INVESTMENT SUB-ADVISORY AGREEMENT
Exhibit 23(d)(20)
THIS
INVESTMENT SUB-ADVISORY AGREEMENT (“Agreement”), made this 6th day of August,
2007 by and between Xxxxxx Advisors, LLC, a Delaware limited liability company (the “Advisor”),
and NFJ Investment Group L.P., a Delaware Limited partnership (“Sub-Advisor”).
Advisor and Sub-Advisor agree as follows:
1. Advisor hereby engages the services of Sub-Advisor in connection with Advisor’s management of
the Xxxxxx/Allianz NFJ Small-Mid Cap Value Portfolio, to be renamed the Xxxxxx/Allianz NFJ Mid Cap Value Portfolio on October 8, 2007 (the “Portfolio”) of MLIG Variable Insurance Trust (the
“Trust”). Pursuant to this Agreement and subject to the oversight and supervision by Advisor and
the officers and the board of trustees of the Trust, Sub-Advisor shall manage the investment and
reinvestment of that portion of the assets of the Portfolio that the Advisor shall, from time to
time, direct.
2. Sub-Advisor hereby accepts appointment by Advisor in the foregoing capacity and agrees, at its
own expense, to render the services set forth herein and to provide the office space, furnishings,
equipment and personnel required by it to perform such services on the terms and for the
compensation provided in this Agreement.
3. In particular, Sub-Advisor shall furnish continuously an investment program for the Portfolio
and shall determine from time to time in its discretion the securities and other investments to be
purchased or sold or exchanged and what portions of the Portfolio shall be held in various
securities, cash or other investments. In this connection, Sub-Advisor shall provide Advisor and
the officers and trustees of the Trust with such reports and documentation as the latter shall
reasonably request regarding its management of the Portfolio assets. The Advisor shall instruct the custodian
of the Portfolio to sweep all cash held in the Portfolio into the custodian’s short term investment fund program
and the Sub-Advisor will not be responsible for investments made pursuant to such cash sweep. The custodian shall also
be responsible for collecting the interest and dividends on the Portfolio’s investment in its custody and the
Sub-Advisor shall have no responsibility in this regard.
4. Sub-Advisor shall carry out its responsibilities under this Agreement in compliance with: (a)
the Portfolio’s investment objective, policies and restrictions as set forth in the Trust’s
current registration statement as delivered to the Sub-Advisor, (b) such policies or directives as the Trust’s trustees may from
time to time establish or issue and communicate to the Sub-Advisor in writing, and (c) applicable
law and related regulations. Advisor shall promptly notify Sub-Advisor in writing of changes to
(a) or (b) above and shall notify Sub-Advisor in writing of changes to (c) above promptly after it
becomes aware of such changes.
In particular, Sub-Advisor shall be responsible to ensure that the Portfolio: (a)
complies with the diversification requirements of Section 817(h) of the Internal Revenue Code of
1986, as amended, (the “Code”) and regulations issued thereunder as these apply to separate
accounts through which variable life insurance contracts and variable annuity contracts are
issued, and (b) continuously qualifies as a regulated investment company under Sub-Chapter M of
the Code.
Sub-Advisor shall not consult with other sub-advisers of the Portfolio, or with sub-advisers
of other investment portfolios of the Trust, concerning transactions in portfolio securities or
other portfolio investments of the Portfolio.
5. Sub-Advisor shall take all actions which it considers necessary to implement the investment
policies of the Portfolio as these relate to the Portfolio, and in particular, to place all orders
for the purchase or sale of securities or other investments for the Portfolio with brokers or
dealers selected by it, and to that end, Sub-Advisor is authorized as the agent of the Trust to
give instructions to the Trust’s custodian as to deliveries of securities or other investments and
payments of cash for the account of the Portfolio. In connection with the selection of brokers or
dealers and the placing of purchase and sale orders with respect to investments of the Portfolio,
except where Advisor or the Trust instruct Sub-Advisor to place orders with a particular broker or
dealer, Sub-Advisor is directed at all times to seek to obtain best execution and price within the
policy guidelines determined by the Trust’s board of trustees and set forth in the Trust’s current
registration statement delivered to the Sub-Advisor.
Sub-Advisor is authorized to consider, in the selection of brokers and
dealers to execute portfolio transactions, not only the available prices and rates of brokerage
commissions, but also other relevant factors which may include, without limitation: (a) the
execution capabilities of such brokers and dealers, (b) research, custody and other services
provided by such brokers and dealers which the Sub-Advisor believes will enhance its general
portfolio management capabilities, (c) the size of the transaction, (d) the difficulty of
execution, (e) the operational facilities of such brokers and dealers, (f) the risk to such a
broker or dealer of positioning a block of securities, and (g) the overall quality of brokerage
and research services provided by such brokers and dealers. In connection with the foregoing,
Sub-Advisor is specifically authorized to pay those brokers and dealers who provide brokerage and
research services to it a higher commission than that charged by other brokers and dealers if the
Sub-Advisor determines in good faith that the amount of such commission is reasonable in relation
to the value of such services in terms of either the particular transaction or in terms of
Sub-Advisor’s overall responsibilities with respect to the Portfolio and to any other client
accounts or portfolios which it Sub-Advisor advises. The execution of such transactions shall not be
considered to represent an unlawful breach of any duty created by this Agreement or otherwise.
Sub-Advisor also is authorized to aggregate purchase and sale orders for securities held (or
to be held) in the Portfolio with similar orders being made on the same
day for other client
accounts or portfolios managed by Sub-Advisor. When an order is so aggregated: (a) the actual
prices applicable to the aggregated transaction will be averaged and the Portfolio and each other
account or portfolio participating in the aggregated transaction shall be treated as having
purchased or sold its portion of the securities at such average price, and (b) all transaction
costs incurred in effecting the aggregated transaction shall be shared on a pro-rata basis among
the accounts or portfolios (including the Portfolio) participating in the transaction. Advisor
recognizes that in some cases this procedure may adversely affect the size of the position
obtainable for the Portfolio.
When recommending or effecting a transaction in a particular security or investment for more
than one client account or portfolio (including the Portfolio), Sub-Advisor may allocate such
recommendations or transactions among all accounts and portfolios for whom the recommendation is
made or transaction is effected on a basis that Sub-Advisor considers equitable.
6. Sub-Advisor’s services under this Agreement are not exclusive. Sub-Advisor may provide the same
or similar services to other clients. Advisor acknowledges that, except when transactions for
multiple clients are aggregated, transactions in a specific security or other investment may not
be recommended or executed at the same time or price for all client accounts or portfolios
(including the Portfolio) for which that security or investment is recommended or executed. This
Agreement does not require Sub-Advisor to give priority to the Portfolio over other client
accounts or portfolios.
7. Sub-Advisor shall for all purposes herein be deemed to be an independent contractor and shall,
unless otherwise expressly provided or authorized, have no authority to act for or represent the
Advisor, the Trust or the Portfolio or otherwise be deemed agents of the Advisor, the Trust or the
Portfolio.
8. Sub-Advisor or an affiliated person of Sub-Advisor may act as broker for the Portfolio in
connection with the purchase or sale of securities or other investments for the Portfolio, subject
to: (a) the requirement that Sub-Advisor seek to obtain best execution and price within the policy
guidelines determined by the Trust’s board of trustees and set forth in the Trust’s current
registration statement; (b) the provisions of the Investment Advisors Act of 1940, as amended (the
“Advisors Act”); (c) the provisions of the Securities Exchange Act of 1934, as amended; and (d)
other applicable provisions of law. Such brokerage services are not within the scope of the duties
of Sub-Advisor under this Agreement. Subject to the requirements of applicable law and any
procedures adopted by Trust’s board of trustees, Sub-Advisor or its affiliated persons may receive
brokerage commissions, fees or other remuneration from the Portfolio or the Trust for such
services in addition to Sub-Advisor’s fees for services under this Agreement.
9. (a) The Advisor delegates the Advisor’s discretionary authority to exercise voting rights with
respect to the securities and other investments in the Portfolio to the Sub-Advisor.
Sub-Advisor shall exercise these voting rights unless and until the Advisor revokes this
delegation. The Advisor may revoke this delegation at any time without cause. Sub-
Advisor shall maintain
and preserve a record, in an easily-accessible place for a period of not less than three years,
of Sub-Advisor’s voting procedures, and of Sub-Advisor’s actual votes, and shall supply
this record to the Advisor, or any authorized representative of the Advisor, upon the written
request of the Advisor or the Advisor’s authorized
representative, as appropriate. The Advisor will instruct the custodian of the
Portfolio to forward promptly to the Sub-Advisor or its designee copies of all proxies and similar shareholder communications
relating to securities held in the Portfolio. The Advisor acknowledges that currently the Sub-Advisor has engaged a third party
services provider to assist with the administrative functions related to voting proxies.
(b) The Sub-Advisor will use reasonable efforts to notify the custodian of the Portfolio of class action settlements involving securities purchased by the
Sub-Advisor and held in, or formerly held in, the Portfolio; provided, that, the Sub-Advisor will have no obligation to advise, initiate
or take any other action on behalf of the Portfolio in any legal proceedings (including class actions). The Sub-Advisor does not file proofs
of claims for its clients (including the Portfolio) in connection with class action settlements. In addition, the Sub-Advisor does not provide the service of notifying custodians
(or clients) of class action settlements as described in this Section 9(b) once this Agreement has been terminated and the Sub-Advisor no longer provides investment advisory services to the
Portfolio. The Advisor acknowledges that the Sub-Advisor relies on a third party service provider to assist in offering this service to clients (including the Portfolio).
10. Nothing in this Agreement shall require Sub-Advisor to take or receive physical possession of
cash, securities or other investments of the Portfolio.
11. Sub-Advisor is registered with the U.S. Securities and Exchange Commission under the Advisors
Act. Sub-Advisor shall remain so registered throughout the term of this Agreement and shall notify
Advisor immediately if Sub-Advisor ceases to be so registered as an investment advisor.
12. Sub-Advisor: (a) is duly organized and validly existing under the laws of the State of
Delaware, with the power to own and possess its assets and carry on its business as it is now
being conducted, (b) has the authority to enter into and perform the services contemplated by this
Agreement, (c) is not prohibited by the Investment Company Act of 1940, as amended, (the “1940
Act”) or the Advisors Act from performing the services contemplated by this Agreement, (d) has met,
and will continue to seek to meet for the duration of this Agreement, any other applicable federal
or state requirements, or the applicable requirements of any regulatory or industry self-regulatory
agency, necessary to be met in order to perform the services this Agreement, and (e) will promptly
notify Advisor of the occurrence of any event that would disqualify it from serving as an
investment advisor to an investment company pursuant to Section 9(a) of the 1940 Act.
13. Advisor: (a) is duly organized and validly existing under the laws of the State of Delaware
with the power to own and possess its assets and carry on its business as it is now being
conducted, (b) has the authority to enter into and perform the services
contemplated by this Agreement, (c) is not prohibited by the 1940 Act or the Advisers Act from
performing the services contemplated by this Agreement, (d) has met, and will continue to seek to
meet for the duration of this Agreement, any other applicable federal or state requirements, or
the applicable requirements of any regulatory or industry self-regulatory agency, necessary to be
met in order to perform the services this Agreement, and (e) will promptly notify Sub-Advisor of
the occurrence of any event that would disqualify it from serving as an investment adviser to an
investment company pursuant to Section 9(a) of the 1940 Act. Advisor represents that the Trust is
(and during the term of this Agreement, will remain) registered as an open-end management
investment company under the 1940 Act and that the shares of the Trust representing an interest in
the Portfolio are (and during the term of this Agreement will remain) registered under the
Securities Act of 1933 and under any applicable state securities laws.
14. Sub-Advisor has adopted a written code of ethics complying with the requirements of Rule 17j-l
under the 1940 Act and will provide Advisor and the Trust with a copy of that code, together with
evidence of its adoption. Within 20 days of the end of each calendar quarter during which this
Agreement remains in effect, the Chief Compliance Officer of Sub-Advisor shall
certify to Advisor or the Trust that Sub-Advisor has complied with the requirements of Rule 17j-1
during the previous quarter and that there have been no violations of
Sub-Advisor’s codes of
ethics or, if such a material violation has occurred, that appropriate action has been taken in response
to such material violation. Upon written request of Advisor or the Trust, Sub-Advisor shall permit
representatives of Advisor or the Trust to examine the reports (or summaries of the reports)
required to be made to Sub-Advisor by Rule 17j-l(c)(l) and other records evidencing enforcement
of the code of ethics.
15. For the services rendered, the facilities furnished and the expenses assumed by Sub-Advisor, Advisor shall pay Sub-Advisor at the end of each month a fee based on the average
daily net assets of the Portfolio at an annual rates of 0.40%.
Sub-Advisor’s fee shall be accrued daily at l/365th of the applicable annual rate set forth above.
For the purpose of accruing compensation, the net assets of the Portfolio shall be determined in
the manner and on the dates set forth in the current prospectus of the Trust, and, on days on
which the net assets are not so determined, the net asset value computation to be used shall be as
determined on the immediately preceding day on which the net assets were determined. In the event
of termination of this Agreement, all compensation due through the date of termination will be
calculated on a pro-rated basis through the date of termination and paid within thirty business
days of the date of termination.
During any period when the determination of net asset value is suspended, the net asset value
of the Portfolio as of the last business day prior to such suspension shall for this purpose be
deemed to be the net asset value at the close of each succeeding business day until it is again
determined.
16. Sub-Advisor hereby undertakes and agrees to maintain, in the form and for the period
required by Rule 31a-2 under the 1940 Act, all records relating to the Portfolio’s investments
that are required to be maintained by the Trust pursuant to the requirements of paragraphs (b)(5),
(b)(6), (b)(7), (b)(9), (b)(10) and (f) of Rule 31a-1 under the 1940 Act.
Sub-Advisor agrees that all books and records which it maintains for the Portfolio or the
Trust are the property of the Trust and further agrees to surrender promptly to the Advisor or the
Trust any such books, records or information upon the Advisor’s
or the Trust’s reasonable request (provided,
however, that Sub-Advisor may retain copies of such records). All such books and records shall be
made available, within five business days of a written request, to the Trust’s accountants or
auditors during regular business hours at Sub-Advisor’s offices. Advisor and the Trust or either
of their authorized representative shall have the right to copy any records in the possession of
Sub-Advisor which pertain to the Portfolio or the Trust. Such books, records, information or
reports shall be made available to properly authorized government representatives consistent with
state and federal law and/or regulations. In the event of the termination of this Agreement, all
such books, records or other information shall be returned to Advisor or the Trust upon request.
Sub-Advisor agrees that the policies and procedures established by the Sub-Advisor for
managing the Portfolio, including, but not limited to, all policies and procedures designed to
ensure compliance with federal and state regulations governing the sub-advisor/client relationship
and management and operation of the Portfolio, shall be made available for inspection by the
Advisor and the Trust or either of their authorized representatives not less frequently than
annually.
17. Sub-Advisor agrees that it will not disclose or use any records or confidential information
obtained pursuant to this Agreement in any manner whatsoever except as authorized in this
Agreement or in connection with the performance of its obligations
under this Agreement or authorized specifically by Advisor or the Trust, or if such disclosure is required by federal or
state regulatory authorities.
Sub-Advisor may disclose the investment performance of the Portfolio, provided that such
disclosure does not reveal the identity of the Advisor, the Portfolio or the Trust. Sub-Advisor
may, however, disclose that Advisor, the Trust and the Portfolio are
its clients (including in marketing materials distributed to third
parties from time to time), provided that
such disclosure does not reveal the investment performance or the composition of the Portfolio.
18. In the absence of willful misfeasance, bad faith or gross negligence on the part of
Sub-Advisor or its officers, trustees or employees, or reckless disregard by Sub-Advisor of its
duties under this Agreement (together, “disabling conduct”), Sub-Advisor shall not be liable to
Advisor, the Portfolio, the Trust or to any shareholder of the Portfolio for any act or omission
in the course of, or connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security, except
to the extent otherwise
provided in Section 36(b) of the 1940 Act concerning loss resulting from a breach of fiduciary
duty with respect to the receipt of compensation for services. Notwithstanding the foregoing,
breach by the Sub-Advisor of the second paragraph of section 4 hereof is deemed to be disabling
conduct.
19. Sub-Advisor agrees to indemnify and defend Advisor, its officers, trustees, partners,
employees and any person who controls Advisor for any loss or expense (including attorneys’ fees)
arising out of any claim, demand, action, suit or proceeding arising out of any actual or alleged
material misstatement or omission in the Trust’s registration statement, any proxy statement, or
communication to current or prospective investors in the Portfolio relating to disclosure about
Sub-Advisor provided to Advisor by Sub-Advisor in writing expressly
for the purpose of being included in such registration statement,
proxy statement or communication; provided, that Sub-Advisor has also
been given the opportunity to review and provide comments regarding
the parts of such registration statement, proxy statement or
communication referencing or relating to Sub-Advisor prior to its
distribution, for the purpose of correcting any material inaccuracies.
Sub-Advisor agrees to indemnify and defend Advisor, its officers, trustees, partners,
employees and any person who controls Advisor for any loss or expense (including attorneys’ fees)
arising out of any claim, demand, action, suit or proceeding arising out of the Sub-Advisor’s
failure to ensure that the Portfolio: (a) complies with the diversification requirements of
Section 817(h) of the Code and regulations issued thereunder as these apply to separate accounts
through which variable life insurance contracts and variable annuity contracts are issued, and (b)
continuously qualifies as a regulated investment company under Sub-Chapter M of the Code.
20. Advisor agrees to indemnify and defend Sub-Advisor, its officers, trustees, partners,
employees and any person who controls Sub-Advisor for any loss or expense (including
attorneys’ fees) arising out of any claim, demand, action, suit or proceeding arising out of any
actual or alleged material misstatement or omission in the Trust’s registration statement, any
proxy statement, or other communication to current or prospective investors in the Portfolio
(other than a misstatement or omission relating to disclosure about
Sub-Advisor provided in writing to the Advisor or Trust expressly for
the purpose of being included in such registration statement, proxy
statement or communication and reviewed and approved by the
Sub-Advisor prior to its distribution.
21. The Sub-Advisor agrees to permit the Advisor and the Trust to use its name, along side the
Advisor’s name, in the Portfolio’s name and to refer to
the Sub-Advisor as the sub-adviser of the Portfolio in descriptions of the Portfolio, as these appear in
the Trust’s prospectus(es) and/or sales literature related to the Portfolio, provided, however,
that the Advisor and the Trust shall cease such use of the Sub-Advisor’s name in the event that
this Agreement is terminated and shall not have any rights to use, or
in Sub-Advisor’s name except as expressly permitted in this
Section 21.
22. This Agreement shall not become effective unless and until it is approved by the board of
trustees of the Trust, including a majority of trustees who are not parties to this
Agreement or interested persons of any such party to this Agreement, and, to the extent required by
law, a majority of the outstanding shares of the class of the Trust’s stock representing an
interest in the Portfolio. This Agreement shall come into full force and effect on the date which
it is so approved and the Advisor will promptly notify the
Sub-Advisor of such approval and effectiveness in writing. This Agreement shall continue in effect for two years and shall thereafter
continue in effect from year to year so long as such continuance is specifically approved at least
annually by (a) the board of trustees of the Trust, or by the vote of a majority of the outstanding
shares of the class of stock representing an interest in the Portfolio, and (b) a majority of those
trustees who are not parties to this Agreement or interested persons of any such party cast in
person at a meeting called for the purpose of voting on such approval. If this Agreement is not
approved, the Advisor will promptly notify the Sub-Advisor in writing.
23. Notwithstanding any other provision of this Agreement, this Agreement may be terminated at any
time without the payment of any penalty, by the Trust’s board of trustees, or by vote of a
majority of the outstanding shares of the class of stock representing an interest in the Portfolio
on sixty days written notice to the Advisor and Sub-Advisor, or by the Advisor, or by the
Sub-Advisor, on sixty days written notice to the other. This Agreement shall automatically
terminate in the event of its assignment or in the event of the termination of the investment
advisory agreement between the Advisor and the Trust regarding the Advisor’s management of the
Portfolio (in which case, the Advisor will immediately notify the Sub-Advisor in writing regarding
the termination of this Agreement).
24. This Agreement may be amended by the parties only if such amendment is specifically approved
by (a) a majority of those trustees who are not parties to this Agreement or interested persons of
any such party cast in person at a meeting called for the purpose of voting on such approval, and,
if required by applicable law or (b) a majority of votes attributable to the outstanding Trust
shares of the class representing an interest in the Portfolio.
25. The terms “assignment”, “affiliated person” and “interested person”, when used in this
Agreement, shall have the respective meanings specified in the 1940 Act. The term “majority of the
outstanding shares of the class” means the lesser of (a) 67% or more of the votes attributable to
shares of such class present at a meeting if more than 50% of the votes attributable to such
shares are present or represented by proxy or (b) more than 50% of the votes attributable to
shares of such class.
26. This Agreement shall be construed in accordance with laws of the State of Delaware, and
applicable provisions of the Advisors Act and 1940 Act.
27. 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.
28. All notices and other communications required by or pertaining to this Agreement shall be in
writing sent by email, facsimile, delivered in person or by messenger, overnight courier (which
provides evidence of delivery) or certified mail with a return receipt to the parties at the
following addresses (or at such other address or number for a party as may be specified by like
notice):
If to the Advisor or the Trust:
|
MLIG Variable Insurance Trust | |
| 0000 Xxxxxxx Xxxxx Xxxxx, 0xx Xxxxx | ||
| Xxxxxxxxxx, XX 00000 | ||
| Attention: Chief Compliance Officer | ||
| Email: xxxxx_xxxxxxxx@xx.xxx | ||
| Fax: 000-000-0000 | ||
If to the Sub-Advisor:
|
(A) For General Investment Matters: | |
| NFJ Investment Group L.P. | ||
| 0000 Xxxx Xxxxxx, Xxxxx 000 | ||
| Xxxxxx, XX 00000 | ||
| Attention: Portfolio Management Notices | ||
| Email: xxxxxxxxxxxxxx@xxxxxx.xxx | ||
| Fax: 000-000-0000 | ||
| With a copy at the same address to the Compliance Department: | ||
| Attention: Compliance Department | ||
| Email: xxxxxxxxxx@xxxxxx.xxx | ||
| Fax: 000-000-0000 | ||
| (B) For Operational Matters (such as withdrawals, contributions, etc.): | ||
| Attention: Operations Department | ||
| Email: operations@xxx@xxxxxx.xxx | ||
| Fax:2l4-754-1798 |
If notices to the Sub-Advisor relating to Operational Matters (such as contributions, withdrawals,
etc.) are not sent to the Sub-Advisor’s notice address for Operational Matters as set forth above,
such matters may not be processed or may not be processed in a timely manner and the Sub-Advisor
will not be responsible for any losses or damages resulting from or arising out of any such delay
or failure to process.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
as of the date first above written.
| Xxxxxx Advisors, LLC |
||||
| By: | /s/ Xxxx Xxxxxxx | |||
| Name: | Xxxx Xxxxxxx | |||
| Title: | President | |||
| ATTEST: |
||||
| /s/ Illegible | ||||
| NFJ Investment Group L.P. |
||||
| By: | /s/ Illegible | |||
| Title MD/COO | ||||
| ATTEST: |
||||
| /s/ Illegible | ||||
| By: | /s/ Xxxx Xxxxxxxx | |||
| Title Managing Director | ||||
| ATTEST: |
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