EX-99.d.10
INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT is effective this 18th day of February, 2004, 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 Variable Fund
LLC, JNL Variable Fund III LLC, JNL Variable Fund V LLC, and JNLNY Variable Fund
I LLC (the "Funds"), open-end management investment companies registered under
the Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Funds are authorized to issue separate funds, each fund
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 Funds listed on Schedule A hereto
("Funds").
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.
In the event the Adviser designates one or more funds other than the Funds
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 fund 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) each Fund's Certificate of Formation, as filed with the Secretary of
the State of Delaware on October 13, 1998 for JNL Variable Fund LLC
and filed on January 26, 1999 for JNL Variable Fund III LLC, JNL
Variable Fund V LLC, and JNLNY Variable Fund I LLC, and all amendments
thereto or restatements thereof (such Certificate of Formation, as
presently in effect and as it shall from time to time be amended or
restated, is herein called the "Certificate of Formation");
b) each Fund's Operating Agreement and amendments thereto;
c) resolutions of the Funds' Board of Managers authorizing the
appointment of Sub-Adviser and approving this Agreement;
d) each Fund'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) each Fund'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) each Fund's most recent prospectus and Statement of Additional
Information (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 is in
turn subject to the supervision of the Funds' Board of Managers,
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 Fund's investments, and will comply with the provisions of each
Fund's Certificate of Formation and Operating Agreement, as amended from
time to time, and the stated investment objectives, policies and
restrictions of the Funds as described in the Investment Objectives
attached hereto as Schedule C, which may be amended from time to time.
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 Funds' Board of Managers
as reasonably agreed between the Adviser and the Sub-Adviser and will
make appropriate persons available for the purpose of reviewing with
representatives of Adviser and the Board of Managers 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 benchmark 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 cause to be filed in a timely manner Form 13F and, if
required, Schedule 13G with respect to securities held for the account
of the Funds subject to Sub-Adviser's supervision;
f) will prepare and maintain such books and records with respect to the
Fund's securities transactions in accordance with Section 7 herein,
and will furnish Adviser and Funds' Board of Managers such periodic
and special reports as the Board of Managers or Adviser may reasonably
request;
g) will act upon reasonable instructions from Adviser not inconsistent
with the fiduciary duties and Investment Objectives hereunder;
h) will treat confidentially and as proprietary information of Funds all
such records and other information relative to the Funds 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 the Funds, 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 the Funds, 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
i) 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 Funds' Board of Managers 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 Funds. 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.
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 Funds are the property of the Funds and further agrees to
surrender promptly to the Funds any of such records upon the Funds'
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 therefor, a sub-advisory fee, accrued
daily and payable monthly on the average daily net assets in the Funds in
accordance with Schedule B hereto.
9. SERVICES TO OTHERS. Adviser understands, and has advised the Funds' Board
of Managers, 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 Funds 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 Funds' Board of Managers, that in some cases this procedure
may adversely affect the size and the opportunities of the position that
the participating Funds may obtain in a particular security. In addition,
Adviser understands, and has advised Fund's Board of Managers, 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, bad faith 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, 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 Funds'
Board of Managers 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 Members of the Funds' Board of Managers who are not interested persons
of the Funds, 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
Funds or Adviser, or on ninety 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.) Section 10 and 11 herein shall survive the
termination of this Agreement.
13. ACKNOWLEDGEMENTS OF ADVISER. Adviser acknowledges and agrees that:
(a) 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
(b) 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 Funds. 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 Funds 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: Client Services
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 names "JNL Variable Fund LLC," "JNL Variable Fund III LLC," "JNL
Variable Fund V LLC," and "JNLNY Variable Fund I LLC," and the terms
"Members of the JNL Variable Fund LLC's Board of Managers," "Members of the
JNL Variable Fund III LLC's Board of Managers," "Members of the JNL
Variable Fund V LLC's Board of Managers," and "Members of the JNLNY
Variable I Fund LLC's Board of Managers" refer respectively to the Funds
created by, and the Members of the Board of Managers, as members but not
individually or personally, acting from time to time under, the Operating
Agreements, to which reference is hereby made, and to any and all
amendments thereto. The obligations of the Funds entered in the name or on
behalf thereof by any of the Members of the Funds' Board of Managers,
representatives or agents are made not individually but only in such
capacities and are not binding upon any of the Members, interest holders or
representatives of the Funds personally, but bind only the assets of the
Funds, and persons dealing with the Funds must look solely to the assets of
the Funds belonging to such Fund for the enforcement of any claims against
Funds.
19. 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 it has reviewed the post-effective
amendment to the Registration Statement for the Funds 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 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 necessary to make the statements contained therein not
misleading.
20. APPLICABLE LAW. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Michigan.
21. 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 18th day of February, 2004.
XXXXXXX NATIONAL ASSET MANAGEMENT, LLC
By: /s/ Xxxxx X. Xxxx
-----------------------------------------
Name: XXXXX X. XXXX
---------------------------------------
Title: SECRETARY
--------------------------------------
MELLON CAPITAL MANAGEMENT CORPORATION
/s/ Xxxxxxx Xxxxxxxxx
By: _______________________________
Xxxxxxx Xxxxxxxxx
Name: _____________________________
Managing Director
Client Service and Marketing
Title: Communications
_____________________________
SCHEDULE A
(Funds)
JNL VARIABLE FUND LLC
JNL/Mellon Capital Management The DowSM 10 Fund
JNL/Mellon Capital Management The DowSM 5 Fund
JNL/Mellon Capital Management The S&P(R) 10 Fund
JNL/Mellon Capital Management Global 15 Fund
JNL/Mellon Capital Management 25 Fund
JNL/Mellon Capital Management Select Small-Cap Fund
JNL/Mellon Capital Management Communications Sector Fund
JNL/Mellon Capital Management Consumer Brands Sector Fund
JNL/Mellon Capital Management Energy Sector Fund
JNL/Mellon Capital Management Financial Sector Fund
JNL/Mellon Capital Management Pharmaceutical/Healthcare Sector Fund
JNL/Mellon Capital Management Technology Sector Fund
JNL VARIABLE FUND III LLC
JNL/Mellon Capital Management The DowSM 10 Fund
JNL VARIABLE FUND V LLC
JNL/Mellon Capital Management The XxxXX 00 Xxxx
XXXXX VARIABLE FUND I LLC
JNL/Mellon Capital Management The DowSM 10 Fund
JNL/Mellon Capital Management The S&P(R) 10 Fund
JNL/Mellon Capital Management Global 15 Fund
JNL/Mellon Capital Management 25 Fund
JNL/Mellon Capital Management Select Small-Cap Fund
SCHEDULE B
(Compensation)
JNL VARIABLE FUND LLC
JNL/Mellon Capital Management The DowSM 10 Fund
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $50 million 0.12%
Next $50 million 0.06%
Over $100 million 0.03%
JNL/Mellon Capital Management The DowSM 5 Fund
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $50 million 0.12%
Next $50 million 0.06%
Over $100 million 0.03%
JNL/Mellon Capital Management The S&P(R) 10 Fund
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $50 million 0.12%
Next $50 million 0.06%
Over $100 million 0.03%
JNL/Mellon Capital Management Global 15 Fund
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $50 million 0.12%
Next $50 million 0.06%
Over $100 million 0.03%
JNL/Mellon Capital Management 25 Fund
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $50 million 0.12%
Next $50 million 0.06%
Over $100 million 0.03%
JNL/Mellon Capital Management Select Small-Cap Fund
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $50 million 0.12%
Next $50 million 0.06%
Over $100 million 0.03%
JNL/Mellon Capital Management Communications Sector Fund
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $50 million 0.12%
Next $50 million 0.06%
Over $100 million 0.03%
JNL/Mellon Capital Management Consumer Brands Sector Fund
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $50 million 0.12%
Next $50 million 0.06%
Over $100 million 0.03%
JNL/Mellon Capital Management Energy Sector Fund
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $50 million 0.12%
Next $50 million 0.06%
Over $100 million 0.03%
JNL/Mellon Capital Management Financial Sector Fund
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $50 million 0.12%
Next $50 million 0.06%
Over $100 million 0.03%
JNL/Mellon Capital Management Pharmaceutical/Healthcare Sector Fund
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $50 million 0.12%
Next $50 million 0.06%
Over $100 million 0.03%
JNL/Mellon Capital Management Technology Sector Fund
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $50 million 0.12%
Next $50 million 0.06%
Over $100 million 0.03%
JNL VARIABLE FUND III LLC
JNL/Mellon Capital Management The DowSM 10 Fund
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $50 million 0.12%
Next $50 million 0.06%
Over $100 million 0.03%
JNL VARIABLE FUND V LLC
JNL/Mellon Capital Management The DowSM 10 Fund
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $50 million 0.12%
Next $50 million 0.06%
Over $100 million 0.03%
JNLNY VARIABLE FUND I LLC
JNL/Mellon Capital Management The DowSM 10 Fund
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $50 million 0.12%
Next $50 million 0.06%
Over $100 million 0.03%
JNL/Mellon Capital Management The S&P(R) 10 Fund
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $50 million 0.12%
Next $50 million 0.06%
Over $100 million 0.03%
JNL/Mellon Capital Management Global 15 Fund
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $50 million 0.12%
Next $50 million 0.06%
Over $100 million 0.03%
JNL/Mellon Capital Management 25 Fund
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $50 million 0.12%
Next $50 million 0.06%
Over $100 million 0.03%
JNL/Mellon Capital Management Select Small-Cap Fund
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $50 million 0.12%
Next $50 million 0.06%
Over $100 million 0.03%
SCHEDULE C
FEBRUARY 18, 2004
INVESTMENT OBJECTIVES
JNL/MELLON CAPITAL MANAGEMENT THE DOWSM 10 FUND
The investment objective of the JNL/Mellon Capital Management The DowSM 10 Fund
is total return through a combination of capital appreciation and dividend
income.
JNL/MELLON CAPITAL MANAGEMENT THE DOWSM 5 FUND
The investment objective of the JNL/Mellon Capital Management The DowSM 5 Fund
is total return through a combination of capital appreciation and dividend
income.
JNL/MELLON CAPITAL MANAGEMENT THE S&P(R) 10 FUND
The investment objective of the JNL/Mellon Capital Management The S&P(R) 10 Fund
is total return through a combination of capital appreciation and dividend
income.
JNL/MELLON CAPITAL MANAGEMENT GLOBAL 15 FUND
The investment objective of the JNL/Mellon Capital Management Global 15 Fund is
total return through a combination of capital appreciation and dividend income.
JNL/MELLON CAPITAL MANAGEMENT 25 FUND
The investment objective of the JNL/Mellon Capital Management 25 Fund is total
return through a combination of capital appreciation and dividend income.
JNL/MELLON CAPITAL MANAGEMENT SELECT SMALL-CAP FUND
The investment objective of the JNL/Mellon Capital Management Small-Cap Fund is
total return through capital appreciation.
JNL/MELLON CAPITAL MANAGEMENT COMMUNICATIONS SECTOR FUND
The objective of the JNL/Mellon Capital Management Communications Sector Fund is
total return through capital appreciation and dividend income.
JNL/MELLON CAPITAL MANAGEMENT CONSUMER BRANDS SECTOR FUND
The objective of the JNL/Mellon Capital Management Consumer Brands Sector Fund
is total return through capital appreciation and dividend income.
JNL/MELLON CAPITAL MANAGEMENT ENERGY SECTOR FUND
The objective of the JNL/Mellon Capital Management Energy Sector Fund is total
return through capital appreciation and dividend income.
JNL/MELLON CAPITAL MANAGEMENT FINANCIAL SECTOR FUND
The objective of the JNL/Mellon Capital Management Financial Sector Fund is
total return through capital appreciation and dividend income.
JNL/MELLON CAPITAL MANAGEMENT PHARMACEUTICAL/HEALTHCARE SECTOR FUND
The objective of the JNL/Mellon Capital Management Pharmaceutical/Healthcare
Sector Fund is total return through capital appreciation and dividend income.
JNL/MELLON CAPITAL MANAGEMENT TECHNOLOGY SECTOR FUND
The objective of the JNL/Mellon Capital Management Technology Sector Fund is
total return through capital appreciation and dividend income.
