PILGRIM VARIABLE PRODUCTS TRUST
INVESTMENT ADVISORY AGREEMENT
DATED APRIL 30, 2000
AGREEMENT, made on this 30th day of April 2000, by and between PILGRIM
VARIABLE PRODUCTS TRUST, a Massachusetts business trust, (the "Trust") and
PILGRIM INVESTMENTS, INC., a Delaware business corporation (the "Adviser").
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Investment Company
Act"); and
WHEREAS, the Trust is authorized to issue shares of beneficial interest in
separate series with each such series representing interests in a separate
portfolio of securities and assets; and
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and is engaged in the business of
supplying investment advice, investment management and administrative services,
as an independent contractor; and
WHEREAS, the Trust desires to retain the Adviser to render investment
advisory services to the series of the Trust identified in Schedule A (the
"Fund"), and the Adviser is willing to render such investment advisory on the
terms set forth below.
NOW, THEREFORE, the parties agree as follows:
1. The Trust hereby appoints the Adviser to act as investment adviser to
the Trust and the Fund for the period and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to render the
services described, for the compensation provided, in this Agreement.
2. Subject to the supervision of the Trustees, the Adviser shall manage the
investment operations of the Fund and the composition of the Fund's portfolio,
including the purchase and retention and disposition of portfolio securities, in
accordance with the Fund's investment objectives, policies and restrictions as
stated in the Trust's Prospectus and Statement of Additional Information (as
defined below) subject to the following understandings:
(a) The Adviser shall provide supervision of the Fund's investments and
determine from time to time what investments will be made, held or disposed of
or what securities will be purchased and retained, sold or loaned by the Fund,
and what portion of the assets will be invested or held uninvested as cash.
(b) The Adviser shall use its best judgment in the performance of its
duties under this Agreement.
(c) The Adviser, in the performance of its duties and obligations under
this Agreement, shall (i) act in conformity with the Declaration of Trust,
By-Laws, Prospectus and Statement of Additional Information of the Trust, with
the instructions and directions of the Trustees and (ii) conform to and comply
with the requirements of the Investment Company Act and all other applicable
federal and state laws and regulations.
(d) (i) The Adviser shall determine the securities to be purchased or sold
by the Fund and will place orders pursuant to its determinations with or through
such persons, brokers or dealers to carry out the policy with respect to
brokerage as set forth in the Trust's Prospectus and Statement of Additional
Information or as the Trustees may direct from time to time. In providing the
Fund with investment supervision, the Adviser will give primary consideration to
securing the most favorable price and efficient execution. The Adviser may also
consider the financial responsibility, research and investment information and
other services and research related products provided by brokers or dealers who
may effect or be a party to any such transactions or other transactions to which
other clients of the Adviser may be a party. The Trust recognizes that the
services and research related products provided by such brokers may be useful to
the Adviser in connection with its services to other clients.
(ii) When the Adviser deems the purchase or sale of a security to be in the
best interest of the Fund as well as other clients, the Adviser, to the extent
permitted by applicable laws and regulations, may aggregate the securities to be
sold or purchased in order to obtain the most favorable price or lower brokerage
commissions and efficient execution. In such event, allocation of the securities
so purchased or sold, as well as the expenses incurred in the transactions, will
be made by the Adviser in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Fund and to such other clients.
(e) The Adviser shall maintain, or cause to be maintained, all books and
records required under the Investment Company Act to the extent not maintained
by the custodian of the Trust. The Adviser shall render to the Trustees such
periodic and special reports as the Trustees may reasonably request.
(f) The Adviser shall provide the Trust's custodian on each business day
information relating to all transactions concerning the Fund's assets.
(g) The investment management services of the Adviser to the Trust and to
the Fund under this Agreement are not to be deemed exclusive, and the Adviser
shall be free to render similar services to others.
3. The Trust has delivered to the Adviser copies of each of the following
documents and will deliver to it all future amendments and supplements, if any:
(a) Declaration of Trust, as amended, as filed with the Secretary of the
Commonwealth of Massachusetts (such Declaration of Trust, as in effect on the
date hereof and as further amended from time to time, are herein called the
"Declaration of Trust");
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(b) By-Laws of the Trust (such By-Laws, as in effect on the date hereof and
as amended from time to time, are herein called the "By-Laws");
(c) Certified resolutions of the Trustees authorizing the appointment of
the Adviser and approving this Agreement on behalf of the Trust and the Fund;
(d) Registration Statement on Form N-lA under the Investment Company Act
and the Securities Act of 1933, as amended from time to time (the "Registration
Statement"), as filed with the Securities and Exchange Commission (the
"Commission"), relating to the Trust and shares of beneficial interest of the
Fund and all amendments thereto.
(e) Notification of Registration of the Trust under the Investment Company
Act on Form N-8A as filed with the Commission and all amendments thereto;
(f) Prospectus and Statement of Additional Information included in the
Registration Statement, as amended from time to time. All references to this
Agreement, the Prospectus and the Statement of Additional Information shall be
to such documents as most recently amended or supplemented and in effect.
4. The Adviser shall authorize and permit any of its directors, officers
and employees who may be elected as trustees or officers of the Trust and/or the
Fund to serve in the capacities in which they are elected. All services to be
furnished by the Adviser under this Agreement may be furnished through such
directors, officers or employees of the Adviser.
5. The Adviser agrees that all records which it maintains for the Trust
and/or the Fund are property of the Trust and/or the Fund. The Adviser will
surrender promptly to the Trust and/or the Fund any such records upon either the
Trust's or the Fund's request. The Adviser further agrees to preserve such
records for the periods prescribed in Rule 3la-2 of the Commission under the
Investment Company Act.
6. (i) In connection with the services rendered by the Adviser under this
Agreement, the Adviser will pay all of the following expenses:
(a) the salaries and expenses of all personnel of the Trust, the Fund and
the Adviser required to perform the services to be provided pursuant to this
Agreement, except the fees of the trustees who are not affiliated persons of the
Adviser, and
(b) all expenses incurred by the Adviser, the Trust or by the Fund in
connection with the performance of the Adviser's responsibilities hereunder,
other than brokers' commissions and any issue or transfer taxes chargeable to
the Fund in connection with its securities transactions.
7. For the services provided and the expenses assumed pursuant to this
Agreement, the Fund will pay to the Adviser as compensation a fee accrued daily
and paid monthly at the annual rate of 0.75% of the aggregate average daily net
assets of the Fund.
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8. The Adviser may rely on information reasonably believed by it to be
accurate and reliable. Neither the Adviser nor its officers, directors,
employees or agents or controlling persons shall be liable for any error or
judgment or mistake of law, or for any loss suffered by the Trust and/or the
Fund in connection with or arising out of the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement.
9. This Agreement shall continue in effect for an initial period of two
years from the date of adoption and shall continue in effect thereafter for so
long as such continuance is specifically approved at least annually by the
affirmative vote of (i) a majority of the Trustees of the Trust, who are not
interested persons of the Trust, cast in person at a meeting called for the
purpose of voting on such approval, and (ii) a majority of the Trustees of the
Trust or the holders of a majority of the outstanding voting securities of the
Fund; provided however, that this Agreement may be terminated by the Trust, on
behalf of the Fund at any time, without the payment of any penalty, by the
Trustees acting on behalf of the Fund or by vote of a majority of the
outstanding voting securities (as defined in the Investment Company Act) of the
Fund, or by the Adviser at any time, without the payment of any penalty, on not
more than 60 days' nor less than 30 days' written notice to the other party.
This Agreement shall terminate automatically in the event of its assignment
provided that a transaction which does not, under the Investment Company Act,
result in a change of actual control or management of the Adviser's business
shall not be deemed to be an assignment for the purposes of this Agreement.
10. This agreement shall terminate automatically in the event of its
assignment; the term "assignment" for this purpose shall have the meaning
defined in Section 2(a)(4) of the Investment Company Act.
11. Nothing in this Agreement shall limit or restrict the right of any
director, officer or employee of the Adviser who may also be a trustee, officer
or employee of the Trust to engage in any other business or to devote his time
and attention in part to the management or other aspect of any business, whether
of a similar or dissimilar nature, nor limit or restrict the right of the
Adviser to engage in any other business or to render services of any kind to any
other person or entity.
12. During the term of this Agreement, the Trust and the Fund agree to
furnish the Adviser at its principal office all prospectuses, proxy statements,
reports to shareholders, sales literature, or other material prepared for
distribution to shareholders of the Fund or the public, which refer in any way
to the Adviser, prior to use thereof and not to use such material if the Adviser
reasonably objects in writing within five business days (or such other time as
may be mutually agreed) after receipt. In the event of termination of the
Agreement, the Trust and/or the Fund will continue to furnish to the Adviser
such other information relating to the business affairs of the Trust and/or the
Fund as the Adviser at any time, or from time to time, reasonably requests in
order to discharge its obligations hereunder.
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13. This Agreement may be amended by mutual agreement, but only after
authorization of such amendments by the affirmative vote of (i) the holders of
the majority of the outstanding voting securities of the Fund and (ii) a
majority of the members of the Trustees who are not interested persons of the
Trust or the Adviser, cast in person at a meeting called for the purpose of
voting on such approval.
14. The Adviser, the Trust and the Fund each agree that the name "Pilgrim"
is proprietary to, and a property right of, the Adviser. The Trust and the Fund
agree and consent that (i) each will only use the name "Pilgrim" as part of its
name and for no other purpose, (ii) each will not purport to grant any third
party the right to use the name "Pilgrim" and (iii) upon the termination of this
Agreement, the Trust and the Fund shall, upon the request of the Adviser, cease
to use the name "Pilgrim," and shall use its best efforts to cause its officers,
trustees and shareholders to take any and all actions which the Adviser may
request to effect the foregoing.
15. Any notice or other communications required to be given pursuant to
this Agreement shall be deemed to be given if delivered or mailed by registered
mail, postage paid, (1) to the Adviser at 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxx 00000; or (2) to the Trust and/or the Fund at 00 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000.
16. This Agreement shall be governed by and construed in accordance with
the laws of the State of Connecticut. The terms "interested person",
"assignment", and "vote of the majority of the outstanding securities" shall
have the meaning set forth in the Investment Company Act.
17. The Declaration of Trust, establishing the Trust, dated December 17,
1993, a copy of which, together with all amendments thereto (the "Declaration"),
is on file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name "Pilgrim Variable Products Trust" refers to the Trustees
under the Declaration collectively as trustees, but not individually or
personally; and no Trustee, shareholder, officer, employee or agent of the Trust
and/or the Fund may be held to any personal liability, nor may resort be had to
their private property for the satisfaction of any obligation or claim or
otherwise in connection with the affairs of the Trust, but the Trust property
only shall be liable.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year written
above.
PILGRIM VARIABLE PRODUCTS TRUST
By:
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PILGRIM INVESTMENTS, INC.
By:
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SCHEDULE A
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN
PILGRIM VARIABLE PRODUCTS TRUST
AND
PILGRIM INVESTMENTS, INC.
FUNDS
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Pilgrim VP MagnaCap Portfolio
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