Exhibit 23(d)31(a)
Short Term Bond
SUB-INVESTMENT MANAGEMENT AGREEMENT
AMONG
XXXX XXXXXXX VARIABLE SERIES TRUST I
INDEPENDENCE INVESTMENT ASSOCIATES, INC.
AND
XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY
SUB-INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the 15/th/ day of April, 1994 by and among Xxxx
Xxxxxxx Variable Series Trust I, a Massachusetts business trust (the "Series"),
Independence Investment Associates, Inc., a Delaware corporation ("IIA"), and
Xxxx Xxxxxxx Mutual Life Insurance Company, a Massachusetts corporation
("JHMLICO").
WHEREAS, the Series is organized and is engaged in business as an open-end
management investment company and is so registered under the Investment Company
Act of 1940 (the "1940 Act"); and
WHEREAS, JHMLICO and IIA are engaged in the business of rendering
investment advice under the Investment Advisers Act of 1940; and
WHEREAS, the Series is authorized to issue shares of capital stock in
separate classes with each such class representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Series offers shares in several classes, one of which is
designated as the Short-Term U.S. Government Portfolio, (together with all other
classes established by the Series, the "Portfolios"), each of which pursues its
investment objectives through separate investment policies; and
WHEREAS, the Series has retained JHMLICO to render investment management
services to the Series pursuant to an Investment Management Agreement dated as
of April 15, 1994 (the
"Investment Management Agreement'), pursuant to which it may contract with IIA
as a Sub-Manager as provided for herein:
NOW THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPONTMENT OF SUB-MANAGER.
(a) Subject Portfolio. IIA is hereby appointed and IIA hereby accepts the
appointment to act as investment adviser and manager to the Short-Term U.S.
Government Portfolio (the "Subject Portfolio") for the period and on the
terms herein set forth, for the compensation herein provided.
(b) Additional Subject portfolios. In the event that the Series and
JHMLICO desire to retain IIA to render investment advisory services
hereunder for any other Portfolio, they shall no notify IIA in writing. If
it is willing to render such services, IIA shall notify the Series in
writing, whereupon such Portfolio shall become a Subject Portfolio
hereunder.
(c) Independent Contractor. IIA shall for all purposes herein be deemed to
be an independent contractor and shall, unless otherwise expressly provided
or authorized, have no authority to act for or be deemed an agent of the
Series.
2. PROVISION OF INVESTMENT MANAGEMENT SERVICES.
IIA will provide for the Subject Portfolio a continuing and suitable
investment program consistent with the investment policies, objectives and
restrictions of said Portfolio. IIA, as Sub-Manager, will manage the
investment and reinvestment of the assets in the Subject Portfolio, and
perform the functions set forth below, subject to the overall supervision,
direction, control and review of the Board of Trustees of the Series,
JHMLICO and, as in effect from time to time, the provisions of the Series'
Declaration of Trust, Bylaws, prospectus, statement of additional
information, 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 delivered
to IIA in writing by JHMLICO or the Series from time to time).
IIA will, at its own expense:
(a) advise the Series in connection with investment decisions to be made
by its Board of Trustees or any committee thereof regarding the Subject
Portfolio and, upon request, furnish the Series with research, economic and
statistical data in connection with said Portfolio's investments and
investment policies;
(b) submit such reports relating to the valuation of the Subject
Portfolio's securities at the Series' Board of Trustees may reasonably
request;
(c) place orders for purchases and sales of portfolio investments for the
Subject Portfolio;
(d) maintain and preserve the records relating to its activities hereunder
required by the 1940 Act to be maintained and preserved by the Series, to
the extent not maintained by the Series' custodian transfer agent or
JHMLICO.
The Series and JHMLICO will provide timely information to the Sub-Manager
regarding such matters as purchases and redemptions of shares in the Subject
Portfolio and the cash requirements of, and cash available for investment in,
the Portfolio, and all information as may be reasonably necessary or appropriate
in order for the Sub-Manager to perform its responsibilities hereunder. On its
own initiative, the Sub-Manager will apprise JHMLICO and the Series of important
developments materially affecting the Subject Portfolio and will furnish JHMLICO
and the Series' Board of Trustees from time to time such information as is
appropriate for this purpose.
3. ALLOCATION OF EXPENSES.
Each party to this Agreement shall bear the costs and expenses of
performing its obligations hereunder. In this regard, the Series specifically
agrees to assume the expense of:
(i) brokerage commissions for transactions in the portfolio investments
of the Series and similar fees and charges for the acquisition,
disposition, lending or borrowing of such portfolio investments;
(ii) all taxes, including issuance and transfer taxes, and reserves for
taxes payable by the Series to federal, state or other governmental
agencies; and
(iii) interest payable on the Series' borrowings.
Nothing in this Agreement shall alter the allocation of expenses and costs
agreed upon between the Series and JHMLICO in the Investment Management
Agreement or any other agreement to which they are parties.
4. SUB-ADVISORY FEES.
For all of the services rendered as herein provided, JHMLICO shall pay to
the Sub-Manager a fee (for payment of which the Series shall have no obligation
or liability), with respect to the Subject Portfolio, at an effective annual
rate of:
(i) 0.19% on an annual basis of the first $250,000,000 of the Current Net
Assets of the Current Net Assets of such Portfolio; and
(ii) 0.17% on an annual basis for that portion of Current Net Assets in
excess of $250,000,000 and not over $500,000,000 of such Portfolio; and
(iii) 0.15% on an annual basis for that portion of Current Net Assets in
excess of
$500,000,000 of such Portfolio.
The fee shall be accrued daily and payable monthly as soon as practicable
after the last day of each calendar month. In the case of termination of this
Agreement with respect to the Subject Portfolio during any calendar month, the
fee with respect to such Portfolio accrued to termination shall be paid.
"Current Net Assets" of the Portfolio for purposes of computing the amount
of advisory fee accrued for any day shall mean the Portfolio's net assets as of
the most recent preceding day for which the Portfolio's net assets were
computed.
5. PORTFOLIO TRANSACTIONS.
In connection with the investment and reinvestment of the assets of the
Subject Portfolio, the Sub-Manager is authorized to select the brokers or
dealers that will execute purchase and sale transactions for the Portfolio and
to use its best efforts to obtain the best available price and most favorable
execution with respect to all such purchases and sales of portfolio securities
for said Portfolio. The Sub-Manager shall maintain records adequate to
demonstrate compliance with this requirement. Subject to this primary
requirement and maintaining as its first consideration to the Subject Portfolio
and its shareholders, the Sub-Manager shall have the right subject to the
control of the Board of Trustees, and to the extent authorized by the Securities
Exchange Act of 1934, to follow a policy of selecting brokers who furnish
brokerage and research services to the Subject Portfolio or to the Sub Manager
and who charge a higher commission rate to the Subject Portfolio than may result
when allocating brokerage solely on the basis of seeking the most favorable
price and execution. The Sub-Manager shall determine in good faith that such
higher cost was reasonable in relation to the value of the brokerage and
research services provided.
The fees payable to the Sub-Manager by JHMLICO hereunder shall be reduced
by any tender offer solicitation fees or similar payments received by the
Sub-Manager, in connection with the tender of investments of any Portfolio (less
direct expenses incurred by the Sub-Manager in connection with obtaining such
fees or payments). The Sub-Manager shall use its best efforts to recapture all
available tender offer solicitation fees and similar payments in connection with
tenders of the securities of any Portfolio, provided that neither the
Sub-Manager nor any of its affiliates shall be required to register as a
broker-dealer for this purpose. The Sub-Manager shall advise JHMLICO and the
Series' Board of Trustees of any fees or payments of whatever type which it may
be possible for it or IIA or an affiliate of it to receive in connection with
the purchase or sale of investment securities for any Subject Portfolio.
6. INFORMATION, RECORDS AND CONFIDENTIALITY.
The Series shall own and control all records maintained hereunder by the
Sub-Manager on the Series' behalf and, in the event of termination of this
Agreement with respect to any Portfolio for any reason, all records relating to
that Portfolio shall be promptly returned to the Series, free from an claim or
retention of rights by the Sub-Manager. The Sub-Manager also agrees, upon
request of the
Series, promptly to surrender such books and records or, at its expense, copies
thereof, to the Series to make such books and records available for inspection
by representatives of regulatory authorities or other persons reasonably
designated by the Series. The Sub-Manager 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, Rules 31a-1 and
31a-2 and to supply all information requested by any insurance regulatory
authorities to determine whether all insurance laws and regulations are being
complied with.
The Sub-Manager shall not disclose or use any records or information
obtained pursuant hereto in any manner whatsoever except as expressly authorized
herein, and will keep confidential any information obtained pursuant hereto, and
disclose such information only if the Series has authorized such disclosure, or
if such disclosure is expressly required by applicable federal or state
regulatory authorities.
The Sub-Manager shall supply the Board of Trustees and officers of the
Series and JHMLICO with all statistical information regarding investments which
is reasonably required by them and reasonably available to it.
7. LIABILITY.
No provision of this Agreement shall be deemed to protect the Sub-Manager
or JHMLICO against any liability to the Series or its shareholders to which it
might otherwise be subject by reason of any willful misfeasance, bad faith or
negligence in the performance of its duties or the reckless disregard of its
obligations and duties under this Agreement or the Investment Management
Agreement. Nor shall any provision hereof be deemed to protect any trustee or
officer of the Series against any such liability to which he might otherwise be
subject by reason of any willful misfeasance, bad faith or negligence in the
performance his duties or the reckless disregard of his obligations and duties.
8. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective with respect to the
Short-Term U.S. Government Portfolio on the date hereof and, with respect
to any additional Subject Portfolio, on the date of receipt by the Series
of notice from the Sub-Manager in accordance with Paragraph 1(b) hereof
that it is willing to serve with respect to such Portfolio. Unless
terminated as herein provided, this Agreement shall remain in full force
and effect for two years from the date hereof with respect to the initial
Subject Portfolio and, with respect to each additional Subject Portfolio,
until two years following the date on which such Portfolio becomes a
Subject Portfolio hereunder, and shall continue in full force and effect
thereunder with respect to each Subject Portfolio so long as such
continuance with respect to any such Portfolio is approved at least
annually (a) by either the Board of Trustees of the Series or by vote of a
majority of the outstanding voting shares of such Portfolio, and (b) in
either event by the vote of a majority of the trustees of the Series who
are not parties to this Agreement or
"interested persons' of any such party, cast in person at a meeting called
for the purpose of voting on such approval.
Any approval of this Agreement by the holders of a majority of the
outstanding shares of any Subject Portfolio shall be effective to continue
this Agreement with respect to any such Portfolio notwithstanding (A) that
this Agreement has not been approved by the holders of a majority of the
outstanding shares of any other Portfolio affected hereby, and (B) that
this Agreement has not bee approved by the vote of a majority of the
outstanding shares of the Series, unless such approval shall be required by
any other applicable law or otherwise. The terms "assignment", "vote of a
majority of the outstanding shares" and "interested person", when used in
this Agreement, shall have the respective meanings specified in the 1940
Act rules thereunder.
(b) Termination. This Agreement may be terminated with respect to any
Subject Portfolio at any time, without payment of any penalty, by vote of
the trustees of the Series, by vote of a majority of the outstanding shares
of such Portfolio, by the Sub-Manager on at least sixty days' written
notice to the Series and JHMLICO, or by JHMLICO on at least sixty days'
written notice to the Series and the Sub-Manager.
(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.
The services of the Sub-Manager to the Series are not to be deemed
exclusive and it shall be free to render similar services to others so long as
its services hereunder are not impaired thereby. It is specifically understood
that directors, officers and employees of the Sub-Manager 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.
10. AVOIDANCE OF INCONSISTENT POSITION.
In connection with the purchase and sale of portfolio securities of the
Subject Portfolio, the Sub-Manager and its directors, officers and employees
will not act as principal or agent or receive any commission. Nothing in this
Agreement, however, shall preclude the combination of orders for the sale or
purchase of portfolio securities of the Subject Portfolio with those for other
registered investment companies managed by the Sub-Manager or its affiliates, if
orders are allocated in a manner deemed equitable by IIA among the accounts and
at a price approximately averaged.
11. AMENDMENT.
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing. No amendment of this
Agreement shall be effective with respect to any Portfolio until approved
specifically by (a) the Board of Trustees of the Series, or by vote of a
majority of the outstanding shares of that Portfolio, and (b) by vote of a
majority of those Trustees of the Series who are not interested persons of any
party to this Agreement cast in person at a meeting called for the purpose of
voting on such approval.
12. LIMITATION OF LIABILITY.
It is expressly agreed that the obligations of the Series hereunder shall
not be binding upon any of the trustees, shareholders, officers, agents or
employees of Series personally, but only bind the trust property of the Series,
as provided in the Series' Declaration of Trust.
13. 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.
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. XxXxxx By: /s/ Xxxxx X. Xxxx
Title: Chairman
ATTEST: XXXX XXXXXXX MUTUAL LIFE INSURANCE
COMPANY
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxx
Title: Second Vice President
ATTEST: INDEPENDENCE INVESTMENT ASSOCIATES, INC.
/s/ Xxxxxxxxx X. Xxxxxxx By: /s/ X X Xxxxxxxx
Title: President
