PORTFOLIO MANAGEMENT AGREEMENT
Exhibit (d)(68)(a)
AGREEMENT made effective as of the close of business this 29th day of September,
2006 among Pacific Life Insurance Company, a Nebraska corporation (“Investment Adviser”), and
BlackRock Investment Management, LLC, a Delaware limited liabity company (“Portfolio Manager”), and
Pacific Select Fund, a Massachusetts Business Trust (the “Fund”).
WHEREAS, the Fund 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”);
WHEREAS, the Investment Adviser is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended (“Advisers Act”);
WHEREAS, the Portfolio Manager is registered with the SEC as an investment adviser under the
Advisers Act;
WHEREAS, the Fund has retained the Investment Adviser to render investment advisory services
to the various portfolios of the Fund pursuant to an Advisory Agreement, as amended, and such
Agreement authorizes the Investment Adviser to engage a portfolio manager to discharge the
Investment Adviser’s responsibilities with respect to the investment management of such portfolios,
a copy of which has been provided to the Portfolio Manager and is incorporated herein by reference;
WHEREAS, the Fund and the Investment Adviser desire to retain the Portfolio Manager to
furnish investment advisory services to one or more portfolios of the Fund, and the Portfolio
Manager is willing to furnish such services to such portfolios and the Investment Adviser in the
manner and on the tenns hereinafter set forth; and
NOW THEREFORE, in consideration of the promises and mutual covenants herein contained,
it is agreed among the Fund, the Investment Adviser, and the Portfolio Manager as follows:
1. Appointment. The Fund and the Investment Adviser hereby appoint BlackRock Investment
Management, LLC to act as Portfolio Manager to provide investment advisory services to the
portfolios of the Fund listed on Exhibit A attached hereto (hereinafter the “Portfolios”) for the
periods and on the tenns 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 Investment Adviser wishes to retain the Portfolio Manager to render
investment advisory services to one or more portfolios of the Fund other than the Portfolios, the
Investment Adviser shall notify the Portfolio Manager in writing and shall revise Exhibit A to
reflect such additional portfolio(s). If the Portfolio Manager is willing to render such services,
it shall notify the Fund and the Investment Adviser in writing, whereupon such portfolio shall
become a Portfolio hereunder, and be subject to this Agreement.
2. Portfolio Manager Duties.
Subject to the supervision of the Fund’s Board of Trustees (the “Board”) and the Investment
Adviser, the Portfolio Manager will provide a continuous investment program for the Portfolios and
determine the composition of the assets of the Portfolios. 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 Portfolios’
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 Portfolios, when these transactions should be executed, and what portion of the assets of the
Portfolios 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 Portfolios. To the extent permitted by the written investment policies of the Portfolios, the
Portfolio Manager shall make decisions for the Portfolios 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 Portfolios. The Portfolio
Manager is authorized to and shall exercise tender offers, exchange offers and vote proxies on
behalf of each Portfolio, each as the Portfolio Manager determines is in the best interest of the
Portfolio.
In performing these duties, the Portfolio Manager:
(a) will conform with (1) 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 the Fund, to the Investment Adviser (as provided to the
Portfolio Manager by the Investment Adviser), or to the Portfolio Manager), (2) all other
applicable federal and state laws and regulations pertaining to investment vehicles underlying
variable annuity and/or variable life insurance contracts, (3) any applicable written
procedures, policies and guidelines adopted by the Board and furnished to the Portfolio
Manager, (4) the Fund’s objectives, investment policies and investment restrictions as stated in
the Fund’s Prospectus and Statement of Additional Information as supplemented or amended from time
to time, as furnished to the Portfolio Manager, (5) the provisions of the Fund’s Registration
Statement filed on Form N-IA under the Securities Act of 1933 (the “1933 Act”) and the 1940 Act, as
supplemented or amended from time to time (the “Registration Statement”), (6) Section 851(b)(2) and
(3) of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), (7) the
provisions of Section 817(h) of the Code, applicable to the Portfolio; and (8) any other
applicable laws and regulations, including without limitation, proxy
voting regulations. Until
the Investment Adviser delivers any supplements or amendments to the Portfolio Manager, the
Portfolio Manager shall be fully protected in relying on the Fund’s Registration Statement
previously furnished by the Investment Adviser to the Portfolio Manager. In managing the Portfolios
in accordance with the requirements of this Section 2, the Portfolio Manager shall be entitled to
receive and act upon advice of counsel to the Fund, to the Investment Adviser or to the Portfolio
Manager that is also acceptable to the Investment Adviser.
(b) will (i) use its best efforts to identify each position in the Portfolios that
constitutes stock in a Passive Foreign Investment Company (“PFIC”), as that term is defined in
Section 1296 of the Code, and (ii) make such determinations and inform the Investment Adviser at
least annually (or more often and by such date(s) as the Investment Adviser shall request) of any
stock in a PFIC.
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(c) is responsible, in connection with its responsibilities under this Section 2, for
decisions to buy and sell securities and other investments for the Portfolios, 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 Portfolios, taking into account the factors specified in the
Prospectus and Statement of Additional Information for the Fund, as they may be amended or
supplemented from time to time and furnished to the Portfolio Manager. Subject to such policies as
the Board may determine and consistent with Section 28( e) of the Securities Exchange Act of 1934,
as amended (the “1934 Act”), 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 Portfolios 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 Portfolios
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 1934 Act and Rule lla2-2(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
Portfolios 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”), through
any of its affiliates that are brokers or dealers or FCMs or such other entities which provide
similar services in foreign countries, or through such brokers and dealers that also provide
research or statistical research and material, or other services to the Portfolios 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 Investment Adviser and Board, indicating the brokers, dealers or FCMs to
which such allocations have been made the basis therefor. The Portfolio Manager is authorized to
open brokerage accounts on behalf of the Portfolios in accordance with Fund procedures. The
Portfolio Manager shall not direct brokerage to any broker-dealer in recognition of, or otherwise
take into account in making brokerage allocation decisions, sales of shares of a Portfolio or of
any other investment vehicle by that broker-dealer.
(d) may, on occasions when the purchase or sale of a security is deemed to be in the best
interest of a Portfolio 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 the Registration Statement as furnished to the 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 fair and equitable and
consistent with the Portfolio Manager’s fiduciary obligations to the Portfoli()s and to such other
clients.
(e) will, in connection with the purchase and sale of securities for the Portfolios, together
with the Investment Adviser, arrange for the transmission to the custodian and recordkeeping agent
for the Fund, 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 Portfolios, as may be reasonably necessary to enable the
custodian and recordkeeping agent to perform its administrative and
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recordkeeping responsibilities with respect to the Portfolios, and with respect to Portfolio
securities to be purchased or sold through the Depository Trust Company, will arrange for the
automatic transmission of the confirmation of such trades to the Fund’s custodian and
recordkeeping agent, and, if required, the Investment Adviser. The Portfolio Manager agrees to
comply with such rules, procedures and time frames as the Fund’s custodian may reasonably set or
provide with respect to the clearance and settlement of transactions for a Portfolio, including
but not limited to submission of trade tickets. Any Portfolio assets shall be delivered directly
to the Fund’s custodian.
(f) will provide reasonable assistance to the Investment Adviser, custodian or
recordkeeping agent for the Fund in their determining or confirming, consistent with the
procedures and policies stated in the Fund’s valuation procedures and/or the Registration
Statement, the value of any portfolio securities or other assets of the Portfolios for which the
Investment Adviser, custodian or recordkeeping agent seeks assistance from the Portfolio Manager
or identifies for review by the Portfolio Manager. Such reasonable assistance shall include (but
is not limited to): (i) designating and providing timely access, independently on an as needed
basis and upon the reasonable request of the Investment Adviser or custodian, to one or
more employees of the Portfolio Manager who are knowledgeable about the security/issuer, its
financial condition, trading and/or other relevant factors for valuation, which employees shall be
available for consultation when the Board’s Valuation Committee convenes; (ii) if requested by the
Investment Adviser and so far as reasonable and practicable, notifying the Investment Adviser in
the event any Portfolio security’s value does not appear to reflect corporate actions,
news, significant events or such security otherwise requires reviews to determine if
fair valuation is necessary under the Fund’s procedures (iii) if requested by the
Investment Adviser, notifying the Investment Adviser in the event the Portfolio Manager
determines, with respect to a security held by the Portfolio Manager, the value of such security
pursuant to the Portfolio Manager’s procedures for determining the fair value of a security; (iv)
upon the request of the Investment Adviser or custodian assisting in obtaining bids and offers or
quotes from broker/dealers or market-makers with respect to securities held by the Portfolios; (v)
verifying pricing and providing fair valuations or recommendations for fair valuations in
accordance with the Fund’s valuation procedures, as they may be amended from time to time; and
(vi) maintaining adequate records and written backup information with respect to the securities
valuation services provided hereunder, and providing such information to the Investment Adviser or
the Fund upon request. Such records shall be deemed Fund records. Both parties acknowledge that
the pricing information provided by Portfolio Manager is for informational purposes only and does
not constitute recommendations by Portfolio Manager for the pricing of any securities referenced.
(g) will maintain and preserve such records related to each Portfolio’s transactions as
required under the 1940 Act and the Advisers Act. The Portfolio Manager will make available to the
Fund and the Investment Adviser promptly upon request, any of the Portfolios’ 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 the Fund), as are necessary to assist the
Fund and the Investment Adviser in complying with requirements of the 1940 Act and the Advisers
Act, as well as other applicable laws, and will furnish to regulatory authorities having the
requisite authority any information or reports in connection with such services which may be
requested in order to ascertain whether the operations of the Fund are being conducted in a manner
consistent with applicable laws and regulations.
(h) will regularly report to the Board on the investment program for the
Portfolios and the issuers and securities represented in the Portfolios, and will furnish the
Board,
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with respect to the Portfolios, such periodic and special reports as the Board and the
Investment Adviser may reasonably request, including, but not limited to, reports concerning
transactions and performance of each Portfolio, a quarterly compliance checklist reports regarding
compliance with the Fund’s procedures pursuant to Rules 17e-l, 17a-7, 10f-3 and 12d3-1 under the
1940 Act, 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, IOs/POs, and compliance with the Portfolio Manager’s Code of Ethics,
and such other procedures or requirements that the Investment Adviser may reasonably request from
time to time.
(i) will adopt a written Code of Ethics complying with the requirements of Rule 17j-l under
the 1940 Act and Rule 204A-l under the Advisers Act and will provide the Investment Adviser and the
Fund with a copy of the Code of Ethics, together with evidence of its adoption. Within 30 days of
the end of each calendar quarter during which this Agreement remains in effect, the president or a
vice-president of the Portfolio Manager shall certify to the Investment Adviser that the Portfolio
Manager has complied with the requirements of Rule 17j-l during the previous calendar quarter and
that there have been no violations of the Code of Ethics or, if a violation has occurred, that
appropriate action has been taken in response to such violation. Upon written request of the
Investment Adviser or the Fund, the Portfolio Manager shall permit representatives of the
Investment Adviser and the Trust to examine the reports (or summaries of the reports) required to
be made under the Code of Ethics and other records evidencing enforcement of the Code of Ethics.
(j) will provide to the Investment Adviser a copy of the Portfolio Manager’s
Form ADV, and any supplements or amendments thereto, as filed with the SEC, on an annual basis (or
more frequently if requested by the Investment Adviser or the Board). The Portfolio Manager
represents and warrants that it is a duly registered investment adviser under the Advisers Act.
The Portfolio Manager will provide a list of persons who the Portfolio Manager wishes to have
authorized to give written and/or oral instructions to Custodians of assets for the Portfolios.
(k) will be responsible for the preparation and filing of Schedule 13G and Form 13F on behalf
of the Fund reflecting holdings over which the Portfolio Manager and its affiliates have investment
discretion.
(1) will not permit any employee of the Portfolio Manager to have any material connection with
the handling of the Portfolios 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
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 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
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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.
(m) 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 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 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. The Fund and the Investment Adviser will not disclose or use any records or
information with respect to 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 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.
(n) will assist the Investment Adviser, the Fund, and any of its or their trustees, directors,
officers, and/or employees in complying with the provisions of the SarbanesOxley Act of 2002 to the
extent such provisions relate to the services to be provided by, and the obligations of, the
Portfolio Manager hereunder. Specifically, and without limitation to the foregoing, the Portfolio
Manager agrees to provide certifications to the principal executive and financial officers of the
Fund (the “certifying officers”) that correspond to and/or support the certifications required to
be made by the certifying officers in connection with the preparation and/or filing of the Fund’s
Form N-CSRs, N-Qs, N-SARs, shareholder reports, financial statements, and other disclosure
documents or regulatory filings, in such form and content as the Fund shall reasonably request or
in accordance with procedures adopted by the Fund.
(0) is, along with its affiliated persons, permitted to enter into transactions with the other
portfolios of the Fund and affiliated persons of those other portfolios of the Fund (collectively,
the “Other Portfolios”). In doing so, the Portfolio Manager is prohibited from consulting with the
Investment Adviser or the portfolio managers of these Other Portfolios concerning securities
transactions of the Portfolios except for the purpose of complying with the conditions of Rule
12d3-I(a) and (b) under the 1940 Act.
(P) will exercise voting rights on portfolio securities held by a Portfolio in accordance with
written policies and procedures adopted by the Portfolio Manager, which may be amended from time to
time, and which at all times shall comply with the requirements of applicable federal statutes and
regulations and any related SEC guidance relating to such statutes and regulations (collectively,
“Proxy Voting Policies and Procedures”). The Portfolio Manager shall vote proxies on behalf
of each Portfolio in a manner deemed by the Portfolio Manager to be in the best interests of
each Portfolio pursuant to the Portfolio Manager’s written Proxy Voting Policies and Procedures.
The Portfolio Manager shall provide disclosure regarding the Proxy Voting Policies and Procedures
in accordance with the requirements of Form N-IA for inclusion in the Fund’s registration
statement. The Portfolio Manager shall report to the Investment
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Adviser in a timely manner a record of all proxies voted, in such form and format that
complies with acceptable federal statutes and regulations (e.g., requirements of Form N-PX). The
Portfolio Manager shall certify at least annually or more often as may reasonably be requested
by the Investment Adviser, as to its compliance with its own Proxy Voting Policies and
Procedures and applicable federal statues and regulations.
(q) will provide reasonable assistance to the Fund and the Fund’s Chief Compliance Officer
(“CCO”) in complying with Rule 38a-l under the 1940 Act. Specifically, the Portfolio Manager
represents and warrants that it shall maintain a compliance program in accordance with the
requirements of Rule 206(4)-7 under the Advisers Act, and shall provide the CCO with
reasonable access to information regarding the Portfolio Manager’s compliance program, which access
shall include on-site visits with the Portfolio Manager as may be reasonably requested from time to
time. In connection with the periodic review and annual report required to be prepared by the CCO
pursuant to Rule 38a-l, the Portfolio Manager agrees to provide certifications as may be reasonably
requested by the CCO related to the design and implementation of the Portfolio Manager’s compliance
program.
(r) will comply with the Fund’s policy on selective disclosure of portfolio holdings of the
Fund (the “Selective Disclosure Policy”), as provided in writing to the Portfolio Manager and as
may be amended from time to time. The Portfolio Manager agrees to provide a certification with
respect to compliance with the Fund’s Selective Disclosure Policy as may be reasonably requested by
the Fund from time to time.
(s) will use its best efforts to notify the Investment Adviser promptly in the
event that, in the judgment of the Portfolio Manager, Portfolio share transaction activity becomes
disruptive to the ability of the Portfolio Manager to effectively manage the assets of a Portfolio
consistent with the Portfolio’s investment objectives and policies.
(t) will provide assistance as may be reasonably requested by the Investment
Adviser in connection with compliance by the Portfolios with any current or future legal and
regulatory requirements related to the services provided by the Portfolio Manager hereunder.
(u) will provide such certifications to the Fund as the Fund or the Investment
Adviser may reasonably request related to the services provided by the Portfolio Manager
hereunder.
(v) will research and confirm whether the Portfolios held or traded a particular
security during its management at the direction of the Investment Adviser, as the Investment
Adviser may direct from time to time.
(w) will provide reasonable assistance to the Investment Adviser with respect
to the annual audit of the Fund’s financial statements, including, but not limited to: (i)
providing broker contacts as needed for obtaining trade confirmations (specifically with respect
to term
loans and all derivatives, including swaps); (ii) providing copies of term loans and swap
agreements, within a reasonable time after the execution of such agreements; (iii) providing
assistance in obtaining trade confirmations in the event the Fund or the Fund’s independent
registered public accounting firm is unable to obtain such confirmations directly from the
brokers and (iv) obtaining market quotations for investments (including term loans and
derivatives) that are not readily ascertainable in the event the Fund or the Fund’s independent
registered public accounting firm is unable to obtain such market quotations through
independent means.
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3. Disclosure about Portfolio Manager and Portfolio. The Portfolio Manager has
reviewed the current Registration Statement and agrees to promptly review future
amendments to the Registration Statement, including any supplements thereto, which relate to the
Portfolio Manager or the Portfolios, filed with the SEC (or which will be filed with the SEC in the
future) and represents and warrants that, solely with respect to the disclosure respecting
or relating to the Portfolio Manager, including any performance information the Portfolio
Manager provides that is included in or serves as the basis for information included in the
Registration Statement, such Registration Statement contains as of the date hereof, or will contain
as of the date of effectiveness of any future Registration Statement or supplement thereto, no
untrue statement of any material fact and does not omit any statement of material fact which was
required to be stated therein or necessary to make the statements contained therein not misleading.
The Portfolio Manager further agrees to notify the Investment Adviser and the Fund immediately of
any material fact about the Portfolio Manager, known to the Portfolio Manager respecting or
relating to the Portfolio Manager that is not contained in the Registration Statement
or prospectus for the Fund, or any amendment or supplement thereto, or of any statement
respecting or relating to the Portfolio Manager contained therein that becomes untrue in any
material respect. With respect to the disclosure respecting each Portfolio, the Portfolio Manager
represents and agrees that the description in the Fund’s prospectus contained in the following
sections: “The portfolio’s investment goal,” and “What the portfolio invests in” (collectively,
“Portfolio Description”) as of the date of this Agreement is consistent with the manner in which
the Portfolio Manager intends to manage each Portfolio, and the description of “Risks you should be
aware of’ (“Risk Description”) is consistent with risks known to the Portfolio Manager that arise
in connection with the manner in which the Portfolio Manager intends to manage the Portfolio. The
Portfolio Manager further agrees to notify the Investment Adviser and the Fund promptly in the
event that the Portfolio Manager becomes aware that the Portfolio Description for a Portfolio is
inconsistent in any material respect with the manner in which the Portfolio Manager is managing the
Portfolio, and in the event that the Risk Description is inconsistent in any material respect with
the risks known to the Portfolio Manager that arise in connection with the manner in which the
Portfolio Manager is managing the Portfolio. In addition, the Portfolio Manager agrees to comply
with the Investment Adviser’s reasonable request for information regarding the personnel of the
Portfolio Manager who are responsible for the day-to-day management of the Fund’s assets.
4. Expenses. The Portfolio Manager shall bear all expenses incurred by it and its staff with
respect to all activities in connection with the performance of the Portfolio Manager’s services
under this Agreement. including but not limited to salaries, overhead, travel, preparation of
Board materials, review of marketing materials, and marketing support. Portfolio Manager
agrees to pay to the Investment Adviser the cost of generating a prospectus supplement, which
includes preparation, filing, printing, and distribution (including mailing) of the supplement,
if
the Portfolio Manager makes any changes that require immediate disclosure in the
prospectus or any required regulatory documents by supplement, including changes to its
structure, to
investment personnel, to investment style or management, or otherwise (“Changes”), and at the
time of notification to the Fund by the Portfolio Manager of such Changes, the Fund is not
generating a supplement for other purposes or the Fund does not wish to add such Changes to a
pending supplement. However, such Changes will not be unreasonably withheld from a
pending supplement. All other expenses not specifically assumed by the Portfolio Manager
hereunder or by the Investment Adviser under the Advisory Agreement are borne by the applicable
Portfolio
of the Fund. The Fund, the Portfolio Manager and the Investment Adviser shall not be
considered as partners or participants in a joint venture.
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5. Compensation. For the services provided and the expenses borne by the Portfolio
Manager pursuant to this Agreement, the Investment Adviser will pay to the Portfolio Manager a fee
in accordance with Exhibit A attached to this Agreement. This fee will be computed and accrued
daily and payable monthly. The fees for any month during which this Agreement is in effect for less
than the entire month shall be pro-rated based on the number of days during such month that the
Agreement was in effect.
6. Seed Money. The Investment Adviser agrees that the Portfolio Manager shall not
be responsible for providing money for the initial capitalization of any Portfolio.
7. Compliance.
(a) The Portfolio Manager agrees that it shall immediately notify the Investment Adviser and
the Fund (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 Portfolio has ceased to qualify or might
not qualify as a regulated investment company under Subchapter M of the Code; and (iii) upon having
a reasonable basis for believing that the Portfolio has ceased to comply with the diversification
provisions of Section 817(h) of the Code or the Regulations thereunder. The Portfolio Manager
further agrees to notify the Investment Adviser and Fund 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 the Fund, or any
amendment or supplement thereto, or of any statement contained therein that becomes untrue in
any material respect.
(b) The Investment Adviser agrees that it shall immediately notify the
Portfolio Manager (i) in the event that the SEC has censured the Investment Adviser or
the Fund; placed limitations upon either of their activities, functions, or operations; suspended
or revoked the Investment 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 Portfolio has ceased to qualify or might not qualify as a
regulated investment company under Subchapter M of the Code; or (iii) upon having a reasonable
basis for believing that the Portfolio has ceased to comply with the diversification provisions of
Section 817(h) of the Code or the Regulations thereunder.
8. Independent Contractor. The Portfolio Manager shall for all purposes herein be
deemed to be an independent contractor and shall, unless otherwise expressly provided herein or
authorized by the Investment Adviser from time to time, have no authority to act for or represent
the Investment 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 the Fund, the Portfolio
Manager shall have no authority to act for or represent the Fund in any way or otherwise be deemed
the Fund’s Agent.
9. Books and Records. In compliance with the requirements of and to the extent required by
Section 31a of the 1940 Act and the rules thereunder, the Portfolio Manager hereby agrees that all
records which it maintains for the Portfolios are the property of the Fund and further agrees to
surrender promptly to the Fund any of such records upon the Fund’s or the Investment Adviser’s
request, although the Portfolio Manager may, at its own expense, make and retain a copy
of such records.
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10. Cooperation. Each party to this Agreement agrees to 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 the Fund.
11. Responsibility and Control. Notwithstanding any other provision of this Agreement, it is
understood and agreed that the Fund 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, provided,
however, that the Portfolio Manager shall not be liable for any losses to the Fund resulting from
the Fund’s direction, or from the Fund’s disapproval of any action proposed to be taken by the
Portfolio Manager.
12. Services Not Exclusive. It is understood that the services of the 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 Portfolios) or from engaging in other activities.
13. Liability. Except as may otherwise be required by the 1940 Act or the rules thereunder or
other applicable law, the Fund and the Investment 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, nothing contained in this Agreement shall constitute a
waiver or limitation of rights that the Fund may have under federal or state securities laws.
14. Indemnification.
(a) The Portfolio Manager agrees to indemnify and hold harmless, the Investment Adviser, any
affiliated person within the meaning of Section 2(a)(3) of the 1940 Act (“affiliated person”) of
the Investment Adviser, and each person, if any, who, within the meaning of Section 15 of the 1933
Act, controls (“controlling person”) the Investment Adviser (collectively, “PL Indemnified
Persons”) against any and all losses, claims, damages, liabilities or litigation (including
reasonable legal and other expenses), to which the Investment Adviser or such affiliated person or
controlling 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 Portfolio Manager’s responsibilities
to the Fund which (i) are based upon any willful misfeasance, bad faith, negligence, or reckless
disregard of, the Portfolio Manager’s obligations and/or duties under this Agreement by the
Portfolio Manager 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) are based upon any
untrue statement or alleged untrue statement of a material fact contained in a registration
statement or prospectus covering the Shares of the Fund or any Portfolio, 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 to the Investment Adviser, the Fund, or any affiliated person of
10
the Fund 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 Investment Adviser or any affiliated person or controlling
person of the Investment Adviser deemed to protect such person against any liability to
which any such person would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the performance of his duties, or by reason of his reckless
disregard of obligations and duties under this Agreement.
(b) The Investment 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 reasonable 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 Investment
Adviser of the Fund which (i) are based upon any willful misfeasance, bad faith or
negligence by the Investment Adviser, any of its directors, officers, or employees or any
affiliate acting on
behalf of the Investment Adviser (other than a Portfolio Manager Indemnified Person),
or (ii) are based upon any untrue statement or alleged untrue statement of a material fact
contained in a
registration statement or prospectus covering the Shares of the Fund or any Portfolio, 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, unless such a statement or omission was made in reliance upon information
furnished in writing to the Investment Adviser, the Fund, or any affiliated person of
the Fund 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 Investment Adviser’s indemnity
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 the date of
execution first written above, and shall continue in effect for two years and continue thereafter
on an annual basis with respect to each Portfolio; provided that such annual continuance is
specifically approved at least annually (a) by the vote of a majority of the Board, or (b) by the
vote of a majority of the outstanding voting shares of each Portfolio, and provided that
continuance is also approved by the vote of a majority of the Board who are not parties to this
Agreement or “interested persons” (as such term is defined in the 0000 Xxx) of the Fund, the
Investment Adviser, or the Portfolio Manager, cast in person at a meeting called for the purpose of
voting on such approval.
This Agreement may be terminated with respect to any Portfolio:
(a) by the Fund at any time with respect to the services provided by the Portfolio Manager,
without the payment of any penalty, by vote of a majority of the Board or by a vote of a majority
of the outstanding voting shares of the Fund or, with respect to a particular Portfolio, by vote of
a majority of the outstanding voting shares of such Portfolio, upon (60) sixty days prior written
notice to the Portfolio Manager and the Investment Adviser;
11
(b) by the Portfolio Manager at any time, without the payment of any penalty,
upon (60) sixty days prior written notice to the Investment Adviser and the Fund.
(c) by the Investment Adviser at any time, without the payment of any penalty, upon (60) sixty
days prior written notice to the Portfolio Manager and the Fund.
This Agreement will terminate automatically in event of its assignment under the 1940 Act and
any rules adopted by the SEC thereunder, but shall not terminate in connection with
any transaction not deemed an assignment. In the event this Agreement is terminated or is not
approved in the manner described above, the Sections or Paragraphs numbered 2(g) for a period of
six years, and 2(m), 2(n), 2(q), 2(t), 9,10,13,14,16,17,18 and 19 of this Agreement as well as
any applicable provision of this Paragraph numbered 15 shall remain in effect.
16. Use of Name.
(a) It is understood that the name “Pacific Life Insurance Company” and “Pacific Life” and
“Pacific Select Fund” and any derivative thereof or logo associated with those names are the
valuable property of the Investment Adviser and its affiliates, and that the Portfolio Manager
shall not use such names (or derivatives or logos) without the prior written approval of the
Investment Adviser and only so long as the Investment Adviser is an investment adviser to the Fund
and/or the Portfolios. Upon termination of this Agreement, the Portfolio Manager shall forthwith
cease to use such name (or derivative or logo).
(b) It is understood that the name BlackRock or any logo associated with those names is the
valuable property of the Portfolio Manager and that the Fund and the Investment Adviser have the
right to use such name (or derivative or logo), in the Fund’s prospectus, SAI and Registration
Statement or other filings, forms or reports required under applicable state or federal securities,
insurance, or other law, for so long as the Portfolio Manager is a Portfolio
Manager to the Fund and/or one of the Portfolios, provided, however, that the Fund may
continue to use the name of the Portfolio Manager in its Registrations Statement and other
documents to the extent deemed necessary by the Fund to comply with disclosure obligations under
applicable law and regulation. Neither the Fund nor the Investment Adviser shall use the Portfolio
Manager’s name or logo in promotional or sales related materials prepared by or on behalf of the
Investment Adviser or the Fund, without prior review and approval by the Portfolio Manager, which
may not be unreasonably withheld. Upon termination of this Agreement, the Fund and the Investment
Adviser shall forthwith cease to use such names (and logo), except as provided for herein. Subject
to prior review and approval, the Fund and the Investment Adviser retain the right to the use of
the Mercury Advisors name through November 30, 2006.
17. Limitation of Liability.
A copy of the Declaration of Trust for the Fund is on file with the Secretary of
the State of Massachusetts. The Declaration of Trust has been executed on behalf of the Fund by a
Trustee of the Fund in his capacity as Trustee of the Fund and not individually. The obligations of
this Agreement with respect to each Portfolio shall be binding upon the assets and property of each
such Portfolio individually, and not jointly, and shall not be binding upon any Trustee, officer,
employee, agent or shareholder, whether past, present, or future, of the Fund individually, or upon
the Fund generally or upon any other portfolio of the Fund.
12
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:
BlackRock Investment Management LLC_ 000
Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
Facsimile transmission number: (000) 000-0000
Attention: General Counsel
Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
Facsimile transmission number: (000) 000-0000
Attention: General Counsel
B. ifto the Investment Adviser, to:
Pacific Life Insurance Company
000 Xxxxxxx Xxxxxx Xxxxx Xxxxxxx
Xxxxx, XX 00000
Facsimile transmission number: (000) 000-0000
Attention: Xxxxx X. Y xxxx
000 Xxxxxxx Xxxxxx Xxxxx Xxxxxxx
Xxxxx, XX 00000
Facsimile transmission number: (000) 000-0000
Attention: Xxxxx X. Y xxxx
X. if to the Fund, to:
Pacific Select Fund
c/o Pacific Life Insurance Company
000 Xxxxxxx Xxxxxx Xxxxx Xxxxxxx
Xxxxx, XX 00000
Facsimile transmission number: (000) 000-0000
Attention: Xxxxx X. Y onis
c/o Pacific Life Insurance Company
000 Xxxxxxx Xxxxxx Xxxxx Xxxxxxx
Xxxxx, XX 00000
Facsimile transmission number: (000) 000-0000
Attention: Xxxxx X. Y onis
19. Miscellaneous.
(a) This Agreement shall be governed by the laws of California, without regard to the conflict
of law principles thereof, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act, or rules or orders of the SEC thereunder. The
term “affiliate” or “affiliated person” as used in this Agreement shall mean “affiliated person” as
defined in Section 2(a)(3) of the 0000 Xxx.
(b) The captions of this Agreement are included for convenience only and in no way
define or limit any of the provisions hereof or otherwise affect their construction or effect.
(c) To
the extent permitted under Section 15 ofthis Agreement and under the 1940 Act, 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
13
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.
14
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 | ||||||||||
By:
|
/s/ Xxxxx X. Xxxxxx | By: | /s/ Xxxx X. Xxxx | |||||||
| Name: Xxxxx X. Xxxxxx | Name: Xxxx X. Xxxx | |||||||||
| Title: Chief Operating Officer | Title: Assistant Secretary | |||||||||
| BLACKROCK INVESTMENT MANAGEMENT, LLC | ||||||||||
By:
|
/s/ Xxxxxx X. Xxxxx | |||||||||
| Name: Xxxxxx X. Xxxxx | ||||||||||
| Title: Managing Director | ||||||||||
| PACIFIC SELECT FUND | ||||||||||
By:
|
/s/ Xxxxx X. Xxxxxx | |||||||||
| Name: Xxxxx X. Xxxxxx | ||||||||||
| Title: Chief Operating Officer | ||||||||||
Exhibit A
PACIFIC SELECT FUND
FEE SCHEDULE
FEE SCHEDULE
Effective: as of the close of business on September 29, 2006
Portfolios: Equity Index and Small-Cap Index
The Investment Adviser will pay to the Portfolio Manager a monthly fee based on an annual
percentage of the combined average daily net assets of the Equity Index and Small-Cap Index
Portfolios according to the following schedule:
| Rate (%) | Break Point (assets) | |||
.08% on the first $100 million |
||||
.04% on the next $100 million |
||||
.02% on the excess |
||||
The fees for services shall be prorated for any portion of a year in which the Agreement is
not effective.
16
