SUBADVISORY AGREEMENT
Exhibit (d)(23)
AGREEMENT made effective the 1st day of July, 2011 among X. Xxxx Price Associates, Inc., a
Maryland corporation (“Subadviser”), Pacific Life Fund Advisors LLC, a Delaware Limited Liability
Company (“Investment Adviser”), and Pacific Life Funds, a Massachusetts Business Trust (the
“Trust”).
WHEREAS, the Trust is registered with the Securities and Exchange Commission (“SEC”) as an
open-end, management investment company under the Investment Company Act of 1940, as amended (the
“1940 Act”);
WHEREAS, the Investment Adviser is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended (“Advisers Act”);
WHEREAS, the Subadviser is registered with the SEC as an investment adviser under the Advisers
Act;
WHEREAS, the Trust has retained the Investment Adviser to render investment advisory services
to the various portfolios of the Trust pursuant to an Advisory Agreement, as amended, and such
Agreement authorizes the Investment Adviser to engage a subadviser to discharge the Investment
Adviser’s responsibilities with respect to the investment management of such portfolios;
WHEREAS, the Trust and the Investment Adviser desire to retain the Subadviser to furnish
investment advisory services to one or more portfolios of the Trust, and the Subadviser is willing
to furnish such services to such portfolios and the Investment Adviser in the manner and on the
terms hereinafter set forth; and
NOW THEREFORE, in consideration of the promises and mutual covenants herein contained, it is
agreed among the Trust, the Investment Adviser, and the Subadviser as follows:
1. Appointment. The Trust and the Investment Adviser hereby appoint Subadviser to act as
subadviser to provide investment advisory services to the portfolios of the Trust listed on Exhibit
A attached hereto (individually, a “Portfolio” and together, the “Portfolios”) for the periods and
on the terms set forth in this Agreement. The Subadviser accepts such appointment and agrees to
furnish the services set forth herein for the compensation herein provided.
In the event the Investment Adviser wishes to retain the Subadviser to render investment
advisory services to one or more portfolios of the Trust other than the Portfolio, the Investment
Adviser shall notify the Subadviser in writing and shall revise Exhibit A to reflect such
additional portfolio(s). If the Subadviser is willing to render such services, it shall notify the
Trust and the Investment Adviser in writing, whereupon such portfolio shall become a Portfolio
hereunder, and be subject to this Agreement.
2. Subadviser Duties. Subject to the supervision of the Trust’s Board of Trustees (the
“Board”) and the Investment Adviser, the Subadviser will provide a continuous investment program
for the Portfolio and determine the composition of the assets of the Portfolio. The
Subadviser will provide investment research and analysis, which may include computerized
investment methodology, and will conduct a continuous program of evaluation, investment, purchases
and/or sales, and reinvestment of the Portfolio’s assets by determining the securities, cash and
other investments, including, but not limited to, futures, options contracts, swaps and other
derivative instruments, if any and to the extent permitted in the Portfolio’s registration
statement, that shall be purchased, entered into, retained, sold, closed, or exchanged for the
Portfolio, when these transactions should be executed, and what portion of the assets of the
Portfolio should be held in the various securities and other investments in which it may invest,
and the Subadviser is hereby authorized to execute and perform such services on behalf of the
Portfolio. To the extent permitted by the written investment policies of the Portfolio, the
Subadviser shall make decisions for the Portfolio as to foreign currency matters and make
determinations as to the retention or disposition of foreign currencies or securities or other
instruments denominated in foreign currencies, or derivative instruments based upon foreign
currencies, including forward foreign currency contracts and options and futures on foreign
currencies and shall execute and perform the same on behalf of the Portfolio. The Subadviser is
authorized to and shall exercise tender offers, exchange offers and vote proxies on behalf of the
Portfolio, each as the Subadviser determines is in the best interest of the Portfolio in accordance
with the Subadviser’s proxy voting policy. The Subadviser is authorized, on behalf of the
Portfolio, to open brokerage accounts in accordance with Trust procedures. The Subadviser is
authorized, on behalf of the Portfolio, to enter into futures account agreements, ISDA master
agreements and related documents, and to open accounts and take other necessary or appropriate
actions related thereto, in accordance with Trust procedures. The Investment Adviser shall provide
such assistance to the Subadviser in setting up and maintaining brokerage accounts, futures and
options accounts, and other accounts and trading documentation as the Subadviser shall reasonably
request to allow for the purchase or sale of various forms of securities pursuant to this
Subadvisory Agreement. The Subadviser is not required to execute foreign currency trades through
the Custodian but may trade with those foreign exchange counterparties that the Subadviser believes
will provide the best service in accordance with its fiduciary duty to seek best execution. In
connection with the selection of counterparties, the Subadviser may be required to provide certain
Portfolio information to broker-dealers (e.g., if requested in connection with their obligations to
confirm the Portfolio’s credit capacity) but may not provide non-public Portfolio holdings.
Subadviser may also reasonably request certain documentation from the Investment Adviser as agreed
upon between the parties.
In performing these duties, the Subadviser:
(a) will conform with (1) the 1940 Act and all rules and regulations thereunder, and releases
and interpretations related thereto (including any no-action letters and exemptive orders which
have been granted by the SEC applicable to the Trust, to the Investment Adviser (as provided to the
Subadviser by the Investment Adviser), or to the Subadviser); (2) applicable rules and regulations
under the Securities Exchange Act of 1934, as amended (the “1934 Act”); (3) any applicable written
procedures, policies and guidelines adopted by the Board and furnished to the Subadviser; (4) the
Trust’s objectives, investment policies and investment restrictions as stated in the Trust’s
Prospectus and Statement of Additional Information as supplemented or amended from time to time, as
furnished to the Subadviser; (5) the provisions of the Trust’s Registration Statement filed on Form
N-1A under the Securities Act of 1933 (the “1933 Act”) and the 1940 Act, as supplemented or amended
from time to time (the “Registration
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Statement”); (6) Section 851(b)(2) and (3) of Subchapter M of the Internal Revenue Code of
1986, as amended (the “Code”); and (7) any other applicable laws and regulations, including without
limitation, proxy voting regulations. To the extent that the Subadviser engages in transactions
that require segregation of assets or other arrangements, including but not limited to, options,
futures contracts, short sales or borrowing transactions, the Subadviser shall designate to the
Trust’s Custodian those assets to be segregated in accordance with the 1940 Act, if necessary,
based upon trading strategies and positions the Subadviser employs on behalf of the Portfolio, as
well as to segregate assets, if necessary, in accordance with the 1934 Act and any other
requirements of broker/dealers who may execute transactions for the Portfolio in connection
therewith. Until the Investment Adviser delivers any supplements or amendments to the Subadviser,
the Subadviser shall be fully protected in relying on the Trust’s Registration Statement previously
furnished by the Investment Adviser to the Subadviser. In managing the Portfolio in accordance
with the requirements of this Section 2, the Subadviser shall be entitled to receive and act upon
advice of counsel to the Trust, to the Investment Adviser or to the Subadviser that is also
acceptable to the Investment Adviser.
(b) will (i) identify each position in certain of the Subadviser’s Portfolios that constitutes
stock in a Passive Foreign Investment Company (“PFIC”), as that term is defined in Section 1296 of
the Code, and (ii) provide such information for comparison purposes to the Investment Adviser at
least annually (or more often ). This information will be provided for informational purposes
only, and does not constitute tax or accounting advice. The information is provided “as is”, and
the Subadviser makes no representations or warranties as to its accuracy or completeness and has no
obligation to update or supplement the information. The Subadviser will not reconcile the PFIC
list to the Portfolio’s specific holdings.
(c) is responsible, in connection with its responsibilities under this Section 2, for
decisions to buy and sell securities and other investments for the Portfolio, for broker-dealer and
futures commission merchant (“FCM”) selection, and for negotiation of commission rates. The
Subadviser’s primary consideration in effecting a security or other transaction will be to obtain
the best execution for the Portfolio according to the Subadviser’s best execution policies, taking
into account the factors specified in the Prospectus and Statement of Additional Information for
the Trust, as they may be amended or supplemented from time to time and furnished to the
Subadviser. Subject to such policies as the Board may determine and consistent with Section 28(e)
of the Securities Exchange Act of 1934, as amended (the “1934 Act”), the Subadviser shall not be
deemed to have acted unlawfully or to have breached any duty created by this Agreement or otherwise
solely by reason of its having caused the Portfolio to pay a broker or dealer, acting as agent, for
effecting a Portfolio transaction at a price in excess of the amount of commission another broker
or dealer would have charged for effecting that transaction, if the Subadviser determines in good
faith that such amount of commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of either that particular
transaction or the Subadviser’s (or its affiliates’) overall responsibilities with respect to the
Portfolio and to its other clients as to which it exercises investment discretion. To the extent
consistent with these standards, and in accordance with Section 11(a) of the 1934 Act and Rule
11a2-2(T) thereunder, and subject to any other applicable laws and regulations including Section
17(e) of the 1940 Act, the Subadviser is further authorized to place orders on behalf of the
Portfolio through the Subadviser if the Subadviser is registered as a broker or dealer with the SEC
or as a FCM with the Commodities Futures Trading
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Commission (“CFTC”), through any of its affiliates that are brokers or dealers or FCMs or such
other entities which provide similar services in foreign countries, or through such brokers and
dealers that also provide research or statistical research and material, or other services to the
Portfolio or the Subadviser. Such allocation shall be in such amounts and proportions as the
Subadviser shall determine consistent with the above standards, and, upon request, the Subadviser
will report on said allocation to the Investment Adviser and Board, indicating the brokers, dealers
or FCMs to which such allocations have been made and the basis therefor. The Subadviser is
authorized to open brokerage accounts or other accounts, as described above, on behalf of the
Portfolio in accordance with Trust procedures. The Subadviser shall not direct brokerage to any
broker-dealer in recognition of, or otherwise take into account in making brokerage allocation
decisions, sales of shares of a Portfolio or of any other investment vehicle by that broker-dealer.
(d) may, on occasions when the purchase or sale of a security is deemed to be in the best
interest of a Portfolio as well as any other investment advisory clients, to the extent permitted
by applicable laws and regulations, but shall not be obligated to, aggregate the securities to be
so sold or purchased with those of its other clients where such aggregation is not inconsistent
with the policies set forth in the Registration Statement as furnished to the Subadviser. In such
event, allocation of the securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Subadviser in a manner that is fair and equitable and consistent
with the Subadviser’s fiduciary obligations to the Portfolio and to such other clients.
(e) will, in connection with the purchase and sale of securities for the Portfolio, together
with the Investment Adviser, arrange for the transmission to the custodian and recordkeeping agent
for the Trust, on a daily basis, such confirmation(s), trade tickets, and other documents and
information, including, but not limited to, CUSIP, SEDOL, or other numbers that identify securities
to be purchased or sold on behalf of the Portfolio, as may be reasonably necessary to enable the
custodian and recordkeeping agent to perform its administrative and recordkeeping responsibilities
with respect to the Portfolio, and with respect to Portfolio securities to be purchased or sold
through the Depository Trust Company, will arrange for the automatic transmission of the
confirmation of such trades to the Trust’s custodian and recordkeeping agent, and, if required, the
Investment Adviser. The Subadviser agrees to comply with such rules, procedures and time frames as
the Trust’s custodian may reasonably set or provide with respect to the clearance and settlement of
transactions for a Portfolio, including but not limited to submission of trade tickets. Any
Portfolio assets shall be delivered directly to the Trust’s custodian.
(f) will provide reasonable assistance to the Investment Adviser, custodian or recordkeeping
agent for the Trust in determining or confirming, consistent with the procedures and policies
stated in the Trust’s valuation procedures and/or the Registration Statement, the value of any
portfolio securities or other assets of the Portfolio for which the Investment Adviser, custodian
or recordkeeping agent seeks assistance from the Subadviser or identifies for review by the
Subadviser. Such reasonable assistance shall include (but is not limited to): (i) designating and
providing timely access, on an as-needed basis and upon the reasonable request of the Investment
Adviser or custodian, to one or more employees of the Subadviser who are knowledgeable about the
security/issuer, its financial condition, trading and/or other relevant
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factors for valuation, which employees shall be available for consultation when the Board’s
Valuation Committee convenes; (ii) notifying the Investment Adviser in the event any Portfolio
security’s value does not appear to reflect corporate actions, news, significant events or such
security otherwise requires review to determine if fair valuation is necessary and as a result the
Subadviser recommends a change in the valuation of such Portfolio security; or such security
otherwise requires review to determine if fair valuation is necessary either under the Trust’s
procedures or under instructions provided by the Investment Adviser in a letter related to the fair
value notification process, dated March 26, 2010, as either may be amended from time to time, and
both to be incorporated herein by reference; (iii) applying to the Portfolio’s assets the
procedures of the Subadviser used for valuing the assets held by other accounts under management of
the Subadviser and notifying the Investment Adviser of the valuation of such assets determined
under such procedures, including in the event that the application of such procedures would result
in a determination of fair value with respect to any asset held by the Portfolio where a market
quotation is not readily available or is deemed to be unreliable with respect to such asset; (iv)
upon the request of the Investment Adviser or custodian, assisting in obtaining bids and offers or
quotes from broker/dealers or market-makers with respect to securities held by the Portfolio for
which market quotations are not readily available or reliable; (v) verifying pricing and providing
fair valuations or recommendations for fair valuations in accordance with the Subadviser’s
valuation procedures, as they may be amended from time to time; and (vi) maintaining adequate
records and written backup information with respect to the securities valuation services provided
hereunder, and providing such information to the Investment Adviser or the Trust upon request. Such
records shall be deemed to be Trust records although the Subadviser is permitted to maintain copies
of those records necessary to comply with federal regulatory requirements.
(g) will maintain and preserve such records related to the Portfolio’s transactions as
required under the 1940 Act and the Advisers Act. The Subadviser will make available to the Trust
and the Investment Adviser promptly upon request, any of the Portfolio’s investment records and
ledgers maintained by the Subadviser (which shall not include the records and ledgers maintained by
the custodian and recordkeeping agent for the Trust), as are necessary to assist the Trust and the
Investment Adviser in complying with requirements of the 1940 Act and the Advisers Act, as well as
other applicable laws, and will furnish to regulatory authorities having the requisite authority
any information or reports in connection with such services which may be requested in order to
ascertain whether the operations of the Trust are being conducted in a manner consistent with
applicable laws and regulations.
To the extent that the Subadviser has agreed to perform the services specified in this Section
2 in accordance with applicable law (including Subchapters M and L of the Internal Revenue Code of
1986, as amended (the “Code”), the 1940 Act and the Advisers Act) and in accordance with the
Trust’s Instrument and By-Laws, policies and determinations of the Trustees of the Trust, the
Investment Adviser, and the Trust’s Registration Statement, the Subadviser may perform such
services based upon its books and records with respect to the Portfolio; provided, however,
Subadviser shall reconcile its books and records to the Trust’s books and records on a daily basis.
(h) will quarterly, or as otherwise requested by the Board or Investment Adviser, report to
the Board on the investment program for the Portfolio and the issuers and
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securities represented in the Portfolio, and will furnish the Board, with respect to the
Portfolio, such periodic and special reports as the Board and the Investment Adviser may reasonably
request, including, but not limited to, reports concerning transactions and performance of the
Portfolio, a quarterly compliance checklist, reports regarding compliance with the Trust’s
procedures pursuant to Rules 17e-1, 17a-7, 10f-3 and 12d3-1 under the 1940 Act, fundamental
investment restrictions, procedures for opening brokerage accounts and commodity trading accounts,
liquidity determination of securities purchased pursuant to Rule 144A and 4(2) commercial paper,
IOs/POs, confirmation of the liquidity of all other securities in the Trusts, and compliance with
the Subadviser’s Code of Ethics, and such other reports or certifications that the Investment
Adviser may reasonably request from time to time.
(i) will adopt a written Code of Ethics complying with the requirements of Rule 17j-1 under
the 1940 Act and Rule 204A-1 under the Advisers Act and will provide the Investment Adviser and the
Trust with a copy of the Code of Ethics, together with evidence of its adoption. Within 30 days of
the end of each calendar quarter during which this Agreement remains in effect, the president or a
vice president, the chief compliance officer and/or president and/or managing director (as the
Investment Adviser determines appropriate) of the Subadviser shall certify to the Investment
Adviser that the Subadviser has complied with the requirements of Rule 17j-1 during the previous
calendar quarter and that there have been no material violations of the Code of Ethics or, if a
material violation has occurred, that appropriate action has been taken in response to such
violation. Upon written request of the Investment Adviser or the Trust, the Subadviser shall
permit representatives of the Investment Adviser and the Trust to examine the reports on material
and non-material violations (or summaries of the reports) required to be made under the Code of
Ethics and other records evidencing enforcement of the Code of Ethics.
(j) will provide to the Investment Adviser a copy of the Subadviser’s Form ADV, and any
supplements or amendments thereto, as filed with the SEC, on an annual basis (or more frequently if
requested by the Investment Adviser or the Board) including any portion which contains disclosure
of legal or regulatory actions. The Subadviser represents and warrants that it is a duly
registered investment adviser under the Advisers Act and will notify the Investment Adviser
immediately if any action is brought by any regulatory body which would affect that registration.
The Subadviser will provide a list of persons whom the Subadviser wishes to have authorized to give
written and/or oral instructions to Custodians of assets for the Portfolio.
(k) will be responsible for meeting the Subadviser’s regulatory obligations, including the
preparation and filing of such reports with respect to the assets of the Portfolio reflecting
holdings over which the Subadviser or its affiliates have investment discretion as may be required
from time to time, including but not limited to Form 13F, Schedule 13D or 13G in respect of the
Portfolio as may be required of the Trust due to the activities of the Subadviser, and the
Subadviser is authorized to and shall file on behalf of the Portfolio any required filing if the
Portfolio holds a portfolio security for which a Schedule 13D or 13G is required based on the
ownership level.
(l) will not permit any employee of the Subadviser to have any material involvement with the
management of the Portfolio if such employee has:
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(i) been, within the last ten (10) years, convicted of or acknowledged commission of any
felony or misdemeanor (a) involving the purchase or sale of any security, (b) involving
embezzlement, fraudulent conversion, or misappropriation of funds or securities, (c) involving
sections 1341, 1342 or 1343 of Title 18 of the U.S. Code, or (d) arising out of such person’s
conduct as an underwriter, broker, dealer, investment adviser, municipal securities dealer,
government securities broker, government securities dealer, transfer agent, or entity or person
required to be registered under the Commodity Exchange Act, or as an affiliated person, salesman,
or employee or officer or director of any investment company, bank, insurance company, or entity or
person required to be registered under the Commodity Exchange Act;
(ii) been permanently or temporarily enjoined by reason of any misconduct, by order, judgment,
or decree of any court of competent jurisdiction, from acting as an underwriter, broker, dealer,
investment adviser, municipal securities dealer, government securities broker, government
securities dealer, transfer agent, or entity or person required to be registered under the
Commodity Exchange Act, or as an affiliated person, salesman or employee of any investment company,
bank, insurance company, or entity or person required to be registered under the Commodity Exchange
Act, or from engaging in or continuing any conduct or practice in connection with any such activity
or in connection with the purchase or sale of any security.
(m) will not disclose or use any records or information obtained pursuant to this Agreement
(“Confidential Information”) (and any other information obtained for the use of its clients
excluding investment research and investment advice) in any manner whatsoever except as expressly
authorized in this Agreement or in the ordinary course of business in connection with placing
orders for the purchase and sale of securities or obtaining investment licenses in various
countries or the opening of brokerage or other accounts or the opening of custody accounts and
dealing with settlement agents in various countries, and will keep confidential any information
obtained pursuant to the Agreement, and disclose such information only if the Board has authorized
such disclosure, or if such disclosure is required by applicable federal or state law or
regulations or regulatory authorities having the requisite authority or is otherwise publicly
available. The Trust and the Investment Adviser will not disclose or use any records or
information with respect to the Subadviser obtained pursuant to this Agreement, in any manner
whatsoever except as expressly authorized in this Agreement, and will keep confidential any
information obtained pursuant to this Agreement, and disclose such information only as expressly
authorized in this Agreement, or if such disclosure is required by applicable federal or state law
or regulations or regulatory authorities having the requisite authority.
The Investment Adviser and Subadviser each agrees that it, its trustees, officers and
employees, or any service provider to whom the entity may disclose Confidential Information in the
ordinary course of business, will not use the Confidential Information to make investments for
themselves or others or to make recommendations for others. The Investment Adviser and Subadviser
each agrees to establish and enforce appropriate procedures to ensure that all such persons will
use the Confidential Information only as permitted under this Agreement. The Investment Adviser
and Subadviser each shall take reasonable security precautions, at least as great as the
precautions it takes to protect its own confidential information, to prevent the Confidential
Information from being disclosed to third persons.
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In the event that the recipient of Confidential Information (the “Recipient”) is requested or
required (by deposition, interrogatories, requests for information or documents in legal
proceedings, subpoenas, civil investigative demand or similar process), in connection with any
proceeding, to disclose any of the discloser’s Confidential Information, the Recipient will give
the discloser prompt written notice of such request or requirement to allow the discloser an
opportunity to obtain a protective order or otherwise obtain assurances that confidential treatment
will be accorded to such Confidential Information. In the event that such protective order or
other remedy is not obtained, disclosure shall be made of only that portion of the Confidential
Information that is legally required to be disclosed. All Confidential Information disclosed as
required by law shall nonetheless continue to be deemed Confidential Information.
(n) will assist the Investment Adviser, the Trust, and any of its or their trustees,
directors, officers, and/or employees in complying with the provisions of the Xxxxxxxx-Xxxxx Act of
2002 to the extent such provisions relate to the services to be provided by, and the obligations
of, the Subadviser hereunder. Specifically, and without limitation to the foregoing, the
Subadviser agrees to provide certifications to the principal executive and financial officers of
the Trust (the “certifying officers”) that correspond to and/or support the certifications required
to be made by the certifying officers in connection with the preparation and/or filing of the
Trust’s Form N-CSRs, N-Qs, N-SARs, shareholder reports, financial statements, and other disclosure
documents or regulatory filings, in such form and content as the Trust shall reasonably request or
in accordance with procedures adopted by the Trust.
(o) is, along with its affiliated persons, permitted to enter into transactions with the other
portfolios of the Trust and affiliated persons of those other portfolios of the Trust
(collectively, the “Other Portfolios”). In doing so, the Subadviser is prohibited from consulting
with the Investment Adviser or the subadvisers of these Other Portfolios concerning securities
transactions of the Portfolio except for the purpose of complying with the conditions of Rule
12d3-1(a) and (b) under the 1940 Act.
(p) will exercise voting rights with respect to portfolio securities held by a Portfolio in
accordance with written policies and procedures adopted by the Subadviser, which may be amended
from time to time, and which at all times shall comply with the requirements of applicable federal
statutes and regulations and any related SEC guidance relating to such statutes and regulations
(collectively, “Proxy Voting Policies and Procedures”). The Subadviser shall vote proxies on
behalf of the Portfolio in a manner deemed by the Subadviser to be in the best interests of the
Portfolio pursuant to the Subadviser’s written Proxy Voting Policies and Procedures. The
Subadviser shall provide disclosure regarding the Proxy Voting Policies and Procedures in
accordance with the requirements of Form N-1A for inclusion in the Registration Statement. The
Subadviser shall report to the Investment Adviser in a timely manner a record of all proxies voted,
in such form and format that complies with acceptable federal statutes and regulations (e.g.,
requirements of Form N-PX). The Subadviser shall certify at least annually or more often as may
reasonably be requested by the Investment Adviser, as to its compliance with its own Proxy Voting
Policies and Procedures and applicable federal statutes and regulations.
(q) will provide reasonable assistance to the Trust and the Trust’s Chief Compliance Officer
(“CCO”) in complying with Rule 38a-1 under the 1940 Act. Specifically, the Subadviser represents
and warrants that it shall maintain a compliance program in
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accordance with the requirements of Rule 206(4)-7 under the Advisers Act, and shall provide
the CCO with reasonable access to information regarding the Subadviser’s compliance program, which
access shall include on-site visits with the Subadviser as may be reasonably requested from time to
time. In connection with the periodic review and annual report required to be prepared by the CCO
pursuant to Rule 38a-1, the Subadviser agrees to provide certifications as may be reasonably
requested by the CCO related to the design and implementation of the Subadviser’s compliance
program.
(r) will comply with the Trust’s policy on selective disclosure of portfolio holdings of the
Trust (the “Selective Disclosure Policy”), as provided in writing to the Subadviser and as may be
amended from time to time. The Subadviser agrees to provide a certification with respect to
compliance with the Trust’s Selective Disclosure Policy as may be reasonably requested by the Trust
from time to time.
(s) will notify the Investment Adviser promptly in the event that, in the judgment of the
Subadviser, Portfolio share transaction activity becomes disruptive to the ability of the
Subadviser to effectively manage the assets of a Portfolio consistent with the Portfolio’s
investment objectives and policies.
(t) will provide assistance as may be reasonably requested by the Investment Adviser in
connection with compliance by the Portfolio with any current or future legal and regulatory
requirements related to the services provided by the Subadviser hereunder.
(u) will provide such certifications to the Trust as the Trust or the Investment Adviser may
reasonably request related to the services provided by the Subadviser hereunder, including (but not
limited to) certifications of compliance with Trust procedures, the Registration Statement, and
applicable securities regulations.
(v) will monitor and inform the Investment Adviser of developments relating to class action
litigation involving securities held by the Portfolio, and upon request by the Investment Adviser,
research and confirm to the Investment Adviser whether the Portfolio held or traded in a particular
security, on any particular day or during any particular timeframe within the term of this
Agreement, as the Investment Adviser may specify; and Subadviser will provide relevant trade
information (for example, a schedule of purchases and sales and/or holdings) for such security.
Upon request of the Investment Adviser, the Subadviser agrees to assist with and review on a
case-by-case basis foreign class actions for any security held within the Portfolio managed by
Subadviser during its management at the direction of the Investment Adviser.
(w) will provide reasonable assistance to the Investment Adviser with respect to the annual
audit of the Trust’s financial statements, including, but not limited to: (i) providing assistance
with obtaining broker contacts as needed for obtaining trade confirmations (in particular with
respect to investments in loans (including participations and assignments) and all derivatives,
including swaps); (ii) providing copies of all documentation relating to investments in loans
(including participations and assignments) and derivative contracts, within a reasonable time after
the execution of such documentation; (iii) providing assistance in obtaining trade confirmations in
the event the Trust or the Trust’s independent registered public accounting firm is unable to
obtain such confirmations directly from the brokers; and (iv) providing assistance in
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obtaining market quotations for investments (including investments in loans (including
participations and assignments) and derivatives) that are not readily ascertainable in the event
the Trust or the Trust’s independent registered public accounting firm is unable to obtain such
market quotations through independent means.
(x) will, pursuant to the Investment Adviser’s request, provide comparative fee information if
the Subadviser acts as sub-adviser to another U.S. registered mutual fund that follows the same
investment strategy as the Portfolio.
(y) will, for the duration of this Agreement, not directly solicit or induce any investment
personnel of Investment Adviser or its affiliated companies to leave the employ of Investment
Adviser or affiliated company. Subadviser may indirectly solicit personnel of Investment Adviser
or its affiliated companies to leave the employ of Investment Adviser or affiliated companies by
means of general advertising or through broad recruiting efforts. After personnel of Investment
Adviser or an affiliate cease to be in the employ of Investment Adviser or affiliate, Subadviser
shall be free to directly or indirectly employ or retain such investment personnel in any capacity,
so long as Subadviser did not solicit or induce such personnel to leave the employ of Investment
Adviser or its affiliate.
3. Disclosure about Subadviser and Portfolio. The Subadviser represents that it has reviewed
the current Registration Statement and agrees to promptly review future amendments to the
Registration Statement, including any supplements thereto, which relate to the Subadviser or the
Portfolio, filed with the SEC (or which will be filed with the SEC in the future) and represents
and warrants that, solely with respect to the disclosure respecting or relating to the Subadviser,
including any performance information the Subadviser provides that is included in or serves as the
basis for information included in the Registration Statement, such Registration Statement contains
as of the date hereof, and will contain as of the date of any Registration Statement or supplement
thereto, no untrue statement of any material fact and does not omit any statement of material fact
which was required to be stated therein or necessary to make the statements contained therein not
misleading. The Subadviser further agrees to notify the Investment Adviser and the Trust
immediately of any material fact about the Subadviser, related to the Portfolio or services
provided to the Portfolio, known to the Subadviser respecting or relating to the Subadviser, that
is not contained in the Registration Statement or prospectus for the Trust, or any amendment or
supplement thereto, or of any statement respecting or relating to the Subadviser contained therein
that becomes untrue in any material respect. With respect to the disclosure respecting the
Portfolio, the Subadviser represents and agrees that the description in the Trust’s prospectus
(including the summary prospectus) and statement of additional information, including the
Portfolio’s goal, investment strategies and risks (the “Portfolio Description”), as of the date of
this Agreement and as of the date of any Registration Statement or supplement thereto, is
consistent with the manner in which the Subadviser intends to manage the Portfolio, and the
identification of risks is inclusive of all material risks known to the Subadviser that are
expected to arise in connection with the manner in which the Subadviser intends to manage the
Portfolio. The Subadviser further agrees to notify the Investment Adviser and the Trust promptly
in the event that the Subadviser becomes aware that the Portfolio Description for a Portfolio is
inconsistent in any material respect with the manner in which the Subadviser is managing the
Portfolio, and in the event that the identified risks are inconsistent in any material respect with
the risks known to the Subadviser that arise in connection with the
10
manner in which the Subadviser is managing the Portfolio. In addition, the Subadviser agrees
to comply with the Investment Adviser’s reasonable request for information regarding the personnel
of the Subadviser who are responsible for the day-to-day management of a Portfolio’s assets.
4. Expenses. The Subadviser shall bear all expenses incurred by it and its staff with respect
to all activities in connection with the performance of the Subadviser’s services under this
Agreement, including but not limited to salaries, overhead, travel, preparation of Board materials,
review of marketing materials relating to Subadviser or other information provided by Subadviser to
the Investment Adviser and/or the Trust’s Distributor, and marketing support. Subadviser agrees to
pay to the Investment Adviser the cost of generating a prospectus supplement, which includes
preparation, filing, printing, and distribution (including mailing costs) of the supplement, if the
Subadviser makes any changes that require immediate disclosure in the prospectus or any required
regulatory documents by supplement, including changes to its structure or ownership, to the
Portfolio’s portfolio manager(s), to investment style or management, or otherwise (“Changes”), and
at the time of notification to the Trust by the Subadviser of such Changes, the Trust is not
generating a supplement for other purposes or the Trust does not wish to add such Changes to a
pending supplement. In the event two or more subadvisers each require a supplement simultaneously,
the expense of each supplement will be shared pro rata with such other subadviser(s) based upon the
number of pages required by each such subadviser. All other expenses not specifically assumed by
the Subadviser hereunder or by the Investment Adviser under the Advisory Agreement are borne by the
applicable Portfolio of the Trust. The Trust, the Subadviser and the Investment Adviser shall not
be considered as partners or participants in a joint venture.
5. Compensation. For the services provided and the expenses borne by the Subadviser pursuant
to this Agreement, the Investment Adviser will pay to the Subadviser a fee in accordance with
Exhibit A attached to this Agreement. This fee will be computed and accrued daily and payable
monthly. The fees for any month during which this Agreement is in effect for less than the entire
month shall be pro-rated based on the number of days during such month that the Agreement was in
effect. The Investment Adviser shall pay the Subadviser such fee not later than the fifteenth
(15th) business day immediately following the end of each month.
6. Seed Money. The Investment Adviser agrees that the Subadviser shall not be responsible for
providing money for the initial capitalization of any Portfolio.
7. Compliance.
(a) The Subadviser agrees that it shall immediately notify the Investment Adviser and the
Trust (i) in the event that the SEC, CFTC, or any banking or other regulatory body has censured the
Subadviser; placed limitations upon its activities, functions or operations; suspended or revoked
its registration, if any, or ability to serve as an investment adviser; (ii) upon having a
reasonable basis for believing that a Portfolio has ceased to qualify or might not qualify as a
regulated investment company under Subchapter M of the Code based on the Trust’s records related to
the Portfolio or based on the Subadviser’s records related to the Portfolio so long as Subadviser
reconciles its records on a daily basis to the Trust’s records. The Subadviser further agrees to
notify the Investment Adviser and Trust immediately of any material fact
11
known to the Subadviser respecting or relating to the Subadviser that is not contained in the
Registration Statement that relates to the Subadviser or the Portfolio, or any amendment or
supplement thereto, or of any statement contained therein that becomes untrue in any material
respect.
8. The Investment Adviser agrees that it shall immediately notify the Subadviser (i) in the
event that the SEC or any other applicable regulatory body has censured the Investment Adviser or
the Trust; placed limitations upon either of their activities, functions, or operations; suspended
or revoked the Investment Adviser’s registration as an investment adviser; or has commenced
proceedings or an investigation that may result in any of these actions; or (ii) upon having a
reasonable basis for believing that a Portfolio has ceased to qualify or might not qualify as a
regulated investment company under Subchapter M of the Code.
9. Independent Contractor. The Subadviser shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided herein or authorized by the
Investment Adviser from time to time, have no authority to act for or represent the Investment
Adviser in any way or otherwise be deemed its agent. The Subadviser understands that unless
provided herein or authorized from time to time by the Trust, the Subadviser shall have no
authority to act for or represent the Trust in any way or otherwise be deemed the Trust’s agent.
10. Books and Records. In compliance with the requirements of and to the extent required by
Section 31(a) of the 1940 Act and the rules thereunder, the Subadviser hereby agrees that all
records which it maintains for the Portfolio are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust’s or the Investment Adviser’s
request, although the Subadviser may, at its own expense, make and retain a copy of such records.
11. Cooperation. Each party to this Agreement agrees to cooperate with each other party and
with all appropriate governmental authorities having the requisite jurisdiction (including, but not
limited to, the SEC and state insurance authorities) in connection with any investigation or
inquiry relating to this Agreement or the Trust.
12. Responsibility and Control. Notwithstanding any other provision of this Agreement, it is
understood and agreed that the Trust reserves the right to direct, approve or disapprove any action
hereunder taken on its behalf by the Subadviser, provided, however, that the Subadviser shall not
be liable for any losses to the Trust resulting from the Trust’s direction, or from the Trust’s
disapproval of any action proposed to be taken by the Subadviser.
13. Services Not Exclusive. It is understood that the services of the Subadviser and its
employees are not exclusive, and nothing in this Agreement shall prevent the Subadviser (or its
employees or affiliates) from providing similar services to other clients, including investment
companies (whether or not their investment objectives and policies are similar to those of the
Portfolio) or from engaging in other activities. The Subadviser may act as a subadviser to other
subadvisers of the Trust and Pacific Life Funds.
12
14. Liability. Except as may otherwise be required by the 1940 Act or the rules thereunder or
other applicable law, the Trust and the Investment Adviser agree that the Subadviser, any
affiliated person of the Subadviser, and each person, if any, who, within the meaning of Section 15
of the 1933 Act, controls the Subadviser, shall not be liable for, or subject to any damages,
expenses, or losses in connection with, any act or omission connected with or arising out of any
services rendered under this Agreement, except by reason of willful misfeasance, bad faith, or
gross negligence in the performance of the Subadviser’s duties, or by reason of reckless disregard
of the Subadviser’s obligations and duties under this Agreement. Notwithstanding the foregoing,
nothing contained in this Agreement shall constitute a waiver or limitation of rights that the
Trust may have under federal or state securities laws.
15. Indemnification.
(a) The Subadviser agrees to indemnify and hold harmless, the Investment Adviser, any
affiliated person within the meaning of Section 2(a)(3) of the 1940 Act (“affiliated person”) of
the Investment Adviser, and each person, if any, who, within the meaning of Section 15 of the 1933
Act, controls (“controlling person”) the Investment Adviser (collectively, “PL Indemnified
Persons”) against any and all losses, claims, damages, liabilities or litigation (including
reasonable legal and other expenses), to which a PL Indemnified Person may become subject under the
1933 Act, the 1940 Act, the Advisers Act, under any other statute, at common law or otherwise,
arising out of the Subadviser’s responsibilities to the Trust as Subadviser which (i) are based
upon any willful misfeasance, bad faith, gross negligence, or reckless disregard of, the
Subadviser’s obligations and/or duties under this Agreement by the Subadviser or by any of its
directors, officers or employees, or any affiliate acting on behalf of the Subadviser (other than a
PL Indemnified Person), or (ii) are based upon any untrue statement or alleged untrue statement of
a material fact contained in a Registration Statement or prospectus covering the Shares of the
Trust or any Portfolio, or any amendment thereof or any supplement thereto, or the omission or
alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, if such a statement or omission was made in reliance
upon information furnished in writing to the Investment Adviser, the Trust, or any affiliated
person of the Trust by the Subadviser or any affiliated person of the Subadviser (other than a PL
Indemnified Person) provided, however, that in no case is the Subadviser’s indemnity in favor of
the Investment Adviser or any affiliated person or controlling person of the Investment Adviser
deemed to protect such person against any liability to which any such person would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of his
duties, or by reason of his reckless disregard of obligations and duties under this Agreement.
(b) The Investment Adviser agrees to indemnify and hold harmless the Subadviser, any
affiliated person within the meaning of Section 2(a)(3) of the 1940 Act of the Subadviser and each
person, if any, who, within the meaning of Section 15 of the 1933 Act controls (“controlling
person”) the Subadviser (collectively, “Subadviser Indemnified Persons”) against any and all
losses, claims, damages, liabilities or litigation (including reasonable legal and other expenses)
to which a Subadviser Indemnified Person may become subject under the 1933 Act, the 1940 Act, the
Advisers Act, under any other statute, at common law or otherwise, arising out of the Investment
Adviser’s responsibilities as Investment Adviser of the Trust which (i) are based upon any willful
misfeasance, bad faith, gross negligence, or reckless disregard by
13
the Investment Adviser, any of its directors, officers, or employees or any affiliate acting
on behalf of the Investment Adviser (other than a Subadviser Indemnified Person), or (ii) are based
upon any untrue statement or alleged untrue statement of a material fact contained in a
Registration Statement or prospectus covering the Shares of the Trust or any Portfolio, or any
amendment thereof or any supplement thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements therein not
misleading, unless such a statement or omission was made in reliance upon information furnished in
writing to the Investment Adviser, the Trust, or any affiliated person of the Trust by the
Subadviser or any affiliated person of the Subadviser (other than a PL Indemnified Person) provided
however, that in no case is the Investment Adviser’s indemnity in favor of the Subadviser
Indemnified Persons deemed to protect such person against any liability to which any such person
would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the
performance of his duties, or by reason of his reckless disregard of obligations and duties under
this Agreement.
16. Duration and Termination. This Agreement shall become effective as of the date of
execution first written above, and shall continue in effect for two years and continue thereafter
on an annual basis with respect to the Portfolio; provided that such annual continuance is
specifically approved at least annually (a) by the vote of a majority of the Board, or (b) by the
vote of a majority of the outstanding voting shares of the Portfolio, and provided that continuance
is also approved by the vote of a majority of the Board who are not parties to this Agreement or
“interested persons” (as such term is defined in the 0000 Xxx) of the Trust, the Investment
Adviser, or the Subadviser, cast in person at a meeting called for the purpose of voting on such
approval.
This Agreement may be terminated with respect to any Portfolio:
(a) by the Trust at any time with respect to the services provided by the Subadviser, without
the payment of any penalty, by vote of a majority of the Board or by a vote of a majority of the
outstanding voting shares of the Trust or, with respect to a particular Portfolio, by vote of a
majority of the outstanding voting shares of such Portfolio, upon sixty (60) days’ prior written
notice to the Subadviser and the Investment Adviser;
(b) by the Subadviser at any time, without the payment of any penalty, upon sixty (60) days’
prior written notice to the Investment Adviser and the Trust.
(c) by the Investment Adviser at any time, without the payment of any penalty, upon sixty (60)
days’ prior written notice to the Subadviser and the Trust.
This Agreement will terminate automatically in event of its assignment under the 1940 Act and
any rules adopted by the SEC thereunder, but shall not terminate in connection with any transaction
not deemed an assignment. In the event this Agreement is terminated or is not approved in the
manner described above (i) Subadviser agrees to provide all reports, certification and assistance
called for pursuant to paragraphs 2(b), 2(h), 2(i), 2(k), 2(n), 2(p), and 2(q) within 30 business
days of termination; and (ii) the Sections or Paragraphs numbered 2(g) for a period of six years,
and 2(m), 2(t), 2(v), 10, 11, 14, 15, 17, 18, 19 and 20 of this Agreement as well as any applicable
provision of this Paragraph numbered 15 shall remain in effect.
14
17. Use of Name.
(a) It is understood that the name “Pacific Life Insurance Company,” “Pacific Life Fund
Advisors LLC,” “Pacific Asset Management,” and “Pacific Life Funds” and any abbreviated forms and
any derivatives thereof and any logos associated with those names (including, without limitation,
the whale logo) are the valuable property of the Investment Adviser and its affiliates, and that
the Subadviser shall not use such names (or abbreviations, derivatives or logos) without the prior
written approval of the Investment Adviser and only so long as the Investment Adviser is an
investment adviser to the Trust and/or the Portfolio. Upon termination of this Agreement, the
Subadviser shall forthwith cease to use such names (or abbreviations, derivatives or logos).
(b) It is understood that the name “X. Xxxx Price Associates, Inc.” is the valuable property
of the Subadviser and that the Trust and the Investment Adviser have the right to use such name (or
derivative), in the Trust’s prospectus, SAI and Registration Statement or other filings, forms or
reports required under applicable state or federal securities, insurance, or other law, for so long
as the Subadviser is a Subadviser to the Trust and/or one of the Portfolio, provided, however, that
the Trust may continue to use the name (but not the logos) of the Subadviser in its Registration
Statements and other documents to the extent deemed necessary by the Trust to comply with
disclosure obligations under applicable law and regulation. Neither the Trust nor the Investment
Adviser shall use the Subadviser’s name or logos in promotional or sales related materials prepared
by or on behalf of the Investment Adviser or the Trust, without prior review and written approval
by the Subadviser which may not be unreasonably withheld. Upon termination of this Agreement, the
Trust and the Investment Adviser shall forthwith cease to use such names, (and logo), except as
provided for herein.
18. Limitation of Liability. A copy of the Declaration of Trust for the Trust is on file with
the Secretary of the State of Delaware. The Declaration of Trust has been executed on behalf of
the Trust by a Trustee of the Trust in his capacity as Trustee of the Trust and not individually.
The obligations of this Agreement with respect to the Portfolio shall be binding upon the assets
and property of each such Portfolio individually, and not jointly, and shall not be binding upon
any Trustee, officer, employee, agent or shareholder, whether past, present, or future, of the
Trust individually, or upon the Trust generally or upon any other portfolio of the Trust.
19. Notices. All notices and other communications hereunder shall be in writing sent by email
first, if practicable, but shall only be deemed given if delivered in person or by messenger,
cable, certified mail with return receipt, or by a reputable overnight delivery service which
provides evidence of receipt to the parties at the following addresses (or at such other address or
number for a party as shall be specified by like notice):
| A. | if to the Subadviser, mail to: | ||
| X. Xxxx Price Associates, Inc. 000 Xxxx Xxxxx Xxxxxx Xxxxxxxxx, XX 00000 Facsimile transmission number: 000-000-0000 |
15
| Attention: Xxxxx Xxxxxxxxxxx, Chief Legal Counsel | |||
| Email notifications to: xxxxx_xxxxxxxxxxx@xxxxxxxxxx.xxx | |||
| B. | if to the Investment Adviser, mail to: | ||
| Pacific Life Fund Advisors LLC 000 Xxxxxxx Xxxxxx Xxxxx Xxxxxxx Xxxxx, XX 00000 Facsimile transmission number: (000) 000-0000 Attention: Xxxxx X. Xxxxx, General Counsel Fund Advisor |
|||
| Email notifications to: | |||
| Email: XxxxxXxxxx@XxxxxxxXxxx.xxx And a copy email to: XxxxxXxxxxxxxxxxxx@XxxxxxxXxxx.xxx |
|||
| C. | if to the Trust, mail to: | ||
| Pacific Life Funds c/o Pacific Life Insurance Company 000 Xxxxxxx Xxxxxx Xxxxx Xxxxxxx Xxxxx, XX 00000 Facsimile transmission number: (000) 000-0000 Attention: Xxxxx X. Xxxxx, General Counsel |
|||
| Email notifications to: | |||
| Email: XxxxxXxxxx@XxxxxxxXxxx.xxx And a copy email to: XxxxxXxxxxxxxxxxxx@XxxxxxxXxxx.xxx |
20. Miscellaneous.
(a) This Agreement shall be governed by the laws of the State of California, without regard to
the conflict of law principles thereof, 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. The
term “affiliate” or “affiliated person” as used in this Agreement shall mean “affiliated person” as
defined in Section 2(a)(3) of the 0000 Xxx.
(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.
16
(c) To the extent permitted under Section 15 of this Agreement and under the 1940 Act, this
Agreement may only be assigned by any party with prior written consent of the other parties.
(d) If any provision of this Agreement shall be held or made invalid by a court decision,
statute, rule, or otherwise, the remainder of this Agreement shall not be affected thereby, and to
this extent, the provisions of this Agreement shall be deemed to be severable. To the extent that
any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise with regard to any party hereunder, such provisions with respect to other parties hereto
shall not be affected thereby.
(e) This Agreement may be executed in several counterparts, each of which shall be deemed to
be an original, and all such counterparts shall together constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed as of the
day and year first written above.
| PACIFIC LIFE FUND ADVISORS, LLC | ||||||||||||||
| By: | /s/ Xxxxxx X. Xxxxxxxx | By: | /s/ Xxxxxxx X. XxxXxxxx | |||||||||||
| Name: | Xxxxxx X. Xxxxxxxx | Name: | Xxxxxxx X. XxxXxxxx | |||||||||||
| Title: | VP, Fund Advisor Operations | Title: | AVP & Assistant Secretary | |||||||||||
| X. XXXX PRICE ASSOCIATES, INC. | ||||||||||||||
| By: | /s/ Xxxx Xxxxxxx-Xxxx | |||||||||||||
| Name: | Xxxx Xxxxxxx-Xxxx | |||||||||||||
| Title: | Vice President | |||||||||||||
| PACIFIC LIFE FUNDS | ||||||||||||||
| By: | /s/ Xxxxxx X. Xxxxxxxx | By: | /s/ Xxxxxxx X. XxxXxxxx | |||||||||||
| Name: | Xxxxxx X. Xxxxxxxx | Name: | Xxxxxxx X. XxxXxxxx | |||||||||||
| Title: | Vice President | Title: | VP & Assistant Secretary | |||||||||||
17
Exhibit A
PACIFIC LIFE FUND
FEE SCHEDULE
FEE SCHEDULE
Effective: July 1, 2011
| Portfolio: | PL Short Duration Bond Portfolio |
The Investment Adviser will pay to the Subadviser a monthly fee for its services for the above
noted Portfolio based on:
| (a) | The annual percentage of the combined average daily net assets of the PL Short Duration Bond Portfolio and the Short Duration Bond Fund of Pacific Select Funds (“Combined Assets”) according to the following schedule: |
| Rate% | Break Points (assets) | |
| 0.30% | On first $50 million of the Combined Assets |
|
| 0.25% | On next $50 million of the Combined Assets |
Once Combined Assets exceed $100 million, the above schedule terminates and the following fee
schedule applies:
| Rate% | Break Points (assets) | |
| 0.20% | On first $100 million of the Combined Assets |
|
| 0.175% | On next $150 million of the Combined Assets |
|
| 0.125% | On next $250 million of the Combined Assets |
|
| 0.10% | Above $500 million of the Combined Assets |
Once Combined Assets are at or above $1.5 billion, the above schedule terminates and the
following fee schedule applies:
| Rate% | ||||||||
| 0.10% flat of the Combined Assets | ||||||||
Multiplied by
| (b) | The ratio of the PL Short Duration Bond Portfolio’s average daily net assets over the Combined Assets. |
Both Portfolios:
Fees for services shall be prorated for any portion of a year in which the Agreement is not
effective.
In recognition of the fact that the Subadviser may have an inherent constraint with respect to
the amount of money that Subadviser is able to manage in a particular strategy, Subadviser agrees
to consult with Investment Adviser on an annual basis to determine the extent of those constraints
and the appropriate investment limitations for the Short Duration Bond Portfolio.
