INVESTMENT SUB-ADVISORY AGREEMENT
EXHIBIT
99-23.d.xvii
This
Investment Sub-Advisory Agreement (“Agreement”) is made as of the 9th day of
March, 2009 by and between Wilshire Associates Incorporated, a California
corporation (“Adviser”), and ClearBridge Advisors, a registered investment
adviser (“Sub-Adviser”).
Whereas Adviser is the
investment adviser of the Wilshire Variable Insurance Trust Funds (the “Fund”),
an open-end diversified, management investment company registered under the
Investment Company Act of 1940, as amended (“1940 Act”), currently consisting of
seven separate series or portfolios (collectively, the “Fund Portfolios”)
including the Wilshire Variable Insurance Trust Equity Fund, the Wilshire
Variable Insurance Trust Income Fund, the Wilshire Variable Insurance
Trust Balanced Fund, the Wilshire Variable Insurance Trust Socially Responsible
Fund, the Wilshire Variable Insurance Trust International Equity
Fund, and the Wilshire Variable Insurance Trust Small-Cap Growth Fund, the
Wilshire Insurance Variable Trust 2010 Conservative Fund, , the Wilshire
Insurance Variable Trust 2015 Moderate Fund, the Wilshire Insurance Variable
Trust 2025 Moderate Fund, and the Wilshire Insurance Variable Trust 2035
Moderate Fund;
Whereas Adviser desires to
retain Sub-Adviser to furnish investment advisory services for the
Fund Portfolio(s) as described in Exhibit 1 – Fund Portfolio Listing, as
may be amended from time to time, and Sub-Adviser wishes to provide such
services, upon the terms and conditions set forth herein;
Now Therefore, in
consideration of the mutual covenants herein contained, the parties agree as
follows:
1. Appointment. Adviser
hereby appoints Sub-Adviser to provide certain sub-investment advisory services
to each Fund Portfolio for the period and on the terms set forth in this
Agreement. Sub-Adviser hereby accepts such appointment and agrees to
furnish the services set forth for the compensation herein
provided.
2. Sub-Adviser
Services. Subject always to the supervision of the Fund’s
Board of Directors and Adviser, Sub-Adviser will furnish an investment program
in respect of, and make investment decisions for, such portion of the assets of
each Fund Portfolio as Adviser shall from time to time designate (each a
“Portfolio Segment”) and place all orders for the purchase and sale of
securities on behalf of each Portfolio Segment. In the performance of
its duties, Sub-Adviser will satisfy its fiduciary duties to the Fund and each
Fund Portfolio and will monitor a Portfolio Segment’s investments, and will
comply with the provisions of the Fund’s Articles of Incorporation and By-laws,
as amended from time to time, and the stated investment objectives, policies and
restrictions of each Fund Portfolio as set forth in the prospectus and Statement
of Additional Information for each Fund Portfolio, as amended from time to time,
as well as any other objectives, policies or limitations as may be provided by
Adviser to Sub-Adviser in writing from time to time.
Sub-Adviser
will provide reports at least quarterly to the Board of Directors and to
Adviser. Sub-Adviser will make its officers and employees available to Adviser
and the Board of Directors from time to time at reasonable times to review
investment policies of each Fund Portfolio with respect to each Portfolio
Segment and to consult with Adviser regarding the investment affairs of each
Portfolio Segment.
Sub-Adviser
agrees that it:
(a) will use
the same skill and care in providing such services as it uses in providing
services to fiduciary accounts for which it has investment
responsibilities;
(b) will
conform with all applicable provisions of the 1940 Act and rules and regulations
of the Securities and Exchange Commission in all material respects and in
addition will conduct its activities under this Agreement in accordance with any
applicable laws and regulations of any governmental authority pertaining to its
investment advisory activities, including all portfolio diversification
requirements necessary for each Portfolio Segment to comply with subchapter M of
the Internal Revenue Code as if each were a regulated investment company
thereunder;
(c) to the
extent authorized by Adviser in writing, and to the extent permitted by law,
will execute purchases and sales of portfolio securities and other investments
for each Portfolio Segment through brokers or dealers designated by management
of the Fund to Adviser for the purpose of providing direct benefits to the Fund,
provided that Sub-Adviser determines that such brokers or dealers will provide
best execution in view of all appropriate factors, and is hereby authorized as
the agent of the Fund to give instructions to the Fund’s custodian as to
deliveries of securities or other investments and payments of cash of each
Portfolio Segment to such brokers or dealers for the account of the relevant
Fund Portfolio. Adviser and the Fund understand that the brokerage
commissions or transaction costs in such transactions may be higher than those
which the Sub-Adviser could obtain from another broker or dealer, in order to
obtain such benefits for the Fund;
(d) is
authorized to and will select all other brokers or dealers that will execute the
purchases and sales of portfolio securities for each Portfolio Segment and is
hereby authorized as the agent of the Fund to give instructions to the Fund’s
custodian as to deliveries of securities or other investments and payments of
cash of each Portfolio Segment for the account of each Fund Portfolio. In making
such selection, Sub-Adviser is directed to use its best efforts to obtain best
execution, which includes most favorable net results and execution of a
Portfolio Segment’s orders, taking into account all appropriate factors,
including price, dealer spread or commission, size and difficulty of the
transaction and research or other services provided. With respect to
transactions under sub-paragraph (c) or this sub-paragraph (d), it is understood
that Sub-Adviser will not be deemed to have acted unlawfully, or to have
breached a fiduciary duty to the Fund or in respect of any Fund Portfolio, or be
in breach of any obligation owing to the Fund or in respect of any Fund
Portfolio under this Agreement, or otherwise, solely by reason of its having
caused a Fund Portfolio to pay a member of a securities exchange, a broker or a
dealer a commission for effecting a securities transaction of a Fund Portfolio
in excess of the amount of commission another member of an exchange, broker or
dealer would have charged if Sub-Adviser determined in good faith that the
commission paid was reasonable in relation to the brokerage and research
services provided by such member, broker, or dealer, viewed in terms of that
particular transaction or Sub-Adviser’s overall responsibilities with respect to
its accounts, including the Fund, as to which it exercises investment
discretion. The Adviser may, from time to time, engage other
sub-advisers to advise portions of a Fund Portfolio other than the Portfolio
Segment. The Sub-Adviser agrees that it will not consult with any
other sub-adviser engaged by the Adviser with respect to transactions in
securities or other assets concerning a Fund Portfolio, except to the extent
permitted by certain exemptive rules under the 1940 Act that permit certain
transactions with a sub-adviser or its affiliates.
(e) is
authorized to consider for investment by each Portfolio Segment securities that
may also be appropriate for other funds and/or clients served by
Sub-Adviser. To assure fair treatment of each Portfolio Segment and
all other clients of Sub-Adviser in situations in which two or more clients’
accounts participate simultaneously in a buy or sell program involving the same
security, such transactions will be allocated among each Portfolio Segment and
other clients in a manner deemed equitable by
Sub-Adviser. Sub-Adviser is authorized to aggregate purchase and sale
orders for securities held (or to be held) in each Portfolio Segment with
similar orders being made on the same day for other client accounts or
portfolios managed by Sub-Adviser. When an order is so aggregated,
the actual prices applicable to the aggregated transaction will be averaged and
each Portfolio Segment and each other account or portfolio participating in the
aggregated transaction will be treated as having purchased or sold its portion
of the securities at such average price, and all transaction costs incurred in
effecting the aggregated transaction will be shared on a pro-rata basis among
the accounts or portfolios (including each Portfolio Segment) participating in
the transaction. Adviser and the Fund understand that Sub-Adviser may not be
able to aggregate transactions through brokers or dealers designated by Adviser
with transactions through brokers or dealers selected by Sub-Adviser, in which
event the prices paid or received by each Portfolio Segment will not be so
averaged and may be higher or lower than those paid or received by other
accounts or portfolios of Sub-Adviser;
(f) will
report regularly to Adviser and to the Board of Directors and will make
appropriate persons available for the purpose of reviewing with representatives
of Adviser and the Board of Directors on a regular basis at reasonable times the
management of each Portfolio Segment, including without limitation, review of
the general investment strategies of each Portfolio Segment, the performance of
each Portfolio Segment in relation to standard industry indices, interest rate
considerations and general conditions affecting the marketplace, and will
provide various other reports from time to time as reasonably requested by
Adviser;
(g) will
prepare such books and records with respect to each Portfolio Segment’s
securities transactions as requested by Adviser and will furnish Adviser and the
Fund’s Board of Directors such periodic and special reports as the Board or
Adviser may reasonably request;
(h) will vote
all proxies with respect to securities in each Portfolio Segment;
and
(i) will act
upon reasonable instructions from Adviser which, in the reasonable determination
of Sub-Adviser, are not inconsistent with Sub-Adviser’s fiduciary duties under
this Agreement.
3. Expenses. During
the term of this Agreement, Sub-Adviser will provide the office space,
furnishings, equipment and personnel required to perform its activities under
this Agreement, and will pay all customary management expenses incurred by it in
connection with its activities under this Agreement, which shall not include the
cost of securities (including brokerage commissions, if any) purchased for each
Portfolio Segment. Sub-Adviser agrees to bear any Portfolio expenses
caused by future changes in control of the Sub-Adviser or by future changes in
portfolio managers at Sub-Adviser responsible for providing services to the
Fund, such expenses including but not limited to preparing, printing, and
mailing to Portfolio shareholders of information statements or stickers to or
complete prospectuses or statements of additional information.
4. Compensation. For
the services provided and the expenses assumed under this Agreement, Adviser
will pay Sub-Adviser, and Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee computed and paid as set forth in
Exhibit 2 - Fee Schedule.
5. Other
Services. Sub-Adviser will for all purposes herein be deemed
to be an independent contractor and will, unless otherwise expressly provided or
authorized, have no authority to act for or represent Adviser, the Fund or a
Fund Portfolio or otherwise be deemed an agent of Adviser, the Fund or a Fund
Portfolio. Adviser understands and has advised the Fund’s Board of
Directors that Sub-Adviser may act as an investment adviser or sub-investment
adviser to other investment companies and other advisory
clients. Sub-Adviser understands that during the term of this
Agreement Adviser may retain one or more other sub-advisers with respect to any
portion of the assets of a Fund Portfolio other than each Portfolio
Segment.
6. Affiliated
Broker. Sub-Adviser or an affiliated person of Sub-Adviser may
act as broker for each Fund Portfolio in connection with the purchase or sale of
securities or other investments for each Portfolio Segment, subject to:
(a) the requirement that Sub-Adviser seek to obtain best execution as set
forth above; (b) the provisions of the Investment Advisers Act of 1940, as
amended (the “Advisers Act”); (c) the provisions of the Securities Exchange
Act of 1934, as amended; and (d) other applicable provisions of
law. Subject to the requirements of applicable law and any procedures
adopted by the Fund’s Board of Directors, Sub-Adviser or its affiliated persons
may receive brokerage commissions, fees or other remuneration from the Fund
Portfolio or the Fund for such services in addition to Sub-Adviser’s fees for
services under this Agreement.
7. Representations of
Sub-Adviser. Sub-Adviser is registered with the Securities and
Exchange Commission under the Advisers Act. Sub-Adviser shall remain
so registered throughout the term of this Agreement and shall notify Adviser
immediately if Sub-Adviser ceases to be so registered as an investment
adviser. Sub-Adviser: (a) is duly organized and validly existing
under the laws of the state of its organization with the power to own and
possess its assets and carry on its business as it is now being conducted,
(b) has the authority to enter into and perform the services contemplated
by this Agreement, (c) is not prohibited by the 1940 Act or the Advisers
Act from performing the services contemplated by this Agreement, (d) has
met, and will continue to seek to meet for the duration of this Agreement, any
other applicable federal or state requirements, and the applicable requirements
of any regulatory or industry self-regulatory agency, necessary to be met in
order to perform its services under this Agreement, (e) will promptly
notify Adviser of the occurrence of any event that would disqualify it from
serving as an investment adviser to an investment company pursuant to
Section 9(a) of the 1940 Act, and (f) will notify Adviser of any
change in control of the Sub-Adviser within a reasonable time after such
change.
8. Books and
Records. Sub-Adviser will maintain, in the form and for the
period required by Rule 31a-2 under the 1940 Act, all records relating to each
Portfolio Segment’s investments that are required to be maintained by the Fund
pursuant to the requirements of paragraphs (b)(5), (b)(6), (b)(7), (b)(9),
(b)(10) and (f) of Rule 31a-1 under the 1940 Act. Sub-Adviser agrees
that all books and records which it maintains for each Fund Portfolio or the
Fund are the property of the Fund and further agrees to surrender promptly to
the Adviser or the Fund any such books, records or information upon the
Adviser’s or the Fund’s request (provided, however, that Sub-Adviser may retain
copies of such records). All such books and records shall be made
available, within five business days of a written request, to the Fund’s
accountants or auditors during regular business hours at Sub-Adviser’s
offices. Adviser and the Fund or either of their authorized
representatives shall have the right to copy any records in the possession of
Sub-Adviser which pertain to each Fund Portfolio or the Fund. Such
books, records, information or reports shall be made available to properly
authorized government representatives consistent with state and federal law
and/or regulations. In the event of the termination of this
Agreement, all such books, records or other information shall be returned to
Adviser or the Fund (provided, however, that Sub-Adviser may retain copies of
such records as required by law).
Sub-Adviser
agrees that it will not disclose or use any records or confidential information
obtained pursuant to this Agreement in any manner whatsoever except as
authorized in this Agreement or in writing by Adviser or the Fund, or if such
disclosure is required by federal or state regulatory
authorities. Sub-Adviser may disclose the investment performance of
each Portfolio Segment, provided that such disclosure does not reveal the
identity of Adviser, each Fund Portfolio or the Fund or the composition of each
Portfolio Segment. Sub-Adviser may, however, disclose that Adviser,
the Fund and each Fund Portfolio are its clients. Notwithstanding the
foregoing, Sub-Adviser may disclose (i) the investment performance of each
Portfolio Segment to Fund officers and directors and other service providers of
the Fund, and (ii) any investment performance that is public information to
any person.
9. Code of
Ethics. Sub-Adviser has adopted a written code of ethics
complying with the requirements of Rule 17j-1 under the 1940 Act and will
provide Adviser and the Fund with a copy of such code. Within 35 days
of the end of each calendar quarter during which this Agreement remains in
effect, the chief compliance officer of Sub-Adviser shall certify to Adviser or
the Fund that Sub-Adviser has complied with the requirements of Rule 17j-1
during the previous quarter and that there have been no violations of
Sub-Adviser’s code of ethics or, if any violation has occurred that is material
to the Fund, the nature of such violation and of the action taken in response to
such violation.
10. Limitation of
Liability. Neither Sub-Adviser nor any of its partners,
officers, stockholders, agents or employees shall have any liability to Adviser,
the Fund or any shareholder of the Fund for any error of judgment, mistake of
law, or loss arising out of any investment, or for any other act or omission in
the performance by Sub-Adviser of its duties hereunder, except for liability
resulting from willful misfeasance, bad faith, or negligence on Sub-Adviser’s
part in the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement, except to the extent otherwise
provided in Section 36(b) of the 1940 Act concerning loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services.
Sub-Adviser
agrees to indemnify and defend Adviser, its officers, directors, employees and
any person who controls Adviser for any loss or expense (including reasonable
attorneys’ fees) arising out of or in connection with any claim, demand, action,
suit or proceeding relating to any actual or alleged material misstatement or
omission in the Fund’s registration statement, any proxy statement, or any
communication to current or prospective investors in each Fund Portfolio, made
by Sub-Adviser and provided to Adviser or the Fund by Sub-Adviser.
11. Term and
Termination. This Agreement shall become effective with
respect to each Portfolio Segment on February 20, 2009, and shall remain in full
force until February 20, 2011, unless sooner terminated as hereinafter
provided. This Agreement shall continue in force from year to year
thereafter with respect to each Fund Portfolio, but only as long as such
continuance is specifically approved for each Fund Portfolio at least annually
in the manner required by the 1940 Act and the rules and regulations thereunder;
provided, however, that if the continuation of this Agreement is not approved
for a Fund Portfolio, Sub-Adviser may continue to serve in such capacity for
such Fund Portfolio in the manner and to the extent permitted by the 1940 Act
and the rules and regulations thereunder.
This
Agreement shall terminate as follows:
(a) This
Agreement shall automatically terminate in the event of its assignment (as
defined in the 0000 Xxx) and may be terminated with respect to any Fund
Portfolio at any time without the payment of any penalty by Adviser or by
Sub-Adviser on sixty days written notice to the other party. This
Agreement may also be terminated by the Fund with respect to any Fund Portfolio
by action of the Board of Directors or by a vote of a majority of the
outstanding voting securities of such Fund Portfolio (as defined in the 0000
Xxx) on sixty days written notice to Sub-Adviser by the Fund.
(b) This
Agreement may be terminated with respect to any Fund Portfolios at any time
without payment of any penalty by Adviser, the Board of Directors or a vote of
majority of the outstanding voting securities of such Fund Portfolio in the
event that Sub-Adviser or any officer or director of Sub-Adviser has taken any
action which results in a material breach of the covenants of Sub-Adviser under
this Agreement.
(c) This
Agreement shall automatically terminate with respect to a Fund Portfolio in the
event the Investment Management Agreement between Adviser and the Fund with
respect to that Fund Portfolio is terminated, assigned or not
renewed.
Termination
of this Agreement shall not affect the right of Sub-Adviser to receive payments
of any unpaid balance of the compensation described in Section 4 earned
prior to such termination.
12. Notice. Any notice
under this Agreement by a party shall be in writing, addressed and delivered,
mailed postage prepaid, or sent by facsimile transmission with confirmation of
receipt, to the other party at such address as such other party may designate
for the receipt of such notice.
13. Limitations on
Liability. The obligations of the Fund entered into in the
name or on behalf thereof by any of its directors, representatives or agents are
made not individually but only in such capacities and are not binding upon any
of the directors, officers, or shareholders of the Fund individually but are
binding upon only the assets and property of the Fund, and persons dealing with
the Fund must look solely to the assets of the Fund and those assets belonging
to each Fund Portfolio for the enforcement of any claims.
14. Adviser
Responsibility. Adviser will provide Sub-Adviser with copies
of the Fund’s Articles of Incorporation, By-laws, prospectus, and Statement of
Additional Information and any amendment thereto, and any objectives, policies
or limitations not appearing therein as they may be relevant to Sub-Adviser’s
performance under this Agreement; provided, however, that no changes or
modifications to the foregoing shall be binding on Sub-Adviser until it is
notified thereof.
15. Arbitration of
Disputes. Any claim or controversy arising out of or relating
to this Agreement which is not settled by agreement of the parties shall be
settled by arbitration in Santa Monica, California before a panel of three
arbitrators in accordance with the commercial arbitration rules of the American
Arbitration Association then in effect. The parties agree that such
arbitration shall be the exclusive remedy hereunder, and each party expressly
waives any right it may have to seek redress in any other forum. Any
arbitrator acting hereunder shall be empowered to assess no remedy other than
payment of fees and out-of-pocket damages. Each party shall bear its
own expenses of arbitration, and the expenses of the arbitrators and of a
transcript of any arbitration proceeding shall be divided equally between the
parties. Any decision and award of the arbitrators shall be binding
upon the parties, and judgment thereon may be entered in the Superior Court of
the State of California or any other court having jurisdiction. If
litigation is commenced to enforce any such award, the prevailing party will be
entitled to recover reasonable attorneys’ fees and costs.
16. Miscellaneous. This
Agreement sets forth the entire understanding of the parties with respect to the
subject matter hereof and may be amended only by written consent of both
parties. The captions in this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect. If any provision of
this Agreement is held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement will not be affected
thereby. This Agreement will be binding upon and shall inure to the
benefit of the parties and their respective successors.
17. Applicable
Law. This Agreement shall be construed in accordance with
applicable federal law and the laws of the state of California.
Adviser
and Sub-Adviser have caused this Agreement to be executed as of the date and
year first above written.
|
WILSHIRE
ASSOCIATES INCORPORATED
By: /s/ Xxxxxxxx X.
Xxxxxxx
Print
Name: Xxxxxxxx
X. Xxxxxxx
Title: President
|
ClearBridge
Advisors
By:
/s/ Xxxxxxxx
Xxxxxx
Print
Name: Xxxxxxxx
Xxxxxx
Title: Chief Compliance
Officer
|
EXHIBIT 1
FUND
PORTFOLIO LISTING
Wilshire
Variable Insurance Trust – Socially Responsible
EXHIBIT 2
FEE
SCHEDULE
Adviser
shall pay Sub-Adviser, promptly after receipt by Adviser of its advisory fee
from the Fund with respect to each Fund Portfolio each calendar month during the
term of this Agreement, a fee based on the average daily net assets of each
Portfolio Segment, at the following annual rates:
x.xx% on
all assets
Sub-Adviser’s
fee shall be accrued daily at 1/365th of the annual rate set forth
above. For the purpose of accruing compensation, the net assets of
each Portfolio Segment will be determined in the manner and on the dates set
forth in the current prospectus of the Fund with respect to each Fund Portfolio
and, on days on which the net assets are not so determined, the net asset value
computation to be used will be as determined on the immediately preceding day on
which the net assets were determined. Upon the termination of this
Agreement, all compensation due through the date of termination will be
calculated on a pro-rata basis through the date of termination and paid within
thirty business days of the date of termination.
