SUBADVISORY AGREEMENT
Exhibit (d) (25)
AGREEMENT made effective the 7th day of December 2012 or the inception date of the
PL Precious Metals Fund listed on Exhibit A, among Xxxxx Capital Management Incorporated a
corporation incorporated in California (“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 render investment advisory services to 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 as
reflected in the Portfolio’s then-current Prospectus and Statement of Additional information in its
Registration Statement (as defined in Section 2(a) below), 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. With respect to trading in restricted currencies, however, the
Subadviser shall review any trades executed by the respective Portfolio’s custodian to determine
that they are reasonable and are in the best interest of the Portfolio and agrees to promptly
notify the Investment Adviser if a trade does not, in its reasonable determination, meet either
criteria. 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. To the extent permitted by the written investment policies of the Portfolio, as
reflected in the Portfolio’s then-current Prospectus and Statement of Additional Information in its
Registration Statement (as defined in Section 2(a) below), 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 provisions of the 1940 Act, the Advisers Act and all
applicable rules and regulations and regulatory guidance 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), including performing its obligations
under this Agreement as a fiduciary to each Portfolio and its shareholders; (2) applicable rules
and regulations under the Securities Exchange Act of 1934, as amended (the “1934 Act”) and
regulatory guidance, releases and interpretations related thereto; (3) any applicable written
procedures, policies and guidelines adopted by the Board and furnished to the Subadviser (“Trust
Procedures”); (4) the Trust’s or Portfolio’s investment goals, 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 and furnished to the
Subadviser (the “Registration Statement”); (6) Section
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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, who shall be identified by the Investment
Adviser in writing, 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 protected in relying on the Trust’s Registration Statement previously
furnished by the Investment Adviser to the Subadviser. 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) will (i) identify each position in the Portfolio that constitutes stock in a Passive
Foreign Investment Company (“PFIC”), as that term is defined in Section 1296 of the Code, and (ii)
make such determinations and inform the Investment Adviser at least annually (or more often and by
such date(s) as the Investment Adviser shall request) of any stock in a PFIC.
(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
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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
therefore. 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.
(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 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, 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 agrees 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
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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 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 reasonable advance 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 reasonably
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 specifically related to the
Portfolio 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 president, a
vice president, the chief compliance officer, a managing director, or other senior officer (as the
Investment Adviser determines appropriate) of the Subadviser shall certify to the Investment
Adviser that (a) the Subadviser had a Code of Ethics that complied with the requirements of Rule
17j-1 during the previous calendar quarter, (b) the Code contains procedures reasonably necessary
to prevent Access Persons (as defined in Rule 17j-1 under the 1940 Act, as amended) from violating
the Code, and that (c), except as otherwise
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disclosed, there have been no material violations of
the Code 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 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 and records, 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. Notwithstanding
anything herein to the contrary, the Subadviser shall not redact any information that would
reasonably be considered relevant information to the Investment Adviser or the Trust for the
purpose of the examination, including name or title of a person.
(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 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) will not permit any employee of the Subadviser to have any material involvement with the
management of the Portfolio if such employee has:
(i) been, within the last ten (10) years, convicted of or acknowledged commission of any
felony or misdemeanor (a) involving the purchase or sale of any security, (b) involving
embezzlement, fraudulent conversion, or misappropriation of funds or securities, (c) involving
sections 1341, 1342 or 1343 of Title 18 of the U.S. Code, or (d) arising out of such person’s
conduct as an underwriter, broker, dealer, investment adviser, municipal securities dealer,
government securities broker, government securities dealer, transfer agent, 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;
(ii) 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, transfer agent, 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.
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(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 (i) as
expressly authorized in this Agreement,(ii) disclosures to an affiliate subject to comparable
confidentiality obligations, (iii) 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, (iv) if the Board has authorized such disclosure, or (v) if such disclosure is required
by applicable federal or state law or regulations or 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 (x) as expressly authorized in this Agreement,(y) if the Subadviser has
authorized such disclosure, or (z) 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 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
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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, including, in the event of any relevant
regulatory exams, providing notice of any material deficiencies, and providing notice of any
material changes to business operations that will likely, in the Subadviser’s reasonable
determination, adversely affect the services provided by Subadviser under this Agreement, provided
that the provision of such notices are permitted under applicable law. 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 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 any Trust Procedures, including the Trust’s policy on selective
disclosure of portfolio holdings of the Trust (the “Selective Disclosure Policy”), as provided in
writing to the Subadviser and as may be amended from time to time. As such, the Subadviser agrees
not to trade on non-public portfolio holdings information of the Trust in a manner inconsistent
with applicable federal and state securities law or applicable international law, including
anti-fraud provisions of such laws, or inconsistent with any internal policy adopted by the
Subadviser 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 Trust that meet the minimum requirements of the
Selective Disclosure Policy. The Subadviser will provide any such agreements to the Investment
Adviser or the Trust, along with any amendments or supplements thereto, from time to time on an
ongoing basis only if reasonably requested by the Investment Adviser or the Trust, provided however
that Subadviser may provide only those parts of the agreements that relate to ensuring conformance
with the Trust’s Selective Disclosure Policy or other Trust Procedures. The Subadviser agrees to
provide a certification with respect to compliance with Trust Procedures 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,
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including (but not
limited to) certifications of compliance with Trust Procedures, the Registration Statement, and
applicable securities regulations.
(v) will monitor and promptly inform the Investment Adviser of developments relating to class
action litigation 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 or documentation (for example, a schedule of purchases and sales and/or holdings or
trade confirmations) 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.
(x) will, on an annual basis, advise the Investment Adviser (i) if the Subadviser 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 Subadviser’s fee rate is less than the rate charged the
Investment Adviser for management of the Portfolio.
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, which relate to the Subadviser or the
Portfolio, filed with the SEC (or which will be filed with the SEC in the future) and represents
and warrants that, solely with respect to the disclosure respecting or relating to the Subadviser
or the Portfolio that the Subadviser has provided to the Trust for inclusion in the Registration
Statement, including any performance information the Subadviser provides that is included in or
serves as the basis for information included in the Registration Statement, such portion of the
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 and/or the
Portfolio, 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,
or of any statement respecting or relating to the Subadviser and/or Portfolio contained therein
that becomes untrue in any material respect.
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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
the identification of risks is inclusive of all material risks known to the 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 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.
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; provided, however, that Investment Adviser shall provide written support for
such cost at Subadviser’s request for any event exceeding Ten Thousand Dollars ($10,000.00). 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 by the Investment Adviser 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.
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7. Compliance. 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
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 that can reasonably be expected to result in any of these actions;
(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 statement contained therein that
becomes untrue in any material respect.
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; (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.
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, including requests made upon or following termination of this Agreement (unless other
dispensation of such records is mutually agreed by the parties) for so long as Subadviser is
required to maintain such records under applicable law, 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.
11
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.
13. Liability.
(a) Except as may otherwise be required by the provisions of this Agreement (including under
Section 14), 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 the Subadviser’s 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 or Investment Adviser may have
under federal or state securities laws.
(b) Except as may otherwise be required by the provisions of this Agreement (including under
Section 14), the 1940 Act or the rules thereunder or other applicable law, the Subadviser agrees
that the Trust 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 Trust 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 Trust’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 Trust’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 Subadviser
may have under federal or state securities laws.
14. Indemnification.
(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 PL 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 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 or agent or delegate acting on behalf of the
Subadviser (other than a PL Indemnified Person), (ii)
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are based upon the Subadviser’s (or its
agent’s or delegate’s) breach of any provision of this Agreement, including breach of any
representation, warranty or undertaking, or (iii) 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 or agent or delegate of
the Subadviser (other than a PL Indemnified Person) or (iv) are based upon breach of its fiduciary
duties to the Trust or violation of applicable law 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, or reckless disregard of, the Investment Adviser’s
obligations and/or duties under this Agreement by the Investment Adviser or by any of its
directors, officers, or employees or any affiliate or agent or delegate acting on behalf of the
Investment Adviser (other than a Subadviser Indemnified Person); (ii) are based upon the Investment
Adviser’s (or its agent’s or delegate’s) breach of any provision of this Agreement, including
breach of any representation, warranty or undertaking, (iii) 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 or agent or
delegate of the Subadviser (other than a PL Indemnified Person) or (iv) are based upon breach of
its fiduciary duties to the Trust or violation of applicable law 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 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
13
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, 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), 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), 10, 13, 14, 16, 17, 18, 19 and 20 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 Life Funds” 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 and only so long as the Investment Adviser is an
investment adviser to the Trust and/or the Portfolio. Upon termination of this Agreement, the
Subadviser shall forthwith cease to use such names (or abbreviations, derivatives or logos).
(b) It is understood that the name “Xxxxx Capital Management Incorporated” 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 Portfolios, provided,
14
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 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 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. For the
avoidance of doubt, obligations of the Investment Adviser hereunder are solely binding upon the
Investment Adviser.
18. 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 Subadviser, to: Xxxxx Capital Management 000 Xxxxxxxx Xxxxxxx Xxxxxxxxx Xxxxx, XX 00000 Attention: Client Administration MAC N9882-L030 Email: XxxxxXxxXxxxxxXxxxx@xxxxxxxx.xxx Telephone number: (000) 000-0000 Facsimile transmission number: (000) 000-0000 |
||
| B. | if to the Investment Adviser, to: Pacific Life Fund Advisors LLC 000 Xxxxxxx Xxxxxx Xxxxx Xxxxxxx Xxxxx, XX 00000 Attention: Xxxxx X. Xxxxx Email: Xxxxx.Xxxxx@XxxxxxxXxxx.xxx Telephone number: (000) 000-0000 And a copy email to: XxxxxXxxxxxxxxxxxx@XxxxxxxXxxx.xxx |
15
| C. | if to the Trust, to: Pacific Life Funds c/o Pacific Life Insurance Company 000 Xxxxxxx Xxxxxx Xxxxx Xxxxxxx Xxxxx, XX 00000 Attention: Xxxxx X. Xxxxx Telephone number: (000) 000-0000 And a copy email to: XxxxxXxxxxxxxxxxxx@XxxxxxxXxxx.xxx |
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. 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.
(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.
(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.
(f) No provision of this Agreement may be changed, waived, discharged or terminated orally,
but only by an instrument in writing signed by the parties to this Agreement. Any amendment of this
Agreement shall be subject to the 1940 Act.
16
20. 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, non-public 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 in connection with the obligations set forth in Section
2(e) hereof or as otherwise expressly provided for in this Agreement, and otherwise maintain
policies and procedures reasonably designed to prevent disclosure of the Confidential Information.
To the extent a party discloses Confidential Information to a third party, as permitted herein,
such disclosing party (a) shall ensure that, prior to such disclosure, the recipient third party is
subject to commercially reasonable confidentiality obligations in writing with respect to the
disclosed Confidential Information and (b) shall be deemed in breach of this section 20 for any
unauthorized disclosure of Confidential Information by such recipient third party. 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 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.
17
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:
|
/s/ Xxxxxx X. Xxxxxxxx | By: | /s/ Xxxxxxx X. XxxXxxxx | |||||||
| Title: VP, Fund Advisor Operations | Title: VP & Assistant Secretary | |||||||||
| XXXXX CAPITAL MANAGEMENT INCORPORATED | ||||||||||
By:
|
/s/ Xxxxxxxx X. Xxxxxxxx | By: | ||||||||
| Title: Client Service Manager | Title: | |||||||||
| PACIFIC LIFE FUNDS | ||||||||||
By:
|
/s/ Xxxxxx X. Xxxxxxxx | By: | /s/ Xxxxxxx X. XxxXxxxx | |||||||
| Title: Vice President | Title: VP & Assistant Secretary | |||||||||
18
Exhibit A
PACIFIC LIFE FUNDS
FEE SCHEDULE
FEE SCHEDULE
Effective: December 7, 2012 or the inception date of the PL Precious Metals Fund
Portfolio: PL Precious Metals Fund
The Investment Adviser will pay to the Subadviser 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 PL Precious Metals
Fund and the Precious Metals Portfolio of Pacific Select Fund according to the following
schedule:
| Rate% | Break Point (assets) | |||
| 0.40 | % | First $100 million |
||
| 0.35 | % | Next $400 million |
||
| 0.30 | % | Next $500 million; AND |
||
| 0.25 | % | Excess over $1 billion |
||
MULTIPLIED BY
(b) The ratio of the PL Precious Metals Fund’s average daily net assets over the combined
assets of the PL Precious Metals Fund and the Precious Metals Portfolio.
In recognition of the fact that the Subadviser may have an inherent constraint with respect to
the amount of money that Subadviser is able to manage in a particular strategy, Subadviser agrees
to hold back or reserve total capacity (that is, agrees to accept a certain level of dollars) for
the Precious Metals Portfolio and the strategies employed for the Portfolio and investments as
follows:
$2 billion dollars combined for the Precious Metals Portfolio and the PL Precious Metals Fund
(to be determined on a net cash flow basis into the account); to be reviewed annually.
Fees for services shall be prorated for any portion of a year in which the Agreement is not
effective. Billing cycle to commence upon inception date of the PL Precious Metals Fund.
