EX-99.B5q
INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT is effective this 17th day of December, 1997, by and between
XXXXXXX NATIONAL FINANCIAL SERVICES, INC., a Delaware Corporation and registered
investment adviser ("Adviser"), and XXXXXXX SACHS ASSET MANAGEMENT, a separate
operating division of Xxxxxxx, Xxxxx & Co., a New York limited partnership 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, in particular,
amendments to the Prospectus shall be furnished to the Sub-Adviser in
advance to the extent that the Fund is impacted by the Amendment.
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; however, the
Adviser agrees to inform the Sub-Adviser of any and all applicable state
insurance law restrictions on investments that operate to limit or restrict
the investments the Fund may otherwise make, and to inform the Sub-Adviser
promptly of any changes in such requirements.
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, and to the extent notified as set forth above with respect
to applicable state insurance laws, 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. Therefore, the
Sub-Adviser is authorized to consider such services provided to the
Fund and other accounts over which Sub-Adviser or any of its
affiliates exercises investment discretion and to place orders for the
purchase and sale of securities for the Fund with such brokers,
subject to review by the Board of Trustees from time to time with
respect to the extent and continuation of this practice. It is
understood that the services provided by such brokers may be useful to
Sub-Adviser in connection with its services to other clients.
Sub-Adviser may, on occasions when it deems the purchase or sale of a
security to be in the best interests of the Fund as well as its other
clients, aggregate, to the extent permitted by applicable laws and
rules, the securities to be sold or purchased in order to obtain the
most favorable execution and net price. In such event, allocation of
the securities so purchase or sold, as well as the expenses incurred
in the transaction, will be made by Sub-Adviser in the manner it
considers to be the most equitable and consistent with its obligations
to the Fund and to such other clients. Sub-Adviser is not, however,
required to aggregate securities orders. 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. In addition, joint
repurchase or other accounts may not be utilized by the Fund except to
the extent permitted under any exemptive order obtained by the
Sub-Adviser provided that all conditions of such order are complied
with;
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, provided that the Sub-Adviser may disclose any information
otherwise required to be kept confidential pursuant to this subsection
(i) to it employees, agents, affiliates and counsel on a need-to-know
basis, (ii) to its examiners, auditors or accountants or any other
governmental agency or similar authority exercising jurisdiction over
it, (iii) as may be required by applicable law, legal process or in
connection with any litigation arising out of the subject matter of
this Agreement, and (iv) to the extent that such information is
otherwise made public and such disclosure is not in breach of any
confidentiality restriction; and
h) will vote proxies received in connection with securities held by the
Fund consistent with its fiduciary duties hereunder.
4. 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 taxes, brokerage
commissions and other transaction costs, if any) purchased for the Fund.
5. 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(b)(5),(6),(7),(9) and (10) under the 1940 Act.
6. 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. 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.
For the purpose of accruing compensation, the net assets of the Fund will
be determined in the manner provided in the then-current prospectus of the
Fund. In the event of termination of this Agreement, all compensation due
to Sub-Adviser through the date of termination will be calculated on a
pro-rated basis through the date of termination and paid on the first
business day after the next succeeding month end.
The Sub-Adviser represents and warrants that in no event shall the
Sub-Adviser provide substantially the same investment advisory services to
any client (excluding any existing proprietary product or client of the
Sub-Adviser or any of its affiliates) comparable to the Fund being managed
under this Agreement at a composite rate of compensation less than that
provided for herein.
7. 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.
Adviser and Board of Trustees also understand that Sub-Adviser and its
affiliates may give advice and take action with respect to any of its other
clients or for its own account which may differ from the timing or nature
of action taken by Sub-Adviser with respect to the Fund. Nothing in this
Agreement imposes upon Sub-Adviser any obligation to purchase or sell or to
recommend for purchase or sale, with respect to the Fund, any security
which Sub-Adviser or its partners, officers, employees or affiliates may
purchase or sell for its or their own account(s) or for the account of any
other client. 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.
8. Standard of Care and Limitation of Liability. The Sub-Adviser shall
exercise its best judgment and shall act in good faith in rendering the
services pursuant to this Agreement.
Sub-Adviser, its officers, partners, managing directors, employees, agents
or affiliates ("associated persons") will not be subject to any liability
to the Adviser or the Fund or their trustees, 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 or as a result of the failure by
the Adviser, or any of its affiliates, to comply with this Agreement and/or
any applicable insurance laws and rules, 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.
9. Indemnification. Notwithstanding Section 8 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 (1) may
be based upon any misfeasance, malfeasance, or nonfeasance by the
Sub-Adviser, any of its employees or representatives, or any affiliate of
or any person acting on behalf of the Sub-Adviser, (2) may be based upon a
failure to comply with Section 3 of this Agreement, or (3) may be based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus, or any amendment or supplement thereto, or the
omission or alleged 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,
if such a statement or omission was made in reliance upon information
furnished to the Adviser, the Trust, or any affiliated person of the
Adviser or Trust by the Sub-Adviser or any affiliated person of the
Sub-Adviser; 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 reckless disregard of its
obligations and duties under this Agreement.
The Adviser hereby indemnifies, defends and protects Sub-Adviser and holds
Sub-Adviser and its associated persons harmless from and against any and
all losses, claims, damages, liabilities or litigation (including
reasonable legal and other expenses) arising out of any breach by Adviser
of any representation or agreement contained in this Agreement (including
any failure by the Adviser to apprise Sub-Adviser of any changes in any
applicable state insurance laws and rules).
10. 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 such date. 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.)
11. 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.
12. 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.
13. Reference to Sub-Adviser. Neither Adviser nor the Trust will publish or
distribute any information, including but not limited to registration
statements, advertising or promotional material, regarding the provision of
investment advisory services by Sub-Adviser pursuant to this Agreement, or
use in advertising, publicity or otherwise the name of Sub-Adviser or any
of its affiliates, or any trade name, trademark, trade device, service
xxxx, symbol or any abbreviation, contraction or simulation thereof of
Sub-Adviser or its affiliates without the prior written consent of
Sub-Adviser. Notwithstanding the foregoing, Adviser may distribute
information regarding the provision of investment advisory services by
Sub-Adviser to the Trust's Board of Trustees ("Board Materials") without
the prior written consent of Sub-Adviser.
14. 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. Sub-Adviser and its affiliates will not, without the prior written
consent of Adviser, solicit for employment, or hire or retain as a
consultant, representative, agent or adviser, any person who is now
employed by or acting as a representative or agent for Adviser or Adviser's
affiliates (including, without limitation, Xxxxxxx National Life
Distributors, Inc.)
The business unit within Sub-Adviser responsible for sub-advisory
relationships will not, without the prior written consent of Adviser,
solicit for employment, initiate a recommendation of employment or hire or
retain as a consultant, representative, agent or adviser, any person who is
now employed by or acting as a representative or agent for Adviser or
Adviser's affiliates (including, without limitation, Xxxxxxx National Life
Distributors, Inc.)
15. 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 is has reviewed 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, 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.
16. Applicable Law. This Agreement shall be construed in accordance with
applicable federal law and the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this
Agreement to be executed as of this 17th day of December, 1997.
XXXXXXX NATIONAL FINANCIAL
SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------
Title: President
--------------------------
XXXXXXX XXXXX ASSET MANAGEMENT,
a separate operating
division of Xxxxxxx, Sachs & Co.
By: Xxxxxxx, Xxxxx & Co.
By: /s/ Xxxxx X. Xxxx
--------------------------
Name: Xxxxx X. Xxxx
--------------------------
Title: Partner
--------------------------
SCHEDULE A
(Fund)
Xxxxxxx Sachs/JNL Growth & Income Series
SCHEDULE B
(Compensation)
Xxxxxxx Xxxxx/JNL Growth & Income Series
Average Daily Net Assets Annual Rate
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0 to $50 Million: .50%
$50 Million to $200 Million: .45%
$200 Million to $350 Million: .40%
Amounts over $350 Million: .35%
