INVESTMENT SUB-ADVISORY AGREEMENT
Exhibit 23 d(14)
THIS INVESTMENT SUB-ADVISORY Agreement (“Agreement”), made this day of December 14, 2007,
by and between Xxxxxx Advisors, LLC, a Delaware limited liability company (the “Adviser”), and
Xxxxxxx Capital Management, LLC, a Delaware limited liability company (the “Sub-Adviser”).
Adviser and Sub-Adviser agree as follows:
1. Adviser hereby engages the services of the Sub-Adviser in connection with Adviser’s management
of the Xxxxxx/Xxxxxxx Large Cap Growth Portfolio (formerly the Xxxxxx/Xxxxxxx Large Cap Core
Portfolio) (the “Portfolio”) of MLIG Variable Insurance Trust (the “Trust”). Pursuant to this
Agreement and subject to the oversight and supervision by Adviser and the officers and the board of
trustees of the Trust, Sub-Adviser shall manage the investment and reinvestment of the assets of
the Portfolio that the Adviser shall, from time to time direct.
2. Sub-Adviser hereby accepts appointment by Adviser in the foregoing capacity and agrees, at its
own expense, to render the services set forth herein and to provide the office space, furnishings,
equipment and personnel required by it to perform such services on the terms and for the
compensation provided in this Agreement.
3. In particular, Sub-Adviser shall furnish continuously an investment program for the Portfolio
and shall determine from time to time in its discretion the securities and other investments to be
purchased or sold or exchanged and what portions of the Portfolio shall be held in various
securities, cash or other investments. Sub-Adviser may give standing instructions to the
Portfolio’s custodian to automatically invest any uninvested cash assets of the Portfolio in
particular cash equivalent investments on a daily basis. In this connection, Sub-Adviser shall
provide Adviser and the officers and trustees of the Trust with such reports and documentation as
the latter shall reasonably request regarding Sub-Adviser’s management of the Portfolio assets.
4. Sub-Adviser shall carry out its responsibilities under this Agreement in compliance with: (a)
the Portfolio’s investment objective, policies and restrictions as set forth in the Trust’s current
registration statement, (b) such policies or directives as the Trust’s trustees may from time to
time establish or issue and communicate to the Sub-Adviser in writing, and (c) applicable law and
related regulations. Adviser shall promptly notify Sub-Adviser in writing of changes to (a) or (b)
above and shall notify Sub-Adviser in writing of changes to (c) above promptly after it becomes
aware of such changes.
In particular, the Sub-Adviser shall be responsible to ensure that the Portfolio: (a) complies
with the diversification requirements of Section 817(h) of the Internal Revenue Code of 1986, as
amended, (the “Code”) and regulations issued thereunder as these apply to separate accounts through
which variable life insurance contracts and variable annuity contracts are issued, and (b)
continuously qualifies as a regulated investment company under Sub-Chapter M of the Code.
Sub-Adviser shall not consult with other sub-advisers of the Portfolio, or sub-advisers of
other investment portfolios of the Trust, concerning transactions in portfolio securities or other
portfolio investments of the Portfolio.
Sub-Adviser does not warrant that the investment performance or holdings of the Portfolio will
match the performance or holdings of an index or benchmark or any other portfolio managed by
Sub-Adviser. The performance and holdings of the Portfolio may differ substantially from those of
other portfolios managed by Sub-Adviser. Adviser and the Trust may represent in disclosure
documents (to the extent consistent with specific disclosure language agreed upon by the
Sub-Adviser) that the Sub-Adviser will manage the Portfolio in the Sub-Adviser’s diversified growth
style. Adviser and the Trust will not represent, however, that the Sub-Adviser will manage the
Portfolio identically with or similarly to any other particular portfolio managed by Sub-Adviser.
5. Sub-Adviser shall take all actions which it considers necessary to implement the
investment policies of the Portfolio as these relate to the Portfolio, and in particular, to place
all orders for the purchase or sale of securities or other investments for the Portfolio with
brokers or dealers selected by it, and to that end, Sub-Adviser is authorized as the agent of the
Trust to give instructions to the Trust’s custodian as to deliveries of securities or other
investments and payments of cash for the account of the Portfolio. In connection with the selection
of brokers or dealers and the placing of purchase and sale orders with respect to investments of
the Portfolio, except where Adviser or the Trust instruct Sub-Adviser to place orders with a
particular broker or dealer, Sub-Adviser is directed at all times to seek to obtain best execution
within the policy guidelines determined by the Trust’s board of trustees and set forth in the
Trust’s current registration statement, and Sub-Adviser’s applicable policies and procedures.
As currently permitted by the policy and guidelines set forth in the Trust’s current
registration statement and as authorized by Section 28(e) of the Securities Exchange Act of 1934,
Sub-Adviser is authorized to consider, in the selection of brokers and dealers to execute portfolio
transactions, not only the available prices and rates of brokerage commissions, but also other
relevant factors which may include, without limitation: (a) the execution capabilities of such
brokers and dealers, (b) research, custody and other services provided by such brokers and dealers
which the Sub-Adviser believes will enhance its general portfolio management capabilities, (c) the
size of the transaction, (d) the difficulty of execution, (e) the operational facilities of such
brokers and dealers, (f) the block-positioning capabilities of such brokers or dealers, and (g) the
overall quality of brokerage and research services provided by such brokers and dealers. In
connection with the foregoing, Sub-Adviser is specifically authorized to pay those brokers and
dealers who provide brokerage and research services to it a higher commission than that charged by
other brokers and dealers if the Sub-Adviser determines in good faith that the amount of such
commission is reasonable in relation to the value of such services in terms of either the
particular transaction or in terms of Sub-Adviser’s overall responsibilities with respect to the
Portfolio and to any other client accounts or portfolios which Sub-Adviser advises. The execution
of such transactions shall not be considered to represent an unlawful breach of any duty created by
this Agreement or otherwise.
In connection with the selection of brokers or dealers and the placing of purchase and sale
orders with respect to investments of the Portfolio, when instructed to do so by either the Trust
or the Adviser, Sub-Adviser agrees, consistent with its applicable policies and procedures, and is
authorized to place orders with one or more brokers or dealers identified by the Trust or Adviser
(including brokers or dealers who are affiliated persons of the Trust or Adviser). The
execution of such transactions shall not be considered to represent an unlawful breach of any duty
created by this Agreement or otherwise.
Sub-Adviser also is authorized to aggregate purchase and sale orders for securities held (or
to be held) in the Portfolio with similar orders being made on the same day for other client
accounts or portfolios managed by Sub-Adviser. When an order is so aggregated Sub-Adviser will
generally, consistent with its applicable policies and procedures: (a) seek to assure that each
account participating in the aggregated transaction receives the average share price for the
securities, and (b) all transaction costs incurred in effecting the aggregated transaction shall be
shared on a pro-rata basis among the accounts or portfolios (including the Portfolio) participating
in the transaction. The Adviser and the Trust recognize that in some cases aggregating transactions
may adversely affect the size of the position obtainable for the Portfolio.
When recommending or effecting a transaction in a particular security or investment for more
than one client account or portfolio (including the Portfolio), Sub-Adviser may allocate such
recommendations or transactions among any or all accounts and portfolios for whom the
recommendation is made or transaction is effected on a basis that Sub-Adviser considers equitable.
6. Sub-Adviser’s services under this Agreement are not exclusive. Sub-Adviser may provide the same
or similar services to other clients. Adviser acknowledges that, except when transactions for
multiple clients are aggregated, transactions in a specific security or other investment may not be
recommended or executed at the same time or price for all client accounts or portfolios (including
the Portfolio) for which that security or investment is recommended or executed. This Agreement
does not require Sub-Adviser to give priority to the Portfolio over other client accounts or
portfolios.
7. Sub-Adviser 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 represent the
Adviser, the Trust or the Portfolio or otherwise be deemed agents of the Adviser, the Trust or the
Portfolio.
8. An affiliated person of Sub-Adviser may act as broker for the Portfolio in connection with the
purchase or sale of securities or other investments for the Portfolio, subject to: (a) the
requirement that Sub-Adviser seek to obtain best execution within the policy guidelines determined
by the Trust’s board of trustees and set forth in the Trust’s current registration statement and
Sub-Adviser’s applicable policies and procedures; (b) the provisions of the Investment Advisers Act
of 1940, as amended (the “Advisers Act”); (c) the provisions of the Securities Exchange Act of
1934, as amended; and (d) other applicable provisions of law. Such brokerage services are not
within the scope of the duties of Sub-Adviser under this Agreement. Subject to the requirements of
applicable law and any procedures adopted by Trust’s board of trustees, Sub-Adviser’s affiliated
persons may receive brokerage commissions, fees or other remuneration from the Portfolio or the
Trust for such services in addition to Sub-Adviser’s fees for services under this Agreement.
9. The Adviser delegates the Adviser’s discretionary authority to exercise proxy voting rights with
respect to the securities and other investments in the Portfolio to the Sub-Adviser.
The Sub-Adviser shall exercise these voting rights unless and until the Adviser revokes this
delegation. The Adviser may revoke this delegation at any time without cause. The Sub-Adviser’s
Proxy Voting Policy and Procedures shall guide all proxy voting decisions by the Sub-Adviser. The
Sub-Adviser shall maintain and preserve a record, in an easily-accessible place, of the
Sub-Adviser’s voting procedures, and of the Sub-Adviser’s actual votes for such period as required
under the Advisers Act, and shall supply or have its designee supply this record to the Adviser, or
any authorized representative of the Adviser, upon the written request of the Adviser or the
Adviser’s authorized representative, as appropriate. The Sub-Adviser shall have no responsibility
to process or file any claim forms relating to any litigation by or on behalf of the Trust or the
Portfolio.
10. Sub-Adviser will not take or receive physical possession of cash, securities or other
investments of the Portfolio.
11. Sub-Adviser is registered as an investment adviser with the U.S. Securities and Exchange
Commission under the Advisers Act. Sub-Adviser shall remain so registered throughout the term of
this Agreement and shall notify Adviser immediately if Sub-Adviser ceases to be so registered as an
investment adviser.
12. Sub-Adviser: (a) is duly organized and validly existing under the laws of the State of Delaware
with the power to own and possess its assets and carry on its business as it is now being
conducted, (b) has the authority to enter into and perform the services contemplated by this
Agreement, (c) is not prohibited by the Investment Company Act of 1940, as amended, (the “1940
Act”) or the Advisers Act from performing the services contemplated by this Agreement, (d) has met,
and will continue to seek to meet for the duration of this Agreement, any other applicable federal
or state requirements, or the applicable requirements of any regulatory or industry self regulatory
agency, necessary to be met in order to perform the services this Agreement, and (e) will promptly
notify Adviser of the occurrence of any event that Sub-Adviser is aware of that would disqualify it
from serving as an investment adviser to an investment company pursuant to Section 9(a) of the 1940
Act.
13. Adviser: (a) is duly organized and validly existing under the laws of the State of Delaware
with the power to own and possess its assets and carry on its business as it is now being
conducted, (b) has the authority to enter into and perform the services contemplated by this
Agreement, (c) is not prohibited by the 1940 Act or the Advisers Act from performing the services
contemplated by this Agreement, (d) has met, and will continue to seek to meet for the duration of
this Agreement, any other applicable federal or state requirements, or the applicable requirements
of any regulatory or industry self-regulatory agency, necessary to be met in order to perform the
services of this Agreement, and (e) will promptly notify Sub-Adviser of the occurrence of any event
that would disqualify it from serving as an investment adviser to an investment company pursuant to
Section 9(a) of the 1940 Act. Adviser represents that the Trust is (and during the term of this
Agreement, will remain) registered as an open-end management investment company under the 1940 Act
and that the shares of the Trust representing an interest in the Portfolio are (and during the term
of this Agreement will remain) registered under the Securities Act of 1933 and under any applicable
state securities laws.
14. Sub-Adviser has adopted a written code of ethics complying with the requirements of Rule 17j-1
under the 1940 Act and will provide Adviser and the Trust with a copy of that code, together with
evidence of its adoption. Within 20 days of the end of each calendar quarter during which this
Agreement remains in effect, the Sub-Adviser shall certify to Adviser or the Trust that Sub-Adviser
has adopted procedures reasonably necessary to prevent Access persons from violating its Code of
Ethics, and will report any material changes in or material violations of its Code of Ethics.
15. For the services rendered, the facilities furnished and the expenses assumed by
Sub-Adviser, Adviser shall pay Sub-Adviser at the end of each month a fee based on the
average daily net assets of the Portfolio at an annual rate of 0.40%.
Sub-Adviser’s fee shall be accrued daily at l/365th of the applicable annual rate set forth
above. For the purpose of accruing compensation, the net assets of the Portfolio shall be
determined in the manner and on the dates set forth in the current prospectus of the Trust, and, on
days on which the net assets are not so determined, the net asset value computation to be used
shall be as determined on the immediately preceding day on which the net assets were determined. In
the event of termination of this Agreement, all compensation due through the date of termination
wall be calculated on a pro-rated basis through the date of termination and paid within thirty
business days of the date of termination.
During any period when the determination of net asset value is suspended, the net asset value
of the Portfolio as of the last business day prior to such suspension shall for this purpose be
deemed to be the net asset value at the close of each succeeding business day until it is again
determined.
16. Sub-Adviser hereby undertakes and agrees to maintain, in the form and for the period
required by Rule 31a-2 under the 1940 Act, all records relating to the Portfolio’s investments that
are required to be maintained by the Trust pursuant to the requirements of paragraphs (b)(5),
(b)(6), (b)(7), (b)(10) and (f) of Rule 31a-1 under the 1940 Act.
Sub-Adviser agrees that all books and records which it maintains for the Portfolio or the
Trust are the property of the Trust and further agrees to surrender promptly to the Adviser or the
Trust any such books, records or information upon the Adviser’s or the Trust’s request (provided,
however, that Sub-Adviser may retain copies of such records). All such books and records shall be
made available, within five business days of a written request, to the Trust’s accountants or
auditors during regular business hours at Sub-Adviser’s offices. Adviser and the Trust or either of
their authorized representatives shall have the right to copy any records in the possession of
Sub-Adviser which pertain to the Portfolio or the Trust. Such books, records, information or
reports shall be made available to properly authorized government representatives consistent with
state and federal law and/or regulations. In the event of the termination of this Agreement, all
such books, records or other information shall be returned to Adviser or the Trust. The Sub-Adviser
agrees that any policies and procedures established by the Sub-Adviser for managing client assets,
including, but not limited to, all policies and procedures designed to ensure compliance with
federal and state regulations governing the sub-adviser/client relationship and management of the
investment and reinvestment of client assets, shall be made
available for inspection by the Adviser and the Trust or either of their authorized representatives
not less frequently than annually.
17. Sub-Adviser agrees that it will not disclose or use any records or confidential information
obtained pursuant to this Agreement in any manner whatsoever except as authorized in this
Agreement or specifically by Adviser or the Trust, or if such disclosure is required by federal or
state regulatory authorities; provided, however, that the Sub-Adviser may disclose information
about the Portfolio to other persons for operational, compliance, or risk management purposes as
necessary for Sub-Adviser to perform its duties under this Agreement.
Sub-Adviser may disclose the investment performance of the Portfolio, provided that such
disclosure does not reveal the identity of the Adviser, the Portfolio or the Trust. Sub-Adviser
may, however, disclose that Adviser, the Trust and the Portfolio are its clients, provided that
such disclosure does not reveal the investment performance or the composition of the Portfolio’s
assets managed by the Sub-Adviser.
18. In the absence of willful misfeasance, bad faith or gross negligence on the part of Sub-Adviser
or its officers, trustees or employees, or reckless disregard by Sub-Adviser of its duties under
this Agreement (together, “disabling conduct”), Sub-Adviser shall not be liable to Adviser, the
Portfolio, the Trust or to any shareholder of the Portfolio 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.
19. Sub-Adviser agrees to indemnify and defend Adviser, its officers, trustees, partners, employees
and any person who controls Adviser for any loss or expense (including reasonable attorneys’ fees)
arising out of any claim, demand, action, suit or proceeding arising out of any actual or alleged
material misstatement or omission in the Trust’s registration statement, any proxy statement, or
communication to current or prospective investors in the Portfolio arising directly out of
disclosure about Sub-Adviser provided to Adviser by Sub-Adviser.
Sub-Adviser agrees to indemnify and defend Adviser, its officers, trustees, partners,
employees and any person who controls Adviser for any loss or expense (including reasonable
attorneys’ fees) arising out of any claim, demand, action, suit or proceeding arising out of the
Sub-Adviser’s failure to ensure that the Portfolio: (a) complies with the diversification
requirements of Section 817(h) of the Code and regulations issued thereunder as these apply to
separate accounts through which variable life insurance contracts and variable annuity contracts
are issued, and (b) continuously qualifies as a regulated investment company under Sub-Chapter M of
the Code.
20. Adviser agrees to indemnify and defend Sub-Adviser, its officers, trustees, partners,
employees and any person who controls Sub-Adviser for any loss or expense (including
reasonable attorneys’ fees) arising out of any claim, demand, action, suit or proceeding arising
out of any actual or alleged material misstatement or omission in the Trust’s registration
statement, any proxy statement, or other communication to current or prospective investors in the
Portfolio (other than a misstatement or omission arising directly out of disclosure about Sub-
Adviser approved by the Sub-Adviser or provided to Adviser or the Trust by Sub-Adviser).
21. The Sub-Adviser agrees to permit the Adviser and the Trust to use its name, along side the
Adviser’s name, in the Portfolio’s name and in descriptions of the Portfolio, as these appear in
the Trust’s prospectus(es) and/or sales literature related to the Portfolio, provided, however,
that the Adviser and the Trust shall cease such use of the Sub-Adviser’s name in the event that
this Agreement is terminated.
22. This Agreement shall not become effective unless and until it is approved by the board of
trustees of the Trust, including a majority of trustees who are not parties to this Agreement or
interested persons of any such party to this Agreement, and, to the extent required by law, a
majority of the outstanding shares of the class of the Trust’s stock representing an interest in
the Portfolio. This Agreement shall come into full force and effect on the date which it is so
approved. This Agreement shall continue in effect for two years and shall thereafter continue in
effect from year to year so long as such continuance is specifically approved at least annually by
(a) the board of trustees of the Trust, or by the vote of a majority of the outstanding shares of
the class of stock representing an interest in the Portfolio, and (b) a majority of those trustees
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.
23. Notwithstanding any other provision of this Agreement, this Agreement may be terminated at any
time without the payment of any penalty, by the Trust’s board of trustees, or by vote of a majority
of the outstanding shares of the class of stock representing an interest in the Portfolio on sixty
days written notice to the Adviser and Sub-Adviser, or by the Adviser, or by the Sub-Adviser, on
sixty days written notice to the other. This Agreement shall automatically terminate in the event
of its assignment or in the event of the termination of the investment advisory agreement between
the Adviser and the Trust regarding the Adviser’s management of the Portfolio.
24. This Agreement may be materially amended by the parties only if such amendment is specifically
approved by (a) a majority of those trustees 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, and, if required by applicable law, (b) a majority of votes attributable to the
outstanding Trust shares of the class representing an interest in the Portfolio.
25. The terms “assignment”, “affiliated person” and “interested person”, when used in this
Agreement, shall have the respective meanings specified in the 1940 Act. The term “majority of the
outstanding shares of the class” means the lesser of (a) 67% or more of the votes attributable to
shares of such class present at a meeting if more than 50% of the votes attributable to such shares
are present or represented by proxy or (b) more than 50% of the votes attributable to shares of
such class.
26. This Agreement shall be construed in accordance with laws of the State of Delaware, and
applicable provisions of the Advisers Act and 1940 Act.
27. 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.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the
date first above written.
| Xxxxxx Advisors, LLC |
||||
| By: | /s/ Xxxx Xxxxxxx | |||
| Name: | Xxxx Xxxxxxx | |||
| Title: | President | |||
| ATTEST: |
||||
| /s/ Illegible | ||||
| Xxxxxxx Capital Management, LLC |
||||
| By: | /s/ Xxxxxxxxxxx X. Xxxxxxx | |||
| Name: Xxxxxxxxxxx X. Xxxxxxx | ||||
| Title President | ||||
| ATTEST: |
||||
| /s/ Illegible | ||||
