FUND MANAGEMENT AGREEMENT
Exhibit (d)(14)
AGREEMENT made effective this 1st day of January 2006 among Pacific Life Insurance Company, a
Nebraska corporation (“Investment Adviser”), and Xxxxxx, Xxxxxx & Company, L.P. (“Portfolio
Manager”), a Delaware Limited Partnership, and Pacific Funds, a Delaware Statutory Trust (the
“Trust”).
WHEREAS, the Trust is registered with the Securities and Exchange Commission (“SEC”) as an
open-end, management investment company under the Investment Company Act of 1940, as amended (the
“1940 Act”);
WHEREAS, the Investment Adviser is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended (“Advisers Act”);
WHEREAS, the Portfolio Manager is registered with the SEC as an investment adviser under the
Advisers Act;
WHEREAS, the Trust has retained the Investment Adviser to render investment advisory services
to the various portfolios of the Trust pursuant to an Advisory Agreement, as amended, and such
Agreement authorizes the Investment Adviser to engage a portfolio manager to discharge the
Investment Adviser’s responsibilities with respect to the investment management of such portfolios,
a copy of which has been provided to the Portfolio Manager and is incorporated herein by reference;
WHEREAS, the Trust and the Investment Adviser desire to retain the Portfolio Manager to
furnish investment advisory services to one or more portfolios of the Trust, and the Portfolio
Manager is willing to furnish such services to such portfolios and the Investment Adviser in the
manner and on the terms hereinafter set forth; and
NOW THEREFORE, in consideration of the promises and mutual covenants herein contained, it is
agreed among the Trust, the Investment Adviser, and the Portfolio Manager as follows:
1. Appointment. The Trust and the Investment Adviser hereby appoint Looms, Xxxxxx & Company,
L.P. to act as Portfolio Manager to provide investment advisory services as described herein to the
portfolio of the Trust listed on Exhibit A attached hereto (hereinafter the “Portfolio”) for the
periods and on the terms set forth in this Agreement. The Portfolio Manager accepts such
appointment and agrees to furnish the services herein set forth for the compensation herein
provided.
In the event the Investment Adviser wishes to retain the Portfolio Manager to render
investment advisory services as described herein to one or more portfolios of the Trust other than
the Portfolio, the Investment Adviser shall notify the Portfolio Manager in writing and shall
revise Exhibit A to reflect such additional portfolio(s). If the Portfolio Manager is willing to
render such services, it shall notify the Trust and the Investment Adviser in writing, whereupon
such portfolio shall become a Portfolio hereunder, and be subject to this Agreement.
2. Portfolio Manager Duties.
Subject to the supervision of the Trust’s Board of Trustees (the “Board”) and the Investment
Adviser, the Portfolio Manager will provide a continuous investment program for the Portfolio and
determine the composition of the assets of the Portfolio. The Portfolio Manager will provide
investment research and analysis, which may include computerized investment methodology, and will
conduct a continuous program of evaluation, investment, sales, and reinvestment of the Portfolio’s
assets by determining the securities, cash and other investments, including futures and options
contracts, if any, that shall be purchased, entered into, retained, sold, closed, or exchanged for
the Portfolio, when these transactions should be executed, and what portion of the assets of the
Portfolio should be held in the various securities and other investments in which it may invest,
and the Portfolio Manager is hereby authorized to execute and perform such services on behalf of
the Portfolio. To the extent permitted by the written investment policies of the Portfolio, the
Portfolio Manager shall make decisions for the Portfolio as to foreign currency matters and make
determinations as to the retention or disposition of foreign currencies or securities or other
instruments denominated in foreign currencies, or derivative instruments based upon foreign
currencies, including forward foreign currency contracts and options and futures on foreign
currencies and shall execute and perform the same on behalf of the Portfolio.
The Portfolio Manager is hereby authorized to execute all documentation to facilitate
investments for the Portfolio, including, broker dealer agreements, counterparty agreements,
futures commission merchant agreements as necessary, and documentation necessary to effect
investments in mutual funds or other commingled products (if applicable) to the extent permitted by
this Agreement and any investment guidelines.
The Portfolio Manager is hereby authorized, in its sole discretion, to exercise all voting
rights, to execute consents and to exercise or sell stock subscription and conversion rights and to
join in or oppose (jointly or with others) reorganizations, recapitalizations and liquidations and
in connection therewith it is hereby authorized to execute all documentation to facilitate any
reorganization, recapitalization or liquidation, unless the Fund or the Investment Adviser
otherwise specifies in writing. In the event that any action in connection with any reorganization,
recapitalization or liquidation shall require the payment of legal or other costs or fees by a
Portfolio, the Portfolio Manager shall obtain written approval of the Portfolio prior to incurring
any such fees; provided, however, that Portfolio Manager shall not be required to obtain prior
approval if the cost or fee is an investment cost or fee.
The Portfolio Manager is authorized to and shall exercise tender offers, exchange offers and
vote proxies on behalf of each Portfolio, each as the Portfolio Manager determines is in the best
interest of the Portfolio.
In performing these duties, the Portfolio Manager:
(a) will conform with (1) the 1940 Act and all rules and regulations thereunder, and releases
and interpretations related thereto (including any no-action letters and exemptive orders which
have been granted by the SEC to the Trust, to the Investment Adviser (as provided to the Portfolio
Manager by the Investment Adviser), or to the Portfolio Manager), (2) any applicable written
procedures, policies and guidelines adopted by the Board and furnished to the Portfolio Manager,
(3) the Trust’s objectives, investment policies and investment restrictions as stated in the
Trust’s Prospectus and Statement of Additional Information as supplemented or amended from time to
time, as furnished to the Portfolio Manager, (4) the
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provisions of the Trust’s Registration Statement filed on Form N-1A under the Securities Act of
1933 (the “1933 Act”) and the 1940 Act, as supplemented or amended from time to time (the
“Registration Statement”), (5) Section 851(b)(2) and (3) of Subchapter M of the Internal Revenue
Code of 1986, as amended (the “Code”), and (6) any other applicable laws and regulations, including
without limitation, proxy voting regulations.
(b) will (i) use its best efforts to identify each position in the Portfolio that constitutes
stock in a Passive Foreign Investment Company (“PFIC”), as that term is defined in Section 1296 of
the Code, and (ii) make such determinations and inform the Investment Adviser at least annually (or
more often and by such date(s) as the Investment Adviser shall request) of any stock in a PFIC.
(c) is responsible, in connection with its responsibilities under this Section 2, for
decisions to buy and sell securities and other investments for the Portfolio, for broker-dealer and
futures commission merchant (“FCM”) selection, and for negotiation of commission rates.
Notwithstanding the foregoing, unless such actions resulted from willful misfeasance, bad faith, or
gross negligence in the performance of the Portfolio Manager’s duties, or by reason of reckless
disregard of the Portfolio Manager’s obligations and duties under this Agreement, the Portfolio
Manager is not liable for the performance of investments, the actions or omissions of
broker-dealers or FCMs, or the amount of commission rates negotiated as provided in this
subsection(c). The Portfolio Manager’s primary consideration in effecting a security or other
transaction will be to obtain the best execution for the Portfolio, taking into account the factors
specified in the Prospectus and Statement of Additional Information for the Trust, as they may be
amended or supplemented from time to time and furnished to the Portfolio Manager. Subject to such
policies as the Board may determine and consistent with Section 28(e) of the Securities Exchange
Act of 1934, as amended (the “1934 Act”), the Portfolio Manager shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or otherwise solely by reason of
its having caused the Portfolio to pay a broker or dealer, acting as agent, for effecting a
Portfolio transaction at a price in excess of the amount of commission another broker or dealer
would have charged for effecting that transaction, if the Portfolio Manager determines in good
faith that such amount of commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of either that particular
transaction or the Portfolio Manager’s (or its affiliates’) overall responsibilities with respect
to the Portfolio and to its other clients as to which it exercises investment discretion. To the
extent consistent with these standards, and in accordance with Section 11(a) of the 1934 Act and
Rule 11a2-2(T) thereunder, and subject to any other applicable laws and regulations including
Section 17(e) of the 1940 Act, the Portfolio Manager is further authorized to place orders on
behalf of the Portfolio through the Portfolio Manager if the Portfolio Manager is registered as a
broker or dealer with the SEC or as a FCM with the Commodities Futures Trading Commission (“CFTC”),
through any of its affiliates that are brokers or dealers or FCMs or such other entities which
provide similar services in foreign countries, or through such brokers and dealers that also
provide research or statistical research and material, or other services to the Portfolio or the
Portfolio Manager. Such allocation shall be in such amounts and proportions as the Portfolio
Manager shall determine consistent with the above standards, and, upon request, the Portfolio
Manager will report on said allocation to the Investment Adviser and Board, indicating the brokers,
dealers or FCMs to which such allocations have been made the basis therefor. The Portfolio Manager
is authorized to open brokerage accounts on behalf of the Portfolio in accordance with Trust
procedures. The Portfolio Manager shall not direct brokerage to any broker-dealer in recognition
of, or otherwise take into account in making brokerage allocation decisions, sales of shares of a
Portfolio or of any other investment vehicle by that broker-dealer.
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(d) may, on occasions when the purchase or sale of a security is deemed to be in the best
interest of a Portfolio as well as any other investment advisory clients, to the extent permitted
by applicable laws and regulations, but shall not be obligated to, aggregate the securities to be
so sold or purchased with those of its other clients where such aggregation is not inconsistent
with the policies set forth in the Registration Statement as furnished to the Portfolio Manager.
In such event, allocation of the securities so purchased or sold, as well as the expenses incurred
in the transaction, will be made by the Portfolio Manager in a manner that is fair and equitable
and consistent with the Portfolio Manager’s fiduciary obligations to the Portfolio and to such
other clients.
(e) will, in connection with the purchase and sale of securities for the Portfolio, together
with the Investment Adviser, arrange for the transmission to the custodian and recordkeeping agent
for the Trust, on a daily basis, such confirmation(s), trade tickets, and other documents and
information, including, but not limited to, Cusip, Sedol, or other numbers that identify securities
to be purchased or sold on behalf of the Portfolio, as may be reasonably necessary to enable the
custodian and recordkeeping agent to perform its administrative and recordkeeping responsibilities
with respect to the Portfolio, and with respect to Portfolio securities to be purchased or sold
through the Depository Trust Company, will arrange for the automatic transmission of the
confirmation of such trades to the Trust’s custodian and recordkeeping agent, and, if required, the
Investment Adviser. The Portfolio Manager agrees to comply with such rules, procedures and time
frames as the Trust’s custodian may set or provide with respect to the clearance and settlement of
transactions for a Portfolio, including but not limited to submission of trade tickets. Any
Portfolio assets shall be delivered directly to the Trust’s custodian.
(f) will provide assistance to the Investment Adviser, custodian or recordkeeping agent for
the Trust in determining or confirming, consistent with the procedures and policies stated in the
Trust’s valuation procedures and/or the Registration Statement, the value of any portfolio
securities or other assets of the Portfolio for which the Investment Adviser, custodian or
recordkeeping agent seeks assistance from the Portfolio Manager or identifies for review by the
Portfolio Manager. This assistance includes (but is not limited to): (i) designating and providing
access to one or more employees of the Portfolio Manager who are knowledgeable about the
security/issuer, its financial condition, trading and/or other relevant factors for valuation,
which employees shall be available for consultation when the Board’s Valuation Committee convenes;
(ii) notifying the Investment Adviser in the event the Portfolio Manager determines, with respect
to a security that is held both by the Portfolio and by another account managed by the Portfolio
Manager, of the value of such security pursuant to the Portfolio Manager’s procedures for
determining the fair value of a security; (iii) obtaining bids and offers or quotes from
broker/dealers or market-makers with respect to securities held by the Portfolio, upon the request
of the Investment Adviser or custodian; (iv) verifying pricing and providing fair valuations or
recommendations for fair valuations in accordance with the Trust’s valuation procedures, as they
may be amended from time to time; and (v) maintaining adequate records and written backup
information with respect to the securities valuation services provided hereunder, and providing
such information to the Investment Adviser or the Trust upon request. Such records shall be deemed
Trust records. Notwithstanding the foregoing, the Portfolio Manager shall not be the party
responsible for the pricing and valuation of the Trust or the Portfolio.
(g) will maintain and preserve such records related to each Portfolio’s transactions as
required under the 1940 Act and the Advisers Act. The Portfolio Manager will make available to the
Trust and the Investment Adviser during normal business hours promptly
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upon request, any of the Portfolio’s investment records and ledgers maintained by the Portfolio
Manager (which shall not include the records and ledgers maintained by the custodian and
recordkeeping agent for the Trust), as are necessary to assist the Trust and the Investment Adviser
in complying with requirements of the 1940 Act and the Advisers Act, as well as other applicable
laws, and will furnish to regulatory authorities having the requisite authority any information or
reports in connection with such services which may be requested in order to ascertain whether the
operations of the Trust are being conducted in a manner consistent with applicable laws and
regulations.
(h) will regularly report to the Board on the investment program for the Portfolio and the
issuers and securities represented in the Portfolio, and will furnish the Board, with respect to
the Portfolio, such periodic and special reports as the Board and the Investment Adviser may
reasonably request, including, but not limited to, reports concerning transactions and performance
of each Portfolio, a monthly compliance checklist, reports regarding compliance with the Trust’s
procedures pursuant to Rules 17e-1, 17a-7, 10f-3 and 12d3-1 under the 1940 Act, fundamental
investment restrictions, procedures for opening brokerage accounts and commodity trading accounts,
liquidity determination of securities purchased pursuant to Rule 144A and 4(2) commercial paper,
IOs/POs, and compliance with the Portfolio Manager’s Code of Ethics, and such other procedures or
requirements that the Investment Adviser may reasonably request from time to time.
(i) will adopt a written Code of Ethics complying with the requirements of Rule 17j-1 under
the 1940 Act and Rule 204A-1 under the Advisers Act and will provide the Investment Adviser and the
Trust with a copy of the Code of Ethics, 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 Portfolio Manager shall certify to the Investment Adviser that the Portfolio
Manager has complied with the requirements of Rule 17j-1 during the previous calendar quarter and
that there have been no violations of the Code of Ethics or, if a violation has occurred, that
appropriate action has been taken in response to such violation. Upon written request of the
Investment Adviser or the Trust, the Portfolio Manager shall permit representatives of the
Investment Adviser and the Trust to examine the conflict and exceptions reports generated under the
Code of Ethics related to (i) the Portfolio and (ii) any investment personnel providing services
hereunder for the Portfolio.
(j) will provide to the Investment Adviser a copy of the Portfolio Manager’s Form ADV, and any
supplements or amendments thereto, as filed with the SEC, on an annual basis (or more frequently if
requested by the Investment Adviser or the Board). The Portfolio Manager represents and warrants
that it is a duly registered investment adviser under the Advisers Act. The Portfolio Manager will
provide a list of persons who the Portfolio Manager wishes to have authorized to give written
and/or oral instructions to Custodians of assets for the Portfolio.
(k) will be responsible for the preparation and filing of Schedule 13G on behalf of the Trust
and Form 13F reflecting holdings over which the Portfolio Manager and its affiliates have
investment discretion.
(l) will not permit any employee of the Portfolio Manager to have any material connection with
the handling of the Portfolio if such employee has:
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(i) been, within the last ten (10) years, convicted of or acknowledged commission of any
felony or misdemeanor (a) involving the purchase or sale of any security, (b) involving
embezzlement, fraudulent conversion, or misappropriation of funds or securities, (c) involving
sections 1341, 1342 or 1343 of Title 18 of the U.S. Code, or (d) arising out of such person’s
conduct as an underwriter, broker, dealer, investment adviser, municipal securities dealer,
government securities broker, government securities dealer, transfer agent, or entity or
person required to be registered under the Commodity Exchange Act, or as an affiliated person,
salesman, or employee or officer or director of any investment company, bank, insurance company, or
entity or person required to be registered under the Commodity Exchange Act.
(ii) been permanently or temporarily enjoined by reason of any misconduct, by order, judgment,
or decree of any court of competent jurisdiction, from acting as an underwriter, broker, dealer,
investment adviser, municipal securities dealer, government securities broker, government
securities dealer, transfer agent, or entity or person required to be registered under the
Commodity Exchange Act, or as an affiliated person, salesman or employee of any investment company,
bank, insurance company, or entity or person required to be registered under the Commodity Exchange
Act, or from engaging in or continuing any conduct or practice in connection with any such activity
or in connection with the purchase or sale of any security.
(m) will not disclose or use any records or information obtained pursuant to this Agreement
(excluding investment research and investment advice) in any manner whatsoever except as expressly
authorized in this Agreement or in the ordinary course of business in connection with placing
orders for the purchase and sale of securities or obtaining investment licenses in various
countries, the opening of custody accounts and dealing with settlement agents in various countries
or any other activity in connection with its services under this Agreement, and will keep
confidential any information obtained pursuant to the Agreement, and disclose such information only
if the Board has authorized such disclosure, or if such disclosure is required by applicable
federal or state law or regulations or requested by regulatory authorities having the requisite
authority. The Trust and the Investment Adviser will not disclose or use any records or
information with respect to the Portfolio Manager obtained pursuant to this Agreement, in any
manner whatsoever except as expressly authorized in this Agreement, and will keep confidential any
information obtained pursuant to this Agreement, and disclose such information only as expressly
authorized in this Agreement, if the Board has authorized such disclosure, or if such disclosure is
required by applicable federal or state law or regulations or regulatory authorities having the
requisite authority.
(n) will assist the Investment Adviser, the Trust, and any of its or their trustees,
directors, officers, and/or employees in complying with the provisions of the Xxxxxxxx-Xxxxx Act of
2002 to the extent such provisions relate to the services to be provided by, and the obligations
of, the Portfolio Manager hereunder. Specifically, and without limitation to the foregoing, the
Portfolio Manager agrees to provide certifications to the principal executive and financial
officers of the Trust (the “certifying officers”) that correspond to and/or support the
certifications required to be made by the certifying officers in connection with the preparation
and/or filing of the Trust’s Form N-CSRs, N-Qs, N-SARs, shareholder reports, financial statements,
and other disclosure documents or regulatory filings, in such form and content as the Trust shall
reasonably request or as in accordance with procedures adopted by the Trust.
(o) is, along with its affiliated persons, permitted to enter into transactions with the other
portfolios of the Trust and affiliated persons of those other portfolios of the Trust
(collectively, the “Other Portfolios”). In doing so, the Portfolio Manager is prohibited from
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consulting with the Investment Adviser or the portfolio managers of these Other Portfolios
concerning securities transactions of the Portfolio except for the purpose of complying with the
conditions of Rule 12d3-1(a) and (b) under the 1940 Act.
(p) will exercise voting rights on portfolio securities held by a Portfolio in accordance with
written policies and procedures adopted by the Portfolio Manager, which may be amended from time to
time, and which at all times shall comply with the requirements of applicable federal statutes and
regulations and any related SEC guidance relating to such statutes and regulations (collectively,
“Proxy Voting Policies and Procedures”). The Portfolio Manager shall vote proxies on behalf of
each Portfolio in a manner deemed by the Portfolio Manager to be in the best interests of each
Portfolio pursuant to the Portfolio Manager’s written Proxy Voting Policies and Procedures. The
Portfolio Manager shall provide disclosure regarding the Proxy Voting Policies and Procedures in
accordance with the requirements of Form N-1A for inclusion in the Trust’s registration statement.
The Portfolio Manager shall report to the Investment Adviser in a timely manner a record of all
proxies voted, in such form and format that complies with acceptable federal statutes and
regulations (e.g., requirements of Form N-PX). The Portfolio Manager shall certify at least
annually or more often as may reasonably be requested by the Investment Adviser, as to its
compliance with its own Proxy Voting Policies and Procedures and applicable federal statues and
regulations.
(q) will assist the Trust and the Trust’s Chief Compliance Officer (“CCO”) in complying with
Rule 38a-1 under the 1940 Act. Specifically, the Portfolio Manager represents and warrants that it
shall maintain a compliance program in accordance with the requirements of Rule 206(4)-7 under the
Advisers Act, and shall provide the CCO with reasonable access to information regarding the
Portfolio Manager’s compliance program, which access shall include on-site visits with the
Portfolio Manager as may be reasonably requested from time to time. In connection with the
periodic review and annual report required to be prepared by the CCO pursuant to Rule 38a-1, the
Portfolio Manager agrees to provide certifications as may be reasonably requested by the CCO
related to the design and implementation of the Portfolio Manager’s compliance program.
(r) will comply with the Trust’s policy on selective disclosure of portfolio holdings of the
Trust (the “Selective Disclosure Policy”), as provided in writing to the Portfolio Manager and as
may be amended from time to time. The Portfolio Manager agrees to provide a certification with
respect to compliance with the Trust’s Selective Disclosure Policy as may be requested by the Trust
from time to time.
(s) will notify the Investment Adviser promptly in the event that, in the judgment of the
Portfolio Manager, Portfolio share transaction activity becomes disruptive to the ability of the
Portfolio Manager to effectively manage the assets of a Portfolio consistent with the Portfolio’s
investment objectives and policies.
(t) will provide assistance as may be reasonably requested by the Investment Adviser in
connection with compliance by the Portfolio with any current or future legal and regulatory
requirements related to the services provided by the Portfolio Manager hereunder.
(u) will provide such certifications to the Trust as the Trust or the Investment Adviser may
reasonably request related to the services provided by the Portfolio Manager hereunder.
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(v) will process class action paperwork for any security held within the portfolio managed by
Portfolio Manager during its management at the direction of the Investment Adviser, as the
Investment Adviser may reasonably direct from time to time.
3. Disclosure about Portfolio Manager and Portfolio. The Portfolio Manager has reviewed the
current Registration Statement and agrees to promptly review future amendments to the Registration
Statement, including any supplements thereto, which relate to the Portfolio Manager or the
Portfolio, filed with the SEC (or which will be filed with the SEC in the future) and represents
and warrants that, with respect to the disclosure respecting or relating to the Portfolio Manager,
including any performance information the Portfolio Manager provides that is included in or serves
as the basis for information included in the Registration Statement, such Registration Statement
contains as of the date hereof, or will contain as of the date of effectiveness of any future
Registration Statement or supplement thereto, no untrue statement of any material fact and does not
omit any statement of material fact which was required to be stated therein or necessary to make
the statements contained therein not misleading. The Portfolio Manager further agrees to notify
the Investment Adviser and the Trust immediately of any material fact known to the Portfolio
Manager respecting or relating to the Portfolio Manager that is not contained in the Registration
Statement or prospectus for the Trust, or any amendment or supplement thereto, or of any statement
respecting or relating to the Portfolio Manager contained therein that becomes untrue in any
material respect. With respect to the disclosure respecting each Portfolio, the Portfolio Manager
represents and agrees that the description in the Trust’s prospectus contained in the following
sections: “The portfolio’s investment goal,” and “What the portfolio invests in” (collectively,
“Portfolio Description”) is consistent with the manner in which the Portfolio Manager intends to
manage each Portfolio, and the description of “Risks you should be aware of” (“Risk Description”)
is consistent with risks known to the Portfolio Manager that arise in connection with the manner in
which the Portfolio Manager intends to manage the Portfolio. The Portfolio Manager further agrees
to notify the Investment Adviser and the Trust immediately in the event that the Portfolio Manager
becomes aware that the Portfolio Description for a Portfolio is inconsistent in any material
respect with the manner in which the Portfolio Manager is managing the Portfolio, and in the event
that the Risk Description is inconsistent in any material respect with the risks known to the
Portfolio Manager that arise in connection with the manner in which the Portfolio Manager is
managing the Portfolio. In addition, the Portfolio Manager agrees to comply with the Investment
Adviser’s reasonable request for information regarding the personnel of the Portfolio Manager who
are responsible for the day-to-day management of the Trust’s assets.
4. Expenses. The Portfolio Manager shall bear all expenses incurred by it and its staff with
respect to all activities in connection with the performance of the Portfolio Manager’s services
under this Agreement, including but not limited to salaries, overhead, travel, preparation of Board
materials, review of marketing materials, and marketing support. Upon request by the Investment
Adviser, Portfolio Manager agrees to reimburse the Investment Adviser for costs associated with
certain supplements (“Supplements”). Such Supplements are those generated due to changes by
Portfolio Manager requiring disclosure in the Trust’s prospectus. Such changes by Portfolio
Manager include, but are not limited to, changes to its structure, to investment personnel, to
investment style or management. Investment Adviser may request reimbursement from Portfolio
Manager for some or all of the costs associated with generating such Supplements. Reimbursable
costs may include, but are not limited to, costs of preparation, filing, printing, and/or
distribution of such Supplements to all existing variable product contract and policy holders that
are eligible to use the Trust as their underlying investment vehicle. Each Portfolio will bear
certain other expenses to be incurred in its operation, including, but not limited to, investment
advisory fees, sub-advisory fees (other than sub-advisory fees paid
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pursuant to this Agreement) and administration fees; fees for necessary professional and brokerage
services; costs of regulatory compliance; and pro rata costs associated with maintaining the
Trust’s legal existence and shareholder relations. All other expenses not specifically assumed by
the Portfolio Manager hereunder or by the Investment Adviser under the Advisory Agreement are borne
by the applicable Portfolio of the Trust. The Trust, the Portfolio Manager and the Investment
Adviser shall not be considered as partners or participants in a joint venture.
5. Compensation. For the services provided and the expenses borne by the Portfolio Manager
pursuant to this Agreement, the Investment Adviser will pay to the Portfolio Manager a fee in
accordance with Exhibit A attached to this Agreement. This fee will be computed and accrued daily
and payable monthly. The fees for any month during which this Agreement is in effect for less than
the entire month shall be pro-rated based on the number of days during such month that the
Agreement was in effect.
6. Seed Money. The Investment Adviser agrees that the Portfolio Manager shall not be
responsible for providing money for the initial capitalization of any Portfolio.
7. Compliance.
(a) The Portfolio Manager agrees that it shall immediately notify the Investment Adviser and
the Trust (i) in the event that the SEC, CFTC, or any banking or other regulatory body has censured
the Portfolio Manager; placed limitations upon its activities, functions or operations; suspended
or revoked its registration, if any, or ability to serve as an investment adviser; or has commenced
proceedings or an investigation that can reasonably be expected to result in any of these actions;
and (ii) upon having a reasonable basis for believing that a Portfolio has ceased to qualify or
might not qualify as a regulated investment company under Subchapter M of the Code. The Portfolio
Manager further agrees to notify the Investment Adviser and Trust immediately of any material fact
known to the Portfolio Manager respecting or relating to the Portfolio Manager that is not
contained in the Registration Statement or prospectus for the Trust, or any amendment or supplement
thereto, or of any statement contained therein that becomes untrue in any material respect.
(b) The Investment Adviser agrees that it shall immediately notify the Portfolio Manager (i)
in the event that the SEC has censured the Investment Adviser or the Trust; placed limitations upon
either of their activities, functions, or operations; suspended or revoked the Investment Adviser’s
registration as an investment adviser; or has commenced proceedings or an investigation that may
result in any of these actions; or (ii) upon having a reasonable basis for believing that a
Portfolio has ceased to qualify or might not qualify as a regulated investment company under
Subchapter M of the Code.
8. Independent Contractor. The Portfolio Manager shall for all purposes herein be deemed to
be an independent contractor and shall, unless otherwise expressly provided herein or authorized by
the Investment Adviser from time to time, have no authority to act for or represent the Investment
Adviser in any way or otherwise be deemed its agent. The Portfolio Manager understands that unless
provided herein or authorized from time to time by the Trust, the Portfolio Manager shall have no
authority to act for or represent the Trust in any way or otherwise be deemed the Trust’s Agent.
9. Books and Records. In compliance with the requirements of and to the extent required by
Section 31 of the 1940 Act and rules thereunder, the Portfolio Manager hereby
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agrees that all records which it maintains for the Portfolio are the property of the Trust and
further agrees to surrender promptly to the Trust any of such records upon the Trust’s or the
Investment Adviser’s request, although the Portfolio Manager may, at its own expense, make and
retain a copy of such records.
10. Cooperation. Each party to this Agreement agrees to cooperate with each other party and
with all appropriate governmental authorities having the requisite jurisdiction (including, but not
limited to, the SEC and state insurance authorities) in connection with any investigation or
inquiry relating to this Agreement or the Trust.
11. Responsibility and Control. Notwithstanding any other provision of this Agreement, it is
understood and agreed that the Trust shall at all times retain the ultimate responsibility for and
control of all functions performed pursuant to this Agreement and reserves the right to direct,
approve or disapprove any action hereunder taken on its behalf by the Portfolio Manager, provided,
however, that the Portfolio Manager shall not be liable for any losses to the Trust resulting from
the Trust’s direction, or from the Trust’s disapproval of any action proposed to be taken by the
Portfolio Manager.
12. Services Not Exclusive. It is understood that the services of the Portfolio Manager and
its employees are not exclusive, and nothing in this Agreement shall prevent the Portfolio Manager
(or its employees or affiliates) from providing similar services to other clients, including
investment companies (whether or not their investment objectives and policies are similar to those
of the Portfolio) or from engaging in other activities.
13. Liability. Except as may otherwise be required by the 1940 Act or the rules thereunder or
other applicable law, the Trust and the Investment Adviser agree that the Portfolio Manager, any
affiliated person of the Portfolio Manager, and each person, if any, who, within the meaning of
Section 15 of the 1933 Act, controls the Portfolio Manager, shall not be liable for, or subject to
any damages, expenses, or losses in connection with, any act or omission connected with or arising
out of any services rendered under this Agreement, except by reason of willful misfeasance, bad
faith, or gross negligence in the performance of the Portfolio Manager’s duties, or by reason of
reckless disregard of the Portfolio Manager’s obligations and duties under this Agreement.
Notwithstanding the foregoing, the Portfolio Manager may be liable to the Trust for acts of good
faith which result from willful misfeasance, bad faith, or gross negligence in the performance of
the Portfolio Manager’s duties, or by reason of reckless disregard of the Portfolio Manager’s
obligations and duties under this Agreement and nothing contained in this Agreement shall
constitute a waiver or limitation of rights that the Trust may have under federal or state
securities laws.
14. Indemnification.
(a) The Portfolio Manager agrees to indemnify and hold harmless, the Trust, the Investment
Adviser, any affiliated person within the meaning of Section 2(a)(3) of the 1940 Act (“affiliated
person”) of the Investment Adviser, and each person, if any, who, within the meaning of Section 15
of the 1933 Act, controls (“controlling person”) the Investment Adviser (collectively, “PL
Indemnified Persons”) against any and all losses, claims, damages, liabilities or litigation
(including reasonable legal and other expenses), to which the Investment Adviser or such affiliated
person or controlling person may become subject under the 1933 Act, the 1940 Act, the Advisers Act,
under any other statute, at common law or otherwise, arising out of the Portfolio Manager’s
responsibilities to the Trust which may be based upon any willful misfeasance, bad faith,
negligence, or reckless disregard of, the Portfolio Manager’s obligations and/or duties under this
Agreement by the Portfolio Manager or by any of its directors, officers
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or employees, or any affiliate acting on behalf of the Portfolio Manager (other than a PL
Indemnified Person), provided, however, that in no case is the Portfolio Manager’s indemnity in
favor of the Investment Adviser or any affiliated person or controlling person of the Investment
Adviser deemed to protect such person against any liability to which any such person would
otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the
performance of his duties, or by reason of his reckless disregard of obligations and duties under
this Agreement.
(b) The Investment Adviser agrees to indemnify and hold harmless the Portfolio Manager, any
affiliated person within the meaning of Section 2(a)(3) of the 1940 Act of the Portfolio Manager
and each person, if any, who, within the meaning of Section 15 of the 1933 Act controls
(“controlling person”) the Portfolio Manager (collectively, “Portfolio Manager Indemnified
Persons”) against any and all losses, claims, damages, liabilities or litigation (including
reasonable legal and other expenses) to which a Portfolio Manager Indemnified Person may become
subject under the 1933 Act, the 1940 Act, the Advisers Act, under any other statute, at common law
or otherwise, arising out of the Adviser’s responsibilities as Investment Adviser of the Trust
which may be based upon any willful misfeasance, bad faith or negligence by the Investment Adviser,
any of its directors, officers, or employees or any affiliate acting on behalf of the Investment
Adviser (other than a Portfolio Manager Indemnified Person), provided however, that in no case is
the Investment Adviser’s indemnity in favor of the Portfolio Manager Indemnified Persons deemed to
protect such person against any liability to which any such person would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the performance of his duties, or
by reason of his reckless disregard of obligations and duties under this Agreement.
15. Duration and Termination. This Agreement shall become effective as of the date of
execution first written above, and shall continue in effect for two years and continue thereafter
on an annual basis with respect to each Portfolio; provided that such annual continuance is
specifically approved at least annually (a) by the vote of a majority of the Board, or (b) by the
vote of a majority of the outstanding voting shares of each Portfolio, and provided that
continuance is also approved by the vote of a majority of the Board who are not parties to this
Agreement or “interested persons” (as such term is defined in the 0000 Xxx) of the Trust, the
Investment Adviser, or the Portfolio Manager, cast in person at a meeting called for the purpose of
voting on such approval.
This Agreement may be terminated with respect to any Portfolio:
(a) by the Trust at any time with respect to the services provided by the Portfolio Manager,
without the payment of any penalty, by vote of a majority of the Board or by a vote of a majority
of the outstanding voting shares of the Trust or, with respect to a particular Portfolio, by vote
of a majority of the outstanding voting shares of such Portfolio, upon (60) sixty days prior
written notice to the Portfolio Manager and the Investment Adviser;
(b) by the Portfolio Manager at any time, without the payment of any penalty, upon (60) sixty
days prior written notice to the Investment Adviser and the Trust.
(c) by the Investment Adviser at any time, without the payment of any penalty, upon (60) sixty
days prior written notice to the Portfolio Manager and the Trust.
This Agreement will terminate automatically in event of its assignment under the 1940 Act and
any rules adopted by the SEC thereunder, but shall not terminate in connection with any
11
transaction not deemed an assignment. In the event this Agreement is terminated or is not approved
in the manner described above, the Sections or Paragraphs numbered 2(g) for a period of six years,
and 2(m), 2(n), 2(p), 2(q), 2(t), and 2(u) for a reasonable period after termination in order to
assist with the transition and fulfillment of responsibilities of the Portfolio Manager to the
Investment Adviser or any successor portfolio manager, and 9, 10, 13, 14, 16, 17, 18 and 19 of this
Agreement as well as any applicable provision of this Paragraph numbered 15 shall remain in effect.
16. Use of Name.
(a) It is understood that the name “Pacific Life Insurance Company” and “Pacific Life” and
“Pacific Select Trust” and any derivative thereof or logo associated with those names are the
valuable property of the Investment Adviser and its affiliates, and that the Portfolio Manager
shall not use such names (or derivatives or logos) without the prior written approval of the
Investment Adviser and only so long as the Investment Adviser is an investment adviser to the Trust
and/or the Portfolio. Upon termination of this Agreement, the Portfolio Manager shall forthwith
cease to use such name (or derivative or logo).
(b) It is understood that the name “Xxxxxx, Xxxxxx & Company, L.P.”, “Xxxxxx Xxxxxx”, “Xxxxxx,
Xxxxxx & Company” or any logo associated with those names is the valuable property of the Portfolio
Manager and that the Trust and the Investment Adviser have the right to use such name (or
derivative or logo), in the Trust’s prospectus, SAI and Registration Statement or other filings,
forms or reports required under applicable state or federal securities, insurance, or other law,
for so long as the Portfolio Manager is a Portfolio Manager to the Trust and/or the Portfolio,
provided, however, that the Trust may continue to use the name of the Portfolio Manager in its
Registrations Statement and other documents to the extent deemed necessary by the Trust to comply
with disclosure obligations under applicable law and regulation. Neither the Trust nor the
Investment Adviser shall use the Portfolio Manager’s name or logo in promotional or sales related
materials prepared by or on behalf of the Investment Adviser or the Trust, without prior review and
approval by the Portfolio Manager, which may not be unreasonably withheld. Upon termination of
this Agreement, the Trust and the Investment Adviser shall forthwith cease to use such names (and
logo), except as provided for herein.
17. Limitation of Liability.
A copy of the Declaration of Trust for the Trust is on file with the Secretary of the State of
Massachusetts. The Declaration of Trust has been executed on behalf of the Trust by a Trustee of
the Trust in his capacity as Trustee of the Trust and not individually. The obligations of this
Agreement with respect to each Portfolio shall be binding upon the assets and property of each such
Portfolio individually, and not jointly, and shall not be binding upon any Trustee, officer,
employee, agent or shareholder, whether past, present, or future, of the Trust individually, or
upon the Trust generally or upon any other portfolio of the Trust.
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18. Notices.
All notices and other communications hereunder shall be in writing sent by facsimile first, if
practicable, but shall only be deemed given if delivered in person or by messenger, cable,
certified mail with return receipt, or by a reputable overnight delivery service which provides
evidence of receipt to the parties at the following addresses (or at such other address or number
for a party as shall be specified by like notice):
A.
|
if to the Portfolio Manager, to: | |
| Xxxxxx, Xxxxxx & Company, L.P. | ||
| Xxx Xxxxxxxxx Xxxxxx | ||
| Xxxxxx, XX 00000 | ||
| Facsimile transmission number: 000-000-0000 | ||
| Attention: Xxxxxx Xxxxxxx | ||
B.
|
if to the Investment Adviser, to: | |
| Pacific Life Insurance Company | ||
| 000 Xxxxxxx Xxxxxx Xxxxx | ||
| Xxxxxxx Xxxxx, XX 00000 | ||
| Facsimile transmission number: (000) 000-0000 | ||
| Attention: Xxxxx X. Xxxxx | ||
C.
|
if to the Trust, to: | |
| Pacific Funds | ||
| c/o Pacific Life Insurance Company | ||
| 000 Xxxxxxx Xxxxxx Xxxxx | ||
| Xxxxxxx Xxxxx, XX 00000 | ||
| Facsimile transmission number: (000) 000-0000 | ||
| Attention: Xxxxx X. Xxxxx |
19. Miscellaneous.
(a) This Agreement shall be governed by the laws of California, without regard to the conflict
of law principles thereof, provided that nothing herein shall be construed in a manner inconsistent
with the 1940 Act, the Advisers Act, or rules or orders of the SEC thereunder. The term
“affiliate” or “affiliated person” as used in this Agreement shall mean “affiliated person” as
defined in Section 2(a)(3) of the 0000 Xxx.
(b) The captions of this Agreement are included for convenience only and in no way define or
limit any of the provisions hereof or otherwise affect their construction or effect.
(c) To the extent permitted under Section 15 of this Agreement and under the 1940 Act, this
Agreement may only be assigned by any party with prior written consent of the other parties.
(d) If any provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be affected
13
thereby, and to this extent, the provisions of this Agreement shall be deemed to be severable. To
the extent that any provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise with regard to any party hereunder, such provisions with respect to
other parties hereto shall not be affected thereby.
(e) This Agreement may be executed in several counterparts, each of which shall be deemed to
be an original, and all such counterparts shall together constitute one and the same Agreement.
14
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed as of the day and
year first written above.
PACIFIC LIFE INSURANCE COMPANY
By:
|
/s/ Xxxxx X. Xxxxxx | By: | /s/ Xxxxxx X. Milfs | |||
Name:
|
Xxxxx X. Xxxxxx | Name: | Xxxxxx X. Milfs | |||
Title:
|
Executive Vice President and Chief Insurance Officer | Title: | Vice President and Secretary | |||
XXXXXX, XXXXXX & COMPANY, L.P.,
By its General Partner,
Xxxxxx, Xxxxxx & Company Incorporated
By its General Partner,
Xxxxxx, Xxxxxx & Company Incorporated
By:
|
/s/ Xxxxxx X. Xxxxxxx | By: | ||||
Name:
|
Xxxxxx X. Xxxxxxx | Name: | ||||
Title:
|
Vice President | Title: | ||||
By:
|
/s/ Xxxxx X. Xxxxxx | By: | /s/ Xxxxxx X. Milfs | |||
Name:
|
Xxxxx X. Xxxxxx | Name: | Xxxxxx X. Milfs | |||
Title:
|
President | Title: | Secretary | |||
15
Exhibit A
PACIFIC FUNDS
FEE SCHEDULE
FEE SCHEDULE
Effective: January 1, 2006
Portfolio: Large Cap Growth
The Investment Adviser will pay to the Portfolio Manager a monthly fee based on an annual
percentage of the average daily net assets of the Large Cap Growth Portfolio according to the
following schedule:
| Rate (%) | Break Point (assets) | |
.45 |
up to $25 million | |
.40 |
from $25 million to $250 million | |
.30 |
from $250 million to $2 billion | |
.25 |
On excess |
The fees for services shall be prorated for any portion of a year in which the Agreement is
not effective.
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