1
EXHIBIT (5)(b)(xviii)
NASL SERIES TRUST
SUBADVISORY AGREEMENT
AGREEMENT made this 1st day of October, 1996, between NASL
Financial Services, Inc., a Massachusetts corporation ("NASL Financial" or the
"Adviser"), and Manufacturers Adviser Corporation, a Colorado Corporation (the
"Subadviser"). In consideration of the mutual covenants contained herein, the
parties agree as follows:
1. APPOINTMENT OF SUBADVISER
The Subadviser undertakes to act as investment subadviser to,
and, subject to the supervision of the Trustees of NASL Series Trust (the
"Trust") and the terms of this Agreement to manage the investment and
reinvestment of the assets of the Portfolios specified in Appendix A to this
Agreement as it shall be amended by the Adviser and the Subadviser from time to
time (the "Portfolios"). The Subadviser will be an independent contractor and
will have no authority to act for or represent the Trust or Adviser in any way
except as expressly authorized in this Agreement or another writing by the
Trust and Adviser.
2. SERVICES TO BE RENDERED BY THE SUBADVISER TO THE TRUST
a. Subject always to the direction and control of the Trustees of
the Trust, the Subadviser will manage the investments and
determine the composition of the assets of the Portfolios in
accordance with the Portfolios' registration statement, as
amended. In fulfilling its obligations to manage the
investments and reinvestments of the assets of the Portfolios,
the Subadviser will:
i. obtain and evaluate pertinent economic, statistical,
financial and other information affecting the economy
generally and individual companies or industries the
securities of which are included in the Portfolios or
are under consideration for inclusion in the
Portfolios;
ii. formulate and implement a continuous investment
program for each Portfolio consistent with the
investment objectives and related investment policies
for each such Portfolio as described in the Trust's
registration statement, as amended;
iii. take whatever steps are necessary to implement these
investment programs by the purchase and sale of
securities including the placing of orders for such
purchases and sales;
iv. regularly report to the Trustees of the Trust with
respect to the implementation of these investment
programs; and
2
2
v. provide determinations, in accordance with procedures
and methods established by the Trustees of the Trust,
of the fair value of securities held by the
Portfolios for which market quotations are not
readily available for purposes of enabling the
Trust's Custodian to calculate net asset value.
b. The Subadviser, at its expense, will furnish (i) all necessary
investment and management facilities, including salaries of
personnel required for it to execute its duties faithfully,
and (ii) administrative facilities, including bookkeeping,
clerical personnel and equipment necessary for the efficient
conduct of the investment affairs of the Portfolios (excluding
determination of net asset value and shareholder accounting
services).
c. The Subadviser will select brokers and dealers to effect all
transactions subject to the following conditions: the
Subadviser will place all orders with brokers, dealers, or
issuers, and will negotiate brokerage commissions if
applicable. The Subadviser is directed at all times to seek
to execute brokerage transactions for the Portfolios in
accordance with such policies or practices as may be
established by the Trustees and described in the Trust's
registration statement as amended. The Subadviser may pay a
broker-dealer which provides research and brokerage services a
higher spread or commission for a particular transaction than
otherwise might have been charged by another broker-dealer, if
the Subadviser determines that the higher spread or commission
is reasonable in relation to the value of the brokerage and
research services that such broker-dealer provides, viewed in
terms of either the particular transaction or the Subadviser's
overall responsibilities with respect to accounts managed by
the Subadviser. The Subadviser may use for the benefit of the
Subadviser's other clients, or make available to companies
affiliated with the Subadviser or to its directors for the
benefit of its clients, any such brokerage and research
services that the Subadviser obtains from brokers or dealers.
d. The Subadviser will maintain all accounts, books and records
with respect to the Portfolios as are required of an
investment adviser of a registered investment company pursuant
to the Investment Company Act of 1940 (the "Investment Company
Act") and Investment Advisers Act of 1940 (the "Investment
Advisers Act") and the rules thereunder.
3
3
3. COMPENSATION OF SUBADVISER
The Adviser will pay the Subadviser with respect to each
Portfolio the compensation specified in Appendix A to this Agreement.
4. LIABILITY OF SUBADVISER
Neither the Subadviser nor any of its officers or employees
shall be liable to the Adviser or Trust for any loss suffered by the Adviser or
Trust resulting from any error of judgment made in the good faith exercise of
the Subadviser's investment discretion in connection with selecting Portfolio
investments except for losses resulting from willful misfeasance, bad faith or
gross negligence of, or from reckless disregard of, the duties of the
Subadviser or any of its officers or employees; and neither the Subadviser nor
any of its officers or employees shall be liable to the Adviser or Trust for
any loss suffered by the Adviser or Trust resulting from any other matters to
which this Agreement relates (i.e., those other matters specified in Sections 2
and 8 of this Agreement), except for losses resulting from willful misfeasance,
bad faith, or gross negligence in the performance of, or from disregard of, the
duties of the Subadviser or any of its employees.
5. SUPPLEMENTAL ARRANGEMENTS
The Subadviser may enter into arrangements with other persons
affiliated with the Subadviser to better enable it to fulfill its obligations
under this Agreement for the provision of certain personnel and facilities to
the Subadviser.
6. CONFLICTS OF INTEREST
It is understood that trustees, officers, agents and
shareholders of the Trust are or may be interested in the Subadviser as
trustees, officers or otherwise; that directors, officers and agents of the
Subadviser are or may be interested in the Trust as trustees, officers,
shareholders or otherwise; that the Subadviser may be interested in the Trust;
and that the existence of any such dual interest shall not affect the validity
hereof or of any transactions hereunder except as otherwise provided in the
Agreement and Declaration of Trust of the Trust and the Certificate of
Incorporation of the Subadviser, respectively, or by specific provision of
applicable law.
7. REGULATION
The Subadviser shall submit to all regulatory and
administrative bodies having jurisdiction over the services provided pursuant
to this Agreement any information, reports or other material which any such
body by reason of this Agreement may request or require pursuant to applicable
laws and regulations.
4
4
8. DURATION AND TERMINATION OF AGREEMENT
This Agreement shall become effective with respect to each
Portfolio on the later of (i) its execution, (ii) the effective date of the
registration statement of the Portfolio and (iii) with respect to each
Portfolio except the Money Market Portfolio, the date of the meeting of the
shareholders of the Portfolio, at which meeting this Agreement is approved by
the vote of a majority of the outstanding voting securities (as defined in the
Investment Company Act) of the Portfolio. The Agreement will continue in
effect for a period more than two years from the date of its execution only so
long as such continuance is specifically approved at least annually either by
the Trustees of the Trust or by a majority of the outstanding voting securities
of each of the Portfolios, provided that in either event such continuance shall
also be approved by the vote of a majority of the Trustees of the Trust who are
not interested persons (as defined in the Investment Company Act) of any party
to this Agreement cast in person at a meeting called for the purpose of voting
on such approval. The required shareholder approval of the Agreement or of any
continuance of the Agreement shall be effective with respect to any Portfolio
if a majority of the outstanding voting securities of the series (as defined in
Rule 18f-2(h) under the Investment Company Act) of shares of that Portfolio
votes to approve the Agreement or its continuance, notwithstanding that the
Agreement or its continuance may not have been approved by a majority of the
outstanding voting securities of (a) any other Portfolio affected by the
Agreement or (b) all the portfolios of the Trust.
If the shareholders of any Portfolio fail to approve the
Agreement or any continuance of the Agreement, the Subadviser will continue to
act as investment subadviser with respect to such Portfolio pending the
required approval of the Agreement or its continuance or of any contract with
the Subadviser or a different adviser or subadviser or other definitive action;
provided, that the compensation received by the Subadviser in respect of such
Portfolio during such period is in compliance with Rule 15a-4 under the
Investment Company Act.
This Agreement may be terminated at any time, without the
payment of any penalty, by the Trustees of the Trust, by the vote of a majority
of the outstanding voting securities of the Trust, or with respect to any
Portfolio by the vote of a majority of the outstanding voting securities of
such Portfolio, on sixty days' written notice to the Adviser and the
Subadviser, or by the Adviser or Subadviser on sixty days' written notice to
the Trust and the other party. This agreement will automatically terminate,
without the payment of any penalty, in the event of its assignment (as defined
in the Investment Company Act) or in the event the Advisory Agreement between
the Adviser and the Trust terminates for any reason.
5
5
9. PROVISION OF CERTAIN INFORMATION BY SUBADVISER
The Subadviser will promptly notify the Adviser in writing of
the occurrence of any of the following events:
a. the Subadviser fails to be registered as an investment adviser
under the Investment Advisers Act or under the laws of any
jurisdiction in which the Subadviser is required to be
registered as an investment adviser in order to perform its
obligations under this Agreement;
b. the Subadviser is served or otherwise receives notice of any
action, suit, proceeding, inquiry or investigation, at law or
in equity, before or by any court, public board or body,
involving the affairs of the Trust; and
c. any change in actual control or management of the Subadviser
or the portfolio manager of any Portfolio.
10. AMENDMENTS TO THE AGREEMENT
This Agreement may be amended by the parties only if such
amendment is specifically approved by the vote of a majority of the outstanding
voting securities of each of the Portfolios affected by the amendment and by
the vote of a majority of the Trustees of the Trust who are not interested
persons of any party to this Agreement cast in person at a meeting called for
the purpose of voting on such approval. The required shareholder approval
shall be effective with respect to any Portfolio if a majority of the
outstanding voting securities of that Portfolio vote to approve the amendment,
notwithstanding that the amendment may not have been approved by a majority of
the outstanding voting securities of (a) any other Portfolio affected by the
amendment or (b) all the portfolios of the Trust.
11. ENTIRE AGREEMENT
This Agreement contains the entire understanding and
agreement of the parties.
12. HEADINGS
The headings in the sections of this Agreement are inserted
for convenience of reference only and shall not constitute a part hereof.
13. NOTICES
All notices required to be given pursuant to this Agreement
shall be delivered or mailed to the last known business address of the Trust or
applicable party in person or by registered mail or a private mail or delivery
service providing the sender with notice of receipt. Notice shall be deemed
given
6
6
on the date delivered or mailed in accordance with this paragraph.
14. SEVERABILITY
Should any portion of this Agreement for any reason be held to
be void in law or in equity, the Agreement shall be construed, insofar as is
possible, as if such portion had never been contained herein.
15. GOVERNING LAW
The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of The Commonwealth of Massachusetts,
or any of the applicable provisions of the Investment Company Act. To the
extent that the laws of The Commonwealth of Massachusetts, or any of the
provisions in this Agreement, conflict with applicable provisions of the
Investment Company Act, the latter shall control.
16. LIMITATION OF LIABILITY
The Agreement and Declaration of Trust dated September 28,
1988, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of The Commonwealth
of Massachusetts, provides that the name "NASL Series Trust" refers to the
Trustees under the Declaration collectively as Trustees, but not as individuals
or personally; and no Trustee, shareholder, officer, employee or agent of the
Trust shall be held to any personal liability, nor shall resort be had to their
private property, for the satisfaction of any obligation or claim, in
connection with the affairs of the Trust or any portfolio thereof, but only the
assets belonging to the Trust, or to the particular portfolio with which the
obligee or claimant dealt, shall be liable.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed under seal by their duly authorized officers as of the
date first mentioned above.
[SEAL] NASL Financial Services, Inc.
by:
--------------------------
[SEAL] Manufacturers Adviser Corporation
by:
--------------------------
7
APPENDIX A
The Subadviser shall serve as investment subadviser for the
following portfolio of the Trust. The Adviser will pay the Subadviser, as full
compensation for all services provided under this Agreement, the fee computed
separately for each such Portfolio at an annual rate as follows (the
"Subadviser Percentage Fee"):
Money Market Portfolio: .075% of the first $50,000,000, .075%
between $50,000,000 and $200,000,000, .075% between
$200,000,000 and $500,000,000 and .020% on the excess over
$500,000,000 of the current value of the net assets of the
Portfolio;
The Subadviser Percentage Fee for each Portfolio shall be
accrued for each calendar day and the sum of the daily fee accruals shall be
paid monthly to the Subadviser. The daily fee accruals will be computed by
multiplying the fraction of one over the number of calendar days in the year by
the applicable annual rate described in the preceding paragraph, and
multiplying this product by the net assets of the Portfolio as determined in
accordance with the Trust's prospectus and statement of additional information
as of the close of business on the previous business day on which the Trust was
open for business.
If this Agreement becomes effective or terminates before the
end of any month, the fee (if any) for the period from the effective date to
the end of such month or from the beginning of such month to the date of
termination, as the case may be, shall be prorated according to the proportion
which such period bears to the full month in which such effectiveness or
termination occurs.
