AMENDMENT NO. 2 TO THE PORTFOLIO MANAGEMENT AGREEMENT
Exhibit (d)(h)(7)
AMENDMENT NO. 2 TO THE
PORTFOLIO MANAGEMENT AGREEMENT
PORTFOLIO MANAGEMENT AGREEMENT
THIS AMENDMENT effective as of this 1st day of May, 2013 is made to the Portfolio Management
Agreement (the “Agreement”) dated September 29, 2006, as amended on May 1, 2007, by and among
BlackRock Investment Management, LLC, a Delaware limited liability company (“Portfolio Manager”),
Pacific Life Fund Advisors LLC, a Delaware Limited Liability Company (“Investment Adviser”), and
Pacific Select Fund, a Massachusetts Business Trust (“Fund”). The Agreement is hereby amended as
set forth below (together, the “Amendment”), which is effective on May 1, 2013. Capitalized terms
not defined herein shall have the meaning given to them in the Agreement.
WHEREAS, Investment Adviser, Portfolio Manager and Fund are parties to the Agreement;
WHEREAS, the parties mutually desire to amend the Agreement as set forth herein;
WHEREAS, the Fund has retained the Investment Adviser to render investment advisory services
to the various portfolios of the Fund 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; and
WHEREAS, the parties desire to appoint Portfolio Manager to serve as subadviser to another
portfolio of the Fund;
NOW THEREFORE, in consideration of the renewal of the premises, promises and mutual covenants
contained herein and in the Agreement, and for other good and valuable consideration paid, the
receipt and sufficiency of which are hereby acknowledged by the parties, the parties agree that the
Agreement is hereby amended as follows:
1. The Exhibit A attached to this Amendment hereby replaces the current Exhibit A to the
Agreement.
2. Section 2 is hereby amended by adding the following to the end of the first paragraph:
The Portfolio Manager is authorized to open brokerage accounts on behalf of the
Portfolios in accordance with Fund procedures. The Portfolio Manager is authorized 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
Fund procedures.
3. Sections 2(a)(6) and 2(a)(7) are hereby replaced with the following:
Section 851(b)(2) and (3) of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), (7) the provisions of Section 817(h) of the Code, applicable to the Portfolio, in each case of Sections 2(a)(6) and 2(a)(7) solely with |
respect to the assets of the Portfolios which are under its management and based on information provided by the Portfolios’ administrator, custodian and other service providers; |
4. The following is hereby added after section 2(a)(8) as section 2(a)(9):
(9) To the extent that the Portfolio Manager 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 Portfolio Manager shall maintain
liquid assets to satisfy the requirements of the 1940 Act and in accordance with Fund
Procedures, including the Segregation Requirements Policy.
5. Section 2(i) is hereby replaced with the following:
(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 Fund 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 president, a vice president, the chief compliance officer, a managing
director, or other senior officer (as the Investment Adviser determines appropriate) of the
Portfolio Manager shall certify to the Investment Adviser that (a) the Portfolio Manager had
a Code of Ethics that complied with the requirements of Rule 17j-1 during the previous
calendar quarter, (b) the Code of Ethics contains procedures reasonably necessary to prevent
Access Persons (as defined in Rule 17j-1, as amended) from violating the Code of Ethics, and
that (c) except as otherwise disclosed, 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 reasonable written request of the Investment Adviser or
the Fund, the Portfolio Manager shall permit representatives of the Investment Adviser and
the Trust to examine the reports and records related to the reported material violations (or
provide summaries of such reports, with non-public personal information redacted) required
to be made under the Code of Ethics and other records evidencing enforcement of the Code of
Ethics. Upon reasonable written request of the Investment Adviser, Portfolio
Manager is willing to discuss such material violations by the portfolio managers of the
Portfolio solely to the extent any such violation affects the Portfolio; provided that any
such discussions do not violate applicable law.
6. The following sentence is added to Section 2(j):
The Portfolio Manager will notify the Investment Adviser promptly if any action is
brought by any regulatory body which in the Portfolio Manager’s reasonable determination
will likely affect its registration as a duly registered investment adviser.
7. The first sentence in Section 2(q) is hereby replaced with the following:
...will provide reasonable assistance to the Fund and the Fund’s Chief Compliance
Officer (“CCO”) in complying with Rule 38a-1 under the 1940 Act,
Amdmt No. 2 BlackRock Portfolio Management Agmt | 2 |
including, in the event of any relevant regulatory exams, providing notice of any
material deficiencies that will likely, in the Portfolio Manager’s reasonable determination,
adversely affect the services provided by Portfolio Manager under this Agreement, provided
that the provision of such notices are permitted under applicable law.
8. Section 2(r) is hereby replaced with the following:
(r) will comply with any Fund Procedures, including the Fund’s policy on selective
disclosure of portfolio holdings of the Fund (the “Selective Disclosure Policy”), as
provided in writing to the Portfolio Manager and as may be amended from time to time.
Accordingly, the Portfolio Manager acknowledges that to trade on material non-public
portfolio holdings information of the Fund would violate applicable federal and state
securities law or applicable international law, including anti-fraud provisions of such
laws, or internal policies adopted by the Portfolio Manager to govern trading of its
employees. Compliance with the Selective Disclosure Policy includes the requirement of
entering into confidentiality agreements with certain third parties who will receive
non-public portfolio holdings of the Fund that meet the minimum requirements of the
Selective Disclosure Policy. The Portfolio Manager will provide any such agreements to the
Investment Adviser or the Fund, along with any amendments or supplements thereto, upon the
reasonable request of the Investment Adviser or the Fund, provided however that Portfolio
Manager may provide only those parts of the agreements that relate to ensuring conformance
with the Fund’s Selective Disclosure Policy or other Trust Procedures. The Portfolio
Manager agrees to provide a certification with respect to compliance with Fund Procedures as
may be reasonably requested by the Fund from time to time.
9. Section 2 is hereby amended to add the following new section after section 2(w):
(x) will provide reasonable assistance to the Investment Adviser in connection with
the preparation of documentation relating to non-U.S. class action claims involving
securities held in the Portfolio.
(y) will, on an annual basis, advise the Investment Adviser (i) if the Portfolio
Manager acts as sub-adviser to another U.S. registered mutual fund that follows the
same investment strategy as the Portfolio and (ii) if so, whether the Portfolio
Manager’s fee rate is less than the rate charged the Investment Adviser for
management of the Portfolio.
10. The following is hereby added to Section 4:
In the event two or more portfolio managers each require a supplement simultaneously,
the expense of each supplement will be shared pro rata with such other portfolio manager(s)
based upon the number of pages required by each such portfolio manager.
11. Section 13 is hereby replaced as follows:
Amdmt No. 2 BlackRock Portfolio Management Agmt | 3 |
(a) Except as may otherwise be required by Section 14 of this Agreement, the 1940 Act or the
rules thereunder or other applicable law, the Fund and the Investment Adviser agree that the
Portfolio Manager, any affiliated person of the Portfolio Manager, and each person, if any, who,
within the meaning of Section 15 of the 1933 Act, controls the Portfolio Manager, 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
the Portfolio Manager’s willful misfeasance, bad faith, or gross negligence in the performance of
the Portfolio Manager’s duties, or by reason of reckless disregard of the Portfolio Manager’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 Fund or Investment
Adviser may have under federal or state securities laws.
(b) Except as may otherwise be required by Section 14 of this Agreement, , the 1940 Act or the
rules thereunder or other applicable law, the Portfolio Manager agrees that the Fund and the
Investment Adviser, any affiliated person thereof, and each person, if any, who, within the meaning
of Section 15 of the 1933 Act, controls the Fund or Investment Adviser, 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 the Fund’s or
Investment Adviser’s willful misfeasance, bad faith, or gross negligence in the performance of
their duties, or by reason of reckless disregard of the Fund’s or Investment Adviser’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 Portfolio Manager may have
under federal or state securities laws.
12. Section 14(a)(ii) is hereby replaced with the following and current Section 14(a)(ii) is
renumbered to 14(a)(iii):
(ii) | are based upon Portfolio Manager’s material breach of any provision of this Agreement, including its material breach of any representation, warranty or undertaking, or |
13. Section 14(b)(ii) is hereby replaced with the following and current Section 14(b)(ii) is
renumbered to 14(b)(iii):
(ii) | are based upon Investment Adviser’s material breach of any provision of this Agreement, including its material breach of any representation, warranty or undertaking, or, |
14. In the last paragraph of Section 15, the last sentence is hereby replaced with the
following:
In the event this Agreement is terminated or is not approved in the manner described
above (i) the Portfolio Manager agrees to provide all reports, certification and assistance
called for pursuant to Sections 2(b), 2(h), 2(i), 2(n), 2(k), 2(p) and 2(q), within 30
business days of termination; and (ii) the Sections or Paragraphs numbered 2(g) for a period
of six years, and 2(m), 2(x), 9, 10, 13, 14, 15, 16, 17, 18, 19 and 20 of this
Amdmt No. 2 BlackRock Portfolio Management Agmt | 4 |
Agreement as well as any applicable provision of this Paragraph numbered 15 shall
remain in effect.
15. Section 18 is hereby replaced with the following:
Notices. All notices, consents, waivers, and other communications under the Agreement,
as amended, shall be in writing and shall be given first via email to the addresses noted
below and then by personal delivery to the applicable party (which includes via hand
delivery service or a reliable nationally recognized overnight delivery or mail service,
each of which shall provide evidence of receipt to the applicable parties) at the addresses
noted below, or at such other address as each party hereto may direct by notice given in
accordance with this paragraph. All notices shall be deemed effective the next business day
following delivery in accordance with this paragraph.
A. | if to the Portfolio Manager, to: | ||
BlackRock Investment Management LLC Xxxxxxxxxx Xxxxxx Xxxxx Xxxxxxxxx, XX 00000-0000 Attention: Xxxxxx Xxxxx Email: xxx-xx-xxxxxxxxxxx@xxxxxxxxx.xxx |
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B. | if to the Investment Adviser, to: | ||
Pacific Life Fund Advisors LLC 000 Xxxxxxx Xxxxxx Xxxxx Xxxxxxx Xxxxx, XX 00000 Attention: Xxxxx X. Xxxxx, Vice President and Fund Advisor General Counsel Email: Xxxxx.Xxxxx@XxxxxxxXxxx.xxx and XxxxxxxxXxxxxxxxxxxxx@XxxxxxxXxxx.xxx Telephone number: 000-000-0000 |
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C. | if to the Fund, to: | ||
Pacific Select Fund c/o Pacific Life Insurance Company 000 Xxxxxxx Xxxxxx Xxxxx Xxxxxxx Xxxxx, XX 00000 Attention: Xxxxx X. Xxxxx, Vice President and Fund Advisor General Counsel Email: Xxxxx.Xxxxx@XxxxxxxXxxx.xxx and XxxxxxxxXxxxxxxxxxxxx@XxxxxxxXxxx.xxx Telephone number: 000-000-0000 |
Amdmt No. 2 BlackRock Portfolio Management Agmt | 5 |
16. Section 19(a) is hereby amended by adding the following sentence to the end of the current
section:
The parties to this Agreement hereby irrevocably agree to submit to the jurisdiction of
the courts located in the State of California for any action or proceeding arising out of
this Agreement, and hereby irrevocably agree that all claims in respect of such action or
proceeding shall be heard or determined in such courts.
17. A new Section 19(f) is hereby added as follows after Section 19(e):
(f) Amendment of this Agreement. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing signed by the
party against which enforcement of the change, waiver, discharge or termination is sought.
Any amendment of this Agreement shall be subject to the 1940 Act.
18. A new Section 20 is hereby added as follows after Section 19:
Confidentiality. In addition to other provisions of this Agreement related to
confidentiality obligations of the parties, each party shall treat all non-public
information about another party to this Agreement as confidential, proprietary information
of such other party (“Confidential Information”). Such Confidential Information includes
but is not limited to information about business operations, Fund portfolio holdings,
business and financial information, methods, plans, techniques, processes, documents and
trade secrets of a party. Each party shall use Confidential Information only in furtherance
of the purposes of this Agreement, limit access to the Confidential Information within its
organization to those employees who reasonably require access to such Confidential
Information and shall not disclose such Confidential Information to any third parties except
as expressly provided for in this Agreement, and otherwise maintain policies and procedures
reasonably designed to prevent disclosure of the Confidential Information. Confidential
Information shall not include anything that (i) is or lawfully becomes in the public domain,
other than as a result of a breach of an obligation hereunder, (ii) is furnished to the
applicable party by a third party having a lawful right to do so, (iii) was known to the
applicable party at the time of the disclosure through no unauthorized act or (iv) is
authorized in writing by the party whose Confidential Information is to be disclosed.
Further, the parties are authorized to disclose Confidential Information if required by law
or regulatory authorities having jurisdiction. The disclosing party shall, if permitted by
applicable law, notify the other party of such disclosure as soon as reasonably practicable.
Amdmt No. 2 BlackRock Portfolio Management Agmt | 6 |
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the day and
year first written above.
PACIFIC LIFE FUND ADVISORS, LLC | ||||||||||
By:
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/s/ Xxxxxx X. Xxxxxxxx
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By: | /s/ Xxxxxxx X. XxxXxxxx
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Title: VP, Fund Advisor Operations | Title: VP & Assistant Secretary | |||||||||
BLACKROCK INVESTMENT MANAGEMENT, LLC | ||||||||||
By:
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/s/ Xxxxxxx X. Xxxxxx
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Title: Managing Director | ||||||||||
PACIFIC SELECT FUND | ||||||||||
By:
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/s/ Xxxxxx X. Xxxxxxxx
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By: | /s/ Xxxxxxx X. XxxXxxxx
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Title: VP, Fund Advisor Operations | Title: VP & Assistant Secretary |
Amdmt No. 2 BlackRock Portfolio Management Agmt | 7 |
Exhibit A
PACIFIC SELECT FUND
FEE SCHEDULE
FEE SCHEDULE
Effective: May 1, 2013 or the inception date of the Large-Cap Growth Portfolio
Portfolios: | Equity Index Portfolio Small-Cap Index Portfolio PD Large-Cap Value Index Portfolio PD Large-Cap Growth Index Portfolio PD Small-Cap Value Index Portfolio PD Small-Cap Growth Index Portfolio Small-Cap Equity Portfolio |
The Investment Adviser will pay to the Portfolio Manager a monthly fee for its services for
the above noted Portfolios’ combined average daily net assets based on the following formula:
Rate(%) | Break Point (assets) | |
0.04%
|
on the first $300 million | |
0.02%
|
on excess |
The fees for services shall be prorated for any portion of a year in which the Agreement is not
effective.
Portfolio: Large-Cap Growth Portfolio
The Investment Adviser will pay to the Portfolio Manager a monthly fee for its services for
the above noted Portfolio based on the following formula:
(a) The annual percentage of the combined* average daily net assets of the Large-Cap Growth
Portfolio of Pacific Select Fund (“PSF”) and the PL Large-Cap Growth Fund of Pacific Life Funds
according to the following schedule:
Rate% | Break Point (assets) | |
0.38%
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on the first $25 million | |
0.33%
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on the next $225 million | |
0.23%
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on the next $1.75 billion | |
0.20%
|
Excess over $2 billion |
A-1
(b) Multiplied by the ratio of the PSF Large-Cap Growth Portfolio’s average daily net assets
over the combined average daily net assets of the PSF Large-Cap Growth Portfolio and the PL
Large-Cap Growth Fund of Pacific Life Funds.
* | Assets are combined only while the Portfolio Manager is managing both portfolios. Otherwise rates presented above are applied as an annual percentage of the average daily net assets of the PSF Large-Cap Growth Portfolio. |
Fees for services shall be prorated for any portion of a year in which the Agreement is not
effective.
A-2