PORTFOLIO MANAGEMENT AGREEMENT
Exhibit (d)(56)
AGREEMENT made effective this 1st day of May 2006 among Pacific Life Insurance Company,
a Nebraska corporation (“Investment Adviser”), and X. X. Xxxxxx Investment Management Inc.
(“Portfolio Manager”), a Delaware corporation, and Pacific Select Fund, a Massachusetts Business
Trust (the “Fund”).
WHEREAS, the Fund 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 Portfolio Manager is registered with the SEC as an investment adviser under the
Advisers Act;
WHEREAS, the Fund has retained the Investment Adviser to render investment advisory services
to the various portfolios of the Fund pursuant to an Advisory Agreement, as amended, and such
Agreement authorizes the Investment Adviser to engage a portfolio manager to discharge
the Investment Adviser’s responsibilities with respect to the investment management of such
portfolios, a copy of which has been provided to the Portfolio Manager and is incorporated herein
by reference;
WHEREAS, the Fund and the Investment Adviser desire to retain the Portfolio Manager to
furnish investment advisory services to one or more portfolios of the Fund, and the Portfolio
Manager 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 Fund, the Investment Adviser, and the Portfolio Manager as follows:
1. Appointment.
The Fund and the Investment Adviser hereby appoint X.X. Xxxxxx Investment
Management Inc. to act as Portfolio Manager to provide investment advisory services to the
portfolios of the Fund listed on Exhibit A attached hereto (hereinafter the “Portfolios”) 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.
In the event the Investment Adviser wishes to retain the Portfolio Manager to
render investment advisory services to one or more portfolios of the Fund other than the
Portfolios, the Investment Adviser shall notify the Portfolio Manager in writing and shall revise
Exhibit A to reflect such additional portfolio(s). If the Portfolio Manager is willing to render
such services, it shall notify the Fund and the Investment Adviser in writing, whereupon such
portfolio shall become a Portfolio hereunder, and be subject to this
Agreement.
2. Portfolio Manager Duties.
Subject to the supervision of the Fund’s Board of Trustees (the “Board”) and the
Investment Adviser, the Portfolio Manager will provide a continuous
investment program for the
Portfolios and determine the composition of the assets of the Portfolios. The Portfolio Manager
will provide investment research and analysis, which may include computerized investment
methodology, and will conduct a continuous program of evaluation, investment, sales, and
reinvestment of the Portfolios’ assets by determining the
securities, cash and other investments, including futures and options contracts, if any, that shall be purchased, entered
into, retained, sold, closed, or exchanged for the Portfolios, when these transactions
should be executed, and what portion of the assets of the Portfolios should be held in the various
securities and other investments in which it may invest, and the Portfolio Manager is hereby
authorized to execute and perform such services on behalf of the Portfolios. To the extent
permitted by the written investment policies of the Portfolios, the Portfolio Manager shall make
decisions for the Portfolios 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 Portfolios. The Portfolio Manager is authorized to and shall
exercise tender offers, exchange offers and vote proxies on behalf of each Portfolio, each as the
Portfolio Manager determines is in the best interest of the Portfolio.
In performing these duties, the Portfolio Manager:
(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 to the Fund, to the Investment Adviser (as provided to the Portfolio
Manager by the Investment Adviser), or to the Portfolio Manager), (2) all other applicable federal
laws and regulations pertaining to investment vehicles underlying variable annuity and/or variable
life insurance contracts, (3) the applicable state insurance laws and regulations pertaining to
investment vehicles underlying variable annuity and/or variable life insurance contracts
identified and described in the Fund’s registration statement related to the Portfolio or
otherwise provided to the Portfolio Manager by the Investment Adviser (4) any applicable written
procedures, policies and guidelines adopted by the Board and furnished to the Portfolio Manager,
(5) the Fund’s objectives, investment policies and investment restrictions as stated in the Fund’s
Prospectus and Statement of Additional Information as supplemented or amended from time to time,
as furnished to the Portfolio Manager, (6) the provisions of the Fund’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 Statement”), (7) Section 851(b)(2)
and (3) of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), (8) the
provisions of Section 817(h) of the Code, applicable to the Portfolio; and (9) any other
applicable laws and regulations, including without limitation, proxy voting regulations.
(b) will (i) use its best efforts to identify each position in the Portfolios that
constitutes stock in a Passive Foreign Investment Company (“PFIC’’), as that term is defined in
Section 1296 of the Code, and (ii) make such determinations and inform the Investment Adviser at
least annually (or more often and by such date(s) as the Investment Adviser shall request) of
any stock in a PFIC.
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(c) is
responsible, in connection with its responsibilities under this Section 2, for
decisions to buy and sell securities and other investments for the Portfolios, for broker-dealer
and futures commission merchant (“FCM”) selection, and for negotiation of commission rates The
Portfolio Manager’s primary consideration in effecting a security or other transaction will be to
obtain the best execution for the Portfolios, taking into account such factors as price (including
the applicable commission or dollar spread), size of the order, the nature of the market for the
security, the timing of the transaction, the reputation, experience and financial stability of the
broker — dealer involved, the quality of the service, the difficulty of execution and the
operational facilities of the firms involved, and the firm’s risk in positioning a block of
securities and other such factors that are consistent with the objective of obtaining best
execution as may be listed in the Prospectus and Statement of Additional Information for the Fund
as they may be amended or supplemented from time to time and furnished to the Portfolio Manager.
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 Portfolio Manager 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 Portfolios 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 Portfolio Manager
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 Portfolio Manager’s (or its affiliates’) overall
responsibilities with respect to the Portfolios 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 lla2-2(T) thereunder, and subject to any other applicable
laws and regulations including Section 17(e) of the 1940 Act, the Portfolio Manager is further
authorized to place orders on behalf of the Portfolios through the Portfolio Manager if the
Portfolio Manager is registered as a broker or dealer with the SEC or as a FCM with the Commodities
Futures Trading 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 Portfolios or the Portfolio Manager. Such allocation shall be in such amounts and
proportions as the Portfolio Manager shall determine consistent with the above standards, and, upon
request, the Portfolio Manager will report on said allocation to the Investment Adviser and Board,
indicating the brokers, dealers or FCMs to which such allocations
have been made the basis therefor. The Portfolio Manager is authorized to open brokerage accounts on behalf of the Portfolios in
accordance with Fund procedures. The Portfolio Manager 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 Portfolio Manager. 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 Portfolio Manager in a manner that is fair and
equitable and consistent with the Portfolio Manager’s fiduciary obligations to the Portfolios and
to such other clients. The Investment Adviser and the Fund recognize that, in some cases, this
procedure may limit the size of the position that may be acquired or
sold for the Portfolios.
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(e) will, in connection with the purchase and sale of securities for the Portfolios,
together with the Investment Adviser, arrange for the transmission to the custodian and
recordkeeping agent for the Fund, 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 Portfolios, as may be
reasonably necessary to enable the custodian and recordkeeping agent to perform its administrative
and recordkeeping responsibilities with respect to the Portfolios, 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 Fund’s custodian and
recordkeeping agent, and, if required, the Investment Adviser. The Portfolio Manager agrees to
comply with such rules, procedures and time frames as the Fund’s custodian may 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 Fund’s
custodian.
(f) will provide assistance to the Investment Adviser, custodian or
recordkeeping agent for the Fund in determining or confirming, consistent with the procedures and
policies stated in the Fund’s valuation procedures and/or the Registration Statement, the value of
any portfolio securities or other assets of the Portfolios for which the Investment Adviser,
custodian or recordkeeping agent seeks assistance from the Portfolio Manager or identifies for
review by the Portfolio Manager. This assistance includes (but is not limited to): (i) designating
and providing access to one or more employees of the Portfolio Manager who are knowledgeable about
the security/issuer, its financial condition, trading and/or other relevant 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 the Portfolio Manager has reason to believe that
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
under the Fund’s procedures (iii) notifying the Investment Adviser in the event the Portfolio
Manager determines, with respect to a security held by the Portfolio, of the fair value of such
security pursuant to the Portfolio Manager’s procedures for determining the fair value of a
security; (iv) assisting the Investment Adviser or custodian to obtain bids and offers or quotes
from broker/dealers or market-makers with respect to securities held by the Portfolios, upon the
request of the Investment Adviser or custodian; (v) upon the request of the Investment Adviser or
custodian, confirming pricing and providing fair valuations or recommendations for fair valuations
in accordance with the Fund’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 assistance provided hereunder, and providing such information to the Investment Adviser
or the Fund upon request. Such records shall be deemed Fund records.
(g) will maintain and preserve such records related to each Portfolio’s transactions as
required under the 1940 Act and the Advisers Act. The Portfolio Manager will make available to
the Fund and the Investment Adviser promptly upon request, any of the Portfolios’ investment
records and ledgers maintained by the Portfolio Manager (which shall not include the records and
ledgers maintained by the custodian and recordkeeping agent for the Fund), as are necessary to
assist the Fund 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 Fund are being conducted in a
manner consistent with applicable laws and regulations.
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(h) will regularly report to the Board on the investment program for the Portfolios and the
issuers and securities represented in the Portfolios, and will furnish the Board, with respect to
the Portfolios, 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 each Portfolio, a monthly compliance checklist, monthly tax compliance worksheet, reports
regarding compliance with the Fund’s procedures pursuant to Rules 17e-l, 17a-7, 10f-3 and 12d3-l
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, lOs/POs, and compliance with the Portfolio Manager’s Code
of Ethics, and such other procedures or requirements 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 Fund with a copy of the Code of Ethics, together with evidence of its adoption. Within 20 days
of the end of each calendar quarter during which this Agreement remains in effect, the president
or a vice-president of the Portfolio Manager shall certify to the Investment Adviser that the
Portfolio Manager has complied with the requirements of Rule 17j-1 during the previous
calendar quarter and that there have been no violations of the Code of Ethics or, if a
violation has occurred, that appropriate action has been taken in response to such violation.
Upon written request of the Investment Adviser or the Fund, with respect to violations of the Code
of Ethics potentially affecting the Portfolios, the Portfolio Manager shall permit representatives
of the Investment Adviser and the Trust to examine summaries of the reports required to be made
under the Code of Ethics relating to enforcement of the Code of Ethics and reports describing how
any violations of the Code of Ethics were resolved.
(j) will provide to the Investment Adviser a copy of the Portfolio Manager’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). The Portfolio Manager represents
and warrants that it is a duly registered investment adviser under the Advisers Act. The
Portfolio Manager will provide a list of persons who the Portfolio Manager wishes to have
authorized to give written and/or oral instructions to Custodians of
assets for the Portfolios.
(k) will be responsible for the preparation and filing of Schedule 13G and Form 13F on
behalf of the Fund reflecting holdings over which the Portfolio Manager and its affiliates have
investment discretion.
(l) will not permit any employee of the Portfolio Manager to have any material connection
with the handling of the Portfolios if such employee has:
(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
under1 the Commodity Exchange Act.
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(ii) been
peirmanently 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
(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 and other investments, including derivatives, or
obtaining investment licenses in various countries 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. The Fund and the Investment Adviser will not
disclose or use any records or information with respect to the Portfolio Manager 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, 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.
(n) will assist the Investment Adviser, the Fund, 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 Portfolio Manager hereunder. Specifically, and without limitation to the
foregoing, the Portfolio Manager agrees to provide certifications to the principal executive and
financial officers of the Fund (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 Fund’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 Fund shall
reasonably request, or in accordance with procedures adopted by the
Fund.
(o) is, along with its affiliated persons, permitted to enter into transactions with the
other portfolios of the Fund and affiliated persons of those other portfolios of the Fund
(collectively, the “Other Portfolios”). In doing so, the Portfolio Manager is prohibited from
consulting with the Investment Adviser or the portfolio managers of these Other Portfolios
concerning securities transactions of the Portfolios except for the purpose of complying with the
conditions of Rule 12d3-l(a) and (b) under the 1940 Act.
(p) will exercise voting rights on portfolio securities held by a Portfolio in accordance
with written policies and procedures adopted by the Portfolio Manager, 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 Portfolio Manager
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shall vote
proxies on behalf of each Portfolio in a manner deemed by the Portfolio Manager to be
in the best interests of each Portfolio pursuant to the Portfolio Manager’s written Proxy Voting
Policies and Procedures. The Portfolio Manager shall provide disclosure regarding the Proxy Voting
Policies and Procedures in accordance with the requirements of Form N-1A for inclusion in the
Fund’s registration statement. The Portfolio Manager 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 Portfolio Manager 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
statues and regulations.
(q) will assist the Fund and the Fund’s Chief Compliance Officer (“CCO”) in complying with
Rule 38a-l under the 1940 Act. Specifically, the Portfolio Manager represents and warrants that it
shall maintain a compliance program in 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
Portfolio Manager’s compliance program, which access shall include on-site visits with the
Portfolio Manager 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-l, the
Portfolio Manager agrees to provide certifications as may be reasonably requested by the CCO
related to the design and implementation of the Portfolio Manager’s compliance program.
(r) will comply with the Fund’s policy on selective disclosure of portfolio holdings of the
Fund (the “Selective Disclosure Policy”), as provided in writing to the Portfolio Manager and as
may be amended from time to time. The Portfolio Manager agrees to provide a quarterly
certification with respect to compliance with the Fund’s Selective Disclosure Policy as may be
reasonably requested by the Fund. The Investment Adviser and the Fund acknowledge that the
Portfolio Manager manages other accounts, including other mutual funds, following the same
investment strategy as the Portfolio and that these accounts may have different portfolio holdings
disclosure policies.
(s) will notify the Investment Adviser promptly in the event that, in the judgment of the
Portfolio Manager, Portfolio share transaction activity becomes disruptive to the ability of the
Portfolio Manager 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 Portfolios with any current or future legal and regulatory
requirements related to the services provided by the Portfolio Manager hereunder.
(u) will provide such certifications to the Fund as the Fund or the Investment Adviser may
reasonably request related to the services provided by the Portfolio
Manager hereunder.
(v) will process class action paperwork for any security held within the portfolio
managed by Portfolio Manager xxxxxxx its management at the direction of the Investment Adviser, as
the Investment Adviser may direct from time to time.
(w) will provide reasonable assistance to the Investment Adviser with respect to the
annual audit of the Fund’s financial statements, including, but not limited to: (i) providing
broker contacts as needed for obtaining trade confirmations (specifically with respect to term
loans and all derivatives, including swaps); (ii) providing copies of term loans and swap
7
agreements, within a reasonable time after the execution of such agreements; (iii) providing
assistance in obtaining trade confirmations in the event the Fund or the Fund’s independent
registered public accounting firm is unable to obtain such confirmations directly from the brokers
and (iv) obtaining market quotations for investments (including term loans and derivatives) that
are not readily asceitainable in the event the Fund or the Fund’s independent registered public
accounting firm is unable to obtain such market quotations through independent means.
3. Confidential
Treatment. It is understood that any information or recommendation supplied
by, or produced by, the Portfolio Manager in connection with the performance of its obligations
hereunder is to be regarded by the Fund and the Investment Adviser as confidential and for use
only by the Investment Adviser and the Fund. 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 Investment Adviser and the Portfolio Manager, the Investment Adviser and Fund will not
disclose, in any manner whatsoever except as expressly authorized in this Agreement, any list of
securities held by the Portfolios for a period of at least 30 days after month end, except that
the Portfolios’ top 10 holdings may be disclosed 16 days after month end. In addition, the
Investment Adviser or the Fund may disclose, earlier than 30 days after month end, a list of the
securities held by the Portfolios to certain third parties who have entered into a confidentiality
agreement with the Fund.
4. Disclosure about Portfolio Manager and Portfolio. The Portfolio Manager 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 Portfolio Manager or the
Portfolios, filed with the SEC (or which will be filed with the SEC in the future) and represents
and warrants that, with respect to the disclosure respecting or relating to the Portfolio Manager,
including any performance information the Portfolio Manager 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, or will contain as of the date of effectiveness of any future
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 Portfolio Manager further agrees to notify
the Investment Adviser and the Fund immediately of any material fact known to the Portfolio Manager
respecting or relating to the Portfolio Manager that is not contained in the Registration Statement
or prospectus for the Fund, or any amendment or supplement thereto, or of any statement respecting
or relating to the Portfolio Manager contained therein that becomes untrue in any material respect.
With respect to the disclosure respecting each Portfolio, the Portfolio Manager represents and
agrees that the description in the Fund’s prospectus contained in the following sections: “The
portfolio’s investment goal,” and “What the portfolio invests in” (collectively, “Portfolio
Description”) is consistent with the manner in which the Portfolio Manager intends to manage each
Portfolio, and the description of “Risks you should be aware
of” (“Risk Description”) is consistent
with risks known to the Portfolio Manager that arise in connection with the manner in which the
Portfolio Manager intends to manage the Portfolio. The Portfolio Manager further agrees to notify
the Investment Adviser and the Fund immediately in the event that the Portfolio Manager becomes
aware that the Portfolio Description for a Portfolio is inconsistent in any material respect with
the manner in which the Portfolio Manager is managing the Portfolio, and in the event that the Risk
Description is inconsistent in any material respect with the risks known to the Portfolio Manager
that arise in connection with the manner in which the Portfolio
Manager is managing the Portfolio. In
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addition, the Portfolio Manager agrees to comply with the Investment Adviser’s reasonable
request for information regarding the personnel of the Portfolio Manager who are responsible for
the day-to-day management of the Fund’s assets.
5. Expenses. The Portfolio Manager shall bear all expenses incurred by it and its staff
with respect to all activities in connection with the performance of the Portfolio Manager’s
services under this Agreement, including but not limited to salaries, overhead, travel, preparation
of Board materials, review of marketing materials, and marketing support. Upon request by the
Investment Adviser, Portfolio Manager agrees to reimburse the Investment Adviser for costs
associated with certain supplements (“Supplements”). Such Supplements are those generated due to
changes by Portfolio Manager requiring immediate disclosure in the Fund’s prospectus and for which,
at the time of notification by Portfolio Manager to Investment Adviser of such changes, the Fund is
not already generating a supplement for other purposes or for which the Investment Adviser may not
be able to reasonably add such changes to a pending supplement. Such changes by Portfolio Manager
include, but are not limited to, changes to its structure, to investment personnel, to investment
style or management . Investment Adviser may request reimbursement from Portfolio Manager for
some or all of the costs associated with generating such Supplements. Reimbursable costs may
include, but are not limited to, costs of preparation, filing, printing, and/or distribution of
such Supplements to all existing variable product contract and policy holders that are eligible to
use the Fund as their underlying investment vehicle. Each Portfolio will bear certain other
expenses to be incurred in its operation, including, but not limited to, investment advisory fees,
sub-advisory fees (other than sub-advisory fees paid pursuant to this Agreement) and administration
fees; fees for necessary professional and brokerage services; costs of regulatory compliance;
and pro rata costs associated with maintaining the Fund’s legal existence and shareholder
relations. All other expenses not specifically assumed by the Portfolio Manager hereunder or by
the Investment Adviser under the Advisory Agreement are borne by the applicable Portfolio of the
Fund. The Fund, the Portfolio Manager and the Investment Adviser shall not be considered as
partners or participants in a joint venture.
6. Compensation. For the services provided and the expenses borne by the Portfolio Manager
pursuant to this Agreement, the Investment Adviser will pay to the Portfolio Manager 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.
7. Seed Money. The Investment Adviser agrees that the Portfolio Manager shall not be
responsible for providing money for the initial capitalization of any
Portfolio.
8. Compliance.
(a) The Portfolio Manager agrees that it shall immediately notify the Investment Adviser and
the Fund (i) in the event that the SEC, CFTC, or any banking or other regulatory body has
censured the Portfolio Manager; placed limitations upon its activities, functions or operations;
suspended or revoked its registration, if any, or ability to serve as an investment adviser; or
has commenced proceedings or an investigation that can reasonably be expected to result in any of
these actions; (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;
and (iii) upon having a reasonable basis for believing that the Portfolio has ceased to comply
with the diversification provisions of Section 817(h) of the Code
9
or the
Regulations thereunder. The Portfolio Manager further agrees to notify the Investment
Adviser and Fund immediately of any material fact known to the Portfolio Manager respecting or
relating to the Portfolio Manager that is not contained in the Registration Statement or
prospectus for the Fund, or any amendment or supplement thereto, or of any statement contained
therein that becomes untrue in any material respect.
(b) The Investment Adviser agrees that it shall immediately notify the Portfolio Manager (i)
in the event that the SEC has censured the Investment Adviser or the Fund; 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; (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; or (iii) upon having a reasonable basis for believing that the
Portfolio has ceased to comply with the diversification provisions of Section 817(h) of the Code
or the Regulations thereunder.
9. Independent
Contractor. The Portfolio Manager 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 Portfolio Manager understands that
unless provided herein or authorized from time to time by the Fund, the Portfolio Manager shall
have no authority to act for or represent the Fund in any way or otherwise be deemed the Fund’s
Agent.
10. Books and Records. In compliance with the requirements of and to the extent required by
Section 3la of the 1940 Act and the rules thereunder, the Portfolio Manager hereby agrees that all
records which it maintains for the Portfolios are the property of the Fund and further agrees to
surrender promptly to the Fund any of such records upon the Fund’s or the Investment Adviser’s
request, although the Portfolio Manager 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 Fund.
12. Responsibility and Control. Notwithstanding any other provision of this Agreement, it
is understood and agreed that the Fund shall at all times retain the ultimate responsibility for
and control of all functions performed pursuant to this Agreement and reserves the right to direct,
approve or disapprove any action hereunder taken on its behalf by the Portfolio Manager, provided,
however, that the Portfolio Manager shall not be liable for any losses to the Fund resulting from
the Fund’s direction to the Portfolio Manager to take an action, or from the Fund’s disapproval of
any action proposed to be taken by the Portfolio Manager.
13.
Services Not Exclusive. It is understood that the services of the Portfolio Manager and its employees are not exclusive, and nothing in this Agreement shall prevent the
Portfolio Manager (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 Portfolios) or from engaging in other activities.
14. Liability.
10
(a) Except as may otherwise be required by the 1940 Act or the rules thereunder or other
applicable law, the Fund and the Investment Adviser agree that the Portfolio Manager, any
affiliated person of the Portfolio Manager, and each person, if any, who, within the meaning of
Section 15 of the 1933 Act, controls the Portfolio Manager, 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 (notwithstanding that the Portfolio Manager was acting in good faith)
in the performance of the Portfolio Manager’s duties, or by reason of reckless disregard of the
Portfolio Manager’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
Fund may have under federal or state securities laws.
(b) The Portfolio Manager does not guarantee the future performance of the Portfolios or any
specific level of performance, the success of any investment decision or strategy that Portfolio
Manager may use, or the success of the Portfolio Manager’s
overall management of the Portfolios. The Investment Adviser and the Fund understand that investment decisions made for the Portfolios
by the Portfolio Manager are subject to various market, currency, economic, political and business
risks, and that those investment decisions will not always be
profitable.
15. Indemnification.
(a) The Portfolio Manager 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 the Investment Adviser or such affiliated person or
controlling 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 Portfolio Manager’s
responsibilities to the Fund which may be based upon any willful misfeasance, bad faith, gross
negligence, or reckless disregard of, the Portfolio Manager’s obligations and/or duties under this
Agreement by the Portfolio Manager or by any of its directors, officers or employees, or any
affiliate acting on behalf of the Portfolio Manager (other than a PL Indemnified Person),
provided, however, that in no case is the Portfolio Manager’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 Portfolio Manager, any
affiliated person within the meaning of Section 2(a)(3) of the 1940 Act of the Portfolio Manager
and each person, if any, who, within the meaning of Section 15 of the 1933 Act controls
(“controlling person”) the Portfolio Manager (collectively, “Portfolio Manager Indemnified
Persons”) against any and all losses, claims, damages, liabilities or litigation (including
reasonable legal and other expenses) to which a Portfolio Manager 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 Adviser’s responsibilities as Investment Adviser of the Fund
which may be based upon any willful misfeasance, bad faith or gross negligence by the Investment
Adviser, any of its directors, officers, or employees or any affiliate
11
acting on behalf of the Investment Adviser (other than a Portfolio Manager Indemnified. Person),
provided however, that in no case is the Investment Adviser’s indemnity in favor of the Portfolio
Manager 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 each 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 each 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 Fund, the
Investment Adviser, or the Portfolio Manager, 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 Fund at any time with respect to the services provided by the Portfolio Manager,
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 Fund or, with respect to a particular Portfolio, by vote of
a majority of the outstanding voting shares of such Portfolio, upon (60) sixty days prior written
notice to the Portfolio Manager and the Investment Adviser;
(b) by the Portfolio Manager at any time, without the payment of any penalty, upon (60) sixty
days prior written notice to the Investment Adviser and the Fund.
(c) by the Investment Adviser at any time, without the payment of any penalty, upon (60) sixty
days prior written notice to the Portfolio Manager and the Fund.
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, the Sections or Paragraphs numbered 2(g) for a period of
six years, and 2(m), 2(n), 2(p), 2(q), 2(t), 9, 10, 13, 14, 16, 17, 18 and 19 of this Agreement
as well as any applicable provision of this Paragraph numbered 15
shall remain in effect.
17. Use of Name.
(a) It is understood that the name “Pacific Life Insurance Company” and “Pacific Life” and
“Pacific Select Fund” and any derivative thereof or logo associated with those names are the
valuable property of the Investment Adviser and its affiliates, and that the Portfolio Manager
shall not use such names (or 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 Fund
and/or the Portfolios. Upon termination of this Agreement, the Portfolio Manager shall forthwith
cease to use such name (or derivative or logo).
(b) It
is understood that the name X.X. Xxxxxx Investment Management Inc., XX Xxxxxx Chase &
Co., XX Xxxxxx Asset Management or any logo associated with those names is the valuable property of
the Portfolio Manager and that the Fund and the Investment Adviser
12
have the light to use such name (or derivative or logo), in the Fund’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 Portfolio Manager is a Portfolio
Manager to the Fund and/or one of the Portfolios, provided, however, that the Fund may continue to
use the name of the Portfolio Manager in its Registrations Statement and other documents to the
extent deemed necessary by the Fund to comply with disclosure obligations under applicable law and
regulation. Neither the Fund nor the Investment Adviser shall use the Portfolio Manager’s name or
logo in promotional or sales related materials prepared by or on behalf of the Investment Adviser
or the Fund, without prior review and approval by the Portfolio Manager, which may not be
unreasonably withheld. Upon termination of this Agreement, the Fund 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 Fund is on file with the Secretary of the
State of Massachusetts. The Declaration of Trust has been executed on behalf of the Fund by a
Trustee of the Fund in his capacity as Trustee of the Fund and not individually. The obligations
of this Agreement with respect to each 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 Fund
individually, or upon the Fund generally or upon any other portfolio of the Fund.
19. Notices.
All notices and other communications hereunder shall be in writing sent by facsimile
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 Poitfolio Manager, to:
X.X. Xxxxxx Investment Management Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Facsimile transmission number: (000) 000-0000
Attention: Mutual Funds Legal
000 Xxxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Facsimile transmission number: (000) 000-0000
Attention: Mutual Funds Legal
B if to the Investment Adviser, to:
Pacific
Life Insurance Company
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Facsimile transmission number: (000) 000-0000
Attention: Xxxxx X. Xxxxx
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Facsimile transmission number: (000) 000-0000
Attention: Xxxxx X. Xxxxx
C. if to the Fund, to:
00
Xxxxxxx Xxxxx, XX 00000
Facsimile transmission number: (000) 000-0000
Attention: Xxxxx X. Xxxxx
Facsimile transmission number: (000) 000-0000
Attention: Xxxxx X. Xxxxx
20. Force Majeure.
The Portfolio Manager shall not be liable for damages resulting from delayed or
defective performance when such delays arise out of causes beyond the control and without the
fault or negligence of the Portfolio Manager and could not have been reasonably prevented by the
Portfolio Manager through back-up systems and other business continuation and disaster recovery
procedures commonly employed by other SEC-registered investment advisers that meet reasonable
commercial standards in the investment company industry. Such causes may include, but are not
restricted to, Acts of God or of the public enemy, terrorism, acts of the State in its sovereign
capacity, fires, floods, earthquakes, power failure, disabling strikes, epidemics, quarantine
restrictions, and freight embargoes.
21. Miscellaneous.
(a) This Agreement shall be governed by the laws 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.
(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.
14
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed as of the day and
year first written above.
PACIFIC LIFE INSURANCE COMPANY
By:
|
/s/ Xxxxx X. Xxxxxx
|
By: | /s/ Xxxxxx X. Milfs
|
|||||||
Name:
|
Xxxxx X. Xxxxxx | Name: | Xxxxxx X. Milfs | |||||||
Title:
|
Chief Operating Officer | Title: | Director |
X.X.
XXXXXX INVESTMENT MANAGEMENT INC.
By:
|
/s/ Xxxxx (ILLEGIBLE )
|
By: | /s/ Xxxxx Xxxxxxx
|
|||||||
Name:
|
Xxxxx (ILLEGIBLE) | Name: | Xxxxx Xxxxxxx | |||||||
Title:
|
Vice President | Title: | Vice President |
By:
|
/s/ Xxxxx X. Xxxxxx
|
By: | /s/ Xxxxxx X. Milfs
|
|||||||
Name:
|
Xxxxx X. Xxxxxx | Name: | Xxxxxx X. Milfs | |||||||
Title:
|
President | Title: | Secretary |
15
Exhibit A
PACIFIC SELECT FUND
FEE SCHEDULE
FEE SCHEDULE
Effective: May 1, 2006
Portfolio: Diversified Bond
The Investment Adviser will pay to the Portfolio Manager a monthly fee based on an annual
percentage of the average daily net assets of the Diversified Bond Portfolio according to the
following schedule:
Rate(%) Break Point (assets)
225 up to $300 million
.15 from $300 million up to $2 billion
.10 on excess
The fees for services shall be prorated for any portion of a year in which the Agreement is
not effective.
16
