EXHIBIT 23 (d) (2)
MLIG VARIABLE INSURANCE TRUST
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT ("Agreement") is made this 19th day of
February, 2003 by and between MLIG Variable Insurance Trust, a business trust
organized and existing under the laws of the state of Delaware (the "Trust"),
and Xxxxxx Advisors, LLC (the "Manager"), a limited liability company organized
and existing under the laws of the state of Delaware.
RECITALS
1. The Trust is a series-type, open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), that currently consists of the twenty four investment portfolios,
including the three Portfolios listed in Appendix A, attached hereto (each, a
"Portfolio");
2. The Trust issues a separate series of shares of beneficial interest for
each Portfolio, which shares represent fractional undivided interests in the
Portfolio;
3. The Trust desires to retain the Manager to provide or to arrange to
provide overall management of the Trust and each Portfolio, including investment
advisory services, in the manner and on the terms and conditions set forth in
this Agreement;
4. The Manager is willing to provide or to arrange to provide general
management and investment advisory services to the Trust and each Portfolio on
the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the promises and the covenants
herein, the Trust and the Manager agree as follows:
ARTICLE I
Duties of the Manager
The Trust engages the Manager to act as the Trust's general manager and
investment adviser to provide directly or to arrange through third parties,
investment advisory and general management services to it and to each existing
Portfolio, for the period on the terms and conditions set forth in this
Agreement. This Agreement may be extended to any additional investment
portfolios that the Trust may establish in the future on the same terms and
conditions. The Manager hereby accepts such engagement and agrees during such
period, at its own expense, to provide or to arrange to provide, such investment
advisory and general management services, and to assume the obligations set
forth in this Agreement for the compensation provided for herein. Subject to the
supervision of the board of trustees of the Trust (the "Board") and the
provisions of the 1940 Act and the Investment Advisers Act of 1940, as amended
(the "Advisers Act"), the Manager may retain any affiliated or unaffiliated
investment adviser(s),
investment subadviser(s) or other party, to perform any or all of the services
set forth in this Agreement.
The Manager, its affiliates and any investment adviser(s), investment
subadviser(s) or other parties performing services for the Manager shall, for
all purposes herein, be independent contractors and shall, except as otherwise
expressly provided or authorized, have no authority to act for or represent the
Trust or a Portfolio in any way or otherwise be deemed agents of the Trust or a
Portfolio.
Subject to supervision by the Board, the Manager shall have and exercise
full investment discretion and authority to act as agent for the Trust in
buying, selling or otherwise disposing of or managing the investments of each
Portfolio, directly or through investment subadvisers.
The Manager and any other party performing services covered by this
Agreement shall be subject to: (1) the restrictions of the Trust's Declaration
of Trust as amended from time to time; (2) the provisions of the 1940 Act and
the Advisers Act; (3) the statements relating to each Portfolio's investment
objectives, investment strategies and investment restrictions as set forth in
the currently effective (and as amended from time to time) registration
statement of the Trust (the "registration statement") under the Securities Act
of 1933, as amended; (4) appropriate state insurance laws; and (5) any
applicable provisions of the Internal Revenue Code of 1986, as amended (the
"Code").
(a) General Management Services. The Manager shall supervise and
oversee all custody, transfer agency, dividend disbursing, legal, accounting and
administrative services by third parties that have contracted with the Trust to
provide such services ("Service Providers"). The Manager shall also be
responsible for the performance of various administrative functions for the
Trust including:
(1) coordinate the efforts of the Trust's counsel and independent
auditors;
(2) provide officers for the Trust;
(3) provide clerical, secretarial and bookkeeping services, office
supplies, office space and related services (including telephone and
other utility services); and
(4) monitor state and federal law as it may apply to the Trust or
Portfolios.
(b) Investment Advisory Services. The Manager shall provide the
Trust directly or through investment subadvisers with such investment research,
advice and supervision as the Trust may from time to time consider necessary for
the proper management of the assets of each Portfolio, shall furnish
continuously an investment program for each Portfolio, shall determine from time
to time which securities or other investments shall be purchased, sold or
exchanged for the various Portfolios, including providing or obtaining such
services as may be necessary in managing, acquiring or disposing of securities,
cash or other investments.
The Trust has furnished the Manager with copies of the Trust's
registration statement and Declaration of Trust as currently in effect and
agrees during the continuance of this Agreement to furnish the Manager with
copies of any amendments or supplements thereto before or at the
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time the amendments or supplements become effective. The Manager and any Service
Providers will be entitled to rely on all documents furnished by the Trust.
The Manager represents that in performing investment advisory services
for each Portfolio, the Manager shall make every effort to ensure that: (1) each
Portfolio complies with Section 817(h) of the Code and the regulations issued
thereunder, specifically Regulation Section 1.817-5, relating to the
diversification requirements for variable annuity, endowment, and life insurance
contracts, and any amendments or other modifications to such Section or
regulations; (2) each Portfolio continuously qualifies as a regulated investment
company under Subchapter M of the Code or any successor provisions; and (3) any
and all applicable state insurance law restrictions on investments that operate
to limit or restrict the investments that a Portfolio may otherwise make are
complied with as well as any changes thereto. Except as instructed by the Board,
the Manager shall also make decisions for the Trust as to the manner in which
voting rights, rights to consent to corporate action, and any other rights
pertaining to the Trust's securities shall be exercised. If the Board at any
time makes any determination as to investment policy and notifies the Manager of
such determination, the Manager shall be bound by such determination until
notified to the contrary.
The Manager shall take, on behalf of each Portfolio, all actions which
it considers necessary to implement the investment strategies of such Portfolio,
and in particular, to place all orders for the purchase or sale of securities or
other investments for the account of each Portfolio with brokers and dealers
selected by it, and to that end, the Manager 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 each
Portfolio.
In connection with the selection of brokers or dealers and the placing
of purchase and sale orders with respect to investments of the Portfolios, the
Manager is directed at all times to seek to obtain best execution and price
within the policy guidelines determined by the Board from time to time. Subject
to this requirement and the provisions of the 1940 Act, the Advisers Act, the
Securities Exchange Act of 1934, as amended, and other applicable provisions of
law, the Manager may select brokers or dealers that are affiliated with it or
the Trust (or with a subadviser) as well as brokers or dealers which sell
insurance policies of Xxxxxxx Xxxxx Insurance Company and ML Life Insurance
Company of York or their affiliates.
To the extent permitted by the policy guidelines, the Manager 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: (1) the execution capabilities of such brokers and dealers, (2)
research, brokerage and other services provided by such brokers and dealers
which the Manager believes will enhance its general portfolio management
capabilities, (3) the size of the transaction, (4) the difficulty of execution,
(5) the operational facilities of such brokers and dealers, (6) the risk to such
a broker or dealer of positioning a block of securities, and (7) the brokerage
service arrangements made available by the broker or dealer. In connection with
the foregoing, the Manager 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 Manager 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
the
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Manager's overall responsibilities with respect to the Trust, the Portfolio and
to any other client accounts or portfolios which the Manager advises. The
execution of such transactions shall not be considered to represent an unlawful
breach of any duty created by this Agreement or otherwise.
When selecting brokers or dealers and placing purchase and sale orders
for securities and other investments, when instructed to do so by the Trust in
connection with brokerage service arrangements approved by the Board, the
Manager agrees and is authorized to place orders with one or more brokers or
dealers identified by the Trust (including brokers or dealers who are affiliated
persons of the Trust, the Manager or a subadviser). The execution of such
transactions shall not be considered to represent an unlawful breach of any duty
created by this Agreement or otherwise.
The Manager also is authorized to aggregate purchase and sale orders for
securities held (or to be held) in a Portfolio with similar orders being made on
the same day for other client accounts or Portfolios managed by Manager. When an
order is so aggregated: (1) the actual prices applicable to the aggregated
transaction will be averaged and the Portfolio and each other account or
portfolio participating in the aggregated transaction shall be treated as having
purchased or sold its portion of the securities at such average price, and (2)
all transaction costs incurred in effecting the aggregated transaction shall be
shared on a pro-rata basis among the accounts or portfolios (including the
Portfolios) participating in the transaction. The Trust recognizes that in some
cases this procedure 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 a
Portfolio), the Manager may allocate such recommendations or transactions among
all accounts and portfolios for whom the recommendation is made or transaction
is effected on a basis that the Manager considers equitable. Similarly, the
Manager may not recommend a specific security or other investment for all client
accounts or portfolios (including the Portfolios) with the same or similar
investment objective(s) or strategies or may not recommend a specific security
or other investment for such client accounts at the same time or price.
As part of carrying out its obligations to manage the investment and
reinvestment of the assets of each Portfolio consistent with the requirements
under the 1940 Act, the Manager shall:
(1) Perform research and obtain and analyze pertinent economic,
statistical, and financial data relevant to the investment
policies of each Portfolio as set forth in the registration
statement;
(2) Consult with the Board and furnish to the Board recommendations
with respect to an overall investment strategy for each
Portfolio for approval, modification, or rejection by the Board;
(3) Seek out and implement specific investment opportunities,
consistent with any investment strategies approved by the Board;
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(4) Take such steps as are necessary to implement any overall
investment strategies approved by the Board for each Portfolio,
including making and carrying out day-to-day decisions to
acquire or dispose of permissible investments, managing
investments and any other property of the Portfolio, and
providing or obtaining such services as may be necessary in
managing, acquiring or disposing of investments;
(5) Regularly report to the Board with respect to the implementation
of any approved overall investment strategy and any other
activities in connection with management of the assets of each
Portfolio including furnishing, within 60 days after the end of
each calendar quarter, a statement of investment performance for
the period since the last report and a schedule of investments
and other assets of each Portfolio as of the end of the quarter;
(6) Maintain, in the form and for the periods required by Rule 31a-2
of the 1940 Act, all records relating to each Portfolio's
investments that are required to by maintained by the Trust
pursuant to paragraphs (b)(5), (b)(6), (b)(7), (b)(9), (b)(10)
and (f) of Rule 31a-1 of the 1940 Act;
(7) Furnish any personnel, office space, equipment and other
facilities necessary for it to perform its obligations under
this Agreement;
(8) Provide the appropriate Service Provider(s) with such financial
or other data concerning each Portfolio's investment activities
as shall be necessary or required to prepare and to file all
periodic financial reports or other documents required to be
filed with the Securities and Exchange Commission ("SEC") and
any other regulator;
(9) To the extent required by appropriate Service Providers, assist
in determining each business day the net asset value of the
shares of each Portfolio; and
(10) Enter into any written investment advisory or investment
subadvisory contract with another affiliated or unaffiliated
party, subject to any approvals required by Section 15 of the
1940 Act, pursuant to which such party will carry out some or
all of the Manager's responsibilities listed above.
ARTICLE II
The Manager
The Manager is registered with the SEC under the Advisers Act. The
Manager shall remain so registered throughout the term of this Agreement and
shall notify Trust immediately if the Manager ceases to be so registered as an
investment adviser.
The Manager has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and will provide 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
president or a vice president of the Manager shall certify to the
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Trust that the Manager has complied with the requirements of Rule 17j-1 (as
amended from time to time) during the previous quarter and that there have been
no violations of the Manager's code of ethics or, if such a violation has
occurred, that appropriate action has been taken in response to such violation.
Upon written request of the Trust, the Manager shall permit representatives of
the Trust to examine the reports (or summaries of the reports) required to be
made to the Manager by Rule 17j-1(c)(1) and other records evidencing enforcement
of the code of ethics.
ARTICLE III
Allocation of Charges and Expenses
(a) The Manager. The Manager assumes the expense of and shall pay for
maintaining the staff and personnel necessary to perform its obligations under
this agreement, and shall at its own expense provide the office space, equipment
and facilities for such personnel, and shall pay all compensation of officers
and trustees of the Trust who are affiliated persons of the Manager.
(b) Investment Subadviser Fees. The Manager assumes and shall pay the
fees of any investment adviser(s), investment subadviser(s) or other party it
contracts with to assume all or part of the Manager's responsibilities under
this Agreement.
(c) The Trust. The Trust assumes and shall pay or cause to be paid all
of its other expenses, including, without limitation, the following: taxes, fees
of the administrator, expenses for legal and auditing services, costs of
printing proxy materials, shareholder reports and prospectuses (except to the
extent such prospectuses are used in connection with the sale and distribution
of the Trust's securities), custody and transfer agency fees, expenses of
redemption of shares, SEC filing fees, expenses of registering the shares under
the federal securities laws, fees and actual out-of-pocket expenses of trustees
who are not affiliated persons of the Trust, accounting and printing costs
(including the daily calculation of the net asset value), insurance, interest,
brokerage costs, litigation and other extraordinary or nonrecurring expenses,
and other expenses properly payable by the Trust.
ARTICLE IV
Compensation of the Manager
For the services rendered, the facilities furnished and expenses assumed
by the Manager, the Trust shall pay to the Manager at the end of each calendar
month a fee for each Portfolio calculated as a percentage of the average daily
net assets of the Portfolio at the annual rates set forth in Appendix A of this
Agreement. The Manager's fee is accrued daily at 1/365th of the applicable
annual rate set forth in Appendix A. For the purpose of the fee accrual, the
daily net assets of each Portfolio are determined in the manner and at the times
set forth in the Trust's current prospectus 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 will be calculated on a pro-rated basis through
the date of termination and paid within fifteen business days of the date of
termination.
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ARTICLE V
Limitation of Liability of the Manager
The Manager shall not be liable for any error of judgment or mistake of
law or for any loss arising out of any investment or for any act or omission in
the management of the Trust, except for (a) willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of reckless
disregard of its obligations and duties hereunder, and (b) to the extent
specified in section 36(b) of the 1940 Act concerning loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation.
ARTICLE VI
Activities of the Manager
The Manager's services under this Agreement are not exclusive. The
Manager may provide the same or similar services to other clients and is not
required to give priority to one or more of the Portfolios over its other client
accounts or portfolios.
It is understood that trustees, officers, employees and shareholders of
the Trust are or may become interested persons of the Manager, as trustees,
officers, employees and shareholders or otherwise, and that trustees, officers,
employees and shareholders of the Manager are or may become similarly interested
persons of the Trust, and that the Manager may become interested in the Trust as
a shareholder or otherwise.
ARTICLE VII
Books and Records
The Manager hereby undertakes and agrees to maintain all records not
maintained by Service Providers or investment subadvisers pursuant to their
agreements with the Trust or Manager, in the form and for the period required by
Rule 31a-2 under the 1940 Act.
The Manager agrees that all books and records which it maintains for the
Trust are the property of the Trust and further agrees to surrender promptly to
the Trust any such books, records or information upon the Trust's request. 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 the Manager's offices. The Trust or its authorized representative shall
have the right to copy any records in the possession of the Manager or a Service
Provider that pertain to 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 the Trust free from any claim or assertion of rights by the
Manager.
The Manager further agrees that it will not disclose or use any records
or information obtained pursuant to this Agreement in any manner whatsoever
except as authorized in this Agreement and that it will keep confidential any
information obtained pursuant to this
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Agreement and disclose such information only if the Trust has authorized such
disclosure, or if such disclosure is required by federal or state regulatory
authorities.
ARTICLE VIII
Effectiveness, Duration and Termination of this Agreement
This Agreement shall not become effective unless and until it is
approved by the Board, including a majority of trustees who are not parties to
this Agreement or interested persons of any such party, and, to the extent
required by law, by the vote of a majority of the outstanding voting shares of
each Portfolio. This Agreement shall become effective on the date which it is so
approved. This Agreement may be extended to cover any investment portfolios of
the Trust that may be created in the future. This agreement shall become
effective as to each such future investment portfolio when it is approved by the
Board, including a majority of trustees who are not parties to this Agreement or
interested persons of any such party, and, to the extent required by law, by the
vote of a majority of the outstanding voting shares of such portfolio. As to
each Portfolio of the Trust, the 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 for each Portfolio at least annually by:
(a) the Board, or by the vote of a majority of outstanding votes attributable to
the shares of 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.
This Agreement may be terminated at any time as to any Portfolio or to
all Portfolios, without the payment of any penalty, by the Board, or by vote of
a majority of the outstanding votes attributable to the shares of the applicable
Portfolio, or by the Manager, on 60 days written notice to the other party. If
this Agreement is terminated only with respect to one or more, but less than
all, of the Portfolios, or if a different investment manager is appointed with
respect to a new portfolio, the Agreement shall remain in effect with respect to
the remaining Portfolios. This Agreement shall automatically terminate in the
event of its assignment.
ARTICLE IX
Amendments of this Agreement
This Agreement may be amended as to each Portfolio by the parties only
if such amendment is specifically approved by (a) the vote of a majority of
outstanding votes attributable to the shares of 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.
ARTICLE X
Definitions of Certain Terms
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 votes" attributable to the
shares of a Portfolio means the lesser of (1) 67% or more of the votes
attributable to such Portfolio present at a meeting if the holders of more than
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50% of such votes are present or represented by proxy, or (2) more than 50% of
the votes attributable to shares of the Portfolio.
ARTICLE XI
Governing Law
This Agreement shall be construed in accordance with laws of the State
of Delaware, and applicable provisions of the Advisers Act and 1940 Act.
ARTICLE XII
Severability
If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
MLIG VARIABLE INSURANCE TRUST
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
By: Xxxxxxx X. Xxxxxxxx
Title: President and Trustee
ATTEST:
/s/Xxxxxx X. Xxxxxx, Xx.
XXXXXX ADVISORS, LLC
By: /s/ Xxxx Xxxxxxx
---------------------------------
By: Xxxx Xxxxxxx
Title: President
ATTEST:
/s/Xxxxxx X. Xxxxxx, Xx.
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APPENDIX A
MLIG VARIABLE INSURANCE TRUST
Name of Portfolio Management Fee Rate
----------------- -------------------
Xxxxxx/Delaware Trend Portfolio 0.85%
Xxxxxx/ Lord Xxxxxx Affiliated Portfolio 0.80%
Xxxxxx/PIMCO CCM Capital Appreciation Portfolio 0.80%
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