EXHIBIT 5(a)
AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT
--------------------------------------------------
AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT, dated as of this 14th day of
April, 1994 as amended and restated on this 16th day of October, 1997, by and
between MFS VARIABLE INSURANCE TRUST, a Massachusetts business trust (the
"Trust") on behalf of the series of the Trust listed on Exhibit A attached
hereto (referred to individually as a "Fund" and collectively as the "Funds"),
and Massachusetts Financial Services Company, a Delaware corporation (the
"Adviser").
WITNESSETH:
-----------
WHEREAS, the Trust is engaged in business as an open-end investment company
registered under the Investment Company Act of 1940;
WHEREAS, the Adviser is willing to provide business management services to
each Fund on the terms and conditions hereinafter set forth; and
WHEREAS, the parties hereto entered into this Agreement on April 14, 1997,
and amended and restated this Agreement on October 16, 1997 for the purposes of
(i) making certain changes with respect to the MFS/Foreign & Colonial Emerging
Markets Equities Series (formerly known as the MFS Strategic Fixed Income
Series), such changes having been approved by the sole shareholder of this
Series on October 16, 1997; and (ii) making other minor and conforming changes;
NOW, THEREFORE, in consideration of the mutual covenants and Agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
ARTICLE 1: Duties of the Adviser. The Adviser shall provide each Fund
---------------------
with such investment advice and supervision as the latter may from time to time
consider necessary for the proper management of its funds. The Adviser shall
act as Adviser to each Fund and as such shall furnish continuously an investment
program and shall determine from time to time what securities shall be
purchased, sold or exchanged and what portion of the assets of each Fund shall
be held uninvested, subject always to the restrictions of the Trust's Amended
and Restated Declaration of Trust, dated January 24, 1996 and By-Laws, as
amended from time to time (respectively, the "Declaration" and the "By-Laws"),
and to the provisions of the Investment Company Act of 1940. Should the
Trustees at any time, however, make any determination as to investment policy
and notify the Adviser thereof in writing, the Adviser shall be bound by such
determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked. The Adviser shall
take, on behalf of each Fund, all actions which it deems necessary to implement
the investment policies determined as provided above,
-1-
and in particular to place all orders for the purchase or sale of portfolio
securities for each Fund's account with brokers or dealers selected by it, and
to that end the Adviser is authorized as the agent of each Fund to give
instructions to the Custodian of each Fund as to deliveries of securities and
payments of cash for the account of each Fund. In connection with the selection
of such brokers or dealers and the placing of such orders, the Adviser is
directed to seek for each Fund execution at the most favorable price by
responsible brokerage firms at reasonably competitive commission rates. In
fulfilling this requirement the Adviser 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 each Fund to pay a broker or dealer an
amount of commission for effecting a securities transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction, if the Adviser determined 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 Adviser's overall responsibilities with respect to
each Fund and to other clients of the Adviser as to which the Adviser exercises
investment discretion.
With respect to the MFS/Foreign & Colonial Emerging Markets Equity Series
only, the Adviser may from time to time enter into investment sub-advisory
agreements with one or more investment advisers (a "Sub-Adviser") to the Fund to
perform some or all of the services for which the Adviser is responsible
pursuant to this Article 1 upon such terms and conditions as the Adviser may
determine provided that such investment sub-advisory agreements have been
approved by a majority of the Trustees of the Trust who are not interested
persons of the Trust, the Adviser or the Sub-Adviser and by vote of a majority
of the outstanding voting securities of the Fund. The Adviser may terminate the
services of any Sub-Adviser at any time in its sole discretion, and shall at
such time assume the responsibilities of such Sub-Adviser unless and until a
successor Sub-Adviser is selected. Subject to the provisions of Article 6, the
Adviser shall not be liable for any error of judgment or mistake of law by any
Sub-Adviser or for any loss arising out of any investment made by any Sub-
Adviser or for any act or omission in the execution and management of the Fund
by any Sub-Adviser.
ARTICLE 2: Allocation of Charges and Expenses. The Adviser shall furnish
----------------------------------
at its own expense investment advisory and administrative services, office
space, equipment and clerical personnel necessary for servicing the investments
of each Fund and maintaining the Trust's organization, and investment advisory
facilities and executive and supervisory personnel for managing the investments
and effecting the portfolio transactions of each Fund. The Adviser shall
arrange, if desired by the Trust, for Directors, officers and employees of the
Adviser to serve as Trustees, officers or agents of the Trust if duly elected or
appointed to such positions and subject to their individual consent and to any
limitations imposed by law. It is understood that the Trust will pay all of its
own expenses including, without limitation, compensation of Trustees not
affiliated with the Adviser, governmental fees, interest charges, taxes,
membership dues in the Investment Company Institute allocable to the Trust, fees
and expenses of independent auditors, of legal counsel and of any transfer
agent, registrar or dividend disbursing agent of the Trust, expenses of
repurchasing and redeeming shares and servicing shareholder accounts, expenses
of preparing, printing and mailing stock certificates, prospectuses, periodic
reports, notices and proxy statements to shareholders and to governmental
officers and commissions, brokerage and other expenses connected with the
execution, recording and
-2-
settlement of portfolio security transactions, insurance premiums, fees and
expenses of the custodian for all services to the Trust, including safekeeping
of funds and securities, keeping of books and accounts and calculation of the
net asset value of shares of each Fund, expenses of shareholder meetings, and
expenses relating to the issuance, registration and qualification of shares of
the Trust.
ARTICLE 3: Compensation of the Adviser. For the services to be rendered
---------------------------
and the facilities to be furnished as provided in Articles 1 and 2 above, each
Fund shall pay to the Adviser an investment advisory fee computed and paid
monthly at the annual rate as listed on Exhibit B, attached hereto, of each
Fund's average daily net assets.
If the Adviser shall serve for less than the whole of any period specified
in this Article 3, the compensation to the Adviser shall be prorated.
ARTICLE 4: Special Services. Should the Trust have occasion to request
----------------
the Adviser to perform services not herein contemplated or to request the
Adviser to arrange for the services of others, the Adviser will act for the
Trust upon request to the best of its ability, with compensation for the
Adviser's services to be agreed upon with respect to each such occasion as it
arises.
ARTICLE 5: Covenants of the Adviser. The Adviser agrees that it will not
------------------------
deal with itself, or with the Trustees of the Trust or the Trust's distributor
as principals in making purchases or sales of securities or other property for
the account of any Fund, will not take a long or short position in the shares of
any Fund except as provided by the Declaration, and will comply with all other
provisions of the Declaration and By-Laws relative to the Adviser and its
Directors and officers.
ARTICLE 6: Limitation of Liability of the Adviser. The Adviser shall not
--------------------------------------
be liable for any error of judgment or mistake of law or for any loss arising
out of any investment or for any act or omission in the execution and management
of any Fund, except for willful misfeasance, bad faith or gross negligence in
the performance of its duties, or by reason of reckless disregard of its
obligations and duties hereunder. As used in this Article 6, the term "Adviser"
shall include Directors, officers and employees of the Adviser as well as the
corporation itself.
ARTICLE 7: Activities of the Adviser. The services of the Adviser to the
-------------------------
Trust are not to be deemed to be exclusive, the Adviser being free to render
services to others. The Adviser may permit other fund clients to use the words
"Massachusetts Financial" or "MFS" in their names. The Trust agrees that if the
Adviser shall for any reason no longer serve as the Adviser to the Trust, the
Trust and each Fund will each change its name so as to delete the words
"Massachusetts Financial" or "MFS". It is understood that Trustees, officers,
and shareholders of the Trust are or may be or become interested in the Adviser,
as Directors, officers, employees, or otherwise and that Directors, officers and
employees of the Adviser are or may become similarly
-3-
interested in the Trust and that the Adviser may be or become interested in the
Trust as a shareholder or otherwise.
ARTICLE 8: Duration, Termination and Amendments of this Agreement. This
------------------------------------------------------
Agreement shall become effective with respect to each Fund on the date of its
execution and shall govern the relations between the parties hereto thereafter,
and shall remain in force with respect to a Fund until August 1, 1995, on which
date it will terminate with respect to that Fund unless its continuance after
August 1, 1995, is specifically approved at least annually (i) by the vote of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Adviser at a meeting specifically called for the purpose of
voting on such approval, and (ii) by the Trustees of the Trust, or by vote of a
majority of the outstanding voting securities of that Fund. The aforesaid
requirement that continuance of this Agreement be "specifically approved at
least annually" shall be construed in a manner consistent with the Investment
Company Act of 1940 and the Rules and Regulations thereunder.
This Agreement may be terminated as to any Fund at any time without the
payment of any penalty by the Trustees or by vote of a majority of the
outstanding voting securities of that Fund, or by the Adviser, on not more than
sixty days' nor less that thirty days' written notice to the other party. This
Agreement shall automatically terminate in the event of its assignment.
This Agreement may be amended with respect to any Fund only if such
amendment is approved by vote of a majority of the outstanding voting securities
of that Fund.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," "affiliated person," and "interested persons," when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act of 1940 and the Rules and Regulations thereunder, subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
under said Act.
ARTICLE 9: Record Keeping. The Adviser will maintain records in a form
---------------
acceptable to the Trust and in compliance with the rules and regulations of the
Securities and Exchange Commission, including but not limited to records
required to be maintained by Section 31(a) of the Investment Company Act of 1940
and the rules thereunder, which at all times will be the property of the Trust
and will be available for inspection and use by the Trust.
ARTICLE 10: Limitation of Liability of the Trustees and Shareholders. A
---------------------------------------------------------
copy of the Declaration of the Trust is on file with Secretary of State of The
Commonwealth of Massachusetts. The parties hereto acknowledge that the
obligations of or arising out of this instrument are not binding upon any of the
Trust's trustees, officers, employees, agents or shareholders individually, but
are binding solely upon the assets and property of the Trust in accordance with
its proportionate interest hereunder. If this instrument is executed by the
Trust on behalf of one or more series of the Trust, the parties hereto
acknowledge that the assets and liabilities of each series of the Trust are
separate and distinct and that the obligations of or arising out of this
instrument are binding solely upon the assets or property of the series on whose
behalf the Trust has executed this instrument. If the Trust has executed this
instrument on behalf of one or more series of the Trust, the parties hereto also
agree that the obligations of each series
-4-
hereunder shall be several and not joint, in accordance with its proportionate
interest hereunder, and the parties hereto agree not to proceed against any
series for the obligations of another series.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered in their names and on their behalf by the undersigned, thereunto
duly authorized, and their respective seals to be hereto affixed, all as of the
day and year first written above. The undersigned Trustee of the Trust has
executed this Agreement not individually, but as Trustee under the Declaration
and the obligations of this Agreement are not binding upon any of the Trustees,
officers or shareholders of the Trust, individually, but bind only the Trust
estate.
MFS VARIABLE INSURANCE TRUST
By:
------------------------------
A. Xxxxx Xxxxxxx
Chairman and Trustee
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By:
------------------------------
Xxxxxxx X. Xxxxxx
President
-5-
EXHIBIT A
---------
MFS VARIABLE INSURANCE TRUST
MFS Emerging Growth Series
MFS Value Series
MFS Research Series
MFS Growth With Income Series
MFS Total Return Series
MFS Utilities Series
MFS High Income Series
MFS World Governments Series
MFS/Foreign & Colonial Emerging Markets Equity Series
MFS Bond Series
MFS Limited Maturity Series
MFS Money Market Series
-6-
EXHIBIT B
---------
MANAGEMENT FEES
---------------
SERIES % OF AVERAGE DAILY NET ASSETS
------ -----------------------------
MFS Emerging Growth Series 0.75
MFS Value Series 0.75
MFS Research Series 0.75
MFS Growth With Income Series 0.75
MFS Total Return Series 0.75
MFS Utilities Series 0.75
MFS High Income Series 0.75
MFS World Government Series 0.75
MFS/Foreign & Colonial Emerging Markets Equity Series 1.25
MFS Bond Series 0.60
MFS Limited Maturity Series 0.55
MFS Money Market Series 0.50
-7-
