Exhibit (d)(9)
USALLIANZ VARIABLE INSURANCE PRODUCTS TRUST
PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT, made this 1st day of May, 2002 by and among USAllianz
Advisers, LLC (the "Manager"), USAllianz Variable Insurance Products Trust (the
"Trust") and A I M Capital Management, Inc. (the "Portfolio Manager").
WHEREAS, the Trust is a Delaware business trust of the series type
organized under an Agreement and Declaration of Trust dated July 13, 1999 (the
"Declaration") and is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end, management series-type investment
company;
WHEREAS, the Manager has been appointed by the Trust, pursuant to an
investment management agreement dated April 27, 2001 ("Investment Management
Agreement"), to act as investment manager to the Trust with respect to certain
series (each a "Fund," and collectively the "Funds")
WHEREAS, the Manager wishes to retain the Portfolio Manager to render
portfolio management services to the Trust with respect to the Funds set forth
in Schedule A hereto and the Portfolio Manager is willing to furnish such
services;
WHEREAS, the Portfolio Manager is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended ("Advisers Act");
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the Manager and the Portfolio Manager as
follows:
1. APPOINTMENT. Pursuant to authority granted in the Investment
Management Agreement and with the approval of the Trustees of the Trust (the
"Trustees"), the Manager hereby appoints the Portfolio Manager to act as
portfolio manager for each Fund for the periods and on the terms set forth in
this Agreement. The Portfolio Manager accepts such appointment and agrees to
furnish the services herein set forth, for the compensation herein provided.
2. PORTFOLIO MANAGEMENT DUTIES. Subject to the overall supervision of
the Trustees and the Manager, the Portfolio Manager is hereby granted full
responsibility and discretion, with respect to each Fund, for (a) the management
of the Fund in accordance with such Fund's investment objectives, policies and
limitations as stated in its prospectus and Statement of Additional Information
included as part of the Trust's registration statement filed with the Securities
and Exchange Commission (the "SEC"), as they may be amended from time to time
(the "Registration Statement"), copies of which shall be provided to the
Portfolio Manager by the Manager; and (b) the placement of orders to purchase
and sell securities for such Fund. At the request of the Manager, the Portfolio
Manager shall report to the Trustees or Manager regularly at such times and in
such detail as reasonably agreed to by the Manager and the Portfolio Manager.
The Manager has herewith furnished the Portfolio Manager copies of the Funds'
current Prospectus, Statement of Additional Information, Declaration and Bylaws
(collectively, "Documents") and agrees during the continuance of this Agreement
to furnish the Portfolio Manager copies of any amendments or supplements thereto
before or at the time the amendments or supplements become effective. Until the
Manager or Trust delivers such amendments or supplements to the Portfolio
Manager, the Portfolio Manager will be fully protected and entitled to rely on
the Documents most recently furnished to it by the Manager or the Trust.
The Portfolio Manager is hereby granted authority to retain X.X. Xxxx
Advisors, Inc. (the "Sub-Adviser") to act as a sub-advisor to it, with respect
to USAZ AIM Dent Demographic Trends Fund, for the purpose of providing the
Portfolio Manager with analysis and recommendations concerning appropriate
industry and sector allocations and weightings for the Fund's investment
portfolio, in accordance with the philosophies of Xxxxx X. Xxxx, Xx. concerning
industry and sector allocations based on demographic principles. The duties of
the Sub-Adviser shall not include selection of specific securities within the
recommended industry or sectors for purchase or sale. . The Portfolio Manager
shall be solely responsible for paying the fees of the Sub-Adviser.
The Portfolio Manager further agrees that, in performing its duties
hereunder, it will:
(a) comply, to the extent applicable to the Portfolio Manager, with the
1940 Act and all rules and regulations thereunder and the Advisers Act and all
other applicable federal and state laws and regulations, and with any applicable
procedures adopted by the Trustees;
(b) use reasonable efforts to manage the Funds, and to coordinate its
activities with the Manager, so that the Funds will comply, and continue to
comply, with the adequate diversification requirements of Section 817(h)(2) and
the Subchapter M qualification requirements of Sections 851(b)(2) and (3) of the
Code and regulations issued thereunder, to the extent such compliance is within
the Portfolio Manager's control;
(c) place orders for the investment of the Funds directly with the
issuer, or with any broker or dealer, in accordance with applicable policies
expressed in the prospectus and/or Statement of Additional Information with
respect to the Funds and in accordance with applicable legal requirements.
Specifically, in executing portfolio transactions and selecting broker-dealers,
the Portfolio Manager will use its best efforts to seek best execution on behalf
of each Fund. In assessing the best execution available for any transaction, the
Portfolio Manager shall consider all factors it deems relevant, which may
include, without limitation, the breadth of the market in the security, the
price of the security, the financial condition and execution capability of the
broker-dealer, the size of and difficulty in executing the order, and the
reasonableness of the commission, if any (all for the specific transaction and
on a continuing basis). In evaluating the best execution available, and in
selecting the broker-dealer to execute a particular transaction, the Portfolio
Manager may also consider the brokerage and research services (as those terms
are used in Section 28(e) of the Securities Exchange Act of 1934) provided to a
Fund and /or other accounts over which the Portfolio Manager or an affiliate of
the Portfolio Manager exercises investment discretion. The Portfolio Manager is
authorized to pay a broker-dealer who provides
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such brokerage and research services a commission for executing a portfolio
transaction for a Fund which is in excess of the amount of commissions another
broker-dealer would have charged for effecting that transaction if, but only if,
the Porfolio Manager determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker-dealer viewed in terms of that particular transaction or
in terms of all of the accounts over which the Portfolio Manager or an affiliate
of the Portfolio Manager exercises investment discretion.
Provided the investment objectives of a Fund and applicable law are
adhered to, the Portfolio Manager may aggregate sale and purchase orders of
securities and other investments held in the Fund with similar orders being made
simultaneously for other accounts managed by the Portfolio Manager or with
accounts of affiliates of the Portfolio Manager in accordance with a formula
believed to be equitable to each account, taking into consideration an
advantageous selling or purchase price, brokerage commissions and other
expenses, and beneficial timing of transactions, or a combination of these and
other factors. The Fund and the Manager recognize that in some cases this
procedure may adversely affect the size of the position obtainable for such
Fund;
(d) keep the Manager and the Trustees informed of developments related
to the Portfolio Manager's duties hereunder that materially affect the Funds'
portfolios; and, on the Portfolio Manager's own initiative, furnish to the Trust
or the Manager from time to time whatever information the Portfolio Manager
believes appropriate for this purpose;
(e) make available to the Trust or the Manager, promptly upon their
request, such copies of its investment records and ledgers with respect to the
Funds as may be required to assist the Trust's administrator (the
"Administrator"), the Trust and the Manager in their compliance with applicable
laws and regulations. The Portfolio Manager will furnish the Trustees or the
Manager with such periodic and special reports regarding the Funds as reasonably
agreed to by the Manager and Portfolio Manager;
(f) immediately notify the Trust and the Manager in the event that the
Portfolio Manager: (1) becomes aware that it is subject to a statutory
disqualification that prevents the Portfolio Manager from serving as a portfolio
manager pursuant to this Agreement; or (2) becomes aware that it is the subject
of an administrative proceeding or enforcement action by the SEC or other
regulatory authority. The Portfolio Manager further agrees to notify the Trust
and the Manager immediately of any material fact known to the Portfolio Manager
respecting or relating to the Portfolio Manager that is not contained in the
Trust's Registration Statement regarding the Funds, or any amendment or
supplement thereto, but that is required to be disclosed therein, and of any
statement contained therein respecting or relating to the Portfolio Manager that
becomes untrue in any material respect;
(g) in making investment decisions with respect to the Funds, use no
material non-public information that may be in its possession nor will the
Portfolio Manager seek to obtain any such information.
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Except as otherwise provided in this Agreement, the Portfolio Manager
shall not be responsible hereunder for compliance monitoring, reporting or
testing or for preparing or maintaining books and records for the Funds or
otherwise providing accounting or pricing services to the Funds and such
services shall be provided by others retained by the Funds. The Portfolio
Manager shall have access to such reports and records to assist it in performing
its services hereunder.
The Portfolio Manager shall not be responsible for pursuing or
defending legal causes of action that may be based on the purchase, sale or
holding of a security by a Fund. The Portfolio Manager shall, however, provide
reasonable cooperation to the Manager in any possible proceeding.
3. BANKING AND CUSTODY ACCOUNTS. The Portfolio Manager shall not be
required to provide or arrange for banking accounts for the Funds or to hold
money or assets on the Funds' behalf. The Portfolio Manager shall not be
required to act as the registered holder of any investment or to provide or
procure any custody or settlement services in connection with its services
hereunder. The Funds have entered into one or more agreements with providers of
banking and custody services (Custodians) whom the Funds will authorize to act
upon instructions from properly authorized representatives of the Portfolio
Manager, in connection with its services hereunder, directing the Custodian(s)
to pay, deliver or receive cash and securities in settlement of transactions
authorized by the Portfolio Manager on the Funds' behalf. The Funds'
agreement(s) with such Custodian(s) will require the Custodian(s) to settle all
transactions directed by the Portfolio Manager on the Funds' behalf at the
Fund's expense.
4. ALLOCATION OF CHARGES AND EXPENSES. The Portfolio Manager shall not
be required to pay any expenses of the Trust or the Funds other than those
specifically allocated to the Portfolio Manager in this section 4. In
particular, but without limiting the generality of the foregoing, the Portfolio
Manager shall not be responsible for the following expenses of the Trust or the
Funds: organization and offering expenses of the Trust and the Funds (including
out-of-pocket expenses, but not including the Portfolio Manager's overhead and
employee costs); fees payable to or expenses of other portfolio managers or
consultants; legal expenses; auditing and accounting expenses; interest
expenses; telephone, telex, facsimile, postage and other communications
expenses; taxes and governmental fees; fees, dues and expenses incurred by or
with respect to the Trust or the Funds in connection with membership in
investment company trade organizations; costs of insurance; fees and expenses of
the Trust's Administrator or of any custodian, subcustodian, transfer agent,
registrar, or dividend disbursing agent of the Trust or the Funds; payments for
portfolio pricing or valuation services to pricing agents, accountants, bankers
and other specialists, if any; other expenses in connection with the issuance,
offering, distribution, redemption or sale of securities issued by the Funds;
expenses relating to investor and public relations; expenses of registering and
qualifying shares of the Funds for sale; freight, insurance and other charges in
connection with the shipment of the Funds' portfolio securities; brokerage
commissions or other costs of acquiring or disposing of any portfolio securities
or other assets of the Funds, or of entering into other transactions or engaging
in any investment practices with respect to the Funds; expenses of printing and
distributing prospectuses,
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Statements of Additional Information, reports, notices and dividends to
shareholders; costs of preparing, printing and filing documents with regulatory
agencies; costs of stationery and other office supplies; expenses of any
litigation or other extraordinary or nonrecurring events and expenses relating
to the issuance, registration and qualification of the shares of the Funds;
costs of shareholders' and other meetings; the compensation and all expenses
(specifically including travel expenses relating to the business of the Trust or
the Funds) of officers, Trustees and employees of the Trust who are not
interested persons of the Portfolio Manager; and travel expenses (or an
appropriate portion thereof) of officers or Trustees of the Trust who are
officers, directors or employees of the Portfolio Manager to the extent that
such expenses relate to attendance at meetings of the Board of Trustees of the
Trust, or any committees thereof or advisory group thereto or other business of
the Trust or the Funds.
5. COMPENSATION. As compensation for the services provided and expenses
assumed by the Portfolio Manager under this Agreement, the Manager, out of its
own assets will pay the Portfolio Manager at the end of each calendar month an
investment management fee computed daily at an annual rate equal to the
percentage of each Fund's average daily net assets specified in Schedule A
hereto. The "average daily net assets" shall mean the average of the values
placed on the net Fund assets as of the time at which, and on such days as, the
Funds lawfully determine the value of their net assets in accordance with the
Registration Statement. The value of the net assets of the Funds shall always be
determined pursuant to the applicable provisions of the Declaration and the
Registration Statement. If, pursuant to such provisions, the determination of
net asset value for a Fund is suspended for any particular business day, then
for the purposes of this section 5, the value of the net assets as last
determined shall be deemed to be the value of the net assets as of the close of
regular trading on the New York Stock Exchange, or as of such other time as the
value of the net assets of the Fund's portfolio may lawfully be determined, on
that day. If the determination of the net asset value of the shares of the Fund
has been so suspended for a period including any month end when the Portfolio
Manager's compensation is payable pursuant to this section, then the Portfolio
Manager's compensation payable at the end of such month shall be computed on the
basis of the value of the net assets as last determined (whether during or prior
to such month). If the Fund determines the value of the net assets of its
portfolio more than once on any day, then the last such determination thereof
with respect to the net assets on that day shall be deemed to be the sole
determination thereof on that day with respect to the net assets for the
purposes of this section 5. If the Portfolio Manager serves less than the whole
of any period specified, its compensation will be prorated.
6. BOOKS AND RECORDS. The Portfolio Manager agrees to maintain such
books and records with respect to its services to the Funds as are required by
Section 31 under the 1940 Act, and rules adopted thereunder, and by other
applicable legal provisions, and to preserve such records for the periods and in
the manner required by that Section and those rules and legal provisions. The
Portfolio Manager also agrees that records it maintains and preserves pursuant
to Rules 31a-1 and 31a-2 under the 1940 Act and otherwise in connection with its
services hereunder are the property of the Trust and will be surrendered
promptly to the Trust upon its request. The Portfolio Manager further agrees
that it will furnish to regulatory authorities having
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the requisite authority any information or reports in connection with its
services hereunder which may be requested in order to determine whether the
operations of the Trust and the Funds are being conducted in accordance with
applicable laws and regulations. The Manager shall maintain all books and
records not related to the Portfolio Manager's duties under this Agreement as
required under the 1940 Act.
7. USE OF NAMES. The names "A I M Capital Management, Inc.", "AIM
Capital Management", "AIM Capital" or "AIM" (collectively, the "AIM Names") may
be used only as provided in the Agreement with respect to Trademarks and Fund
Names among A I M Management Group Inc., the Portfolio Manager, the Manager, and
the Trust.
8. STANDARD OF CARE AND LIMITATION OF LIABILITY. The Portfolio Manager
shall exercise its best judgment in rendering the services provided by it under
this Agreement. The Portfolio Manager shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust or the Funds or
the holders of the Funds' shares in connection with the matters to which this
Agreement relates, provided that nothing in this Agreement shall be deemed to
protect or purport to protect the Portfolio Manager against any liability to the
Trust, the Funds or to holders of the Funds' shares to which the Portfolio
Manager would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence on its part in the performance of its duties or by reason of
the Portfolio Manager's reckless disregard of its obligations and duties under
this Agreement. As used in this section 7, the term "Portfolio Manager" shall
include any officers, directors, employees or other affiliates of the Portfolio
Manager performing services with respect to the Trust or the Funds.
9. SERVICES NOT EXCLUSIVE. It is understood that the services of the
Portfolio Manager are not exclusive, and that nothing in this Agreement shall
prevent the Portfolio Manager from providing similar services to other
investment companies or to other series of investment companies (whether or not
their investment objectives and policies are similar to those of the Funds of
the Trust) or from engaging in other activities, provided such other services
and activities do not, during the term of this Agreement, interfere in a
material manner with the Portfolio Manager's ability to meet its obligations to
the Trust, the Manager and the Funds hereunder.
The Manager and the Trust acknowledge that the Portfolio Manager and
its officers, affiliates, and employees, and the Portfolio Manager's other
clients, may at any time have, acquire, increase, decrease, or dispose of
positions in investments which are at the same time being acquired for or
disposed of from the Funds. The Portfolio Manager shall have no obligation to
acquire for a Fund a position in any investment which the Portfolio Manager, its
officers, affiliates or employees may acquire for its or their own accounts or
for the account of another client.
The Manager and the Trust acknowledge that the Portfolio Manager may
give advice and take action with respect to any of its other clients or for its
own account which may differ from the timing or nature of action taken by the
Portfolio Manager with respect to the Funds. The
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Manager and the Trust acknowledge that the performance of a Fund may differ from
the performance of other accounts or investment companies managed by the
Portfolio Manager and that the Portfolio Manager is not expected to replicate
the holdings or returns of any other account or fund that it manages.
When the Portfolio Manager recommends the purchase or sale of a
security for other investment companies and other clients, and at the same time
the Portfolio Manager recommends the purchase or sale of the same security for a
Fund, it is understood that in light of its fiduciary duty to the Fund, such
transactions will be executed on a basis that is fair and equitable to the Fund.
In connection with purchases or sales of portfolio securities for the account of
a Fund, neither the Portfolio Manager nor any of its Trustees, officers or
employees shall act as a principal or agent or receive any commission. If the
Portfolio Manager provides any advice to its clients concerning the shares of
the Funds or other funds of the Trust, the Portfolio Manager shall act solely as
investment counsel for such clients and not in any way on behalf of the Trust,
the Funds or another fund of the Trust.
10. DURATION AND TERMINATION. This Agreement shall continue in effect
with respect to each Fund for two years from the date set forth above and
thereafter shall continue automatically for successive annual periods, provided
such continuance is specifically approved at least annually by (i) the Trustees
or (ii) by vote of a "majority" (as defined in the 0000 Xxx) of the Fund's
outstanding voting securities (as defined in the 1940 Act), provided that in
either event the continuance is also approved by a majority of the Trustees who
are not parties to this Agreement or "interested persons" (as defined in the
0000 Xxx) of any party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval. Notwithstanding the
foregoing, this Agreement may be terminated with respect to a Fund: (a) at any
time without penalty (i) by the Manager, (ii) by the Trust upon the vote of a
majority of the Trustees or (iii) by vote of the majority of the Fund's
outstanding voting securities, each upon sixty (60) days' written notice to the
Portfolio Manager; or (b) by the Portfolio Manager at any time without penalty,
upon sixty (60) days' written notice to the Trust or the Manager. This Agreement
will also terminate automatically in the event of its assignment (as defined in
the 1940 Act).
11. AMENDMENTS. Except as otherwise provided by applicable law or
regulatory relief, no provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective
until approved by an affirmative vote of (i) a majority of the outstanding
voting securities of the applicable Fund, and (ii) a majority of the Trustees,
including a majority of Trustees 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, if such approval is required by applicable law.
12. PROXIES AND RIGHTS. Unless the Trust or the Manager gives written
instructions to the contrary, the Portfolio Manager shall (a) vote all proxies
solicited by or with respect to the
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issuers of securities in which the Funds are invested, using its best judgment
to vote such proxies in a manner which best serves the interests of the Funds'
shareholders, and (b) exercise all other rights attaching to or arising with
respect to the Funds, subject to the Funds' investment objectives, policies and
limitations as stated in their Registration Statement, directing the Custodian
to make any required payment or settlement in connection therewith.
13. CONFIDENTIAL TREATMENT. It is understood that any information or
recommendation supplied by, or produced by, Portfolio Manager in connection with
the performance of its obligations hereunder is to be regarded as confidential
and for use only by the Manager and the Trust. Furthermore, except as required
by law (including, but not limited to semi-annual, annual or other filings made
under the 0000 Xxx) or as agreed to by the Manager and Portfolio Manager, the
Manager and Trust will not disclose any list of securities purchased or sold by
the Portfolio for a period of 15 days after month end, or any list of securities
held by the Funds for 90 days after month end in any manner whatsoever except as
expressly authorized in this Agreement, and except that the top 10 holdings may
be disclosed 15 days after month end.
14. MISCELLANEOUS.
a. This Agreement shall be governed by the laws of the State
of Delaware, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act, or rules or orders of the SEC
thereunder.
b. The captions of this Agreement are included for convenience
only and in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect.
c. 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 hereby and, to this extent, the provisions of
this Agreement shall be deemed to be severable.
d. Nothing herein shall be construed as constituting the
Portfolio Manager as an agent of the Trust or the Funds.
e. The Manager agrees to provide or complete, as the case may
be, the following prior to the commencement of the Portfolio Manager's duties as
specified under this Agreement:
(i) A list of first tier and second tier affiliates
of the Fund;
(ii) A list of restricted securities for the Fund
(including CUSIP, Sedol or other appropriate
security identification);
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(iii) Establish a Futures Agreement and Give-Up
Agreements with the list of designated brokers
provided to the Manager by the Portfolio
Manager in writing;
(iv) A copy of the current compliance procedures
for the Portfolio.
f. The Manager also agrees to promptly update the above
referenced items in order to ensure their accuracy, completeness and/or
effectiveness.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the date first above
written.
USAllianz Variable Insurance Products Trust
By _______________________________________
Vice President
A I M Capital Management, Inc.
By _______________________________________
Vice President
USAllianz Advisers, LLC
By ________________________________________
President
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SCHEDULE A
Fees payable to the Portfolio Manager pursuant to section 5 hereof
shall be at the following annual rates for each Fund:
FUND PERCENTAGE OF AVERAGE NET ASSETS
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USAZ AIM Basic Value Fund 0.50% first $500 Million
0.45% over $500 Million
USAZ AIM Blue Chip Fund 0.55% first $500 Million
0.50% over $500 Million
USAZ AIM Dent Demographic Trends Fund 0.60% first $500 Million
0.55% over $500 Million
USAZ AIM International Equity Fund 0.65% first $500 Million
0.60% over $500 Million
The management fee shall be accrued and paid to the Portfolio
Manager as provided in section 5 of the Portfolio Management Agreement.
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