EXHIBIT (d)(4)
FORM OF
FUND MANAGEMENT AGREEMENT
AGREEMENT made this ___ day of _______, 2001 between Pacific Life Insurance
Company, ("Adviser"), a California corporation, and Salomon Brothers Asset
Management Inc, ("Portfolio Manager"), a Delaware corporation, and Pacific
Funds ("Pacific Funds"), a Delaware Business Trust.
WHEREAS, the 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 of which is
designated as the ▇▇ ▇▇▇▇▇▇▇ Brothers Large-Cap Value Fund, such Fund together
with any other Funds subsequently established by Pacific Funds, with respect to
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, being herein collectively referred to also as the
"Funds"; 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 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 Fund 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 between Pacific Funds, the Adviser, and
the Portfolio Manager as follows:
1. Appointment. Pacific Funds and the Adviser hereby appoint Portfolio
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Manager to act as portfolio manager to the ▇▇ ▇▇▇▇▇▇▇ Brothers Large-Cap
Value Fund ("the Fund") 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 funds other than the Fund, the
Adviser shall notify the Portfolio Manager in writing. If the Portfolio Manager
is willing to render such services, it shall notify the Pacific Funds and
Adviser in writing, whereupon such fund 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 Fund and determine the
composition of the assets of the Fund, including determination of the
purchase, retention, or sale of the securities, cash, and other
investments, including futures contracts and options thereon, for the
Fund. The Portfolio Manager will provide investment research and
analysis, which may consist of computerized investment methodology, and
will conduct a continuous program of evaluation, investment, sales, and
reinvestment of the Fund's assets by determining the securities and other
investments that shall be purchased, entered into, sold, closed, or
exchanged for the Fund, when these transactions should be executed, and
what portion of the assets of the Fund 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 Fund. To the extent permitted by the investment
policies of the Fund, the Portfolio Manager shall make decisions for the
Fund 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 Fund. The Portfolio Manager is
authorized to exercise tender offers, exchange offers and to vote proxies
on behalf of the Pacific Funds, each as the Portfolio Manager determines
is in the best interest of the Pacific Funds. In performing these duties,
the Portfolio Manager:
(a) Will manage the Fund so that it will qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code.
(b) Shall 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 Pacific Funds, the Adviser or the Portfolio Manager and which have been
delivered to 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 procedures, policies and guidelines adopted by Pacific Funds'
Board of Trustees, (4) with the Fund's objectives, investment policies and
investment restrictions as stated in Pacific Funds' Prospectus and
Statement of Additional Information, 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 previously furnished to
the Portfolio Manager by the Adviser.
(c) Will: (I) use its best efforts to identify each position in the Fund
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 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
Fund, 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 Fund, 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.
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 Fund to pay a broker or dealer including a broker
or dealer affiliated with the Portfolio Manager, acting as agent, for
effecting a fund 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 Fund 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 Fund 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 Fund 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. 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
Portfolio, together with the Adviser, 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 Fund, as may be
reasonably necessary to enable the custodian and recordkeeping agent to
perform its administrative and recordkeeping responsibilities with respect
to the Fund, and with respect to fund 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 required, 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 Pacific Funds, the value of any
fund securities or other assets of the Fund for which the
custodian and recordkeeping agent seeks assistance from the Portfolio
Manager or identifies for review by the Portfolio Manager.
(h) Will make available to Pacific Funds and the Adviser promptly upon request,
any of the Fund's 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 Fund and the issuers and securities represented
in the Fund's portfolio, and will furnish Pacific Funds' Board of Trustees
with respect to the fund 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, procedures for opening brokerage
accounts and commodity trading accounts, liquidity determination of
securities purchased pursuant to Rule 144A AND 4(2) commercial paper, and
compliance with the Portfolio Manager's Code of Ethics, and such other
procedures or requirements that the Adviser may reasonably request from
time to time.
(j) 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 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.
Pacific Funds and the 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 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.
(k) Shall not permit any employee of the Portfolio Manager to have any
material connection with the handling of the Fund if, to the knowledge of
the Portfolio Manager after reasonable inquiry, such employee has:
(i) been convicted, in the last ten (10) years, of any felony or
misdemeanor involving the purchase or sale of any security or
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 of
any investment company, bank, insurance company, or entity or person
required to be registered under the Commodity Exchange Act; or
(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 Fund.
3. Disclosure about Portfolio Manager. The Portfolio Manager has reviewed the
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current Registration Statement for Pacific Funds filed with the SEC and
represents and warrants that, with respect to the disclosure about the
Portfolio Manager or information relating, directly or indirectly, to the
Portfolio Manager, such Registration Statement contains, as of the date
hereof, no untrue statement of any material fact and does not omit any
statement of a material fact which was required to be stated therein or
necessary to make the statements contained therein
not misleading. 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.
4. Expenses. During the term of this Agreement, the Portfolio Manager will
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pay all expenses incurred by it and its staff and for their activities in
connection with its services under this Agreement. The Portfolio Manager
shall not be responsible for any of the following:
(a) Expenses of all audits by Pacific Funds' independent public
accountants;
(b) Expenses of Pacific Funds' transfer agent, registrar, dividend
disbursing agent, and shareholder recordkeeping services;
(c) Expenses of Pacific Funds' custodial services including recordkeeping
services provided by the custodian;
(d) Expenses of Pacific Funds' recordkeeping services provided by the
recordkeeping agent;
(e) Expenses of obtaining quotations for calculating the value of the
Funds' net assets;
(f) Expenses of obtaining fund activity reports for each Fund;
(g) Expenses of maintaining Pacific Funds' tax records;
(h) Salaries and other compensation of any of Pacific Funds' executive
officers and employees, if any, who are not officers, directors,
stockholders, or employees of the Portfolio Manager or its
subsidiaries or affiliates (except that the Adviser, or any of its
subsidiaries or affiliates, shall bear the expense with respect to
executive officers and employees, if any, who are officers, directors,
stockholders or employees of the Adviser or of its subsidiaries or
affiliates);
(i) Taxes, if any, levied against Pacific Funds or any of its Funds;
(j) Brokerage fees and commissions in connection with the purchase and
sale of portfolio securities for the Fund;
(k) Costs, including the interest expenses, of borrowing money;
(l) Costs and/or fees incident to meetings of Pacific Funds' shareholders,
the preparation and mailings of proxy statements, prospectuses,
statements of additional information and reports of the Fund to its
shareholders, the filing of reports with regulatory bodies, the
maintenance of Pacific Funds'
existence, and the registration of shares with federal and state
securities or insurance authorities;
(m) Pacific Funds' legal fees, including the legal fees related to the
registration and continued qualification of Pacific Funds' shares for
sale;
(n) Costs of printing "share" stock certificates, if any, representing
shares of Pacific Funds;
(o) Trustees' fees and expenses of Trustees of Pacific Funds who are not
officers, employees, or stockholders of the Portfolio Manager or any
affiliate thereof (except that the Adviser shall bear the expense of
any trustee who is an officer, employee, or stockholder of the Adviser
or any affiliate thereof);
(p) Pacific Funds' fidelity bond required by Section 17(g) of the 1940
Act, or other insurance premiums;
(q) Association membership dues;
(r) Extraordinary expenses of Pacific Funds as may arise including
expenses incurred in connection with litigation, proceedings and other
claims and the legal obligations of Pacific Funds to indemnify its
trustees, officers, employees, shareholders, distributors, and agents
with respect thereto (unless Portfolio Manager is responsible for such
expenses under Section 14 of this Agreement); and
(s) Organizational and offering expenses and, if applicable, reimbursement
(with interest) of underwriting discounts and commissions.
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 in the event (I) that the SEC has censured
the Portfolio Manager; placed limitations upon its activities,
functions or operations; suspended or revoked its registration 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 Code, and (iii) upon having a reasonable basis for believing
that the Fund has ceased to comply with the diversification provisions
of Section 817(h) of the 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 in the event (I) 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 Code, and (iii) upon having a reasonable basis for
believing that the Fund has ceased to comply with the diversification
provisions of Section 817(h) of the 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. Books and Records. In compliance with the requirements of Rule 31a-3 under
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the 1940 Act, the Portfolio Manager hereby agrees that all records which it
maintains for the Fund are the property of Pacific Funds and further agrees
to surrender promptly to Pacific Funds any of such records upon Pacific
Funds' or the Adviser's request, although the Portfolio Manager may, at
its own expense, make and retain a copy of such records. The Portfolio
Manager further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1
under the 1940 Act and to preserve the records required by Rule 204-2 under
the Advisers Act for the period specified in the Rule.
10. Cooperation. Each party to this Agreement agrees to cooperate with each
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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
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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 the services of the
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Portfolio Manager are not exclusive, and nothing in this Agreement shall
prevent the Portfolio Manager (or its 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
Fund) or from engaging in other 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 within the meaning of Section 2(a)(3) of the 1940 Act
("affiliated person") 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 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.
14. Indemnification.
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(a) The Portfolio Manager agrees to indemnify and hold harmless, the
Adviser, any affiliated person of the Adviser, and each controlling
person, if any, who, controls 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 the Trust which (I) may be
based upon any willful misfeasance, bad faith, or gross negligence of,
or by 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),
or (ii) may be 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 Fund, 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 Adviser, the Trust, or any affiliated person of the Trust by the
Portfolio Manager or any affiliated person 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 PL
Indemnified Person 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 of the Portfolio Manager and each
controlling person, if any, who, controls 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 or out of this Agreement which (I) 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) or (ii) may be based upon any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or prospectus covering Shares
of Pacific Funds or any Fund, 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 statement therein not misleading, unless such statement or
omission was made in reliance upon written information furnished to
Pacific Funds or the Adviser or any affiliated person of the Adviser
by a Portfolio Manager Indemnified Person (other than an Adviser
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 of the
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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 the 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 (as defined under the ▇▇▇▇ ▇▇▇) 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 not be materially amended
without a majority vote of the outstanding shares (as defined in the ▇▇▇▇
▇▇▇) of the Fund. This Agreement may be terminated:
(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.
However, any approval of this Agreement by the holders of a majority of the
outstanding shares (as defined in the ▇▇▇▇ ▇▇▇) 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. In the event of termination for any reason, all
records of the Fund shall promptly be returned to the Adviser or Pacific Funds,
free from any claim or retention of rights in such record by the Portfolio
Manager, although the Portfolio Manager may, at its own expense, make and retain
a copy of such records. 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), 2(j), 9, 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 Fund. 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 "Salomon Brothers Asset Management" or
"SBAM" or any derivative thereof or logo associated with that name is
the valuable property of the Portfolio Manager and that the Adviser
has the right to use such name (or derivative or logo), in offering
materials of Pacific Funds and/or Fund with the approval of the
Portfolio Manager and for so long as the Portfolio Manager is a
Portfolio Manager to Pacific Funds and/or the Fund. 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).
(c) Neither Pacific Funds nor the Advisers shall use the Portfolio
Manager's name (or that of any affiliate, including the name "Salomon
Brothers Asset Management") 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.
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
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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:
Salomon Brothers Asset Management, Inc.
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile transmission number: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
B. if to the Adviser, to:
Pacific Life Insurance Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile transmission number: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
C. if to the Fund, to:
Pacific Funds
c/o Pacific Life Insurance Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile transmission number: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
19. Miscellaneous.
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(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 Advisers Act or rules or orders of the SEC
thereunder.
(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.
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:
SALOMON BROTHERS ASSET MANAGEMENT INC
Attest: By:
------------------------------- ---------------------------------
Name: Name:
Title: Title:
PACIFIC FUNDS
Attest: By:
------------------------------- ------------------------------------
Name: Name:
Title: Title:
PACIFIC FUNDS
FEE SCHEDULE
Fund: ▇▇ ▇▇▇▇▇▇▇ Brothers Large-Cap Value
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 ▇▇ ▇▇▇▇▇▇▇
Brothers Large-Cap Value Fund and the Large-Cap Value Portfolio of the
Pacific Select Fund, according to the following schedule:
.45% On first $100 million
.40% On next $100 million
.35% On next $200 million
.30% On next $350 million
.25% On next $250 million
.20% On excess
These fees for services shall be prorated for any portion of a year in which the
Agreement is not effective.