EX-99.23(d)(47)
INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT is effective this ____ day of _____________ 2001, by and
between Xxxxxxx National Asset Management, LLC, a Michigan limited liability
company and registered investment adviser ("Adviser"), and Mellon Capital
Management CORPORATION, a Delaware corporation and registered investment adviser
("Sub-Adviser").
WHEREAS, Adviser is the investment manager for the JNL Series Trust
(the "Trust"), an open-end management investment company registered under the
Investment Company Act of 1940, as amended ("1940 Act");
WHEREAS, the Adviser represents that it has entered into an Investment
Advisory and Management Agreement ("Management Agreement") dated as of January
31, 2001, with the Trust; and
WHEREAS, Adviser desires to retain Sub-Adviser as Adviser's agent to
furnish investment advisory services to the investment portfolios of the Trust
listed on Schedule A hereto ("each a Fund").
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Appointment. Adviser hereby appoints Sub-Adviser to provide certain
sub-investment advisory services to the Funds for the period and on the terms
set forth in this Agreement. Sub-Adviser accepts such appointment and agrees to
furnish the services herein set forth for the compensation herein provided.
2. Delivery of Documents. Adviser has or will furnish Sub-Adviser with copies
properly certified or authenticated of each of the following prior to the
commencement of the Sub-Adviser's services:
a) the Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of The Commonwealth of Massachusetts on June 1, 1994,
and all amendments thereto or restatements thereof (such Declaration, as
presently in effect and as it shall from time to time be amended or
restated, is herein called the "Declaration of Trust");
b) the Trust's By-Laws and amendments thereto;
c) resolutions of the Trust's Board of Trustees authorizing the appointment
of Sub-Adviser and approving this Agreement;
d) the Trust's Notification of Registration on Form N-8A under the 1940 Act
as filed with the Securities and Exchange Commission (the "SEC") and all
amendments thereto;
e) the Trust's Registration Statement on Form N-1A under the Securities Act
of 1933, as amended ("1933 Act") and under the 1940 Act as filed with the
SEC and all amendments thereto insofar as such Registration Statement and
such amendments relate to the Funds; and
f) the Trust's most recent prospectus and Statement of Additional
Information for the Funds (collectively called the "Prospectus").
Adviser will furnish the Sub-Adviser with copies of all amendments of or
supplements to the foregoing within a reasonable time before they become
effective. Any amendments or supplements that impact the management of the
Funds will not be deemed effective with respect to the Sub-Adviser until
the Sub-Adviser's approval thereof.
3. Management. Subject always to the supervision of the Adviser, who in turn is
subject to the supervision of the Trust's Board of Trustees, Sub-Adviser will
furnish an investment program in respect of, and make investment decisions for,
all assets of the Funds and place all orders for the purchase and sale of
securities, including foreign or domestic securities or other property
(including financial futures and options of any type), all on behalf of the
Funds. Sub-Adviser is expressly authorized to cause the assets of the Funds to
be invested in Mellon Financial Corporation stock. In the performance of its
duties, Sub-Adviser will satisfy its fiduciary duties to the Funds (as set forth
below), and will monitor the Funds' investments, and will comply with the
provisions of Trust's Declaration of Trust and By-Laws, as amended from time to
time, and the stated investment objectives, policies and restrictions of the
Funds as stated in the current prospectus and Statement of Additional
Information. Sub-Adviser and Adviser will each make its officers and employees
available to the other from time to time at reasonable times to review
investment policies of the Funds and to consult with each other regarding the
investment affairs of the Funds. Sub-Adviser will report to the Board of
Trustees and to Adviser with respect to the implementation of such program.
Sub-Adviser, solely with respect to the assets of the Funds which are under its
management pursuant to this Agreement, is responsible for compliance with the
diversification provisions of Section 817(h) of the Internal Revenue Code of
1986, as amended ("IRC"), and its accompanying Regulation, Treas. Reg. Section
1.817-5, applicable to the Funds.
The anniversary date of each Fund, as defined in Treas. Reg. 1.817-5(c), is the
anniversary of the date on which any amount received under a life insurance or
annuity contract is first allocated to the Fund (i.e.: [date]) and the Funds
shall be considered adequately diversified until their first anniversary date.
Adviser will not act in a manner that would result in Sub-Adviser failing to
maintain the required diversification and if the failure to diversify is
inadvertent, Xxxxxxx National Life Insurance Company and any of its affiliates
investing in the Funds, as owner of the assets in the Funds, shall in good faith
and in conjunction with Sub-Adviser follow the procedures specified in Treas.
Reg. Section 1.817-5(a)(2) and Revenue Procedure 92-25 (or its successor) to
request relief from the Commissioner of Internal Revenue Service, and that in
such an event Adviser shall work in conjunction with Sub-Adviser in the
preparation of any request for relief or closing agreement and, to the extent
that Adviser is seeking indemnification under Section 11 hereof, no filings or
agreements shall be made with the Commissioner of Internal Revenue Service
without the prior written approval of Sub-Adviser.
The Adviser agrees that the Sub-Adviser 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 any information which might, in the Sub-Adviser's opinion, constitute a
violation of any federal or state laws, rules or regulations.
The Sub-Adviser further agrees that it:
a) will use the same skill and care in providing such services as it uses
in providing services to fiduciary accounts for which it has investment
responsibilities;
b) will conform with all applicable Rules and Regulations of the SEC in all
material respects and in addition will conduct its activities under this
Agreement in accordance with any applicable regulations of any governmental
authority pertaining to its investment advisory activities;
c) will report regularly to Adviser and to the Board of Trustees as
reasonably agreed between the Adviser and Sub-Adviser and will make
appropriate persons available for the purpose of reviewing with
representatives of Adviser and the Board of Trustees on a regular basis at
reasonable times agreed to by the Adviser and Sub-Adviser , the management
of the Funds, including, without limitation, review of the general
investment strategies of the Funds, the performance of the Funds in
relation to the specified benchmarks and will provide various other reports
from time to time as reasonably requested by Adviser;
d) will provide to the Adviser (i) a monthly compliance checklist developed
for each Fund by Adviser and Sub-Adviser, and (ii) quarterly reports
developed for each Fund by Adviser and Sub-Adviser;
e) will prepare and maintain such books and records with respect to each
Fund's securities transactions in accordance with Section 7 herein, and
will furnish Adviser and Trust's Board of Trustees such periodic and
special reports as the Adviser may reasonably request;
f) will act upon reasonable instructions from Adviser not inconsistent with
the fiduciary duties and Investment Objectives as stated in the current
prospectus and Statement of Additional Information hereunder;
g) will treat confidentially and as proprietary information of Trust all
such records and other information relative to the Trust maintained by the
Sub-Adviser, and will not use such records and information for any purpose
other than performance of its responsibilities and duties hereunder, except
after prior notification to and approval in writing by Trust, which
approval shall not be unreasonably withheld and may not be withheld where
the Sub-Adviser may be exposed to civil or criminal contempt proceedings
for failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by Trust, provided, however,
that notwithstanding the foregoing, Sub-Adviser may disclose such
information as required by applicable law, regulation or upon request by a
regulator or auditor of Sub-Adviser; and
h) will vote proxies received in connection with securities held by the
Funds consistent with its fiduciary duties hereunder.
4. Custody of Assets. Sub-Adviser shall at no time have the right to physically
possess the assets of the Funds or have the assets registered in its own name or
the name of its nominee, nor shall Sub-Adviser in any manner acquire or become
possessed of any income, whether in kind or cash, or proceeds, whether in kind
or cash, distributable by reason of selling, holding or controlling such assets
of the Funds. In accordance with the preceding sentence, Sub-Adviser shall have
no responsibility with respect to the collection of income, physical acquisition
or the safekeeping of the assets of the Funds. All such duties of collection,
physical acquisition and safekeeping shall be the sole obligation of the
custodian.
5. Brokerage. The Sub-Adviser is responsible for decisions to buy and sell
securities for each Fund, broker-dealer selection, and negotiation of brokerage
commission rates. Sub-Adviser shall have the express authority to negotiate,
open, continue and terminate brokerage accounts and other brokerage arrangements
with respect to all portfolio transactions entered into by Sub-Adviser on behalf
of the Funds. Sub-Adviser will provide copies of all such agreements to the
Adviser. It is the Sub-Adviser's general policy in selecting a broker to effect
a particular transaction to seek to obtain "best execution", which means prompt
and efficient execution of the transaction at the best obtainable price with
payment of commissions which are reasonable in relation to the value of the
brokerage services provided by the broker.
Consistent with this policy, the Sub-Adviser, in selecting broker-dealers and
negotiating commission rates, will take all relevant factors into consideration,
including, but not limited to: the best price available; the reliability,
integrity and financial condition of the broker-dealer; the size of and
difficulty in executing the order; and the value of the expected contribution of
the broker-dealer to the investment performance of the applicable Fund on a
continuing basis. Subject to such policies and procedures as the Trust's Board
of Trustees may determine, the Sub-Adviser shall have discretion to effect
investment transactions for each Fund through broker-dealers (including, to the
extent permissible under applicable law, broker-dealer affiliates) who provide
brokerage and/or research services, as such services are defined in section
28(e) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
to cause such Fund to pay any such broker-dealers an amount of commission for
effecting a portfolio investment transaction in excess of the amount of
commission another broker-dealer would have charged for effecting that
transaction, if the Sub-Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage or research
services provided by such broker-dealer, viewed in terms of either that
particular investment transaction or the Sub-Adviser's overall responsibilities
with respect to such Fund and other accounts to which the Sub-Adviser exercises
investment discretion (as such term is defined in section 3(a)(35) of the 1934
Act). Allocation of orders placed by the Sub-Adviser on behalf of a Fund to such
broker-dealers shall be in such amounts and proportions as the Sub-Adviser shall
determine in good faith in conformity with its responsibilities under applicable
laws, rules and regulations. The Sub-Adviser will submit reports on such
allocations to the Adviser as reasonably requested by the Adviser, in such form
as may be mutually agreed to by the parties hereto, indicating the
broker-dealers to whom such allocations have been made and the basis therefor.
6. Expenses. The Sub-Adviser shall bear all expenses incurred by it in
connection with the performance of 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, and administration fees; fees for
necessary professional and brokerage services; costs relating to local
administration of securities; and fees for any pricing services. All other
expenses not specifically assumed by the Sub-Adviser hereunder or by the Adviser
under the Management Agreement are borne by the applicable Fund or the Trust.
7. Books and Records. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Sub-Adviser hereby agrees that all records which it maintains
for the Trust are the property of the Trust and further agrees to surrender
promptly to the Trust any of such records upon the Trust's request, copies of
which may be retained by the Sub-Adviser. Sub-Adviser 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 related to each Fund's
portfolio transactions. The Adviser shall maintain all books and records not
related to the Fund's portfolio transactions.
8. Compensation. For the services provided and the expenses assumed pursuant to
this Agreement, Adviser will pay the Sub-Adviser, and the Sub-Adviser agrees to
accept as full compensation therefore, a sub-advisory fee accrued daily and
payable monthly on the average daily net assets in the Funds in accordance with
Schedule B hereto. Beginning one year after the date that initial capital is
provided to a Fund, the Adviser will pay the Sub-Adviser a minimum aggregate
sub-advisory fee in the amount of $300,000 for each succeeding twelve (12) month
period.
9. Services to Others. Adviser understands, and has advised the Trust's Board of
Trustees, that Sub-Adviser now acts, or may in the future act, as an investment
adviser to fiduciary and other managed accounts, and as investment adviser or
sub-investment adviser to other investment companies or accounts. Adviser has no
objection to Sub-Adviser acting in such capacities, provided that whenever the
Fund and one or more other investment advisory clients of Sub-Adviser have
available funds for investment, investments suitable and appropriate for each
will be allocated in a manner believed by Sub-Adviser to be equitable to each.
Sub-Adviser may group orders for a Fund with orders for other funds and accounts
to obtain the efficiencies that may be available on larger transactions when it
determines that investment decisions are appropriate for each participating
account. Sub-Adviser cannot assure that such policy will not adversely affect
the price paid or received by a Fund. Adviser recognizes, and has advised
Trust's Board of Trustees, that in some cases this procedure may adversely
affect the size and the opportunities of the position that the participating
Fund may obtain in a particular security. In addition, Adviser understands, and
has advised the Trust's Board of Trustees, that the persons employed by
Sub-Adviser to assist in Sub-Adviser's duties under this Agreement will not
devote their full time to such service and nothing contained in this Agreement
will be deemed to limit or restrict the right of Sub-Adviser or any of its
affiliates to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature.
10. Limitation of Liability. Sub-Adviser, its officers, directors, employees,
agents or affiliates will not be subject to any liability to the Adviser or the
Funds or their directors, officers, employees, agents or affiliates for any
error of judgment or mistake of law or for any loss suffered by the Funds, any
shareholder of the Funds or the Adviser either in connection with the
performance of Sub-Adviser's duties under this Agreement or its failure to
perform due to events beyond the reasonable control of the Sub-Adviser or its
agents, except for a loss resulting from Sub-Adviser's willful misfeasance, or
gross negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement. Federal and State
securities laws may impose liabilities under certain circumstances on persons
who act in good faith, and therefore nothing herein shall in any way constitute
a waiver or limitation of any right which Adviser may have under any applicable
laws.
11. Indemnification. Adviser and the Sub-Adviser each agree to indemnify the
other party (and each such party's affiliates, employees, directors and
officers) against any claim, damages, loss or liability (including reasonable
attorneys' fees) arising out of any third party claims brought against an
indemnified party that are found to constitute willful misfeasance or gross
negligence on the part of the indemnifying party.
12. Duration and Termination. This Agreement will become effective as to a Fund
upon execution or, if later, on the date that initial capital for such Fund is
first provided to it and, unless sooner terminated as provided herein, will
continue in effect for two years from the date of its execution. Thereafter, if
not terminated as to a Fund, this Agreement will continue in effect as to a Fund
for successive periods of 12 months, provided that such continuation is
specifically approved at least annually by the Trust's Board of Trustees or by
vote of a majority of the outstanding voting securities of such Fund, and in
either event approved also by a majority of the Trustees of the Trust who are
not interested persons of the Trust, or of the Adviser, or of the Sub-Adviser.
Notwithstanding the foregoing, this Agreement may be terminated as to a Fund at
any time, without the payment of any penalty, on sixty days' written notice by
the Trust or Adviser, or on sixty days' written notice by the Sub-Adviser. This
Agreement will immediately terminate in the event of its assignment. (As used in
this Agreement, the terms "majority of the outstanding voting securities",
"interested persons" and "assignment" have the same meaning of such terms in the
1940 Act.) Section 10 and 11 herein shall survive the termination of this
Agreement.
13. Acknowledgements of Adviser. Adviser acknowledges and agrees that:
(a) The assets of the Account may be invested in futures contracts and
consents to the Sub-Adviser's use of the alternate disclosure and
recordkeeping standards under Commodity Futures Trading Commission Rule 4.7
with respect to such futures trading, which alternate standards are
available to the Sub-Adviser on account of each Fund's ownership of
securities of issuers not affiliated with the Funds and other investments
with an aggregate market value of at least $2,000,000 and on account of the
Trust's status as an investment company registered under the 1940 Act (not
formed for the specific purpose of either investing in an exempt pool or
opening an exempt account);
(b) It is excluded from the definition of a commodity pool operator under
CFTC Rule 4.5, and in connection with such exemption has filed a notice of
eligibility and will provide the Sub-Adviser with a copy of such notice of
eligibility before the execution of this Agreement; and
(c) The Adviser hereby acknowledges that not less than forty-eight (48)
hours before the date it has executed this Agreement, it received from the
Sub-Adviser a copy of Part II of Sub-Advisers Form ADV, as required by Rule
204-(3) of the Investment Advisers Act of 1940, as amended.
14. Obligations of Adviser. The Adviser agrees to provide or complete, as the
case may be, the following prior to the commencement of the Sub-Adviser's
investment advisory services as specified under this Agreement:
(a) A list of first tier affiliates and second tier affiliates (i.e.,
affiliates of affiliates) of the Fund;
(b) A list of restricted securities for each Fund (including CUSIP, Sedol
or other appropriate security identification); and (c) A copy of the
current compliance procedures for each Fund.
The Adviser also agrees to promptly update the above referenced items in
order to ensure their accuracy, completeness and/or effectiveness.
15. Confidential Treatment. It is understood that any information or
recommendation supplied by, or produced by, Sub-Adviser in connection with the
performance of its obligations hereunder is to be regarded as confidential and
for use only by the Adviser and the Trust. Furthermore, 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 Sub-Adviser, the Adviser
and Trust will not disclose 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 Fund for 90 days after month end in any manner whatsoever except as
expressly authorized in this Agreement, and except that the top 10 holdings may
be disclosed 15 days after month end.
16. Entire Agreement; Amendment of this Agreement. This Agreement constitutes
the entire agreement between the parties with respect to the Funds. No provision
of this Agreement may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by the party against which enforcement
of the change, waiver, discharge or termination is sought.
17. Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as
designated herein.
(a) To Adviser:
Xxxxxxx National Life Insurance Company
0 Xxxxxxxxx Xxx
Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxx
(b) To Sub-Adviser:
Mellon Capital Management
Corporation 000 Xxxxxx
Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn:
18. Miscellaneous. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this
Agreement is held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement will be binding upon and shall inure
to the benefit of the parties hereto.
The name "JNL Series Trust" and "Trustees of JNL Series Trust" refer
respectively to the Trust created by, and the Trustees, as trustees but not
individually or personally, acting from time to time under, the Declaration of
Trust, to which reference is hereby made and a copy of which is on file at the
office of the Secretary of State of the Commonwealth of Massachusetts and
elsewhere as required by law, and to any and all amendments thereto so filed or
hereafter filed. The obligations of the "JNL Series Trust" entered in the name
or on behalf thereof by any of the Trustees, representatives or agents are made
not individually but only in such capacities and are not binding upon any of the
Trustees, Shareholders or representatives or agents of Trust personally, but
bind only the assets of Trust, and persons dealing with the Funds must look
solely to the assets of Trust belonging to such Fund for the enforcement of any
claims against the Trust.
19. Applicable Law. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Michigan.
20. Counterpart Signatures. This Agreement may be executed in several
counterparts, including via facsimile, each of which shall be deemed an original
for all purposes, including judicial proof of the terms hereof, and all of which
together shall constitute and be deemed one and the same agreement.
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this
Agreement to be executed as of this _____ day of ______________ 2001.
PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN
CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE PERSONS, THIS BROCHURE OR ACCOUNT
DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE COMMISSION. THE
COMMODITY FUTURES TRADING COMMISSION DOES NOT PASS UPON THE MERITS OF
PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF COMMODITY
TRADING ADVISER DISCLOSURE. CONSEQUENTLY, THE COMMODITY FUTURES TRADING
COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR THIS BROCHURE OR
ACCOUNT DOCUMENT.
Xxxxxxx National Asset Management, LLC
By:
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Name: Xxxxxx X. Xxxxxxx
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Title: President
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Mellon Capital Management Corporation
By:
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Name:
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Title:
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SCHEDULE A
DATED ___________________, 2001
(Funds)
Mellon Capital Management/JNL S&P 500 Index
Mellon Capital Management/JNL S&P 400 Mid Cap Index
Mellon Capital Management/JNL Small Cap Index
Mellon Capital Management/JNL International Index
Mellon Capital Management/JNL Bond Index
SCHEDULE B
DATED ____________________, 2001
(Compensation)
Mellon Capital Management/JNL S&P 500 Index
Average Daily Net Assets Annual Rate
$0 to 50 Million: .12%
$50 to 100 Million .06%
Amounts over $100 Million: .02%
Mellon Capital Management/JNL S&P 400 Mid Cap Index
Average Daily Net Assets Annual Rate
$0 to 50 Million: .12%
$50 to 100 Million .06%
Amounts over $100 Million: .02%
Mellon Capital Management/JNL Small Cap Index
Average Daily Net Assets Annual Rate
$0 to 50 Million: .12%
$50 to 100 Million .06%
Amounts over $100 Million: .02%
Mellon Capital Management/JNL International Index
Average Daily Net Assets Annual Rate
$0 to 50 Million: .15%
$50 to 100 Million .10%
Amounts over $100 Million: .04%
Mellon Capital Management/JNL Bond Index
Average Daily Net Assets Annual Rate
$0 to 50 Million: .12%
$50 to 100 Million .06%
Amounts over $100 Million: .02%
