the Manager or its
affiliates; that directors, officers, agents and shareholders of the Manager or
its affiliates are or may be Interested Persons of the Trust as Trustees,
officers, agents, shareholders or otherwise; that the Manager or its affiliates
may be Interested Persons of the Trust as shareholders or otherwise; and that
the effect of any such interests shall be governed by said Declaration of Trust,
By-Laws and the Investment Company Act and the rules thereunder.
6. Compensation of the Manager.
For all services to be rendered and payments made pursuant to this
Agreement, the Trust, on its own behalf and on behalf of Fund, will pay the
Manager monthly in arrears a fee at an annual rate equal to 0.75% of the net
asset value of the Fund. The fee shall be accrued for each calendar day and the
sum of the daily fee accruals shall be paid monthly on or before the tenth day
of the following calendar month. The daily accruals of the fee will be computed
by (i) multiplying the annual percentage rate referred to above by the fraction
the numerator of which is one and the denominator of which is the number of
calendar days in the year, and (ii) multiplying the product obtained pursuant to
clause (i) above by the net asset value of the Fund as determined in accordance
with the Trust's Prospectus as of the previous business day on which the Fund
was open for business. The foregoing fee shall be prorated for any month during
which this Agreement is in effect for only a portion of the month.
7. Liabilities of the Manager.
A. Except as provided below, in the absence of willful
misfeasance, bad faith, gross negligence, or reckless disregard of obligations
or duties hereunder on the part of the Manager, the Manager shall not be subject
to liability to the Trust or to any shareholder of the Trust for any act or
omission in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale of any
security.
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B. The Manager shall indemnify and hold harmless the Trust from
any loss, cost, expense or damage resulting from the failure of any Sub-Advisor
to comply with (i) any statement included in the Prospectus and Statement of
Additional Information of the Trust, or (ii) instructions given by the Manager
to any Sub-Advisor for the purpose of ensuring the Trust's compliance with
securities, tax and other requirements applicable to the Trust's business and
the investment activities of its Funds; provided, however, that the
indemnification provided in this paragraph 7B shall apply only to the extent
that a Sub-Adviser is liable to the Trust and, after demand by the Trust, is
unable or refuses to discharge its obligations to the Trust.
C. No provision of this Agreement shall be construed to protect
any Trustee or officer of the Trust, or the Manager, from liability in violation
of Sections 17(h) and (i) of the Investment Company Act.
8. Effective Date: Term.
This Agreement shall become effective on the later of (i) the date
first written above or (ii) the date on which the offer and sale of shares of
the Fund has been registered under the Securities Act and the Investment Company
Act pursuant to an effective Registration Statement of the Trust on Form N-1A
and shall continue until January , 2001, and from year to year thereafter, but
only so long as such continuance is specifically approved at least annually by a
vote of the Trustees, including the vote of a majority of the Trustees who are
not interested persons of the Trust, cast in person at a meeting called for the
purpose of voting on such approval, or by vote of a majority of the outstanding
voting securities. The aforesaid provision shall be construed in a manner
consistent with the Investment Company Act and the rules and regulations
thereunder.
9. Assignment.
No assignment of this Agreement shall be made by the Manager, and
this Agreement shall terminate automatically in the event of any such
assignment. The Manager shall notify the Trust in writing in advance of any
proposed change of control to enable the Trust to take the steps necessary to
enter into a new advisory contract.
10. Amendment.
This Agreement may be amended at any time, but only by written
Agreement between the Manager and the Trust, which is subject to the approval of
the Trustees of the Trust and the shareholders of any affected Fund in the
manner required by the Investment Company Act and the rules thereunder.
11. Termination.
This Agreement:
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(a) may at any time be terminated without payment of any
penalty, by the Trust (by the Board of Trustees of
the Trust or by the vote of a majority of the
outstanding voting securities of the Fund) on sixty
(60) days' written notice to the Manager;
(b) shall immediately terminate in the event of its assignment;
and
(c) may be terminated by the Manager on sixty (60) days written
notice to the Trust.
12. Definitions.
As used in this Agreement, the terms "affiliated person,"
"assignment," "control," "interested person" and "vote of a majority of the
outstanding voting securities" shall have the meanings set forth in the
Investment Company Act and the rules and regulations thereunder, subject to any
applicable orders of exemption issued by the SEC.
13. Notice.
Any notice under this Agreement shall be given in writing
addressed and delivered or mailed postpaid to the other party to this Agreement
at its principal place of business.
14. Severability.
If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
15. Shareholder Liability.
The Manager is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Declaration of Trust of the Trust and
agrees that obligations assumed by the Trust pursuant to this Agreement shall be
limited in all cases to the Trust and its assets, and if the liability relates
to one or more Funds, the obligations thereunder shall be limited to the
respective assets of such Funds. The Manager further agrees that it shall not
seek satisfaction of any such obligation from the shareholders of the Funds, nor
from the Trustees or any individual Trustee of the Trust.
16. Governing Law.
This Agreement shall be interpreted under, and the performance of
the Manager under this Agreement shall be consistent with, the provisions of the
Agreement and Declaration of Trust and By-Laws of the Trust, the terms of the
Investment Company Act, applicable rules and regulations thereunder, the Code
and regulations thereunder, and the Trust's Prospectus and Statement of
Additional Information, in each case as from time to time in effect. The
provisions of this Agreement shall be construed and interpreted in accordance
with the domestic substantive
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laws of The Commonwealth of Massachusetts without giving effect to any choice or
conflict of laws rules or provisions that would result in the application of the
domestic substantive laws of any other jurisdiction; provided, however, that if
such law or any of the provisions of this Agreement conflict with the applicable
provisions of the Investment Company Act, the latter shall control.
17. Use of Manager's Name.
The Trust may use the name "Liberty" or any other name derived
from the name "Liberty" only for so long as this Agreement (or another similar
management agreement pertaining to other series funds of the Trust) or any
extension, renewal, or amendment hereof (or thereof) remains in effect,
including any similar agreement with any organization that shall have succeeded
to the business of the Manager. At such time as this Agreement (and each other
similar agreement pertaining to such other series funds) or any extension,
renewal or amendment hereof (or thereof), or each such other similar successor
organization agreement shall no longer be in effect, the Trust will cease to use
any name derived from the name "Liberty," any name similar thereto, or any other
name indicating that it is managed by or otherwise connected with the Manager,
or with any organization which shall have succeeded to Manager's business as
investment advisor or manager.
This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
IN WITNESS WHEREOF, the parties hereto have duly executed this
agreement on the date first above written.
ATTEST: LIBERTY VARIABLE INVESTMENT TRUST,
on its own behalf and on behalf of [SoGen] Overseas
Fund, Variable Series
_____________________ By: __________________________________
Title: Secretary Title:
ATTEST: KEYPORT ADVISORY SERVICES CORP.
_____________________ By: __________________________________
Title: Secretary Title:
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