INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 1st day of October, 2001, by and between A I M Capital
Management, Inc., a Texas corporation ("AIM") (the "Adviser"), and Met Investors
Advisory Corp., a Delaware corporation (the "Manager").
WHEREAS, the Manager serves as investment manager of Met Investors Series
Trust (the "Trust"), a Delaware business trust which has filed a registration
statement (the "Registration Statement") under the Investment Company Act of
1940, as amended (the "1940 Act") and the Securities Act of 1933, as amended
(the "1933 Act") pursuant to a management agreement dated December 8, 2000, as
amended on February 12, 2001 and October 1, 2001 (the "Management Agreement");
and
WHEREAS, the Trust is comprised of several separate investment portfolios,
one of which is the Met/AIM Small Cap Growth Portfolio (the "Portfolio"); and
WHEREAS, the Manager desires to avail itself of the services, information,
advice, assistance and facilities of an investment adviser to assist the Manager
in performing investment advisory services for the Portfolio; and
WHEREAS, the Adviser is registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), and is engaged in the business of
rendering investment advisory services to investment companies and other
institutional clients and desires to provide such services to the Manager;
NOW, THEREFORE, in consideration of the terms and conditions hereinafter
set forth, it is agreed as follows:
1. Employment of the Adviser. The Manager hereby employs the Adviser to
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manage the investment and reinvestment of the assets of the Portfolio, subject
to the control and direction of the Trust's Board of Trustees, for the period
and on the terms hereinafter set forth. The Adviser hereby accepts such
employment and agrees during such period to render the services and to assume
the obligations herein set forth for the compensation herein provided. The
Adviser shall for all purposes herein be deemed to be an independent contractor
and shall, except as expressly provided or authorized (whether herein or
otherwise), have no authority to act for or represent the Manager, the Portfolio
or the Trust in any way. The Adviser may execute account documentation,
agreements, contracts and other documents requested by brokers, dealers,
counterparties and other persons in connection with its management of the assets
of the Portfolio, provided the Adviser receives the express agreement and
consent of the Manager and/or the Trust's Board of Trustees to execute such
futures account agreements, ISDA Master Agreements and other documents related
thereto, which consent shall not be unreasonably withheld. In such respect, and
only for this limited purpose, the Adviser shall act as the Manager's and the
Trust's agent and attorney-in-fact.
Copies of the Trust's Registration Statement, as it relates to the
Portfolio (the "Registration Statement"), and the Trust's Declaration of Trust
and Bylaws (collectively, the "Charter Documents"), each as currently in effect,
have been or will be delivered to the Adviser prior to the commencement of the
Adviser's services as contemplated in this Agreement. The Manager agrees, on an
ongoing basis, to notify the Adviser of each change in the fundamental and
non-fundamental investment policies and restrictions of the Portfolio before
they become effective and to provide to the Adviser as promptly as practicable
copies of all amendments and supplements to the Registration Statement before
filing with the Securities and Exchange Commission ("SEC") and amendments to the
Charter Documents. The Manager will promptly provide the Adviser with any
procedures applicable to the Adviser adopted from time to time by the Trust's
Board of Trustees and agrees to promptly provide the Adviser copies of all
amendments thereto. The Adviser will not be bound to follow any change in the
Trust's Registration Statement or Charter Documents, or in the investment
policies, restrictions or procedures of the Portfolio or Trust, however, until
it has received written notice of any such change from the Manager.
The Manager shall timely furnish the Adviser with such additional
information as may be reasonably necessary for or requested by the Adviser to
perform its responsibilities pursuant to this Agreement. The Manager shall
cooperate with the Adviser in setting up and maintaining brokerage accounts and
other accounts the Adviser deems advisable to allow for the purchase or sale of
various forms of securities pursuant to this Agreement.
2. Obligations of and Services to be Provided by the Adviser. The Adviser
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undertakes to provide the following services and to assume the following
obligations:
a. The Adviser shall manage the investment and reinvestment of the
portfolio assets of the Portfolio, all without prior consultation with the
Manager, subject to and in accordance with the investment objective and policies
of the Portfolio set forth in the Trust's Registration Statement and the Charter
Documents, as such Registration Statement and Charter Documents may be amended
from time to time, in compliance with the requirements applicable to registered
investment companies under applicable laws and those requirements applicable to
both regulated investment companies and segregated asset accounts under
Subchapters M and L of the Internal Revenue Code of 1986, as amended (the
"Code") and any written instructions which the Manager or the Trust's Board of
Trustees may issue from time-to-time in accordance therewith, but only to the
extent that such written instructions are provided to the Adviser with
sufficient advance notice. In pursuance of the foregoing, the Adviser shall make
all determinations with respect to the purchase and sale of portfolio securities
and shall take such action necessary to implement the same. The Adviser shall
render such reports to the Trust's Board of Trustees and the Manager as they may
reasonably request concerning the investment advisory activities of the Adviser
related to the Portfolio, provided that the Adviser shall not be responsible for
Portfolio accounting. Unless the Manager gives the Adviser written instructions
to the contrary, the Adviser shall, in good faith and in a manner which it
reasonably believes best serves the interests of the Portfolio's shareholders,
direct the Portfolio's custodian as to how to vote such proxies as may be
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necessary or advisable in connection with any matters submitted to a vote of
shareholders of securities held by the Portfolio.
b. The Adviser is responsible for decisions to buy and sell securities
for the Portfolio, broker-dealer selection, and negotiation of brokerage
commission rates. It is the Adviser's general policy in selecting a broker to
effect a particular transaction to seek to obtain "best execution," which means
prompt and efficient execution of the transaction at the best obtainable price
with payment of commissions which are reasonable in relation to the value of the
brokerage services provided by the broker.
Consistent with this policy, the Adviser, in selecting broker-dealers
and negotiating brokerage commission rates, will take all relevant factors into
consideration, including, but not limited to: the best price available; the
reliability, integrity and financial condition of the broker-dealer; the size of
and difficulty in executing the order; and the value of the expected
contribution of the broker-dealer to the investment performance of the Portfolio
on a continuing basis. Subject to such policies and procedures as the Board may
determine, the Adviser shall have discretion to effect investment transactions
for the Portfolio through broker-dealers (including, to the extent permissible
under applicable law, broker-dealers affiliated with the Adviser) who provide
brokerage and/or research services, as such services are defined in Section
28(e) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
to cause the Portfolio to pay any such broker-dealers an amount of commission
for effecting a portfolio investment transaction in excess of the amount of
commission another broker-dealer would have charged for effecting that
transaction, if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage or research
services provided by such broker-dealer, viewed in terms of either that
particular investment transaction or the Adviser's overall responsibilities with
respect to the Portfolio and other accounts as to which the Adviser exercises
investment discretion (as such term is defined in Section 3(a)(35) of the 1934
Act). Allocation of orders placed by the Adviser on behalf of the Portfolio to
such broker-dealers shall be in such amounts and proportions as the Adviser
shall determine in good faith in conformity with its responsibilities under
applicable laws, rules and regulations. The Adviser will submit reports on such
allocations to the Manager regularly as requested by the Manager, in such form
as may be mutually agreed to by the parties hereto, indicating the
broker-dealers to whom such allocations have been made and the basis therefor.
c. In connection with the placement of orders for the execution of the
portfolio transactions of the Portfolio, the Adviser shall create and maintain
all necessary records pertaining to the purchase and sale of securities by the
Adviser on behalf of the Portfolio in accordance with all applicable laws, rules
and regulations, including but not limited to records required by Section 31(a)
of the 1940 Act. The Adviser shall not be responsible for the provision of
administrative or accounting services to the Trust. All records shall be the
property of the Trust and shall be available for inspection and use by the SEC,
the Trust, the Manager or any person retained by the Trust during normal
business hours. The Adviser may retain copies of any records surrendered to the
Trust. Where applicable, such records shall be maintained by the Adviser for the
periods and in the places required by Rule 31a-2 under the 1940 Act. The Manager
shall maintain and
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preserve all books and records not related to the Portfolio's transactions as
required under the 0000 Xxx.
d. The Adviser shall bear its expenses of providing services pursuant
to this Agreement, but shall not be obligated to pay any expenses of the
Manager, the Trust, or the Portfolio, including without limitation: (a) interest
and taxes; (b) brokerage commissions and other costs in connection with the
purchase or sale of securities or other investment instruments for the
Portfolio; (c) fees of pricing services; and (d) custodian fees and expenses.
e. The Adviser and the Manager acknowledge that the Adviser is not the
compliance agent for the Portfolio or for the Manager, and does not have access
to all of the Portfolio's books and records necessary to perform certain
compliance testing. To the extent that the Adviser has agreed to perform the
services specified in this Section 2 in accordance with: (a) the Trust's
Registration Statement and Charter Documents, (b) written instructions of the
Manager and any policies adopted by the Trust's Board of Trustees applicable to
the Adviser and the Portfolio (collectively, the "Charter Requirements"), and
(c) applicable law (including Subchapters M and L of the Code, the 1940 Act and
the Advisers Act ("Applicable Law")), the Adviser shall perform such services
based upon its books and records with respect to the Portfolio (as specified in
Section 2.c. hereof), which comprise a portion of the Portfolio's books and
records, and upon information and written instructions received from the Trust,
the Manager or the Trust's administrator, and shall not be held responsible
under this Agreement so long as it performs such services in accordance with
this Agreement, the Charter Requirements and Applicable Law based upon such
books and records and such information and instructions provided by the Trust,
the Manager or the Trust's administrator. The Adviser shall have no
responsibility to monitor certain limitations or restrictions for which the
Adviser has not been provided sufficient information in accordance with Section
1 of this Agreement or otherwise. All such monitoring shall be the
responsibility of the Manager.
f. The Adviser makes no representation or warranty, express or
implied, that any level of performance or investment results will be achieved by
the Portfolio or that the Portfolio will perform comparably with any standard or
index, including other clients of the Adviser and/or its affiliates, whether
public or private.
g. The Adviser shall be responsible for the preparation and filing of
Schedule 13G and Form 13F on behalf of the Portfolio. For both of these reports,
the Adviser shall only be responsible for reporting the assets of the Portfolio
it is managing. The Adviser shall not be responsible for the preparation or
filing of any other reports required of the Portfolio by any governmental or
regulatory agency, except as expressly agreed to in writing.
h. The Manager agrees that the Adviser shall not be liable for any
failure to recommend the purchase or sale of any security on behalf of the
Portfolio on the basis of any information which might, in the Adviser's
reasonable opinion, constitute a violation of any federal or state law, rules or
regualtions.
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3. Compensation of the Adviser. In consideration of services rendered
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pursuant to this Agreement, the Manager will pay the Adviser a fee at the annual
rate of the value of the Portfolio's average daily net assets set forth in
Schedule A hereto. Such fee shall be accrued daily and paid monthly as soon as
practicable after the end of each month. If the Adviser shall serve for less
than the whole of any month, the foregoing compensation shall be prorated. For
the purpose of determining fees payable to the Adviser, the value of the
Portfolio's net assets shall be computed at the times and in the manner
specified in the Trust's Registration Statement.
4. Activities of the Adviser. The services of the Adviser hereunder are not
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to be deemed exclusive, and the Adviser shall be free to render similar services
to others and to engage in other activities, so long as the services rendered
hereunder are not impaired. In addition, it is understood that the persons
employed by the Adviser to assist in the performance of the Adviser's duties
under this Agreement will not devote their full time to such service and nothing
contained in this Agreement shall be deemed to limit or restrict such right. The
Manager understands that the Adviser now acts, will continue to act and may act
in the future as investment adviser to fiduciary and other managed accounts and
as investment adviser to other investment companies, and the Manager has no
objection to the Adviser so acting, provided that whenever the Portfolio and one
or more other accounts or investment companies advised by the Adviser have
available funds for investment, investments suitable and appropriate for each
will be allocated in accordance with a methodology believed to be equitable to
each entity. The Adviser agrees to allocate similarly opportunities to sell
securities. The Manager recognizes that, in some cases, this procedure may limit
the opportunities and the size of the position that may be acquired or sold for
the Portfolio.
The Adviser shall be subject to a written code of ethics adopted by it that
conforms to the requirements of Rule 17j-1(b) of the 1940 Act, and shall not be
subject to any other code of ethics, including the Manager's code of ethics,
unless specifically adopted by the Adviser.
5. Obligations of Manager. The Manager agrees to provide or complete, as
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the case may be, the following prior to the commencement of the Adviser's
services as specified under this Agreement:
(a) A list of first tier affiliates and second tier affiliates (i.e.,
affiliates of affiliates) of the Portfolio;
(b) A list of restricted securities for the Portfolio (including CUSIP,
Sedol or other appropriate security identification);
(c) Establish Futures Accounts and Give-Up Arrangements with the list of
designated brokers provided in writing to the Manager or Adviser;
(d) A copy of the current compliance procedures for the Portfolio.
The Manager also agrees to promptly update the above referenced items in
order ensure their accuracy, completeness and/or effectiveness.
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6. Use of Names. The Adviser hereby consents to the Portfolio being named
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the Met/AIM Mid Cap Equity Portfolio. The Manager shall not use the name "AIM"
and any of the other names of the Adviser or its affiliated companies and any
derivative or logo or trade or service xxxx thereof (the "AIM Names"), or
disclose information related to the business of the Adviser or any of its
affiliates in any prospectus, sales literature or other material relating to the
Trust in any manner not approved prior thereto by the Adviser; provided,
however, that the Adviser shall approve all uses of its name and that of its
affiliates which merely refer in accurate terms to its appointment hereunder or
which are required by the SEC or a state securities commission; and provided,
further, that in no event shall such approval be unreasonably withheld. The
Adviser shall not use the name of the Trust, the Manager or any of their
affiliates in any material relating to the Adviser in any manner not approved
prior thereto by the Manager; provided, however, that the Manager shall approve
all uses of its or the Trust's name which merely refer in accurate terms to the
appointment of the Adviser hereunder or which are required by the SEC or a state
securities commission; and, provided, further, that in no event shall such
approval be unreasonably withheld.
The Manager recognizes that from time to time directors, officers and
employees of the Adviser may serve as directors, trustees, partners, officers
and employees of other corporations, business trusts, partnerships or other
entities (including other investment companies) and that such other entities may
include the name "AIM" or any derivative or abbreviation thereof as part of
their name, and that the Adviser or its affiliates may enter into investment
advisory, administration or other agreements with such other entities.
Upon termination of this Agreement for any reason, the Manager shall
promptly cease and cause the Portfolio to cease all use of the AIM Names.
7. Liability and Indemnification.
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a. Except as may otherwise be provided by the 1940 Act or any other
federal securities law, the Adviser, its officers, directors and employers shall
not be liable for any losses, claims, damages, liabilities or litigation
(including legal and other expenses) incurred or suffered by the Manager, any
shareholder of the Portfolio or the Trust as a result of any error of judgment
or mistake of law by the Adviser with respect to the Portfolio, except that
nothing in this Agreement shall operate or purport to operate in any way to
exculpate, waive or limit the liability of the Adviser for, and the Adviser
shall indemnify and hold harmless the Trust, the Manager, all affiliated persons
thereof (within the meaning of Section 2(a)(3) of the 1940 Act ) and all
controlling persons (as described in Section 15 of the 1933 Act) (collectively,
"Manager Indemnitees") against, any and all losses, claims, damages, liabilities
or litigation (including reasonable legal and other expenses) to which any of
the Manager Indemnitees may become subject under the 1933 Act, the 1940 Act, the
Advisers Act, or under any other statute, at common law or otherwise arising out
of or based on (i) any willful misconduct, bad faith, reckless disregard or
gross negligence of the Adviser in the performance of any of its duties or
obligations hereunder or (ii) any untrue statement of a material fact contained
in the Registration Statement, proxy materials, reports, advertisements, sales
literature, or other materials pertaining to the Portfolio or the omission to
state therein a material fact known
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to the Adviser which was required to be stated therein or necessary to make the
statements therein not misleading, if such statement or omission was made in
reliance upon information furnished to the Manager or the Trust by the Adviser
Indemnitees (as defined below) for use therein.
b. Except as may otherwise be provided by the 1940 Act or any other
federal securities law, the Manager and the Trust shall not be liable for any
losses, claims, damages, liabilities or litigation (including legal and other
expenses) incurred or suffered by the Adviser as a result of any error of
judgment or mistake of law by the Manager with respect to the Portfolio, except
that nothing in this Agreement shall operate or purport to operate in any way to
exculpate, waive or limit the liability of the Manager for, and the Manager
shall indemnify and hold harmless the Adviser, all affiliated persons thereof
(within the meaning of Section 2(a)(3) of the 0000 Xxx) and all controlling
persons (as described in Section 15 of the 1933 Act) (collectively, "Adviser
Indemnitees") against, any and all losses, claims, damages, liabilities or
litigation (including reasonable legal and other expenses) to which any of the
Adviser Indemnitees may become subject under the 1933 Act, the 1940 Act, the
Advisers Act, or under any other statute, at common law or otherwise arising out
of or based on (i) any willful misconduct, bad faith, reckless disregard or
gross negligence of the Manager in the performance of any of its duties or
obligations hereunder or (ii) any untrue statement of a material fact contained
in the Registration Statement, proxy materials, reports, advertisements, sales
literature, or other materials pertaining to the Portfolio or the omission to
state therein a material fact known to the Manager which was required to be
stated therein or necessary to make the statements therein not misleading,
unless such statement or omission was made in reliance upon information
furnished to the Manager or the Trust by an Adviser Indemnitee for use therein.
8. Limitation of Trust's Liability. The Adviser acknowledges that it
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has received notice of and accepts the limitations upon the Trust's liability
set forth in its Agreement and Declaration of Trust. The Adviser agrees that any
of the Trust's obligations shall be limited to the assets of the Portfolio and
that the Adviser shall not seek satisfaction of any such obligation from the
shareholders of the Trust nor from any Trust officer, employee or agent of the
Trust.
9. Renewal, Termination and Amendment. This Agreement shall continue
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in effect, unless sooner terminated as hereinafter provided, for a period of two
years from the date hereof and shall continue in full force and effect for
successive periods of one year thereafter, but only so long as each such
continuance as to the Portfolio is specifically approved at least annually by
vote of the holders of a majority of the outstanding voting securities of the
Portfolio or by vote of a majority of the Trust's Board of Trustees; and further
provided that such continuance is also approved annually by the vote of a
majority of the Trustees who are not parties to this Agreement or interested
persons of any such party. This Agreement may be terminated as to the Portfolio
at any time, without payment of any penalty, by the Trust's Board of Trustees,
by the Manager, or by a vote of the majority of the outstanding voting
securities of the Portfolio upon 60 days' prior written notice to the Adviser,
or by the Adviser upon 60 days' prior written notice to the Manager, or upon
such shorter notice as may be mutually agreed. This
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Agreement shall terminate automatically and immediately upon termination of the
Management Agreement between the Manager and the Trust at which time the Manager
will promptly provide written notice to the Adviser. This Agreement shall
terminate automatically and immediately in the event of its assignment. The
terms "assignment" and "vote of a majority of the outstanding voting securities"
shall have the meaning set forth for such terms in the 1940 Act. This Agreement
may be amended at any time by the Adviser and the Manager, subject to approval
by the Trust's Board of Trustees and, if required by applicable SEC rules,
regulations, or orders, a vote of a majority of the Portfolio's outstanding
voting securities.
10. Confidential Relationship. Any information and advice furnished by any
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party to this Agreement to the other party or parties shall be treated as
confidential and shall not be disclosed to third parties without the consent of
the other party hereto except as required by law, rule or regulation.
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 Adviser
and Manager, the Trust and the Manager will not disclose any list of securities
purchased or sold by the Portfolio for a period of 15 days after month end, or
any list of securities held by the Portfolio for 90 days after month end in any
manner whatsoever except as expressly authorized in this Agreement, and except
that the top ten holdings of a Portfolio may be disclosed 15 days after month
end.
11. Severability. If any provision of this Agreement shall be held or made
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invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
12. Custodian. The Portfolio assets shall be maintained in the custody of
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its custodian. Any assets added to the Portfolio shall be delivered directly to
such custodian. The Adviser shall have no liability for the acts or omissions of
any custodian of the Portfolio's assets. The Adviser shall have no
responsibility for the segregation requirement of the 1940 Act or other
applicable law other than to notify the custodian of investments that require
segregation and appropriate assets for segregation.
13. Information. The Manager hereby acknowledges that it and the Trustees
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of the Trust have been provided with all information necessary in connection
with the services to be provided by the Adviser hereunder, including a copy of
Part II of the Adviser's Form ADV at least 48 hours prior to the Manager's
execution of this Agreement, and any other information that the Manager or the
Trustees deem necessary.
The Manager hereby consents to the disclosure to third parties of (i)
investment results and other data of the Manager or the Portfolio in connection
with providing composite investment results of the Adviser and (ii) investments
and transactions of the Manager or the Portfolio in connection with providing
composite information of clients of the Adviser.
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14. Representation. Each of the parties hereto represents that the
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Agreement has been duly authorized, executed and delivered by all required
action.
15. Miscellaneous. This Agreement constitutes the full and complete
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agreement of the parties hereto with respect to the subject matter hereof. Each
party agrees to perform such further actions and execute such further documents
as are necessary to effectuate the purposes hereof. This Agreement shall be
construed and enforced in accordance with and governed by the laws of the State
of Delaware and the applicable provisions of the 1940 Act. The captions in this
Agreement are included for convenience only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed in several counterparts, all of which together shall
for all purposes constitute one Agreement, binding on all the parties.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first written above.
MET INVESTORS ADVISORY CORP.
BY: /s/ Xxxxxxxxx X. Forget
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Authorized Officer
A I M CAPITAL MANAGEMENT, INC.
BY: /s/ Xxxxxx Xxxxx
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Authorized Officer
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SCHEDULE A
Percentage of average daily net assets
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Met/AIM Small Cap 0.65% of first $500 million of such assets, plus 0.60% of
Growth Portfolio such assets over $500 million.
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