EXHIBIT (d)(8)
FORM OF
FUND MANAGEMENT AGREEMENT
AGREEMENT made as of the ___ day of ______, 2001 among Pacific Life
Insurance Company, ("Adviser"), a California corporation, and Massachusetts
Financial Services Company, doing business as MFS Investment Management, a
corporation organized under the laws of the State of Delaware ("MFS" or
"Portfolio Manager"), and Pacific Funds ("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 Portfolio Manager to render
investment advisory services hereunder, and with respect to which the Portfolio
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 Portfolio Manager is registered as an investment adviser under
the Advisers Act; and
WHEREAS, Pacific Funds has retained the Adviser to render investment
advisory services to various funds of Pacific Funds pursuant to an Advisory
Agreement, as amended, and such Agreement authorizes the Adviser to engage a
portfolio manager to discharge the Adviser's responsibilities with respect to
the investment management of such funds, a copy of which has been provided to
the Portfolio Manager and is incorporated herein by reference; and
WHEREAS, Pacific Funds and the Adviser desire to retain the MFS to furnish
investment advisory services to one or more funds of Pacific Funds, and the
Portfolio 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 between Pacific Funds, the Adviser, and
the Portfolio Manager as follows:
1. Appointment. Pacific Funds and the Adviser hereby appoint MFS to act
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as portfolio 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 Portfolio 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 Portfolio Manager to render
investment advisory services to one or more funds other than the Funds, the
Adviser shall notify the
Portfolio Manager in writing and shall revise the Fee Schedule to reflect such
additional portfolio(s). If the Portfolio 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. Portfolio Manager Duties. Subject to the supervision of Pacific
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Funds' Board of Trustees and the Adviser, the Portfolio Manager will provide a
continuous investment program for the Funds and determine the composition of the
assets of the Funds. The Portfolio Manager will provide investment research and
analysis, which may include computerized investment methodology, and will
conduct a continuous program of evaluation, investment, sales, and reinvestment
of the Funds' 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 Portfolio 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 Portfolio 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 Portfolio Manager is authorized to exercise tender
offers, exchange offers and to vote proxies on behalf of the Funds, each as the
Portfolio Manager determines is in the best interest of the Funds. In performing
these duties, the Portfolio Manager:
(a) Will manage each of the Funds so that it will meet the
requirements of Section 851(b)(2) and (3) and Subchapter M of the Internal
Revenue Code,
(b) Shall conform with (i) 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 Portfolio Manager), (ii) with all other
applicable federal and state laws and regulations pertaining to investment
vehicles underlying variable annuity and/or variable life insurance contracts,
provided Adviser informs Portfolio Manager of all applicable state insurance
laws relating to the investment and management of the Funds, (iii) with any
applicable written procedures, policies and guidelines adopted by Pacific Funds'
Board of Trustees and furnished to Portfolio Manager, (iv) with the Funds'
objectives, investment policies and investment restrictions as stated in Pacific
Funds' Prospectus and Statement of Additional Information as supplemented or
amended from time to time, as furnished to the Portfolio 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. The Adviser
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agrees to provide promptly to the Portfolio Manager a copy of the documents and
other materials mentioned above and all changes made to such documents, together
with a list of companies the securities of which are not to be bought or sold
for the Funds (such list shall include each security name, cusip number, sedol
and/or applicable ticker, if applicable) and a list of affiliated brokers and
underwriters for reporting transactions under applicable provisions of the
1940 Act. These documents, other materials and any amendments thereto shall not
be deemed effective with respect to the Portfolio Manager until three business
days after the Portfolio Manager's receipt thereof. Until the Adviser delivers
any supplements or amendments to the Portfolio Manager, the Portfolio Manager
shall be fully protected in relying on Pacific Funds' Registration Statement
previously furnished to the Portfolio Manager by the Adviser.
(c) 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 Portfolio 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 Portfolio
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
Portfolio Manager shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by reason of its
having caused the Funds to pay a broker or dealer, acting as agent, for
effecting a portfolio transaction at a price in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction, if the Portfolio Manager determines in good faith that such amount
of commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of either
that particular transaction or the Portfolio Manager's (or its affiliates)
overall responsibilities with respect to the 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 Portfolio Manager
is further authorized to place orders on behalf of the Funds through the
Portfolio Manager if the Portfolio Manager is registered as a broker or dealer
with the SEC or as a FCM with the Commodities Futures Trading Commission
("CFTC"), 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 Portfolio Manager. Such
allocation shall be in such amounts and proportions as the Portfolio Manager
shall determine consistent with the above standards, and, upon request, the
Portfolio Manager will report on said allocation to the 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.
(d) 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
Portfolio Manager. In such event, allocation of the securities so purchased or
sold, as well as the expenses incurred in the transaction, will be made by the
Portfolio Manager in a manner that is
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fair and equitable and consistent with the Portfolio Manager's fiduciary
obligations to Pacific Funds and to such other clients.
(e) Will, in connection with the purchase and sale of securities for
the Funds, together with the Adviser, 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 required, the
Adviser.
(f) 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 Pacific Funds, the value of
any portfolio securities or other assets of the Funds for which the custodian
and recordkeeping agent seeks assistance from the Portfolio Manager or
identifies for review by the Portfolio Manager. This includes (but is not
limited to) obtaining bids and offers or quotes from broker/dealers or market-
makers, verifying pricing and providing recommendations as to fair valuations
and providing information to assist Pacific Funds in making fair valuations in
accordance with Pacific Funds procedures, as they may be amended from time to
time.
(g) Will maintain and preserve such records related to each Fund's
transactions as required under the 1940 Act and the Advisers Act "Required
Records". The Portfolio Manager will make available to Pacific Funds and the
Adviser promptly upon request, any of the Funds' investment records and ledgers
maintained by the Portfolio Manager (which shall not include the records and
ledgers maintained by the custodian and recordkeeping agent for 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
Required Records 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.
(h) 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' portfolios, and will furnish 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 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, procedures for opening brokerage accounts and commodity trading
accounts, liquidity determination of securities purchased pursuant to Rule 144A
and 4(2) commercial paper, and compliance with the Portfolio Manager's Code of
Ethics, and such other procedures or requirements that Pacific Funds or Adviser
may reasonably request from time to time.
(i) Will not disclose or use any records or information obtained
pursuant to this Agreement (excluding investment research and investment advice)
in any manner whatsoever except as expressly authorized in this Agreement or in
the ordinary course of business in connection with placing orders for the
purchase and sale of securities or obtaining
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investment licenses in various countries or the opening of custody accounts and
dealing with settlement agents in various countries, and will keep confidential
any information obtained pursuant to the Agreement, and disclose such
information only if the Board 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.
Pacific Funds and the Adviser will not disclose or use any records or
information respecting the Portfolio Manager obtained pursuant to this
Agreement, in any manner whatsoever except as expressly authorized in this
Agreement, and will keep confidential any information obtained pursuant to this
Agreement, and disclose such information only as expressly authorized in this
Agreement, if the Board 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.
(j) Shall not permit any employee of the Portfolio 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.
(k) Shall provide to Adviser a complete copy of Portfolio Manager's
Form ADV as filed with the Securities and Exchange Commission and a list of
persons who Portfolio Manager wishes to have authorized to give written and/or
oral instructions to Custodians of Pacific Funds assets for the Funds. The
Adviser has received a current copy of the Portfolio 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 Portfolio Manager agrees to provide the
Adviser with current copies of the Portfolio Manager's Form ADV, and any
supplements or amendments thereto, as filed with the SEC.
3. Disclosure about Portfolio Manager. The Portfolio Manager has reviewed
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the current Registration Statement for Pacific Funds and agrees to promptly
review future Registration Statements, including any supplements thereto which
relate to Portfolio Manager, filed with the SEC (or which will be filed with the
SEC in the future) and represents and warrants that, with
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respect to the disclosure about the Portfolio Manager or any performance
information the Portfolio Manager provides that is included in the Registration
Statement for Pacific Funds, such Registration Statement contains as of the date
hereof, or will contain as of the date of effectiveness of any future
Registration Statement or supplement thereto, no untrue statement of any
material fact and does not omit any statement of material fact which was
required to be stated therein or necessary to make the statements contained
therein not misleading. Portfolio Manager represents and warrants that any
performance information provided by it to the Adviser or Pacific Funds in
writing, which is used as the basis for calculating adjusted performance, shall
be true and correct, does not contain any misstatement of a material fact or
omit any statement of material fact which was required to be stated therein or
necessary to make the information provided to the Adviser or Pacific Funds not
misleading. The Portfolio Manager further represents and warrants that to the
extent that any statements or omissions made in any Registration Statement for
Pacific Funds, or any amendment or supplement thereto, are made in direct
reliance upon and in direct conformity with specific information furnished by
the Portfolio Manager expressly for use therein ("Furnished Information"), such
Registration Statement and any amendments or supplements thereto will, with
respect to the Furnished Information, when they become effective, conform in all
material respects to the requirements of the Securities Act of 1933 and the
rules and regulations of the Commission thereunder (the "1933 Act") and the Act
and will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading. The Portfolio Manager 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 Portfolio Manager
is required to be registered.
4. Expenses. The Portfolio Manager shall bear all expenses incurred by it
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and its staff and for their activities in connection with the performance if its
services under this Agreement, including but not limited to salaries, overhead,
travel, preparation of Board materials, review of marketing materials, marketing
support. 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 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 Portfolio 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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Portfolio Manager pursuant to this Agreement, the Adviser will pay to the
Portfolio Manager a fee in accordance with the Fee Schedule attached to this
Agreement. This fee will be computed and accrued daily and payable monthly. The
monthly management fee shall be paid to the Portfolio Manager not later than the
15th business day of the month following the month in which such services were
rendered and shall be based upon the average net asset values of Funds for the
month as determined as of the close of each business day of the month.
Documentation that verifies the calculation of such fee will be provided upon
request of the Portfolio Manager. If the management of the Funds by the
Portfolio Manager commences or terminates at any time other than the beginning
or end of a month, the management fee shall be prorated for that portion of such
month.
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6. Seed Money. The Adviser agrees that the Portfolio 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 Portfolio Manager agrees that it shall immediately notify the
Adviser and Pacific Funds (i) in the event that the SEC, CFTC, or any banking or
other regulatory body has censured the Portfolio Manager; placed limitations
upon its activities, functions or operations; suspended or revoked its
registration, if any, or ability to serve as an investment adviser; or has
commenced proceedings or an investigation that can reasonably be expected to
result in any of these actions, (ii) upon having a reasonable basis for
believing that a Fund has ceased to qualify or might not qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code, and (iii)
upon having a reasonable basis for believing that a Fund has ceased to comply
with the diversification provisions of Section 817(h) of the Internal Revenue
Code or the Regulations thereunder. The Portfolio Manager further agrees to
notify the Adviser and Pacific Funds immediately of any material fact known to
the Portfolio Manager respecting or relating to the Portfolio Manager that is
not contained in the Registration Statement or prospectus for 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 Portfolio
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, (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, and (iii) upon having a reasonable
basis for believing that a Fund has ceased to comply with the diversification
provisions of Section 817(h) of the Internal Revenue Code or the Regulations
thereunder.
8. Independent Contractor. The Portfolio Manager shall for all purposes
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herein be deemed to be an independent 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 Portfolio Manager understands that unless provided herein
or authorized from time to time by Pacific Funds, the Portfolio Manager shall
have no authority to act for or represent Pacific Funds in any way or otherwise
be deemed Pacific Funds' Agent.
9. Books and Records. In compliance with the requirements of Rule 31a-3
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under the 1940 Act, the Portfolio Manager hereby agrees that all records which
it maintains for the Funds are the property of Pacific Funds and further agrees
to surrender promptly to Pacific Funds any of such records upon Pacific Funds'
or the Adviser's request, although the Portfolio Manager may, at its own
expense, make and retain a copy of such records.
10. Cooperation. Each party to this Agreement agrees to reasonably
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cooperate with each other party and with all appropriate governmental
authorities having the requisite jurisdiction (including, but not limited to,
the SEC and state insurance authorities) in connection with any investigation or
inquiry relating to this Agreement or Pacific Funds.
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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 Portfolio Manager.
12. Services Not Exclusive. It is understood that the services of the
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Portfolio Manager and its employees are not exclusive, and nothing in this
Agreement shall prevent the Portfolio Manager (or its employees or affiliates)
from providing similar services to other clients, including investment companies
(whether or not their investment objectives and policies are similar to those of
the Funds) or from engaging in other 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 Portfolio Manager, any affiliated
person of the Portfolio Manager, and each person, if any, who, within the
meaning of Section 15 of the 1933 Act, controls the Portfolio Manager shall not
be liable for, or subject to any damages, expenses, or losses in connection
with, any act or omission connected with or arising out of any services rendered
under this Agreement, except by reason of willful misfeasance, bad faith, or
gross negligence in the performance of the Portfolio Manager's duties, or by
reason of reckless disregard of the Portfolio Manager's obligations and duties
under this Agreement. Notwithstanding the foregoing, the Portfolio Manager may
be liable to Pacific Funds for acts of good faith and 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 Portfolio 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 Portfolio Manager's
responsibilities to Pacific Funds which (i) may be based upon any misfeasance,
non-feasance, bad faith, negligence or reckless disregard of the Portfolio
Manager's obligations and/or duties under this Agreement by the Portfolio
Managers or by any of its directors, officers or employees, or any affiliate
acting on behalf of the Portfolio Manager (other than a PL Indemnified Person),
or (ii) may be based upon any untrue statement or alleged untrue statement of a
material fact contained in a registration statement or prospectus covering the
Shares of Pacific Funds, or any amendment thereof or any supplement thereto, or
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, if
such a statement or omission was made in reliance upon information furnished in
writing as provided in Section 3 hereof to the Adviser, Pacific Funds, or any
affiliated person of Pacific Funds by the Portfolio Manager or any affiliated
person of the Portfolio Manager (other than a PL Indemnified Person); provided,
however, that in no case is the Portfolio Manager's indemnity in favor of the
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
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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 Portfolio
Manager, any affiliated person within the meaning of Section 2(a)(3) of the 1940
Act of the Portfolio Manager and each person, if any, who, within the meaning of
Section 15 of the 1933 Act controls ("controlling person") the Portfolio Manager
(collectively, "Portfolio Manager Indemnified Persons") against any and all
losses, claims, damages, liabilities or litigation (including legal and other
expenses) to which a Portfolio Manager Indemnified Person may become subject
under the 1933 Act, the 1940 Act, the Advisers Act, under any other statute, at
common law or otherwise, arising out of the Adviser's responsibilities as
adviser of Pacific Funds which (i) may be based upon any misfeasance,
nonfeasance, bad faith or negligence by the Adviser, any of its employees or any
affiliate acting on behalf of the Adviser (other than a Portfolio Manager
Indemnified Person) or (ii) may be based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
prospectus covering Shares of Pacific Funds or any Fund, or any amendment
thereof or any supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statement therein not misleading, unless such statement or omission was made in
reliance upon written information furnished to as provided in Section 3 hereof
Pacific Funds or the Adviser or any affiliated person of the Adviser by a
Portfolio Manager Indemnified Person (other than an Adviser Indemnified Person);
provided however, that in no case is the indemnity of the Adviser in favor of
the Portfolio Manager Indemnified Persons deemed to protect such person against
any liability to which any such person would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of his
duties, or by reason of his reckless disregard of obligations and duties under
this Agreement.
15. Duration and Termination. This Agreement shall become effective as of
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the date of execution first written above, and shall continue in effect for two
years for a term ending 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 Portfolio
Manager, cast in person at a meeting called for the purpose of voting on such
approval. This Agreement may not be materially amended without a majority vote
of the outstanding shares (as defined in the 0000 Xxx) of the Funds. 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 Portfolio 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 Portfolio Manager and the Adviser;
(b) by the Portfolio 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.
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(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 Portfolio
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" and any derivative thereof or
logo associated with those names are the valuable property of the Adviser and
its affiliates. Portfolio Manager shall not use such names (or derivatives or
logos) without the prior written approval of the Adviser and only for so long as
the Adviser is an investment adviser to Pacific Funds and/or the Funds. Upon
termination of the Investment Advisory Agreement between the Fund and the
Adviser, the Portfolio Manager shall forthwith cease to use such name (or
derivative or logo).
(b) It is understood that the name "Massachusetts Financial Services
Company" or "MFS Investment Management" or "MFS" or any derivative thereof or
logo associated with those names are the valuable property of the Portfolio
Manager and that Pacific Funds and Adviser have the right to use such name (or
derivative or logo), in Pacific Funds' prospectus, SAI and registration
statement or other filings, forms or reports required under applicable state or
federal securities, insurance, or other law, and for so long as the Portfolio
Manager is a Portfolio Manager to one or more Funds of Pacific Funds. Neither
Pacific Funds nor the Adviser shall use the Portfolio Manager's name or logo in
promotional or sales related materials prepared by or on behalf of the Adviser
or Pacific Funds, without prior review and written approval by the Portfolio
Manager. Upon termination of this Agreement among Pacific Funds, the Adviser and
the Portfolio Manager, Pacific Funds and the Adviser shall forthwith cease to
use such name (or logo).
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 Pacific Funds by a
Trustee of Pacific Funds in his capacity as Trustee of Pacific Funds and not
individually. The obligations of this Agreement shall be
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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 Portfolio Manager, to:
Massachusetts Financial Services Company
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax # (000) 000-0000
Attention: Legal Department
Xxxxx X. XxxXxxxxx
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
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.
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(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.
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: By:
------------------------ -------------------------------
Name: Name:
Title: Title:
MASSACHUSETTS FINANCIAL SERVICES COMPANY
Attest: By:
------------------------ ------------------------------
Name: Name:
Title: Title:
PACIFIC FUNDS
Attest: By:
------------------------ ------------------------------
Name: Name:
Title: Title:
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PACIFIC FUNDS
FEE SCHEDULE
Fund: PF MFS Mid-Cap Growth
Fee: 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 MFS Mid-Cap
Growth Fund and the Capital Opportunities and Mid-Cap Growth Portfolios
of the Pacific Select Fund, according to the following schedule:
.40% On first $300 million
.375% On next $300 million
.35% On next $300 million
.325% On next $600 million
.25% on excess
Fund: PF MFS Global Growth
Fee: 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 MFS Global
Growth Fund and the Global Growth Portfolio of the Pacific Select Fund,
according to the following schedule:
.55% On first $200 million
.50% On next $300 million
.45% On next $500 million
.40% On excess
These fees for services shall be prorated for any portion of a year in which the
Agreement is not effective.
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