Exhibit (d) 25
SUB-INVESTMENT MANAGEMENT AGREEMENT
AMONG
XXXX XXXXXXX VARIABLE SERIES TRUST I
INDEPENDENCE INTERNATIONAL ASSOCIATES, INC.
AND
XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY
SUB-INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the 15th day of May, 1998, by and among Xxxx Xxxxxxx
Variable Series Trust I, a Massachusetts business trust (the "Series"),
Independence International Associates, Inc., a Massachusetts corporation ("Sub-
Manager"), and Xxxx Xxxxxxx Mutual Life Insurance Company, a Massachusetts
corporation ("JHMLICO").
WHEREAS, the Series is organized and is engaged in business as an open-end
management investment company and is so registered under the Investment Company
Act of 1940 (the "1940 Act"); and
WHEREAS, JHMLICO and Sub-Manager are engaged in the business of rendering
investment advice under the Investment Advisers Act of 1940; and
WHEREAS, the Series is authorized to issue shares of capital stock in
separate classes with each such class representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Series offers shares in several classes, one of which is
designated as the International Equity Index Portfolio, (together with all other
classes established by the Series, the "Portfolios"), each of which pursues its
investment objectives through separate investment policies; and
WHEREAS, the Series has retained JHMLICO to render investment management
services to the Series pursuant to an Investment Management Agreement dated as
of April 14, 1998 (the "Investment Management Agreement"), pursuant to which it
may contract with Sub-Manager as provided for herein;
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF SUB-MANAGER
(a) Subject Portfolio. Sub-Manager is hereby appointed and Sub-Manager
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hereby accepts the appointment to act as investment adviser and manager to the
International Equity Index Portfolio (the "Subject Portfolio") for the period
and on the terms herein set forth, for the compensation herein provided.
(b) Additional Subject portfolios. In the event that the Series and JHMLICO
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desire to retain Sub-Manager to render investment advisory services hereunder
for any other Portfolio, they shall so notify Sub-Manager in writing. If it is
willing to render such services, Sub-Manager shall notify the Series in writing,
whereupon such Portfolio shall become a Subject Portfolio hereunder.
(c) Independent Contractor. Sub-Manager shall for all purposes herein be
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deemed to be an independent contractor and shall, unless otherwise expressly
provided or authorized, have no authority to act for or be deemed an agent of
the Series.
2. PROVISION OF INVESTMENT MANAGEMENT SERVICES.
Sub-Manager will provide for the Subject Portfolio a continuing and suitable
investment program consistent with the investment policies, objectives and
restrictions of said Portfolio, as furnished to Sub-Manager by JHMLICO in
writing from time to time. Sub-Manager will manage the investment and
reinvestment of the assets in the Subject Portfolio, and perform the functions
set forth below, subject to the overall supervision, direction, control and
review of the Board of Trustees of the Series, JHMLICO and, as in effect from
time to time, the provisions of the Series' Declaration of Trust, Bylaws,
prospectus, statement of additional information (all as furnished to Sub-Manager
by JHMLICO in writing from time to time), the 1940 Act and all other applicable
laws and regulations (including any applicable investment restrictions imposed
by state insurance laws and regulations or any directions or instructions, all
as delivered to Sub-Manager in writing by JHMLICO or the Series from time to
time).
Sub-Manager will have investment discretion with respect to the Subject
Portfolio and will, at its own expense:
(a) upon request, advise the Series in connection with investment
decisions to be made by its Board of Trustees or any committee thereof regarding
the Subject Portfolio and furnish the Series with research, economic and
statistical data in connection with said Portfolio's investments and investment
policies;
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(b) submit such reports relating to the valuation of the Subject
Portfolio's securities as the Series' Board of Trustees may reasonably request;
(c) place orders for purchases and sales of portfolio investments for the
Subject Portfolio;
(d) maintain and preserve the records relating to its activities
hereunder, including those records required by the 1940 Act to be maintained by
it and preserved by the Series, to the extent not maintained by the Series'
custodian, transfer agent or JHMLICO; and
(e) subject to its receipt of all necessary voting materials, in its
discretion, as it deems advisable in the best interests of the Subject
Portfolio, vote any or all proxies with respect to investments of the Subject
Portfolio in accordance with Sub-Manager's proxy voting policy as most recently
provided to JHMLICO.
The Series and JHMLICO will provide timely information to the Sub-Manager
regarding such matters as purchases and redemptions of shares in the Subject
Portfolio and the cash requirements of, and cash available for investment in,
the Portfolio, and all information as may be reasonably necessary or appropriate
in order for the Sub-Manager to perform its responsibilities hereunder. On its
own initiative, the Sub-Manager will apprise JHMLICO and the Series of important
developments materially affecting the Subject Portfolio and will furnish JHMLICO
and the Series' Board of Trustees from time to time such information as is
appropriate for this purpose.
3. ALLOCATION OF EXPENSES.
Each party to this Agreement shall bear the costs and expenses of performing
its obligations hereunder. In this regard, the Series specifically agrees to
assume the expense of:
(i) brokerage commissions for transactions in the portfolio investments
of the Series and similar fees and charges for the acquisition, disposition,
lending or borrowing of such portfolio investments;
(ii) all taxes, including issuance and transfer taxes, and reserves for
taxes payable by the Series to federal, state or other governmental agencies;
and
(iii) interest payable on the Series' borrowings.
Nothing in this Agreement shall alter the allocation of expenses and costs
agreed upon between the Series and JHMLICO in the Investment Management
Agreement or any other agreement to which they are parties.
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4. SUB-ADVISORY FEES.
For all of the services rendered as herein provided, JHMLICO shall pay to the
Sub-Manager a fee (for payment of which the Series shall have no obligation or
liability), with respect to the Subject Portfolio, at an effective annual rate
of 0.125% on the first $100 million of the Current Net Assets of such Portfolio,
0.10% on the next $100 million of the Current Net Assets of such Portfolio, and
0.06% on all Current Net Assets in excess of $200 million. The fee shall be
accrued daily and payable monthly, as soon as practicable after the last day of
each calendar month. In the case of termination of this Agreement with respect
to the Subject Portfolio during any calendar month, the fee with respect to such
Portfolio accrued to termination shall be paid.
"Current Net Assets" of the Portfolio for purposes of computing the amount of
advisory fee accrued for any day shall mean the Portfolio's net assets as of the
most recent preceding day for which the Portfolio's net assets were computed.
5. PORTFOLIO TRANSACTIONS.
In connection with the investment and reinvestment of the assets of the
Subject Portfolio, the Sub-Manager is authorized to select the brokers or
dealers that will execute purchase and sale transactions for the Portfolio and
to use its best efforts to obtain the best available price and most favorable
execution with respect to all such purchases and sales of portfolio securities
for said Portfolio. The Sub-Manager shall maintain records adequate to
demonstrate compliance with this requirement. Subject to this primary
requirement, and maintaining as its first consideration the benefits to the
Subject Portfolio and its shareholders, the Sub-Manager shall have the right
subject to the control of the Board of Trustees, and to the extent authorized by
the Securities Exchange Act of 1934, to follow a policy of selecting brokers who
furnish brokerage and research services to the Subject Portfolio or to the Sub
Manager, and who charge a higher commission rate to the Subject Portfolio than
may result when allocating brokerage solely on the basis of seeking the most
favorable price and execution. The Sub-Manager shall determine in good faith
that such higher cost was reasonable in relation to the value of the brokerage
and research services provided.
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The fees payable to the Sub-Manager by JHMLICO hereunder shall be reduced by
any tender offer solicitation fees or similar payments received by the Sub-
Manager, in connection with the tender of investments of any Portfolio (less
direct expenses incurred by the Sub-Manager in connection with obtaining such
fees or payments).
6. INFORMATION, RECORDS, AND CONFIDENTIALITY.
The Series shall own and control all records maintained hereunder by the Sub-
Manager on the Series' behalf and, in the event of termination of this Agreement
with respect to any Portfolio for any reason, all records (or true and complete
copies thereof) relating to that Portfolio shall be promptly returned to the
Series, free from any claim or retention of rights by the Sub-Manager. The Sub-
Manager also agrees, upon request of the Series, promptly to surrender such
books and records or, at its expense, copies thereof, to the Series or make such
books and records available for inspection by representatives of regulatory
authorities or other persons reasonably designated by the Series. The Sub-
Manager further agrees to maintain, prepare and preserve such books and records
in accordance with the 1940 Act and rules thereunder, including but not limited
to, Rules 31a-1 and 31a-2 and to supply all information in its possession or
reasonably available to it, requested by any insurance regulatory authorities to
determine whether all insurance laws and regulations are being complied with.
The Sub-Manager shall not disclose or use any records or information obtained
pursuant hereto in any manner whatsoever except as expressly authorized herein,
and will keep confidential any information obtained pursuant hereto, and
disclose such information only (i) to Independence Investment Associates, Inc.,
Xxxx Xxxxxxx Assets Management, Inc. and Xxxx Xxxxxxx Subsidiaries, Inc., (ii)
if the Series or JHMLICO has authorized such disclosure, or (iii) if such
disclosure is expressly required by applicable federal or state regulatory
authorities or court proceedings.
The Sub-Manager shall supply the Board of Trustees and officers of the Series
and JHMLICO with all statistical information regarding investments which is
reasonably required by them and reasonably available to it.
7. LIABILITY.
No provision of this Agreement shall be deemed to protect the Sub-Manager or
JHMLICO against any liability to the Series or its shareholders to which it
might otherwise be subject by reason of any willful misfeasance, bad faith or
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negligence in the performance of its duties or the reckless disregard of its
obligations and duties under this Agreement or the Investment Management
Agreement, as applicable. Nor shall any provision hereof be deemed to protect
any trustee or officer of the Series against any such liability to which he
might otherwise be subject by reason of any willful misfeasance, bad faith or
negligence in the performance his duties or the reckless disregard of his
obligations and duties.
8. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective with respect to the
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International Equity Index Portfolio on the date hereof and, with respect to any
additional Subject Portfolio, on the date of receipt by the Series of notice
from the Sub-Manager in accordance with Paragraph 1(b) hereof that it is willing
to serve with respect to such Portfolio. Unless terminated as herein provided,
this Agreement shall remain in full force and effect for two years from the date
hereof with respect to the initial Subject Portfolio and, with respect to each
additional Subject Portfolio, until two years following the date on which such
Portfolio becomes a Subject Portfolio hereunder, and shall continue in full
force and effect thereafter with respect to each Subject Portfolio so long as
such continuance with respect to any such Portfolio is approved at least
annually (a) by either the Board of Trustees of the Series or by vote of a
majority of the outstanding voting shares of such Portfolio, and (b) in either
event by the vote of a majority of the trustees of the Series 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.
Any approval of this Agreement by the holders of a majority of the
outstanding shares of any Subject Portfolio shall be effective to continue this
Agreement with respect to any such Portfolio notwithstanding (A) that this
Agreement has not been approved by the holders of a majority of the outstanding
shares of any other Portfolio affected hereby, and (B) that this Agreement has
not been approved by the vote of a majority of the outstanding shares of the
Series, unless such approval shall be required by any other applicable law or
otherwise. The terms "assignment," "vote of a majority of the outstanding
shares" and "interested person," when used in this Agreement, shall have the
respective meanings specified in the 1940 Act and rules thereunder.
(b) Termination. This Agreement may be terminated with respect to any
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Subject Portfolio at any time, without payment of any penalty, by vote of the
trustees of the Series, by vote of a majority of the outstanding shares of such
Portfolio, by the Sub-Manager on at least sixty days' written notice to the
Series and JHMLICO, or by JHMLICO on at
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least sixty days' written notice to the Series and the Sub-Manager. Transactions
already entered into by the Sub-Manager but not yet settled at the time of any
such termination shall settle for the account of the Series.
(c) Automatic Termination. This Agreement shall automatically and
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immediately terminate in the event of its assignment or if the Investment
Management Agreement is terminated.
9. SERVICES NOT EXCLUSIVE.
The services of the Sub-Manager to the Series are not to be deemed exclusive
and it shall be free to render similar services to others so long as its
services hereunder are not impaired thereby. It is specifically understood that
directors, officers and employees of the Sub-Manager and of its subsidiaries and
affiliates may continue to engage in providing portfolio management services and
advice to other investment companies, whether or not registered, and other
investment advisory clients.
Nothing in this Agreement shall limit or restrict the Sub-Manager or any of
its officers, affiliates or employees from buying, selling or trading in any
securities for its or their own accounts; provided, however, that no such person
shall purchase securities from or sell securities to the Subject Portfolio
except as permitted under applicable laws and regulations, including without
limitation the 1940 Act and the Investment Advisers Act of 1940, and the rules
and regulations thereunder. The Series acknowledges that the Sub-Manager and
its officers, affiliates and employees, and its and their other clients, may at
any time have, acquire, increase, decrease or dispose of positions in
investments which are at the same time being acquired or disposed of under this
Agreement. The Sub-Manager shall have no obligation to acquire for the Subject
Portfolio a position in any investment which the Sub-Manager, its officers,
affiliates or employees may acquire for their own accounts or for the accounts
of another client, if in the sole discretion of the Sub-Manager it is not
feasible or desirable to do so.
10. AVOIDANCE OF INCONSISTENT POSITION.
In connection with the purchase and sale of portfolio securities of the
Subject Portfolio, the Sub-Manager and its directors, officers and employees
will not act as principal or agent or receive any commission. Nothing in this
Agreement, however, shall preclude the combination of orders for the sale or
purchase of portfolio securities of the
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Subject Portfolio with those for other accounts managed by the Sub-Manager or
its affiliates, if orders are allocated in a manner deemed equitable by Sub-
Manager among the accounts and at a price approximately averaged.
11. AMENDMENT.
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by a duly
authorized officer of the party or parties intending to be bound thereby. No
amendment of this Agreement shall be effective with respect to any Portfolio
until approved specifically by (a) the Board of Trustees of the Series, or by
vote of a majority of the outstanding shares of that Portfolio, and (b) by vote
of a majority of those Trustees of the Series who are not interested persons of
any party to this Agreement cast in person at a meeting called for the purpose
of voting on such approval.
12. LIMITATION OF LIABILITY.
It is expressly agreed that the obligations of the Series hereunder shall not
be binding upon any of the trustees, shareholders, officers, agents or employees
of Series personally, but only bind the trust property of the Series, as
provided in the Series' Declaration of Trust.
13. GOVERNING LAW.
This agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts and the applicable provisions of the 1940 Act and
rules thereunder.
14. NOTICES.
Notices and other communications required or permitted under this Agreement
shall be in writing, shall be deemed to be effectively delivered when actually
received, and may be delivered by US mail (first class, postage prepaid), by
facsimile transmission, by hand or by commercial overnight delivery service,
addressed as follows:
SUB-MANAGER: Independence International Associates, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
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Attention:
Fax #: 617-
JHMLICO: Xxxx Xxxxxxx Mutual Life Insurance Company
000 Xxxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Fax #: 000-000-0000
SERIES: Xxxx Xxxxxxx Variable Series Trust I
000 Xxxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Fax #: 000-000-0000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day first set forth above.
XXXX XXXXXXX VARIABLE SERIES TRUST I
By: Xxxxx X. Xxxx
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Title: Chairman and CEO
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XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY
By: Xxxxxx X. Xxxxxxx
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Title: Vice President
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INDEPENDENCE INTERNATIONAL ASSOCIATES, INC.
By: W.C. Flilik
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Title: Chairman and President
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