Exhibit 99.B4i
INVESTMENT SUBADVISORY AGREEMENT
GROWTH PORTFOLIO
THIS AGREEMENT, made this 1st day of May, 2004, is between JEFFERSON PILOT
INVESTMENT ADVISORY CORPORATION, a Tennessee corporation with offices at Xxx
Xxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxxxxx, 00000 (the "Investment Manager") and
Xxxxxx Investment Partners, Inc. (the "Subadviser"), a Pennsylvania corporation
with offices at 0000 Xxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxx, XX 00000.
WITNESSETH:
WHEREAS, Jefferson Pilot Variable Fund, Inc. (the "Fund") is engaged in
business as a diversified open-end management investment company and is
registered as such under the Investment Company Act of 1940 (the "Investment
Company Act");
WHEREAS, the Fund issues separate classes or series of stock, each of which
represents a separate portfolio of investments;
WHEREAS, the Fund's shareholders are and will be separate accounts
maintained by insurance companies for variable life insurance policies under
which income, gains, losses, whether or not realized, from assets allocated to
such accounts are, in accordance with the Policies, credited to or charged
against such accounts without regard to other income, gains, or losses of such
insurance companies;
WHEREAS, the Fund has employed the Investment Manager to act as investment
manager of the Portfolio, as set forth in an Investment Management Agreement
between the Fund and the Investment Manager dated August 28, 1997, (the
"Investment Management Agreement") pursuant to which it was agreed that the
Investment Manager may contract with the Subadviser, or other parties for
certain investment management services;
WHEREAS, the Subadviser is engaged in the business of rendering investment
advisory services and is registered as an investment adviser under the
Investment Advisers Act of 1940 (the "Advisers Act");
WHEREAS, the Investment Manager desires to retain the Subadviser to render
investment management services to the Fund's Growth Portfolio (the "Portfolio")
in the manner and on the terms hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained the Investment Manager and the Subadviser hereby agree as
follows:
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1. Appointment of the Subadviser. The Investment Manager hereby appoints
the Subadviser to act as an investment subadviser for the Portfolio and to
manage the investment and reinvestment of the assets of the Portfolio, subject
to the supervision of the Directors of the Fund and the terms and conditions of
this Agreement. The Subadviser will be an independent contractor and will have
no authority to act for or represent the Fund or Investment Manager in any way
or otherwise be deemed an agent of the Fund or Investment Manager except as
expressly authorized in this Agreement or another writing by the Fund,
Investment Manager and the Subadviser. Notwithstanding the foregoing, the
Subadviser shall have full and complete discretion to establish brokerage
accounts with one or more brokers, dealers, or other financial intermediaries as
the Subadviser may select. The Fund will be a party to any agreement or contract
which opens a futures account or options account.
2. Duties of the Subadviser. The Subadviser hereby agrees, subject to the
supervision of the Investment Manager and the Board of Directors of the Fund,
(1) to act as the Subadviser of the Portfolio, (2) to manage the investment and
reinvestment of the assets of the Portfolio for the period and on the terms and
conditions set forth in this Agreement, and (3) during the term hereof, to
render the services and to assume the obligations herein set forth in return for
the compensation provided for herein and to bear all expenses of its performance
of such services and obligations.
3. Services to be Rendered by the Subadviser to the Fund
A. The Subadviser will manage the investment and reinvestment of the
assets of the Portfolio and determine the composition of the assets of the
Portfolio, subject always to the general direction and control of the Directors
of the Fund and the Investment Manager and in accordance with the provisions of
the Fund's registration statement, as amended and supplemented from time to
time. In fulfilling its obligations to manage the investment and reinvestment of
the assets of the Portfolio, the Subadviser will:
(i) obtain and evaluate pertinent, statistical, financial, and
other information relating to individual companies or industries, the securities
of which are included in the Portfolio or are under consideration for inclusion
in the Portfolio;
(ii) formulate and implement a continuous investment program for
the Portfolio (a) consistent with the investment objectives, policies, and
restrictions of the Portfolio as stated in the Fund's Agreement and Articles of
Incorporation, Bylaws, and such Portfolio's currently effective Prospectus and
Statement of Additional Information ("SAI") as amended from time to time, and
(b) in compliance with the requirements applicable to both regulated investment
companies and segregated asset accounts under Subchapters M and L of the
Internal Revenue Code of 1986, as amended ("IRC"), and requirements applicable
to registered investment companies under applicable laws;
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(iii) take whatever steps are necessary to implement the
investment program for the Portfolio by the purchase and sale of securities and
other investments authorized under the Fund's Agreement and Articles of
Incorporation, Bylaws, and such Portfolio's currently effective Prospectus and
SAI, including the placing of orders for such purchases and sales;
(iv) regularly report to the Directors of the Fund and the
Investment Manager with respect to the implementation of the investment program
and, in addition, provide such statistical information and special reports
concerning the Portfolio and/or important developments materially affecting the
investments held, or contemplated to be purchased, by the Portfolio, as may
reasonably be requested by the Investment Manager or the Directors of the Fund,
including attendance at Board of Directors Meetings, as reasonably requested, to
present such information and reports to the Board, provided that Subadviser
shall not be responsible for fund accounting.
(v) assist in suggesting methods for determining fair value of
certain portfolio securities when market quotations are not readily available
for the purpose of calculating the Portfolio's net asset value in accordance
with procedures and methods established by the Directors of the Fund;
(vi) establish appropriate interfaces with the Fund's Investment
Manager in order to provide such Investment Manager with all necessary
information requested by the Investment Manager and required to be provided by
Subadviser hereunder.
(vii) vote all shares owned by the Portfolio in accordance with
Subadviser's proxy voting policy.
B. To facilitate the Subadviser's fulfillment of its obligations
under this Agreement, the Investment Manager will undertake the following:
(i) the Investment Manager agrees to provide the Subadviser
with all amendments or supplements to the Registration Statement, the Fund's
Agreement and Articles of Incorporation, and Bylaws prior to filing with
Securities and Exchange Commission.
(ii) the Investment Manager agrees, on an ongoing basis, to
notify the Subadviser expressly in writing of each change in the fundamental and
nonfundamental investment policies of the Portfolio five business days prior to
the effective date of such changes.
(iii) The Investment Manager agrees to provide or cause to be
provided to the Subadviser such assistance as may be reasonably requested by the
Subadviser in connection with its activities pertaining to the Portfolio under
this
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Agreement, including, without limitation, information concerning the Portfolio,
its available funds, or funds that may reasonably become available for
investment, and information as to the general condition of the Portfolio's
affairs and information to enable Subadviser to monitor the Portfolio's
compliance with Subchapter M of the IRC;
(iv) the Investment Manager agrees to provide or cause to be
provided to the Subadviser on an ongoing basis, such information as is
reasonably requested by the Subadviser for performance by the Subadviser of its
obligations under this Agreement, and the Subadviser shall not be in breach of
any term of this Agreement or be deemed to have acted negligently if the
Investment Manager fails to provide or cause to be provided such requested
information and the Subadviser relies on the information most recently furnished
to the Subadviser; and
(v) the Investment Manager will promptly provide the Subadviser
in writing guidelines and procedures applicable to the Subadviser or the
Portfolio adopted from time to time by the Board of Directors of the Fund and
agrees to promptly provide the Subadviser copies of all amendments thereto.
(vi) the Investment Manager will provide a list of affiliates of
the Investment Manager and the Fund and will promptly notify the Subadviser
regarding any material changes, additions or amendments to the list.
C. The Fund and the Investment Manager shall not, without the prior
written consent of Subadviser, make representations in any disclosure document,
advertisement, sales literature or other promotional material regarding the
Subadviser or its affiliates. The Investment Manager shall hold harmless and
indemnify the Subadviser against any loss, liability, cost, damage or expense
(including reasonable attorneys fees and costs) arising out of any use of any
disclosure documents, advertisement, sales literature or other promotional
material without prior written consent from/of the Subadviser.
D. The Subadviser, at its expense, will furnish all necessary investment
and management facilities and investment personnel, including salaries, expenses
and fees of any personnel required for it to faithfully perform its duties under
this Agreement. The Fund or Investment Manager assumes and shall pay all
expenses incidental to their respective organization, operation and business not
specifically assumed or agreed to be paid by the Subadviser pursuant hereto,
including, but not limited to, investment adviser fees; any compensation, fees,
or reimbursements which the Fund pays to its Directors; compensation of the
Fund's custodian, transfer agent, registrar and dividend disbursing agent;
legal, accounting, audit and printing expenses; administrative, clerical,
record-keeping and bookkeeping expenses; brokerage commissions and all other
expenses in connection with execution of portfolio transactions (including any
appropriate commissions paid to the Subadviser or its affiliates for effecting
exchange listed, over-the-counter or other securities transactions); interest,
all federal, state and local taxes (including stamp, excise, income and
franchise taxes) costs of stock certificates and expenses of delivering such
certificates to the purchaser thereof; expenses of
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shareholders' meetings and of preparing, printing and distributing proxy
statements, notices, and reports to shareholders; all expenses incurred in
complying with all federal and state laws and the laws of any foreign country
applicable to the issue, offer, or sale of shares for the Fund, including, but
not limited to all costs involved in the registration or qualification of shares
of the Fund for sale in any jurisdiction, the costs of portfolio pricing
services and systems for compliance with blue sky laws, and all costs involved
in preparing, printing and mailing prospectuses and statements of additional
information of the Fund; and all fees, dues and other expenses incurred by the
Fund in connection with the membership in any trade association or other
investment company organization.
Notwithstanding anything herein, the Subadviser shall be responsible for
any and all commercially reasonable expenses relating to the filing, printing
and mailing of supplements to the Fund's registration statement, provided that
such supplements relate solely to an action taken or proposed to be taken by the
Subadviser, including, but not limited to, changes in portfolio manager(s) or
other organizational changes.
E. The Subadviser will select brokers and dealers to effect all portfolio
transactions subject to the conditions set forth herein (except to the extent
such transactions are cross-trades effected in accordance with Rule 17a-7 and
such policies or procedures as may be established by the Board of Directors).
The Subadviser will place all necessary orders with brokers, dealers, or
issuers, and will negotiate brokerage commissions if applicable. The Subadviser
is directed at all times to seek to execute brokerage transactions for the
Portfolio in accordance with such policies or practices as may be established by
the Board of Directors and described in the Fund's currently effective
prospectus and SAI, as amended from time to time. The Investment Manager
reserves the right to direct the Subadviser upon written notice not to execute
transactions through any particular broker(s) or dealer(s), and the Subadviser
agrees to comply with such request within ten business days of receiving written
notice. The Investment Manager acknowledges that to the extent it directs the
Subadviser not to execute transactions through a particular broker or dealer,
the Portfolio will not be able to participate in the Subadviser's aggregation
with respect to transactions placed by the Subadviser for its other clients with
such broker or dealer.
The Subadviser will monitor the use of broker-dealers. In placing orders
for the purchase or sale of investments for the Portfolio, in the name of the
Portfolio or its nominees, the Subadviser shall use its best efforts to obtain
for the Portfolio the most favorable price and best execution available,
considering all of the circumstances, and shall maintain records adequate to
demonstrate compliance "Best execution" shall mean prompt and reliable execution
at the most favorable securities price, taking into account the other provisions
hereinafter set forth. Whenever the Subadviser places orders, or directs the
placement of orders, for the purchase or sale of portfolio securities on behalf
of the Portfolio, in selecting brokers or dealers to execute such orders, the
Subadviser is expressly authorized to consider the fact that a broker or dealer
has furnished statistical, research or other information or services which
enhance the Subadviser's research and portfolio management capability generally.
It is further understood in accordance with
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Section 28(e) of the Securities Exchange Act of 1934, as amended, that the
Subadviser may negotiate with and assign to a broker a commission which may
exceed the commission which another broker would have charged for effecting the
transaction if the Subadviser determines in good faith that the amount of
commission charged was reasonable in relation to the value of brokerage and/or
research services (as defined in Section 28(e)) provided by such broker. To the
extent authorized by said Section 28(e), the Subadviser shall not be deemed to
have acted unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of such action.
F. On occasions when the Subadviser deems the purchase or sale of a
security to be in the best interest of the Portfolio as well as other clients of
the Subadviser, the Subadviser to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be purchased or sold to attempt to obtain a more favorable price or lower
brokerage commissions and efficient execution. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Subadviser in compliance with Section 17(d) of
the Investment Company Act of 1940 and the rules established thereunder, Section
206 of the Investment Advisers Act of 1940 and any rules established thereunder,
and pursuant to policies adopted by the Subadviser and approved by the Board of
Directors of the Fund. Material amendments to the Subadviser's aggregation
policy shall be approved by the Fund.
The Subadviser may perform its Services through any employee, partner,
officer or agent of Subadviser and the Investment Manager and the Fund shall not
be entitled to the advice, recommendation or judgment of any specific person.
The Subadviser makes no representation or warranty, express or implied, that any
level of performance or investment results will be achieved by the Mid-Cap
Growth Portfolio or that such Portfolio will perform comparably with any
standard or index, including other clients of Subadviser, whether public or
private.
G. The Subadviser will maintain all accounts, books and records with
respect to the Portfolio as are required of an investment adviser of a
registered investment company pursuant to the Investment Company Act and
Advisers Act and the rules thereunder.
4. Compensation of the Subadviser. The Investment Manager will pay the
Subadviser, with respect to the Portfolio, the compensation specified in
Appendix A to this Agreement. Payments shall be made to the Subadviser within
the first five business days of each month; however, this advisory fee will be
calculated on the daily average value of the Portfolio's assets and accrued on a
daily basis. Solely for the purpose of determining the promptness of payments,
payments shall be considered made upon mailing or wiring pursuant to wiring
instructions provided by the Subadviser.
5. Non-Exclusivity. The Investment Manager agrees that the services of
the Subadviser are not to be deemed exclusive and the Subadviser is free to act
as investment
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manager to various investment companies and as fiduciary for other managed
accounts. The Subadviser shall, for all purposes herein, be deemed to be an
independent contractor and shall, unless otherwise provided or authorized, have
no authority to act for or represent the Fund or the Investment Manager in any
way or otherwise be deemed an agent of the Fund or Investment Manager other than
in furtherance of its duties and responsibilities as set forth in this
Subadvisory Agreement.
6. Books and Records. The Subadviser agrees that all books and records
which it maintains for the fund are the Fund's property, and, in the event of
termination of this Agreement for any reason, the Subadviser agrees promptly to
return to the Fund, free from any claim or retention of rights by the
Subadviser, all records relating to the Portfolio. The Subadviser also agrees
upon request of the Investment Manager or the Fund, promptly to surrender the
books and records to either party or make the books and records available for
inspection by representatives of regulatory authorities. In connection with its
duties hereunder, the Subadviser further agrees to maintain, prepare and
preserve books and records in accordance with the Investment Company Act and
rules thereunder, including but not limited to, Rule 31a-1 and 31a-2.
The Subadviser will use records or information obtained under this
Agreement only for the purposes contemplated hereby, and will not disclose such
records or information in any manner other than expressly authorized by the
Fund, or if disclosure is expressly required by applicable federal or state
regulatory authorities or by this Agreement. The Subadviser will furnish any
informational reports requested by any state insurance commissioner.
7. Liability. Except as may otherwise be provided by the Investment
Company Act, neither the Subadviser nor its officers, directors, employees or
agents shall be subject to any liability to the Investment Manager, the Fund or
any shareholder of the Fund for any error of judgment, mistake of law or any
loss arising out of any investment or other act or omission in the course of,
connected with or arising out of any service to be rendered hereunder, except by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of reckless disregard of its obligations and duties
under this Agreement. The Investment Manager shall hold harmless and indemnify
the Subadviser for any loss, liability, cost, damage or expense (including
reasonable attorneys fees and costs) arising from any claim or demand by the
Fund or any past or present shareholder of the fund that is not arising from
Subadviser's willful misfeasance, bad faith or gross negligence.
8. Reliance on Documents. The Board of Directors of the Fund or its
officers or agent will provide timely information to the Subadviser regarding
such matters as purchases and redemptions of shares in the Portfolio, the cash
requirements, and cash available for investment in the Portfolio, and all other
information as may be reasonably necessary or appropriate in order for the
Subadviser to perform its responsibilities hereunder. The Subadviser has
provided the Investment Manager with a copy of its current form ADV.
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Neither the Fund or the Investment Manager, nor their respective designees
or agents, shall use any material describing or identifying the Subadviser or
its affiliates without the prior consent of the Subadviser. Any material
utilized by the Fund, the Investment Manager or their respective designees or
agents which contain information as to the Subadviser and/or its affiliates
shall be submitted to the Subadviser for approval prior to use, not less than
five (5) business days before such approval is requested.
The Investment Manager has herewith furnished the Subadviser copies of the
Fund's Prospectus, Statement of Additional Information, Articles of
Incorporation and By-Laws as currently in effect and agrees during the
continuance of the Agreement to furnish the Subadviser copies of any amendments
or supplements thereto before or at the time the amendments or supplements
become effective. The Subadviser will be entitled to rely on all such documents
furnished to it by the Investment Manager of the Fund.
9. Duration and Termination of the Agreement. This Subadvisory Agreement
shall become effective as of the date first written above and remain in force
until May 1, 2006. Thereafter, it shall continue in effect from year to year,
but only so long as such continuance is specifically approved at least annually
by (a) the Board of Directors of the Fund, or by the vote of a majority of the
outstanding voting securities of the Portfolio, and (b) a majority of those
Directors who are not parties to this Subadvisory Agreement nor interested
persons of any party to this Subadvisory Agreement ("Independent Directors"),
cast in person at a meeting called for the purpose of voting on such approval.
This Agreement may be terminated, without the payment of any penalty, by the
Board of Directors of the Fund, by a vote of a majority of the outstanding
shares of the Portfolio, or by the Investment Manager on sixty days' written
notice to the Subadviser, or by the Subadviser on sixty days' written notice to
the Fund or the Investment Manager. This Agreement shall automatically terminate
in the event of its assignment or in the event of termination of the Investment
Management Agreement.
10. Amendments of the Agreement. Except to the extent permitted by the
Investment Company Act or the rules or regulations thereunder or pursuant to any
exemptive relief granted by the Securities and Exchange Commission ("SEC"), this
Agreement may be amended by the parties only if such amendment, if material, is
specifically approved by the vote of a majority of the outstanding voting
securities of the Portfolio (unless such approval is not required by Section 15
of the Investment Company Act as interpreted by the SEC or its staff) and by the
vote of a majority of the Independent Directors cast in person at a meeting
called for the purpose of voting on such approval. The required shareholder
approval shall be effective with respect to the Portfolio if a majority of the
outstanding voting securities of the Portfolio vote to approve the amendment,
notwithstanding that amendment may not have been approved by a majority of the
outstanding voting securities of any other portfolio affected by the amendment
or all the portfolios of the Fund.
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11. Definitions. The terms "assignment", "interested person", and
"majority of the outstanding voting securities", when used in this Agreement,
shall have the respective meaning specified under the Investment Company Act and
the rules thereunder.
12. Change in Law. Where the effect of a requirement of the Investment
Company Act of 1940 or of the Investment Advisers Act of 1940 reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
Securities and Exchange Commission, whether of special or general application,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.
13. Notices. Any notice that is required to be given by the parties to
each other under the terms of this Agreement shall be given in writing,
delivered, or mailed postpaid to the other party, or transmitted by facsimile
with acknowledgment of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to the Subadviser:
Xxxxxx Investment Partners, Inc.
0000 Xxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx 00000
Attn: President
Facsimile (000) 000-0000
(b) If to the Investment Manager:
Jefferson Pilot Investment Advisory Corporation
Xxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx
Facsimile (000) 000-0000
14. Governing Law. The provisions of this Agreement shall be construed
and interpreted in accordance with the laws of the State of New Hampshire as at
the time in effect and the applicable provisions of the Investment Company Act
or other federal laws and regulations which may be applicable. To the extent
that the applicable law of the State of New Hampshire or any of the provisions
herein, conflict with the applicable provisions of the Investment Company Act or
other federal laws and regulations which may be applicable, the latter shall
control.
15. Use of Subadviser's Name. Neither the Fund nor the Investment Manager
or any affiliate or agent thereof shall make reference to or use the name, and
any derivative thereof or logo associated with that name, of the Subadviser or
any of its
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affiliates in any advertising or promotional materials without the prior
approval of the Subadviser, which approval shall not be unreasonably withheld or
delayed. Upon termination of this Agreement, the Investment Manager and the Fund
shall forthwith cease to use such name (or derivative or logo) as soon as
reasonably practicable.
16. The Investment Manager agrees that the Subadviser may inform others
that the Investment Manager and Fund are clients of the Subadviser, and further
agrees that the Subadviser may provide others with performance results related
to the Portfolio on a composite basis without disclosing the specific
performance results attributed to the Portfolio, the Investment Manager or the
Fund.
17. Entire Agreement. This Agreement contains the entire understanding and
agreement of the parties with respect to the Portfolio.
18. Headings. The headings in the sections of this Agreement are inserted
for convenience of reference only and shall not constitute a part hereof.
19. Severability. Should any portion of this Agreement for any reason be
held to be void in law or in equity, the Agreement shall be construed, insofar
as is possible, as if such portion had never been contained herein.
JEFFERSON PILOT INVESTMENT ADVISORY
CORPORATION
ATTEST: BY:
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TITLE: TITLE:
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XXXXXX INVESTMENT PARTNERS, INC.
ATTEST: BY:
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TITLE: TITLE:
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