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Exhibit 23(d)21
(Small Cap Value Fund)
SUB-INVESTMENT MANAGEMENT AGREEMENT
AMONG
XXXX XXXXXXX VARIABLE SERIES TRUST I
WELLINGTON MANAGEMENT COMPANY, LLP
AND
XXXX XXXXXXX LIFE INSURANCE COMPANY
SUB-INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the thirtieth day of October 2002 by and among Xxxx
Xxxxxxx Variable Series Trust I, a Massachusetts business trust (the "Trust"),
Wellington Management Company, LLP, a Massachusetts limited liability
partnership ("Wellington Management"), 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, as amended (the "1940 Act"); and
WHEREAS, JHLICO and Wellington Management are each engaged in the business
of rendering investment advice under the Investment Advisers Act of 1940, as
amended; and
WHEREAS, the Trust is authorized to issue its shares in separate classes,
with each such class representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Trust offers shares in several classes, one of which is
designated as the Small Cap Value Fund (together with all other classes
established by the Trust, collectively referred to as the "Funds"), 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 as amended (the "Investment Management Agreement"), pursuant to which it
may contract with one or more sub-managers with respect to the Small Cap Value
Fund.
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NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF SUB-INVESTMENT MANAGER
(a) Subject Fund. Wellington Management is hereby appointed and Wellington
Management hereby accepts the appointment to act as a sub-investment manager to
the Small Cap Value Fund (the "Subject Fund") effective October 30, 2002 for the
period and on the terms herein set forth, and for the compensation herein
provided.
(b) Additional Subject Funds. In the event that the Trust and JHLICO desire
to retain Wellington Management to render investment advisory services hereunder
for any other Fund, they shall so notify Wellington Management in writing. If it
is willing to render such services, Wellington Management shall notify the Trust
in writing, whereupon such Fund shall become a Subject Fund hereunder.
(c) Incumbency Certificates. Wellington Management shall furnish to JHLICO,
immediately upon execution of this Agreement, a certificate of a senior officer
of Wellington Management setting forth (by name and title, and including
specimen signatures) those officers of Wellington Management who are authorized
to give instructions for the Subject Fund pursuant to the provisions of this
Agreement. Wellington Management shall promptly provide supplemental
certificates in connection with each additional Subject Fund (if any) and
further supplemental certificates, as needed, to reflect all changes with
respect to such authorized officers for any Subject Fund. On behalf of the
Trust, JHLICO shall instruct the custodian for the Subject Fund to accept
instructions with respect to the Subject Fund from the officers of Wellington
Management so named.
(d) Independent Contractor. Wellington Management 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.
(e) Wellington Management's Representations. Wellington Management
represents, warrants and agrees (i) that it is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended, 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 ownership of Wellington Management, or of any change in
the identity of the personnel who manage the Subject Fund, (iv) that it has
adopted a code of ethics complying with the requirements of Section 17(j) and
Rule 17j-1 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 Wellington Management's Form ADV, as most recently filed with the
Securities and Exchange Commission ("SEC"), and will promptly furnish copies of
each future amendment thereto.
2. PROVISION OF INVESTMENT MANAGEMENT SERVICES.
Wellington Management will provide for the Subject Fund's assets
as
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may be designated to it by JHLICO from time to time (the "Subject Assets") a
continuing and suitable investment program consistent with the investment
objectives, policies, guidelines and restrictions of said Fund, as established
by the Trust and JHLICO. From time to time, JHLICO or the Trust may provide
Wellington Management with additional or amended investment policies, guidelines
and restrictions. Wellington Management, as sub-investment manager, will manage
the investment and reinvestment of the Subject Assets, and perform the functions
set forth below, (i) subject to the overall supervision, direction, control and
review of JHLICO and the Board of Trustees of the Trust, and (ii) consistent
with the applicable investment objectives, policies, guidelines and
restrictions, the provisions of the Trust's Declaration of Trust, By-laws,
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 other directions or instructions delivered to Wellington
Management in writing by JHLICO or the Trust from time to time). In the event
that, in addition to Wellington Management, other investment advisers or
sub-managers are appointed by the Trust or JHLICO to render investment advisory
services to the Subject Fund, JHLICO and the Trust each acknowledges and agrees
that Wellington Management will not be held responsible for such other
investment advisers' or sub-managers' compliance with policies and limitations
applicable to the Subject Fund. By its signature below, Wellington Management
acknowledges receipt of a copy of the Trust's Declaration of Trust, By-laws,
prospectus, and statement of additional information, each as in effect on the
date of this Agreement.
Wellington Management 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 Subject
Assets and, upon request, furnish the Trust with research, economic and
statistical data in connection with said 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 Subject Assets;
(c) place orders for purchases and sales of portfolio investments for the
Subject Assets;
(d) give instructions to the Subject Fund's custodian concerning the
delivery of securities and transfer of cash for the Subject Assets;
(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) at or prior to the close of business each day, provide JHLICO and the
custodian with trade information for each transaction effected for the Subject
Assets, and promptly provide to the custodian information on all brokerage or
dealer confirmations;
(g) as soon as practicable following the end of each calendar month,
provide JHLICO with information on all transactions effected for the Subject
Assets during the month, a summary listing all investments held in such Subject
Assets as of the last day of the month,
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and such other information as JHLICO may reasonably request in connection with
the accounting services that JHLICO provides for the Subject Fund; 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 Subject Assets in accordance with Wellington
Management's proxy voting policy as most recently provided to JHLICO.
On its own initiative, Wellington Management will apprise JHLICO and the
Trust of important political and economic developments materially affecting the
marketplace or the Subject Fund, and will furnish JHLICO and the Trust's Board
of Trustees from time to time such information as is appropriate for this
purpose. Wellington Management will also make its personnel available in Boston,
Massachusetts or other reasonable locations as often as quarterly to discuss the
Subject Assets and Wellington Management's management thereof, to educate JHLICO
sales personnel with respect thereto, and for such other purposes as the Trust
or JHLICO may reasonably request.
The Trust and JHLICO will provide timely information to Wellington
Management regarding such matters as purchases and redemptions of shares in the
Subject Fund and the cash requirements of, and cash available for investment in,
the Subject Fund. JHLICO will timely provide Wellington Management with monthly
accounting statements for the Subject Assets, and such other information
(including, without limitation, reports concerning the classification of the
Subject Assets' securities for purposes of Subchapter M of the Internal Revenue
Code and Treasury Regulations Section 1.817) as may be reasonably necessary or
appropriate in order for Wellington Management to perform its responsibilities
hereunder.
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.
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.
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For all of the services rendered with respect to the Subject Assets as
herein provided, JHLICO shall pay to Wellington Management a fee (for the
payment of which the Trust shall have no obligation or liability), based on the
Current Net Assets of that Subject Assets, as set forth in Schedule I attached
hereto and made a part hereof, and as may be amended from time to time with
respect to additional Subject Funds. 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 a Subject Fund during
any calendar month, the fee with respect to such Fund's Subject Assets 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 Subject Assets as of the most
recent preceding day for which that Subject Fund's net assets were computed.
5. FUND TRANSACTIONS.
In connection with the investment and reinvestment of the assets of the
Subject Assets, Wellington Management is authorized to select the brokers or
dealers that will execute purchase and sale transactions for the Subject Assets
and to use its best efforts to obtain the best available price and most
favorable execution with respect to all such purchases and sales of portfolio
securities for said Subject Assets. Wellington Management shall maintain records
adequate to demonstrate compliance with this requirement. Subject to this
primary requirement, and maintaining as its first consideration the benefits to
the Subject Fund and its shareholders, Wellington Management 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 Subject
Fund or to Wellington Management, and who charge a higher commission rate to the
Subject Fund than may result when allocating brokerage solely on the basis of
seeking the most favorable price and execution. Wellington Management shall
determine in good faith that such higher cost was reasonable in relation to the
value of the brokerage and research services provided.
Wellington Management will not receive any tender offer solicitation fees
or similar payments in connection with the tender of investments of any Fund.
6. OWNERSHIP OF INFORMATION, RECORDS, AND CONFIDENTIALITY.
The Trust shall own and control all records maintained hereunder by
Wellington Management on the Trust's behalf and, in the event of termination of
this Agreement with respect to any Subject Assets for any reason, all records
relating to the Subject Fund shall be promptly returned to the Trust, free from
any claim or retention of rights by Wellington Management, provided that
(subject to the last paragraph of this Section 6) Wellington Management may
retain copies of such records. Wellington Management also agrees, upon request
of the Trust, promptly to surrender such books and records or, at its expense,
copies thereof, to the Trust or to make such books and records available for
audit or inspection by representatives of regulatory authorities, or other
persons reasonably designated by the Trust. Wellington Management 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 Section 31 and Rules
31a-1 and 31a-2, to the extent such records are not maintained by the custodian,
transfer agent or JHLICO, and to supply all information requested by any
securities and insurance regulatory authorities to determine whether all
securities and insurance laws and regulations are being complied with.
Wellington Management shall
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supply the Board of Trustees and officers of the Trust and JHLICO with all
statistical information regarding investments of the Subject Assets which is
reasonably required by them and reasonably available to Wellington Management.
Wellington Management 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 Wellington
Management 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 or she might
otherwise be subject by reason of any willful misfeasance, bad faith or
negligence in the performance of his or her duties or the reckless disregard of
his or her obligations and duties. Wellington Management shall employ only
qualified personnel to manage the Subject Assets; 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
objectives, policies, guidelines and restrictions of the Subject Fund and with
the provisions of the Trust's Declaration of Trust, By-laws, prospectus and
statement of additional information or any supplements thereto; shall manage the
Subject Assets (subject to the receipt of, and based upon the information
contained in, periodic reports from JHLICO or the custodian concerning the
classification of Fund 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 Section 1.817-5(b); shall act at
all times in the best interests of the Trust; and shall discharge its duties
with the care, skill, prudence and diligence under the circumstances then
prevailing that a prudent person acting in a like capacity and familiar with
such matters would use in the conduct of a similar enterprise. However,
Wellington Management 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.
8. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective with respect to the
Subject Fund on October 30, 2002 and, with respect to any additional Subject
Fund, on the date of receipt by the Trust of notice from Wellington Management
in accordance with Paragraph 1(b) hereof that it is willing to serve with
respect to such Fund. Unless terminated as herein provided, this Agreement shall
remain in full force and effect for two years from the date hereof with respect
to the initial Subject Fund and, with respect to each additional Subject Fund,
until two years following the date on which such Fund becomes a Subject Fund
hereunder, and shall continue in full force and effect thereafter with respect
to each Subject Fund only so long as such continuance with respect to any such
Fund is specifically approved at least annually (i) by either the Board of
Trustees of the Trust or by vote of a
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majority of the outstanding voting shares of such Fund, and (ii) in either event
by the vote of a majority of the Board of Trustees of the Trust who are not
parties to this Agreement or "interested persons" of any such party, cast in
person at a meeting called for the purpose of voting on such approval.
Any approval of this Agreement by the holders of a majority of the
outstanding shares of any Subject Fund shall be effective to continue this
Agreement with respect to any such Fund notwithstanding (A) that this Agreement
has not been approved by the holders of a majority of the outstanding shares of
any other Fund affected hereby, and (B) that this Agreement has not been
approved by the vote of a majority of the outstanding shares of the Trust,
unless such approval shall be required by any other applicable law or otherwise.
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. This Agreement may be terminated with respect to any
Subject Fund at any time, without payment of any penalty, by the Trust pursuant
to a vote of the Trustees of the Trust or a vote of a majority of the
outstanding shares of such Fund, which termination shall be effective
immediately upon delivery of written notice thereof to Wellington Management and
JHLICO. This Agreement may be terminated by Wellington Management on at least
ninety days' prior written notice to the Trust and JHLICO, and may be terminated
by JHLICO on at least ninety days' prior written notice to the Trust and
Wellington Management.
(c) Automatic Termination. This Agreement shall automatically and
immediately terminate in the event of its assignment or if the Investment
Management Agreement is terminated.
9. SERVICES NOT EXCLUSIVE; USE OF WELLINGTON MANAGEMENT'S NAME AND LOGO.
The services of Wellington Management 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 partners, officers and employees of Wellington Management 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, subject to Wellington Management's
consent (which consent shall not be unreasonably withheld and which may be
presumed unless an objection is made to a proposed use as hereinafter provided),
JHLICO and the Trust shall have the non-exclusive and non-transferable right to
use Wellington Management's name and logo in all materials relating to the
Subject 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
printing or distributing of any materials which refer to Wellington Management,
JHLICO shall consult with Wellington Management and shall furnish to Wellington
Management a copy of such materials. Wellington Management agrees to cooperate
with JHLICO and to review such materials promptly. JHLICO shall not print or
distribute such materials if Wellington Management reasonably objects in
writing, within five (5) business days of its receipt of
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such copy (or such other time as may be mutually agreed), to the manner in which
its name and logo are to be used.
10. AVOIDANCE OF INCONSISTENT POSITION.
In connection with the purchase and sale of portfolio securities of the
Subject Fund, Wellington Management and its partners, officers and employees
will not act as principal or agent or receive any commission. Nothing in this
Agreement, however, shall preclude the combination of orders for the sale or
purchase of portfolio securities of the Subject Assets with those for other
accounts managed by Wellington Management or its affiliates, if orders are
allocated in a manner deemed equitable by Wellington Management among the
accounts and at a price approximately averaged.
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 any Fund until approved
specifically by (a) the Board of Trustees of the Trust, or by vote of a majority
of the outstanding shares of that 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 the 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:
SUB-INVESTMENT MANAGER: Wellington Management Company, LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Regulatory Affairs
Fax #: 000-000-0000
JHLICO: Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx
X. Xxxxx Fax #:
000-000-0000
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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.
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
/s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxxxx X. Xxxxxxxx
-------------------------------------- -------------------------------
Xxxxxxxx X. Xxxxxxxx
Vice Chairman and President
ATTEST: XXXX XXXXXXX LIFE INSURANCE COMPANY
/s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxx Xxxx
-------------------------------------- -------------------------------
Xxxxxxx X. Xxx Xxxx
Senior Vice President
ATTEST: WELLINGTON MANAGEMENT COMPANY, LLP
/s/ Xxxxxxx X. Xxxxxx By: /s/ Illegible
-------------------------------------- -------------------------------
Name:
Title:
SCHEDULE I
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FEES
For the Subject Assets of the Small Cap Value Fund:
Current Net Assets Under Management Sub-Advisory Fee
----------------------------------- ----------------
On the first $100,000,000 65 basis points (0.65%) per annum
On amounts over $100,000,000 60 basis points (0.60%) per annum
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