EXHIBIT (d)(5)
FORM OF
FUND MANAGEMENT AGREEMENT
AGREEMENT made as of the ___ day of _____, 2001 among Pacific Life
Insurance Company, ("Adviser"), a California corporation, and Lazard Asset
Management, a division of Lazard Freres & Co. LLC ("Lazard" or "Portfolio
Manager"), a New York limited liability company, and Pacific Funds ("Pacific
Funds"), a Delaware Business Trust.
WHEREAS, Pacific Funds is registered with the Securities and Exchange
Commission ("SEC") as an open-end, management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, Pacific Funds is authorized to issue shares of beneficial interest
("Shares") in separate funds, with each such fund representing interests in a
separate fund; and
WHEREAS, Pacific Funds currently offers multiple Funds, one or more of
which Pacific Funds and Adviser desire to retain the Portfolio Manager to render
investment advisory services hereunder, and with respect to which the Portfolio
Manager is willing to do so; and
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940 ("Advisers Act"); and
WHEREAS, the Portfolio Manager is registered with the SEC as an investment
adviser under the Advisers Act; and
WHEREAS, Pacific Funds has retained the Adviser to render investment
advisory services to the various funds of Pacific Funds pursuant to an Advisory
Agreement, as amended, and such Agreement authorizes the Adviser to engage a
portfolio manager to discharge the Adviser's responsibilities with respect to
the investment management of such funds, a copy of which has been provided to
the Portfolio Manager and is incorporated herein by reference; and
WHEREAS, Pacific Funds and the Adviser desire to retain Lazard to furnish
investment advisory services to one or more funds of Pacific Funds, and the
Portfolio Manager is willing to furnish such services to such funds and the
Adviser in the manner and on the terms hereinafter set forth; and
NOW THEREFORE, in consideration of the premises and the promises and mutual
covenants herein contained, it is agreed between Pacific Funds, the Adviser, and
the Portfolio Manager as follows:
1. Appointment. Pacific Funds and the Adviser hereby appoint Lazard to
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act as portfolio manager to provide investment advisory services to the series
of funds listed on the Fee Schedule attached hereto (hereinafter the "Funds")
for the periods and on the terms set forth in this Agreement. The Portfolio
Manager accepts such appointment and agrees to furnish the services herein set
forth for the compensation herein provided.
In the event the Adviser wishes to retain the Portfolio Manager to render
investment advisory services to one or more funds other than the Funds, the
Adviser shall notify the
Portfolio Manager in writing and shall revise the Fee Schedule to reflect such
additional fund(s). If the Portfolio Manager is willing to render such services,
it shall notify Pacific Funds and Adviser in writing, whereupon such fund shall
become a Fund hereunder, and be subject to this Agreement.
2. Portfolio Manager Duties. Subject to the supervision of Pacific
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Funds' Board of Trustees and the Adviser, the Portfolio Manager will provide a
continuous investment program for the Funds and determine the composition of the
assets of the Funds. The Portfolio Manager will provide investment research and
analysis, which may include computerized investment methodology, and will
conduct a continuous program of evaluation, investment, sales, and reinvestment
of the Funds' assets by determining the securities, cash and other investments,
including futures and options contracts, if any, that shall be purchased,
entered into, retained, sold, closed, or exchanged for the Funds, when these
transactions should be executed, and what portion of the assets of the Funds
should be held in the various securities and other investments in which it may
invest, and the Portfolio Manager is hereby authorized to execute and perform
such services on behalf of the Funds. To the extent permitted by the written
investment policies of the Funds, the Portfolio Manager shall make decisions for
the Funds as to foreign currency matters and make determinations as to the
retention or disposition of foreign currencies or securities or other
instruments denominated in foreign currencies, or derivative instruments based
upon foreign currencies, including forward foreign currency contracts and
options and futures on foreign currencies and shall execute and perform the same
on behalf of the Funds. The Portfolio Manager is authorized to exercise tender
offers, exchange offers and to vote proxies on behalf of the Fund, each as the
Portfolio Manager determines is in the best interest of the Fund. In performing
these duties, the Portfolio Manager:
(a) Will manage each of the Funds so that it will meet the
requirements of Section 851(b)(2) and (3) Subchapter M of the Internal Revenue
Code.
(b) Shall conform with (i) the 1940 Act and all rules and regulations
thereunder, and releases and interpretations related thereto (including any no-
action letters and exemptive orders which have been granted by the SEC to the
Fund, to the Adviser (as provided to the Portfolio Manager by the Adviser), or
to the Portfolio Manager), (ii) with all other applicable federal and state laws
and regulations pertaining to investment vehicles underlying variable annuity
and/or variable life insurance contracts (provided that Advisor shall provide a
list to Portfolio Manager of applicable states), (iii) with any applicable
written procedures, policies and guidelines adopted by Pacific Funds' Board of
Trustees and furnished to Portfolio Manager, (iv) with the Funds' objectives,
investment policies and investment restrictions as stated in Pacific Funds'
Prospectus and Statement of Additional Information as supplemented or amended
from time to time, as furnished to the Portfolio Manager, and (5) with the
provisions of Pacific Funds' Registration Statement filed on Form N-1A under
the Securities Act of 1933 (the
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"1933 Act") and the 1940 Act, as supplemented or amended from time to time.
Until the Adviser delivers any supplements or amendments to the Portfolio
Manager, the Portfolio Manager shall be fully protected in relying on
Pacific Funds' Registration Statement previously furnished to the Portfolio
Manager by the Adviser.
(c) Will: (i) use its best efforts to identify each position in the
Funds that constitutes stock in a Passive Foreign Investment Company ("PFIC"),
as that term is defined in Section 1296 of the Internal Revenue Code, and (ii)
make such determinations and inform the Adviser at least annually, (or more
often and by such date(s) as the Adviser shall request), of any stock in a PFIC.
(d) Is responsible, in connection with its responsibilities under this
Section 2, for decisions to buy and sell securities and other investments for
the Funds, for broker-dealer and futures commission merchant ("FCM") selection,
and for negotiation of commission rates. The Portfolio Manager's primary
consideration in effecting a security or other transaction will be to obtain the
best execution for the Funds, taking into account the factors specified in the
Prospectus and Statement of Additional Information for Pacific Funds, as they
may be amended or supplemented from time to time and furnished to the Portfolio
Manager. Subject to such policies as the Board of Trustees may determine and
consistent with Section 28(e) of the Securities Exchange Act of 1934, the
Portfolio Manager shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by reason of its
having caused the Funds to pay a broker or dealer, acting as agent, for
effecting a portfolio transaction at a price in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction, if the Portfolio Manager determines in good faith that such amount
of commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of either
that particular transaction or the Portfolio Manager's (or its affiliates)
overall responsibilities with respect to the Funds and to its other clients as
to which it exercises investment discretion. To the extent consistent with these
standards, and in accordance with Section 11(a) of the Securities Exchange Act
of 1934 and Rule 11a2-2(T) thereunder, and subject to any other applicable laws
and regulations including Section 17(e) of the 1940 Act, the Portfolio Manager
is further authorized to place orders on behalf of the Funds through the
Portfolio Manager if the Portfolio Manager is registered as a broker or dealer
with the SEC or as a FCM with the Commodities Futures Trading Commission
("CFTC"), to any of its affiliates that are brokers or dealers or FCMs or such
other entities which provide similar services in foreign countries, or to such
brokers and dealers that also provide research or statistical research and
material, or other services to the Funds or the Portfolio Manager. Such
allocation shall be in such amounts and proportions as the Portfolio Manager
shall determine consistent with the above standards, and, upon request, the
Portfolio Manager will report on said allocation to the Adviser and Board of
Trustees of Pacific Funds, indicating the brokers, dealers or FCMs to which
such allocations have been made and the basis therefor.
(e) May, on occasions when the purchase or sale of a security is deemed
to be in the best interest of a Fund as well as any other investment advisory
clients, to the extent permitted by applicable laws and regulations, but shall
not be obligated to, aggregate the securities to be so sold or purchased with
those of its other clients where such aggregation is not inconsistent with the
policies set forth in Pacific Funds' Registration Statement as furnished to
Portfolio Manager. In such event, allocation of the securities so purchased or
sold, as well as the
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expenses incurred in the transaction, will be made by the Portfolio Manager in a
manner that is fair and equitable and consistent with the Portfolio Manager's
fiduciary obligations to Pacific Funds and to such other clients.
(f) Will, in connection with the purchase and sale of securities for
the Funds, together with the Adviser, arrange for the transmission to the
custodian and recordkeeping agent for Pacific Funds, on a daily basis, such
confirmation(s), trade tickets, and other documents and information, including,
but not limited to, Cusip, Sedol, or other numbers that identify securities to
be purchased or sold on behalf of the Funds, as may be reasonably necessary to
enable the custodian and recordkeeping agent to perform its administrative and
recordkeeping responsibilities with respect to the Funds, and with respect to
portfolio securities to be purchased or sold through the Depository Trust
Company, will arrange for the automatic transmission of the confirmation of such
trades to Pacific Funds' custodian, and recordkeeping agent, and, if required,
the Adviser.
(g) Will assist the custodian and recordkeeping agent for Pacific Funds
in determining or confirming, consistent with the procedures and policies stated
in Pacific Funds' Procedures and/or the Registration Statement for
Pacific Funds, the value of any portfolio securities or other assets of the
Funds for which the custodian and recordkeeping agent seeks assistance from
the Portfolio Manager or identifies for review by the Portfolio Manager. This
includes (but is not limited to) obtaining bids and offers or quotes from
broker/dealers or market-makers, verifying pricing and providing fair valuations
or recommendations for fair valuations in accordance with Fund procedures, as
they may be amended from time to time.
(h) Will maintain and preserve such records related to each Fund's
transactions as required under the 1940 Act and the Advisers Act. The Portfolio
Manager will make available to Pacific Funds and the Adviser promptly upon
request, any of the Funds' investment records and ledgers maintained by the
Portfolio Manager (which shall not include the records and ledgers maintained by
the custodian and recordkeeping agent for the Fund), as are necessary to assist
Pacific Funds and the Adviser to comply with requirements of the 1940 Act and
the Advisers Act, as well as other applicable laws, and will furnish to
regulatory authorities having the requisite authority any information or reports
in connection with such services which may be requested in order to ascertain
whether the operations of Pacific Funds are being conducted in a manner
consistent with applicable laws and regulations.
(i) Will regularly report to Pacific Funds' Board of Trustees on the
investment program for the Funds and the issuers and securities represented in
the Funds' portfolios, and will furnish Pacific Funds' Board of Trustees with
respect to the Funds such periodic and special reports as the Trustees and the
Adviser may reasonably request, including, but not limited to, the monthly
compliance checklist, monthly tax compliance worksheet, reports regarding
compliance with Pacific Funds' procedures pursuant to Rules 17e-1, 17a-7, 10f-3
and 12d3-1 under the Investment Company Act of 1940, fundamental investment
restrictions, procedures for opening brokerage accounts and commodity trading
accounts, liquidity determination of securities purchased pursuant to Rule 144A
and 4(2) commercial paper, and compliance with the Portfolio Manager's Code of
Ethics, and such other procedures or requirements that the Adviser may request
from time to time.
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(j) Will not disclose or use any records or information obtained
pursuant to this Agreement (excluding investment research and investment advice)
in any manner whatsoever except as expressly authorized in this Agreement or in
the ordinary course of business in connection with placing orders for the
purchase and sale of securities or obtaining investment licenses in various
countries or the opening of custody accounts and dealing with settlement agents
in various countries, and will keep confidential any information obtained
pursuant to the Agreement, and disclose such information only if the Board of
Trustees of Pacific Funds has authorized such disclosure, or if such disclosure
is required by applicable federal or state law or regulations or regulatory
authorities having the requisite authority. Pacific Funds and the Adviser will
not disclose or use any records or information respecting the Portfolio Manager
obtained pursuant to this Agreement, in any manner whatsoever except as
expressly authorized in this Agreement, and will keep confidential any
information obtained pursuant to this Agreement, and disclose such information
only as expressly authorized in this Agreement, if the Board of Trustees of
Pacific Funds has authorized such disclosure, or if such disclosure is required
by applicable federal or state law or regulations or regulatory authorities
having the requisite authority.
(k) Shall not permit any employee of the Portfolio Manager to have any
material connection with the handling of the Funds if such employee has:
(i) been, within the last ten (10) years, convicted of or
acknowledged commission of any felony or misdemeanor (a) involving the purchase
or sale of any security, (b) involving embezzlement, fraudulent conversion, or
misappropriation of funds or securities, (c) involving sections 1341, 1342 or
1343 of Title 18 of the U.S. Code, or (d) arising out of such person's conduct
as an underwriter, broker, dealer, investment adviser, municipal securities
person required to be registered under the Commodity Exchange Act, or as an
affiliated person, salesman, or employee or officer or director of any
investment company, bank, insurance company, or entity or person required to be
registered under the Commodity Exchange Act.
(ii) been permanently or temporarily enjoined by reason of any
misconduct, by order, judgment, or decree of any court of competent jurisdiction
from acting as an underwriter, broker, dealer, investment adviser, municipal
securities dealer, government securities broker, government securities dealer,
transfer agent, or entity or person required to be registered under the
Commodity Exchange Act, or as an affiliated person, salesman or employee of any
investment company, bank, insurance company, or entity or person required to be
registered under the Commodity Exchange Act, or from engaging in or continuing
any conduct or practice in connection with any such activity or in connection
with the purchase or sale of any security.
(l) Shall provide to Adviser a complete copy of Portfolio Manager's
Form ADV as filed with the Securities and Exchange Commission and a list of
persons who Portfolio Manager wishes to have authorized to give written and/or
oral instructions to Custodians of Pacific Funds assets for the Funds. The
Adviser has received a current copy of the Portfolio Manager's Uniform
Application for Investment Adviser Registration on Form ADV, as filed with the
SEC. On an annual basis, (or more frequently if requested by the Adviser or
Pacific Funds' Board of Trustees) the Portfolio Manager agrees to provide the
Adviser with current copies of the Portfolio Manager's Form ADV, and any
supplements or amendments thereto, as filed with the SEC.
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3. Disclosure about Portfolio Manager. The Portfolio Manager has reviewed
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the current Registration Statement for Pacific Funds and agrees to promptly
review future Registration Statements, including any supplements thereto which
relate to Portfolio Manager or the Funds, filed with the SEC (or which will be
filed with the SEC in the future) and represents and warrants that, with respect
to the disclosure about the Portfolio Manager or information relating, directly
or indirectly, to the Portfolio Manager or the Funds (other than historical
performance and financial statements of the Funds) or any performance
information the Portfolio Manager provides that is included in the Registration
Statement for Pacific Funds, such Registration Statement contains as of the date
hereof, or will contain as of the date of effectiveness of any future
Registration Statement or supplement thereto, no untrue statement of any
material fact and does not omit any statement of material fact which was
required to be stated therein or necessary to make the statements contained
therein not misleading. The Portfolio Manager further represents and warrants
that it is a duly registered investment adviser under the Advisers Act and a
duly registered investment adviser in all states in which the Portfolio Manager
is required to be registered.
4. Expenses. The Portfolio Manager shall bear all expenses incurred by it
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and its staff and for their activities in connection with the performance if its
services under this Agreement, including but not limited to salaries, overhead,
travel, preparation of Board materials, review of marketing materials, and
marketing support. Each Fund will bear certain other expenses to be
incurred in its operation, including, but not limited to, investment advisory
fees, sub-advisory fees (other than sub-advisory fees paid pursuant to this
Agreement) and administration fees; fees for necessary professional and
brokerage services; costs of regulatory compliance; and pro rata costs
associated with maintaining Pacific Funds' legal existence and shareholder
relations. All other expenses not specifically assumed by the Portfolio Manager
hereunder or by the Adviser under the Advisory Agreement are borne by the
applicable Fund of Pacific Funds.
5. Compensation. For the services provided and the expenses borne by the
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Portfolio Manager pursuant to this Agreement, the Adviser will pay to the
Portfolio Manager a fee in accordance with the Fee Schedule attached to this
Agreement. This fee will be computed and accrued daily and payable monthly.
These fees for services shall be prorated for any portion of a year in which the
Agreement is not effective.
6. Seed Money. The Adviser agrees that the Portfolio Manager shall not be
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responsible for providing money for the initial capitalization of any Fund.
7. Compliance.
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(a) The Portfolio Manager agrees that it shall immediately notify the
Adviser and Pacific Funds (i) in the event that the SEC, CFTC, or any banking or
other regulatory body has censured the Portfolio Manager; placed limitations
upon its activities, functions or operations; suspended or revoked its
registration, if any, or ability to serve as an investment adviser; or has
commenced proceedings or an investigation that can reasonably be expected to
result in any of these actions, (ii) upon having a reasonable basis for
believing that a Fund has ceased to qualify or might not qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code,
and (iii) upon having a reasonable basis for believing that a Fund
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has ceased to comply with the diversification provisions of Section 817(h) of
the Internal Revenue Code or the Regulations thereunder. The Portfolio Manager
further agrees to notify the Adviser and Pacific Funds immediately of any
material fact known to the Portfolio Manager respecting or relating to the
Portfolio Manager that is not contained in the Registration Statement or
prospectus for Pacific Funds, or any amendment or supplement thereto, or of any
statement contained therein that becomes untrue in any material respect.
(b) The Adviser agrees that it shall immediately notify the Portfolio
Manager (i) in the event that the SEC has censured the Adviser or Pacific Funds;
placed limitations upon either of their activities, functions, or operations;
suspended or revoked the Adviser's registration as an investment adviser; or has
commenced proceedings or an investigation that may result in any of these
actions, (ii) upon having a reasonable basis for believing that a Fund has
ceased to qualify or might not qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code, and (iii) upon having a reasonable
basis for believing that a Fund has ceased to comply with the diversification
provisions of Section 817(h) of the Internal Revenue Code or the Regulations
thereunder.
8. Independent Contractor. The Portfolio Manager shall for all purposes
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herein be deemed to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Adviser from time to time, have
no authority to act for or represent the Adviser in any way or otherwise be
deemed its agent. The Portfolio Manager understands that unless provided herein
or authorized from time to time by Pacific Funds, the Portfolio Manager shall
have no authority to act for or represent the Fund in any way or otherwise be
deemed Pacific Funds' Agent.
9. Books and Records. In compliance with the requirements of Rule 31a-3
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under the 1940 Act, the Portfolio Manager hereby agrees that all records which
it maintains for the Funds are the property of Pacific Funds and further agrees
to surrender promptly to Pacific Funds any of such records upon Pacific Funds'
or the Adviser's request, although the Portfolio Manager may, at its own
expense, make and retain a copy of such records.
10. Cooperation. Each party to this Agreement agrees to cooperate with
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each other party and with all appropriate governmental authorities having the
requisite jurisdiction (including, but not limited to, the SEC and state
insurance authorities) in connection with any investigation or inquiry relating
to this Agreement or Pacific Funds.
11. Responsibility and Control. Notwithstanding any other provision of
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this Agreement, it is understood and agreed that Pacific Funds shall at all
times retain the ultimate responsibility for and control of all functions
performed pursuant to this Agreement and reserves the right to direct, approve
or disapprove any action hereunder taken on its behalf by the Portfolio Manager,
provided, however, that Portfolio Manager shall not be liable for any losses to
Pacific Funds resulting from Pacific Funds' direction, or from Pacific Funds'
disapproval of any action proposed to be taken by the Portfolio Manager.
12. Services Not Exclusive. It is understood that the services of the
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Portfolio Manager and its employees are not exclusive, and nothing in this
Agreement shall prevent the Portfolio Manager (or its employees or affiliates)
from providing similar services to other clients,
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including investment companies (whether or not their investment objectives and
policies are similar to those of the Funds) or from engaging in other
activities.
13. Liability. Except as provided in Section 14 and as may otherwise be
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required by the 1940 Act or the rules thereunder or other applicable law,
Pacific Funds and the Adviser agree that the Portfolio Manager, any affiliated
person of the Portfolio Manager, and each person, if any, who, within the
meaning of Section 15 of the 1933 Act, controls the Portfolio Manager shall not
be liable for, or subject to any damages, expenses, or losses in connection
with, any act or omission connected with or arising out of any services rendered
under this Agreement, except by reason of willful misfeasance, bad faith, or
gross negligence in the performance of the Portfolio Manager's duties, or by
reason of reckless disregard of the Portfolio Manager's obligations and duties
under this Agreement. Notwithstanding the foregoing, the Portfolio Manager may
be liable to Pacific Funds for acts of good faith and nothing contained in this
Agreement shall constitute a waiver or limitation of rights that the Fund may
have under federal or state securities laws.
14. Indemnification.
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(a) The Portfolio Manager agrees to indemnify and hold harmless, the
Adviser, any affiliated person within the meaning of Section 2(a)(3) of the 1940
Act ("affiliated person") of the Adviser, and each person, if any, who, within
the meaning of Section 15 of the 1933 Act, controls ("controlling person") the
Adviser (collectively, "PL Indemnified Persons") against any and all losses,
claims, damages, liabilities or litigation (including reasonable legal and other
expenses), to which the Adviser or such affiliated person or controlling person
may become subject under the 1933 Act, 1940 Act, the Advisers Act, under any
other statute, at common law or otherwise, arising out of the Portfolio
Manager's responsibilities to Pacific Funds which (i) may be based upon any
misfeasance, nonfeasance, bad faith, negligence, or reckless disregard of, the
Portfolio Manager's obligations and/or duties under this Agreement by the
Portfolio Manager or by any of its directors, officers or employees, or any
affiliate acting on behalf of the Portfolio Manager (other than a PL Indemnified
Person), or (ii) may be based upon any untrue statement or alleged untrue
statement of a material fact contained in a registration statement or prospectus
covering the Shares of Pacific Funds, or any amendment thereof or any supplement
thereto, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, if such a statement or omission was made in reliance upon
information furnished in writing to the Adviser, Pacific Funds, or any
affiliated person of Pacific Funds by the Portfolio Manager or any affiliated
person of the Portfolio Manager (other than a PL Indemnified Person); provided,
however, that in no case is the Portfolio Manager's indemnity in favor of the
Adviser or any affiliated person or controlling person of the Adviser deemed to
protect such person against any liability to which any such person would
otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of his duties, or by reason of his reckless
disregard of obligations and duties under this Agreement.
(b) The Adviser agrees to indemnify and hold harmless the Portfolio
Manager, any affiliated person within the meaning of Section 2(a)(3) of the 1940
Act of the Portfolio Manager and each person, if any, who, within the meaning of
Section 15 of the 1933 Act controls ("controlling person") the Portfolio Manager
(collectively, "Portfolio Manager Indemnified Persons") against any and all
losses, claims, damages, liabilities or litigation (including reasonable legal
and other expenses) to which a Portfolio Manager Indemnified
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Person may become subject under the 1933 Act, the 1940 Act, the Advisers Act,
under any other statute, at common law or otherwise, arising out of the
Adviser's responsibilities as adviser of Pacific Funds which (i) may be based
upon any misfeasance, nonfeasance, bad faith or negligence by the Adviser, any
of its employees or any affiliate acting on behalf of the Adviser (other than a
Portfolio Manager Indemnified Person) or (ii) may be based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or prospectus covering Shares of Pacific Funds or any
Fund, or any amendment thereof or any supplement thereto, or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statement therein not misleading, unless such statement
or omission was made in reliance upon written information furnished to Pacific
Funds or the Adviser or any affiliated person of the Adviser by a Portfolio
Manager Indemnified Person (other than an Adviser Indemnified Person); provided
however, that in no case is the Adviser's indemnity in favor of the Portfolio
Manager Indemnified Persons deemed to protect such person against any liability
to which any such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of his duties, or
by reason of his reckless disregard of obligations and duties under this
Agreement.
15. Duration and Termination. This Agreement shall become effective as of
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the date of execution first written above, and shall continue in effect for two
years for a term ending December 31, 2002 and continue thereafter on an annual
basis with respect to each Fund; provided that such annual continuance is
specifically approved at least annually (a) by the vote of a majority of the
Board of Trustees of Pacific Funds, or (b) by the vote of a majority of the
outstanding voting shares of each Fund, and provided that continuance is also
approved by the vote of a majority of the Board of Trustees of Pacific Funds who
are not parties to this Agreement or "interested persons" (as such term is
defined in the 1940 Act) of Pacific Funds, the Adviser, or the Portfolio
Manager, cast in person at a meeting called for the purpose of voting on such
approval. This Agreement may not be materially amended without a majority vote
of the outstanding shares (as defined in the 0000 Xxx) of the Funds. This
Agreement may be terminated with respect to any Fund:
(a) by Pacific Funds at any time with respect to the services
provided by the Portfolio Manager, without the payment of any penalty,
forfeiture, compulsory buyout amount, or performance of any other obligation
which could deter termination, by vote of a majority of the entire Board of
Trustees of Pacific Funds or by a vote of a majority of the outstanding voting
shares of Pacific Funds or, with respect to a particular Fund, by vote of a
majority of the outstanding voting shares of such Fund, on 60 days' written
notice to the Portfolio Manager and the Adviser;
(b) by the Portfolio Manager at any time, without the payment of any
penalty, forfeiture, compulsory buyout amount or performance of any other
obligation which could deter termination, upon 60 days' written notice to the
Adviser and Pacific Funds.
(c) by the Adviser at any time, without the payment of any penalty,
forfeiture, compulsory buyout amount or performance of any other obligation
which could deter termination, upon 60 days' written notice to the Portfolio
Manager and Pacific Funds.
Any approval of this Agreement by the holders of a majority of the
outstanding shares (as defined in the 0000 Xxx) of a particular Fund shall be
effective to continue this Agreement with respect to such Fund notwithstanding
(a) that this Agreement has not been approved by
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the holders of a majority of the outstanding shares of any other Fund or
(b) that this Agreement has not been approved by the vote of a majority of the
outstanding shares of Pacific Funds, unless such approval shall be required by
any other applicable law or otherwise.
This Agreement will terminate automatically in event of its assignment (as
that term is defined in the 1940 Act), but shall not terminate in connection
with any transaction not deemed an assignment within the meaning of Rules 2a-6
under the 1940 Act, or any other rule adopted by the SEC regarding transactions
not deemed to be assignments. In the event this Agreement is terminated or is
not approved in the manner described above, the Sections or Paragraphs numbered
2(h) for a period of six years, and 10, 11, 13, 14 and 16 of this Agreement as
well as any applicable provision of this Paragraph numbered 15 shall remain in
effect.
16. Use of Name.
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(a) It is understood that the name "Pacific Life Insurance Company"
and "Pacific Life", and "Pacific Select Funds" and any derivative thereof or
logo associated with those names are the valuable property of the Adviser and
its affiliates, and that the Portfolio Manager shall not use such names (or
derivatives or logos) without the prior written approval of the Adviser and only
so long as the Adviser is an investment adviser to Pacific Funds and/or the
Funds. Upon termination of the Investment Advisory Agreement between Pacific
Funds and the Adviser, the Portfolio Manager shall forthwith cease to use such
name (or derivative or logo).
(b) It is understood that the name "Lazard Freres & Co. LLC", or
"Lazard Asset Management" or "Lazard" or logo associated with those names is the
valuable property of the Portfolio Manager and that Pacific Funds and Adviser
have the right to use such name (or derivative or logo), in Pacific Funds'
prospectus, SAI and registration statement or other filings, forms or reports
required under applicable state or federal securities, insurance, or other law,
and for so long as the Portfolio Manager is a Portfolio Manager to Pacific Funds
and/or one of the Funds. Neither Pacific Funds nor the Adviser shall use the
Portfolio Manager's name or logo in promotional or sales related materials
prepared by or on behalf of the Adviser or Pacific Funds, without prior review
and approval by the Portfolio Manager, which may not be unreasonably withheld.
Upon termination of this Agreement among Pacific Funds, the Adviser and the
Portfolio Manager, Pacific Funds and the Adviser shall forthwith cease to use
such names (and logo).
17. Limitation of Liability.
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A copy of the Agreement and Declaration of Trust for the Fund is on
file with the Secretary of the State of Delaware. The Agreement and Declaration
of Trust has been executed on behalf of Pacific Funds by a Trustee of Pacific
Funds in his capacity as Trustee of the Fund and not individually. The
obligations of this Agreement shall be binding upon the assets and property of
Pacific Funds and shall not be binding upon any Trustee, officer, employee,
agent or shareholder, whether past, present, or future, of Pacific Funds
individually.
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18. Notices
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All notices and other communications hereunder shall be in writing
sent by facsimile first, if practicable, but shall only be deemed given if
delivered in person or by messenger, cable, certified mail with return receipt,
or by a reputable overnight delivery service which provides evidence of receipt
to the parties at the following addresses (or at such other address or number
for a party as shall be specified by like notice):
A. if to the Portfolio Manager, to:
Lazard Asset Management
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000-0000
Facsimile transmission number: 000-000-0000
Attention: Xxxxxx Xxxx
B. if to the Adviser, to:
Pacific Life Insurance Company
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Facsimile transmission number: 000-000-0000
Attention: Xxxxx X. Xxxxx
C. if to the Fund, to:
Pacific Funds
c/o Pacific Life Insurance Company
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Facsimile transmission number: 000-000-0000
Attention: Xxxxx X. Xxxxx
19. Miscellaneous.
-------------
(a) This Agreement shall be governed by the laws of California,
provided that nothing herein shall be construed in a manner inconsistent with
the 1940 Act, the Investment Advisers Act of 1940 or rules or orders of the SEC
thereunder. The term "affiliate" or "affiliated person" as used in this
Agreement shall mean "affiliated person" as defined in Section 2(a)(3) of the
0000 Xxx.
(b) The captions of this Agreement are included for convenience only
and in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.
(c) To the extent permitted under Section 15 of this Agreement, this
Agreement may only be assigned by any party with prior written consent of the
other parties.
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(d) 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, and to this extent, the provisions of this
Agreement shall be deemed to be severable. To the extent that any provision of
this Agreement shall be held or made invalid by a court decision, statute, rule
or otherwise with regard to any party hereunder, such provisions with respect to
other parties hereto shall not be affected thereby.
(e) This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original, and all such counterparts shall
together constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed as of the day and year first written above.
PACIFIC LIFE INSURANCE COMPANY
Attest: By:
------------------------- ------------------------------
Name: Name:
Title: Title:
LAZARD FRERES & CO. LLC
Attest: By:
-------------------------- ------------------------------
Name: Name:
Title: Title:
PACIFIC FUNDS
Attest: By:
-------------------------- ------------------------------
Name: Name:
Title: Title:
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PACIFIC FUNDS
FEE SCHEDULE
Fund: XX Xxxxxx International Value
Fee: The Adviser will pay to the Fund Manager a monthly fee based on an
annual percentage of the combined average daily net assets of the
XX Xxxxxx International Value Fund and the International Value Portfolio
of the Pacific Select Fund, according to the following schedule:
.35% On first $2 billion
.30% On excess
These fees for services shall be prorated for any portion of a year in which the
Agreement is not effective.
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