FORM OF SUBADVISORY AGREEMENT
Exhibit (d)(20)
FORM OF
SUBADVISORY AGREEMENT
SUBADVISORY AGREEMENT
AGREEMENT made effective the 1st day of July, 2010 among Xxxxx Xxxxx Management, a
Massachusetts Business Trust (“Subadviser”), Pacific Life Fund Advisors LLC, a Delaware Limited
Liability Company (“Investment Adviser”), and Pacific Life Funds, a Delaware Statutory Trust (the
“Trust”).
WHEREAS, the Trust is registered with the Securities and Exchange Commission (“SEC”) as an
open-end, management investment company under the Investment Company Act of 1940, as amended (the
“1940 Act”);
WHEREAS, the Investment Adviser is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended (“Advisers Act”);
WHEREAS, the Subadviser is registered with the SEC as an investment adviser under the Advisers
Act;
WHEREAS, the Trust has retained the Investment Adviser to render investment advisory services
to the various portfolios of the Trust pursuant to an Advisory Agreement, as amended, and such
Agreement authorizes the Investment Adviser to engage a subadviser to discharge the Investment
Adviser’s responsibilities with respect to the investment management of such portfolios;
WHEREAS, the Trust and the Investment Adviser desire to retain the Subadviser to furnish
investment advisory services to one or more portfolios of the Trust, and the Subadviser is willing
to furnish such services to such portfolios and the Investment Adviser in the manner and on the
terms hereinafter set forth; and
NOW THEREFORE, in consideration of the promises and mutual covenants herein contained, it is
agreed among the Trust, the Investment Adviser, and the Subadviser as follows:
1. Appointment. The Trust and the Investment Adviser hereby appoint Subadviser to act as
subadviser to provide investment advisory services to the portfolios of the Trust listed on Exhibit
A attached hereto (individually, a “Portfolio” and together, the “Portfolios”) for the periods and
on the terms set forth in this Agreement. The Subadviser accepts such appointment and agrees to
furnish the services set forth herein for the compensation herein provided.
In the event the Investment Adviser wishes to retain the Subadviser to render investment
advisory services to one or more portfolios of the Trust other than the Portfolio, the Investment
Adviser shall notify the Subadviser in writing and shall revise Exhibit A to reflect such
additional portfolio(s). If the Subadviser is willing to render such services, it shall notify the
Trust and the Investment Adviser in writing, whereupon such portfolio shall become a Portfolio
hereunder, and be subject to this Agreement.
2. Subadviser Duties. Subject to the supervision of the Trust’s Board of Trustees (the
“Board”) and the Investment Adviser, the Subadviser will provide a continuous investment program
for the Portfolio and determine the composition of the assets of the Portfolio. The
Subadviser will provide investment research and analysis, which may include computerized
investment methodology, and will conduct a continuous program of evaluation, investment, purchases
and/or sales, and reinvestment of the Portfolio’s assets by determining the securities, cash and
other investments, including, but not limited to, futures, options contracts, swaps and other
derivative instruments, if any and to the extent permitted in the Portfolio’s registration
statement, that shall be purchased, entered into, retained, sold, closed, or exchanged for the
Portfolio, when these transactions should be executed, and what portion of the assets of the
Portfolio should be held in the various securities and other investments in which it may invest,
and the Subadviser is hereby authorized to execute and perform such services on behalf of the
Portfolio. To the extent permitted by the written investment policies of the Portfolio, the
Subadviser shall make decisions for the Portfolio as to foreign currency matters and make
determinations as to the retention or disposition of foreign currencies or securities or other
instruments denominated in foreign currencies, or derivative instruments based upon foreign
currencies, including forward foreign currency contracts and options and futures on foreign
currencies and shall execute and perform the same on behalf of the Portfolio. The Subadviser is
authorized to and shall exercise tender offers, exchange offers and vote proxies on behalf of the
Portfolio, each as the Subadviser determines is in the best interest of the Portfolio in accordance
with the Subadviser’s proxy voting policy. The Subadviser is authorized, on behalf of the
Portfolio, to open brokerage accounts in accordance with Trust procedures. The Subadviser is
authorized, on behalf of the Portfolio, to enter into futures account agreements, ISDA master
agreements and related documents, and to open accounts and take other necessary or appropriate
actions related thereto, in accordance with Trust procedures.
In performing these duties, the Subadviser:
(a) will conform with (1) the applicable sections of the 1940 Act and all rules and
regulations thereunder, and releases and interpretations related thereto (including any no-action
letters and exemptive orders which have been granted by the SEC applicable to the Trust, to the
Investment Adviser (as provided to the Subadviser by the Investment Adviser), or to the
Subadviser); (2) applicable rules and regulations under the Securities Exchange Act of 1934, as
amended (the “1934 Act”); (3) any applicable written procedures, policies and guidelines adopted by
the Board and furnished to the Subadviser; (4) the Trust’s objectives, investment policies and
investment restrictions as stated in the Trust’s Prospectus and Statement of Additional Information
as supplemented or amended from time to time, as furnished to the Subadviser; (5) the provisions of
the Trust’s Registration Statement filed on Form N-1A under the Securities Act of 1933 (the “1933
Act”) and the 1940 Act, as supplemented or amended from time to time (the “Registration Statement”)
as furnished to the Subadviser; (6) Section 851(b)(2) and (3) of Subchapter M of the Internal
Revenue Code of 1986, as amended (the “Code”); and (7) any other applicable laws and regulations,
including without limitation, proxy voting regulations. To the extent that the Subadviser engages
in transactions that require segregation of assets or other arrangements, including but not limited
to, options, futures contracts, short sales or borrowing transactions, the Subadviser shall
designate to the Trust’s Custodian those assets to be segregated in accordance with the 1940 Act,
if necessary, based upon trading strategies and positions the Subadviser employs on behalf of the
Portfolio, as well as to segregate assets, if necessary, in accordance with the 1934 Act and any
other requirements of broker/dealers who may execute transactions for the Portfolio in connection
therewith. Until the Investment Adviser delivers any supplements or amendments to the Subadviser,
the Subadviser shall be fully
2
protected in relying on the Trust’s Registration Statement previously furnished by the
Investment Adviser to the Subadviser and the Subadviser shall not have any liability resulting from
Investment Adviser’s failure to deliver documents pursuant to this section. In managing the
Portfolio in accordance with the requirements of this Section 2, the Subadviser shall be entitled
to receive and act upon advice of counsel to the Trust, to the Investment Adviser or to the
Subadviser that is also acceptable to the Investment Adviser.
(b) intentionally omitted.
(c) is responsible, in connection with its responsibilities under this Section 2, for
decisions to buy and sell securities and other investments for the Portfolio, for broker-dealer and
futures commission merchant (“FCM”) selection, and for negotiation of commission rates. The
Subadviser’s primary consideration in effecting a security or other transaction will be to obtain
the best execution for the Portfolio, taking into account the factors specified in the Prospectus
and Statement of Additional Information for the Trust, as they may be amended or supplemented from
time to time and furnished to the Subadviser. Subject to such policies as the Board may determine
and consistent with Section 28(e) of the Securities Exchange Act of 1934, as amended (the “1934
Act”), the 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 its having caused the Portfolio to pay a
broker or dealer, acting as agent, for effecting a Portfolio transaction at a price in excess of
the amount of commission another broker or dealer would have charged for effecting that
transaction, if the Subadviser determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services provided by such broker
or dealer, viewed in terms of either that particular transaction or the Subadviser’s (or its
affiliates’) overall responsibilities with respect to the Portfolio and to its other clients as to
which it exercises investment discretion. To the extent consistent with these standards, and in
accordance with Section 11(a) of the 1934 Act and Rule 11a2-2(T) thereunder, and subject to any
other applicable laws and regulations including Section 17(e) of the 1940 Act, the Subadviser is
further authorized to place orders on behalf of the Portfolio through the Subadviser if the
Subadviser is registered as a broker or dealer with the SEC or as a FCM with the Commodities
Futures Trading Commission (“CFTC”), through any of its affiliates that are brokers or dealers or
FCMs or such other entities which provide similar services in foreign countries, or through such
brokers and dealers that also provide research or statistical research and material, or other
services to the Portfolio or the Subadviser. Such allocation shall be in such amounts and
proportions as the Subadviser shall determine consistent with the above standards, and, upon
request, the Subadviser will report on said allocation to the Investment Adviser and Board,
indicating the brokers, dealers or FCMs to which such allocations have been made and the basis
therefor. The Subadviser is authorized to open brokerage accounts on behalf of the Portfolio in
accordance with Trust procedures. The Subadviser shall not direct brokerage to any broker-dealer
in recognition of, or otherwise take into account in making brokerage allocation decisions, sales
of shares of a Portfolio or of any other investment vehicle by that broker-dealer and the
Investment Adviser shall not disclose data related to the sales of shares of the Portfolio or the
Trust with the Subadviser and its affiliates.
(d) may, on occasions when the purchase or sale of a security is deemed to be in the best
interest of a Portfolio as well as any other investment advisory clients, to the extent permitted
by applicable laws and regulations, but shall not be obligated to, aggregate the
3
securities to be so sold or purchased with those of its other clients where such aggregation
is not inconsistent with the policies set forth in the Registration Statement as furnished to the
Subadviser. 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 a manner that is fair and
equitable and consistent with the Subadviser’s fiduciary obligations to the Portfolio and to such
other clients.
(e) will, in connection with the purchase and sale of securities for the Portfolio, together
with the Investment Adviser, arrange for the transmission to the custodian and recordkeeping agent
for the Trust, on a daily basis, such confirmation(s), trade tickets, and other documents and
information, including, but not limited to, any information needed to book the trade, funding
memos, credit agreements, CUSIP, SEDOL, or other numbers that identify securities to be purchased
or sold on behalf of the Portfolio, as may be reasonably necessary to enable the custodian and
recordkeeping agent to perform its administrative and recordkeeping responsibilities with respect
to the Portfolio, and with respect to Portfolio securities to be purchased or sold through the
Depository Trust Company, will arrange for the automatic transmission of the confirmation of such
trades to the Trust’s custodian and recordkeeping agent, and, if required, the Investment Adviser.
The Subadviser will make best efforts to comply with such rules, procedures and time frames as the
Trust’s custodian may reasonably set or provide with respect to the clearance and settlement of
transactions for a Portfolio, including but not limited to submission of trade tickets. Any
Portfolio assets shall be delivered directly to the Trust’s custodian.
(f) will provide reasonable assistance to the Investment Adviser, custodian or recordkeeping
agent for the Trust in determining or confirming, consistent with the procedures and policies
stated in the Trust’s valuation procedures and/or the Registration Statement, the value of any
portfolio securities or other assets of the Portfolio for which the Investment Adviser, custodian
or recordkeeping agent seeks assistance from the Subadviser or identifies for review by the
Subadviser. Such reasonable assistance shall include (but is not limited to): (i) designating and
providing timely access, on an as-needed basis and upon the reasonable request of the Investment
Adviser or custodian, to one or more employees of the Subadviser who are knowledgeable about the
security/issuer, its financial condition, trading and/or other relevant factors for valuation,
which employees shall be available for consultation when the Board’s Valuation Committee convenes;
(ii) notifying the Investment Adviser in the event any Portfolio security’s value does not appear
to reflect corporate actions, news, significant events or such security otherwise requires review
to determine if fair valuation is necessary under the Trust’s procedures; (iii) applying to the
Portfolio’s assets the procedures of the Subadviser used for valuing the assets held by other
accounts under management of the Subadviser and notifying the Investment Adviser of the valuation
of such assets determined under such procedures, including in the event that the application of
such procedures would result in a determination of fair value with respect to any asset held by the
Portfolio where a market quotation is not readily available or is deemed to be unreliable with
respect to such asset; (iv) upon the request of the Investment Adviser or custodian, assisting in
obtaining bids and offers or quotes from broker/dealers or market-makers with respect to securities
held by the Portfolio; (v) verifying pricing and providing fair valuations or recommendations for
fair valuations in accordance with the Trust’s valuation procedures, as they may be amended from
time to time; and (vi) maintaining adequate records and written backup information with respect to
the securities valuation services provided
4
hereunder, and providing such information to the Investment Adviser or the Trust upon request.
Such records shall be deemed to be Trust records.
(g) will maintain and preserve such records related to the Portfolio’s transactions as
required under the 1940 Act and the Advisers Act. The Subadviser will make available to the Trust
and the Investment Adviser promptly upon request, any of the Portfolio’s investment records and
ledgers maintained by the Subadviser (which shall not include the records and ledgers maintained by
the custodian and recordkeeping agent for the Trust), as are necessary to assist the Trust and the
Investment Adviser in complying with requirements of the 1940 Act and the Advisers Act, as well as
other applicable laws, and will furnish to regulatory authorities having the requisite authority
any information or reports in connection with such services which may be requested in order to
ascertain whether the operations of the Trust are being conducted in a manner consistent with
applicable laws and regulations.
(h) will regularly report to the Board on the investment program for the Portfolio and the
issuers and securities represented in the Portfolio, and will furnish the Board, with respect to
the Portfolio, such periodic and special reports as the Board and the Investment Adviser may
reasonably request, including, but not limited to, reports concerning transactions and performance
of the Portfolio, a quarterly compliance checklist, reports regarding compliance with the Trust’s
procedures pursuant to Rules 17e-1, 17a-7, 10f-3 and 12d3-1 under the 1940 Act, fundamental
investment restrictions, procedures for opening brokerage accounts and commodity trading accounts,
liquidity determination of securities purchased pursuant to Rule 144A and 4(2) commercial paper,
IOs/POs, confirmation of the liquidity of all other securities in the Trusts, and compliance with
the Subadviser’s Code of Ethics, and such other reports or certifications that the Investment
Adviser may reasonably request from time to time.
(i) will adopt a written Code of Ethics complying with the requirements of Rule 17j-1 under
the 1940 Act and Rule 204A-1 under the Advisers Act and will provide the Investment Adviser and the
Trust with a copy of the Code of Ethics, together with evidence of its adoption. Within 30 days of
the end of each calendar quarter during which this Agreement remains in effect, the chief
compliance officer or the president or other appropriate senior officer (as the Investment Adviser
determines appropriate) of the Subadviser shall certify to the Investment Adviser that the
Subadviser has complied with the requirements of Rule 17j-1 during the previous calendar quarter
and that there have been no material violations of the Code of Ethics or, if a material violation
has occurred, that appropriate action has been taken in response to such violation. Upon written
request of the Investment Adviser or the Trust, the Subadviser shall provide to representatives of
the Investment Adviser and the Trust the reports (or redacted summaries of the reports) regarding a
material or non-material violation required to be made under the Code of Ethics and other records
evidencing enforcement of the Code of Ethics.
(j) will provide to the Investment Adviser a copy of the Subadviser’s Form ADV, and any
supplements or amendments thereto, as filed with the SEC, on an annual basis (or more frequently if
requested by the Investment Adviser or the Board) including any portion which contains disclosure
of legal or regulatory actions. The Subadviser represents and warrants that it is a duly
registered investment adviser under the Advisers Act and will notify the Investment Adviser
immediately if any action is brought by any regulatory body which would affect that registration.
The Subadviser will provide a list of persons whom the Subadviser
5
wishes to have authorized to give written and/or oral instructions to Custodians of assets for
the Portfolio.
(k) will be responsible for meeting the Subadviser’s regulatory obligations, including the
preparation and filing of such reports with respect to the assets of the Portfolio reflecting
holdings over which the Subadviser or its affiliates have investment discretion as may be required
from time to time, including but not limited to Schedule 13G, Form 13F and Form SH.
(l) (i) will not permit any employee of the Subadviser to have any material involvement with
the management of the Portfolio if, to the best of the Subadviser’s knowledge, such employee has:
(A) been, within the last ten (10) years, convicted of or acknowledged commission of any
felony or misdemeanor (1) involving the purchase or sale of any security, or (2) arising out of
such person’s conduct as an underwriter, broker, dealer, investment adviser, municipal securities
dealer, government securities broker, government securities dealer, bank, transfer agent, credit
rating agency, or entity or person required to be registered under the Commodity Exchange Act, or
as an affiliated person, salesman, or employee or officer or director of any investment company,
bank, insurance company, or entity or person required to be registered under the Commodity Exchange
Act;
(B) been permanently or temporarily enjoined by reason of any misconduct, by order, judgment,
or decree of any court of competent jurisdiction, from acting as an underwriter, broker, dealer,
investment adviser, municipal securities dealer, government securities broker, government
securities dealer, bank, transfer agent, credit rating agency, or entity or person required to be
registered under the Commodity Exchange Act, or as an affiliated person, salesman or employee of
any investment company, bank, insurance company, or entity or person required to be registered
under the Commodity Exchange Act, or from engaging in or continuing any conduct or practice in
connection with any such activity or in connection with the purchase or sale of any security; and
(ii) will advise Investment Adviser in writing upon discovery of any employee of the
Subadviser that has material involvement with the management of the Portfolio if such employee has
been, within the last ten (10) years, convicted of or acknowledged commission of any felony or
misdemeanor (A) involving embezzlement, fraudulent conversion, or misappropriation of funds or
securities, or (B) involving sections 1341, 1342 or 1343 of Title 18 of the U.S. Code.
(m) will not disclose or use any records or information obtained pursuant to this Agreement
(excluding investment research and investment advice) in any manner whatsoever except as expressly
authorized in this Agreement or in the ordinary course of business in connection with placing
orders for the purchase and sale of securities or obtaining investment licenses in various
countries or the opening of custody accounts and dealing with settlement agents in various
countries, and will keep confidential any information obtained pursuant to the Agreement, and
disclose such information only if the Board has authorized such disclosure, or if such disclosure
is required by applicable federal or state law or regulations or
6
regulatory authorities having the requisite authority. The Trust and the Investment Adviser
will not disclose or use any records or information with respect to the Subadviser obtained
pursuant to this Agreement, in any manner whatsoever except as expressly authorized in this
Agreement, and will keep confidential any information obtained pursuant to this Agreement, and
disclose such information only as expressly authorized in this Agreement, if the Subadviser has
authorized such disclosure, or if such disclosure is required by applicable federal or state law or
regulations or regulatory authorities having the requisite authority.
(n) will assist the Investment Adviser, the Trust, and any of its or their trustees,
directors, officers, and/or employees in complying with the provisions of the Xxxxxxxx-Xxxxx Act of
2002 to the extent such provisions relate to the services to be provided by, and the obligations
of, the Subadviser hereunder. Specifically, and without limitation to the foregoing, the
Subadviser agrees to provide sub-certifications to the principal executive and financial officers
of the Trust (the “certifying officers”) that correspond to and/or support the certifications
required to be made by the certifying officers in connection with the preparation and/or filing of
the Trust’s Form N-CSRs, N-Qs, N-SARs, shareholder reports, financial statements, and other
disclosure documents or regulatory filings, in such form and content as the Trust shall reasonably
request or in accordance with procedures adopted by the Trust.
(o) is, along with its affiliated persons, permitted to enter into transactions with the other
portfolios of the Trust and affiliated persons of those other portfolios of the Trust
(collectively, the “Other Portfolios”). In doing so, the Subadviser is prohibited from consulting
with the Investment Adviser or the subadvisers of these Other Portfolios concerning securities
transactions of the Portfolio except for the purpose of complying with the conditions of Rule
12d3-1(a) and (b) under the 1940 Act.
(p) will exercise voting rights with respect to portfolio securities held by a Portfolio in
accordance with written policies and procedures adopted by the Subadviser, which may be amended
from time to time, and which at all times shall comply with the requirements of applicable federal
statutes and regulations and any related SEC guidance relating to such statutes and regulations
(collectively, “Proxy Voting Policies and Procedures”). The Subadviser shall vote proxies on
behalf of the Portfolio in a manner deemed by the Subadviser to be in the best interests of the
Portfolio pursuant to the Subadviser’s written Proxy Voting Policies and Procedures. The
Subadviser shall provide disclosure regarding the Proxy Voting Policies and Procedures in
accordance with the requirements of Form N-1A for inclusion in the Registration Statement. The
Subadviser shall report to the Investment Adviser in a timely manner a record of all proxies voted,
in such form and format that complies with acceptable federal statutes and regulations (e.g.,
requirements of Form N-PX). The Subadviser shall certify at least annually or more often as may
reasonably be requested by the Investment Adviser, as to its compliance with its own Proxy Voting
Policies and Procedures and applicable federal statutes and regulations.
(q) will provide reasonable assistance to the Trust and the Trust’s Chief Compliance Officer
(“CCO”) in complying with Rule 38a-1 under the 1940 Act. Specifically, the Subadviser represents
and warrants that it shall maintain a compliance program in accordance with the requirements of
Rule 206(4)-7 under the Advisers Act, and shall provide the CCO with reasonable access to
information regarding the Subadviser’s compliance program, which access shall include on-site
visits with the Subadviser as may be reasonably requested
7
from time to time. In connection with the periodic review and annual report required to be
prepared by the CCO pursuant to Rule 38a-1, the Subadviser agrees to provide certifications as may
be reasonably requested by the CCO related to the design and implementation of the Subadviser’s
compliance program.
(r) will comply with the Trust’s policy on selective disclosure of portfolio holdings of the
Trust (the “Selective Disclosure Policy”), as provided in writing from time to time to the
Subadviser and as may be amended from time to time and provided to Subadviser. The Subadviser
agrees to provide a certification with respect to compliance with the Trust’s Selective Disclosure
Policy as may be reasonably requested by the Trust from time to time.
(s) will notify the Investment Adviser promptly in the event that, in the judgment of the
Subadviser, Portfolio share transaction activity becomes disruptive to the ability of the
Subadviser to effectively manage the assets of a Portfolio consistent with the Portfolio’s
investment objectives and policies.
(t) will provide assistance as may be reasonably requested by the Investment Adviser in
connection with compliance by the Portfolio with any current or future legal and regulatory
requirements related to the services provided by the Subadviser hereunder.
(u) will provide such certifications to the Trust as the Trust or the Investment Adviser may
reasonably request related to the services provided by the Subadviser hereunder, including (but not
limited to) certifications of compliance with Trust procedures, the Registration Statement, and
applicable securities regulations.
(v) will promptly inform the Investment Adviser of any class action litigation received by the
Subadviser and involving securities held by the Portfolio, and upon request by the Investment
Adviser, research and confirm to the Investment Adviser whether the Portfolio held or traded in a
particular security, on any particular day or during any particular timeframe within the term of
this Agreement, as the Investment Adviser may specify; and Subadviser will provide relevant trade
information (for example, a schedule of purchases and sales and/or holdings) for such security.
(w) will provide reasonable assistance to the Investment Adviser with respect to the annual
audit of the Trust’s financial statements, including, but not limited to: (i) providing broker
contacts as needed for obtaining trade confirmations (in particular with respect to investments in
loans (including participations and assignments) and all derivatives, including swaps); (ii)
providing copies of all documentation relating to investments in loans (including participations
and assignments) and derivative contracts, within a reasonable time after the execution of such
documentation; (iii) providing assistance in obtaining trade confirmations in the event the Trust
or the Trust’s independent registered public accounting firm is unable to obtain such confirmations
directly from the brokers; and (iv) obtaining market quotations for investments (including
investments in loans (including participations and assignments) and derivatives) that are not
readily ascertainable in the event the Trust or the Trust’s independent registered public
accounting firm is unable to obtain such market quotations through independent means.
8
(x) will, on an annual basis, advise the Investment Adviser (i) if the Subadviser acts as
subadviser to another U.S. registered mutual fund that follows the same investment strategy as the
Portfolio (as reasonably determined by the Subadviser) to which the Subadviser provides investment
advisory services and (ii) if so, whether the Subadviser’s fee rate is less than the rate charged
the Investment Adviser for management of the Portfolio.
(y) will, for the duration of this Agreement, not actively solicit or induce any personnel of
Investment Adviser or its affiliated companies that provide services to the Portfolio to leave the
employ of Investment Adviser or affiliated company. After personnel of Investment Adviser or an
affiliate cease to be in the employ of Investment Adviser or affiliate, Subadviser shall be free to
directly or indirectly employ or retain such personnel in any capacity.
3. Disclosure about Subadviser and Portfolio. The Subadviser represents that it has reviewed
the current Registration Statement and agrees to promptly review future amendments to the
Registration Statement, including any supplements thereto, furnished to the Subadviser which relate
to the Subadviser or the Portfolio, and represents and warrants that, solely with respect to the
disclosure respecting or relating to the Subadviser, such Registration Statement contains as of the
date hereof, and will contain as of the date of any Registration Statement or supplement thereto,
no untrue statement of any material fact and does not omit any statement of material fact which was
required to be stated therein or necessary to make the statements contained therein not misleading.
The Subadviser further agrees to notify the Investment Adviser and the Trust immediately of any
material fact about the Subadviser, known to the Subadviser respecting or relating to the
Subadviser, that is not contained in the Registration Statement or prospectus for the Trust, or any
amendment or supplement thereto, but which is required to be pursuant to Form N-1A, or of any
statement respecting or relating to the Subadviser contained therein that becomes untrue in any
material respect. With respect to the disclosure respecting the Portfolio, the Subadviser
represents and agrees that the description in the Trust’s prospectus, including the Portfolio’s
goal, investment strategies and risks (the “Portfolio Description”), as of the date of this
Agreement and as of the date of any Registration Statement or supplement thereto, is consistent
with the manner in which the Subadviser intends to manage the Portfolio, and has identified the
material risks known to Subadviser that are expected to arise in connection with the manner in
which the Subadviser intends to manage the Portfolio. The Subadviser further agrees to notify the
Investment Adviser and the Trust promptly in the event that the Subadviser becomes aware that the
Portfolio Description for a Portfolio is inconsistent in any material respect with the manner in
which the Subadviser is managing the Portfolio, and in the event that the identified risks are
inconsistent in any material respect with the risks known to the Subadviser that arise in
connection with the manner in which the Subadviser is managing the Portfolio. In addition, the
Subadviser agrees to comply with the Investment Adviser’s reasonable request for information to be
included in the Registration Statement regarding the personnel of the Subadviser who are
responsible for the day-to-day management of a Portfolio’s assets.
4. Expenses. The Subadviser shall bear all expenses incurred by it and its staff with respect
to all activities in connection with the performance of the Subadviser’s services under this
Agreement, including but not limited to salaries, overhead, travel, preparation of Board materials,
review of marketing materials relating to Subadviser or other information provided by Subadviser to
the Investment Adviser and/or the Trust’s Distributor, and marketing support.
9
Subadviser agrees to pay to the Investment Adviser the cost of generating a prospectus
supplement, which includes preparation, filing, printing, and distribution (including mailing) of
the supplement, if the Subadviser makes any changes that require immediate disclosure in the
prospectus or any required regulatory documents by supplement, including changes to its structure
or ownership, to investment personnel, to investment style or management, or otherwise (“Changes”),
and at the time of notification to the Trust by the Subadviser of such Changes, the Trust is not
generating a supplement for other purposes or the Trust does not wish to add such Changes to a
pending supplement. In the event two or more subadvisers each require a supplement simultaneously,
the expense of each supplement will be shared pro rata with such other subadviser(s) based upon the
number of pages required by each such subadviser. All other expenses not specifically assumed by
the Subadviser hereunder or by the Investment Adviser under the Advisory Agreement are borne by the
applicable Portfolio of the Trust. The Trust, the Subadviser and the Investment Adviser shall not
be considered as partners or participants in a joint venture.
5. Compensation. For the services provided and the expenses borne by the Subadviser pursuant
to this Agreement, the Investment Adviser will pay to the Subadviser a fee in accordance with
Exhibit A attached to this Agreement. This fee will be computed and accrued daily and payable
monthly. The fees for any month during which this Agreement is in effect for less than the entire
month shall be pro-rated based on the number of days during such month that the Agreement was in
effect.
6. Seed Money. The Investment Adviser agrees that the Subadviser shall not be responsible for
providing money for the initial capitalization of any Portfolio.
7. Compliance.
(a) The Subadviser agrees that it shall immediately notify the Investment Adviser and the
Trust (i) in the event that the SEC, CFTC, or any banking or other regulatory body has publicly
censured the Subadviser; placed limitations upon its activities, functions or operations; suspended
or revoked its registration, if any, or ability to serve as an investment adviser; or has commenced
proceedings or an investigation; and (ii) upon having a reasonable basis for believing that a
Portfolio has ceased to qualify or might not qualify as a regulated investment company under
Subchapter M of the Code. The Subadviser further agrees to notify the Investment Adviser and Trust
immediately of any material fact known to the Subadviser respecting or relating to the Subadviser
that is not contained in the Registration Statement, or any amendment or supplement thereto, or of
any material statement relating to the Subadviser contained therein that becomes untrue in any
material respect.
(b) The Investment Adviser agrees that it shall immediately notify the Subadviser (i) in the
event that the SEC has censured the Investment Adviser or the Trust; placed limitations upon either
of their activities, functions, or operations; suspended or revoked the Investment Adviser’s
registration as an investment adviser; or has commenced proceedings or an investigation that may
result in any of these actions; or (ii) upon having a reasonable basis for believing that a
Portfolio has ceased to qualify or might not qualify as a regulated investment company under
Subchapter M of the Code.
10
8. Independent Contractor. The Subadviser shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided herein or authorized by the
Investment Adviser from time to time, have no authority to act for or represent the Investment
Adviser in any way or otherwise be deemed its agent. The Subadviser understands that unless
provided herein or authorized from time to time by the Trust, the Subadviser shall have no
authority to act for or represent the Trust in any way or otherwise be deemed the Trust’s agent.
9. Books and Records. In compliance with the requirements of and to the extent required by
Section 31(a) of the 1940 Act and the rules thereunder, the Subadviser hereby agrees that all
records which it maintains for the Portfolio are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust’s or the Investment Adviser’s
request, although the Subadviser may, at its own expense, make and retain a copy of such records.
10. Cooperation. Each party to this Agreement agrees to cooperate with each other party and
with all appropriate governmental authorities having the requisite jurisdiction (including, but not
limited to, the SEC and state insurance authorities) in connection with any investigation or
inquiry relating to this Agreement or the Trust.
11. Responsibility and Control. Notwithstanding any other provision of this Agreement, it is
understood and agreed that the Trust reserves the right to direct, approve or disapprove any action
hereunder taken on its behalf by the Subadviser, provided, however, that the Subadviser shall not
be liable for any losses to the Trust resulting from the Trust’s direction, or from the Trust’s
disapproval of any action proposed to be taken by the Subadviser.
12. Services Not Exclusive. It is understood that the services of the Subadviser and its
employees are not exclusive, and nothing in this Agreement shall prevent the Subadviser (or its
employees or affiliates) from providing similar services to other clients, including investment
companies (whether or not their investment objectives and policies are similar to those of the
Portfolio) or from engaging in other activities. It is understood that the Subadviser may give
advice or take action for its other clients which may differ from advice given, or the timing or
nature of action taken, for the Portfolio.
13. Liability. Except as may otherwise be required by the 1940 Act or the rules thereunder or
other applicable law, the Trust and the Investment Adviser agree that the Subadviser, any
affiliated person of the Subadviser, and each person, if any, who, within the meaning of Section 15
of the 1933 Act, controls the Subadviser, shall not be liable for, or subject to any damages,
expenses, or losses in connection with, any act or omission connected with or arising out of any
services rendered under this Agreement, except by reason of willful misfeasance, bad faith, or
gross negligence in the performance of the Subadviser’s duties, or by reason of reckless disregard
of the Subadviser’s obligations and duties under this Agreement. Notwithstanding the foregoing,
nothing contained in this Agreement shall constitute a waiver or limitation of rights that the
Trust may have under federal or state securities laws.
14. Indemnification.
11
(a) The Subadviser agrees to indemnify and hold harmless, the Investment Adviser, any
affiliated person within the meaning of Section 2(a)(3) of the 1940 Act (“affiliated person”) of
the Investment Adviser, and each person, if any, who, within the meaning of Section 15 of the 1933
Act, controls (“controlling person”) the Investment Adviser (collectively, “PL Indemnified
Persons”) against any and all losses, claims, damages, liabilities or litigation (including
reasonable legal and other expenses), to which the Investment Adviser or such affiliated person or
controlling person may become subject under the 1933 Act, the 1940 Act, the Advisers Act, under any
other statute, at common law or otherwise, arising out of the Subadviser’s responsibilities to the
Trust which (i) are based upon any willful misfeasance, bad faith, gross negligence, or reckless
disregard of, the Subadviser’s obligations and/or duties under this Agreement by the Subadviser or
by any of its directors, officers or employees, or any affiliate acting on behalf of the Subadviser
(other than a PL Indemnified Person), or (ii) are based upon any untrue statement or alleged untrue
statement of a material fact contained in a Registration Statement or prospectus covering the
Shares of the Trust or any Portfolio, or any amendment thereof or any supplement thereto, or the
omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if such a statement or omission was made
in reliance upon information furnished in writing to the Investment Adviser, the Trust, or any
affiliated person of the Trust by the Subadviser or any affiliated person of the Subadviser (other
than a PL Indemnified Person) provided, however, that in no case is the Subadviser’s indemnity in
favor of the Investment Adviser or any affiliated person or controlling person of the Investment
Adviser deemed to protect such person against any liability to which any such person would
otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the
performance of his duties, or by reason of his reckless disregard of obligations and duties under
this Agreement.
(b) The Investment Adviser agrees to indemnify and hold harmless the Subadviser, any
affiliated person within the meaning of Section 2(a)(3) of the 1940 Act of the Subadviser and each
person, if any, who, within the meaning of Section 15 of the 1933 Act controls (“controlling
person”) the Subadviser (collectively, “Subadviser Indemnified Persons”) against any and all
losses, claims, damages, liabilities or litigation (including reasonable legal and other expenses)
to which a Subadviser Indemnified Person may become subject under the 1933 Act, the 1940 Act, the
Advisers Act, under any other statute, at common law or otherwise, arising out of the Investment
Adviser’s responsibilities as Investment Adviser of the Trust which (i) are based upon any willful
misfeasance, bad faith or gross negligence by the Investment Adviser, any of its directors,
officers, or employees or any affiliate acting on behalf of the Investment Adviser (other than a
Subadviser Indemnified Person), or (ii) are based upon any untrue statement or alleged untrue
statement of a material fact contained in a Registration Statement or prospectus covering the
Shares of the Trust or any Portfolio, or any amendment thereof or any supplement thereto, or the
omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, unless such a statement or omission was
made in reliance upon information furnished in writing to the Investment Adviser, the Trust, or any
affiliated person of the Trust by the Subadviser or any affiliated person of the Subadviser (other
than a PL Indemnified Person) provided however, that in no case is the Investment Adviser’s
indemnity in favor of the Subadviser Indemnified Persons deemed to protect such person against any
liability to which any such person would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the
12
performance of his duties, or by reason of his reckless disregard of obligations and duties
under this Agreement.
15. Duration and Termination. This Agreement shall become effective as of the date of
execution first written above, and shall continue in effect for two years and continue thereafter
on an annual basis with respect to the Portfolio; provided that such annual continuance is
specifically approved at least annually (a) by the vote of a majority of the Board, or (b) by the
vote of a majority of the outstanding voting shares of the Portfolio, and provided that continuance
is also approved by the vote of a majority of the Board who are not parties to this Agreement or
“interested persons” (as such term is defined in the 0000 Xxx) of the Trust, the Investment
Adviser, or the Subadviser, cast in person at a meeting called for the purpose of voting on such
approval.
This Agreement may be terminated with respect to any Portfolio:
(a) by the Trust at any time with respect to the services provided by the Subadviser, without
the payment of any penalty, upon sixty (60) days’ prior written notice to the Subadviser and the
Investment Adviser, by vote of a majority of the Board or by a vote of a majority of the
outstanding voting shares of the Trust or, with respect to a particular Portfolio, by vote of a
majority of the outstanding voting shares of such Portfolio, upon sixty (60) days’ prior written
notice to the Subadviser and the Investment Adviser;
(b) by the Subadviser at any time, without the payment of any penalty, upon sixty (60) days’
prior written notice to the Investment Adviser and the Trust.
(c) by the Investment Adviser at any time, without the payment of any penalty, upon sixty (60)
days’ prior written notice to the Subadviser and the Trust.
This Agreement will terminate automatically in event of its assignment under the 1940 Act and
any rules adopted by the SEC thereunder, but shall not terminate in connection with any transaction
not deemed an assignment. In the event this Agreement is terminated or is not approved in the
manner described above (i) Subadviser agrees to provide all reports, certification and assistance
called for pursuant to paragraphs 2(b), 2(h), 2(i), 2(k), 2(n), 2(p) within 30 business days of
termination and pursuant to paragraph 2(q) as soon as reasonably practicable; and (ii) the Sections
or Paragraphs numbered 2(g) for a period of six years, and 2(m), 2(t), 2(v), 9, 10, 13, 14, 16, 17,
18 and 19 of this Agreement as well as any applicable provision of this Paragraph numbered 15,
shall remain in effect.
16. Use of Name.
(a) It is understood that the name “Pacific Life Insurance Company,” “Pacific Life Fund
Advisors LLC,” “Pacific Asset Management,” and “Pacific Select Fund” and any abbreviated forms and
any derivatives thereof and any logos associated with those names (including, without limitation,
the whale logo) are the valuable property of the Investment Adviser and its affiliates, and that
the Subadviser shall not use such names (or abbreviations, derivatives or logos) without the prior
written approval of the Investment Adviser, which may not be unreasonably withheld, and only so
long as the Investment Adviser is an investment adviser to the Trust and/or the Portfolio,
provided, however, that the Subadviser may use such
13
name (or derivative or logo), in filings, forms or reports required under applicable state or
federal securities, insurance, or other law. Upon termination of this Agreement, the Subadviser
shall forthwith cease to use such names (or abbreviations, derivatives or logos) to the extent that
continued use is not required by applicable laws, rules or regulations.
(b) It is understood that the name “Xxxxx Xxxxx Management” and any derivative thereof or any
logo associated with that name is the valuable property of the Subadviser and that the Trust and
the Investment Adviser have the right to use such name (or derivative or logo), in the Trust’s
prospectus, SAI and Registration Statement or other filings, forms or reports required under
applicable state or federal securities, insurance, or other law, for so long as the Subadviser is a
Subadviser to the Trust and/or one of the Portfolio, provided, however, that the Trust may continue
to use the name of the Subadviser in its Registration Statement and other documents to the extent
deemed necessary by the Trust to comply with disclosure obligations under applicable law and
regulation. Neither the Trust nor the Investment Adviser shall use the Subadviser’s name or logo
in promotional or sales related materials prepared by or on behalf of the Investment Adviser or the
Trust, without prior review and written approval by the Subadviser, which may not be unreasonably
withheld. Upon termination of this Agreement, the Trust and the Investment Adviser shall forthwith
cease to use such names (and logo), except as provided for herein.
17. Limitation of Liability.
(a) A copy of the Declaration of Trust for the Trust is on file with the Secretary of the
State of Delaware. The Declaration of Trust has been executed on behalf of the Trust by a Trustee
of the Trust in his capacity as Trustee of the Trust and not individually. The obligations of this
Agreement with respect to the Portfolio shall be binding upon the assets and property of each such
Portfolio individually, and not jointly, and shall not be binding upon any Trustee, officer,
employee, agent or shareholder, whether past, present, or future, of the Trust individually, or
upon the Trust generally or upon any other portfolio of the Trust.
(b) The Trust and the Investment Adviser are hereby expressly put on notice that the
Subadviser is a Massachusetts business trust formed under a declaration of trust. All persons
dealing with Subadviser must look solely to the property of the Subadviser for satisfaction of
claims of any nature against the Subadviser, as neither the trustees, officers, employees nor
shareholders of the Subadviser assume any personal liability in connection with its business or for
obligations entered into on its behalf.
18. Notices. All notices and other communications hereunder shall be in writing sent by
facsimile or email first, if practicable, but shall only be deemed given if delivered in person or
by messenger, cable, certified mail with return receipt, or by a reputable overnight delivery
service which provides evidence of receipt to the parties at the following addresses (or at such
other address or number for a party as shall be specified by like notice):
14
| A. | if to the Subadviser, to: Xxxxx Xxxxx Management Xxx Xxxxxxxxxxxxx Xxxxx Xxxxxx, XX 00000 Facsimile transmission number: (000) 000-0000 Attention: Legal Department |
||
| with a copy to: | |||
| Xxxxx Xxxxx Management Xxx Xxxxxxxxxxxxx Xxxxx Xxxxxx, XX 00000 Facsimile transmission number: (000) 000-0000 Attention: Xxxx Xxxxx |
|||
| B. | if to the Investment Adviser, to: Pacific Life Fund Advisors LLC 000 Xxxxxxx Xxxxxx Xxxxx Xxxxxxx Xxxxx, XX 00000 Facsimile transmission number: (000) 000-0000 Attention: Xxxxx X. Xxxxx, General Counsel Fund Advisor |
||
| C. | if to the Trust, to: Pacific Select Fund c/o Pacific Life Insurance Company 000 Xxxxxxx Xxxxxx Xxxxx Xxxxxxx Xxxxx, XX 00000 Facsimile transmission number: (000) 000-0000 Attention: Xxxxx X. Xxxxx, General Counsel |
19. Miscellaneous.
(a) This Agreement shall be governed by the laws of California, without regard to the conflict
of law principles thereof, provided that nothing herein shall be construed in a manner inconsistent
with the 1940 Act, the Advisers Act, or rules or orders of the SEC thereunder. The term
“affiliate” or “affiliated person” as used in this Agreement shall mean “affiliated person” as
defined in Section 2(a)(3) of the 0000 Xxx.
(b) The captions of this Agreement are included for convenience only and in no way define or
limit any of the provisions hereof or otherwise affect their construction or effect.
(c) To the extent permitted under Section 15 of this Agreement and under the 1940 Act, this
Agreement may only be assigned by any party with prior written consent of the other parties.
15
(d) If any provision of this Agreement shall be held or made invalid by a court decision,
statute, rule, or otherwise, the remainder of this Agreement shall not be affected thereby, and to
this extent, the provisions of this Agreement shall be deemed to be severable. To the extent that
any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise with regard to any party hereunder, such provisions with respect to other parties hereto
shall not be affected thereby.
(e) This Agreement may be executed in several counterparts, each of which shall be deemed to
be an original, and all such counterparts shall together constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed as of the
day and year first written above.
| PACIFIC LIFE FUND ADVISORS, LLC | ||||||||||
By:
|
By: | |||||||||
| Title: | Title: | |||||||||
| XXXXX XXXXX MANAGEMENT | ||||||||||
By:
|
By: | |||||||||
| Title: | Title: | |||||||||
| PACIFIC SELECT FUND | ||||||||||
By:
|
By: | |||||||||
| Title: | Title: | |||||||||
16
Exhibit A
PACIFIC LIFE FUNDS
FEE SCHEDULE
FEE SCHEDULE
Effective: July 1, 2010
Portfolio: PL Floating Rate Loan Fund
The Investment Adviser will pay to the Subadviser a monthly fee for its services for the above
noted Portfolio based on:
(a) The annual percentage of the combined average daily net assets of the PL Floating Rate
Loan Fund and the Floating Rate Loan Portfolio of Pacific Select Fund according to the
following schedule:
| Rate% | Break Point (assets) | |
0.30%
|
None |
(b) The ratio of the PL Floating Rate Loan Fund’s average daily net assets over the combined
assets of the PL Floating Rate Loan Fund and the Floating Rate Loan Portfolio.
Fees for services shall be prorated for any portion of a year in which the Agreement is not
effective.
