Exhibit (d)41
Form of Interim Sub-Investment Management Agreement International Opportunities
B Fund (formerly known as "International Equity Fund")
INTERIM
SUB-INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the 1st day of May, 2002 by and among Xxxx Xxxxxxx
Variable Series Trust I, a Massachusetts business trust (the "Trust"), X. Xxxx
Price International, Inc., a Maryland corporation ("Price International"), and
Xxxx Xxxxxxx Life Insurance Company, a Massachusetts corporation ("JHLICO").
WHEREAS, the Trust 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, JHLICO and Price International are each engaged in the business of
rendering investment advice under the Investment Adviser Act of 1940; and
WHEREAS, the Trust is authorized to issue shares of capital stock in separate
series with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Trust offers shares in several series, one of which is
designated as the International Opportunities B Fund ("Fund," previously known
as the "International Equity Fund"), each of which pursues its investment
objectives through separate investment policies; and
WHEREAS, the Trust has retained JHLICO to render investment management
services to the Trust pursuant to an Investment Management Agreement dated as of
July 28, 1999 (the "Investment Management Agreement"), pursuant to which it may
contract with Price International as a 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) Appointment as Investment Adviser and Manager. Price International is
hereby appointed and Price International hereby accepts the appointment to act
as investment adviser and manager to the Fund for the period and on the terms
herein set forth, for the compensation herein provided.
(b) Incumbency Certificates. Price International shall furnish to JHLICO,
immediately upon execution of this Agreement, a certificate of a senior officer
of Price International setting forth (by name and title, and including specimen
signatures) those officers of Price International who are authorized to make
investment decisions for the Fund pursuant to the provisions of this Agreement.
Price International shall promptly provide supplemental incumbency certificates,
as needed, to reflect all changes with respect to such authorized officers for
the Fund. On behalf of the Trust, JHLICO shall instruct the custodian for the
Fund to accept instructions with respect to the Fund from the officers of Price
International so named.
(c) Independent Contractor. Price International shall for all purposes
herein be 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 Trust.
(d) Price International's Representations. Price International represents,
warrants and agrees (i) that it is registered as an investment adviser under the
Investment Adviser Act of 1940, and that it will remain so registered and will
comply with the requirements of said Act, and the rules and regulations
thereunder, at all times while this Agreement remains in effect, (ii) that it
will promptly notify JHLICO if the foregoing representation and agreement shall
cease to be true (in any material respect) at any time during the term of this
Agreement, (iii) that it will promptly notify JHLICO of any material change in
the senior management or ownership of Price International, or of any change in
the identity of the personnel who manage the Fund, (iv) that it has adopted a
code of ethics complying with the requirements of Rule 17j-1 of the Securities
and Exchange Commission (the "SEC") under the 1940 Act and has provided true and
complete copies of such code to the Trust and to JHLICO, and has adopted
procedures designed to prevent violations of such code, and (v) that it has
furnished the Trust and JHLICO each with a copy of Price International's Form
ADV, as most recently filed with the SEC, and will promptly furnish copies of
each future amendment thereto.
2. PROVISION OF INVESTMENT MANAGEMENT SERVICES.
Price International will provide for the Fund a continuing and suitable
investment program consistent with the investment policies, objectives and
restrictions of the Fund, as established by the Trust and JHLICO. From time to
time, the Board of Trustees of the Trust may provide Price International with
additional or amended investment policies, guidelines and restrictions. Price
International, as sub-manager, will manage the investment and reinvestment of
the assets in the Fund, and perform the functions set forth below, subject to
the overall supervision, direction, control and review of JHLICO and the Board
of Trustees of the Trust, consistent with the applicable investment policies,
guidelines and restrictions, the provisions of the Trust's Declaration of Trust,
Bylaws, prospectus, statement of additional information (each as in effect 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 delivered to Price
International in writing by JHLICO or the Trust from time to time). By its
signature below, Price International acknowledges receipt of a copy of the
Trust's Declaration of Trust, Bylaws, prospectus, and statement of additional
information, each as in effect on the date of this Agreement.
Price International will, at its own expense:
(a) advise the Trust in connection with investment policy decisions to be
made by its Board of Trustees or any committee thereof regarding the Fund and,
upon request, furnish the Trust with research, economic and statistical data in
connection with the Fund's investments and investment policies;
(b) submit such reports and information as JHLICO or the Trust's Board of
Trustees may reasonably request, to assist the custodian in its determination of
the market value of securities held in the Fund to the extent such securities
are not otherwise priceable using an approved pricing service;
(c) place orders for purchases and sales of portfolio investments for the
Fund;
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(d) give instructions to the Fund's custodian concerning the delivery of
securities and transfer of cash for the Fund in connection with the settlement
of trades;
(e) maintain and preserve the records relating to its activities hereunder
required by the 1940 Act to be maintained and preserved by the Trust, to the
extent not maintained by the custodian, transfer agent or JHLICO;
(f) each business day, provide JHLICO with a written daily statement of the
transactions effected for the Fund on the previous business day;
(g) as soon as practicable following the end of each calendar month, provide
JHLICO with a summary listing of all investments held in the Fund as of the last
day of the month, together with the average purchase price per unit of each
investment and such other information as JHLICO may reasonably request; and
(h) absent specific instructions to the contrary provided to it by JHLICO
and subject to its receipt of all necessary voting materials, vote all proxies
with respect to investments of the Fund in accordance with Price International's
proxy voting policy as most recently provided to JHLICO.
The Trust and JHLICO will provide timely information to Price International
regarding such matters as purchases and redemptions of shares in the Fund and
the cash requirements of, and cash available for investment in, the Portfolio.
JHLICO will timely provide Price International with copies of monthly accounting
statements for the Fund, and such other information (including, without
limitation, reports concerning the classification of Portfolio securities for
purposes of Subchapter M of the Internal Revenue Code and Treasury Regulation
Section 1.817) as may be reasonably necessary or appropriate in order for Price
International to perform its responsibilities hereunder. Price International
will apprise JHLICO and the Trust of important political and economic
developments materially affecting the marketplace or the Fund, and will furnish
JHLICO and the Trust's Board of Trustees from time to time such information as
is appropriate for this purpose. Price International will also make such
personnel as it deems appropriate available in Boston or other reasonable
locations as often as quarterly to discuss the Fund and Price International'
management thereof, to educate JHLICO sales personnel with respect thereto, and
for such other purposes as the Trust or JHLICO may reasonably request.
3. ALLOCATION OF EXPENSES.
Each party to this Agreement shall bear the costs and expenses of performing
its obligations hereunder. In this regard, the Trust specifically agrees to
assume the expense of:
(a) brokerage commissions for transactions in the portfolio investments of
the Trust and similar fees and charges for the acquisition, disposition, lending
or borrowing of such portfolio investments;
(b) custodian fees and expenses;
(c) all taxes, including issuance and transfer taxes, and reserves for taxes
payable by the Trust to federal, state or other governmental agencies; and
(d) interest payable on the Trust's borrowings.
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Nothing in this Agreement shall alter the allocation of expenses and costs
agreed upon between the Trust and JHLICO in the Investment Management Agreement
or any other agreement to which they are parties.
4. SUB-ADVISORY FEES.
For all of the services rendered with respect to the Fund as herein provided,
JHLICO shall pay to Price International a fee (for the payment of which the
Trust shall have no obligation or liability), based on the Current Net Assets of
the Fund, as set forth in Schedule I attached hereto and made a part hereof.
Such 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 Fund during any calendar month, the fee with
respect to such Portfolio accrued to but excluding the date of termination shall
be paid promptly following such termination. For purposes of computing the
amount of advisory fee accrued for any day, "Current Net Assets" shall mean the
Fund's net assets as of the most recent preceding day for which the Fund's net
assets were computed.
5. PORTFOLIO TRANSACTIONS.
In connection with the investment and reinvestment of the assets of the Fund,
Price International is authorized to select the brokers or dealers that will
execute purchase and sale transactions for the Fund and to use reasonable
efforts to obtain the best available price and most favorable execution with
respect to all such purchases and sales of portfolio securities for the Fund.
Price International shall maintain records adequate to demonstrate compliance
with this requirement. Price International 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 Fund or to Price International, and who
charge a higher commission rate to the Fund than may result when allocating
brokerage solely on the basis of seeking the most favorable price and execution.
Price International shall determine in good faith that such higher cost was
reasonable in relation to the value of the brokerage and research services
provided.
Price International will not receive any tender offer solicitation fees or
similar payments in connection with the tender of investments of the Fund.
6. OWNERSHIP OF INFORMATION, RECORDS, AND CONFIDENTIALITY.
The Trust shall own and control all records maintained hereunder by Price
International on the Trust's behalf and, in the event of termination of this
Agreement with respect to the Fund for any reason, all records relating to the
Fund shall be promptly returned to the Trust, free from any claim or retention
of rights by Price International, provided that (subject to the last paragraph
of this Section 6) Price International may retain copies of such records. Price
International also agrees, upon request of the Trust, promptly to surrender such
books and records or, at its expense, copies thereof, to the Trust or make such
books and records available for audit or inspection by representatives of
regulatory authorities or other persons reasonably designated by the Trust.
Price International 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. Price International also agrees to supply
all information in its possession required by any insurance regulatory
authorities to determine whether all insurance laws and regulations are being
complied with. Price International shall supply the Board of Trustees and
officers of the Trust and JHLICO with all statistical information regarding the
investments in the Fund which is reasonably required by them and reasonably
available to Price International, provided that Price International shall not be
required to incur any additional expense in connection therewith.
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Price International 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 if the Trust has authorized such disclosure, or
if such disclosure is expressly required by applicable federal or state
regulatory authorities.
7. LIABILITY; STANDARD OF CARE.
No provision of this Agreement shall be deemed to protect Price International
or JHLICO against any liability to the Trust or its shareholders to which it
might otherwise be subject by reason of any willful misfeasance, bad faith or
negligence in the performance of its duties or the reckless disregard of its
obligations and duties under this Agreement or the Investment Management
Agreement. Nor shall any provision hereof be deemed to protect any trustee or
officer of the Trust against any such liability to which he might otherwise be
subject by reason of any willful misfeasance, bad faith or gross negligence in
the performance his duties or the reckless disregard of his obligations and
duties. Price International shall employ only qualified personnel to manage
the Fund; shall comply with all applicable laws and regulations in the discharge
of its duties under this Agreement; shall (as provided in Section 2 above)
comply with the investment policies, guidelines and restrictions of the Fund and
with the provisions of the Trust's Declaration of Trust, Bylaws, prospectus and
statement of additional information; shall manage the Fund (subject to the
receipt of and based upon the information contained in periodic reports from
JHLICO or the custodian concerning the classification of Portfolio securities
for such purposes) as a regulated investment company in accordance with
subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), and
Treasury Regulations to Section 1.817-5(b). However, Price International shall
not be obligated to perform any service not described in this Agreement, and
shall not be deemed by virtue of this Agreement to have made any representation
or warranty that any level of investment performance or level of investment
results will be achieved.
JHLICO agrees to hold harmless Price International, its directors and officers
and each person if any, who controls Price International within the meaning of
Section 15 of the Securities Act of 1933, as amended, from and against any and
all losses, claims, damages liabilities and expenses (including reasonable
attorneys' fees and expenses and costs of investigation) arising out of or based
upon (a) the failure of the Trust's Registration Statement, including the
prospectus and statement of additional information, or any amendment or
supplement thereto, any preliminary prospectus, any other written communication
with investors or any other submission to governmental bodies or self-regulatory
bodies filed on or subsequent to the date of this Agreement (collectively, the
"Disclosure Documents") to comply with the requirements of applicable federal
and state securities, insurance or other laws; (b) any untrue statement or
alleged untrue statement of a material fact contained in any Disclosure
Document; or (c) any omission or alleged omission in any Disclosure Document to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; except insofar as such losses, claims
damages, liabilities and expenses arise out of or are based upon any such
statement or omission which is in turn based upon information furnished in
writing to JHLICO or the Trust by Price International and which Price
International was informed or otherwise knew was to be used in the Disclosure
Document.
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8. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective on the date hereof and,
unless terminated as herein provided, shall remain in full force and effect
until the earlier of (i) 150 days from the date hereof; (ii) the date a
superseding agreement which has been approved by vote of a majority of the
outstanding voting shares of the Fund becomes effective; or (iii) such other
time as may be mutually agreed to by the parties hereto.
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. The Trust may terminate this Agreement at any time, without
payment of any penalty, pursuant to a vote of the trustees of the Trust or a
vote of a majority of the outstanding shares of the Fund, by giving written
notice thereof to Price International and to JHLICO. Any such termination shall
be effective as of the later of the date specified in such notice or the date
such notice is delivered to Price International. Price International may
terminate this Agreement with respect to the Fund on at least sixty (60) days'
prior written notice delivered to the Trust and to JHLICO. JHLICO may terminate
this Agreement with respect to any Fund on at least sixty (60) days' prior
written notice delivered to the Trust and to Price International.
(c) Automatic Termination. This Agreement shall automatically and
immediately terminate in the event of its assignment (other than as permitted in
Section 15) or if the Investment Management Agreement is terminated.
9. SERVICES NOT EXCLUSIVE; USE OF PRICE INTERNATIONAL'S NAME AND LOGO.
The services of Price International to the Trust 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 Price International 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.
During the term of this Agreement, and subject to a separate agreement among
JHLICO, the Trust and Price International, JHLICO and the Trust shall have the
non-exclusive, non-transferable right to use Price International's name and logo
in all materials relating to the Fund, including all prospectuses, proxy
statements, reports to shareholders, sales literature and other written
materials prepared for distribution to shareholders of the Trust or the public.
However, prior to distribution of any materials which refer to Price
International, JHLICO shall consult with Price International and shall furnish
to Price International a copy of such materials. Price International agrees to
cooperate with JHLICO and to review such materials promptly. JHLICO shall not
distribute such materials if Price International reasonably objects in writing,
within five (5) business days of its receipt of such copy (or such other time as
may be mutually agreed), to the manner in which its name and logo are used.
10. AVOIDANCE OF INCONSISTENT POSITION.
In connection with the purchase and sale of portfolio securities of the Fund,
Price International and its directors, officers and employees will not act as
principal. Nothing in this Agreement shall preclude the combination of orders
for the sale or purchase of portfolio securities of the Fund with those for
other registered investment companies and separately managed accounts managed by
Price International or its affiliates, if orders are allocated in a manner
deemed equitable by Price International among the accounts and at a price
approximately averaged.
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11. AMENDMENT.
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing. No amendment of this
Agreement shall be effective with respect to the Fund until approved
specifically by (a) the Board of Trustees of the Trust, or by vote of a majority
of the outstanding shares of the Fund, and (b) by vote of a majority of those
trustees of the Trust 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 Trust hereunder shall not
be binding upon any of the trustees, shareholders, officers, agents or employees
of Trust personally, but only bind the trust property of the Trust, as provided
in the Trust's Declaration of Trust.
13. 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:
Price International: X. Xxxx Price International, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Fax #: (000) 000-0000
cc: Xxxxx X. Xxxxxxx, Esq.
X. Xxxx Price Associates, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax #: (000) 000-0000
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JHLICO: Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Fax #: (000) 000-0000
TRUST: Xxxx Xxxxxxx Variable Series Trust I
000 Xxxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Fax #: (000) 000-0000
14. 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.
15. ASSIGNMENT.
This Agreement may not be assigned by any party, either in whole or in part,
without the prior written consent of each other party.
16. COUNTERPARTS.
This Agreement may be executed in counterparts, each when taken together
shall be deemed an original and all of which, when taken together, shall be
deemed to constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day first set forth above.
ATTEST: XXXX XXXXXXX VARIABLE SERIES
TRUST I
_____________________________ By:__________________________________
Title: Chairman
ATTEST: XXXX XXXXXXX LIFE INSURANCE COMPANY
_______________________________ By:__________________________________
Title: Vice President
ATTEST: X. XXXX PRICE INTERNATIONAL, INC.
________________________________ By:__________________________________
Title: Vice President
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SCHEDULE I
FEES
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Current Net Assets Under Management Sub-Advisory Fee
----------------------------------- ----------------
On the first $ 50 million 60 basis points (0.60%) per annum
On the next $150 million 55 basis points (0.55%) per annum
On Amounts over $250 million 50 basis points (0.50%) per annum
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