WNL SERIES TRUST
SUB-ADVISORY AGREEMENT
AGREEMENT dated as of October 31, 1996, among XXX XXXXXX AMERICAN CAPITAL
ASSET MANAGEMENT, INC., a Delaware corporation (the "Sub-Adviser"), WNL
INVESTMENT ADVISORY SERVICES, INC., a Delaware corporation (the "Adviser"),
and WNL SERIES TRUST, a Massachusetts business trust (the "Trust").
WHEREAS, Adviser has entered into an Investment Advisory Agreement
(referred to herein as the "Advisory Agreement"), dated October 31, 1996, with
the Trust, under which Adviser has agreed to act as investment adviser to the
Trust, which is registered as an open-end diversified management investment
company under the Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Advisory Agreement provides that the Adviser may engage a
sub-adviser or sub-advisers for the purpose of managing the investments of the
Portfolios of the Trust; and
WHEREAS, the Adviser desires to retain Sub-Adviser, which is engaged in
the business of rendering investment management services, to provide certain
investment management services for the Xxx Xxxxxx American Capital Emerging
Growth Portfolio (the "Portfolio") of the Trust as more fully described below;
and
WHEREAS, it is the purpose of this Agreement to express the mutual
agreements of the parties hereto with respect to the services to be provided
by Sub-Adviser to Adviser with respect to the Portfolio and the terms and
conditions under which such services will be rendered.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties hereto agree as follows:
1. SERVICES OF SUB-ADVISER. The Sub-Adviser shall act as investment
counsel to the Adviser with respect to the Portfolio. In this capacity,
Sub-Adviser shall have the following responsibilities:
(a) to furnish continuous investment information, advice and
recommendations to the Adviser as to the acquisition, holding or disposition
of any or all of the securities or other assets which the Portfolio may own or
contemplate acquiring from time to time;
(b) to cause its officers to attend meetings of the Adviser or
the Trust and furnish oral or written reports, as the Adviser may reasonably
require, in order to keep the Adviser and its officers and the Trustees of the
Trust and appropriate officers of the Trust fully informed as to the condition
of the investment securities of the Portfolio, the investment recommendations
of the Sub-Adviser, and the investment considerations which have given rise to
those recommendations;
(c) to furnish such statistical and analytical information and
reports as may reasonably be required by the Adviser from time to time; and
(d) to supervise and place orders for the purchase, sale,
exchange and conversion of securities as directed by the appropriate officers
of the Trust or of the Adviser.
2. OBLIGATIONS OF THE ADVISER. The Adviser shall have the following
obligations under this Agreement:
(a) to keep the Sub-Adviser continuously and fully informed as
to the composition of the Portfolio's investment securities and the nature of
the Portfolio's assets and liabilities;
(b) to keep the Sub-Adviser continually and fully advised of the
Portfolio's investment objectives, and any modifications and changes thereto,
as well as any specific investment restrictions or limitations by sending the
Sub-Adviser copies of each registration statement;
(c) to furnish the Sub-Adviser with a certified copy of any
financial statement or report prepared for the Trust with respect to the
Portfolio by certified or independent public accountants, and with copies of
any financial statements or reports made by the Trust to shareholders or to
any governmental body or securities exchange and to inform the Sub-Adviser of
the results of any audits or examinations by regulatory authorities pertaining
to the Portfolio, if these results affect the services provided by the
Sub-Adviser pursuant to this Agreement;
(d) to furnish the Sub-Adviser with any further materials or
information which the Sub-Adviser may reasonably request to enable it to
perform its functions under this Agreement; and
(e) to compensate the Sub-Adviser for its services under this
Agreement by the payment of fees as set forth in Exhibit A attached hereto.
3. PORTFOLIO TRANSACTIONS. The Sub-Adviser shall place all orders for
the purchase and sale of portfolio securities for the account of the Portfolio
with broker-dealers selected by the Sub-Adviser. In executing portfolio
transactions and selecting broker-dealers, the Sub-Adviser will use its best
efforts to seek best execution on behalf of the Portfolio. In assessing the
best execution available for any transaction, the Sub-Adviser shall consider
all factors it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker-dealer, and the reasonableness of the commission, if
any (all for the specific transaction and on a continuing basis). In
evaluating the best execution available, and in selecting the broker-dealer to
execute a particular transaction, the Sub-Adviser may also consider the
brokerage and research services (as those terms are used in Section 28(e) of
the Securities Exchange Act of 1934) provided to the Portfolio and/or other
accounts over which the Sub-Adviser, an affiliate of the Sub-Adviser (to the
extent permitted by law) or another investment adviser of the Portfolio
exercises investment discretion. The Sub-Adviser is authorized to cause the
Portfolio to pay a broker-dealer who provides such brokerage and research
services a commission for executing a portfolio transaction for the Portfolio
which is in excess of the amount of commission another broker-dealer would
have charged for effecting that transaction if, but only if, the Sub-Adviser
determines in good faith that such commission was reasonable in relation to
the value of the brokerage and research services provided by such
broker-dealer viewed in terms of that particular transaction or in terms of
all of the accounts over which investment discretion is so exercised.
4. MARKETING SUPPORT. The Sub-Adviser shall provide marketing support
to the Adviser in connection with the sale of Trust shares and/or the sale of
variable annuity and variable life insurance contracts issued by Western
National Life Insurance Company and its affiliates which may invest in the
Trust (collectively, the "Life Company"), as reasonably requested by the
Adviser. Such support shall include, but not necessarily be limited to,
presentations by representatives of the Sub-Adviser at investment seminars,
conferences and other industry meetings. Any materials utilized by the
Adviser which contain any information relating to the Sub-Adviser shall be
submitted to the Sub-Adviser for approval prior to use, not less than five (5)
business days before such approval is needed by the Adviser. Any materials
utilized by the Sub-Adviser which contain any information relating to the
Adviser, the Life Company (including any information relating to its separate
accounts or variable annuity or variable life insurance contracts) or the
Trust shall be submitted to the Adviser for approval prior to use, not less
than five (5) business days before such approval is needed by the Sub-Adviser.
5. GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the laws of the Commonwealth of Massachusetts.
6. EXECUTION OF AGREEMENT. This Agreement will become binding on the
parties hereto upon their execution of the attached Exhibit A to this
Agreement.
7. COMPLIANCE WITH LAWS. The Sub-Adviser represents that it is, and
will continue to be throughout the term of this Agreement, an investment
adviser registered under all applicable federal and state laws. In all
matters relating to the performance of this Agreement, the Sub-Adviser will
act in conformity with the Trust's Declaration of Trust, Bylaws, and current
registration statement applicable to the Portfolio and with the instructions
and direction of the Adviser and the Trust's Trustees, and will conform to and
comply with the 1940 Act and all other applicable federal or state laws and
regulations.
8. TERMINATION. This Agreement shall terminate automatically upon the
termination of the Advisory Agreement. This Agreement may be terminated at
any time, without penalty, by the Adviser or by the Trust by giving sixty (60)
days' written notice of such termination to the Sub-Adviser at its principal
place of business, provided that such termination is approved by the Board of
Trustees of the Trust or by vote of a majority of the outstanding voting
securities (as that phrase is defined in Section 2(a)(42) of the 0000 Xxx) of
the Portfolio. This Agreement may be terminated at any time by the
Sub-Adviser by giving 60 days' written notice of such termination to the Trust
and the Adviser at their respective principal places of business.
9. ASSIGNMENT. This Agreement shall terminate automatically in the
event of any assignment (as that term is defined in Section 2(a)(4) of the
0000 Xxx) of this Agreement.
10. TERM. This Agreement shall begin on the date of its execution and
unless sooner terminated in accordance with its terms shall continue in effect
until April 30, 1997 and from year to year thereafter provided continuance is
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons (as the
term is defined in Section 2(a)(19) of the 0000 Xxx) of any such party, cast
in person at a meeting called for the purpose of voting on the approval of the
terms of such renewal, and by either the Trustees of the Trust or the
affirmative vote of a majority of the outstanding voting securities of the
Portfolio (as that phrase is defined in Section 2(a)(42) of the 1940 Act).
11. AMENDMENTS. This Agreement may be amended only with the approval by
the affirmative vote of a majority of the outstanding voting securities of the
Portfolio (as that phrase is defined in Section 2(a)(42) of the 0000 Xxx) and
the approval by the vote of a majority of the Trustees of the Trust who are
not parties hereto or interested persons (as that term is defined in Section
2(a)(19) of the 0000 Xxx) of any such party, cast in person at a meeting
called for the purpose of voting on the approval of such amendment, unless
otherwise permitted in accordance with the 1940 Act.
12. INDEMNIFICATION. The Adviser shall indemnify and hold harmless the
Sub-Adviser, its officers and directors and each person, if any, who controls
the Sub-Adviser within the meaning of Section 15 of the Securities Act of 1933
("1933 Act") (any and all such persons shall be referred to as "Indemnified
Party"), against any loss, liability, claim, damage or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages or expense and reasonable counsel fees incurred in connection
therewith), arising by reason of any matter to which this Sub-Advisory
Agreement relates. However, in no case (i) is this indemnity to be deemed to
protect any particular Indemnified Party against any liability to which such
Indemnified Party would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties or by reason of
reckless disregard of its obligations and duties under this Sub-Advisory
Agreement or (ii) is the Adviser to be liable under this indemnity with
respect to any claim made against any particular Indemnified Party unless such
Indemnified Party shall have notified the Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the
Sub-Adviser or such controlling persons.
The Sub-Adviser shall indemnify and hold harmless the Adviser and each of
its directors and officers and each person if any who controls the Adviser
within the meaning of Section 15 of the 1933 Act, against any loss, liability,
claim, damage or expense described in the foregoing indemnity, but only with
respect to the Sub-Adviser's willful misfeasance, bad faith or gross
negligence in the performance of its duties under this Sub-Advisory Agreement.
In case any action shall be brought against the Adviser or any person so
indemnified, in respect of which indemnity may be sought against the
Sub-Adviser, the Sub-Adviser shall have the rights and duties given to the
Adviser, and the Adviser and each person so indemnified shall have the rights
and duties given to the Sub-Adviser by the provisions of subsections (i) and
(ii) of this section.
EXHIBIT A
WNL SERIES TRUST
SUB-ADVISORY COMPENSATION
For all services rendered by Sub-Adviser hereunder, Adviser shall pay to
Sub-Adviser and Sub-Adviser agrees to accept as full compensation for all
services rendered hereunder, monthly a fee of:
XXX XXXXXX AMERICAN CAPITAL EMERGING GROWTH PORTFOLIO
.50 of 1% on an annualized basis of net assets under management.
WNL SERIES TRUST
By: /s/ Xxxxxx X. Xxxxxx
---------------------
Xxxxxx X. Xxxxxx
General Counsel and
Senior Vice President-Law
WNL INVESTMENT ADVISORY SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------
Xxxxxx X. Xxxxxx
General Counsel and
Senior Vice President-Law
XXX XXXXXX AMERICAN CAPITAL ASSET
MANAGEMENT, INC.
By: /s/ D_____ J. McD______
------------------------
President and Chief
Operating Officer
A copy of the document establishing the Trust is filed with the Secretary of
the common wealth of Massachusetts. This Agreement is executed by officers
not as individuals and is not binding upon any of the Trustees, officers or
shareholders of the Trust individually but only upon the assets of each
Portfolio.
