SUPERVISION AND ADMINISTRATION AGREEMENT
SUPERVISION AND ADMINISTRATION AGREEMENT, made this 30th day of March, 2010,
between PIMCO Equity Series VIT (the "Trust"), a Delaware statutory
trust, and Pacific Investment Management Company LLC (the "Administrator" or
"PIMCO"), a Delaware limited liability company.
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"); and
WHEREAS, the Trust is authorized to issue shares of beneficial interest
("Shares") in separate series, which are listed in the attached Schedule A
(as amended from time to time), with each such series representing interests
in a separate portfolio of securities and other assets; and each series of the
Trust issues its Shares in one or more classes, with each class representing
interests in the same portfolio of securities and other assets; and
WHEREAS, the Trust desires to retain the Administrator to render supervisory
and administrative services hereunder with respect to the series listed in
Schedule A, together with any other series subsequently established by the
Trust, and with respect to which the Administrator is willing to do so, being
herein collectively referred to also as the "Portfolios"; and
WHEREAS, pursuant to an Investment Advisory Contract dated March 30, 2010,
between the Trust and PIMCO ("Investment Advisory Contract"), the Trust has
retained PIMCO to provide investment advisory services with respect to the
Portfolios in the manner and on the terms set forth therein; and
WHEREAS, the Trust wishes to retain PIMCO to provide or procure supervisory
and administrative and other services to the Trust with respect to the
Portfolios in the manner and on the terms hereinafter set forth; and
WHEREAS, PIMCO is willing to furnish supervisory and administrative services
and/or to arrange for such services in the manner and on the terms hereinafter
set forth; and
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, the parties agree as follows:
1. Appointment. The Trust hereby appoints PIMCO as the Administrator to
provide or procure, as applicable, the supervisory and administrative and
other services with respect to the Portfolios for the period and on the terms
set forth in this Agreement, as supplemented from time to time. The
Administrator accepts such appointment and agrees during such period to render
or procure, as applicable, the services herein set forth for the compensation
herein provided.
In the event the Trust establishes and designates additional series with
respect to which it desires to retain the Administrator to render or procure
supervisory and administrative and other services hereunder, it shall notify
the Administrator in writing. If the Administrator is willing to render or
procure, as applicable, such services it shall notify the Trust in writing,
whereupon such additional series shall become a Portfolio hereunder.
2. Duties. Subject to the general supervision of the Board of Trustees, the
Administrator shall provide or cause to be furnished all supervisory and
administrative and other services reasonably necessary for the operation of
the Portfolios other than the investment advisory services provided pursuant
to the Investment Advisory Contract with the Trust or the distribution
services provided by the Trust's principal underwriter pursuant to its
Distribution Contract with the Trust. (a) Supervisory and Administrative
Services. These services shall include the following: (i) The Administrator
shall supervise and coordinate matters relating to the operation of the
Portfolios, including any necessary coordination among the investment adviser
or advisers to the Portfolios, the custodian, transfer agent, dividend
disbursing agent, and recordkeeping agent (including pricing and valuation of
the Portfolios), insurance companies, accountants, attorneys, and other
parties performing services or operational functions for the Portfolios. In
connection with the supervision of the pricing and valuation of the
Portfolios, the Administrator shall establish such systems and procedures as
are necessary to carry out this function, including systems and procedures
relating to defaulted securities; forensic reporting and monitoring of
securities and derivatives pricing, including checks and balances against
internal models and external pricing services; tracking and reviewing fair
valued securities; supervising pricing vendors; monitoring for significant
events occurring after the close of trading that may affect the value of
portfolio holdings; and establishing net asset value estimation processes in
the event the custodian cannot produce a net asset value for Shares of a
Portfolio. (ii) The Administrator shall provide the Portfolios, at the
Administrator's expense, with adequate personnel,office space, communications
facilities, and other facilities necessary for the effective administration of
the Portfolios as contemplated in this Agreement as well as provide the
Portfolios, at the Administrator's expense, with the services of a sufficient
number of persons competent to perform such administrative and clerical
functions as are necessary to ensure compliance with federal securities laws,
state insurance laws and other applicable laws. (iii) The Administrator shall
maintain or supervise the maintenance by third parties of such books and
records of the Trust and the Portfolios as may be required by applicable
federal or state law, other than the records and ledgers maintained under the
Investment Advisory Contract. (iv) The Administrator shall prepare or
supervise the preparation by third parties of all federal, state, local, and
foreign tax returns and reports of the Portfolios required by applicable law.
(v) The Administrator shall prepare, file, and arrange for the distribution of
proxy materials and periodic reports to shareholders of the Portfolios or
other appropriate parties as required by applicable law. (vi) The
Administrator shall prepare and arrange for the filing of such registration
statements and other documents with the SEC and other federal and state or
other regulatory authorities as may be required to register the Shares of the
Portfolios and qualify the Trust to do business or as otherwise required by
applicable law. The Administrator shall maintain registration of the
Portfolios' Shares in such other jurisdictions as it deems necessary and
appropriate. The Administrator shall maintain a review and certification
program and internal controls and procedures in accordance with relevant
provisions of the Sarbanes Oxley Act of 2002 as applicable to registered
investment companies. The Administrator shall maintain systems necessary to
provide or procure required disclosure in the Portfolios' registration
statements, shareholder reports, proxy statements, and similar regulatory
documents, and Portfolio proxy voting information. (vii) The Administrator
shall take such other action with respect to the Portfolios as may be required
by applicable law, including without limitation the rules and regulations of
the SEC, the Commodity Futures Trading Commission, state securities and
insurance commissions and other governmental and regulatory agencies. Such
actions shall include, but are not limited to: establishment and maintenance
of a compliance program in accordance with Rule 38a-1 under the 1940 Act,
support of the Portfolios' Chief Compliance Officer, and systems and
procedures necessary to effectuate the compliance program. (viii) The
Administrator shall provide the Portfolios with administrative services to
shareholders as necessary, including: shareholder transaction processing; the
provision of certain statistical information and performance of the
Portfolios; a web servicing platform and internet website; access by PIMCO
representatives to databases to assist with shareholder inquiries and reports;
oversight of anti-money laundering monitoring systems and procedures;
redemption fee application and monitoring systems (if applicable); anti-market
timing monitoring systems and procedures, including implementation of
shareholder information agreements under Rule 22c 2 under the 1940 Act and
associated monitoring systems and procedures; and processing of client
registration applications. Notwithstanding the foregoing, the Administrator
may procure or delegate provision of these services to third parties with
respect to particular classes of the Portfolios or particular shareholders
that have relationships with other financial intermediaries that perform
similar services. (b) Other Services. The Administrator shall also procure on
behalf of the Trust and the Portfolios, and at the expense of the
Administrator, the following persons to provide services to the Portfolios, to
the extent necessary: (i) a custodian or custodians for the Portfolios to
provide for the safekeeping of the Portfolios' assets; (ii) a recordkeeping
agent to maintain the portfolio accounting records for the Portfolios; (iii) a
transfer agent for the Portfolios; and (iv) a dividend disbursing agent for
the Portfolios. The Trust may be a party to any agreement with any of the
persons referred to in this Section 2(b). (c) Personnel. The Administrator
shall also make its officers and employees available to the Board of Trustees
and officers of the Trust for consultation and discussions regarding the
administration of the Portfolios and services provided to the Portfolios under
this Agreement. (d) Standards; Reports. In performing these services, the
Administrator: (i) Shall conform with the 1940 Act and all rules and
regulations thereunder, with all other applicable federal, state and foreign
laws and regulations, with any applicable procedures adopted by the Trust's
Board of Trustees, and with the provisions of the Trust's Registration
Statement filed on Form N-1A as supplemented or amended from time to time.
(ii) Will make available to the Trust, promptly upon request, any of the
Portfolios' books and records as are maintained under this Agreement, and will
furnish to regulatory authorities having the requisite authority any such
books and records and any information or reports in connection with the
Administrator's services under this Agreement that 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. (iii) Will regularly
report to the Trust's Board of Trustees on the services provided under this
Agreement and will furnish the Trust's Board of Trustees with respect to the
Portfolios such periodic and special reports as the Trustees may reasonably
request. (iv) Will comply, to the extent applicable, with the requirements of
Title V of the Xxxxx-Xxxxx-Xxxxxx Act, 15 U.S.C. (S)(S) 6801 et seq., as may be
amended from time to time, and any regulations adopted thereto, including
Regulation S-P of the Securities and Exchange Commission, as well as with any
other applicable federal or state privacy laws and regulations, including but
not limited to the Massachusetts Standards for the Protection of Personal
Information, 201 CMR 17.00, et seq.
3. Documentation. The Trust has delivered copies of each of the following
documents to the Administrator and will deliver to it all future amendments
and supplements thereto, if any: (a) the Trust's Registration Statement as
filed with the SEC and any amendments thereto; and (b) exhibits, powers of
attorney, certificates and any and all other documents relating to or filed in
connection with the Registration Statement described above.
4. Independent Contractor. The Administrator shall for all purposes herein be
deemed to be an independent contractor and shall, unless otherwise expressly
provided herein or authorized by the Board of Trustees of the Trust from time
to time, have no authority to act for or represent the Trust in any way or
otherwise be deemed its agent.
5. Compensation. As compensation for the services rendered under this
Agreement, the Trust shall pay to the Administrator a monthly fee, calculated
as a percentage (on an annual basis) of the average daily value of the net
assets of each of the Portfolios during the preceding month. The fee rates
applicable to each class of a Portfolio shall be set forth in a schedule to
this Agreement. The fees payable to the Administrator for all of the
Portfolios shall be computed and accrued daily and paid monthly. If the
Administrator shall serve for less than any whole month, the foregoing
compensation shall be prorated.
6. Non-Exclusivity. It is understood that the services of the Administrator
hereunder are not exclusive, and the Administrator shall be free to render
similar services to other investment companies and other clients.
7. Expenses. During the term of this Agreement, the Administrator will pay
all expenses incurred by it in connection with its obligations under this
Agreement, except such expenses as are assumed by the Portfolios under this
Agreement, and any expenses that are paid under the terms of the Investment
Advisory Contract. The Administrator assumes and shall pay for maintaining
its staff and personnel and shall, at its own expense provide the equipment,
office space, office supplies, including stationery, and facilities necessary
to perform its obligations under this Agreement, including, but not limited
to, communications facilities, computer systems and applications, internet
access, and a web servicing platform and internet website. In addition, the
Administrator shall bear the following expenses under this Agreement:
(a) Expenses of all audits by the Trust's independent public accountants;
(b) Expenses of the Trust's transfer agent, registrar, dividend disbursing
agent, and shareholder recordkeeping services; (c) Expenses of the Trust's
custodial services, including any recordkeeping services provided by the
custodian; (d) Expenses of obtaining quotations for calculating the value of
each Portfolio's net assets; (e) Expenses of obtaining Portfolio Activity
Reports for each Portfolio; (f) Expenses of maintaining the Trust's tax
records; (g) Costs and/or fees, including legal fees, incident to meetings of
the Trust's shareholders or of any contract owners with contract value
allocated to the Trust to the extent such costs and/or fees would otherwise be
payable by the Trust, the preparation, printing and mailings of prospectuses,
notices and proxy statements and reports of the Trust to its shareholders or
other appropriate recipients, the filing of reports with regulatory bodies,
the maintenance of the Trust's existence and qualification to do business, and
the expenses of issuing, redeeming, registering and qualifying for sale,
Shares with federal and state securities; (h) The Trust's ordinary legal
fees, including the legal fees that arise in the ordinary course of business
for a Delaware statutory trust registered as an open-end management investment
company; (i) Costs of preparing and printing certificates representing Shares
of the Trust; (j) The Trust's pro rata portion of the fidelity bond required
by Section 17(g) of the 1940 Act, or other insurance premiums; and
(k) Association membership dues.
The Trust shall bear the following expenses: (a) Salaries and other
compensation or expenses, including travel expenses, of any of the Trust's
executive officers and employees, if any, who are not officers, directors,
shareholders, members, partners or employees of the Administrator or its
subsidiaries or affiliates; (b) Taxes and governmental fees, if any, levied
against the Trust or any of its Portfolios; (c) Brokerage fees and
commissions, and other portfolio transaction expenses incurred for any of the
Portfolios; (d) Costs, including the interest expenses, of borrowing money;
(e) Fees and expenses of Trustees who are not officers, employees, partners,
shareholders or members of PIMCO or its subsidiaries or affiliates, including
travel expenses, and fees and expenses of legal counsel retained for the
benefit of such Trustees; (f) Extraordinary expenses, including extraordinary
legal expenses, as may arise, including expenses incurred in connection with
litigation, proceedings, other claims and the legal obligations of the Trust
to indemnify its trustees, officers, employees, shareholders, distributors,
and agents with respect thereto; (g) Organizational and offering expenses of
the Trust and the Portfolios, and any other expenses which are capitalized in
accordance with generally accepted accounting principles; and (h) Any expenses
allocated or allocable to a specific class of Shares.
8. Liability. The Administrator shall give the Trust the benefit of the
Administrator's best efforts in rendering services under this Agreement. The
Administrator may rely on information reasonably believed by it to be accurate
and reliable. As an inducement for the Administrator's undertaking to render
services under this Agreement, the Trust agrees that neither the Administrator
nor its members, officers, directors, or employees shall be subject to any
liability for, or any damages, expenses or losses incurred in connection with,
any act or omission or mistake in judgment connected with or arising out of
any services rendered under this Agreement, except by reason of willful
misfeasance, bad faith, or gross negligence in performance of the
Administrator's duties, or by reason of reckless disregard of the
Administrator's obligations and duties under this Agreement. This provision
shall govern only the liability to the Trust of the Administrator and that of
its members, officers, directors, and employees, and shall in no way govern
the liability to the Trust or the Administrator or provide a defense for any
other person including persons that provide services for the Portfolios as
described in Section 2(b) of this Agreement.
9. Term and Continuation. This Agreement shall take effect as of the date
indicated above, and shall remain in effect, unless sooner terminated as
provided herein, for two years from such date, and shall continue thereafter
on an annual basis with respect to each Portfolio provided that such
continuance is specifically approved at least annually (a) by the vote of a
majority of the outstanding voting securities (as defined in the 0000 Xxx) of
the Fund or by the Trust's Board of Trustees and (b) by the vote of a majority
of the Trust's trustees who are not parties to this Agreement or "interested
persons" (as defined in the 0000 Xxx) of any such party.
This Agreement may be terminated: (a) by the Trust at any time with respect to
the services provided by the Administrator, by vote of a majority of the
entire Board of Trustees of the Trust or by a vote of a majority of the
outstanding voting shares of the Trust or, with respect to a particular
Portfolio or class, by vote of a majority of the outstanding voting shares of
such Portfolio or class, on 60 days' written notice to the Administrator;
(b) by the Administrator at any time, without the payment of any penalty, upon
60 days' written notice to the Trust.
10. Use of Name. It is understood that the names "Pacific Investment
Management Company LLC" or "PIMCO" or any derivative thereof or logo
associated with those names and other servicemarks and trademarks owned by the
Administrator or its affiliates are the valuable property of the Administrator
and its affiliates, and that the Trust and/or the Portfolios may use such
names (or derivatives or logos) only as permitted by the Administrator.
11. Notices. Notices of any kind to be given to the Administrator by the
Trust shall be in writing and shall be duly given if mailed or delivered to
the Administrator at 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx
00000, or to such other address or to such individual as shall be specified by
the Administrator. Notices of any kind to be given to the Trust by the
Administrator shall be in writing and shall be duly given if mailed or
delivered to 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, or to
such other address or to such individual as shall be specified by the Trust.
12. Trust Obligation. Notice is hereby given that the Agreement has been
executed on behalf of the Trust by an officer of the Trust in his or her
capacity as an officer and not individually. The obligations of this Agreement
shall only be binding upon the assets and property of the Trust and shall
not be binding upon any trustee, officer, or shareholder of the Trust
individually.
13. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original.
14. Miscellaneous. (a) This Agreement shall be governed by the laws of
California, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Investment Advisers Act of 1940, or any
rule or order of the SEC thereunder. (b) 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 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. (c) The captions in this Agreement are included for
convenience only and in no way define any of the provisions hereof or
otherwise affect their construction or effect. (d) This Agreement may not be
assigned by the Trust or the Administrator without the consent of the other
party.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below on the day and year first above
written.
PIMCO EQUITY SERIES VIT
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Vice President
ACCEPTED:
PACIFIC INVESTMENT MANAGEMENT COMPANY LLC
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Managing Director
SCHEDULE A
(As of March 30, 2010)
Supervisory and Administrative Fee Rate (%)
Portfolio Core Expenses1 Other Expenses Total
EqS Pathfinder2 0.10 0.25 0.35
1 Core Expenses includes custody, portfolio accounting and tax preparation
expenses.
2 Refer to the Expense Limitation Agreement for certain fee waivers.
