Exhibit (d)(2)
FUND MANAGEMENT AGREEMENT
AGREEMENT made effective this 1st day of July, 2001 among Pacific Life
Insurance Company, ("Adviser"), a California corporation, and A I M Capital
Management, Inc., ("AIM" or "Fund Manager"), a Texas corporation, and Pacific
Funds, a Delaware Business Trust.
WHEREAS, Pacific Funds 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"); and
WHEREAS, Pacific Funds is authorized to issue shares of beneficial interest
("Shares") in separate funds, with each such fund representing interests in a
separate fund; and
WHEREAS, Pacific Funds currently offers multiple Funds, one or more of
which Pacific Funds and Adviser desire to retain the Fund Manager to render
investment advisory services hereunder, and with respect to which the Fund
Manager is willing to do so; and
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940 ("Advisers Act"); and
WHEREAS, the Fund Manager is registered with the SEC as an investment
adviser under the Advisers Act; and
WHEREAS, Pacific Funds has retained the Adviser to render investment
advisory services to the funds pursuant to an Advisory Agreement, as amended,
and such Agreement authorizes the Adviser to engage a fund manager to discharge
the Adviser's responsibilities with respect to the investment management of the
Trust a copy of which has been provided to the Fund Manager and is incorporated
by reference herein; and
WHEREAS, Pacific Funds and the Adviser desire to retain the Fund Manager to
furnish investment advisory services to one or more Funds of Pacific Funds, and
the Fund Manager is willing to furnish such services to such Funds and the
Adviser in the manner and on the terms hereinafter set forth; and
NOW THEREFORE, in consideration of the premises and the promises and mutual
covenants herein contained, it is agreed among Pacific Funds, the Adviser, and
the Fund Manager as follows:
1. Appointment. Pacific Funds and the Adviser hereby appoint AIM to act
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as fund manager to provide investment advisory services to the series of funds
listed on the Fee Schedule attached hereto (hereinafter the "Funds") for the
periods and on the terms set forth in this Agreement. The Fund Manager accepts
such appointment and agrees to furnish the services herein set forth for the
compensation herein provided.
In the event the Adviser wishes to retain the Fund Manager to render
investment advisory services to one or more funds other than the Funds, the
Adviser shall notify the Fund Manager in writing and shall revise the Fee
Schedule to reflect such additional fund(s). If the Fund Manager is willing to
render such services, it shall notify Pacific Funds and Adviser in writing,
whereupon such fund shall become a Fund hereunder, and be subject to this
Agreement.
2. Fund Manager Duties. Subject to the supervision of Pacific Funds'
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Board of Trustees and the Adviser, the Fund Manager will provide a continuous
investment program for the Funds and determine the composition of the assets of
the Funds. The Fund 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
Fund's 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 Funds, when these
transactions should be executed, and what portion of the assets of the Funds
should be held in the various securities and other investments in which it may
invest, and the Fund Manager is hereby authorized to execute and perform such
services on behalf of the Funds. To the extent permitted by the written
investment policies of the Funds, the Fund Manager shall make decisions for the
Funds 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
Funds. The Fund Manager is authorized to exercise tender offers, exchange
offers and to vote proxies on behalf of the Funds, each as the Fund Manager
determines is in the best interest of the Funds. In performing these duties,
the Fund Manager:
(a) Will manage each of the Funds so that it will meet the requirements of
Section 851(b)(2) and (3) Subchapter M of the Internal Revenue Code.
(b) Shall conform (1) with 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
Pacific Funds, the Adviser or the Fund Manager), (2) with all other applicable
federal and state laws and regulations pertaining to registered open-end
investment management companies, (3) with any applicable written procedures,
policies and guidelines adopted by the Pacific Funds' Board of Trustees and
furnished to Fund Manager, (4) with the Fund's objectives, investment policies
and investment restrictions as stated in the Pacific Funds' Prospectus
and Statement of Additional Information as supplemented or amended from time to
time, as furnished to the Fund Manager, and (5) with the provisions of Pacific
Funds' 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. Until the Adviser delivers any supplements or amendments to the Fund
Manager, the Fund Manager shall be fully protected in relying on Pacific Funds'
Registration Statement, procedures, policies and guidelines previously furnished
to the Fund Manager by the Adviser.
(c) Will: (i) use its best efforts to identify each position in the Funds
that constitutes stock in a Passive Foreign Investment Company ("PFIC"), as that
term is defined in Section 1296 of the Internal Revenue Code, and (ii) use its
best efforts to make such determinations and inform the Adviser at least
annually, (or more often and by such date(s) as the Adviser shall request), of
any stock in a PFIC.
(d) Is responsible, in connection with its responsibilities under this
Section 2, for decisions to buy and sell securities and other investments for
the Funds, for broker-dealer and futures commission merchant ("FCM") selection,
and for negotiation of commission rates. The Fund Manager's primary
consideration in effecting a security or other transaction will be to obtain the
best execution for the Funds, taking into account the factors specified in the
Prospectus and Statement of Additional Information for Pacific Funds, as they
may be amended or supplemented from time to time and furnished to the Fund
Manager. Subject to such policies as the Board of Trustees may determine and
consistent with Section 28(e) of the Securities Exchange Act of 1934, the Fund
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 Fund to pay a broker or dealer, acting as agent, for effecting a fund
transaction at a price in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction, if the Fund 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
Fund Manager's (or its affiliates) overall responsibilities with respect to the
Funds 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 Securities Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and
subject to any other applicable laws and regulations including Section 17(e) of
the 1940 Act, the Fund Manager is further authorized to place orders on behalf
of the Funds through the Fund Manager if the Fund Manager is registered as a
broker or dealer with the SEC or as a FCM with the Commodities Futures Trading
Commission ("CFTC"), to any of its affiliates that are brokers or dealers or
FCMs or such other entities which provide similar services in foreign countries,
or to such brokers and dealers that also provide research or statistical
research and material, or other services to the Funds or the Fund Manager. Such
allocation shall be in such amounts and proportions as the Fund Manager shall
determine consistent with the above standards, and, upon request, the Fund
Manager will report on said allocation to the Adviser and Board of Trustees of
Pacific Funds, indicating the
brokers, dealers or FCMs to which such allocations have been made and the basis
therefor.
(e) May, on occasions when the purchase or sale of a security is deemed to
be in the best interest of a Fund 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 Pacific Funds' Registration Statement as furnished to Fund
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 Fund
Manager in a manner that is fair and equitable in the judgment of the Fund
Manager in the exercise of its fiduciary obligations to Pacific Funds and to
such other clients.
(f) Will, in connection with the purchase and sale of securities for the
Funds, arrange for the transmission to the custodian and recordkeeping agent for
Pacific Funds, 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 Funds,
as may be reasonably necessary to enable the custodian and recordkeeping agent
to perform its administrative and recordkeeping responsibilities with respect to
the Funds, and with respect to fund securities to be purchased or sold through
the Depository Trust Company, will arrange for the automatic transmission of the
confirmation of such trades to Pacific Funds' custodian, and recordkeeping
agent, and, if requested, the Adviser.
(g) Will assist the custodian and recordkeeping agent for Pacific Funds in
determining or confirming, consistent with the procedures and policies stated in
the Registration Statement for the Fund and procedures adopted by Pacific Funds'
Board of Trustees, the value of any fund securities or other assets of the Funds
for which the custodian and recordkeeping agent seeks assistance from the Fund
Manager or identifies for review by the Fund Manager.
(h) Will maintain and preserve such records related to each Fund's
transactions as required under the 1940 Act and the Advisers Act. The Adviser
or Pacific Funds shall maintain and preserve all books and records not related
to the Funds' transactions as required under the 1940 Act and the Advisers Act.
The Fund Manager will make available to the Fund and the Adviser promptly upon
request, at all reasonable times during normal business hours, any of the Funds'
investment records and ledgers maintained by the Fund Manager (which shall not
include the records and ledgers maintained by the custodian and recordkeeping
agent for Pacific Funds), as are necessary to assist Pacific Funds and the
Adviser to comply 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
Pacific Funds are being conducted in a manner consistent with applicable laws
and regulations.
(i) Will regularly report to Pacific Funds' Board of Trustees on the
investment program for the Funds and the issuers and securities represented in
the Funds funds, and will furnish the Pacific Funds' Board of Trustees with
respect to the Funds such periodic and special reports as the Trustees and the
Adviser may reasonably request, including, but not limited to, the monthly
compliance checklist, monthly tax compliance worksheet, reports regarding
compliance with Pacific Funds' procedures pursuant to Rules 17e-1, 17a-7, 10f-3
and 12d3-1 under the Investment Company Act of 1940, fundamental investment
restrictions, liquidity determination of securities purchased pursuant to Rule
144A and 4(2) commercial paper, and compliance with Pacific Funds' or, if
adopted by the Board of Trustee's, the Fund Manager's Code of Ethics, and such
other procedures or requirements that Pacific Funds or Adviser may request from
time to time.
(j) Will not disclose or use any records or information specifically
designated, in writing, as confidential and which is obtained pursuant to this
Agreement (excluding investment research and investment advice and any
information which is otherwise publicly available) 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 custody accounts and dealing with settlement agents in various countries, and
will keep confidential any information (excluding investment research and
advice) obtained pursuant to the Agreement, and disclose such information only
if the Board of Trustees of Pacific Funds 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. 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 Fund Manager, Pacific
Funds and the Adviser will not disclose or use any records or information
respecting the Fund Manager obtained pursuant to this Agreement and that is
specifically designated, in writing, as confidential, which, in any event, shall
be deemed to include any list of securities purchased or sold by the Funds for a
period of 15 days after month end, or any list of securities held by the Funds
for 90 days after month end in any manner whatsoever except as expressly
authorized in this Agreement, and except that the top ten holdings of a Fund may
be disclosed 15 days after month end, 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 of Trustees of Pacific
Funds 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. Nothing in this paragraph (j) is intended to prevent
any party from using or disclosing information that is already in the public
domain or independently produced.
(k) Shall not permit any employee of the Fund Manager to have any material
connection with the handling of the Funds 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
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.
(l) Shall provide to Adviser a copy of Fund Manager's Form ADV as filed
with the Securities and Exchange Commission and a list of persons who Fund
Manager wishes to have authorized to give written and/or oral instructions to
Custodians of Pacific Funds assets for the Funds.
3. Disclosure about Fund Manager. The Fund Manager has reviewed the
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current Registration Statement for Pacific Funds and agrees to promptly review
future Registration Statements, including any supplements thereto which relate
to Fund Manager or the Funds, 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 about the Fund Manager or information relating, directly or
indirectly, to the Fund Manager or the Funds or any performance information the
Fund Manager provides that is 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 contained therein not misleading; provided, however, that the Fund
Manager makes no representations or warranties regarding (a) the accuracy or
adequacy of any disclosure in such Registration Statement regarding the degree
and nature of the risks associated with particular types of investments (other
than any instruments unique to the Funds about which the Adviser has asked the
Fund Manager in writing (which may include an e-mail to AIM's legal counsel) for
risk disclosure), or (b) any disclosure in the Registration Statement with
respect to which the Adviser did not include information provided by the Fund
Manager expressly or where the Fund Manager was not provided with a reasonable
amount of time to make comment, which shall be presumed to be ten working days.
The Fund Manager further
represents and warrants that it is a duly registered investment adviser under
the Advisers Act and a duly registered investment adviser in all states in which
the Fund Manager is required to be registered. The Adviser has received a
current copy of the Fund Manager's Uniform Application for Investment Adviser
Registration on Form ADV, as filed with the SEC. On an annual basis, (or more
frequently if requested by the Adviser or Pacific Funds' Board of Trustees) the
Fund Manager agrees to provide the Adviser with current copies of the Fund
Manager's Form ADV, and any supplements or amendments thereto, as filed with the
SEC.
4. Expenses. The Fund Manager shall bear all expenses incurred by it and
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its staff and for their activities in connection with the performance if its
services under this Agreement. Each Fund 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 relating to local administration of securities; fees
for any pricing services; costs of regulatory compliance; and pro rata costs
associated with maintaining Pacific Funds' legal existence and shareholder
relations. All other expenses not specifically assumed by the Fund Manager
hereunder or by the Adviser under the Advisory Agreement are borne by the
applicable Fund of Pacific Funds.
5. Compensation. For the services provided and the expenses borne by the
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Fund Manager pursuant to this Agreement, the Adviser will pay to the Fund
Manager a fee in accordance with the Fee Schedule attached to this Agreement.
This fee will be computed and accrued daily and payable monthly. These fees for
services shall be prorated for any portion of a year in which the Agreement is
not effective.
6. Seed Money. The Adviser agrees that the Fund Manager shall not be
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responsible for providing money for the initial capitalization of any Fund.
7. Compliance.
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(a) The Fund Manager agrees that it shall immediately notify the
Adviser and Pacific Funds (i) in the event that the SEC or any banking or other
regulatory body has censured the Fund 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, and (ii) upon having a reasonable basis for believing that a Fund has
ceased to qualify or might not qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code. The Fund Manager further agrees to
notify the Adviser and Pacific Funds immediately of any material fact known to
the Fund Manager respecting or relating to the Fund Manager that is not
contained in the Registration Statement or prospectus for Pacific Funds, or any
amendment or supplement thereto, or of any statement contained therein that
becomes untrue in any material respect.
(b) The Adviser agrees that it shall immediately notify the Fund
Manager (i) in the event that the SEC has censured the Adviser or Pacific Funds;
placed limitations upon either of their activities, functions, or operations;
suspended or revoked the Adviser's registration as an investment adviser; or has
commenced proceedings or an investigation that may result in any of these
actions, and (ii) upon having a reasonable basis for believing that a Fund has
ceased to qualify or might not qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code.
8. Independent Contractor. The Fund Manager shall for all purposes herein
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be deemed to be an independe nt contractor and shall, unless otherwise expressly
provided herein or authorized by the Adviser from time to time, have no
authority to act for or represent the Adviser in any way or otherwise be deemed
its agent. The Fund Manager understands that unless provided herein or
authorized from time to time by Pacific Funds, the Fund Manager shall have no
authority to act for or represent Pacific Funds in any way or otherwise be
deemed Pacific Funds' Agent.
9. Documents. Pacific Funds or Adviser has furnished, or will furnish
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prior to the commencement of responsibilities by the Fund Manager under this
Agreement, copies of each of the following documents to the Fund Manager:
(a) The Declaration of Trust of the Trust as in effect on the date
hereof;
(b) The By-laws of the Trust in effect on the date hereof;
(c) The resolutions of the Trustees approving the engagement of the
Fund Manager as subadviser to the Adviser and approving the form of this
agreement ;
(d) A certificate of an officer of Pacific Funds which indicates that
shareholders (which may consist of the sole shareholder) have approved this
Agreement;
(e) The resolutions of the Trustees selecting the Adviser as
investment adviser to the Trust and approving the form of the Advisory Agreement
with the Trust;
(f) The Advisory Agreement with the Trust;
(g) The Code of Ethics of the Trust as currently in effect; and
(h) A list specifically identifying those companies that are:
1. First-tier affiliates as that term is defined in the 1940 Act
of the Fund or the Fund.
2. Second-tier affiliates of Pacific Funds or the Funds.
(i) The current procedures and policies of Pacific Funds or a Fund.
(j) The current registration statement of Pacific Funds.
(k) A list of restricted securities, if any, which may not be bought
or sold for the Fund.
The Adviser further agrees to provide amendments or supplements to the above-
referenced documents promptly and further agrees to provide as much advance
notice as practicable with respect to items (h), (i), (j) and (k) so as to
provide Fund Manager a reasonable amount of time to prepare for such changes.
10. Cooperation. Each party to this Agreement agrees to cooperate with
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each other party and with all appro priate 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 Pacific Funds.
11. Responsibility and Control. Notwithstanding any other provision of
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this Agreement, it is understood and agreed that Pacific Funds 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 Fund Manager.
12. Services Not Exclusive. It is understood that Fund Manager now acts,
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will continue to act and may act in the future as investment manager or adviser
to fiduciary and other managed accounts, and as investment manager or adviser to
other investment companies, including any offshore entities, or accounts, and
Pacific Funds has no objection to the Fund Manager so acting, provided that
whenever a Fund and one or more other investment companies or accounts managed
or advised by the Fund Manager have available funds for investment, investments
suitable and appropriate for each will be allocated in accordance with a formula
that is equitable to each company and account including the Fund, which formula
and allocation to a Fund may be subject to review by Pacific Funds' Board of
Trustees upon its reasonable request. Pacific Funds and the Adviser recognize
that in some cases this procedure may adversely affect the size of the position
obtainable for such Fund. Furthermore, it is understood that the services of the
Fund Manager are not exclusive, and nothing in this Agreement shall prevent the
Fund 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 Funds) or from engaging in
other lawful activities.
13. Liability. Except as provided in Section 14 and as may otherwise be
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required by the 1940 Act or the rules thereunder or other applicable law,
Pacific Funds and the Adviser agree that the Fund Manager, any affiliated person
of the Fund Manager,
and each person, if any, who, within the meaning of Section 15 of the 1933 Act,
controls the Fund 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 in the performance of the
Fund Manager's duties, or by reason of reckless disregard of the Fund Manager's
obligations and duties under this Agreement. The parties hereto agree that the
Fund Manager shall not be liable for any failure to recommend the purchase or
sale of any security on behalf of any Fund on the basis of information which
might, in the Fund Manager's opinion, constitute a violation of any federal or
state laws, rules or regulations. Notwithstanding the foregoing, nothing
contained in this Agreement shall constitute a waiver or limitation of rights
that Pacific Funds may have under federal or state securities laws.
14. Indemnification.
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(a) The Fund Manager agrees to indemnify and hold harmless, the
Adviser, any affiliated person within the meaning of Section 2(a)(3) of the 1940
Act ("affiliated person") of the Adviser, and each person, if any, who, within
the meaning of Section 15 of the 1933 Act, controls ("controlling person") the
Adviser (collectively, "PL Indemnified Persons") against any and all losses,
claims, damages, liabilities or litigation (including legal and other expenses),
to which the Adviser or such affiliated person or controlling person may become
subject under the 1933 Act, 1940 Act, the Advisers Act, under any other statute,
at common law or otherwise, arising out of the Fund Manager's responsibilities
to Pacific Funds which may be based upon any willful misfeasance, bad faith,
gross negligence, or reckless disregard of, the Fund Manager's obligations
and/or duties under this Agreement by the Fund Managers or by any of its
directors, officers or employees, or any affiliate acting on behalf of the Fund
Manager (other than a PL Indemnified Person); provided, however, that in no case
is the Fund Manager's indemnity in favor of the Adviser or any affiliated person
or controlling person of the 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 obligation and duties under
this Agreement.
(b) The Adviser agrees to indemnify and hold harmless the Fund
Manager, any affiliated person within the meaning of Section 2(a)(3) of the 1940
Act of the Fund Manager and each person, if any, who, within the meaning of
Section 15 of the 1933 Act controls ("controlling person") the Fund Manager
(collectively, "Fund Manager Indemnified Persons") against any and all losses,
claims, damages, liabilities or litigation (including legal and other expenses)
to which a Fund 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 adviser of Pacific
Funds which may be based upon any willful misfeasance, bad faith or gross
negligence by the Adviser, any of its employees or any affiliate acting on
behalf of the Adviser (other than a Fund Manager Indemnified Person); provided
however, that in
no case is the indemnity of the Adviser in favor of the Fund 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.
15. Duration and Termination. This Agreement shall become effective
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as of the date of execution first written above, and shall continue in effect
until December 31, 2002 and continue thereafter on an annual basis with respect
to each Fund; provided that such annual continuance is specifically approved at
least annually (a) by the vote of a majority of the Board of Trustees of Pacific
Funds, or (b) by the vote of a majority of the outstanding voting shares of each
Fund, and provided that continuance is also approved by the vote of a majority
of the Board of Trustees of Pacific Funds who are not parties to this Agreement
or "interested persons" (as such term is defined in the 1940 Act) of Pacific
Funds, the Adviser, or the Fund 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 Fund:
(a) by Pacific Funds at any time with respect to the services provided
by the Fund Manager, without the payment of any penalty, forfeiture, compulsory
buyout amount, or performance of any other obligation which could deter
termination, by vote of a majority of the entire Board of Trustees of Pacific
Funds or by a vote of a majority of the outstanding voting shares of Pacific
Funds or, with respect to a particular Fund, by vote of a majority of the
outstanding voting shares of such Fund, on 60 days' written notice to the Fund
Manager and the Adviser;
(b) by the Fund Manager at any time, without the payment of any
penalty, forfeiture, compulsory buyout amount or performance of any other
obligation which could deter termination, upon 60 days' written notice to the
Adviser and Pacific Funds.
(c) by the Adviser at any time, without the payment of any penalty,
forfeiture, compulsory buyout amount or performance of any other obligation
which could deter termination, upon 60 days' written notice to the Fund Manager
and Pacific Funds.
Any approval of this Agreement by the holders of a majority of the
outstanding shares (as defined in the 0000 Xxx) of a particular Fund shall be
effective to continue this Agreement with respect to such Fund notwithstanding
(a) that this Agreement has not been approved by the holders of a majority of
the outstanding shares of any other Fund or (b) that this Agreement has not been
approved by the vote of a majority of the outstanding shares of Pacific Funds,
unless such approval shall be required by any other applicable law or otherwise.
This Agreement will terminate automatically in event of its assignment (as
that term is defined in the 1940 Act), but shall not terminate in connection
with any transaction not deemed an assignment within the meaning of Rules 2a-6
under the 1940 Act, or any other rule adopted by the SEC regarding transactions
not deemed to be assignments. In the event this Agreement is terminated or is
not approved in the manner described above, the Sections or Paragraphs numbered
2(h) for a period of six years, and 10, 11, 13, 14 and 16 of this Agreement as
well as any applicable provision of this Paragraph numbered 15 shall remain in
effect.
16. Use of Name.
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(a) It is understood that the name "Pacific Life Insurance Company"
and "Pacific Life", and "Pacific Funds" or any derivative thereof or logo
associated with that name is the valuable property of the Adviser and its
affiliates, and that the Fund Manager has the right to use such name (or
derivative or logo) only with the prior written approval of the Adviser and only
so long as the Adviser is an investment adviser to Pacific Funds and/or the
Funds. Upon termination of the Investment Advisory Agreement between Pacific
Funds and the Adviser, the Fund Manager shall forthwith cease to use such name
(or derivative or logo).
(b) It is understood that the name AIM or A I M Capital Management,
Inc. and the names of the Fund Managers' affiliates, and any derivatives thereof
or logo associated with those names are the valuable property of the Fund
Manager and that the Adviser and its affiliates and Pacific Funds have the right
to use such name (or derivative or logo), in sales materials of Pacific Funds
and/or the Funds with prior review and approval of the Fund Manager as provided
in paragraph (c) below, and for so long as the Fund Manager is a Fund Manager to
Pacific Funds and/or one of the Funds. Upon termination of this Agreement
between Pacific Funds, the Adviser and the Fund Manager, Pacific Funds and the
Adviser shall forthwith cease to use such name (or derivative or logo). It is
specifically agreed that Pacific Funds and Adviser and its affiliates may use
the Fund Manager's logo in Pacific Funds prospectus or sales literature as
provided in this Agreement.
(c) Neither Pacific Funds nor the Adviser shall use the Fund Manager's
name or the names of any of its affiliates, derivatives thereof, or logos
associated with those names in promotional or sales related materials prepared
by or on behalf of the Adviser or Pacific Funds, without prior review and
approval by the Fund Manager, which may not be unreasonably withheld and which
the Fund Manager agrees shall be conducted within ten calendar days.
17. Limitation of Liability.
-----------------------
A copy of the Agreement and Declaration of Trust for Pacific Funds is on file
with the Secretary of the State of Delaware. The Agreement and 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 shall be binding upon the assets and property of
Pacific Funds and shall not be binding upon any Trustee, officer, employee,
agent or shareholder, whether past, present, or future, of Pacific Funds
individually.
18. 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 Fund Manager, to:
A I M Capital Management, Inc.
00 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Facsimile transmission number: 000-000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
B. if to the Adviser, to:
Pacific Life Insurance Company
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Facsimile transmission number: 000-000-0000
Attention: Xxxxx X. Xxxxx
C. if to Pacific Funds, to:
Pacific 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
Each such notice or other communication shall be effective (i) if given by telex
or facsimile transmission, when such telex or facsimile is transmitted to the
number specified in this section and the appropriate answer back or confirmation
is received, and (ii) if given by any other means, when delivered at the address
specified in this section.
19. Miscellaneous.
-------------
(a) This Agreement shall be governed by the laws of California,
provided that nothing herein shall be construed in a manner inconsistent with
the 1940 Act, the Investment Advisers Act of 1940 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, 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.
(f) The parties hereto acknowledge that while Fund Manager will, to
the extent practicable, invest the assets of the Funds in a similar investment
style to certain other mutual funds advised by Fund Manager or its affiliates,
these Funds should not be considered "clones" of such other mutual funds, and
there may be differences between the specific securities and the proportionate
amount of any particular security held in any Fund and held by such other mutual
funds.
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
Attest: /s/ Xxxxxx X. Milfs By: /s/ Xxxxx X. Xxxxxxx
---------------------- ---------------------
Name: Xxxxxx X. Milfs Name: Xxxxx X. Xxxxxxx
Title: Vice President & Secretary Title: President
A I M CAPITAL MANAGEMENT, INC.
Attest: /s/ Xxxx Xxxx By: /s/ Xxxxxx X. Xxxxx
---------------- --------------------
Name: Xxxx Xxxx Name: Xxxxxx X. Xxxxx
Title: Assistant Secretary Title: Senior Vice President
PACIFIC FUNDS
Attest: /s/ Xxxxxx X. Milfs By: /s/ Xxxxx X. Xxxxxxx
---------------------- ---------------------
Name: Xxxxxx X. Milfs Name: Xxxxx X. Xxxxxxx
Title: Secretary Title: President
FEE SCHEDULE
Fund: PF AIM Blue Chip Fund
The Adviser will pay to the Fund Manager a monthly fee based on an annual
percentage of the combined average daily net assets of the PF AIM Blue Chip Fund
and the Blue Chip Portfolio of the Pacific Select Fund according to the
following schedule:
Rate (%) Break Point (assets)
--------------------------------
.55% On first $500 million
.50% On excess
Fund: PF AIM Aggressive Growth Fund
The Adviser will pay to the Fund Manager a monthly fee based on the combined
average daily net assets of the PF AIM Aggressive Growth Fund and the Aggressive
Growth Portfolio of the Pacific Select Fund according to the following schedule:
Rate (%) Break Point (assets)
--------------------------------
.60% On first $500 million
.55% On excess
These fees for services shall be prorated for any portion of a year in which the
Agreement is not effective.
