INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 12th day of February, 2001, by and between Pacific
Investment Management Company LLC, a Delaware limited liability company
("PIMCO") (the "Adviser"), and Met Investors Advisory Corp., a Delaware
corporation (the "Manager").
WHEREAS, the Manager serves as investment manager of Met Investors Series
Trust (the "Trust"), a Delaware business trust which has filed a registration
statement (the "Registration Statement") under the Investment Company Act of
1940, as amended (the "1940 Act") and the Securities Act of 1933, as amended
(the "1933 Act") pursuant to a management agreement dated December 8, 2000 (the
"Management Agreement"); and
WHEREAS, the Trust is comprised of several separate investment portfolios,
one of which is the PIMCO Total Return Portfolio (the "Portfolio"); and
WHEREAS, the Portfolio will serve as an underlying investment medium for
variable annuity and variable life insurance contracts and, therefore, will be
subject to the "diversification" requirements of Section 817(h) of the Internal
Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the Manager desires to avail itself of the services, information,
advice, assistance and facilities of an investment adviser to assist the Manager
in performing investment advisory services for the Portfolio; and
WHEREAS, the Adviser is registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), and is engaged in the business of
rendering investment advisory services to investment companies and other
institutional clients and desires to provide such services to the Manager;
NOW, THEREFORE, in consideration of the terms and conditions hereinafter
set forth, it is agreed as follows:
1. Employment of the Adviser. The Manager hereby employs the Adviser to
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manage the investment and reinvestment of the assets of the Portfolio, subject
to the control and direction of the Trust's Board of Trustees, for the period
and on the terms hereinafter set forth. The Adviser hereby accepts such
employment and agrees during such period to render the services and to assume
the obligations herein set forth for the compensation herein provided. The
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 Manager, the Portfolio
or the Trust in any way. The Adviser may execute account documentation,
agreements, contracts and other documents requested by brokers, dealers,
counterparties and other persons in connection with its management of the assets
of the Portfolio, provided the Adviser receives the express agreement and
consent of the Manager and/or the Trust's Board of Trustees to execute futures
account agreements and ISDA Master Agreements,
which consent shall not be unreasonably withheld. In such respect, and only for
this limited purpose, the Adviser shall act as the Manager's and the Trust's
agent and attorney-in-fact.
Copies of the Trust's Registration Statement, as it relates to the
Portfolio (the "Registration Statement"), and the Trust's Declaration of Trust
and Bylaws (collectively, the "Charter Documents"), each as currently in effect,
have been or will be delivered to the Adviser. The Manager agrees, on an ongoing
basis, to notify the Adviser of each change in the fundamental and
non-fundamental investment policies and restrictions of the Portfolio before
they become effective and to provide to the Adviser as promptly as practicable
copies of all amendments and supplements to the Registration Statement before
filing with the Securities and Exchange Commission ("SEC") and amendments to the
Charter Documents. The Manager will promptly provide the Adviser with any
procedures applicable to the Adviser adopted from time to time by the Trust's
Board of Trustees and agrees to promptly provide the Adviser copies of all
amendments thereto. The Adviser will not be bound to follow any change in the
investment policies, restrictions or procedures of the Portfolio or Trust,
however, until it has received written notice of any such change from the
Manager.
The Manager shall timely furnish the Adviser with such additional
information as may be reasonably necessary for or requested by the Adviser to
perform its responsibilities pursuant to this Agreement. The Manager shall
cooperate with the Adviser in setting up and maintaining brokerage accounts and
other accounts the Adviser deems advisable to allow for the purchase or sale of
various forms of securities pursuant to this Agreement.
2. Obligations of and Services to be Provided by the Adviser. The Adviser
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undertakes to provide the following services and to assume the following
obligations:
a. The Adviser shall manage the investment and reinvestment of the
portfolio assets of the Portfolio, all without prior consultation with the
Manager, subject to and in accordance with the investment objective and
policies of the Portfolio set forth in the Trust's Registration Statement
and the Charter Documents, as such Registration Statement and Charter
Documents may be amended from time to time, in compliance with the
requirements applicable to registered investment companies under applicable
laws and those requirements applicable to both regulated investment
companies and segregated asset accounts under Subchapters M and L of the
Code and any written instructions which the Manager or the Trust's Board of
Trustees may issue from time-to-time in accordance therewith. In pursuance
of the foregoing, the Adviser shall make all determinations with respect to
the purchase and sale of portfolio securities and shall take such action
necessary to implement the same. The Adviser shall render such reports to
the Trust's Board of Trustees and the Manager as they may reasonably
request concerning the investment activities of the Portfolio, provided
that the Adviser shall not be responsible for Portfolio accounting. Unless
the Manager gives the Adviser written instructions to the contrary, the
Adviser shall, in good faith and in a manner which it reasonably believes
best serves the interests of the Portfolio's shareholders, direct the
Portfolio's custodian as to how to vote such proxies as may be necessary or
advisable in connection with any matters submitted to a vote of
shareholders of securities held by the Portfolio.
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b. To the extent provided in the Trust's Registration Statement, as
such Registration Statement may be amended from time to time, the Adviser
shall, in the name of the Portfolio, place orders for the execution of
portfolio transactions with or through such brokers, dealers or other
financial institutions as it may select including affiliates of the Adviser
and, complying with Section 28(e) of the Securities Exchange Act of 1934,
may pay a commission on transactions in excess of the amount of commission
another broker-dealer would have charged. In addition, subject to seeking
the most favorable price and best execution available, the Adviser may also
consider sales of shares of the Trust as a factor in the selection of
brokers and dealers. Subject to seeking the most favorable price and
execution, the Board of Trustees or the Manager may cause the Adviser to
effect transactions in portfolio securities through broker-dealers in a
manner that will help generate resources to: (i) pay the cost of certain
expenses which the Trust is required to pay or for which the Trust is
required to arrange payment; or (ii) finance activities that are primarily
intended to result in the sale of Trust shares. Provided the investment
objectives of the Portfolio are adhered to, the Manager agrees that the
Adviser may aggregate sales and purchase orders of securities, commodities
and other investments held in the Portfolio with similar orders being made
simultaneously for other accounts managed by the Adviser or with accounts
of the affiliates of Adviser, if in the Adviser's reasonable judgment such
aggregation shall result in an overall economic benefit to the Portfolio
taking into consideration the advantageous selling or purchase price,
brokerage commission and other expenses. The Manager acknowledges that the
determination of such economic benefit to the Portfolio by the Adviser
represents the Adviser's evaluation that the Portfolio is benefited by
relatively better purchase or sales prices, lower commission expenses and
beneficial timing of transactions or a combination of these and other
factors.
c. In connection with the placement of orders for the execution of the
portfolio transactions of the Portfolio, the Adviser shall create and
maintain all necessary records pertaining to the purchase and sale of
securities by the Adviser on behalf of the Portfolio in accordance with all
applicable laws, rules and regulations, including but not limited to
records required by Section 31 (a) of the 1940 Act. All records shall be
the property of the Trust and shall be available for inspection and use by
the SEC, the Trust, the Manager or any person retained by the Trust at all
reasonable times. Where applicable, such records shall be maintained by the
Adviser for the periods and in the places required by Rule 31a-2 under the
1940 Act.
d. The Adviser shall bear its expenses of providing services pursuant
to this Agreement, but shall not be obligated to pay any expenses of the
Manager, the Trust, or the Portfolio, including without limitation: (a)
interest and taxes; (b) brokerage commissions and other costs in connection
with the purchase or sale of securities or other investment instruments for
the Portfolio; and (c) custodian fees and expenses.
e. The Adviser and the Manager acknowledge that the Adviser is not the
compliance agent for the Portfolio or for the Manager, and does not have
access to all of
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the Portfolio's books and records necessary to perform certain compliance
testing. To the extent that the Adviser has agreed to perform the services
specified in this Section 2 in accordance with the Trust's Registration
Statement and Charter Documents, written instructions of the Manager and
any policies adopted by the Trust's Board of Trustees applicable to the
Portfolio (collectively, the "Charter Requirements"), and in accordance
with applicable law (including Subchapters M and L of the Code, the 1940
Act and the Advisers Act ("Applicable Law")), the Adviser shall perform
such services based upon its books and records with respect to the
Portfolio (as specified in Section 2.c. hereof), which comprise a portion
of the Portfolio's books and records, and upon information and written
instructions received from the Trust, the Manager or the Trust's
administrator, and shall not be held responsible under this Agreement so
long as it performs such services in accordance with this Agreement, the
Charter Requirements and Applicable Law based upon such books and records
and such information and instructions provided by the Trust, the Manager or
the Trust's administrator. The Adviser shall have no responsibility to
monitor certain limitations or restrictions for which the Adviser has not
been provided sufficient information in accordance with Section 1 of this
Agreement or otherwise. All such monitoring shall be the responsibility of
the Manager.
f. The Adviser makes no representation or warranty, express or
implied, that any level of performance or investment results will be
achieved by the Portfolio or that the Portfolio will perform comparably
with any standard or index, including other clients of the Adviser, whether
public or private.
g. The Adviser shall be responsible for the preparation and filing of
Schedule 13G and Form 13F on behalf of the Portfolio. The Adviser shall not
be responsible for the preparation or filing of any other reports required
of the Portfolio by any governmental or regulatory agency, except as
expressly agreed to in writing.
3. Compensation of the Adviser. In consideration of services rendered
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pursuant to this Agreement, the Manager will pay the Adviser a fee at the annual
rate of the value of the Portfolio's average daily net assets set forth in
Schedule A hereto. Such fee shall be accrued daily and paid monthly as soon as
practicable after the end of each month. If the Adviser shall serve for less
than the whole of any month, the foregoing compensation shall be prorated. For
the purpose of determining fees payable to the Adviser, the value of the
Portfolio's net assets shall be computed at the times and in the manner
specified in the Trust's Registration Statement.
4. Activities of the Adviser. The services of the Adviser hereunder are not
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to be deemed exclusive, and the Adviser shall be free to render similar services
to others and to engage in other activities, so long as the services rendered
hereunder are not impaired.
The Adviser shall be subject to a written code of ethics adopted by it that
conforms to the requirements of Rule 17j-l(b) of the 1940 Act, and shall not be
subject to any other code of ethics, including the Manager's code of ethics,
unless specifically adopted by the Adviser.
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5. Use of Names. The Adviser hereby consents to the Portfolio being named
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the PIMCO Total Return Portfolio. The Manager shall not use the name "PIMCO" and
any of the other names of the Adviser or its affiliated companies and any
derivative or logo or trade or service xxxx thereof, or disclose information
related to the business of the Adviser or any of its affiliates in any
prospectus, sales literature or other material relating to the Trust in any
manner not approved prior thereto by the Adviser; provided, however, that the
Adviser shall approve all uses of its name and that of its affiliates which
merely refer in accurate terms to its appointment hereunder or which are
required by the SEC or a state securities commission; and provided, further,
that in no event shall such approval be unreasonably withheld. The Adviser shall
not use the name of the Trust, the Manager or any of their affiliates in any
material relating to the Adviser in any manner not approved prior thereto by the
Manager; provided, however, that the Manager shall approve all uses of its or
the Trust's name which merely refer in accurate terms to the appointment of the
Adviser hereunder or which are required by the SEC or a state securities
commission; and, provided, further, that in no event shall such approval be
unreasonably withheld.
The Manager recognizes that from time to time directors, officers and
employees of the Adviser may serve as directors, trustees, partners, officers
and employees of other corporations, business trusts, partnerships or other
entities (including other investment companies) and that such other entities may
include the name "PIMCO" or any derivative or abbreviation thereof as part of
their name, and that the Adviser or its affiliates may enter into investment
advisory, administration or other agreements with such other entities.
Upon termination of this Agreement for any reason, the Manager shall within
30 days cease and cause the Portfolio to cease all use of the name and xxxx
"PIMCO."
6. Liability and Indemnification.
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a. Except as may otherwise be provided by the 1940 Act or any other
federal securities law, the Adviser shall not be liable for any losses,
claims, damages, liabilities or litigation (including legal and other
expenses) incurred or suffered by the Manager or the Trust as a result of
any error of judgment or mistake of law by the Adviser with respect to the
Portfolio, except that nothing in this Agreement shall operate or purport
to operate in any way to exculpate, waive or limit the liability of the
Adviser for, and the Adviser shall indemnify and hold harmless the Trust,
the Manager, all affiliated persons thereof (within the meaning of Section
2(a)(3) of the 0000 Xxx) and all controlling persons (as described in
Section 15 of the 1933 Act) (collectively, "Manager Indemnitees") against
any and all losses, claims, damages, liabilities or litigation (including
reasonable legal and other expenses) to which any of the Manager
Indemnitees may become subject under the 1933 Act, the 1940 Act, the
Advisers Act, or under any other statute, at common law or otherwise
arising out of or based on (i) any willful misconduct, bad faith, reckless
disregard or gross negligence of the Adviser in the performance of any of
its duties or obligations hereunder or (ii) any untrue statement of a
material fact contained in the Registration Statement, proxy materials,
reports, advertisements, sales literature, or other materials pertaining to
the Portfolio or the
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omission to state therein a material fact known to the Adviser which was
required to be stated therein or necessary to make the statements therein
not misleading, if such statement or omission was made in reliance upon
information furnished to the Manager or the Trust by the Adviser
Indemnitees (as defined below) for use therein.
b. Except as may otherwise be provided by the 1940 Act or any other
federal securities law, the Manager and the Trust shall not be liable for
any losses, claims, damages, liabilities or litigation (including legal and
other expenses) incurred or suffered by the Adviser as a result of any
error of judgment or mistake of law by the Manager with respect to the
Portfolio, except that nothing in this Agreement shall operate or purport
to operate in any way to exculpate, waive or limit the liability of the
Manager for, and the Manager shall indemnify and hold harmless the Adviser,
all affiliated persons thereof (within the meaning of Section 2(a)(3) of
the 0000 Xxx) and all controlling persons (as described in Section 15 of
the 1933 Act) (collectively, "Adviser Indemnitees") against any and all
losses, claims, damages, liabilities or litigation (including reasonable
legal and other expenses) to which any of the Adviser Indemnitees may
become subject under the 1933 Act, the 1940 Act, the Advisers Act, or under
any other statute, at common law or otherwise arising out of or based on
(i) any willful misconduct, bad faith, reckless disregard or gross
negligence of the Manager in the performance of any of its duties or
obligations hereunder, (ii) any failure by the Manager to properly notify
the Adviser of changes to the Registration Statement or any Charter
Requirements that leads to any such losses, claims, damages, liabilities or
litigation to which any of the Adviser Indemnitees may be subject or (iii)
any untrue statement of a material fact contained in the Registration
Statement, proxy materials, reports, advertisements, sales literature, or
other materials pertaining to the Portfolio or the omission to state
therein a material fact known to the Manager which was required to be
stated therein or necessary to make the statements therein not misleading,
unless such statement or omission was made in reliance upon information
furnished to the Manager or the Trust by an Adviser Indemnitee for use
therein.
7. Limitation of Trust's Liability. The Adviser acknowledges that it has
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received notice of and accepts the limitations upon the Trust's liability set
forth in its Agreement and Declaration of Trust. The Adviser agrees that any of
the Trust's obligations shall be limited to the assets of the Portfolio and that
the Adviser shall not seek satisfaction of any such obligation from the
shareholders of the Trust nor from any Trust officer, employee or agent of the
Trust.
8. Renewal, Termination and Amendment. This Agreement shall continue in
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effect, unless sooner terminated as hereinafter provided, for a period of two
years from the date hereof and shall continue in full force and effect for
successive periods of one year thereafter, but only so long as each such
continuance as to the Portfolio is specifically approved at least annually by
vote of the holders of a majority of the outstanding voting securities of the
Portfolio or by vote of a majority of the Trust's Board of Trustees; and further
provided that such continuance is also approved annually by the vote of a
majority of the Trustees who are not parties to this Agreement or interested
persons of any such party. This Agreement may be terminated as to the Portfolio
at any time, without payment of any penalty, by the Trust's Board of Trustees,
by the Manager,
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or by a vote of the majority of the outstanding voting securities of the
Portfolio upon 60 days' prior written notice to the Adviser, or by the Adviser
upon 90 days' prior written notice to the Manager, or upon such shorter notice
as may be mutually agreed upon. This Agreement shall terminate automatically and
immediately upon termination of the Management Agreement between the Manager and
the Trust. This Agreement shall terminate automatically and immediately in the
event of its assignment. The terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the meaning set forth for such terms
in the 1940 Act. This Agreement may be amended at any time by the Adviser and
the Manager, subject to approval by the Trust's Board of Trustees and, if
required by applicable SEC rules, regulations, or orders, a vote of a majority
of the Portfolio's outstanding voting securities.
9. Confidential Relationship. Any information and advice furnished by any
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party to this Agreement to the other party or parties shall be treated as
confidential and shall not be disclosed to third parties without the consent of
the other party hereto except as required by law, rule or regulation.
The Manager hereby consents to the disclosure to third parties of (i)
investment results and other data of the Manager or the Portfolio in connection
with providing composite investment results of the Adviser and (ii) investments
and transactions of the Manager or the Portfolio in connection with providing
composite information of clients of the Adviser.
10. Severability. If any provision of this Agreement shall be held or made
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invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
11. Custodian. The Portfolio assets shall be maintained in the custody of
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its custodian. Any assets added to the Portfolio shall be delivered directly to
such custodian. The Adviser shall have no liability for the acts or omissions of
any custodian of the Portfolio's assets. The Adviser shall have no
responsibility for the segregation requirement of the 1940 Act or other
applicable law other than to notify the custodian of investments that require
segregation and appropriate assets for segregation.
12. Information. The Manager hereby acknowledges that it and the Trustees
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of the Trust have been provided with all information necessary in connection
with the services to be provided by the Adviser hereunder, including a copy of
Part II of the Adviser's Form ADV at least 48 hours prior to the Manager's
execution of this Agreement, and any other information that the Manager or the
Trustees deem necessary.
13. Futures and Options. The Adviser's investment authority shall include
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the authority to purchase, sell, cover open positions, and generally to deal in
financial futures contracts and options thereon, in accordance with the
Prospectus and Statement of Additional Information.
The Manager will instruct the Adviser to: (i) open and maintain brokerage
accounts for financial futures and options (such accounts hereinafter referred
to as
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"brokerage accounts") on behalf of and in the name of the Portfolio and (ii)
execute for and on behalf of the Portfolio, standard customer agreements with a
broker or brokers. The Adviser may, using such of the securities and other
property in the Portfolio as the Adviser deems necessary or desirable, direct
the custodian to deposit on behalf of the Portfolio, original and maintenance
brokerage deposits and otherwise direct payments of cash, cash equivalents and
securities and other property into such brokerage accounts and to such brokers
as the Adviser deems desirable or appropriate.
The Adviser has delivered to the Manager a copy of its Disclosure Document,
as amended, dated June 15, 2000, on file with the Commodity Futures Trading
Commission. The Manager hereby acknowledges receipt of such copy.
14. Miscellaneous. This Agreement constitutes the full and complete
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agreement of the parties hereto with respect to the subject matter hereof. Each
party agrees to perform such further actions and execute such further documents
as are necessary to effectuate the purposes hereof. This Agreement shall be
construed and enforced in accordance with and governed by the laws of the State
of Delaware and the applicable provisions of the 1940 Act. The captions in this
Agreement are included for convenience only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed in several counterparts, all of which together shall
for all purposes constitute one Agreement, binding on all the parties.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first written above.
MET INVESTORS ADVISORY CORP.
BY: /s/ Xxxxxxxxx X. Forget
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Authorized Officer
PACIFIC INVESTMENT MANAGEMENT COMPANY LLC
BY: /s/ Xxxxxxx X. Benz, II
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Authorized Officer
Xxxxxxx X. Benz, II
Managing Director
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SCHEDULE A
Percentage of average daily net assets
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PIMCO Total Return Portfolio 0.25%
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