EXHIBIT (d)(5)
PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT made effective this 1st day of May, 2003 among Pacific Life
Insurance Company, a California corporation ("Investment Adviser"), Xxxxxxx
Xxxxx Asset Management, L.P. ("Portfolio Manager"), a Delaware limited
partnership organized under the laws of the State of Delaware, and Pacific
Select Fund, a Massachusetts Business Trust (the "Fund"). Upon effectiveness of
this Agreement, the Portfolio Management Agreement dated May 1, 1998, and
subsequently amended on January 28, 2000 and December 21, 2001, among the
Investment Adviser and Xxxxxxx Sachs Asset Management, a separate operating
division of Xxxxxxx, Xxxxx & Co., and the Fund shall be deemed terminated.
WHEREAS, the Fund 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 Portfolio Manager is registered with the SEC as an investment
adviser under the Advisers Act;
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 portfolio manager to discharge the Investment Adviser's
responsibilities with respect to the investment management of such portfolios, a
copy of which has been provided to the Portfolio Manager and is incorporated
herein by reference;
WHEREAS, the Fund and the Investment Adviser desire to retain the Portfolio
Manager to furnish investment advisory services to one or more portfolios of the
Fund, and the Portfolio Manager 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 premises and the promises and mutual
covenants herein contained, it is agreed among the Fund, the Investment Adviser,
and the Portfolio Manager as follows:
1. Appointment. The Fund and the Investment Adviser hereby appoint
Xxxxxxx Sachs Asset Management to act as Portfolio Manager to provide investment
advisory services to the portfolios of the Fund listed on Exhibit A attached
hereto (hereinafter the "Portfolios") for the periods and on the terms set forth
in this Agreement. The Portfolio Manager accepts such appointment and agrees to
furnish the services herein set forth for the compensation herein provided.
In the event the Investment Adviser wishes to retain the Portfolio Manager
to render investment advisory services to one or more portfolios of the Fund
other than the Portfolios, the Investment Adviser shall notify the Portfolio
Manager in writing and shall revise the Exhibit A to reflect such additional
portfolio(s). If the Portfolio Manager is willing to render such services,
it shall notify the Fund and the Investment Adviser in writing, whereupon such
portfolio shall become a Portfolio hereunder, and be subject to this Agreement.
2. Portfolio Manager Duties.
Subject to the supervision of the Fund's Board of Trustees (the
"Board") and the Investment Adviser, the Portfolio Manager will provide a
continuous investment program for the Portfolios and determine the composition
of the assets of the Portfolios. The Portfolio Manager will provide investment
research and analysis, which may include computerized investment methodology,
and will conduct a continuous program of evaluation, investment, sales, and
reinvestment of the Portfolios' assets by determining the securities, cash and
other investments, including futures and options contracts, if any, that shall
be purchased, entered into, retained, sold, closed, or exchanged for the
Portfolios, when these transactions should be executed, and what portion of the
assets of the Portfolios should be held in the various securities and other
investments in which it may invest, and the Portfolio Manager is hereby
authorized to execute and perform such services on behalf of the Portfolios. To
the extent permitted by the written investment policies of the Portfolios, the
Portfolio Manager shall make decisions for the Portfolios 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 Portfolios. The Portfolio
Manager is authorized to and shall exercise tender offers, exchange offers and
vote proxies on behalf of each Portfolio, each as the Portfolio Manager
determines is in the best interest of the Portfolio.
In performing these duties, the Portfolio Manager:
(a) Will conform with (1) the 1940 Act and all rules and regulations
thereunder, and releases and interpretations related thereto (including any
no-action letters and exemptive orders which have been granted by the SEC to the
Fund, to the Investment Adviser (as provided to the Portfolio Manager by the
Investment Adviser), or to the Portfolio Manager), (2) all other applicable
federal and state laws and regulations pertaining to investment vehicles
underlying variable annuity and/or variable life insurance contracts, (3) any
applicable written procedures, policies and guidelines adopted by the Board and
furnished to the Portfolio Manager, provided that with respect to procedures
governing transactions involving affiliated transactions (such as those adopted
pursuant to the 1940 Act Rule 17a-7, 17e-1 and 10f-3), such procedures will
identify any affiliate of the Investment Adviser and the Portfolio(s), other
than affiliates of the Portfolio Manager. The Portfolio Manager shall not bear
any responsibility and shall be released from any obligation or cost which
results from entering into a trade pursuant to the Portfolio(s) Rule 17a-7,
17e-1 or 10f-3 procedures with any affiliated entity, other than affiliates of
the Portfolio Manager, not specifically identified to the Portfolio Manager by
the Investment Advisor; and (4) the Fund's objectives, investment policies and
investment restrictions as stated in the Fund's Prospectus and Statement of
Additional Information as supplemented or amended from time to time, as
furnished to the Portfolio Manager, (5) the provisions of the Fund's
Registration Statement filed on Form N-1A under the Securities Act of 1933 (the
"1933 Act") and the 1940 Act, as supplemented or amended from time to time (the
"Registration Statement"). Until the Investment Adviser delivers any supplements
or amendments to the Portfolio Manager, the Portfolio Manager shall be fully
protected in relying on the Fund's Registration Statement previously furnished
to the Portfolio Manager by Investment Adviser. (6) any other applicable laws
and regulations, including without limitation, proxy voting regulations.
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(b) Is responsible, in connection with its responsibilities under this
Section 2, for decisions to buy and sell securities and other investments for
the Portfolios, for broker-dealer and futures commission merchant ("FCM")
selection, and for negotiation of commission rates. The Portfolio Manager's
primary consideration in effecting a security or other transaction will be to
obtain the best execution for the Portfolios, taking into account the factors
specified in the Prospectus and Statement of Additional Information for the
Fund, as they may be amended or supplemented from time to time and furnished to
the Portfolio Manager. 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 Portfolio Manager 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 Portfolios 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 Portfolio Manager 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 Portfolio Manager's (or its
affiliates') overall responsibilities with respect to the Portfolios 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 Portfolio Manager
is further authorized to place orders on behalf of the Portfolios through the
Portfolio Manager if the Portfolio Manager 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 Portfolios or the Portfolio
Manager. Such allocation shall be in such amounts and proportions as the
Portfolio Manager shall determine consistent with the above standards, and, upon
request, the Portfolio Manager will report on said allocation to the Investment
Adviser and Board, indicating the brokers, dealers or FCMs to which such
allocations have been made the basis therefor. The Portfolio Manager is
authorized to open brokerage accounts on behalf of the Portfolios in accordance
with Fund procedures.
(c) The Investment Adviser hereby agrees and consents that the Portfolio
Manager and its affiliates are authorized to execute agency cross transactions
(collectively "Cross transactions") for the Portfolio(s) provided such
transactions comply with the Rule 206(3)-2 under the Investment Advisers Act of
1940 ("Investment Advisers Act"), Rule 17e-1 under the 1940 Act and any other
applicable laws or regulations. Cross transactions are transactions which may be
effected by the Portfolio Manager or its affiliates acting for both the
Portfolio(s) and the counterparty to the transaction. Cross transactions enable
the Portfolio Manager to purchase or sell a block of securities for an account
at a set price and possibly avoid an unfavorable price movement that may be
created through entrance into the market with such purchase or sell order.
However, the Investment Adviser should note that the Portfolio Manager has a
potentially conflicting division of loyalties and responsibilities regarding
both parties to Cross transactions and that the Portfolio Manager, or any of its
affiliates, if acting as broker, may receive commissions from both parties to
such transactions. The Portfolio Manager understands that its authority to
execute Cross transactions for the Account is terminable at will without
penalty, effective upon receipt by the Portfolio Manager of written notice from
the Investment Adviser or the Fund, and that the failure to terminate such
authorization will result in its continuation.
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In connection with any agency Cross transactions, the Portfolio Manager
will provide the Portfolio(s) with a confirming letter describing the details of
such trades, and other reports or information that the Portfolio(s) may
reasonably request. Upon request, the Portfolio Manager will disclose to the
Portfolio(s) the commissions received by the Portfolio Manager or its affiliates
for executing the other side of the transaction.
(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 Portfolio Manager. 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 Portfolio Manager in a manner that is fair and equitable and
consistent with the Portfolio Manager's fiduciary obligations to the Portfolios
and to such other clients.
(e) Will, in connection with the purchase and sale of securities for
the Portfolios, together with the Investment Adviser, arrange for the
transmission to the custodian and recordkeeping agent for the Fund, 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 Portfolios, as may be
reasonably necessary to enable the custodian and recordkeeping agent to perform
its administrative and recordkeeping responsibilities with respect to the
Portfolios, 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 Fund's custodian and
recordkeeping agent, and, if required, the Investment Adviser. The Portfolio
Manager agrees to comply with such rules, procedures and time frames as the
Fund's custodian may set or provide with respect to the clearance and settlement
of transactions for a Portfolio provided that such rules, procedures and time
frames are customary industry standards for such requirements. Any Portfolio
assets shall be delivered directly to the Fund's custodian.
(f) Will provide reasonable assistance to the custodian and
recordkeeping agent for the Fund in determining or confirming, consistent with
the procedures and policies stated in the Fund's valuation procedures and/or the
Registration Statement, the value of any Portfolio securities or other assets of
the Portfolios for which the custodian and recordkeeping agent seeks assistance
from the Portfolio Manager or identifies for review by the Portfolio Manager.
This includes (but is not limited to) obtaining bids and offers or quotes from
broker/dealers or market-makers, verifying pricing and providing information to
the Investment Adviser or the custodian to aid its fair valuation of securities
in accordance with the Fund's valuation procedures, as they may be amended from
time to time.
(g) Will maintain and preserve such records related to each
Portfolio's transactions as required under the 1940 Act and the Advisers Act.
The Portfolio Manager will make available to the Fund and the Investment Adviser
promptly upon request, any of the Portfolios' investment records and ledgers
maintained by the Portfolio Manager (which shall not include the records and
ledgers maintained by the custodian and recordkeeping agent for the Fund), as
are necessary to assist the Fund and the Investment Adviser in complying with
requirements of the 1940 Act and the Advisers Act, as well as other applicable
laws, and will furnish to regulatory authorities having the requisite authority
any information or reports in connection with such services which may be
requested in order to ascertain whether the
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operations of the Fund 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 Portfolios and the issuers and securities represented in the Portfolios, and
will furnish the Board, with respect to the Portfolios, 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 each Portfolio, a monthly compliance checklist, reports regarding compliance
with the Fund'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,
and compliance with the Portfolio Manager's Code of Ethics, and such other
procedures or requirements 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 will provide the Investment
Adviser and the Fund with a copy of the Code of Ethics, together with evidence
of its adoption. Within 20 days of the end of each calendar quarter during which
this Agreement remains in effect, the president or a vice-president of the
Portfolio Manager shall certify to the Investment Adviser that the Portfolio
Manager has in all material respects complied with the requirements of Rule
17j-1 during the previous calendar quarter and that there have been no material
violations of the Code of Ethics involving investment personnel managing the
assets of the Portfolio or that impacts the Portfolio or, if a violation has
occurred, that appropriate action has been taken in response to such violation.
(j) Will provide to the Investment Adviser a copy of the Portfolio
Manager'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). The Portfolio Manager represents and warrants that it is
a duly registered investment adviser under the Advisers Act. The Portfolio
Manager will provide a list of persons who the Portfolio Manager wishes to have
authorized to give written and/or oral instructions to Custodians of assets for
the Portfolios.
(k) Will be responsible for the preparation and filing of Schedule 13G
and Form 13F on behalf of the Fund reflecting holdings over which the Portfolio
Manager and its affiliates have investment direction.
(l) Will not permit any employee of the Portfolio Manager to have any
material connection with the handling of the Portfolios 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.
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(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.
(m) Will not disclose or use any records or information obtained
pursuant to this Agreement (excluding investment research and investment advice)
in any manner whatsoever except as expressly authorized in this Agreement or in
the ordinary course of business in connection with placing orders for the
purchase and sale of securities or obtaining investment licenses in various
countries or the opening of custody accounts and dealing with settlement agents
in various countries, and will keep confidential any information obtained
pursuant to the Agreement, and disclose such information only if the Board has
authorized such disclosure, or if such disclosure is required by applicable
federal or state law or regulations or regulatory authorities having the
requisite authority. The Fund and the Investment Adviser will not disclose or
use any records or information respecting the Portfolio Manager obtained
pursuant to this Agreement, in any manner whatsoever except as expressly
authorized in this Agreement, and will keep confidential any information
obtained pursuant to this Agreement, and disclose such information only as
expressly authorized in this Agreement, if the Board has authorized such
disclosure, or if such disclosure is required by applicable federal or state law
or regulations or regulatory authorities having the requisite authority, or as
may be required by the legal process or in connection with any litigation
arising out of the subject matter of this Agreement.
(n) Will assist the Investment Adviser, the Fund, 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 Portfolio
Manager hereunder. Specifically, and without limitation to the foregoing, the
Portfolio Manager agrees to provide certifications to the principal executive
and financial officers of the Fund (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 Fund's Form
N-SARs, shareholder reports, financial statements, and disclosure documents, in
such form and content as the Fund shall reasonably request or as in accordance
with procedures adopted by the Fund.
3. Disclosure about Portfolio Manager and Portfolio. The Portfolio
Manager 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 Portfolio Manager or the Portfolios,
filed with the SEC (or which will be filed with the SEC in the future) and
represents and warrants that, with respect to the disclosure respecting or
relating to the Portfolio Manager, including any performance information the
Portfolio Manager provides that is included in or serves as the basis for
information included in the Registration Statement, such Registration Statement
contains as of the date hereof, or will contain as of the date of effectiveness
of any future 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
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Portfolio Manager further agrees to notify the Investment Adviser and the Fund
immediately of any material fact known to the Portfolio Manager respecting or
relating to the Portfolio Manager that is not contained in the Registration
Statement or prospectus for the Fund, or any amendment or supplement thereto, or
of any statement respecting or relating to the Portfolio Manager contained
therein that becomes untrue in any material respect. With respect to the
disclosure respecting each Portfolio, the Portfolio Manager represents and
agrees that the description in the Fund's prospectus contained in the following
sections: "The portfolio's investment goal," and "What the portfolio invests in"
(collectively, "Portfolio Description") is consistent with the manner in which
the Portfolio Manager intends to manage each Portfolio. The Portfolio Manager
further agrees to notify the Investment Adviser and the Fund immediately in the
event that the Portfolio Manager becomes aware that the Portfolio Description
for a Portfolio is inconsistent in any material respect with the manner in which
the Portfolio Manager is managing the Portfolio.
4. Expenses. The Portfolio Manager shall bear all expenses incurred by it
and its staff with respect to all activities in connection with the performance
of the Portfolio Manager's services under this Agreement, including but not
limited to salaries, overhead, travel, preparation of Board materials, review of
marketing materials, and marketing support. Each Portfolio will bear certain
other expenses to be incurred in its operation, including, but not limited to,
investment advisory fees, sub-advisory fees (other than sub-advisory fees paid
pursuant to this Agreement) and administration fees; fees for necessary
professional and brokerage services; costs of regulatory compliance; and pro
rata costs associated with maintaining the Fund's legal existence and
shareholder relations. All other expenses not specifically assumed by the
Portfolio Manager hereunder or by the Investment Adviser under the Advisory
Agreement are borne by the applicable Portfolio of the Fund. The Fund, the
Portfolio Manager 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
Portfolio Manager pursuant to this Agreement, the Investment Adviser will pay to
the Portfolio Manager a fee in accordance with Exhibit A attached to this
Agreement. This fee will be computed and accrued daily and payable monthly. The
fees for any month during which this Agreement is in effect for less than the
entire month shall be pro-rated based on the number of days during such month
that the Agreement was in effect.
6. Seed Money. The Investment Adviser agrees that the Portfolio Manager
shall not be responsible for providing money for the initial or subsequent
capitalization of any Portfolio.
7. Compliance.
(a) The Investment Adviser shall perform quarterly and annual tax
compliance tests to ensure that the Portfolios are in compliance with Subchapter
M of the Internal Revenue Code ("IRC") and Section 817(h) of the IRC. Adviser
shall apprise the Portfolio Manager promptly after each quarter end of any
non-compliance with the diversification requirements in such IRC provisions. If
so advised, the Portfolio Manager shall take prompt action to bring the
Portfolio(s) back into compliance with such IRC diversification provisions, as
directed by the Adviser. The Portfolio Manager agrees that it shall not be
absolved of its responsibilities, duties and obligations to manage the
Portfolios in a manner consistent with Diversification Procedures or other
procedures, policies and/or guidelines adopted by the Fund, or implemented by
the Adviser with respect to Portfolio Manager.
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(b) The Portfolio Manager agrees that it shall immediately notify the
Investment Adviser and the Fund (i) in the event that the SEC, CFTC, or any
banking or other regulatory body has censured the Portfolio Manager; 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 the Portfolio Manager or the Portfolio has ceased to comply with
any procedures, policies and/or guidelines adopted by the Fund or implemented by
the Adviser, including but not limited to diversification procedures. The
Portfolio Manager further agrees to notify the Investment Adviser and Fund
immediately of any material fact known to the Portfolio Manager respecting or
relating to the Portfolio Manager that is not contained in the Registration
Statement or prospectus for the Fund, or any amendment or supplement thereto, or
of any statement contained therein that becomes untrue in any material respect.
(c) The Investment Adviser agrees that it shall immediately notify the
Portfolio Manager (i) in the event that the SEC has censured the Investment
Adviser or the Fund; 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; or
(iii) upon having a reasonable basis for believing that the Portfolio has ceased
to comply with the diversification provisions of Section 817(h) of the Code or
the Regulations thereunder.
(d) The Investment Adviser, Fund and Portfolio Manager agree that the
Portfolio Manager shall have no responsibility or liability for any liability
arising out of any non-compliance by the Fund or Investment Adviser with
anti-money laundering regulations.
8. Independent Contractor. The Portfolio Manager 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 Portfolio Manager understands that
unless provided herein or authorized from time to time by the Fund, the
Portfolio Manager shall have no authority to act for or represent the Fund in
any way or otherwise be deemed the Fund's Agent.
9. Books and Records. In compliance with the requirements of and to the
extent required by Rule 31a-3 under the 1940 Act, the Portfolio Manager hereby
agrees that all records which it maintains for the Portfolios are the property
of the Fund and further agrees to surrender promptly to the Fund any of such
records upon the Fund's or the Investment Adviser's request, although the
Portfolio Manager 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 Fund.
11. Responsibility and Control. Notwithstanding any other provision of
this Agreement, it is understood and agreed that the Fund shall at all times
retain the ultimate
8
responsibility for and control of all functions performed pursuant to this
Agreement and reserves the right to direct, approve or disapprove any action
hereunder taken on its behalf by the Portfolio Manager, provided, however, that
the Portfolio Manager shall not be liable for any losses to the Fund resulting
from the Fund's direction, or from the Fund's disapproval of any action proposed
to be taken by the Portfolio Manager.
12. Services Not Exclusive. It is understood that the services of the
Portfolio Manager and its employees are not exclusive, and nothing in this
Agreement shall prevent the Portfolio Manager (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 Portfolios) or from engaging in other activities.
13. Liability. Except as may otherwise be required by 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 willful misfeasance, bad faith, or 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.
14. Indemnification.
(a) The Portfolio Manager agrees to indemnify and hold harmless, the
Investment Adviser, any affiliated person within the meaning of Section 2(a)(3)
of the 1940 Act ("affiliated person") of the Investment Adviser, and each
person, if any, who, within the meaning of Section 15 of the 1933 Act, controls
("controlling person") the Investment Adviser (collectively, "PL Indemnified
Persons") against any and all losses, claims, damages, liabilities or litigation
(including reasonable legal and other expenses), to which the Investment Adviser
or such affiliated person or controlling person may become subject under the
1933 Act, 1940 Act, the Investment Advisers Act, under any other statute, at
common law or otherwise, arising out of the Portfolio Manager's responsibilities
to the Fund which may be based upon any willful misfeasance, bad faith, gross
negligence, or reckless disregard of, the Portfolio Manager's obligations and/or
duties under this Agreement by the Portfolio Manager or by any of its directors,
officers or employees, or any affiliate acting on behalf of the Portfolio
Manager (other than a PL Indemnified Person), provided, however, that in no case
is the Portfolio Manager'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
Portfolio Manager, any affiliated person within the meaning of Section 2(a)(3)
of the 1940 Act of the Portfolio Manager and each person, if any, who, within
the meaning of Section 15 of the 1933 Act controls ("controlling person") the
Portfolio Manager (collectively, "Portfolio Manager Indemnified Persons")
against any and all losses, claims, damages, liabilities or litigation
(including reasonable legal and other expenses) to which a Portfolio Manager
Indemnified Person may become subject under the 1933 Act, the 1940 Act, the
Investment Advisers Act,
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under any other statute, at common law or otherwise, arising out of the
Investment Adviser's responsibilities as Investment Adviser of the Fund which
may be based upon any willful misfeasance, bad faith or gross negligence by the
Investment Adviser, any of its directors, officers, or employees or any
affiliate acting on behalf of the Investment Adviser (other than a Portfolio
Manager Indemnified Person), provided however, that in no case is the Investment
Adviser's indemnity in favor of the Portfolio Manager 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 each Portfolio;
provided that such annual continuance is specifically approved at least annually
(a) by the vote of a majority of the Board, or (b) by the vote of a majority of
the outstanding voting shares of each 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 Fund, the Investment Adviser, or the Portfolio Manager, 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 Fund at any time with respect to the services provided by
the Portfolio Manager, 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
Fund or, with respect to a particular Portfolio, by vote of a majority of the
outstanding voting shares of such Portfolio, upon (60) sixty days prior written
notice to the Portfolio Manager and the Investment Adviser;
(b) by the Portfolio Manager at any time, without the payment of any
penalty, upon (60) sixty days prior written notice to the Investment Adviser and
the Fund.
(c) by the Investment Adviser at any time, without the payment of any
penalty, upon (60) sixty days prior written notice to the Portfolio Manager and
the Fund.
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, the Sections or Paragraphs numbered 2(g) for a period of six years, and
2(m), 9, 10, 12, 13, 14, 16 , 17, 18 and 19 of this Agreement as well as any
applicable provision of this Paragraph numbered 15 shall remain in effect.
16. Use of Name.
(a) It is understood that the name "Pacific Life Insurance Company"
and "Pacific Life" and "Pacific Select Fund" and any derivative thereof or logo
associated with those names are the valuable property of the Investment Adviser
and its affiliates, and that the Portfolio Manager shall not use such names (or
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 Fund and/or the Portfolios. Upon termination of this Agreement, the
Portfolio Manager shall forthwith cease to use such name (or derivative or
logo).
10
(b) It is understood that the name Xxxxxxx Xxxxx Asset Management or
any logo associated with those names is the valuable property of the Portfolio
Manager and that the Fund and the Investment Adviser have the right to use such
name (or derivative or logo), in the Fund'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 Portfolio
Manager is a Portfolio Manager to the Fund and/or one of the Portfolios,
provided, however, that the Fund may continue to use the name of the Portfolio
Manager in its Registrations Statement and other documents to the extent deemed
necessary by the Fund to comply with disclosure obligations under applicable law
and regulation. Neither the Fund nor the Investment Adviser shall use the
Portfolio Manager's name or logo in promotional or sales related materials
prepared by or on behalf of the Investment Adviser or the Fund, without prior
review and approval by the Portfolio Manager, which may not be unreasonably
withheld. Upon termination of this Agreement, the Fund 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 Fund is on file with the
Secretary of the State of Massachusetts. The Declaration of Trust has been
executed on behalf of the Fund by a Trustee of the Fund in his capacity as
Trustee of the Fund and not individually. The obligations of this Agreement with
respect to each 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 Fund individually, or upon the Fund generally or upon any other
portfolio of the Fund.
18. Notices.
All notices and other communications hereunder shall be in writing
sent by facsimile first, if practicable, but shall only be deemed given if
delivered in person or by messenger, cable, certified mail with return receipt,
or by a reputable overnight delivery service which provides evidence of receipt
to the parties at the following addresses (or at such other address or number
for a party as shall be specified by like notice):
A. if to the Portfolio Manager, to:
Xxxxxxx, Sachs & Co.
One Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile transmission number: 000-000-0000
Attention: Xxxxxx X. Xxxxxxx
B. if to the Investment Adviser, to:
Pacific Life Insurance Company
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Facsimile transmission number: (000) 000-0000
Attention: Xxxxx X. Xxxxx
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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
Facsimile transmission number: (000) 000-0000
Attention: Xxxxx X. Xxxxx
19. Miscellaneous
(a) This Agreement shall be governed by the laws of California,
without regard to the conflict of law principles thereof, provided that nothing
herein shall be construed in a manner inconsistent with the 1940 Act, the
Advisers Act, or rules or orders of the SEC thereunder. The term "affiliate" or
"affiliated person" as used in this Agreement shall mean "affiliated person" as
defined in Section 2(a)(3) of the 0000 Xxx.
(b) The captions of this Agreement are included for convenience only
and in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.
(c) To the extent permitted under Section 15 of this Agreement and
under the 1940 Act, this Agreement may only be assigned by any party with prior
written consent of the other parties.
(d) If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby, and to this extent, the provisions of this
Agreement shall be deemed to be severable. To the extent that any provision of
this Agreement shall be held or made invalid by a court decision, statute, rule
or otherwise with regard to any party hereunder, such provisions with respect to
other parties hereto shall not be affected thereby.
(e) This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original, and all such counterparts shall
together constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first written above.
PACIFIC LIFE INSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxx
------------------------- ---------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxx X. Xxxx
------------------------- ------------------
Title: Chairman, CEO Title: Assistant Secretary
-------------------- --------------------------
12
XXXXXXX SACHS ASSET MANAGEMENT, L.P.
By: /s/ Xxxxx X. XxXxxxxx
-------------------------
Name: Xxxxx X. XxXxxxxx
--------------------------
Title: Authorized Signatory
---------------------------
PACIFIC SELECT FUND
By: /s/ Xxxxxx X. Xxxxxx
------------------------
Name: Xxxxxx X. Xxxxxx
----------------------
Title: Chairman, CEO
--------------------
14
Exhibit A
---------
PACIFIC SELECT FUND
FEE SCHEDULE
Effective: May 1, 2003
Portfolio: I-Net Tollkeeper Portfolio
The Investment Adviser will pay to the Portfolio Manager a monthly fee
based on an annual percentage of the average daily net assets of the I-Net
Tollkeeper Portfolio at an annual rate equal to 0.70%.
Portfolio: Short Duration Bond Portfolio
The Investment Adviser will pay to the Portfolio Manager a monthly fee
based on an annual percentage of the average daily net assets of the Short-Term
Bond Portfolio at an annual rate according to the following schedule:
Break Point (assets) Rate (%)
-------------------------------------------
First $50 million 0.25%
$50-100 million 0.20%
$100-200 million 0.17%
$200-300 million 0.13%
$300 million- $1 billion 0.10%
Excess over $1 billion 0.07%
The fees for services shall be prorated for any portion of a year in which the
Agreement is not effective.
14
