EXHIBIT (d)(6)
FORM OF
FUND MANAGEMENT AGREEMENT
AGREEMENT made this ___ day of _______, 2001 among Pacific Life Insurance
Company, ("Adviser"), a California corporation, and A I M Capital Management,
Inc., ("AIM" or "Portfolio Manager"), a Texas corporation, and Pacific Funds
("Pacific Funds"), a Delaware Business Trust.
WHEREAS, Pacific Funds 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"); and
WHEREAS, Pacific Funds is authorized to issue shares of beneficial interest
("Shares") in separate funds, with each such fund representing interests in a
separate fund; and
WHEREAS, Pacific Funds currently offers multiple Funds, one or more of
which Pacific Funds and Adviser desire to retain the Portfolio Manager to render
investment advisory services hereunder, and with respect to which the Portfolio
Manager is willing to do so; and
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940 ("Advisers Act"); and
WHEREAS, the Portfolio Manager is registered with the SEC as an investment
adviser under the Advisers Act; and
WHEREAS, Pacific Funds has retained the Adviser to render investment
advisory services to the funds pursuant to an Advisory Agreement, as amended,
and such Agreement authorizes the Adviser to engage a portfolio manager to
discharge the Adviser's responsibilities with respect to the investment
management of the fund a copy of which has been provided to the Portfolio
Manager and is incorporated by reference herein; and
WHEREAS, Pacific Funds and the Adviser desire to retain the Portfolio
Manager to furnish investment advisory services to one or more Funds of Pacific
Funds, and the Portfolio Manager is willing to furnish such services to such
Funds and the 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 Pacific Funds, the Adviser, and
the Portfolio Manager as follows:
1. Appointment. Pacific Funds and the Adviser hereby appoint AIM to act
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as portfolio manager to provide investment advisory services to the series of
funds listed on the Fee Schedule attached hereto (hereinafter the "Funds") 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 Adviser wishes to retain the Portfolio Manager to render
investment advisory services to one or more portfolios other than the
Funds, the Adviser shall notify the Portfolio Manager in writing and shall
revise the Fee Schedule to reflect such additional portfolio(s). If the
Portfolio Manager is willing to render such services, it shall notify Pacific
Funds and Adviser in writing, whereupon such portfolio shall become a Fund
hereunder, and be subject to this Agreement.
2. Portfolio Manager Duties. Subject to the supervision of the Pacific
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Funds' Board of Trustees and the Adviser, the Portfolio Manager will provide a
continuous investment program for the Funds and determine the composition of the
assets of the Funds. 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 Funds 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 Funds, when these
transactions should be executed, and what portion of the assets of the Funds
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 Funds. To the extent permitted by the written
investment policies of the Funds, the Portfolio Manager shall make decisions for
the Funds 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 Funds. The Portfolio Manager is authorized to exercise tender
offers, exchange offers and to vote proxies on behalf of the Funds, each as the
Portfolio Manager determines is in the best interest of the Funds. In performing
these duties, the Portfolio Manager:
(a) Will manage each of the Funds so that it will meet the requirements
of Section 851(b)(2) and (3) Subchapter M of the Internal Revenue Code.
(b) Shall conform (1) with 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
Pacific Funds, the Adviser or the Portfolio Manager), (2) with all other
applicable federal and state laws and regulations pertaining to investment
vehicles underlying variable annuity and/or variable life insurance contracts,
(3) with any applicable written procedures, policies and guidelines adopted by
Pacific Funds' Board of Trustees and furnished to Portfolio Manager, (4) with
the Portfolio's objectives, investment policies and investment restrictions as
stated in Pacific Funds' Prospectus and Statement of Additional Information as
supplemented or amended from time to time, as furnished to the Portfolio
Manager, and (5) with the provisions of Pacific Funds' 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. Until the Adviser
delivers any supplements or amendments to the Portfolio Manager, the Portfolio
Manager shall be fully protected in relying on Pacific Funds' Registration
Statement, procedures, policies and guidelines previously furnished to the
Portfolio Manager by the Adviser.
(c) Will: (i) use its best efforts to identify each position in the
Funds that constitutes stock in a Passive Foreign Investment Company ("PFIC"),
as that term is defined in Section 1296 of the Internal Revenue Code, and (ii)
use its best efforts to make such determinations and inform the Adviser at least
annually, (or more often and by such date(s) as the Adviser shall request), of
any stock in a PFIC.
(d) Is responsible, in connection with its responsibilities under this
Section 2, for decisions to buy and sell securities and other investments for
the Funds, 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 Funds, taking into account the factors specified in the
Prospectus and Statement of Additional Information for Pacific Funds, as they
may be amended or supplemented from time to time and furnished to the Portfolio
Manager. Subject to such policies as the Board of Trustees may determine and
consistent with Section 28(e) of the Securities Exchange Act of 1934, 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 Funds 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 Funds 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 Securities Exchange Act
of 1934 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 Funds 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"), to any of its
affiliates that are brokers or dealers or FCMs or such other entities which
provide similar services in foreign countries, or to such brokers and dealers
that also provide research or statistical research and material, or other
services to the Funds 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 Adviser and Board of Trustees of Pacific Funds,
indicating the brokers, dealers or FCMs to which such allocations have been made
and the basis therefor.
(e) May, on occasions when the purchase or sale of a security is deemed
to be in the best interest of a Fund 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 Pacific Funds' Registration Statement as furnished to
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 in the judgment of the
Portfolio Manager in the exercise of its fiduciary obligations to Pacific Funds
and to such other clients.
(f) Will, in connection with the purchase and sale of securities for
the Funds, arrange for the transmission to the custodian and recordkeeping agent
for Pacific Funds, 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
Funds, as may be reasonably necessary to enable the custodian and recordkeeping
agent to perform its administrative and recordkeeping responsibilities with
respect to the Funds, 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 Pacific Funds' custodian, and
recordkeeping agent, and, if requested, the Adviser.
(g) Will assist the custodian and recordkeeping agent for Pacific Funds
in determining or confirming, consistent with the procedures and policies stated
in the Registration Statement for the Fund and procedures adopted by Pacific
Funds' Board of Trustees, the value of any portfolio securities or other assets
of the Funds for which the custodian and recordkeeping agent seeks assistance
from the Portfolio Manager or identifies for review by the Portfolio Manager.
(h) Will maintain and preserve such records related to each Fund's
transactions as required under the 1940 Act and the Advisers Act. The Adviser or
Pacific Funds shall maintain and preserve all books and records not related to
the Funds' transactions as required under the 1940 Act and the Advisers Act. The
Portfolio Manager
will make available to the Fund and the Adviser promptly upon request, at all
reasonable times during normal business hours, any of the Funds' 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
Pacific Funds), as are necessary to assist Pacific Funds and the Adviser to
comply with requirements of the 1940 Act and the Advisers Act, as well as other
applicable laws, and will furnish to regulatory authorities having the requisite
authority any information or reports in connection with such services which may
be requested in order to ascertain whether the operations of Pacific Funds are
being conducted in a manner consistent with applicable laws and regulations.
(i) Will regularly report to Pacific Funds' Board of Trustees on the
investment program for the Funds and the issuers and securities represented in
the Funds' *portfolios, and will furnish Pacific Funds' Board of Trustees with
respect to the Funds such periodic and special reports as the Trustees and the
Adviser may reasonably request, including, but not limited to, the monthly
compliance checklist, monthly tax compliance worksheet, reports regarding
compliance with Pacific Funds' procedures pursuant to Rules 17e-1, 17a-7, 10f-3
and 12d3-1 under the Investment Company Act of 1940, fundamental investment
restrictions, liquidity determination of securities purchased pursuant to Rule
144A and 4(2) commercial paper, and compliance with Pacific Funds' or, if
adopted by the Board of Trustee's, the Portfolio Manager's Code of Ethics, and
such other procedures or requirements that the Pacific Funds or Adviser may
request from time to time.
(j) Will not disclose or use any records or information specifically
designated, in writing, as confidential and which is obtained pursuant to this
Agreement (excluding investment research and investment advice and any
information which is otherwise publicly available) 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 (excluding investment research and
advice) obtained pursuant to the Agreement, and disclose such information only
if the Board of Trustees of Pacific Funds 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. Except as required by law
(including, but not limited to semi-annual, annual or other filings made under
the 0000 Xxx) or as agreed to by the Adviser and Portfolio Manager, Pacific
Funds and the Adviser will not disclose or use any records or information
respecting the Portfolio Manager obtained pursuant to this Agreement and that is
specifically designated, in writing, as confidential, which, in any event, shall
be deemed to include any list of securities purchased or sold by the Funds for a
period of 15 days after month end, or any list of securities held by the Funds
for 90 days after month end in any manner whatsoever except as expressly
authorized in this Agreement, and except that the top ten holdings of a Fund may
be disclosed 15 days after month end, 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 of Trustees of
Pacific Funds 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. Nothing in this paragraph (j) is intended to
prevent any party from using or disclosing information that is already in the
public domain or independently produced.
(k) Shall not permit any employee of the Portfolio Manager to have any
material connection with the handling of the Funds 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
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.
(l) Shall provide to Adviser a copy of Portfolio Manager's Form ADV as
filed with the Securities and Exchange Commission and a list of persons who
Portfolio Manager wishes to have authorized to give written and/or oral
instructions to Custodians of Pacific Funds assets for the Funds.
3. Disclosure about Portfolio Manager. The Portfolio Manager has reviewed
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the current Registration Statement for Pacific Funds and agrees to promptly
review future Registration Statements, including any supplements thereto which
relate to Portfolio Manager or the Funds, 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 about the Portfolio Manager or information relating, directly
or indirectly, to the Portfolio Manager or the Funds or any performance
information the Portfolio Manager provides that is 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 contained therein not misleading; provided, however, that the
Portfolio Manager makes no representations or warranties regarding (a) the
accuracy or
adequacy of any disclosure in such Registration Statement regarding the degree
and nature of the risks associated with particular types of investments (other
than any instruments unique to the Funds about which the Adviser has asked the
Portfolio Manager in writing (which may include an e-mail to AIM's legal
counsel) for risk disclosure), or (b) any disclosure in the Registration
Statement with respect to which the Adviser did not include information provided
by the Portfolio Manager expressly or where the Portfolio Manager was not
provided with a reasonable amount of time to make comment, which shall be
presumed to be ten working days. The Portfolio Manager further represents and
warrants that it is a duly registered investment adviser under the Advisers Act
and a duly registered investment adviser in all states in which the Portfolio
Manager is required to be registered. The Adviser has received a current copy of
the Portfolio Manager's Uniform Application for Investment Adviser Registration
on Form ADV, as filed with the SEC. On an annual basis, (or more frequently if
requested by the Adviser or Pacific Funds' Board of Trustees) the Portfolio
Manager agrees to provide the Adviser with current copies of the Portfolio
Manager's Form ADV, and any supplements or amendments thereto, as filed with the
SEC.
4. Expenses. The Portfolio Manager shall bear all expenses incurred by
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it and its staff and for their activities in connection with the performance if
its services under this Agreement. Each Fund 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 relating to local administration of
securities; fees for any pricing services; costs of regulatory compliance; and
pro rata costs associated with maintaining Pacific Funds' legal existence and
shareholder relations. All other expenses not specifically assumed by the
Portfolio Manager hereunder or by the Adviser under the Advisory Agreement are
borne by the applicable Fund of Pacific Funds.
5. Compensation. For the services provided and the expenses borne by the
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Portfolio Manager pursuant to this Agreement, the Adviser will pay to the
Portfolio Manager a fee in accordance with the Fee Schedule attached to this
Agreement. This fee will be computed and accrued daily and payable monthly.
These fees for services shall be prorated for any portion of a year in which the
Agreement is not effective.
6. Seed Money. The Adviser agrees that the Portfolio Manager shall not be
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responsible for providing money for the initial capitalization of any Fund.
7. Compliance.
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(a) The Portfolio Manager agrees that it shall immediately notify the
Adviser and Pacific Funds (i) in the event that the SEC 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 a fund has ceased to qualify or might not
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code, and (iii) upon having a reasonable basis for believing that a fund
has ceased to comply with the diversification provisions of Section 817(h) of
the Internal Revenue Code or the Regulations thereunder. The Portfolio Manager
further agrees to notify the Adviser and Pacific Funds 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 Pacific Funds, or any amendment or supplement thereto, or of any
statement contained therein that becomes untrue in any material respect.
(b) The Adviser agrees that it shall immediately notify the Portfolio
Manager (i) in the event that the SEC has censured the Adviser or Pacific Funds;
placed limitations upon either of their activities, functions, or operations;
suspended or revoked the 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 Fund has
ceased to qualify or might not qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code, and (iii) upon having a reasonable
basis for believing that a Fund has ceased to comply with the diversification
provisions of Section 817(h) of the Internal Revenue Code or the Regulations
thereunder.
8. Independent Contractor. The Portfolio Manager shall for all purposes
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herein be deemed to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Adviser from time to time, have
no authority to act for or represent the 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 Pacific Funds, the Portfolio Manager shall
have no authority to act for or represent Pacific Funds in any way or otherwise
be deemed Pacific Funds' Agent.
9. Documents. Pacific Funds or Adviser has furnished, or will furnish prior
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to the commencement of responsibilities by the Portfolio Manager under this
Agreement, copies of each of the following documents to the Portfolio Manager:
(a) The Declaration of Trust of the Trust as in effect on the date
hereof;
(b) The By-laws of the Trust in effect on the date hereof;
(c) The resolutions of the Trustees approving the engagement of the
Portfolio Manager as subadviser to the Adviser and approving the form of this
agreement;
(d) A certificate of an officer of Pacific Funds which indicates that
shareholders (which may consist of the sole shareholder) have approved this
Agreement;
(e) The resolutions of the Trustees selecting the Adviser as investment
adviser to the Trust and approving the form of the Advisory Agreement with the
Trust;
(f) The Advisory Agreement with the Trust;
(g) The Code of Ethics of the Trust as currently in effect; and
(h) A list specifically identifying those companies that are:
1. First-tier affiliates as that term is defined in the 1940 Act
of the Fund or the Portfolio.
2. Second-tier affiliates of Pacific Funds or the Funds.
(i) The current procedures and policies of Pacific Funds or a Fund.
(j) The current registration statement of Pacific Funds.
(k) A list of restricted securities, if any, which may not be bought or
sold for the Fund.
The Adviser further agrees to provide amendments or supplements to the above-
referenced documents promptly and further agrees to provide as much advance
notice as practicable with respect to items (h), (i), (j) and (k) so as to
provide Portfolio Manager a reasonable amount of time to prepare for such
changes.
10. Cooperation. Each party to this Agreement agrees to cooperate with
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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 Pacific Funds.
11. Responsibility and Control. Notwithstanding any other provision
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of this Agreement, it is understood and agreed that Pacific Funds shall at all
times retain the ultimate 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.
12. Services Not Exclusive. It is understood that Portfolio Manager now
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acts, will continue to act and may act in the future as investment manager or
adviser to fiduciary and other managed accounts, and as investment manager or
adviser to other investment companies, including any offshore entities, or
accounts, and Pacific Funds has no objection to the Portfolio Manager so acting,
provided that whenever a Fund and one or more other investment companies or
accounts managed or advised by the Portfolio
Manager have available funds for investment, investments suitable and
appropriate for each will be allocated in accordance with a formula that is
equitable to each company and account including the Fund, which formula and
allocation to a Fund may be subject to review by Pacific Funds' Board of
Trustees upon its reasonable request. Pacific Funds and the Adviser recognize
that in some cases this procedure may adversely affect the size of the position
obtainable for such Fund. Furthermore, it is understood that the services of the
Portfolio Manager 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 Funds) or from
engaging in other lawful activities.
13. Liability. Except as provided in Section 14 and as may otherwise be
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required by the 1940 Act or the rules thereunder or other applicable law,
Pacific Funds and the 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
gross negligence in the performance of the Portfolio Manager's duties, or by
reason of reckless disregard of the Portfolio Manager's obligations and duties
under this Agreement. The parties hereto agree that the Portfolio Manager shall
not be liable for any failure to recommend the purchase or sale of any security
on behalf of any Fund on the basis of information which might, in the Portfolio
Manager's opinion, constitute a violation of any federal or state laws, rules or
regulations. Notwithstanding the foregoing, nothing contained in this Agreement
shall constitute a waiver or limitation of rights that Pacific Funds may have
under federal or state securities laws.
14. Indemnification.
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(a) The Portfolio Manager agrees to indemnify and hold harmless, the
Adviser, any affiliated person within the meaning of Section 2(a)(3) of the 1940
Act ("affiliated person") of the Adviser, and each person, if any, who, within
the meaning of Section 15 of the 1933 Act, controls ("controlling person") the
Adviser (collectively, "PL Indemnified Persons") against any and all losses,
claims, damages, liabilities or litigation (including legal and other expenses),
to which the Adviser or such affiliated person or controlling person may become
subject under the 1933 Act, 1940 Act, the Advisers Act, under any other statute,
at common law or otherwise, arising out of the Portfolio Manager's
responsibilities to Pacific Funds 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 Managers 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 Adviser or any affiliated person or controlling person of the
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 obligation and duties under this Agreement.
(b) The 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 legal and other
expenses) to which a Portfolio Manager 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 Adviser's responsibilities as
adviser of Pacific Funds which may be based upon any willful misfeasance,
bad faith or gross negligence by the Adviser, any of its employees or any
affiliate acting on behalf of the Adviser (other than a Portfolio Manager
Indemnified Person); provided however, that in no case is the indemnity of the
Adviser 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
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of the date of execution first written above, and shall continue in effect for
two years for a term ending December 31, 2002 and continue thereafter on an
annual basis with respect to each Fund; provided that such annual continuance is
specifically approved at least annually (a) by the vote of a majority of the
Board of Trustees of Pacific Funds, or (b) by the vote of a majority of the
outstanding voting shares of each Fund, and provided that continuance is also
approved by the vote of a majority of the Board of Trustees of Pacific Funds who
are not parties to this Agreement or "interested persons" (as such term is
defined in the 1940 Act) of Pacific Funds, the 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 Fund:
(a) by Pacific Funds at any time with respect to the services provided
by the Portfolio Manager, without the payment of any penalty, forfeiture,
compulsory buyout amount, or performance of any other obligation which could
deter termination, by vote of a majority of the entire Board of Trustees of
Pacific Funds or by a vote of a majority of the outstanding voting shares of
Pacific Funds or, with respect to a particular Fund, by vote of a majority of
the outstanding voting shares of such Fund, on 60 days' written notice to the
Portfolio Manager and the Adviser;
(b) by the Portfolio Manager at any time, without the payment of any
penalty, forfeiture, compulsory buyout amount or performance of any other
obligation which could deter termination, upon 60 days' written notice to the
Adviser and Pacific Funds.
(c) by the Adviser at any time, without the payment of any penalty,
forfeiture, compulsory buyout amount or performance of any other obligation
which could deter termination, upon 60 days' written notice to the Portfolio
Manager and Pacific Funds.
Any approval of this Agreement by the holders of a majority of the
outstanding shares (as defined in the 0000 Xxx) of a particular Fund shall be
effective to continue this Agreement with respect to such Fund notwithstanding
(a) that this Agreement has not been approved by the holders of a majority of
the outstanding shares of any other Fund or (b) that this Agreement has not been
approved by the vote of a majority of the outstanding shares of Pacific Funds,
unless such approval shall be required by any other applicable law or otherwise.
This Agreement will terminate automatically in event of its assignment (as
that term is defined in the 1940 Act), but shall not terminate in connection
with any transaction not deemed an assignment within the meaning of Rules 2a-6
under the 1940 Act, or any other rule adopted by the SEC regarding transactions
not deemed to be assignments. In the event this Agreement is terminated or is
not approved in the manner described above, the Sections or Paragraphs numbered
2(h) for a period of six years, and 10, 11, 13, 14 and 16 of this Agreement as
well as any applicable provision of this Paragraph numbered 15 shall remain in
effect.
16. Use of Name.
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(a) It is understood that the name "Pacific Life Insurance Company"
and "Pacific Life", and "Pacific Funds" and any derivative thereof or logo
associated with that name is the valuable property of the Adviser and its
affiliates, and that the Portfolio Manager has the right to use such name (or
derivative or logo) only with the approval of the Adviser and only so long as
the Adviser is an investment adviser to Pacific Funds and/or the Funds. Upon
termination of the Investment Advisory Agreement between Pacific Funds and the
Adviser, the Portfolio Manager shall forthwith cease to use such name (or
derivative or logo).
(b) It is understood that the name AIM or A I M Capital Management,
Inc. and the names of the Portfolio Managers' affiliates, and any derivatives
thereof or logo associated with those names are the valuable property of the
Portfolio Manager and that the Adviser and its affiliates and Pacific Funds
have the right to use such name (or derivative or logo), in sales materials of
Pacific Funds and/or Funds with prior review and approval of the Portfolio
Manager as provided in paragraph (c) below, and for so long as the Portfolio
Manager is a Portfolio Manager to Pacific Funds and/or one of the Funds. Upon
termination of this Agreement between Pacific Funds, the Adviser and the
Portfolio Manager, Pacific Funds and the Adviser shall forthwith cease to use
such name (or derivative or logo). It is specifically agreed that Pacific Funds
and Adviser and its affiliates may use the Portfolio Manager's logo in Pacific
Fund prospectus or sales literature as provided in this Agreement.
(c) Neither Pacific Funds nor the Adviser shall use the Portfolio
Manager's name or the names of any of its affiliates, derivatives thereof, or
logos associated with those names in promotional or sales related materials
prepared by or on behalf of the Adviser or Pacific Funds, without prior review
and approval by the Portfolio Manager, which may not be unreasonably withheld
and which the Portfolio Manager agrees shall be conducted within ten calendar
days.
17. Limitation of Liability.
-----------------------
A copy of the Agreement and Declaration of Trust for Pacific Funds is on file
with the Secretary of the State of Delaware. The Agreement and 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 shall be binding upon the assets and property of Pacific Funds and
shall not be binding upon any Trustee, officer, employee, agent or shareholder,
whether past, present, or future, of Pacific Funds individually.
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:
A I M Capital Management, Inc.
00 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Facsimile transmission number: 000-000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
B. if to the Adviser, to:
Pacific Life Insurance Company
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Facsimile transmission number: 000-000-0000
Attention: Xxxxx X. Xxxxx
C. if to Pacific Funds, to:
Pacific Funds
c/o Pacific Life Insurance Company
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Facsimile transmission number: 000-000-0000
Attention: Xxxxx X. Xxxxx
Each such notice or other communication shall be effective (i) if given by telex
or facsimile transmission, when such telex or facsimile is transmitted to the
number specified in this section and the appropriate answer back or confirmation
is received, and (ii) if given by any other means, when delivered at the address
specified in this section
19. Miscellaneous.
-------------
(a) This Agreement shall be governed by the laws of California,
provided that nothing herein shall be construed in a manner inconsistent with
the 1940 Act, the Investment Advisers Act of 1940 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, 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) The parties hereto acknowledge that while Portfolio Manager will,
to the extent practicable, invest the assets of the Portfolios in a similar
investment style to certain other mutual funds advised by Portfolio Manager or
its affiliates, these Funds should not be considered "clones" of such other
mutual funds, and there may be differences between the specific securities and
the proportionate amount of any particular security held in any Fund and
held by such other mutual funds.
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
Attest: By:
----------------------------------- ---------------------
Name: Name:
Title: Title:
A I M CAPITAL MANAGEMENT, INC.
Attest: By:
----------------------------------- -------------------------
Name: Name:
Title: Title:
PACIFIC FUNDS
Attest: By:
----------------------------------- -------------------------
Name: Name:
Title: Title:
FEE SCHEDULE
Fund: PF AIM Blue Chip
Fee: The Adviser will pay to the Fund Manager a monthly fee based on an annual
percentage of the combined average daily net assets of the PF AIM Blue
Chip Fund and the Blue Chip Portfolio of the Pacific Select Fund,
according to the following schedule:
.55% On first $500 million
.50% On excess
Fund: PF AIM Aggressive Growth
Fee: The Adviser will pay to the Fund Manager a monthly fee based on an annual
percentage of the combined average daily net assets of the PF AIM
Aggressive Growth Fund and the Aggressive Growth Portfolio of the Pacific
Select Fund, according to the following schedule:
.60% On first $500 million
.55% On excess
The subadvisory fee schedules apply to each Fund on an individual basis (no
consolidating of assets).
These fees for services shall be prorated for any portion of a year in which the
Agreement is not effective.
