Exhibit 99.B4m
INVESTMENT SUBADVISORY AGREEMENT
SMALL-CAP VALUE PORTFOLIO
THIS AGREEMENT is between JEFFERSON PILOT INVESTMENT ADVISORY CORPORATION,
a Tennessee corporation with offices at Xxx Xxxxxxx Xxxxx, Xxxxxxx, Xxx
Xxxxxxxxx, 00000 (the "Investment Manager") and Dalton, Greiner, Xxxxxxx, Xxxxx
& Co., LLC (the "Subadviser") a Delaware limited liability company with offices
at 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000. This Agreement is to
be effective upon the closing of the acquisition of the Subadviser by Boston
Private Financial Holdings, Inc. (February 6, 2004).
WITNESSETH:
WHEREAS, Jefferson Pilot Variable Fund, Inc. (the "Fund") is engaged in
business as a diversified open-end management investment company and is
registered as such under the Investment Company Act of 1940 (the "Investment
Company Act");
WHEREAS, the Fund issues separate classes or series of stock, each of which
represents a separate portfolio of investments;
WHEREAS, the Fund's shareholders are and will be separate accounts
maintained by insurance companies for variable life insurance policies under
which income, gains, losses, whether or not realized, from assets allocated to
such accounts are, in accordance with the Policies, credited to or charged
against such accounts without regard to other income, gains, or losses of such
insurance companies;
WHEREAS, the Fund has employed the Investment Manager to act as investment
manager of the Portfolio, as set forth in an Investment Management Agreement
between the Fund and the Investment Manager dated August 28, 1997, (the
"Investment Management Agreement") pursuant to which it was agreed that the
Investment Manager may contract with the Subadviser, or other parties for
certain investment management services;
WHEREAS, the Subadviser is engaged in the business of rendering investment
advisory services and is registered as an investment adviser under the
Investment Advisers Act of 1940 (the "Advisers Act");
WHEREAS, the Investment Manager desires to retain the Subadviser to render
investment management services to the Fund's Small-Cap Value Portfolio (the
"Portfolio") in the manner and on the terms hereinafter set forth;
1
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained the Investment Manager and the Subadviser hereby agree as
follows:
1. Appointment of the Subadviser. The Investment Manager hereby appoints
the Subadviser to act as an investment subadviser for the Portfolio and to
manage the investment and reinvestment of the assets of the Portfolio, subject
to the supervision of the Directors of the Fund and the terms and conditions of
this Agreement. The Subadviser will be an independent contractor and will have
no authority to act for or represent the Fund or Investment Manager in any way
or otherwise be deemed an agent of the Fund or Investment Manager except as
expressly authorized in this Agreement or another writing by the Fund,
Investment Manager and the Subadviser. Notwithstanding the foregoing, the
Subadviser may execute account documentation, agreements, contracts and other
documents as the Subadviser may be requested by brokers, dealers, counterparts
and other persons in connection with the Subadviser's management of the assets
of the Portfolio, provided that the Subadviser receives the express agreement
and consent of the Manager and/or the Fund's Board of Directors to execute such
documentation, agreements, contracts and other documents. In such respect, and
only for this limited purpose, the Subadviser shall act as the Investment
Manager's and/or the Fund's agent and attorney-in-fact.
2. Duties of the Subadviser. The Subadviser hereby agrees, subject to the
supervision of the Investment Manager and the Board of Directors of the Fund,
(1) to act as the Subadviser of the Portfolio, (2) to manage the investment and
reinvestment of the assets of the Portfolio for the period and on the terms and
conditions set forth in this Agreement, and (3) during the term hereof, to
render the services and to assume the obligations herein set forth in return for
the compensation provided for herein and to bear all expenses of its performance
of such services and obligations.
3. Services to be Rendered by the Subadviser to the Fund
A. The Subadviser will manage the investment and reinvestment of the
assets of the Portfolio and determine the composition of the assets of the
Portfolio, subject always to the general direction and control of the Directors
of the Fund and the Investment Manager and in accordance with the provisions of
the Fund's registration statement, as amended from time to time. In fulfilling
its obligations to manage the investment and reinvestment of the assets of the
Portfolio, the Subadviser will:
(i) obtain and evaluate pertinent, statistical, financial,
and other information relating to individual companies or industries, the
securities of which are included in the Portfolio or are under consideration for
inclusion in the Portfolio;
(ii) formulate and implement a continuous investment program
for the Portfolio (a) consistent with the investment objectives, policies, and
restrictions of the Portfolio as stated in the Fund's Agreement and Articles of
Incorporation, Xxxxxx,
0
and such Portfolio's currently effective Prospectus and Statement of Additional
Information ("SAI") as amended from time to time, and (b) in compliance with the
requirements applicable to both regulated investment companies and segregated
asset accounts under Subchapters M and L of the Internal Revenue Code of 1986,
as amended ("IRC"), and requirements applicable to registered investment
companies under applicable laws;
(iii) take whatever steps are necessary to implement the
investment program for the Portfolio by the purchase and sale of securities and
other investments authorized under the Fund's Agreement and Articles of
Incorporation, Bylaws, and such Portfolio's currently effective Prospectus and
SAI, including the placing of orders for such purchases and sales;
(iv) regularly report to the Directors of the Fund and the
Investment Manager with respect to the implementation of the investment program
and, in addition, provide such statistical information and special reports
concerning the Portfolio and/or important developments materially affecting the
investments held, or contemplated to be purchased, by the Portfolio, as may
reasonably be requested by the Investment Manager or the Directors of the Fund,
including attendance at Board of Directors Meetings, as reasonably requested, to
present such information and reports to the Board, provided that Subadviser
shall not be responsible for fund accounting.
(v) will assist in suggesting methods for determining fair
value of certain portfolio securities when market quotations are not readily
available for the purpose of calculating the Portfolio's net asset value in
accordance with procedures and methods established by the Directors of the Fund;
(vi) establish appropriate interfaces with the Fund's
Investment Manager in order to provide such Investment Manager with all
necessary information requested by the Investment Manager and required to be
provided by Subadviser hereunder.
B. To facilitate the Subadviser's fulfillment of its obligations
under this Agreement, the Investment Manager will undertake the following:
(i) the Investment Manager agrees to provide the Subadviser
with all amendments or supplements to the Registration Statement, the Fund's
Agreement and Articles of Incorporation, and Bylaws prior to filing with
Securities and Exchange Commission.
(ii) the Investment Manager agrees, on an ongoing basis, to
notify the Subadviser expressly in writing of each change in the fundamental and
nonfundamental investment policies of the Portfolio two business days prior to
the effective date of such changes.
3
(iii) The Investment Manager agrees to provide or cause to be
provided to the Subadviser such assistance as may be reasonably requested by the
Subadviser in connection with its activities pertaining to the Portfolio under
this Agreement, including, without limitation, information concerning the
Portfolio, its available funds, or funds that may reasonably become available
for investment, and information as to the general condition of the Portfolio's
affairs and information to enable Subadviser to monitor the Portfolio's
compliance with Subchapter M of the IRC;
(iv) the Investment Manager agrees to provide or cause to be
provided to the Subadviser on an ongoing basis, such information as is
reasonably requested by the Subadviser for performance by the Subadviser of its
obligations under this Agreement, and the Subadviser shall not be in breach of
any term of this Agreement or be deemed to have acted negligently if the
Investment Manager fails to provide or cause to be provided such requested
information and the Subadviser relies on the information most recently furnished
to the Subadviser; and
(v) the Investment Manager will promptly provide the
Subadviser with any guidelines and procedures applicable to the Subadviser or
the Portfolio adopted from time to time by the Board of Directors of the Fund
and agrees to promptly provide the Subadviser copies of all amendments thereto.
C. The Fund and the Investment Manager shall not, without the prior
written consent of Subadviser, make representations in any disclosure document,
advertisement, sales literature or other promotional material regarding the
Subadviser or its affiliates. The Investment Manager shall hold harmless and
indemnify the Subadviser against any loss, liability, cost, damage or expense
(including reasonable attorneys fees and costs) arising out of any use of any
disclosure documents, advertisement, sales literature or other promotional
material without prior written consent by the Subadviser.
D. The Subadviser, at its expense, will furnish all necessary investment
and management facilities and investment personnel, including salaries, expenses
and fees of any personnel required for it to faithfully perform its duties under
this Agreement. The Fund or Investment Manager assumes and shall pay all
expenses incidental to their respective organization, operation and business not
specifically assumed or agreed to be paid by the Subadviser pursuant hereto,
including, but not limited to, investment adviser fees; any compensation, fees,
or reimbursements which the Fund pays to its Directors; compensation of the
Fund's custodian, transfer agent, registrar and dividend disbursing agent;
legal, accounting, audit and printing expenses; administrative, clerical,
record-keeping and bookkeeping expenses; brokerage commissions and all other
expenses in connection with execution of portfolio transactions (including any
appropriate commissions paid to the Subadviser or its affiliates for effecting
exchange listed, over-the-counter or other securities transactions); interest,
all federal, state and local taxes (including stamp, excise, income and
franchise taxes) costs of stock certificates and expenses of delivering such
certificates to the purchaser thereof; expenses of shareholders' meetings and of
preparing, printing and distributing proxy statements,
4
notices, and reports to shareholders; regulatory authorities; all expenses
incurred in complying with all federal and state laws and the laws of any
foreign country applicable to the issue, offer, or sale of shares for the Fund,
including, but not limited to all costs involved in the registration or
qualification of shares of the Fund for sale in any jurisdiction, the costs of
portfolio pricing services and systems for compliance with blue sky laws, and
all costs involved in preparing, printing and mailing prospectuses and
statements of additional information of the Fund; and all fees, dues and other
expenses incurred by the Fund in connection with the membership in any trade
association or other investment company organization.
Notwithstanding anything herein, the Subadviser shall be responsible for
any and all commercially reasonable expenses relating to the filing, printing
and mailing of required supplements to the Fund's registration statement,
provided that such supplements relate solely to a change in the portfolio
manager or managers assigned by the Subadviser to manage the Portfolio.
E. The Subadviser will select brokers and dealers to effect all portfolio
transactions subject to the conditions set forth herein (except to the extent
such transactions are cross-trades effected in accordance with Rule 17a-7 and
such policies or procedures as may be established by the Board of Directors).
The Subadviser will place all necessary orders with brokers, dealers, or
issuers, and will negotiate brokerage commissions if applicable. The Subadviser
is directed at all times to seek to execute brokerage transactions for the
Portfolio in accordance with such policies or practices as may be established by
the Board of Directors and described in the Fund's currently effective
prospectus and SAI, as amended from time to time. The Investment Manager
reserves the right to direct the Subadviser upon written notice not to execute
transactions through any particular broker(s) or dealer(s), and the Subadviser
agrees to comply with such request within ten business days of receiving written
notice.
The Subadviser will monitor the use of broker-dealers. In placing orders
for the purchase or sale of investments for the Portfolio, in the name of the
Portfolio or its nominees, the Subadviser shall use its best efforts to obtain
for the Portfolio the most favorable price and best execution available,
considering all of the circumstances, and shall maintain records adequate to
demonstrate compliance "Best execution" shall mean prompt and reliable execution
at the most favorable securities price, taking into account the other provisions
hereinafter set forth. Whenever the Subadviser places orders, or directs the
placement of orders, for the purchase or sale of portfolio securities on behalf
of the Portfolio, in selecting brokers or dealers to execute such orders, the
Subadviser is expressly authorized to consider the fact that a broker or dealer
has furnished statistical, research or other information or services which
enhance the Subadviser's research and portfolio management capability generally.
It is further understood in accordance with Section 28(e) of the Securities
Exchange Act of 1934, as amended, that the Subadviser may negotiate with and
assign to a broker a commission which may exceed the commission which another
broker would have charged for effecting the transaction if the Subadviser
determines in good faith that the amount of commission charged was
5
reasonable in relation to the value of brokerage and/or research services (as
defined in Section 28(e)) provided by such broker. To the extent authorized by
said Section 28(e) and the Fund's Board of Directors, the Subadviser shall not
be deemed to have acted unlawfully or to have breached any duty created by this
Agreement or otherwise solely by reason of such action. In addition, subject to
seeking the most favorable price and best execution available, the Subadviser
may also consider sales of shares of the Fund as a factor in the selection of
brokers and dealers.
F. On occasions when the Subadviser deems the purchase or sale of a
security to be in the best interest of the Portfolio as well as other clients of
the Subadviser, the Subadviser to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be purchased or sold to attempt to obtain a more 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
transaction, will be made by the Subadviser in accordance with guidelines
adopted by the Board of Directors of the Fund and communicated to the
Subadviser, or, absent any guidelines, in the manner the Subadviser considers to
be the most equitable and consistent with its fiduciary obligations to the
Portfolio.
The Subadviser may perform its Services through any employee, partner,
officer or agent of Subadviser and the Investment Manager and the Fund shall not
be entitled to the advice, recommendation or judgment of any specific person.
Sub-Investment Manager makes no representation or warranty, express or implied,
that any level of performance or investment results will be achieved by the
Small-Cap Value Portfolio or that such Portfolio will perform comparably with
any standard or index, including other clients of Subadviser, whether public or
private.
G. The Subadviser will maintain all accounts, books and records with
respect to the Portfolio as are required of an investment adviser of a
registered investment company pursuant to the Investment Company Act and
Advisers Act and the rules thereunder.
4. Compensation of the Subadviser. The Investment Manager will pay the
Subadviser, with respect to the Portfolio, the compensation specified in
Appendix A to this Agreement. Payments shall be made to the Subadviser within
the first five business days of each month; however, this advisory fee will be
calculated on the daily average value of the Portfolio's assets and accrued on a
daily basis. Solely for the purpose of determining the promptness of payments,
payments shall be considered made upon mailing or wiring pursuant to wiring
instructions provided by the Subadviser.
5. Non-Exclusivity. The Investment Manager agrees that the services of
the Subadviser are not to be deemed exclusive and the Subadviser is free to act
as investment manager to various investment companies and as fiduciary for other
managed accounts. The Subadviser shall, for all purposes herein, be deemed to be
an independent contractor and shall, unless otherwise provided or authorized,
have no authority to act for or
6
represent the Fund or the Investment Manager in any way or otherwise be deemed
an agent of the Fund or Investment Manager other than in furtherance of its
duties and responsibilities as set forth in this Subadvisory Agreement.
6. Books and Records. The Subadviser agrees that all books and records
which it maintains for the fund are the Fund's property, and, in the event of
termination of this Agreement for any reason, the Subadviser agrees promptly to
return to the Fund, free from any claim or retention of rights by the
Subadviser, all records relating to the Portfolio, provided, however, that the
Subadviser may retain a copy of such records. The Subadviser also agrees upon
request of the Investment Manager or the Fund, promptly to surrender the books
and records to either party or make the books and records available for
inspection by representatives of regulatory authorities. In connection with its
duties hereunder, the Subadviser further agrees to maintain, prepare and
preserve books and records in accordance with the Investment Company Act and
rules thereunder, including but not limited to, Rule 31a-1 and 31a-2.
The Subadviser will use records or information obtained under this
Agreement only for the purposes contemplated hereby, and will not disclose such
records or information in any manner other than expressly authorized by the
Fund, or if disclosure is expressly required by applicable federal or state
regulatory authorities or by this Agreement. The Subadviser will furnish any
informational reports requested by any state insurance commissioner.
7. Liability. Except as may otherwise be provided by the Investment
Company Act, neither the Subadviser nor its officers, directors, employees or
agents shall be subject to any liability to the Investment Manager, the Fund or
any shareholder of the Fund for any error of judgment, mistake of law or any
loss arising out of any investment or other act or omission in the course of,
connected with or arising out of any service to be rendered hereunder, except by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of reckless disregard of its obligations and duties
under this Agreement. The Investment Manager shall hold harmless and indemnify
the Subadviser for any loss, liability, cost, damage or expense (including
reasonable attorneys fees and costs) arising from any claim or demand by the
Fund or any past or present shareholder of the fund that is not arising from
Subadviser's willful misfeasance, bad faith or gross negligence.
8. Reliance on Documents. The Board of Directors of the Fund or its
officers or agent will provide timely information to the Subadviser regarding
such matters as purchases and redemptions of shares in the Portfolio, the cash
requirements, and cash available for investment in the Portfolio, and all other
information as may be reasonably necessary or appropriate in order for the
Subadviser to perform its responsibilities hereunder. The Subadviser has
provided the Investment Manager with a copy of its current form ADV.
7
Neither the Fund or the Investment Manager, nor their respective designees
or agents, shall use any material describing or identifying the Subadviser or
its affiliates without the prior consent of the Subadviser. Any material
utilized by the Fund, the Investment Manager or their respective designees or
agents which contain information as to the Subadviser and/or its affiliates
shall be submitted to the Subadviser for approval prior to use, not less than
five (5) business days before such approval is requested.
The Investment Manager has herewith furnished the Subadviser copies of the
Fund's Prospectus, Statement of Additional Information, Articles of
Incorporation and By-Laws as currently in effect and agrees during the
continuance of the Agreement to furnish the Subadviser copies of any amendments
or supplements thereto before or at the time the amendments or supplements
become effective. The Subadviser will be entitled to rely on all such documents
furnished to it by the Investment Manager of the Fund.
9. Duration and Termination of the Agreement. This Subadvisory Agreement
shall remain in force for a period of two years from the effective date.
Thereafter, it shall continue in effect from year to year, but only so long as
such continuance is specifically approved at least annually by (a) the Board of
Directors of the Fund, or by the vote of a majority of the outstanding voting
securities of the Portfolio, and (b) a majority of those directors who are not
parties to this Subadvisory Agreement, not interested persons of any party to
this Subadvisory Agreement, cast in person at a meeting called for the purpose
of voting on such approval. This Agreement may be terminated, without the
payment of any penalty, by the Board of Directors of the Fund, by a vote of a
majority of the outstanding shares of the Portfolio, or by the Investment
Manager on sixty days' written notice to the Subadviser, or by the Subadviser on
sixty days' written notice to the Fund or the Investment Manager. Termination by
the Board of Directors or by the Investment Manager shall be subject to
shareholder approval to the extent legally required. This Agreement shall
automatically terminate in the event of its assignment or in the event of
termination of the Investment Management Agreement.
10. Amendments of the Agreement. Except to the extent permitted by the
Investment Company Act or the rules or regulations thereunder or pursuant to any
exemptive relief granted by the Securities and Exchange Commission ("SEC"), this
Agreement may be amended by the parties only if such amendment, if material, is
specifically approved by the vote of a majority of the outstanding voting
securities of the Portfolio (unless such approval is not required by Section 15
of the Investment Company Act as interpreted by the SEC or its staff) and by the
vote of a majority of the Independent Directors cast in person at a meeting
called for the purpose of voting on such approval. The required shareholder
approval shall be effective with respect to the Portfolio if a majority of the
outstanding voting securities of the Portfolio vote to approve the amendment,
notwithstanding that amendment may not have been approved by a majority of the
outstanding voting securities of any other portfolio affected by the amendment
or all the portfolios of the Fund.
8
11. Definitions. The terms "assignment", "interested person", and
"majority of the outstanding voting securities", when used in this Agreement,
shall have the respective meaning specified under the Investment Company Act and
the rules thereunder.
12. Notices. Any notice that is required to be given by the parties to
each other under the terms of this Agreement shall be given in writing,
delivered, or mailed postpaid to the other party, or transmitted by facsimile
with acknowledgment of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to the Subadviser:
Dalton, Greiner, Xxxxxxx, Xxxxx & Co.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxx
Facsimile (000) 000-0000
(b) If to the Investment Manager:
Jefferson Pilot Investment Advisory Corporation
Xxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx
Facsimile (000) 000-0000
13. Governing Law. The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of New Hampshire as at the
time in effect and the applicable provisions of the Investment Company Act or
other federal laws and regulations which may be applicable. To the extent that
the applicable law of the State of New Hampshire or any of the provisions
herein, conflict with the applicable provisions of the Investment Company Act or
other federal laws and regulations which may be applicable, the latter shall
control.
14. Use of Subadviser's Name. Neither the Fund nor the Investment Manager
or any affiliate or agent thereof shall make reference to or use the name, and
any derivative thereof or logo associated with that name, of the Subadviser or
any of its affiliates in any advertising or promotional materials without the
prior approval of the Subadviser, which approval shall not be unreasonably
withheld or delayed. Upon termination of this Agreement, the Investment Manager
and the Fund shall forthwith cease to use such name (or derivative or logo) as
soon as reasonably practicable.
15. Entire Agreement. This Agreement contains the entire understanding and
agreement of the parties with respect to the Portfolio.
9
16. Headings. The headings in the sections of this Agreement are inserted
for convenience of reference only and shall not constitute a part hereof.
17. Severability. Should any portion of this Agreement for any reason be
held to be void in law or in equity, the Agreement shall be construed, insofar
as is possible, as if such portion had never been contained herein.
JEFFERSON PILOT INVESTMENT ADVISORY
CORPORATION
ATTEST: BY:
--------------------- ------------------------
TITLE: TITLE:
---------------------- ---------------------
DALTON, GREINER, XXXXXXX, XXXXX &
CO.
ATTEST: BY:
--------------------- ------------------------
TITLE: TITLE:
---------------------- ---------------------
10
