EX-99.d42
INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT is effective this 31st day of January 2001, by and between
Xxxxxxx National Asset Management, LLC, a Michigan limited liability company and
registered investment adviser ("Adviser"), and PACIFIC INVESTMENT MANAGEMENT
COMPANY LLC, a Delaware limited liability company 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"); and
WHEREAS, the Trust is authorized to issue separate series, each series
having its own investment objective or objectives, policies and limitations;
WHEREAS, Adviser desires to retain Sub-Adviser as Adviser's agent to
furnish investment advisory services to the series of the Trust listed on
Schedule A hereto ("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 Fund 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.
In the event the Adviser designates one or more series other than the
Fund with respect to which the Adviser wishes to retain the
Sub-Adviser to render investment advisory services hereunder, it shall
notify the Sub-Adviser in writing. If the Sub-Adviser is willing to
render such services, it shall notify the Adviser in writing,
whereupon such series shall become a Fund hereunder, and be subject to
this Agreement.
2. Delivery of Documents. Adviser has or will furnish Sub-Adviser with
copies properly certified or authenticated of each of the following:
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
Fund; and
f) the Trust's most recent prospectus and Statement of Additional
Information (collectively called the "Prospectus").
Adviser will furnish the Sub-Adviser from time to time with
copies of all amendments of or supplements to the foregoing.
3. Management. Subject always to the supervision of Trust's Board of
Trustees and the Adviser, Sub-Adviser will furnish an investment
program in respect of, and make investment decisions for, all assets
of the Fund and place all orders for the purchase and sale of
securities, all on behalf of the Fund. In the performance of its
duties, Sub-Adviser will satisfy its fiduciary duties to the Fund (as
set forth below), and will monitor the Fund's 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 Fund. 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 Fund and to consult with each other regarding the
investment affairs of the Fund. Sub-Adviser will report to the Board
of Trustees and to Adviser with respect to the implementation of such
program. Sub-Adviser is responsible for compliance with the provisions
of Section 817(h) of the Internal Revenue Code of 1986, as amended,
applicable to the Fund. Sub-Adviser is authorized on behalf of the
Fund to enter into agreement and execute any documents required to
make investments pursuant to the Prospectus, as such Prospectus maybe
amended from time to time.
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
Securities and Exchange Commission 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 place orders pursuant to its investment determinations for
the Fund either directly with the issuer or with any broker or
dealer, including an affiliated broker-dealer which is a member
of a national securities exchange as permitted in accordance with
guidelines established by the Board of Trustees. In placing
orders with brokers and dealers, the Sub-Adviser will attempt to
obtain the best combination of prompt execution of orders in an
effective manner and at the most favorable price. Consistent with
this obligation, when the execution and price offered by two or
more brokers or dealers are comparable Sub-Adviser may, in its
discretion, purchase and sell portfolio securities to and from
brokers and dealers who provide the Sub-Adviser with research
advice and other services. In no instance will portfolio
securities be purchased from or sold to the Adviser, Sub-Adviser
or any affiliated person of either the Trust, Adviser, or
Sub-Adviser, except as may be permitted under the 1940 Act;
d) will report regularly to Adviser and to the Board of Trustees 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 the management of
the Fund, including, without limitation, review of the general
investment strategies of the Fund, the performance of the Fund in
relation to standard industry indices, interest rate
considerations and general conditions affecting the marketplace
and will provide various other reports from time to time as
reasonably requested by Adviser;
e) will prepare and maintain such books and records with respect to
the Fund's securities transactions and will furnish Adviser and
Trust's Board of Trustees such periodic and special reports as
the Board or Adviser may request;
f) will act upon instructions from Adviser not inconsistent with the
fiduciary duties hereunder;
g) will treat confidentially and as proprietary information of Trust
all such records and other information relative to 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; and
h) will vote proxies received in connection with securities held by
the Fund consistent with its fiduciary duties hereunder.
4. Aggregation of Orders. Provided the investment objectives of the Fund
are adhered to, the Adviser agrees that the Sub-Adviser may aggregate
sales and purchase orders of securities held in the Fund with similar
orders being made simultaneously for other accounts managed by the
Sub-Adviser or with accounts of the affiliates of the Sub-Adviser, if
in the Sub-Adviser's reasonable judgment such aggregation shall result
in an overall economic benefit to the Fund, taking into consideration
the advantageous selling or purchase price, brokerage commission and
other expenses. The Adviser acknowledges that the determination of
such economic benefit to the Fund by the Sub-Adviser is subjective and
represents the Sub-Adviser's evaluation that the Fund is benefited by
relatively better purchase or sales prices, lower commission expenses
and beneficial timing of transactions or a combination of these and
other factors.
5. Futures and Options. Provided the investment objectives of the Fund
are adhered to, the Sub-Adviser's investment authority shall include
the authority to purchase, sell, cover open positions, and generally
to deal in financial futures contracts and options thereon.
The Adviser will (i) open and maintain brokerage accounts for
financial futures and options (such accounts hereinafter referred to
as "brokerage accounts") on behalf of and in the name of the Fund and
(ii) execute for and on behalf of the Fund, standard customer
agreements with a broker or brokers. The Sub-Adviser may, using such
of the securities and other property in the Fund as the Sub-Adviser
deems necessary or desirable, direct the Adviser to deposit on behalf
of the Fund, original and maintenance brokerage deposits and otherwise
direct payments of cash, cash equivalents and securities and other
property into such brokerage accounts and to such brokers as the
Sub-Adviser deems desirable or appropriate.
Upon the solicitation of the Adviser, the Sub-Adviser delivered to the
Adviser a copy of its Disclosure Document, as amended, dated June 15,
2000, on file with the Commodity Futures Trading Commission. The
Adviser hereby acknowledges receipt of such copy.
6. Expenses. During the term of this Agreement, Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage
commission, if any) purchased for the Fund.
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. 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.
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 therefor, a
sub-advisory fee, accrued daily and payable monthly on the average
daily net assets in the Fund or Funds excluding the net assets
representing capital contributed by Xxxxxxx National Life Insurance
Company in accordance with Schedule B hereto. The Adviser agrees to
pay a sub-advisory fee on any capital contributed by Xxxxxxx National
Life Insurance Company if the total capital contributed exceeds $5
million dollars. From time to time, the Sub-Adviser may agree to waive
or reduce some or all of the compensation to which it is entitled
under this Agreement.
The Sub-Adviser represents and warrants that in no event shall the
Sub-Adviser provide similar investment advisory services to any client
comparable in size to the Fund being managed under this Agreement at a
composite rate of compensation less than that provided for herein.
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. 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 selected for each will be allocated in a
manner believed by Sub-Adviser to be equitable to each. Adviser
recognizes, and has advised Trust's Board of Trustees, that in some
cases this procedure may adversely affect the size of the position
that the participating Fund may obtain in a particular security. In
addition, Adviser understands, and has advised 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. Standard of Care and Limitation of Liability. The Sub-Adviser shall
exercise its good judgment and shall act in good faith in rendering
the services pursuant to this Agreement.
Sub-Adviser, its officers, directors, employees, agents or affiliates
will not be subject to any liability to the Adviser or the Fund or
their directors, officers, employees, agents or affiliates for any
error of judgment or mistake of law or for any loss suffered by the
Fund in connection with the performance of Sub-Adviser's duties under
this Agreement, except for a loss resulting from Sub-Adviser's willful
misfeasance, bad faith, or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and
duties under this Agreement.
11. Indemnification. Notwithstanding Section 10 of this Agreement, the
Sub-Adviser agrees to indemnify and hold harmless the Adviser, any
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 (all of such persons being referred to as
"Adviser Indemnified Persons") against any and all losses, claims,
damages, liabilities, or litigation (including reasonable legal and
other expenses) to which an Adviser Indemnified Person may become
subject under the 1933 Act, 1940 Act, the Investment Advisers Act of
1940, the Internal Revenue Code, under any other statute, at common
law or otherwise, arising out of the Sub-Adviser's responsibilities as
Sub-Adviser to the Fund and to the Trust which is based upon the
willful misfeasance, bad faith or gross negligence or breach of this
Agreement by Sub-Adviser or its agents, or may be based upon any
untrue statement of a material fact provided in writing by the
Sub-Adviser specifically for inclusion in the Prospectus, or any
amendment or supplement thereto, or the omission to state therein a
material fact known or which should have been known to the Sub-Adviser
and was required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that in no case
shall the indemnity in favor of an Adviser Indemnified Person be
deemed to protect such person against any liability to which any such
person would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence in the performance of its duties, or by
reason of its breach of this Agreement.
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 until June 30, 2002.
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 meanings of such
terms in the 1940 Act.)
13. Amendment of this Agreement. 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.
14. 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 such other party may designate for the receipt of such
notice.
15. Proprietary Rights. Sub-Adviser represents, and the Trust and the
Adviser acknowledge, that Sub-Adviser is the sole owner of the names
"Pacific Investment Management Company LLC" and "PIMCO" and certain
logos associated with such names (the "PIMCO Marks").
The use by the Trust and the Adviser, or their affiliates, on their
own behalf or on behalf of the JNL/PIMCO Total Return Bond Series, of
any PIMCO Marks or any representations regarding Sub-Adviser in any
disclosure document, advertisement, sales literature or other
materials promoting the JNL/PIMCO Total Return Bond Series shall
remain subject to the approval of Sub-Adviser; provided, however, that
(i) Sub-Adviser's review of any material pursuant to this Agreement
shall be conducted in a reasonable and timely manner; (ii)
Sub-Adviser's approval under this Agreement shall not be unreasonably
withheld; and (iii) Sub-Adviser's approval under this Agreement shall
not be required with respect to any use which has been previously
approved by Sub-Adviser, including, but not limited to, any use which
has been derived from disclosure contained in the Trust's or the
Adviser's most recent Prospectus and/or Statement of Additional
Information, or any supplements thereto, regarding any PIMCO Marks,
PIMCO, or the JNL/PIMCO Total Return Bond Series, which has been
previously approved by Sub-Adviser.
Sub-Adviser acknowledges and agrees that it will not use the name the
JNL/PIMCO Total Return Bond Series on its own behalf, or in relation to
any investment company for which Sub-Adviser or its successors and any
subsidiary or affiliate thereof acts as investment adviser, without the
express written permission of the Trust or the Adviser, respectively,
except that Sub-Adviser may state that it acts as a sub-advisor to the
Trust and the Adviser.
The parties hereby acknowledge that the Trust has adopted the name the
"JNL/PIMCO Total Return Bond Series" through the permission of
Sub-Adviser, so long as the Sub-Adviser manages the assets of the
Trust.
16. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit 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 of the Trust
personally, but bind only the assets of the Trust, and persons dealing
with the Fund must look solely to the assets of the Trust belonging to
such Fund for the enforcement of any claims against Trust.
17. Representations and Warranties of the Sub-Adviser.
The Sub-Adviser hereby represents that this Agreement does not violate
any existing agreements between the Sub-Adviser and any other party.
The Sub-Adviser further represents and warrants that it is a duly
registered investment adviser under the Investment Advisers Act of
1940, as amended and has provided to the Adviser a copy of its most
recent Form ADV as filed with the Securities and Exchange Commission.
The Sub-Adviser further represents that upon submission by the Adviser
it will review the post-effective amendment to the Registration
Statement for the Trust filed with the Securities and Exchange
Commission that contains disclosure about the Sub-Adviser (on which
Adviser will have an opportunity to comment), and represents and
warrants that, with respect to the disclosure about the Sub-Adviser or
information relating, directly or indirectly, to the Sub-Adviser, 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.
18. Research Services. PIMCO may from time to time seek research assistance
and rely on investment management resources available to it through its
affiliated companies, but in no case shall such reliance relieve PIMCO
of any of its obligations hereunder, nor shall the Series be
responsible for any additional fees or expenses hereunder as a result.
19. Applicable Law. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Michigan.
20. Assignment. In accordance with Sections 205(a)(2) and 205(a)(3) of the
Investment Advisers Act of 1940, no assignment of this Agreement shall
be made by the Sub-Adviser without the consent of the Adviser. The
Adviser understands and agrees that Pacific Investment Management
Company LLC was indirectly acquired by Allianz AG on May 5, 2000. IN
WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this
Agreement to be executed as of this 31st day of January 2001.
Xxxxxxx National Asset Management, LLC
By:_____________________________________
Name: Xxxxxx X. Xxxxxxx
Title: President
PACIFIC INVESTMENT MANAGEMENT COMPANY LLC
By:_____________________________________
Name:___________________________________
Title:__________________________________
SCHEDULE A
JANUARY 31, 2001
(Funds)
JNL/PIMCO Total Return Bond Series
SCHEDULE B
JANUARY 31, 2001
(Compensation)
JNL/PIMCO Total Return Bond Series
Average Daily Net Assets Annual Rate
Amounts over $0: .25%
