INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 1st day of May, 2004, by and between Xxxxxxx Xxxxx
Asset Management, L.P., a Delaware limited partnership (the "Adviser"), and Met
Investors Advisory LLC, a Delaware limited liability company (the "Manager").
WHEREAS, the Manager serves as investment manager of Met Investors Series
Trust (the "Trust"), a Delaware business trust which has filed a registration
statement (the "Registration Statement") under the Investment Company Act of
1940, as amended (the "1940 Act") and the Securities Act of 1933, as amended
(the "1933 Act") pursuant to a management agreement dated December 8, 2000, as
amended from time to time (the "Management Agreement"); and
WHEREAS, the Trust is comprised of several separate investment portfolios,
one of which is the Xxxxxxx Sachs Mid-Cap Value Portfolio (the "Portfolio"); and
WHEREAS, the Manager desires to avail itself of the services, information,
advice, assistance and facilities of an investment adviser to assist the Manager
in performing investment advisory services for the Portfolio; and
WHEREAS, the Adviser is registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), and is engaged in the business of
rendering investment advisory services to investment companies and other
institutional clients and desires to provide such services to the Manager;
NOW, THEREFORE, in consideration of the terms and conditions hereinafter
set forth, it is agreed as follows:
1. Employment of the Adviser. The Manager hereby employs the Adviser to
manage the investment and reinvestment of the assets of the Portfolio, subject
to the control and direction of the Trust's Board of Trustees, for the period
and on the terms hereinafter set forth. The Adviser hereby accepts such
employment and agrees during such period to render the services and to assume
the obligations herein set forth for the compensation herein provided. The
Adviser shall for all purposes herein be deemed to be an independent contractor
and shall, except as expressly provided or authorized (whether herein or
otherwise), have no authority to act for or represent the Manager, the Portfolio
or the Trust in any way. The Adviser may execute account documentation,
agreements, contracts and other documents requested by brokers, dealers,
counterparties and other persons in connection with its management of the assets
of the Portfolio, provided the Adviser receives the express agreement and
consent of the Manager and/or the Trust's Board of Trustees to execute futures
account agreements, ISDA Master Agreements and other documents related thereto,
which consent shall not be unreasonably withheld. In such respect, and only for
this limited purpose, the Adviser shall act as the Manager's and the Trust's
agent and attorney-in-fact.
Copies of the Trust's Registration Statement, as it relates to the
Portfolio (the "Registration Statement"), and the Trust's Declaration of Trust
and Bylaws (collectively, the "Charter Documents"), each as currently in effect,
have been or will be delivered to the Adviser. The Manager agrees, on an ongoing
basis, to notify the Adviser of each change in the fundamental and
non-fundamental investment policies and restrictions of the Portfolio before
they become effective and to provide to the Adviser as promptly as practicable
copies of all amendments and supplements to the Registration Statement before
filing with the Securities and Exchange Commission ("SEC") and amendments to the
Charter Documents. The Manager will promptly provide the Adviser with any
procedures applicable to the Adviser adopted from time to time by the Trust's
Board of Trustees and agrees to promptly provide the Adviser copies of all
amendments thereto. The Adviser will not be bound to follow any change in the
investment policies, restrictions or procedures of the Portfolio or Trust,
however, until it has received written notice of any such change from the
Manager.
The Manager shall timely furnish the Adviser with such additional
information as may be reasonably necessary for or requested by the Adviser to
perform its responsibilities pursuant to this Agreement. The Manager shall
cooperate with the Adviser in setting up and maintaining brokerage accounts and
other accounts the Adviser deems advisable to allow for the purchase or sale of
various forms of securities pursuant to this Agreement.
2. Obligations of and Services to be Provided by the Adviser. The Adviser
undertakes to provide the following services and to assume the following
obligations:
a. The Adviser shall manage the investment and reinvestment of the
portfolio assets of the Portfolio, all without prior consultation with the
Manager, subject to and in accordance with the investment objective and
policies of the Portfolio set forth in the Trust's Prospectus, Statement of
Additional Information and Registration Statement, as such documents may be
amended from time to time, in compliance with the requirements applicable
to registered investment companies under applicable federal securities laws
and those 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 (the "Code") and any written instructions
which the Manager or the Trust's Board of Trustees may issue from
time-to-time in accordance therewith. Except as provided in an agreement
between the Adviser and the Manager executed as of the date hereof, the
Adviser shall have no responsibility to monitor compliance with the
applicable requirement of Subchapters L and M of the Code. In pursuance of
the foregoing, the Adviser shall make all determinations with respect to
the purchase and sale of portfolio securities and shall take such action
necessary to implement the same. The Adviser shall render such reports to
the Trust's Board of Trustees and the Manager as they may reasonably
request concerning the investment activities of the Portfolio, provided
that the Adviser shall not be responsible for Portfolio accounting or for
other obligations not set forth herein or otherwise agreed by the parties.
Unless the Manager gives the Adviser written instructions to the contrary,
the Adviser shall, consistent with its internal policies and procedures, in
good faith and in a manner which it reasonably believes best serves the
interests of the Portfolio's shareholders, direct the Portfolio's custodian
as to how to vote such proxies as may be necessary or advisable in
connection with any matters submitted to a vote of shareholders of
securities held by the Portfolio; provided that the Portfolio's custodian
provides the Adviser with all such proxy voting materials with sufficient
time for the Adviser to tender a vote on behalf of the Portfolio.
b. To the extent provided in the Trust's Registration Statement, as
such Registration Statement may be amended from time to time, the Adviser
shall, in the name of the Portfolio, place orders for the execution of
portfolio transactions with or through such brokers, dealers or other
financial institutions as it may select including affiliates of the Adviser
and, complying with Section 28(e) of the Securities Exchange Act of 1934,
may pay a commission on transactions in excess of the amount of commission
another broker-dealer would have charged as permitted or described in the
Adviser's Form ADV, which may be amended from time to time. The Adviser
shall not bear any responsibility and shall be released from any obligation
or cost which results from entering into a trade pursuant to the
Portfolio's Rule 17a-7, 17e-1 or 10f-3 procedures with any affiliated
entity, other than affiliates of the Adviser, not specifically identified
to the Adviser by the Manager.. In addition, subject to seeking the most
favorable price and best execution available, the Adviser may also consider
sales of shares of the Trust as a factor in the selection of brokers and
dealers. Subject to seeking the most favorable price and execution, the
Board of Trustees or the Manager may cause the Adviser to effect
transactions in portfolio securities through broker-dealers in a manner
that will help generate resources to pay the cost of certain expenses which
the Trust is required to pay or for which the Trust is required to arrange
payment.
c. In connection with the placement of orders for the execution of the
portfolio transactions of the Portfolio, the Adviser shall create and
maintain all necessary records pertaining to the purchase and sale of
securities by the Adviser on behalf of the Portfolio in accordance with all
applicable U.S. federal securities laws, rules and regulations, including
but not limited to records required by Section 31(a) of the 1940 Act. All
of the Portfolio's investment records shall be the property of the Trust
and the Adviser will make available any of the Portfolio's investment
records and ledgers maintained by the Adviser (which shall not include the
records and ledgers maintained by the custodian and recordkeeping agent for
the Trust) for inspection and use by the SEC, the Trust, the Manager or any
person retained by the Trust at all reasonable times. Where applicable,
such records shall be maintained by the Adviser for the periods and in the
places required by Rule 31a-2 under the 1940 Act.
d. The Adviser shall bear its expenses of providing services pursuant
to this Agreement, but shall not be obligated to pay any expenses of the
Manager, the Trust, or the Portfolio, including without limitation: (a)
interest and taxes; (b) brokerage commissions and other costs in connection
with the purchase or sale of securities or other investment instruments for
the Portfolio; and (c) custodian fees and expenses.
e. The Adviser and the Manager acknowledge that the Adviser is not the
compliance agent for the Portfolio or for the Manager, and does not have
access to all of the Portfolio's books and records necessary to perform
certain compliance testing. To the extent that the Adviser has agreed to
perform the services specified in this Section 2 or in any supplemental
agreement referred to herein, in accordance with the Trust's Registration
Statement and Charter Documents, written instructions of the Manager and
any policies adopted by the Trust's Board of Trustees applicable to the
Portfolio (collectively, the "Charter Requirements"), and in accordance
with applicable law (including Subchapters M and L of the Code, the 1940
Act and the Advisers Act ("Applicable Law")), the Adviser shall perform
such services based upon its books and records with respect to the
Portfolio (as specified in Section 2.c. hereof), which comprise a portion
of the Portfolio's books and records, and upon information and written
instructions received from the Trust, the Manager or the Trust's
administrator, and shall not be held responsible under this Agreement so
long as it performs such services in accordance with this Agreement, the
Charter Requirements and Applicable Law based upon such books and records
and such information and instructions provided by the Trust, the Manager or
the Trust's administrator. The Adviser shall have no responsibility to
monitor certain limitations or restrictions for which the Adviser has not
been provided sufficient information in accordance with Section 1 of this
Agreement or otherwise. All such monitoring shall be the responsibility of
the Manager.
f. The Adviser makes no representation or warranty, express or
implied, that any level of performance or investment results will be
achieved by the Portfolio or that the Portfolio will perform comparably
with any standard or index, including other clients of the Adviser, whether
public or private.
g. The Adviser shall be responsible for the preparation and filing of
Schedule 13G and Form 13F with respect to investments it makes on behalf of
the Portfolio. The Adviser shall not be responsible for the preparation or
filing of any other reports required of the Portfolio by any governmental
or regulatory agency, except as expressly agreed to in writing.
h. The Manager hereby agrees and consents that the Adviser and its
affiliates are authorized to execute agency cross transactions
(collectively "Cross Transactions") for the Portfolio provided such
transactions comply with the Rule 206(3)-2 under the Advisers Act, Rule
17e-1 under the 1940 Act and any other applicable laws or regulations.
i. The Adviser may, but shall not be obligated to, on occasions when
the purchase or sale of a security is deemed to be in the best interest of
the Portfolio as well as any other investment advisory clients, to the
extent permitted by applicable laws and regulations, aggregate the
securities to be so sold or purchased with those of its other clients. 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 Adviser in a
manner that is fair and equitable and consistent with the Adviser's
fiduciary obligations to the Portfolio and to such other clients.
3. Compensation of the Adviser. In consideration of services rendered
pursuant to this Agreement, the Manager will pay the Adviser a fee at the annual
rate of the value of the Portfolio's average daily net assets set forth in
Schedule A hereto. Such fee shall be accrued daily and paid monthly as soon as
practicable after the end of each month. If the Adviser shall serve for less
than the whole of any month, the foregoing compensation shall be prorated. For
the purpose of determining fees payable to the Adviser, the value of the
Portfolio's net assets shall be computed at the times and in the manner
specified in the Trust's Registration Statement governing the valuation of
portfolio securities generally.
4. Activities of the Adviser. The services of the Adviser hereunder are not
to be deemed exclusive, and the Adviser shall be free to render similar services
to others and to engage in other activities, so long as the services rendered
hereunder are not impaired.
The Adviser shall be subject to a written code of ethics adopted by it that
conforms to the requirements of Rule 17j-1(b) of the 1940 Act, and shall not be
subject to any other code of ethics, including the Manager's code of ethics,
unless specifically adopted by the Adviser.
5. Use of Names. The Adviser hereby consents to the Portfolio being named
the Xxxxxxx Xxxxx Mid-Cap Value Portfolio. The Manager shall not use the name
"Xxxxxxx Sachs" and any of the other names of the Adviser or its affiliated
companies and any derivative or logo or trade or service xxxx thereof, or
disclose information related to the business of the Adviser or any of its
affiliates in any prospectus, sales literature or other material relating to the
Trust in any manner not approved prior thereto by the Adviser; provided,
however, that the Adviser shall approve all uses of its name (provided that the
name is fairly and accurately presented) and that of its affiliates which merely
refer in accurate terms to its appointment hereunder or which are required by
the SEC or a state securities commission; and provided, further, that in no
event shall such approval be unreasonably withheld. The Adviser shall not use
the name of the Trust, the Manager or any of their affiliates in any material
relating to the Adviser in any manner not approved prior thereto by the Manager;
provided, however, that the Manager shall approve all uses of its or the Trust's
name which merely refer in accurate terms to the appointment of the Adviser
hereunder or which are required by the SEC or a state securities commission
provided that the name is fairly and accurately presented; and, provided,
further, that in no event shall such approval be unreasonably withheld.
The Manager recognizes that from time to time directors, officers and
employees of the Adviser may serve as directors, trustees, partners, officers
and employees of other corporations, business trusts, partnerships or other
entities (including other investment companies) and that such other entities may
include the name "Xxxxxxx Sachs" or any derivative or abbreviation thereof as
part of their name, and that the Adviser or its affiliates may enter into
investment advisory, administration or other agreements with such other
entities.
Upon termination of this Agreement for any reason, the Manager shall within
30 days cease and cause the Portfolio to cease all use of the name and xxxx
"Xxxxxxx Xxxxx."
6. Liability and Indemnification.
a. Except as may otherwise be provided by the 1940 Act or any other
federal securities law, the Adviser shall not be liable for any losses,
claims, damages, liabilities or litigation (including legal and other
expenses) incurred or suffered by the Manager or the Trust as a result of
any error of judgment or mistake of law by the Adviser with respect to the
Portfolio, except that nothing in this Agreement shall operate or purport
to operate in any way to exculpate, waive or limit the liability of the
Adviser for, and the Adviser shall indemnify and hold harmless the Trust,
the Manager, all affiliated persons thereof (within the meaning of Section
2(a)(3) of the 1940 Act ) and all controlling persons (as described in
Section 15 of the 1933 Act) (collectively, "Manager Indemnitees") against
any and all losses, claims, damages, liabilities or litigation (including
reasonable legal and other expenses) to which any of the Manager
Indemnitees may become subject under the 1933 Act, the 1940 Act, the
Advisers Act, or under any other statute, at common law or otherwise
arising out of or based on (i) any willful misconduct, bad faith, reckless
disregard or gross negligence of the Adviser in the performance of any of
its duties or obligations hereunder or (ii) any untrue statement of a
material fact contained in the Registration Statement, proxy materials,
reports, advertisements, sales literature, or other materials pertaining to
the Portfolio or the omission to state therein a material fact known to the
Adviser which was required to be stated therein or necessary to make the
statements therein not misleading, if such statement or omission was made
in reliance upon information furnished to the Manager or the Trust by the
Adviser Indemnitees (as defined below) for use therein; provided, however,
that in no case is the Adviser's indemnity in favor of the Manager
Indemnities deemed to protect such persons 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 such
person's duties, or by reason of such person's reckless disregard of
obligations and duties under this Agreement.
b. Except as may otherwise be provided by the 1940 Act or any other
federal securities law, the Manager and the Trust shall not be liable for
any losses, claims, damages, liabilities or litigation (including legal and
other expenses) incurred or suffered by the Adviser as a result of any
error of judgment or mistake of law by the Manager with respect to the
Portfolio, except that nothing in this Agreement shall operate or purport
to operate in any way to exculpate, waive or limit the liability of the
Manager for, and the Manager shall indemnify and hold harmless the Adviser,
all affiliated persons thereof (within the meaning of Section 2(a)(3) of
the 0000 Xxx) and all controlling persons (as described in Section 15 of
the 1933 Act) (collectively, "Adviser Indemnitees") against any and all
losses, claims, damages, liabilities or litigation (including reasonable
legal and other expenses) to which any of the Adviser Indemnitees may
become subject under the 1933 Act, the 1940 Act, the Advisers Act, or under
any other statute, at common law or otherwise arising out of or based on
(i) any willful misconduct, bad faith, reckless disregard or gross
negligence of the Manager in the performance of any of its duties or
obligations hereunder, (ii) any failure by the Manager to properly notify
the Adviser of changes to the Registration Statement or any Charter
Requirements that leads to any such losses, claims, damages, liabilities or
litigation to which any of the Adviser Indemnitees may be subject or (iii)
any untrue statement of a material fact contained in the Registration
Statement, proxy materials, reports, advertisements, sales literature, or
other materials pertaining to the Portfolio or the omission to state
therein a material fact known to the Manager which was required to be
stated therein or necessary to make the statements therein not misleading,
unless such statement or omission was made in reliance upon information
furnished to the Manager or the Trust by an Adviser Indemnitee for use
therein; provided, however, that in no case is the Adviser's indemnity in
favor of the Manager Indemnities deemed to protect such persons 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
such person's duties, or by reason of such person's reckless disregard of
obligations and duties under this Agreement.
7. Limitation of Trust's Liability. The Adviser acknowledges that it has
received notice of and accepts the limitations upon the Trust's liability set
forth in its Agreement and Declaration of Trust. The Adviser agrees that any of
the Trust's obligations shall be limited to the assets of the Portfolio and that
the Adviser shall not seek satisfaction of any such obligation from the
shareholders of the Trust nor from any Trust officer, employee or agent of the
Trust.
8. Renewal, Termination and Amendment. This Agreement shall continue in
effect, unless sooner terminated as hereinafter provided, until December 31,
2005 and shall continue in full force and effect for successive periods of one
year thereafter, but only so long as each such continuance as to the Portfolio
is specifically approved at least annually by vote of the holders of a majority
of the outstanding voting securities of the Portfolio or by vote of a majority
of the Trust's Board of Trustees; and further provided that such continuance is
also approved annually by the vote of a majority of the Trustees who are not
parties to this Agreement or interested persons of any such party. This
Agreement may be terminated as to the Portfolio at any time, without payment of
any penalty, by the Trust's Board of Trustees, by the Manager, or by a vote of
the majority of the outstanding voting securities of the Portfolio upon 60 days'
prior written notice to the Adviser, or by the Adviser upon 90 days' prior
written notice to the Manager, or upon such shorter notice as may be mutually
agreed upon. This Agreement shall terminate automatically and immediately upon
termination of the Management Agreement between the Manager and the Trust. This
Agreement shall terminate automatically and immediately in the event of its
assignment. The terms "assignment" and "vote of a majority of the outstanding
voting securities" shall have the meaning set forth for such terms in the 1940
Act. This Agreement may be amended at any time by the Adviser and the Manager,
subject to approval by the Trust's Board of Trustees and, if required by
applicable SEC rules, regulations, or orders, a vote of a majority of the
Portfolio's outstanding voting securities.
9. Confidential Relationship. Any information and advice furnished by any
party to this Agreement to the other party or parties shall be treated as
confidential and shall not be disclosed to third parties without the consent of
the other party hereto except as required by law, rule or regulation.
The Manager hereby consents to the disclosure to third parties of (i)
investment results and other data of the Manager or the Portfolio in connection
with providing composite investment results of the Adviser and (ii) investments
and transactions of the Manager or the Portfolio in connection with providing
composite information of clients of the Adviser.
10. Severability. 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.
11. Custodian. The Portfolio assets shall be maintained in the custody of
its custodian. Any assets added to the Portfolio shall be delivered directly to
such custodian. The Adviser shall have no liability for the acts or omissions of
any custodian of the Portfolio's assets. The Adviser shall have no
responsibility for the segregation requirement of the 1940 Act or other
applicable law other than to notify the custodian of investments that require
segregation and appropriate assets for segregation.
12. Information. The Manager hereby acknowledges that it and the Trustees
of the Trust have been provided with all information necessary in connection
with the services to be provided by the Adviser hereunder, including a copy of
Part II of the Adviser's Form ADV at least 48 hours prior to the Manager's
execution of this Agreement, and any other information that the Manager or the
Trustees deem necessary.
13. Miscellaneous. This Agreement constitutes the full and complete
agreement of the parties hereto with respect to the subject matter hereof. Each
party agrees to perform such further actions and execute such further documents
as are necessary to effectuate the purposes hereof. This Agreement shall be
construed and enforced in accordance with and governed by the laws of the State
of Delaware and the applicable provisions of the 1940 Act. The captions in this
Agreement are included for convenience only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed in several counterparts, all of which together shall
for all purposes constitute one Agreement, binding on all the parties.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first written above.
MET INVESTORS ADVISORY LLC
BY:
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Authorized Officer
XXXXXXX XXXXX ASSET MANAGEMENT, L.P.
BY:
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Authorized Officer
SCHEDULE A
Percentage of average daily net assets
Xxxxxxx Sachs Mid-Cap Value Portfolio 0.50% of first $25 million of such assets plus
0.45% of such assets over $25 million up to $200
million plus 0.40% of such assets over $200 million
