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EXHIBIT (d)(4)
SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT made this _____ day of ________, 2000, between
FIRST TENNESSEE BANK NATIONAL ASSOCIATION, a national banking association
(herein called the "Investment Adviser") and HIGHLAND CAPITAL MANAGEMENT CORP.,
a Delaware corporation (herein called the "Sub-Adviser").
WHEREAS, the Investment Adviser is the investment adviser to the First
Horizon Growth & Income Portfolio (herein called the "Portfolio"), a series
under Financial Investors Variable Insurance Trust (herein called the "Trust"),
an open-end, diversified, management investment company of the "series" type,
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Investment Adviser wishes to retain the Sub-Adviser to
provide investment advisory services in connection with the Portfolio; and
WHEREAS, the Sub-Adviser is willing to provide such services to the
Investment Adviser upon the conditions and for the compensation set forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, it is agreed between
the parties hereto as follows
1. Appointment. (a) The Investment Adviser hereby appoints the
Sub-Adviser its subadviser with respect to the Portfolio, as permitted in the
Investment Advisory and Management Agreement between the Investment Adviser and
the Trust dated ________________, 2000 (such Agreement or the most recent
successor advisor agreement between such parties is herein called the "Advisory
Agreement"). The Sub-Adviser accepts such appointment and agrees to use its best
professional judgement to make timely investment decisions for the Portfolio
with respect to the investments of the Portfolio in accordance with the
provisions of this Agreement for the compensation herein provided.
(b) The Sub-Adviser shall for all purposes herein be deemed to
be an independent contractor and shall, except as expressly provided or
authorized (whether herein or otherwise), have no authority to act for
or represent the Trust or the Investment Adviser in any way or
otherwise be deemed an agent of the Trust or the Investment Adviser.
2. Delivery of Documents. (a) The Investment Adviser shall provide to
the Sub-Adviser copies of the Trust's most recent prospectus and statement of
additional information (as each may be amended or supplemented from time to
time) which relate to shares representing interests in the Portfolio (each such
prospectus and statement of additional information as presently in effect, and
as they shall from time to time be amended and supplemented, is herein
respectively called a "Prospectus" and a "Statement of Additional Information").
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(b) The Sub-Adviser will make available and provide to the
Investment Adviser such financial, accounting, and statistical
information related to its duties and responsibilities hereunder as is
necessary for the preparation of registration statements, reports. and
other documents required by federal and state securities laws and such
other information as the Trust's Board of Trustees (herein called the
"Trustees") or the Investment Adviser may reasonably request for use by
the Trust and its distributor for the underwriting and distribution of
the Portfolio shares.
3. Sub-Advisory Services to the Portfolio. Subject to the supervision
of the Investment Adviser, the Sub-Adviser will supervise the day-to-day
operations of the Portfolio and perform the following services: (i) provide
investment research and credit analysis concerning the Portfolio's investments,
(ii) conduct a continual program of investment of the Portfolio's assets, (iii)
place orders in accordance with paragraphs 4 to 7 hereof for all purchases and
sales of the investments made for the Portfolio, and (iv) maintain the books and
records required in connection with its duties hereunder. In addition, the
Sub-Adviser will keep the Investment Adviser informed of developments materially
affecting the Trust. The Sub-Adviser will communicate to the Investment Adviser
on each day that a purchase or sale of a security is effected for the Portfolio
(i) the name of the issuer, (ii) the amount of the purchase or sale, (iii) the
name of the broker, dealer, bank or other person (herein called "Brokers), if
any, through which the purchase or sale will be effected, (iv) the CUSIP number
of the security, if any, (v) the Portfolio to which such purchase or sale
pertains, and (vi) such other information as the Investment Adviser may
reasonably require for purposes of fulfilling its obligations to the Trust under
the Advisory Agreement. The Sub-Adviser will render to the Trustees such
periodic and special reports as the Investment Adviser or the Trustees may
reasonably request, including, if applicable, regular reports of the total
brokerage business placed by it and the manner in which the allocation of such
brokerage business has been accomplished. The Sub-Adviser will provide the
services rendered by it hereunder in accordance with the Portfolio's investment
objectives, policies, and restrictions as stated in its current Prospectus and
Statement of Additional Information. Except for instructions or advice given to
the Sub-Adviser by the Investment Adviser, the Investment Adviser shall not be
responsible or liable for the investment merits of any decision by the
Sub-Adviser to purchase, hold or sell a security for the Portfolio.
4. Brokerage. The Sub-Adviser may place orders pursuant to its
investment determinations for the Portfolio either directly with the issuer or
with any Brokers. In placing orders, the Sub-Adviser will consider the
experience and skill of the firm's securities traders as well as the firm's
financial responsibility and administrative efficiency. The Sub-Adviser will
attempt to obtain the best price and the most favorable execution of its orders.
Consistent with these obligations, the Sub-Adviser may, subject to the approval
of the Trustees, select Brokers on the basis of the research, statistical, and
pricing services they provide to the Portfolio. A commission paid to such
Brokers may be higher than that which another qualified broker would have
charged for effecting the same transaction, provided that the Sub-Adviser
determined in good faith that such commission is reasonable in terms either of
the transaction or the overall responsibility of the Sub-Adviser to the
Portfolio and its other clients and that the total commissions paid by the
Portfolio will be reasonable in relation to the benefits to the Portfolio over
the long term. In no instance will Portfolio securities be purchased from or
sold to the Trust's principal underwriter, the investment Adviser, the
Sub-Adviser, or any affiliate (as defined in the 0000 Xxx) thereof, except to
the extent permitted by
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SEC exemptive order or by applicable law. The Investment Adviser agrees to
provide the Sub-Adviser a list of Brokers which are "affiliated persons" (as
defined in the 0000 Xxx) of the Trust and the Investment Adviser. The
Sub-Adviser agrees to furnish to the Investment Adviser and to the Trust a list
of Brokers and dealers, which are such "affiliated persons" of the Sub-Adviser.
It is understood that neither the Investment Adviser nor the Sub-Adviser has
adopted a formula for selection of Brokers for the execution of the Portfolio's
investment transactions.
5. Transaction Procedures. All investment transactions on behalf of the
Portfolio will be consummated by payment to or delivery by the duly appointed
custodian for the Portfolio (the "Custodian"), or such depositories or agents
duly appointed by the Trustees and as may be designated by the Custodian in
writing, as custodian for the Portfolio, of all cash and/or securities due to or
from the Portfolio, and the Sub-Adviser shall not have possession or custody
thereof or any responsibility or liability with respect thereto. The Sub-Adviser
in effecting transactions on behalf of the Portfolio shall advise the Custodian
of all investment orders for the Portfolio placed by it with Brokers. The
Investment Adviser shall issue, or cause to be issued, to the custodian such
instructions as may be appropriate in connection with the settlement of any
transaction initiated by the Sub-Adviser. The Portfolio is responsible for all
custodial arrangements and the payment of all custodial charges and fees, and,
upon the giving of proper instructions to the Custodian, the Sub-Adviser shall
have no responsibility or liability with respect to custodial arrangements or
the acts, omissions or other conduct of the Custodian, except that it shall be
the responsibility of the Sub-Adviser to take appropriate action if the
Custodian fails properly to confirm, execution of the instructions to the
Sub-Adviser in a written form duly agreed upon by the Custodian and the
Sub-Adviser.
6. Compliance with Laws; Confidentiality. (a) The Sub-Adviser agrees
that it will comply with all applicable rules and regulations of all federal and
state regulatory agencies having jurisdiction over the Sub-Adviser in
performance of its duties hereunder (herein called the "Rules"). The Sub-Adviser
will treat confidentially and as proprietary information of the Trust all
records and information relative to the Trust and prior, present or potential
shareholders, and will not use such records and information for any purpose
other than performance of its responsibilities and duties hereunder, except
after prior notification to and approval in writing by the Investment Adviser
and the Trust, which approval shall not be unreasonably withheld and may not be
withheld where the Sub-Adviser may be exposed to civil or criminal contempt
proceedings for failure to comply, when required to divulge such information by
duly constituted authorities, or when so requested by the Trust.
(b) The Sub-Adviser is not authorized by the Trust or the
Investment Adviser to take any action, including the purchase or sale
of securities for the account of the Portfolio, (a) in contravention of
(i) any investment restrictions set forth-in the 1940 Act and the rules
thereunder; (ii) specific written instructions adopted by the Trustees
or the Investment Adviser and communicated to the Sub-Adviser; or (iii)
the investment objectives, policies, and restrictions of the Portfolio
as set forth in the Trust's registration statement as amended from time
to time, or (b) which would have the effect of causing the Trust to
fail to qualify or to cease to qualify as a regulated investment
company under the Internal Revenue Code of 1986, as amended, or any
succeeding statute.
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(c) The Sub-Adviser agrees with respect to the services provided
to the Portfolio that it:
(i) will conform with all applicable rules and
regulations of the Securities and Exchange Commission ("SEC");
(ii) will not purchase shares of the Portfolio for
its own investment account; and
(iii) will immediately notify the Trust and the
Investment Adviser of the occurrence of any event which would
disqualify the Sub-Adviser from serving as investment adviser
of an investment company.
7. Control by Trust's Board of Trustees. Any recommendations concerning
the Portfolio's investment program proposed by the Sub-Adviser to the Portfolio
and to the Investment Adviser pursuant to this Agreement, as well as any other
activities undertaken by the Sub-Adviser on behalf of the Portfolio pursuant
hereto, shall at all times be subject to any applicable directives of the Board
of Trustees of the Trust.
8. Services Not Exclusive. The Sub-Adviser's services hereunder are not
deemed to be exclusive, and the Sub-Adviser shall be free to render similar
services to others so long as its services under this Agreement are not impaired
thereby.
9. Books and Records. In compliance with the requirements of Rule 31a-3
of the Rules, the Sub-Adviser hereby agrees that all records which it maintains
for the Trust are the property of the Trust and further agrees to surrender
promptly to the Trust and the Investment Adviser any such records upon the
request of the Trust or the Investment Adviser. The Sub-Adviser further agrees
to preserve for the periods prescribed by Rule 31a-2, the records required to be
maintained by the Sub-Adviser hereunder pursuant to Rule 31a- 1 of the Rules.
10. Expenses. During the term of this Agreement, the Sub-Adviser will
bear all expenses in connection with the performance of its services under this
Agreement. The Sub-Adviser shall not bear certain other expenses related to the
operation of the Trust including, but not limited to: taxes levied against the
Trust, the Portfolio or the Investment Adviser; interest; brokerage fees and
commissions in connection with the purchase and sale of portfolio securities for
the Portfolio; and any extraordinary expense items.
11. Compensation. (a) For the services provided and the expenses
assumed pursuant to this Agreement, the Investment Adviser shall pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation therefor,
a sub-advisory fee payable as soon as practicable after the last day of each
month, calculated using an annual rate of .33% (the "Annual Rate").
(b) The monthly sub-advisory fee to be paid by the Investment
Adviser to the Sub-Adviser shall be determined as of the close of
business on the last business day of each
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month by multiplying one-twelfth of the Annual Rate by the Average
Portfolio Net Assets (hereinafter defined) calculated monthly as of
such day.
(c) For the purposes of this paragraph, the "Average
Portfolio Net Assets" shall be calculated monthly as of the last
business day of each month and shall mean the sum of the net assets of
the Portfolio calculated each business day during the month divided by
the number of business days in the month (such net assets to be
determined as of the close of business each business day and computed
in the manner set forth in the Declaration of Trust of the Trust).
(d) The Sub-Adviser acknowledges that the Investment Adviser
has agreed with the Trust to reduce the Investment Adviser's
compensation for any fiscal year by the amount, if any, by which the
expenses of the Portfolio for such fiscal year exceed the most
restrictive state Blue Sky expense limitation in effect from time to
time, to the extent required by such limitation. The Sub-Adviser agrees
that its compensation for any fiscal year shall be reduced by the same
proportion as the Investment Adviser's compensation is reduced as
described in the preceding sentence, for any fiscal year in which the
expenses of the Portfolio for such fiscal year exceed the most
restrictive state Blue Sky expense limitation in effect from time to
time. The Sub-Adviser shall refund to the Investment Adviser the amount
of any reduction of the Sub-Adviser's compensation pursuant to this
paragraph 1 l(d) as promptly as practicable after the end of such
fiscal year, provided that the Sub-Adviser will not be required to pay
the Investment Adviser an amount greater than the fee paid to the
Sub-Adviser in respect of such year pursuant to this Agreement. As used
in this paragraph ll(d), "expenses" shall mean those expenses included
in the most restrictive state Blue Sky expense limitation, having the
broadest specification in such state's Blue Sky statute, and "expense
limitation" means a limit on the maximum annual expenses which may be
incurred by an investment company determined by multiplying a fixed
percentage by the average or by multiplying more than one such
percentage by different specified amounts of the average, of the values
of the investment company's net assets for a fiscal year. The words
"most restrictive state Blue Sky expense limitation" shall be construed
to result in the largest reduction of the Sub-Adviser's compensation
for any fiscal year of the Portfolio; provided, however, that nothing
in this Agreement shall require the Sub-Adviser to reduce its fees if
the Investment Adviser is not required by an applicable statute or
regulation referred to above in this paragraph ll(d) to reduce its
fees.
12. Limitation on Liability. (a) The Sub-Adviser will not be liable for
any error or judgment or mistake of law or for any loss suffered by the
Investment Adviser, the Portfolio or the Trust in connection with the matters to
which this Agreement relates, except that the Sub-Adviser shall be liable to the
Investment Adviser, the Portfolio or the Trust for a loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the Sub-Adviser's part in the performance of its duties or
reckless disregard by it of its obligations or duties under this Agreement.
(b) The Sub-Adviser shall indemnify and hold harmless the
Trust, the Portfolio and the Investment Adviser from any loss, cost,
expense or damage resulting from the failure
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of the descriptive information furnished by the Sub-Adviser to be
accurate in all material respects at the time provided or the failure
of the Sub-Advisor to comply in all material respects with the
investment objectives and policies and restrictions as set forth in the
Trust's registration statements as amended from time to time.
13. Duration Amendment. and Termination. (a) This Agreement shall
become effective on the date first written above and shall remain in force for a
period of two (2) years from such date, and from year to year thereafter but
only so long as such continuance is specifically approved at least annually by
the Investment Adviser, and (i) by the vote of a majority of the Trustees who
are not interested persons of the Investment Adviser or the Sub-Adviser, cast in
person at a meeting called for the purpose of voting on such approval and by a
vote of the Trustees or (ii) by the vote of a majority of the outstanding voting
securities of the Portfolio. The aforesaid provision that this Agreement may be
continued "annually" shall be construed in a manner consistent with the 1940 Act
and the rules and regulations thereunder.
(b) This Agreement may be amended at any time, but only by
written agreement between the Investment Adviser and the Sub-Adviser,
which amendment is subject to the approval of the Trustees and the
shareholders of the Trust in the manner required by the 1940 Act,
subject to any applicable exemptive order of the SEC modifying the
provisions of the 1940 Act with respect to approval of amendments of
this Agreement.
(c) This Agreement: (i) may at any time be terminated without
the payment of any penalty either by vote of the Trustees or by vote of
a majority of the outstanding voting securities of the Portfolio, on
sixty (60) days' written notice to the Sub-Adviser, (ii) shall
immediately terminate in the event of its assignment; and (iii) may be
terminated by the Sub-Adviser on sixty (60) days' written notice to the
Investment Adviser and by the Investment Adviser on sixty (60) days'
written notice to the Sub-Adviser.
(d) As used in this Section 12, the terms "assignment,"
"interested person," and "vote of a majority of the outstanding voting
securities" shall have the meanings set forth in the 1940 Act and the
rules and regulations thereunder, subject to any applicable orders of
exemption issued by the SEC.
(e) All notices, requests, demands or other communications
hereunder shall be in writing and shall be deemed given, if delivered
personally, on the day delivered or if mailed by certified or
registered mail, postage prepaid, return receipt requested, three (3)
days after placement in the United States mail, to the addresses below:
If to Investment Adviser: First Tennessee Bank National Association
c/o C. Xxxxxxx Xxxxx, III
Senior Vice President and Manager
000 Xxx Xxxxx Xxxxx, Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
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With a copy to: Xxxxxx X. Xxxxx, Esq.
Vice President and Counsel
First Tennessee Bank National Association
000 Xxxxxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
If to Sub-Adviser: Highland Capital Management Corp.
c/o Xxxxx Xxxxxxx
0000 Xxxx Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxx 00000
If to Trust: Financial Investors Variable Insurance Trust
c/o Xxxxxxx Xxxx
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
With a copy to: Xxxxxx Xxxxxxxx, Esq.
Xxxxx, Xxxxxx & Xxxxxx LLP
0000 00xx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
14. Shareholder Liability. Sub-Adviser 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
Portfolio or the Trust, if any, shall be limited in all cases to the Portfolio
and its assets. Sub-Adviser agrees that it shall not seek satisfaction of any
such obligation from the shareholders or any individual shareholder of the
Portfolio or the Trust, nor from the Trustees or any individual Trustee of the
Trust.
15. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any provisions
hereof or otherwise affect their construction or effect. 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.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors. To the extent that state law has
not been preempted by the provisions of any law of the United States heretofore
or hereafter enacted, as the same may be amended from time to time, this
Agreement shall be administered, construed, and enforced according to the laws
of the State of Tennessee without giving effect to the choice of laws provisions
thereof.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their duly authorized officers designated below as of the day and
year first above written.
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FIRST TENNESSEE BANK NATIONAL ASSOCIATION
By:
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Title:
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HIGHLAND CAPITAL MANAGEMENT CORP.
By:
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Title:
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