EXHIBIT 23 (d)(8)
FORM OF INVESTMENT SUB-ADVISORY AGREEMENT
THIS INVESTMENT SUB-ADVISORY AGREEMENT ("Agreement"), made this __ day
of June, 2002 by and between Xxxxxx Advisors LLC, a Delaware limited liability
company ("Adviser"), and X. X. Xxxxxx Xxxxxxx Asset Management (USA) Inc.
("Sub-Adviser").
Adviser and Sub-Adviser agree as follows:
1. APPOINTMENT OF SUB-ADVISER. Adviser hereby engages the services of
Sub-Adviser in connection with Adviser's management of the Xxxxxx/XX Xxxxxx
Small Cap Growth Portfolio ("Portfolio") of MLIG Variable Insurance Trust
("Trust"). Pursuant to this Agreement and subject to the oversight and
supervision by Adviser and the officers and the board of trustees of the Trust,
Sub-Adviser shall manage the investment and reinvestment of that portion or
portions of the assets of the Portfolio that the Adviser shall, from time to
time, direct the Sub-Adviser to manage.
2. SERVICES TO BE PROVIDED BY THE SUB-ADVISER. Sub-Adviser hereby accepts
the appointment by Adviser in the foregoing capacity and agrees to render the
services set forth herein and to provide the office space, furnishings,
equipment and personnel required by it to perform such services under the
terms and conditions set forth in this Agreement and for the compensation to
the Sub-Adviser specified in this Agreement.
(a) In particular, Sub-Adviser shall furnish continuously an
investment program for the Portfolio and shall determine from time to time, in
its discretion, the securities and other investments to be purchased or sold
or exchanged and what portion or portions of the Portfolio shall be held in
various securities, cash or other investments. In this connection, Sub-Adviser
shall provide Adviser and the officers and trustees of the Trust with such
reports and documentation as the latter shall reasonably request regarding
Sub-Adviser's management of the Portfolio assets.
(b) Sub-Adviser shall carry out its responsibilities under this
Agreement in compliance with: (1) the Portfolio's investment objective,
policies and restrictions as set forth in the Trust's current registration
statement, (2) all policies, procedures, guidelines or directives as the board
of trustees of the Trust may, from time to time, approve and adopt and
communicate in writing to the Sub-Adviser, and (3) applicable law and related
regulations. Sub-Adviser will not be required under this Agreement to comply
with any policies, procedures, guidelines or directives that are in clear
violation of applicable laws or regulations.
(i) Adviser shall promptly notify Sub-Adviser in writing
of changes to (1) or (2) above and shall notify Sub-Adviser in writing of
changes to (3) above promptly after it becomes aware of such changes.
(ii) In particular, the Sub-Adviser shall be responsible to
ensure that each portion of the assets of the Portfolio that it manages: (1)
complies with the diversification requirements of Section 817(h) of the
Internal Revenue Code of 1986, as amended, ("Code") and
regulations issued thereunder as these apply to separate accounts through
which variable life insurance contracts and variable annuity contracts are
issued, and (2) satisfies the requirements of Section 851(b)(2)and 851(b)(3)
of the Code. In addition, the Sub-Adviser agrees that it shall take no action
that would call into question the Portfolio's status as a "regulated
investment company" within the meaning of Section 851 of the Code and shall
not fail to take any action reasonably related to the duties described in this
Agreement that would be required to preserve the Portfolio's status as a
"regulated investment company" within the meaning of Section 851 of the Code.
(c) Sub-Adviser shall take all actions which it considers
necessary to implement the investment objective and policies of the Portfolio,
and in particular, to place all orders for the purchase or sale of securities
or other investments for the Portfolio with brokers or dealers selected by it
(or with brokers and dealers selected by the Adviser or the board of trustees
of the Trust) and, to that end, Sub-Adviser is authorized as the agent of the
Trust to give instructions to the Trust's custodian as to deliveries of
securities or other investments and payments of cash for the account of the
Portfolio. In connection with the selection of brokers or dealers and the
placing of purchase and sale orders with respect to securities or other
investments of the Portfolio, Sub-Adviser will at all times seek to obtain
best execution and price in compliance with the policies, procedures,
guidelines and directives approved and adopted by the board of trustees of the
Trust and provided to the Sub-Adviser in writing, except when the Adviser or
board of trustees of the Trust directs the Sub-Adviser to place orders with a
particular broker or dealer. In those instances in which the Adviser or the
board of trustees of the Trust directs the Sub-Adviser to place purchaser or
sale orders with a particular broker or dealer, Adviser acknowledges that the
use of a designated broker or dealer may result in less favorable execution of
some transactions, higher net purchase prices, lower net sales prices and the
execution of an order for the Portfolio after completion of the orders for the
Sub-Adviser's other clients. In addition, Adviser recognizes that the use of a
designated broker or dealer may cause the Portfolio to be unable to
participate in allocations of new issues or other investment opportunities.
(d) To the extent permitted by the policies, guidelines,
procedures or directives approved and adopted by the board of trustees of the
Trust, Sub-Adviser is authorized in selecting brokers and dealers to execute
portfolio transactions, to consider not only the available prices and rates of
brokerage commissions, but also other relevant factors including, without
limitation: (1) the execution capabilities of such brokers and dealers, (2)
research and other services provided by such brokers and dealers which the
Sub-Adviser believes will enhance its general portfolio management
capabilities, (3) the size of the transaction, (4) the difficulty of
execution, (5) the operational facilities of such brokers and dealers, (6) the
risk to such a broker or dealer of positioning a block of securities, and (7)
the overall quality of brokerage and research services provided by such
brokers and dealers. In connection with the foregoing, Sub-Adviser is
specifically authorized to pay those brokers and dealers who provide brokerage
and research services to it a higher commission than that charged by other
brokers and dealers if the Sub-Adviser determines in good faith that the
amount of such commission is reasonable in relation to the value of such
services in terms of either the particular transaction or in terms of
Sub-Adviser's overall responsibilities with respect to the Portfolio and to
any other client
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accounts or portfolios which Sub-Adviser advises. The execution of such
transactions shall not be considered to represent an unlawful breach of any
duty created by this Agreement or otherwise.
(e) In connection with the selection of brokers or dealers and
the placing of purchase and sale orders with respect to securities or other
investments of the Portfolio, when directed by either the board of trustees of
the Trust or the Adviser to use designated brokers or dealers, Sub-Adviser
agrees to place orders with one or more brokers or dealers designated by the
board of trustees of the Trust or Adviser (including brokers or dealers who
are affiliated persons of the Trust or Adviser). The execution of such
transactions shall not be considered to represent an unlawful breach of any
duty created by this Agreement or otherwise. The Adviser will provide the
Sub-Adviser with a copy of the resolution of the Board of Trustees of the
Trust approving the Trust's directed brokerage program.
(f) Sub-Adviser also is authorized to aggregate purchase and sale
orders for securities held (or to be held) in the Portfolio with similar
orders being made on the same day for other client accounts or portfolios
managed by Sub-Adviser. When an order is so aggregated: (1) the actual prices
applicable to the aggregated transaction will be averaged and the Portfolio
and each other account or portfolio participating in the aggregated
transaction shall be treated as having purchased or sold its portion of the
securities at such average price, and (2) all transaction costs incurred in
effecting the aggregated transaction shall be shared on a pro-rata basis among
the accounts or portfolios (including the Portfolio) participating in the
transaction. Adviser recognizes that in some cases this procedure may
adversely affect the size of the position obtainable for the Portfolio.
(g) When recommending or effecting a transaction in a particular
security or investment for more than one client account or portfolio
(including the Portfolio), Sub-Adviser may allocate such recommendations or
transactions among all accounts and portfolios for whom the recommendation is
made or transaction is effected on a basis that Sub-Adviser considers
equitable. Adviser recognizes that in some instances this procedure may
adversely affect the size of the position that may be obtained for the
Portfolio.
(h) Nothing in this Agreement shall require Sub-Adviser to take
or receive physical possession of cash, securities or other investments of the
Portfolio.
3. NOT AN EXCLUSIVE ARRANGEMENT. Sub-Adviser's services under this
Agreement are not exclusive. Sub-Adviser may provide the same or similar
services to other clients. Adviser acknowledges that, except when transactions
for multiple clients are aggregated, transactions in a specific security or
other investment may not be recommended or executed at the same time or price
for all client accounts or portfolios (including the Portfolio) for which that
security or investment is recommended or executed. This Agreement does not
require Sub-Adviser to give priority to the Portfolio over other client
accounts or portfolios.
4. INDEPENDENT CONTRACTOR. Sub-Adviser shall for all purposes herein be
deemed to be an independent contractor and shall, unless otherwise expressly
provided or authorized, have no
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authority to act for or represent the Adviser, the Trust or the Portfolio or
otherwise be deemed agents of the Adviser, the Trust or the Portfolio.
5. USE OF AFFILIATED BROKER DEALER. Sub-Adviser, an affiliated person of
Sub-Adviser, the Adviser, or an affiliated person of the Adviser or the Trust
may act as broker for the Portfolio in connection with the purchase or sale of
securities or other investments for the Portfolio, subject to: (1) the
requirement that Sub-Adviser seeks to obtain best execution and price in
accordance with the policies, guidelines. procedures or directives approved
and adopted by the board of trustees of the Trust; (2) the provisions of the
Investment Company Act of 1940, as amended ("1940 Act") and regulations
thereunder; (3) the provisions of the Investment Advisers Act of 1940, as
amended ("Advisers Act") and the regulations thereunder; (4) the provisions of
the Securities Exchange Act of 1934, as amended, and the regulations
thereunder; and (5) other applicable provisions of law. Such brokerage
services are not within the scope of the duties of Sub-Adviser under this
Agreement. Subject to the requirements of applicable law and any policies,
guidelines, procedures and directives approved and adopted by Trust's board of
trustees, Sub-Adviser or its affiliated persons may receive brokerage
commissions, fees or other remuneration from the Portfolio or the Trust for
such services in addition to Sub-Adviser's fees for services under this
Agreement.
6. VOTING RIGHTS. The Adviser delegates the Adviser's discretionary
authority to exercise voting rights with respect to the securities and other
investments in the Portfolio to the Sub-Adviser. The Sub-Adviser shall
exercise these voting rights unless and until the Adviser revokes this
delegation. The Adviser may revoke this delegation at any time without cause.
The Sub-Adviser shall maintain and preserve a record, in an easily-accessible
place for a period of not less than three years, of the Sub-Adviser's voting
procedures, and of the Sub-Adviser's actual votes, and shall supply this
record to the Adviser, or any authorized representative of the Adviser, upon
the written request of the Adviser or the Adviser's authorized representative,
as appropriate.
7. REPRESENTATIONS AND WARRANTIES OF THE SUB-ADVISER.
(a) Sub-Adviser is registered with the U.S. Securities and Exchange
Commission ("SEC") under the Advisers Act. Sub-Adviser shall remain so
registered throughout the term of this Agreement and shall notify Adviser
immediately if Sub-Adviser ceases to be so registered as an investment
adviser.
(b) Sub-Adviser is duly organized and validly existing under the
laws of the Delaware with the power to own and possess its assets and carry on
its business as it is now being conducted,
(c) Sub-Adviser has the authority to enter into and perform the
services contemplated by this Agreement,
(d) Sub-Adviser is not prohibited by the Investment Company Act of
1940, as amended, ("1940 Act") or the Advisers Act from performing the
services contemplated by this Agreement,
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(e) Sub-Adviser has met, and will continue to seek to meet for the
duration of this Agreement, any other applicable federal or state
requirements, or the applicable requirements of any regulatory or industry
self-regulatory agency, necessary to be met in order to perform the services
this Agreement, and
(f) Sub-Adviser will promptly notify Adviser of the occurrence of any
event that would disqualify it from serving as an investment adviser to an
investment company pursuant to Section 9(a) of the 1940 Act.
8. REPRESENTATION AND WARRANTIES OF THE ADVISER.
(a) Adviser is duly organized and validly existing under the laws
of the State of Delaware with the power to own and possess its assets and
carry on its business as it is now being conducted,
(b) Adviser has the authority to enter into and perform the
services contemplated by this Agreement,
(c) Adviser is not prohibited by the 1940 Act or the Advisers Act
from performing the services contemplated by this Agreement,
(d) Adviser has met, and will continue to seek to meet for the
duration of this Agreement, any other applicable federal or state
requirements, or the applicable requirements of any regulatory or industry
self-regulatory agency, necessary to be met in order to perform the services
this Agreement, and
(e) Adviser will promptly notify Sub-Adviser of the occurrence of
any event that would disqualify it from serving as an investment adviser to an
investment company pursuant to Section 9(a) of the 1940 Act.
(f) Adviser represents that the Trust is (and during the term of
this Agreement, will remain) registered as an open-end management investment
company under the 1940 Act and that the shares of the Trust representing an
interest in the Portfolio are (and during the term of this Agreement will
remain) registered under the Securities Act of 1933 and under any applicable
state securities laws.
9. CODE OF ETHICS. Sub-Adviser has adopted a written code of ethics
complying with the requirements of Rule 17j-1 under the 1940 Act and will
provide Adviser and the Trust with a copy of that code, together with evidence
of its adoption. Within 20 days of the end of each calendar quarter during
which this Agreement remains in effect, the president or a vice president of
Sub-Adviser shall certify to Adviser or the Trust that Sub-Adviser has
complied with the requirements of Rule 17j-1 during the previous quarter and
that there have been no violations of Sub-Adviser's code of ethics or, if such
a violation has occurred, that appropriate action has been taken in response
to such violation. Upon written request of the Adviser, the Sub-Adviser will
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furnish in a timely manner summaries of the reports required to be made to the
Sub-Adviser by Rule 17j-1(c)(1).
10. COMPENSATION OF THE SUB-ADVISER. For the services rendered, the
facilities furnished and the expenses assumed by Sub-Adviser, Adviser shall
pay Sub-Adviser at the end of each month a fee based on the average daily net
assets of the Portfolio at the following annual rates:
0.50% on the first $ 1 billion
0.45% on the balance
(a) Sub-Adviser's fee shall be accrued daily at 1/365th of the
applicable annual rate set forth above. For the purpose of accruing
compensation, the net assets of the Portfolio shall be determined in the
manner and on the dates set forth in the current prospectus of the Trust, and,
on days on which the net assets are not so determined, the net asset value
computation to be used shall be as determined on the immediately preceding day
on which the net assets were determined.
(b) In the event of termination of this Agreement, all compensation
due through the date of termination will be calculated on a pro-rated basis
through the date of termination and paid within thirty business days of the
date of termination.
(c) During any period when the determination of net asset value is
suspended, the net asset value of the Portfolio as of the last business day
prior to such suspension shall for this purpose be deemed to be the net asset
value at the close of each succeeding business day until it is again
determined.
11. RECORDS.
(a) Sub-Adviser hereby undertakes and agrees to maintain, in the
form and for the period required by Rule 31a-2 under the 1940 Act, all records
relating to the Portfolio's investments that are required to be maintained by
the Trust pursuant to the requirements of paragraphs (b)(5), (b)(6), (b)(7),
(b)(9), (b)(10) and (f) of Rule 31a-1 under the 0000 Xxx.
(b) Sub-Adviser agrees that all books and records which it
maintains for the Portfolio or the Trust are the property of the Trust and
further agrees to surrender promptly to the Adviser or the Trust any such
books, records or information upon the Adviser's or the Trust's request
(provided, however, that Sub-Adviser may retain copies of such records). All
such books and records shall be made available, within five business days of a
written request, to the Trust's accountants or auditors during regular
business hours at Sub-Adviser's offices. Adviser and the Trust or either of
their authorized representative shall have the right to copy any records in
the possession of Sub-Adviser which pertain to the Portfolio or the Trust.
Such books, records, information or reports shall be made available to
properly authorized government representatives consistent with state and
federal law and/or regulations. In the event of the termination of this
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Agreement, upon the request of the Adviser or the Trust, all such books,
records or other information shall be returned to Adviser or the Trust.
(c) The Sub-Adviser agrees that the policies and procedures
established by the Sub-Adviser for managing the Portfolio, including, but not
limited to, all policies and procedures designed to ensure compliance with
federal and state regulations governing the sub-adviser/client relationship
and management and operation of the Portfolio, shall be made available for
inspection by the Adviser and the Trust or either of their authorized
representatives not less frequently than annually.
12. CONFIDENTIALITY.
(a) Each party agrees that it will not disclose or use any records
or confidential information obtained pursuant to this Agreement in any manner
whatsoever except (i) as authorized in this Agreement, (ii) as may be
necessary in the ordinary course of performing the services and transactions
contemplated by this Agreement; (iii) with the written consent of the other
party; or (iv) as required by federal or state regulatory authorities, law or
judicial process.
(b) Confidential information shall not include information a party
to this Agreement can clearly establish was (i) known to the party prior to
this Agreement; (ii) rightfully acquired by the party from third parties whom
the party reasonably believes are not under an obligation of confidentiality
to the other party to this Agreement; (iii) placed in public domain without
fault of the party or its affiliates; or (iv) independently developed by the
party without reference or reliance upon any confidential information.
(c) It is specifically agreed by the parties that the Sub-Adviser
may disclose the investment performance of the Portfolio and the Portfolio,
provided that such disclosure does not reveal the identity of the Adviser, the
Portfolio or the Trust. Sub-Adviser may, however, disclose that Adviser, the
Trust and the Portfolio are its clients, provided that such disclosure does
not reveal the investment performance or the composition of the Portfolio.
13. STANDARD OF CARE. In the absence of willful misfeasance, bad faith or
gross negligence on the part of Sub-Adviser or its officers, trustees or
employees, or reckless disregard by Sub-Adviser of its duties under this
Agreement (together, "disabling conduct"), Sub-Adviser shall not be liable to
Adviser, the Portfolio, the Trust or to any shareholder of the Portfolio for
any act or omission in the course of, or connected with, rendering services
hereunder or for any losses that may be sustained in the purchase, holding or
sale of any security, except to the extent otherwise provided in Section 36(b)
of the 1940 Act concerning loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services. Notwithstanding the
foregoing, breach by the Sub-Adviser of the Section 2(b)(ii) hereof is deemed
to be disabling conduct.
14. INDEMNIFICATION BY SUB-ADVISER.
(a) Sub-Adviser agrees to indemnify and defend Adviser, its
officers, trustees, partners, employees and any person who controls Adviser
for any loss or expense (including
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attorneys' fees) arising out of any claim, demand, action, suit or proceeding
arising out of any actual or alleged material misstatement or omission in the
Trust's registration statement, any proxy statement, or communication to
current or prospective investors in the Portfolio relating to disclosure about
Sub-Adviser provided to Adviser by Sub-Adviser.
(b) Sub-Adviser agrees to indemnify and defend Adviser, its
officers, trustees, partners, employees and any person who controls Adviser
for any loss or expense (including attorneys' fees) arising out of any claim,
demand, action, suit or proceeding arising out of any action or omission of
the Sub-Adviser that causes the portion or portions of the assets of the
Portfolio managed by the Sub-Adviser not to: (a) comply with the
diversification requirements of Section 817(h) of the Code and regulations
issued thereunder as these apply to separate accounts through which variable
life insurance contracts and variable annuity contracts are issued, and (b)
continuously satisfy the requirements of Section 851(b)(2) and 851(b)(3) of
the Code.
15. INDEMNIFICATION BY ADVISOR. Adviser agrees to indemnify and defend
Sub-Adviser, its officers, trustees, partners, employees and any person who
controls Adviser for any loss or expense (including attorneys' fees) arising
out of any claim, demand, action, suit or proceeding arising out of any actual
or alleged material misstatement or omission in the Trust's registration
statement, any proxy statement, or other communication to current or
prospective investors in the Portfolio (other than a misstatement or omission
relating to disclosure about Sub-Adviser approved by the Sub-Adviser or
provided to Adviser or the Trust by Sub-Adviser).
16. USE OF NAME. The Sub-Adviser agrees to permit the Adviser and the
Trust to use its name, along side the Adviser's name, in the Portfolio's name
and in descriptions of the Portfolio, as these appear in the Trust's
prospectus(es) and/or sales literature related to the Portfolio, provided,
however, that the Adviser and the Trust shall cease such use of the
Sub-Adviser's name in the event that this Agreement is terminated. Neither the
Trust nor the Adviser shall, without the prior written consent of the
Sub-adviser make any other representations regarding the Sub-Adviser or
reference to the Sub-Adviser or any affiliates of the Sub-Adviser in any
disclosure document, advertisement, sales literature or other promotional
materials without the prior approval of the Sub-Adviser. If Sub-Adviser does
not respond within five business days regarding materials submitted to it for
approval, such material shall be deemed to have been approved by the
Sub-Adviser.
17. TERM AND DURATION OF THE AGREEMENT.
(a) This Agreement shall not become effective unless and until it
is approved by the board of trustees of the Trust, including a majority of
trustees who are not parties to this Agreement or interested persons of any
such party to this Agreement, and, to the extent required by law, a majority
of the outstanding shares of the class of the Trust's stock representing an
interest in the Portfolio. This Agreement shall come into full force and
effect on the date which it is so approved.
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(b) This Agreement shall continue in effect for two years and shall
thereafter continue in effect from year to year so long as such continuance is
specifically approved at least annually by (1) the board of trustees of the
Trust, or by the vote of a majority of the outstanding shares of the class of
stock representing an interest in the Portfolio, and (2) a majority of those
trustees who are not parties to this Agreement or interested persons of any
such party cast in person at a meeting called for the purpose of voting on
such approval.
18. TERMINATION. Notwithstanding any other provision of this Agreement,
this Agreement may be terminated at any time without the payment of any
penalty, by the Trust's board of trustees, or by vote of a majority of the
outstanding shares of the class of stock representing an interest in the
Portfolio on sixty days written notice to the Adviser and Sub-Adviser, or by
the Adviser, or by the Sub-Adviser, on sixty days written notice to the other.
This Agreement shall automatically terminate in the event of its assignment or
in the event of the termination of the investment advisory agreement between
the Adviser and the Trust regarding the Adviser's management of the Portfolio.
19. AMENDMENTS TO THE AGREEMENT. This Agreement may be amended by the
parties only if such amendment is specifically approved by (a) a majority of
those trustees who are not parties to this Agreement or interested persons of
any such party cast in person at a meeting called for the purpose of voting on
such approval, and, if required by applicable law, (b) a majority of votes
attributable to the outstanding Trust shares of the class representing an
interest in the Portfolio.
20. USE OF TERMS. The terms "assignment", "affiliated person" and
"interested person", when used in this Agreement, shall have the respective
meanings specified in the 1940 Act. The term "majority of the outstanding
shares of the class" means the lesser of (a) 67% or more of the votes
attributable to shares of such class present at a meeting if more than 50% of
the votes attributable to such shares are present or represented by proxy or
(b) more than 50% of the votes attributable to shares of such class.
21. GOVERNING LAW. This Agreement shall be construed in accordance with
laws of the State of Delaware, and applicable provisions of the Advisers Act
and 1940 Act.
22. 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.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
Xxxxxx Advisers LLC
By: /s/ XXXX XXXXXXX
------------------------
Xxxx Xxxxxxx, President
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ATTEST:
/s/ XXXXXX X. XXXXXX, XX.
--------------------------
JPMorgan Xxxxxxx Asset Management (U.S.A.) Inc.
By: /s/ XXXXX XXXXXXX
--------------------------------
Title: Vice President
-----------------------------
Xxxxx Xxxxxxx
ATTEST:
--------------------------
Vice President
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