AMENDED AND RESTATED SUBADVISORY AGREEMENT
AMENDED AND RESTATED SUBADVISORY AGREEMENT ("Agreement") made as of the
1st day of May, 2007, amending and restating the Subadvisory Agreement dated May
1, 2006, by and between Allianz Life Advisers, LLC, a Minnesota limited
liability company ("Manager"), and Pacific Investment Management Company LLC, a
Delaware limited liability company ("Subadviser").
WHEREAS each of the funds listed in Schedule A (each a "Fund," and
collectively, the "Funds") is a series of a Delaware business trust registered
as an investment company under the Investment Company Act of 1940, as amended
(the "1940 Act").
WHEREAS Manager has entered into an investment management agreement (the
"Management Agreement") with the Funds pursuant to which Manager provides
investment advisory services to the Funds.
WHEREAS Manager and the Funds each desire to retain Subadviser to
provide investment advisory services to the Funds, and Subadviser is willing to
render such investment advisory services in accordance with the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, the parties, intending to be legally bound, agree as follows:
1. SUBADVISER'S DUTIES.
(a) PORTFOLIO MANAGEMENT. Subject to supervision by Manager and
the Funds' Board of Trustees (the "Board"), Subadviser shall
manage the investment operations and the composition of that
portion of assets of each of the Funds which is allocated to
Subadviser from time to time by Manager (which portion may
include any or all of the Funds' assets), including the
purchase, retention, and disposition thereof, in accordance
with the Funds' investment objectives, policies, and
restrictions as set forth in the Funds' prospectus and
Statement of Additional Information (SAI) (hereinafter
referred to as "Investment Guidelines"), and subject to the
following understandings:
(i) INVESTMENT DECISIONS. Subadviser shall determine from
time to time the investments and securities to be
purchased, retained, or sold with respect to that portion
of each of the Funds allocated to it by Manager, and what
portion of such assets will be invested or held
uninvested as cash. Subadviser is authorized to enter
into agreements and execute documents on behalf of each
Fund as required to make investments pursuant to the
Investment Guidelines, as such may be amended from time
to time. Subadviser shall comply with any amendments to
the Investment Guidelines within a reasonable time after
1
receipt of notice of such amendments. Subadviser shall be
entitled to rely upon written clarifications,
supplements, and modifications of the Investment
Guidelines received from Manager and its authorized
agents. Subadviser is prohibited from consulting with any
other subadviser of any of the Funds concerning
transactions of the Funds in securities or other assets,
except: (1) for purposes of complying with the conditions
of Rule 12d3-1(a) or (b) under the 1940 Act; or (2) to
the extent permitted pursuant to a sub-subadvisory
agreement among the Manager, the Subadviser, and a
sub-subadviser as provided in Section 1(f) of this
Agreement. Unless Manager or any of the Funds gives
written instructions to the contrary, Subadviser shall
vote all proxies with respect to companies whose
securities are held in that portion of each of the Funds
allocated to it by Manager, using its best good faith
judgment to vote such proxies in the manner that best
serves the interests of the Funds' shareholders.
Subadviser shall not be responsible for pursuing rights,
including class action settlements, relating to the
purchase, sale, or holding of securities by the Funds;
provided, however, that Subadviser shall provide notice
to Manager of any such potential claim and cooperate with
Manager in any possible proceeding. Subadviser shall be
entitled to rely upon written clarifications,
supplements, and modifications to the Investment
Guidelines provided by Manager.
If the Funds' custodian enters into securities lending
transactions on behalf of the Fund, the custodian shall
be responsible for ensuring that the securities or other
assets in the Funds are available for sale at all times.
Manager or the custodian shall be liable for any loss
resulting from the sale by Subadviser of a security that
is not available in the Funds for settlement as a result
of such securities lending transactions.
Manager agrees to provide such documents as Subadviser
reasonably requests in order to confirm signing authority
and undertakes to inform Subadviser of any event that
might affect this authority.
(ii) INVESTMENT LIMITS. In the performance of its duties and
obligations under this Agreement, Subadviser shall act in
conformity with applicable limits and requirements, as
amended from time to time, as set forth in (A) the
Investment Guidelines; (B) the instructions and
directions of Manager and of the Board provided to
Subadviser within a reasonable time prior to the
implementation thereof; (C) requirements of the 1940 Act
and the regulations thereunder; Subchapter M of the
Internal Revenue Code of 1986, as amended, (the "IRC")
and Section 817(h) of the IRC; and all other applicable
federal and state laws and regulations; and (D) any
2
policies and procedures of Subadviser communicated to the
Funds and/or Manager.
(iii) FUTURES AND OPTIONS. Subadviser's investment authority
shall include the authority to purchase, sell, and cover
open positions, and generally to deal in financial
futures contracts and options thereon in accordance with
the Investment Guidelines. Manager will (A) open and
maintain brokerage accounts for financial futures and
options (such accounts hereinafter referred to as
"brokerage accounts") on behalf of and in the name of the
Funds and (B) execute for and on behalf of the Funds
standard customer agreements with a broker or brokers.
Subadviser may, using such of the Funds' assets as
Subadviser deems necessary or desirable, direct the
Funds' custodian to deposit on behalf of the Funds
original and maintenance brokerage deposits and otherwise
direct payments of cash, cash equivalents, and securities
and other property into such brokerage accounts and to
such brokers as Subadviser deems desirable or
appropriate. Subadviser has delivered to Manager a copy
of its Disclosure Document dated March 2006, on file with
the Commodity Futures Trading Commission, receipt of
which by Manager is hereby acknowledged.
(iv) PORTFOLIO TRANSACTIONS.
(A) TRADING. With respect to the securities and other
investments to be purchased or sold for the Funds,
Subadviser shall place orders with or through such
persons, brokers, dealers, or futures commission
merchants (including, but not limited to,
broker-dealers that are affiliated with Manager or
Subadviser) as may be selected by Subadviser; provided,
however, that such orders shall be consistent with the
brokerage policy set forth in the Funds' Prospectus and
SAI, or approved by the Board; conform with federal
securities laws; and be consistent with seeking best
execution. Within the framework of this policy,
Subadviser may, to the extent permitted by applicable
law, consider the research provided by, and the
financial responsibility of, brokers, dealers, or
futures commission merchants who may effect, or be a
party to, any such transaction or other transactions to
which Subadviser's other clients may be a party.
(B) AGGREGATION OF TRADES. On occasions when Subadviser
deems the purchase or sale of a security or futures
contract to be in the best interest of one or more of
the Funds as well as other clients of Subadviser,
Subadviser, to the extent permitted by applicable laws
and regulations, may, but shall be under no obligation
to, aggregate the securities or futures contracts to be
3
sold or purchased in order to seek best execution. In
such event, Subadviser will make allocation of the
securities or futures contracts so purchased or sold,
as well as the expenses incurred in the transaction, in
the manner Subadviser considers to be the most
equitable and consistent with its fiduciary obligations
to the applicable Fund or Funds and to such other
clients.
(v) RECORDS AND REPORTS. Subadviser (A) shall maintain such
books and records as are required based on the services
provided by Subadviser pursuant to this Agreement under
the 1940 Act and as are necessary for Manager to meet its
record keeping obligations generally set forth under
Section 31 and related rules thereunder, (B) shall render
to the Board such periodic and special reports as the
Board or Manager may reasonably request in writing, and
(C) shall meet with any persons at the request of Manager
or the Board for the purpose of reviewing Subadviser's
performance under this Agreement at reasonable times and
upon reasonable advance written notice.
(vi) TRANSACTION REPORTS. On each business day Subadviser
shall provide to the Funds' custodian and the Funds'
administrator information relating to all transactions
concerning the Funds' assets and shall provide Manager
with such information upon Manager's request.
(vii) CUSTODY AND CUSTODIAN BANK. It is understood and agreed
that Subadviser shall not act as custodian of the Funds'
assets. Manager shall instruct the Funds' custodian to
(a) advise Subadviser periodically concerning the amount
of cash or cash equivalents available for investment in
the Funds; (b) carry out all investment transactions as
may be directed, in writing, by Subadviser, and (c)
confirm all completed transactions, in writing, to
Subadviser.
(b) COMPLIANCE PROGRAM AND ONGOING CERTIFICATION(S). As reasonably
requested, Subadviser shall timely provide to Manager (i)
information and commentary for the Funds' annual and
semi-annual reports, in a format approved by Manager, and
shall (A) certify that such information and commentary discuss
the factors that materially affected the performance of the
portion of each of the Funds allocated to Subadviser under
this Agreement, including the relevant market conditions and
the investment techniques and strategies used, and do not
contain any untrue statement of a material fact or omit to
state a material fact necessary to make the information and
commentary not misleading, and (B) provide additional
certifications related to Subadviser's management of the Funds
in order to support the Funds' filings on Form N-CSR and Form
N-Q, and the Funds' Principal Executive Officer's and
Principal Financial Officer's certifications under Rule 30a-2
under the 1940 Act, thereon; (ii) a quarterly
4
sub-certification with respect to compliance matters related
to Subadviser and the Subadviser's management of the Funds, in
a format reasonably requested by Manager, as it may be amended
from time to time; (iii) an annual sub-certification with
respect to matters relating to the Funds' compliance program
under Rule 38a-1, and (iv) an annual certification from the
Subadviser's Chief Compliance Officer, appointed under Rule
206(4)-7 under the Investment Advisers Act of 1940 (the
"Advisers Act"), or his or her designee, with respect to the
design and operation of Subadviser's compliance program, in a
format reasonably requested by Manager.
(c) MAINTENANCE OF RECORDS. Subadviser shall timely furnish to
Manager all information relating to Subadviser's services
hereunder which are needed by Manager to maintain the books
and records of the Funds required under the 1940 Act.
Subadviser shall maintain for the Funds the records required
by paragraphs (b)(5), (b)(6), (b)(7), (b)(9), (b)(10) and (f)
of Rule 31a-1 under the 1940 Act and any additional records as
agreed upon by Subadviser and Manager. Subadviser agrees that
all records which it maintains for the Funds are the property
of the Funds and Subadviser will surrender promptly to the
Funds any of such records upon the Funds' request; provided,
however, that Subadviser may retain a copy of such records.
Subadviser further agrees to preserve for the periods
prescribed under the 1940 Act any such records as are required
to be maintained by it pursuant to Section 1(a) hereof.
(d) FIDELITY BOND AND CODE OF ETHICS. Subadviser will provide the
Funds with periodic written certifications that, with respect
to its activities on behalf of the Funds, Subadviser maintains
(i) adequate fidelity bond insurance and (ii) an appropriate
Code of Ethics and related reporting procedures.
(e) CONFIDENTIALITY. Subadviser agrees that it shall exercise the
same standard of care that it uses to protect its own
confidential and proprietary information, but no less than
reasonable care, to protect the confidentiality of the
Portfolio Information. As used herein "Portfolio Information"
means confidential and proprietary information of the Funds or
Manager that is received by Subadviser in connection with this
Agreement, including information with regard to the portfolio
holdings and characteristics of the portion of each of the
Funds allocated to Subadviser that Subadviser manages under
the terms of this Agreement. Subadviser will restrict access
to the Portfolio Information to those employees of Subadviser
who will use it only for the purpose of managing its portion
of the Funds and to the employees of any sub-subadviser of any
of the Funds, pursuant to any agreement under Section 1(f) of
this Agreement. The foregoing shall not prevent Subadviser
from disclosing Portfolio Information that is (1) publicly
known or becomes publicly known through no unauthorized act,
(2) rightfully received from a third party without obligation
of confidentiality, (3) approved in writing by Manager for
disclosure, or (4) required to be disclosed pursuant to a
requirement of a governmental agency or law so long as
5
Subadviser provides Manager with written notice of such
requirement prior to any such disclosure.
(f) With respect to any of the Funds, Subadviser is authorized to
enter into a sub-subadvisory agreement among Manager,
Subadviser, and another investment adviser pursuant to which
such investment adviser shall provide Subadviser with advisory
services, including investment guidance and policy direction
in connection with the management of the Fund, oral and
written research, analysis, advice, and statistical and
economic data and information.
2. MANAGER'S DUTIES. Manager shall oversee and review Subadviser's
performance of its duties under this Agreement. Manager shall also
retain direct portfolio management responsibility with respect to any
assets of the Funds that are not allocated by it to the portfolio
management of Subadviser as provided in Section 1(a) hereof or to any
other subadviser. Manager will periodically provide to Subadviser a
list of the affiliates of Manager or the Funds (other than affiliates
of Subadviser) to which investment restrictions apply, and will
specifically identify in writing (a) all publicly traded companies in
which the Funds may not invest, together with ticker symbols for all
such companies (Subadviser will assume that any company name not
accompanied by a ticker symbol is not a publicly traded company), and
(b) any affiliated brokers and any restrictions that apply to the use
of those brokers by the Funds.
3. DOCUMENTS PROVIDED TO SUBADVISER. Manager has delivered or will deliver
to Subadviser current copies and supplements thereto of the Funds'
Prospectus and SAI, and will promptly deliver to it all future
amendments and supplements, if any.
4. COMPENSATION OF SUBADVISER. Subadviser will bear all expenses in
connection with the performance of its services under this Agreement,
which expenses shall not include brokerage fees or commissions in
connection with the effectuation of securities transactions for the
Funds. For the services provided and the expenses assumed pursuant to
this Agreement, Manager will pay to Subadviser, effective from the date
of this Agreement, a fee which shall be accrued daily and paid monthly,
on or before the last business day of the next succeeding calendar
month, based on the Funds' assets allocated to Subadviser under this
Agreement at the annual rates as a percentage of such average daily net
assets set forth in the attached Schedule A, which Schedule may be
modified from time to time upon mutual written agreement of the parties
to reflect changes in annual rates, subject to any approvals required
by the 0000 Xxx. For the purpose of determining fees payable to the
Subadviser, the value of the Funds' average daily assets allocated to
Subadviser under this Agreement shall be computed at the times and in
the manner specified in the Funds' Prospectus or Statement of
Additional Information as from time to time in effect. If this
Agreement becomes effective or terminates before the end of any month,
the fee for the period from the effective date to the end of the month
or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to the proportion that such
partial month bears to the full month in which such effectiveness or
termination occurs.
5. REPRESENTATIONS OF SUBADVISER. Subadviser represents and warrants as
follows:
(a) Subadviser (i) is registered as an investment adviser under
the Advisers Act and will continue to be so registered for so
long as this Agreement remains in effect; (ii) is not
6
prohibited by the 1940 Act or the Advisers Act from performing
the services contemplated by this Agreement; (iii) has
appointed a Chief Compliance Officer under Rule 206(4)-7 under
the Advisers Act; (iv) has adopted written policies and
procedures that are reasonably designed to prevent violations
of the Advisers Act from occurring, detect violations that
have occurred, and correct promptly any violations that have
occurred, and will provide promptly notice of any material
violations relating to any of the Funds to Manager; (v) has
met and will seek to continue to meet for so long as this
Agreement remains in effect, any other applicable federal or
state requirements, or the applicable requirements of any
regulatory or industry self-regulatory agency; (vi) has the
authority to enter into and perform the services contemplated
by this Agreement; and (vii) will promptly notify Manager of
the occurrence of any event that would disqualify Subadviser
from serving as an investment adviser of an investment company
pursuant to Section 9(a) of the 1940 Act or in the event that
Subadviser becomes aware that it is the subject of a material
administrative proceeding or enforcement action by the SEC or
other regulatory authority. Subadviser further agrees to
notify Manager promptly of any material fact known to
Subadviser concerning Subadviser that is not contained in the
Funds' registration statement, or any amendment or supplement
thereto, but that is required to be disclosed therein, and of
any statement contained therein concerning Subadviser that
becomes untrue in any material respect.
(b) Subadviser has adopted a written code of ethics complying with
the requirements of Rule 17j-1 under the 1940 Act and will
provide Manager with a copy of the code of ethics. Within 60
days of the end of the last calendar quarter of each year that
this Agreement is in effect, a duly authorized officer of
Subadviser shall certify to Manager that Subadviser has
complied with the requirements of Rule 17j-1 during the
previous year and that there has been no material violation of
Subadviser's code of ethics or, if such a violation has
occurred, that appropriate action was taken in response to
such violation.
(c) Subadviser has provided Manager with a copy of its Form ADV
Part II, which as of the date of this Agreement is its Form
ADV Part II as most recently deemed to be filed with the
Securities and Exchange Commission ("SEC"), and promptly will
furnish a copy of all material amendments thereto to Manager.
(d) Subadviser will promptly notify Manager of any material
changes in its Controlling Shareholders/Managing Partners or
in the key personnel who are either the portfolio manager(s)
responsible for the Funds or the Subadviser's Chief Executive
Officer or President, or if there is otherwise an actual or
expected change in control of management of Subadviser.
(e) Subadviser agrees that neither it nor any of its affiliates
will in any way refer directly or indirectly to its
relationship with the Funds or Manager under this Agreement,
or any of their respective affiliates in offering, marketing,
7
or other promotional materials without the prior written
consent of Manager.
6. REPRESENTATIONS OF MANAGER. Manager represents and warrants as follows:
(a) Manager (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long
as this Agreement remains in effect; (ii) is not prohibited by
the 1940 Act or the Advisers Act from performing the services
contemplated by this Agreement, (iii) has met and will seek to
continue to meet for so long as this Agreement remains in
effect, any other applicable federal or state requirements, or
the applicable requirements of any regulatory or industry
self-regulatory agency necessary to be met in order to perform
the services contemplated by this Agreement; (iv) has the
authority to enter into and perform the services contemplated
by this Agreement; and (v) will promptly notify Subadviser of
the occurrence of any event that would disqualify Manager from
serving as an investment adviser of an investment company
pursuant to Section 9(a) of the 1940 Act or otherwise.
(b) Manager agrees that neither it nor any of its affiliates will
in any way refer directly or indirectly to its relationship
with Subadviser, or any of its affiliates in offering,
marketing, or other promotional materials without the prior
written consent of Subadviser, which consent shall not be
unreasonably withheld.
(c) Manager represents and warrants that each of the Funds is a
"qualified institutional buyer" (QIB) as defined in Rule 144A
under the Securities Act of 1933, as amended, (the "1933 Act")
and will promptly notify Subadviser if any Fund ceases to be a
QIB.
7. LIABILITY AND INDEMNIFICATION.
(a) Subadviser agrees to perform faithfully the services required
to be rendered by Subadviser under this Agreement, but nothing
herein contained shall make Subadviser or any of its officers,
partners, or employees liable for any loss sustained by the
Funds or their officers, directors, or shareholders, Manager,
or any other person on account of the services which
Subadviser may render or fail to render under this Agreement;
provided, however, that nothing herein shall protect
Subadviser against liability to the Funds or their officers,
directors, shareholders, Manager, or any other person to which
Subadviser would otherwise be subject, by reason of its
willful misfeasance, bad faith, or negligence in the
performance of its duties, or by reason of its reckless
disregard of its obligations and duties under this Agreement.
Nothing in this Agreement shall protect Subadviser from any
liabilities that it may have under the 1933 Act or the 1940
Act. Subadviser does not warrant that the portion of the
assets of each of the Funds managed by Subadviser will achieve
any particular rate of return or that its performance will
match that of any benchmark index or other standard or
objective. Subadviser shall not be deemed to have breached
8
this Agreement or the Investment Guidelines by reason of
fluctuations in the value of a Fund's assets arising from
market movements and other events beyond Subadviser's control;
provided, however, that the foregoing provision does not limit
the Subadviser's duties as set forth under Section 1(a)(ii)(C)
to comply with the requirements of the 1940 Act and the
regulations thereunder.
(b) Except as may otherwise be provided by the 1940 Act or any
other federal securities law, Subadviser, any of its
affiliates, and any of the officers, partners, employees,
consultants, or agents thereof shall not be liable for any
losses, claims, damages, liabilities, or litigation (including
legal and other expenses) incurred or suffered by the Funds,
Manager, or any affiliated persons thereof (within the meaning
of Section 2(a)(3) of the 0000 Xxx) or controlling persons
thereof (as described in Section 15 of the 1933 Act)
(collectively, "Fund and Manager Indemnitees") as a result of
any error of judgment or mistake of law by Subadviser with
respect to the Funds, except that nothing in this Agreement
shall operate or purport to operate in any way to exculpate,
waive, or limit the liability of Subadviser for, and
Subadviser shall indemnify and hold harmless the Funds and
Manager Indemnitees against, any and all losses, claims,
damages, liabilities, or litigation (including reasonable
legal and other expenses) to which any of the Fund and Manager
Indemnitees may become subject under the 1933 Act, the 1940
Act, the Advisers Act, or under any other statute, at common
law, or otherwise arising out of or based on (i) any willful
misconduct, bad faith, reckless disregard, or gross negligence
of Subadviser in the performance of any of its duties or
obligations hereunder; (ii) any untrue statement of a material
fact regarding the Subadviser contained in the Prospectus and
SAI, proxy materials, reports, advertisements, sales
literature, or other materials pertaining to the Funds or the
omission to state therein a material fact regarding the
Subadviser which was required to be stated therein or
necessary to make the statements therein not misleading, if
such statement or omission was made in reliance upon written
information furnished to Manager or the Funds by the
Subadviser Indemnitees (as defined below) for use therein; or
(iii) any violation of federal or state statutes or
regulations by Subadviser. It is further understood and agreed
that Subadviser may rely upon information furnished to it by
Manager that it reasonably believes to be accurate and
reliable. The federal securities laws impose liabilities in
certain circumstances on persons who act in good faith, and
therefore nothing herein shall in any way constitute a waiver
of limitation of any rights that Manager may have under any
securities laws.
(c) Except as may otherwise be provided by the 1940 Act or any
other federal securities law, Manager and the Funds shall not
be liable for any losses, claims, damages, liabilities, or
litigation (including legal and other expenses) incurred or
suffered by Subadviser or any of its affiliated persons
thereof (within the meaning of Section 2(a)(3) of the 0000
Xxx) or controlling persons (as described in Section 15 of the
1933 Act) (collectively, "Subadviser Indemnitees") as a result
9
of any error of judgment or mistake of law by Manager with
respect to the Funds, except that nothing in this Agreement
shall operate or purport to operate in any way to exculpate,
waive, or limit the liability of Manager for, and Manager
shall indemnify and hold harmless the Subadviser Indemnitees
against any and all losses, claims, damages, liabilities, or
litigation (including reasonable legal and other expenses) to
which any of the Subadviser Indemnitees may become subject
under the 1933 Act, the 1940 Act, the Advisers Act, or under
any other statute, at common law, or otherwise arising out of
or based on (i) any willful misconduct, bad faith, reckless
disregard, or gross negligence of Manager in the performance
of any of its duties or obligations hereunder; (ii) any untrue
statement of a material fact contained in the Prospectus and
SAI, proxy materials, reports, advertisements, sales
literature, or other materials pertaining to the Funds or the
omission to state therein a material fact which was required
to be stated therein or necessary to make the statements
therein not misleading, unless such statement or omission
concerned Subadviser and was made in reliance upon written
information furnished to Manager or the Funds by a Subadviser
Indemnitee for use therein, or (iii) any violation of federal
or state statutes or regulations by Manager or the Funds. It
is further understood and agreed that Manager may rely upon
information furnished to it by Subadviser that it reasonably
believes to be accurate and reliable.
(d) After receipt by Manager, the Funds, or Subadviser, their
affiliates, or any officer, director, employee, or agent of
any of the foregoing, entitled to indemnification as stated in
(a) or (b) above ("Indemnified Party") of notice of the
commencement of any action, if a claim in respect thereof is
to be made against any person obligated to provide
indemnification under this section ("Indemnifying Party"),
such Indemnified Party shall notify the Indemnifying Party in
writing of the commencement thereof as soon as practicable
after the summons or other first written notification giving
information about the nature of the claim that has been served
upon the Indemnified Party; provided that the failure to so
notify the Indemnifying Party will not relieve the
Indemnifying Party from any liability under this section,
except to the extent that such Indemnifying Party is damaged
solely as a result of the failure to give such notice. The
Indemnifying Party, upon the request of the Indemnified Party,
shall retain counsel satisfactory to the Indemnified Party to
represent the Indemnified Party in the proceeding, and shall
pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any Indemnified Party
shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such
Indemnified Party unless (1) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention
of such counsel, or (2) the named parties to any such
proceeding (including any impleaded parties) include both the
Indemnifying Party and the Indemnified Party and
representation by both parties by the same counsel would be
inappropriate due to actual or potential differing interests
10
between them. The Indemnifying Party shall not be liable for
any settlement of any proceeding effected without its written
consent, which consent shall not be unreasonably withheld, but
if settled with such consent or if there be a final judgment
for the plaintiff, the Indemnifying Party agrees to indemnify
the Indemnified Party from and against any loss or liability
by reason of such settlement or judgment.
8. DURATION AND TERMINATION.
(a) Unless sooner terminated as provided herein, this Agreement
shall continue in effect with respect to a Fund for a period
of more than two years from the date after which such Fund
becomes subject to this Agreement only so long as such
continuance is specifically approved at least annually in
conformity with the requirements of the 1940 Act. Thereafter,
if not terminated, this Agreement shall continue automatically
for successive periods of 12 months each, provided that such
continuance is specifically approved at least annually (i) by
a vote of a majority of the Board members who are not parties
to this Agreement or interested persons (as defined in the
0000 Xxx) of any such party, and (ii) by the Board or by a
vote of the holders of a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of the Fund.
Notwithstanding anything to the contrary, Manager may
terminate this Agreement without penalty within five business
days of its execution by giving written notice to such effect
to Subadviser within such five business day period.
(b) Notwithstanding the foregoing, this Agreement may be
terminated at any time, without the payment of any penalty,
with respect to a Fund by the Board or by vote of a majority
of the outstanding voting securities (as defined in the 0000
Xxx) of such Fund on 60 days' written notice to Subadviser.
This Agreement may also be terminated, without the payment of
any penalty, by Manager (i) upon 60 days' written notice to
Subadviser; (ii) upon material breach by Subadviser of any
representations and warranties set forth in this Agreement, if
such breach has not been cured within 20 days after written
notice of such breach; or (iii) immediately if, in the
reasonable judgment of Manager, Subadviser becomes unable to
discharge its duties and obligations under this Agreement,
including circumstances such as the insolvency of Subadviser
or other circumstances that could adversely affect the Funds.
Subadviser may terminate this Agreement at any time, without
payment of any penalty, (1) upon 60 days' written notice to
Manager; (2) upon 30 days' written notice to Manager in the
event that Subadviser reasonably determines that it does not
wish to comply with an amendment to the Investment Guidelines;
or (3) upon material breach by Manager of any representations
and warranties set forth in the Agreement, if such breach has
not been cured within 20 days after written notice of such
breach. This Agreement shall terminate automatically in the
event of its assignment (as defined in the 0000 Xxx) or upon
the termination of the Management Agreement.
11
(c) In the event of termination of the Agreement, those sections
of the Agreement which govern conduct of the parties' future
interactions with respect to the Subadviser having provided
investment management services to the Funds for the duration
of the Agreement, including, but not limited to, Sections
1(a)(iv)(A), 1(e), 7, 14, 16, and 17, shall survive such
termination of the Agreement.
9. SUBADVISER'S SERVICES ARE NOT EXCLUSIVE. Nothing in this Agreement
shall limit or restrict the right of Subadviser or any of its
partners, officers, or employees to engage in any other business or to
devote his or her time and attention in part to the management or
other aspects of any business, whether of a similar or a dissimilar
nature, or limit or restrict Subadviser's right to engage in any other
business or to render services of any kind to any other mutual fund,
corporation, firm, individual, or association.
10. REFERENCES TO SUBADVISER.
(a) The name "PIMCO" is the property of Subadviser for copyright
and other purposes. Subadviser agrees that, for so long as
Subadviser is a Fund's sole subadviser, the name "PIMCO" may
be used in the name of such Fund and that such use of the name
"PIMCO" may include use of the name in prospectuses, reports,
and sales materials. (A sub-subadviser hired pursuant to
Section 1(f) of this Agreement shall not be considered a
subadviser for the purposes of this Section.)
(b) During the term of this Agreement, Manager agrees to furnish
to Subadviser at its principal office all prospectuses, proxy
statements, reports to shareholders, sales literature, or
other material prepared for distribution to sales personnel,
shareholders of the Fund or the public, which refer to
Subadviser or its clients in any way, prior to use thereof and
not to use such material if Subadviser reasonably objects in
writing five business days (or such other time as may be
mutually agreed upon) after receipt thereof. Sales literature
may be furnished to Subadviser hereunder by first-class or
overnight mail, electronic or facsimile transmission, or hand
delivery. Subadviser's right to object to such materials is
limited to the portions of such materials that expressly
relate to Subadviser, its services, and its clients.
12
11. NOTICES. Any notice under this Agreement must be given in writing as
provided below or to another address as either party may designate in
writing to the other.
Subadviser:
General Counsel
Pacific Investment Management Company LLC
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Fax: 000-000-0000
with a copy to:
Xxxxx Xxxxx, Executive Vice President
Pacific Investment Management Company LLC
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Tel: 000-000-0000
Fax: 000-000-0000
Email: Xxxxx.Xxxxx@xxxxx.xxx
Manager:
Xxxxxxx X. Xxxxxx, President
Allianz Life Advisers, LLC
0000 Xxxxxx Xxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Fax: 000-000-0000
Email: Xxxxxxx_Xxxxxx@xxxxxxxxxxx.xxx
with a copy to:
H. Xxxxx xxx Xxxxx, Senior Securities Counsel
Allianz Life Advisers, LLC
0000 Xxxxxx Xxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Tel: 000-000-0000
Fax: 000-000-0000
Email: Xxxxx_xxxXxxxx@xxxxxxxxxxx.xxx
00
00. AMENDMENTS. This Agreement may be amended by mutual agreement in
writing, including Schedule A hereto both with respect to the addition
or removal of Funds, and the rates shown therein, subject to approval
by the Board and the Funds' shareholders to the extent required by the
1940 Act. In the event that Manager designates one or more series other
than the Funds and Manager wishes to retain Subadviser to render
investment advisory services hereunder with respect to a portion of the
assets of such series, Manager shall promptly notify Subadviser in
writing. If Subadviser is willing to render such services, Subadviser
shall so notify Manager in writing whereupon such series shall become a
Fund hereunder and be subject to this Agreement.
13. ASSIGNMENT. Subadviser shall not make an assignment of this Agreement
(as defined in the 0000 Xxx) without the prior written consent of the
Funds and Manager. Notwithstanding the foregoing, no assignment shall
be deemed to result from any changes in the directors, officers, or
employees of Manager or Subadviser except as may be provided to the
contrary in the 1940 Act or the rules and regulations thereunder. Any
agreement entered into pursuant to Section 1(f) of this Agreement shall
not be deemed to be an assignment for purposes of this provision.
Subadviser may delegate administrative duties, such as trade
processing, related to the performance of its duties under this
agreement to its affiliates and may, subject to the provisions of
Section 1(e) of this Agreement, share such information as necessary to
accomplish these purposes. In the event of any such delegation, (a)
Subadviser shall remain liable as if such services were provided
directly and (b) no additional fees shall be imposed for such services
unless otherwise agreed to by Manager in writing.
14. GOVERNING LAW. This Agreement, and, in the event of termination of the
Agreement, those sections that survive such termination of the
Agreement under Section 8, shall be governed by the laws of the State
of Minnesota, without giving effect to the conflicts of laws principles
thereof, or any applicable provisions of the 1940 Act. To the extent
that the laws of the State of Minnesota, or any of the provision of
this Agreement, conflict with applicable provisions of the 1940 Act,
the latter shall control.
15. ENTIRE AGREEMENT. This Agreement and all attachments hereto constitute
the entire agreement and understanding among the parties hereto, and
supersedes all prior agreements and understandings relating to the
subject matter hereof.
16. SEVERABILITY. Should any part of this Agreement be held invalid by a
court of competent jurisdiction, statute, rule, or otherwise, the
remainder of this Agreement shall not be affected thereby. This
Agreement and, in the event of termination of the Agreement, those
sections that survive such termination of the Agreement under Section
8, shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors.
17. INTERPRETATION. Any questions of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act shall be resolved by
reference to such term or provision in the 1940 Act and to
interpretation thereof, if any, by the federal courts or, in the
absence of any controlling decision of any such court, by rules,
regulations, or orders of the SEC validly issued pursuant to the 1940
Act. Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation, or order
of the SEC, whether of special or general application, such provision
14
shall be deemed to incorporate the effect of such rule, regulation, or
order.
18. HEADINGS. The headings in this Agreement are intended solely as a
convenience and are not intended to modify any other provision herein.
19. AUTHORIZATION. Each of the parties represents and warrants that the
execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement have been duly authorized
by all necessary corporate action by such party and when so executed
and delivered, this Agreement will be the valid and binding obligation
of such party in accordance with its terms.
15
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
ALLIANZ LIFE ADVISERS, LLC PACIFIC INVESTMENT MANAGEMENT COMPANY LLC
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President Title: Managing Director
16
SCHEDULE A
Compensation pursuant to Section 4 of this Subadvisory Agreement shall be
calculated at the following rates based on the average daily net assets that are
subject to the Subadviser's investment discretion in the following Funds:
FUND RATE
AZL PIMCO Fundamental IndexPLUS Total Return Fund 0.54%
AZL Target PLUS Balanced Fund:
Fixed Income Portfolio - Diversified Income Strategy Only 0.45%
Fixed Income Portfolio - Total Return Strategy Only 0.25%
AZL Target PLUS Growth Fund:
Fixed Income Portfolio - Diversified Income Strategy Only 0.45%
Fixed Income Portfolio - Total Return Strategy Only 0.25%
AZL Target PLUS Moderate Fund:
Fixed Income Portfolio - Diversified Income Strategy Only 0.45%
Fixed Income Portfolio - Total Return Strategy Only 0.25%
Date: May 1, 2007
17
