EXHIBIT 99.B5-18
EXHIBIT (D)(19)
SUB-ADVISORY AGREEMENT ON BEHALF OF
WRL SALOMON ALL CAP
SUB-ADVISORY AGREEMENT
BETWEEN
WRL INVESTMENT MANAGEMENT, INC.
AND
SALOMON BROTHERS ASSET MANAGEMENT, INC.
Agreement dated and effective as of May 1, 1999, between WRL Investment
Management, Inc., a Florida corporation (the "Adviser") and Salomon Brothers
Asset Management, Inc., a Delaware corporation (the "Sub-Adviser").
WHEREAS, the Adviser has entered into an Advisory Agreement (the
"Advisory Agreement") dated January 1, 1997, with WRL Series Fund, Inc. (the
"Fund"), a Maryland Corporation registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
on behalf of WRL Salomon All Cap (the "Portfolio") of WRL pursuant to which the
Adviser provides investment advisory services to the Fund;
WHEREAS, the Adviser has the authority to delegate its investment
advisory responsibilities under the Advisory Agreement to one or more
sub-advisers;
WHEREAS, the Adviser desires to retain the Sub-Adviser to provide
investment advisory services to the Portfolio;
NOW THEREFORE, in consideration of the mutual agreements herein made,
the Adviser and the Sub-Adviser agree as follows:
1. (a) The Adviser employs the Sub-Adviser, subject to the direction
and control of the directors of the Fund, including without limitation any
approval of the directors of the Fund required by the 1940 Act, to (a) make, in
consultation with the Adviser and the Fund's Board of Directors, investment
strategy decisions for the Portfolio, (b) manage the investing and reinvesting
of the Portfolio's assets and (c) place purchase and sale orders on behalf of
the Portfolio.
(b) At the Adviser's request, the Sub-Adviser agrees:
(1) to cause its officers to attend meetings of the Fund's
Board and furnish oral or written reports, as the Adviser may reasonably
require, in order to keep the Adviser and its officers and the Directors of the
Fund and appropriate officers of the Fund fully informed as to the condition of
the investments of the Portfolio and the investment considerations which have
given rise to those recommendations; and
(2) to furnish such statistical and analytical information and
reports as may reasonably be required by the Adviser from time to time.
2. (a) The adviser shall provide (or cause the Fund's custodian to
provide) timely information to the Sub-Adviser regarding such matters as the
composition of assets in the Portfolio, cash requirements and cash available for
investment in the Portfolio, and all other information as may be reasonably
necessary for the Sub-Adviser to perform its responsibilities hereunder.
(b) The Adviser agrees to furnish the Sub-Adviser with minutes of
meetings of the Board of Directors of the Fund applicable to the Portfolio to
the extent they may affect the duties of the Sub-Adviser, and with copies of any
financial statements or reports made by the Portfolio to its shareholders, and
any further materials or information which the Sub-Adviser may reasonably
request to enable it to perform its functions under this Agreement.
3. (a) The Sub-Adviser shall, at its expense, provide office space,
office facilities and personnel reasonably necessary for performance of the
services to be provided by the Sub-Adviser pursuant to this Agreement.
(b) Except as provided in subparagraph 3(a) hereof, the
Sub-Advisor shall not be responsible for the Portfolio's expenses and
liabilities, including organizational and offering expenses (which include
out-of-pocket expenses, but not overhead or employee costs of the Sub-Adviser);
expenses for legal, accounting and auditing services; taxes and governmental
fees; dues and expenses incurred in connection with membership in investment
company organizations; costs of printing and distributing shareholder reports,
proxy materials, prospectuses, stock certificates and distribution of dividends;
charges of the Fund's custodians and sub-custodians, administrators and
sub-administrators, registrars, transfer agents, dividend disbursing agents and
dividend reinvestment plan agents; payment for portfolio pricing services to a
pricing agent, if any; registration and filing fees of the Securities and
Exchange Commission (the "SEC"); expenses of registering or qualifying
securities of the Portfolio for sale in the various states; freight and other
charges in connection with the shipment of the Portfolio's portfolio securities;
fees and expenses of non-interested Directors; salaries of shareholder relations
personnel; costs of shareholders meetings; insurance; interest; brokerage costs;
and litigation and other extraordinary or non-recurring expenses.
4. The Sub-Adviser shall make investments for the Portfolio's account
in accordance with the investment objectives, policies and limitations set forth
in the Fund's Articles of Incorporation as amended from time to time (the
"Articles"), the Registration Statement, as in effect from time to time (the
"Registration Statement"), filed with the SEC by the Fund under the 1940 Act and
the Securities Act of 1933, as amended, the provisions of the Internal Revenue
Code of 1986, as amended (the "Code"), and supplemented from time to time,
relating to regulated investment companies, Section B17(h) of the Code and
regulations thereunder, and policy decisions adopted by the Fund's Board of
Directors from time to time. Copies of any amendments to the documents referred
to in the preceding sentence shall be promptly furnished to the Sub-Adviser. The
Sub-Adviser shall advise the Fund's officers and Board of Directors, at such
time as the Fund's Board of Directors may specify, of investments made for the
Portfolio's account and shall, when requested by the WRL officers or Board of
Directors, supply the reasons for making such investments.
5. Subject to applicable laws, the Sub-Adviser may contract with or
consult with such banks, other securities firms, brokers or other parties,
without additional expense to the Portfolio, as it may deem appropriate
regarding investment advice, research and statistical data, clerical assistance
or otherwise.
6. Subject to applicable laws and any procedures adopted by the Fund's
Board of Directors, the Sub-Adviser is authorized on behalf of the Portfolio,
from time to time when deemed to be in the best interests of the Portfolio and
to the extent permitted by applicable law, to purchase and/or sell securities in
which the Sub-Adviser or any of their affiliates underwrites, deals in and/or
makes a market and/or may perform or seek to perform investment banking services
for issuers of such securities. The Sub-Adviser is further authorized, to the
extent permitted by applicable law and any procedures adopted by the Fund's
Board of Directors, to select brokers (including Salomon Brothers Inc or any
other brokers affiliated with the Sub-Adviser) for the execution of trades for
the Portfolio.
7. Subect to and in accordance with the Advisory Agreement, and
consistent with the Sub-Adviser's duty to seek to obtain quality execution at
favorable security prices (best price and execution) the Sub-Adviser is
authorized, for the purchase and sale of the Portfolio's portfolio securities,
to employ such dealers and brokers as may, in the judgment of the Sub-Adviser,
implement the policy of the Portfolio to obtain the best results taking into
account such factors as price, including dealer spread, the size, type and
difficulty of the transaction involved, the firm's general execution and
operational facilities and the firm's risk in positioning the securities
involved. Subject to and in accordance with the Advisory Agreement, and
consistent with this policy, the Sub-Adviser is authorized to direct the
execution of the Portfolio's portfolio transactions to dealers and brokers
furnishing statistical information or research, as such is defined in Section
28(e) of the Securities Exchange Act of 1934, deemed by the Sub-Adviser to be
useful or valuable to the performance of its investment advisory functions for
the Portfolio. Information so received will be in addition to and not in lieu
of the services required to be performed by the Sub-Adviser. It is understood
that the expenses of the Sub-Adviser will not necessarily be reduced as a result
of the receipt of such information or research. The Sub-Adviser may use for the
benefit of the Sub-Adviser's other clients, or make available to companies
affiliated with the Sub-Adviser or to its directors for the benefit of its
clients, any such information or research services that the Sub-Adviser received
from brokers or dealers.
8. To compensate the Sub-Adviser for its services provided, and the
expenses assumed under this Agreement, by (i) the payment of a monthly fee as
set forth on Schedule A attached to this Agreement, as it may be amended from
time to time in accordance with Section 11 below. (The fees payable to Pilgrim
Xxxxxx with respect to the WRL Pilgrim Xxxxxx Mid Cap Growth portfolio will be
based upon the average daily net assets, on a combined basis, of both the IDEX
Pilgrim Xxxxxx Mid Cap Growth fund and the WRL Pilgrim Xxxxxx Mid Cap Growth
portfolio.) If the fee payable to the Sub-Adviser pursuant to this paragraph 8
begins to accrue before the end of any month or if this Agreement terminates
before the end of any month, the fee for the period from such date to the end of
such month or from the beginning of such month to the date of termination, as
the case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs. For
purposes of calculating each such monthly fee, the value of the Portfolio's net
assets shall be computed at the time and in the manner specified in the
Registration Statement.
9. The Sub-Adviser represents and warrants that it is duly registered
and authorized as an investment adviser under the Investment Adviser Act of
1940, as amended, and any applicable state laws, and the Sub-Adviser agrees to
maintain effective all requisite registations, authorizations and licenses, as
the case may be, until termination of this Agreement.
10. The Sub-Adviser shall exercise its best judgment in rendering the
services in accordance with the terms of this Agreement. The Sub-Adviser shall
not be liable for any error of judgment or mistake of law or for any act or
omission or any loss suffered by the Portfolio in connection with the matters to
which this Agreement relates, provided that nothing herein shall be deemed to
protect or purport to protect the Sub-Adviser against any liability to the
Portfolio or its shareholders, or the Adviser, to which the Sub-Adviser would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement ("disabling
conduct"). The adviser will indemnify the Sub-Adviser against, and hold harmless
from, any and all losses, claims, damages, liabilities or expenses (including
reasonable counsel fees and expenses), including any amounts paid in
satisfaction of judgments, in compromise or as fines or penalties, not resulting
from disabling conduct by the Adviser. The Sub-Adviser shall be entitled to
advances from the Adviser for payment of reasonable expenses incurred in
connection with the matter as to which it is seeking indemnification in the
manner and to the fullest extent permissible under law.
11. This Agreement may be amended with respect to the Portfolio only
with the approval by the affirmative vote of a majority of the outstanding
voting securities (as that phrase is defined in Section 2(a)(42) of the 0000
Xxx) of the Portfolio and the approval by the vote of a majority of the Fund's
Directors, including a majority of Directors who are not parties hereto or
interested persons (as that term is defined in Section 2(a)(19) of the 0000 Xxx)
of any such party, cast in person at a meeting called for the purpose of voting
on the approval of such amendment, unless otherwise permitted in accordance with
the 1940 Act. or per the terms of the exemptive order - Rel. 23379 dated August
5, 1998 - under section 6(c) of the 1940 Act granting an exemption from section
15(a) of the Act and Rule 18f-2 under the Act.
12. This Agreement shall become effective as of the date of its
execution and continue in effect for an initial term ending April 30, 2001, and
thereafter for successive annual periods, provided that such continuance is
specifically approved at least annually (a) by the vote of a majority of the
Portfolio's outstanding voting securities (as defined in the 0000 Xxx) or by the
Fund's Board of Directors and (b) by the vote, cast in person at a meeting
called for the purpose, of a majority of the Fund's Directors who are not
parties to this Agreement or "interested persons" (as defined in the 0000 Xxx)
of any such party or per the terms of the exemptive relief - Xxxxxxx Xx. 00000
dated August 5, 1998 - under section 6(c) of the 1940 Act granting an
exemption from Section 15(a) of the 1940 Act and Rule 18f-2 under the 1940 Act.
This Agreement may be terminated at any time, without the payment of any
penalty, by (i) the Board, or by a vote of the majority of the outstanding
voting securities of the Portfolio on 60 days' written notice to the Sub-Adviser
or (ii) by the Sub-Adviser on 60 days' written notice to the Adviser or (iii) by
the Adviser on 60 days' written notice to the Sub-Adviser. Subject to the terms
of any exemptive obtained by the Fund, this Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940 Act).
13. Nothing herein shall be deemed to limit or restrict the right of
the Sub-Adviser, or any affiliate of the Sub-Adviser, or any employee of the
Sub-Adviser, to engage in any other business or to devote time and attention to
the management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
firm, individual or association. Nothing herein shall be construed as
constituting the Sub-Adviser an agent of the Adviser or the Fund.
14. This Agreement shall be governed by the laws of the State of New
York; provided, however, that nothing herein shall be construed as being
inconsistent with the 1940 Act.
15. Any notice hereunder shall be in writing and shall be delivered in
person or by telex or facsimile (followed by delivery in person) to the parties
at the addresses set forth below.
If to the Sub-Adviser:
Salomon Brothers Asset Mangement Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: ____________________
If to the Adviser:
WRL Investment Management, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Associate General Counsel
or to such other address as to which the recipient shall have informed the other
party in writing.
Unless specifically provided elsewhere, notice given as provided above
shall be deemed to have been given, if by personal delivery, on the day of such
delivery, and, if by facsimile and mail, on the date on which such facsimile is
sent or mail.
15. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto caused their duly authorized signatories
to execute this Agreement as of the day and year first written above.
WRL Investment Management, Inc.
By Date
Name: XXXX X. XXXXXX
Title: CHAIRMAN, DIRECTOR & PRESIDENT
Salomon Brothers Asset Management, Inc.
By Date
Name:
Title:
Sub-Advisory Agreement
SCHEDULE A
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PORTFOLIO ANNUAL PERCENTAGE OF MONTHLY AVERAGE TERMINATION DATE
DAILY NET ASSETS
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WRL SALOMON ALL CAP 0.30% of the first $20 million of the April 30, 2001
Portfolio's average daily net assets;
0.50% of the next $20 - $100 million
of average daily net assets; and
0.40% of average daily net assets
over $100 million*
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*The fees payable for this portfolio will be based upon the average daily net
assets, on a combined basis, for both the WRL Salomon All Cap portfolio and the
IDEX Salomon All Cap fund.
