EXHIBIT d(1)
PILGRIM VARIABLE PRODUCTS TRUST
INVESTMENT ADVISORY AGREEMENT
AMENDED AND RESTATED APRIL 30, 2001
AGREEMENT, dated September 1, 2000, and amended and restated this 30th
day of April 2001, between PILGRIM VARIABLE PRODUCTS TRUST, a Massachusetts
business trust, (the "Trust") and ING PILGRIM INVESTMENTS, LLC, a Delaware
business corporation (the "Adviser").
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "Investment
Company Act"); and
WHEREAS, the Trust is authorized to issue shares of beneficial interest
in separate series with each such series representing interests in a separate
portfolio of securities and assets; and
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and is engaged in the business of
supplying investment advice, investment management and administrative services,
as an independent contractor; and
WHEREAS, the Trust has retained the Adviser to render investment
advisory services to certain series of the Trust identified hi Schedule A; and
WHEREAS, the Trust wishes to retain the Adviser to render investment
advisory services to the Pilgrim VP MagnaCap Portfolio, the Pilgrim VP Growth
Opportunities Portfolio and the Pilgrim XX XxxXxx Opportunities Portfolio
(together with the other series of the Trust identified on Schedule A, the
"Funds"), and the Adviser is willing to render such investment advisory services
on the terms set forth below.
WHEREAS, the Trust wishes to add eight series (Pilgrim VP Worldwide
Growth Portfolio, Pilgrim VP International SmallCap Growth Portfolio, Pilgrim VP
International Portfolio, Pilgrim VP Emerging Countries Portfolio, Pilgrim VP
Growth & Income Portfolio, Pilgrim VP LargeCap Growth Portfolio, Pilgrim VP
Financial Services Portfolio, and Pilgrim VP Convertible Portfolio) to the Funds
covered by the Agreement and listed on Schedule A to the Agreement; and
NOW, THEREFORE, the parties agree as follows:
1. The Trust hereby appoints the Adviser to act as investment
adviser to the Trust and the Funds for the period and on the terms set forth in
this Agreement. The Adviser accepts such appointment and agrees to render the
services described, for the compensation provided, in this Agreement.
2. Subject to the supervision of the Trustees, the Adviser shall
manage the investment operations of the Funds and the composition of each Fund's
portfolio, including the purchase and retention and disposition of portfolio
securities, in accordance with each Fund's investment objectives, policies and
restrictions as stated in the Trust's Prospectus and Statement of Additional
Information (as defined below) subject to the following understandings:
(a) The Adviser shall provide supervision of each Fund's
investments and determine from time to time what investments will be made, held
or disposed of or what securities will be purchased and retained, sold or loaned
by each Fund, and what portion of the assets will be invested or held uninvested
as cash.
(b) The Adviser shall use its best judgment in the performance of
its duties under this Agreement.
(c) The Adviser, in the performance of its duties and obligations
under this Agreement, shall (i) act in conformity with the Declaration of Trust,
By-Laws, Prospectus and Statement of Additional Information of the Trust, with
the instructions and directions of the Trustees and (ii) conform to and comply
with the requirements of the Investment Company Act and all other applicable
federal and state laws and regulations.
(d) (i) The Adviser shall determine the securities to be purchased
or sold by each Fund and will place orders pursuant to its determinations with
or through such persons, brokers or dealers to carry out the policy with respect
to brokerage as set forth in the Trust's Prospectus and Statement of Additional
Information or as the Trustees may direct from time to time. In providing each
Fund with investment supervision, the Adviser will give primary consideration to
securing the most favorable price and efficient execution. The Adviser may also
consider the financial responsibility, research and investment information and
other services and research related products provided by brokers or dealers who
may effect or be a party to any such transactions or other transactions to which
other clients of the Adviser may be a party. The Funds recognize that the
services and research related products provided by such brokers may be useful to
the Adviser in connection with its services to other clients.
(ii) When the Adviser deems the purchase or sale of a security to
be in the best interest of a Fund as well as other clients, the Adviser, to the
extent permitted by applicable laws and regulations, may aggregate the
securities to be sold or purchased in order to obtain the most 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 transactions, will be made by the Adviser in the manner it
considers to be the most equitable and consistent with its fiduciary obligations
to each Fund and to such other clients.
(e) The Adviser shall maintain, or cause to be maintained, all
books and records required under the Investment Company Act to the extent not
maintained by the
custodian of the Trust. The Adviser shall render to the Trustees such periodic
and special reports as the Trustees may reasonably request.
(f) The Adviser shall provide the Trust's custodian on each
business day information relating to all transactions concerning each Fund's
assets.
(g) The investment management services of the Adviser to the Trust
and to each Fund under this Agreement are not to be deemed exclusive, and the
Adviser shall be free to render similar services to others.
3. The Trust has delivered to the Adviser copies of each of the
following documents and will deliver to it all future amendments and
supplements, if any:
(a) Declaration of Trust, as amended, as filed with the Secretary
of the Commonwealth of Massachusetts (such Declaration of Trust, as in effect on
the date hereof and as further amended from time to time, are herein called the
"Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date
hereof and as amended from time to time, are herein called the "By-Laws");
(c) Certified resolutions of the Trustees authorizing the
appointment of the Adviser and approving this Agreement on behalf of the Trust
and each Fund;
(d) Registration Statement on Form N-1A under the Investment
Company Act and the Securities Act of 1933, as amended from time to time (the
"Registration Statement"), as filed with the Securities and Exchange Commission
(the "Commission"), relating to the Trust and shares of beneficial interest of
each Fund and all amendments thereto.
(e) Notification of Registration of the Trust under the Investment
Company Act on Form N-8A as filed with the Commission and all amendments
thereto;
(f) Prospectus and Statement of Additional Information included in
the Registration Statement, as amended from time to time. All references to this
Agreement, the Prospectus and the Statement of Additional Information shall be
to such documents as most recently amended or supplemented and in effect.
4. The Adviser shall authorize and permit any of its directors,
officers and employees who may be elected as trustees or officers of the Trust
and/or the Funds to serve in the capacities in which they are elected. All
services to be furnished by the Adviser under this Agreement may be furnished
through such directors, officers or employees of the Adviser.
5. The Adviser agrees that all records which it maintains for the
Trust and/or the Funds are property of the Trust and/or the Funds. The Adviser
will surrender promptly to the Trust and/or the Funds any such records upon
either the Trust's or a
Fund's request. The Adviser further agrees to preserve such records for the
periods prescribed in Rule 31a-2 of the Commission under the Investment Company
Act.
6. In connection with the services rendered by the Adviser under
this Agreement, the Adviser will pay all of the following expenses:
(a) the salaries and expenses of all personnel of the Trust, the
Funds and the Adviser required to perform the services to be provided pursuant
to this Agreement, except the fees of the trustees who are not affiliated
persons of the Adviser, and
(b) all expenses incurred by the Adviser, the Trust or by the
Funds in connection with the performance of the Adviser's responsibilities
hereunder, other than brokers' commissions and any issue or transfer taxes
chargeable to each respective Fund in connection with its securities
transactions.
7. For the services provided and the expenses assumed pursuant to
this Agreement, the Pilgrim VP SmallCap Opportunities Portfolio, the Pilgrim VP
Growth + Value Portfolio, the Pilgrim VP Research Enhanced Index Portfolio, and
the Pilgrim XX Xxxxx Yield BondPortfolio, will pay to the Adviser as
compensation a fee accrued daily and paid monthly at the annual rate of 0.75% of
the first $250,000,000 of aggregate average daily net assets of the Fund; 0.70%
of the next $250,000,000 of such assets; 0.65% of the next $250,000,000 of such
assets; 0.60% of the next $250,000,000 of such assets and 0.55% of the remaining
aggregate average daily net assets of the Fund in excess of $1,000,000,000. The
Pilgrim VP International Value Portfolio, Pilgrim VP Worldwide Growth Portfolio,
Pilgrim VP International SmallCap Growth Portfolio, and Pilgrim VP International
Portfolio will each pay to the Adviser as compensation a fee accrued daily and
paid monthly at the annual rate of 1.00% of aggregate average daily net assets
of the Fund. Pilgrim VP Emerging Countries Portfolio will pay to the Adviser as
compensation a fee accrued daily and paid monthly at the annual rate of 1.10% of
aggregate average daily net assets of the Fund. The Pilgrim VP MagnaCap
Portfolio, Pilgrim VP Growth Opportunities Portfolio, Pilgrim XX XxxXxx
Opportunities Portfolio, Pilgrim VP Growth & Income Portfolio, Pilgrim VP
LargeCap Growth Portfolio, Pilgrim VP Financial Services Portfolio, and Pilgrim
VP Convertible Portfolio will each pay to the Adviser as compensation a fee
accrued daily and paid monthly at the annual rate of 0.75% of aggregate average
daily net assets of the Fund.
8. The Adviser may rely on information reasonably believed by it
to be accurate and reliable. Neither the Adviser nor its officers, directors,
employees or agents or controlling persons shall be liable for any error or
judgment or mistake of law, or for any loss suffered by the Trust and/or a Fund
in connection with or arising out of the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement.
9. Generally, this Agreement shall continue in effect for an
initial period of two years from the date of adoption by the Trust on behalf of
a particular Fund and shall continue in effect thereafter for so long as such
continuance is specifically approved at
least annually by the affirmative vote of (i) a majority of the Trustees of the
Trust acting separately on behalf of each Fund, who are not interested persons
of the Trust, cast in person at a meeting called for the purpose of voting on
such approval, and (ii) a majority of the Trustees of the Trust or the holders
of a majority of the outstanding voting securities of each respective Fund;
provided however, that this Agreement may be terminated by the Trust, on behalf
of a Fund at any time, without the payment of any penalty, by the Trustees
acting on behalf of a Fund or by vote of a majority of the outstanding voting
securities (as defined in the Investment Company Act) of a Fund, or by the
Adviser at any time, without the payment of any penalty, on not more than 60
days' nor less than 30 days' written notice to the other party. This Agreement
shall terminate automatically in the event of its assignment provided that a
transaction which does not, under the Investment Company Act, result in a change
of actual control or management of the Adviser's business shall not be deemed to
be an assignment for the purposes of this Agreement.
(a) This Agreement became effective on September 1, 2000 with
respect to Pilgrim VP SmallCap Opportunities Portfolio, Pilgrim VP Growth +
Value Portfolio, Pilgrim VP International Value Portfolio, Pilgrim VP Research
Enhanced Index Portfolio, Pilgrim VP MagnaCap Portfolio, Pilgrim VP Growth
Opportunities Portfolio and the Pilgrim XX XxxXxx Opportunities Portfolio and
Pilgrim VP High Yield Bond Portfolio. This Agreement with respect to the Funds
named in this sub-paragraph shall remain in effect until September 1, 2002.
(b) This Agreement became effective on April 30, 2001 with respect
to Pilgrim VP Worldwide Growth Portfolio, Pilgrim VP International SmallCap
Growth Portfolio, Pilgrim VP International Portfolio, Pilgrim VP Emerging
Countries Portfolio, Pilgrim VP Growth & Income Portfolio, Pilgrim VP LargeCap
Growth Portfolio, Pilgrim VP Financial Services Portfolio, and Pilgrim VP
Convertible Portfolio. This Agreement with respect to the Funds named in this
sub-paragraph shall remain in effect until April 30, 2003.
10. This agreement shall terminate automatically in the event of
its assignment; the term "assignment" for this purpose shall have the meaning
defined in Section 2(a)(4) of the Investment Company Act.
11. Nothing in this Agreement shall limit or restrict the right of
any director, officer or employee of the Adviser who may also be a trustee,
officer or employee of the Trust and/or the Funds to engage in any other
business or to devote his time and attention in part to the management or other
aspect of any business, whether of a similar or dissimilar nature, nor limit or
restrict the right of the Adviser to engage in any other business or to render
services of any kind to any other person or entity.
12. During the term of this Agreement, the Trust and each Fund
agrees to furnish the Adviser at its principal office all prospectuses, proxy
statements, reports to shareholders, sales literature, or other material
prepared for distribution to shareholders of each Fund or the public, which
refer in any way to the Adviser, prior to use thereof and not to use such
material if the Adviser reasonably objects in writing within five business
days (or such other time as may be mutually agreed) after receipt. In the event
of termination of the Agreement, the Trust and/or each Fund will continue to
furnish to the Adviser such other information relating to the business affairs
of the Trust and/or each Fund as the Adviser at any time, or from time to time,
reasonably requests in order to discharge its obligations hereunder.
13. This Agreement may be amended by mutual agreement, but only
after authorization of such amendments by the affirmative vote of (i) the
holders of the majority of the outstanding voting securities of each Fund and
(ii) a majority of the members of the Trustees who are not interested persons of
the Trust or the Adviser, cast in person at a meeting called for the purpose of
voting on such approval.
14. The Adviser, the Trust and the Funds each agree that the name
"Pilgrim" is proprietary to, and a property right of, the Adviser. The Trust and
the Funds agree and consent that (i) each will only use the name "Pilgrim" as
part of its name and for no other purpose, (ii) each will not purport to grant
any third party the right to use the name "Pilgrim" and (iii) upon the
termination of this Agreement, the Trust and the Funds shall, upon the request
of the Adviser, cease to use the name "Pilgrim," and shall use its best efforts
to cause its officers, trustees and shareholders to take any and all actions
which the Adviser may request to effect the foregoing.
15. Any notice or other communications required to be given
pursuant to this Agreement shall be deemed to be given if delivered or mailed by
registered mail, postage paid, (1) to the Adviser at 0000 Xxxx Xxxxxxxxxx Xxxxx
Xxxx, Xxxxxxxxxx, Xxxxxxx 00000; or (2) to the Trust and/or the Funds at 0000
Xxxx Xxxxxxxxxx Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxx 00000.
16. This Agreement shall be governed by and construed in
accordance with the laws of the State of Arizona. The terms "interested person",
"assignment", and "vote of the majority of the outstanding securities" shall
have the meaning set forth in the Investment Company Act.
17. The Declaration of Trust, establishing the Trust, dated
December 17, 1993, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth of
Massachusetts, provides that the name "Pilgrim Variable Products Trust" refers
to the Trustees under the Declaration collectively as trustees, but not
individually or personally; and no Trustee, shareholder, officer, employee or
agent of the Trust and/or the Funds may be held to any personal liability, nor
may resort be had to their private property for the satisfaction of any
obligation or claim or otherwise in connection with the affairs of the Trust,
but the Trust property only shall be liable.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year written
above.
PILGRIM VARIABLE PRODUCTS TRUST
By: /s/ Xxxxxx X. Naka
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Xxxxxx X. Naka, Senior Vice President
ING PILGRIM INVESTMENTS, LLC
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, Senior Vice President
