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EX-99.B5-xxxxxx
SUB-ADVISORY AGREEMENT
JNL SERIES TRUST
[DATE]
Xxxxxxx National Financial Services, Inc. (the "Adviser") confirms its
agreement with Xxxxxx Investment Management, Inc. (the "Sub-Adviser") with
respect to the JNL/Xxxxxx Growth Series and JNL/Xxxxxx Value Equity Series
(each a "Portfolio") of the JNL Series Trust (the "Fund") as follows:
1. INVESTMENT DESCRIPTION; APPOINTMENT
The Fund employs the Adviser as the manager of the Portfolios pursuant to
an Amended Investment Advisory and Management Agreement dated August 17, 1995,
as amended (the "Management Agreement"), and the Fund and the Adviser desire to
employ and hereby appoint the Sub-Adviser to act as the sub-investment adviser
to the Portfolios. The investment objective(s), policies and limitations
governing each Portfolio are specified in the prospectus (the "Prospectus") and
the statement of additional information (the "Statement") of the Fund filed
with the Securities and Exchange Commission as part of the Fund's Registration
Statement on Form N-1A, as amended or supplemented from time to time, and in
the manner and to the extent as may from time to time be approved by the Board
of Trustees of the Fund (the "Board"). Copies of the Prospectus and the
Statement have been or will be submitted to the Sub-Adviser. The Adviser
agrees promptly to provide copies of all amendments and supplements to the
current Prospectus and the Statement to the Sub-Adviser on an on-going basis.
Until the Adviser delivers any such amendment or supplement to the
Sub-Adviser, the Sub-Adviser shall be fully protected in relying on the
Prospectus and Statement of Additional Information as previously furnished to
the Sub-Adviser. The Sub-Adviser accepts the appointment and agrees to furnish
the services for the compensation, as set forth below.
2. SERVICES AS SUB-ADVISER
(a) Subject to the supervision, direction and approval of the Board and
the Adviser, the Sub-Adviser shall conduct a continual program of investment,
evaluation and, if appropriate in the view of the Sub-Adviser, sale and
reinvestment of each Portfolio's assets. The Sub-Adviser is authorized, in its
sole discretion and without prior consultation with the Adviser, to: (i)
manage each Portfolio's assets in accordance with the Portfolio's investment
objective(s) and policies as stated in the Prospectus and the Statement; (ii)
make investment decisions for each Portfolio; (iii) place purchase and sale
orders for portfolio transactions on behalf of each Portfolio; and (iv) employ
professional portfolio managers and securities analysts who provide research
services to each Portfolio. The Sub-Adviser shall not be responsible for the
administrative affairs of the Fund, including, but not limited to, accounting
for and pricing of the Portfolios. The Sub-Adviser will use its best efforts
to manage each Portfolio so that it complies with the provisions of Section
817(h) of the Internal Revenue Code of 1986, as amended, as
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applicable to the Fund. The Adviser acknowledges and agrees that the
Sub-Adviser's compliance with its obligations in the immediately preceding
sentence will be based on information supplied by the Adviser including, but
not limited to, portfolio lot allocation information. The Adviser agrees to
supply all such information on a timely basis.
In addition, the Sub-Adviser shall furnish the Adviser daily information
concerning portfolio transactions and monthly, quarterly and annual reports
concerning transactions and performance of each Portfolio in such form as may
be mutually agreed upon, and the Sub-Adviser agrees to review each Portfolio
and discuss the management of it from time to time with the Adviser and the
Board.
(b) Unless the Adviser gives the Sub-Adviser written instructions to the
contrary, the Sub-Adviser shall use its good faith judgment in a manner which
it reasonably believes best serves the interests of the Portfolio shareholders
to vote or abstain from voting all proxies solicited by or with respect to the
issuers of securities in which assets of a Portfolio may be invested.
(c) The Sub-Adviser shall maintain and preserve such records related to
each Portfolio's transactions as are required of a Sub-Adviser under the
Investment Advisers Act of 1940, as amended. The Sub-Adviser shall timely
furnish to the Adviser all information relating to the Sub-Adviser's services
hereunder reasonably requested by the Adviser to keep and preserve the books
and records of each Portfolio. The Sub-Adviser will promptly supply to the
Adviser copies of any of such records upon request.
3. BROKERAGE
In selecting brokers or dealers to execute transactions on behalf of a
Portfolio, the Sub-Adviser will seek the best overall terms available. In
assessing the best overall terms available for any transaction, the Sub-Adviser
will consider factors it deems relevant, including, but not limited to, the
breadth of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer and the
reasonableness of the commission, if any, for the specific transaction and on a
continuing basis. In selecting brokers or dealers to execute a particular
transaction, and in evaluating the best overall terms available, the
Sub-Adviser is authorized to consider the brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of
1934, as amended) provided to a Portfolio and/or other accounts over which the
Sub-Adviser or its affiliates exercise investment discretion. Nothing in this
paragraph shall be deemed to prohibit the Sub-Adviser from paying an amount of
commission for effecting a securities transaction in excess of the amount of
commission another member of an exchange, broker, or dealer would have charged
for effecting that transaction, if the Sub-Adviser determined in good faith
that such amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such member, broker, or dealer,
viewed in terms of either that particular transaction or its overall
responsibilities with respect to the relevant Portfolio and/or other accounts
over which the Sub-Adviser or its affiliates exercise investment discretion.
4. COMPENSATION
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In consideration of the services rendered pursuant to this Agreement, the
Adviser will pay the Sub-Adviser an annual fee calculated at the rates set
forth in Exhibit A hereto of each Portfolio's average daily net assets; the fee
is calculated daily and paid monthly. The fee for the period from the
Effective Date (defined below) of the Agreement for a Portfolio to the end of
the month during which the Effective Date occurs shall be prorated according to
the proportion that such period bears to the full monthly period. Upon any
termination of this Agreement with respect to a Portfolio before the end of a
month, the fee for such part of that month for that Portfolio shall be prorated
according to the proportion that such period bears to the full monthly period
and shall be payable upon the date of termination of this Agreement. For the
purpose of determining fees payable to the Sub-Adviser, the value of a
Portfolio's net assets shall be computed at the times and in the manner
specified in the Prospectus and/or the Statement.
5. EXPENSES
The Sub-Adviser shall bear all expenses (excluding brokerage costs,
custodian fees, auditors fees or other expenses to be borne by the Portfolios)
in connection with the performance of its services under this Agreement. The
Fund will bear certain other expenses to be incurred in its operation,
including, but not limited to, investment advisory fees, sub-advisory fees
(other than sub-advisory fees paid pursuant to this Agreement) and
administration fees, fees for necessary professional and brokerage services,
costs relating to local administration of securities, fees for any pricing
service, the costs of regulatory compliance, and costs associated with
maintaining the Fund's legal existence and shareholder relations. The
Sub-Adviser shall only bear the expenses it has expressly agreed to assume
under this Agreement.
6. STANDARD OF CARE AND INDEMNIFICATION
In the performance of its duties, the Sub-Adviser will comply with the
stated investment objectives, policies and restrictions of the Portfolios as
set forth in the Prospectus and Statement and will in all material in
accordance with any applicable regulations of any governmental authority
pertaining to its activities hereunder.
The Sub-Adviser shall exercise its best judgment and shall act in good
faith in rendering the services listed in paragraphs 2 and 3 above. The
Sub-Adviser shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Portfolio or the Adviser in connection with the
matters to which this Agreement relates, provided that nothing in this
Agreement shall be deemed to protect or purport to protect the Sub-Adviser
against any liability to the Adviser, the Fund or to the shareholders of the
Portfolio to which the Sub-Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of the Sub-Adviser's reckless disregard
of its obligations and duties under this Agreement ("Disabling Conduct").
Except for Disabling Conduct, the Adviser shall indemnify and hold the
Sub-Adviser (and its officers, directors, employees, controlling persons,
shareholders and affiliates) harmless from any liability arising from the
Sub-Adviser's conduct under this Agreement.
Notwithstanding the foregoing, the Sub-Adviser shall indemnify and hold
the Adviser against any and all losses, claims, damages, liabilities, or
litigation (including legal and other expenses) to which an Adviser Indemnified
Person may become subject under the 1933 Act,
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1940 Act, the Advisers Act, 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 which (1) result from the Disabling Conduct by the
Sub-Adviser, any of its employees or representatives, or any affiliate of the
Sub-Adviser, (2) result from a failure to comply with Section 2 of this
Agreement, or (3) result from any untrue statement of a material fact contained
in the Prospectus or Statement covering the shares of the Fund or a Portfolio,
or any amendment or supplement thereto, or the omission to state therein a
material fact 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
Fund, or any affiliated person of the Adviser or Fund by the Sub-Adviser or any
affiliated person of the Sub-Adviser for use in the Prospectus or Statement;
provided, however, that in no case shall the indemnify 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.
Sub-Adviser will treat confidentially and as proprietary information of
Fund all records and other information relative to the Fund 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 (1)
after prior notification to and approval in writing by the Fund, which approval
shall not be unreasonably withheld, (2) where required by law or required by a
regulatory authority, or (3) for use in a performance composite where the Fund
is not named.
7. TERM OF AGREEMENT
This Agreement shall become effective on May 1, 1997 (the "Effective
Date") and shall continue for an initial two-year term and shall continue
thereafter so long as such continuance is specifically approved at least
annually as required by the Investment Company Act of 1940 (the "1940 Act").
This Agreement is terminable, with respect to a Portfolio without penalty, on
60 days' written notice, by the Adviser, the Board or by vote of holders of a
majority (as defined in the 1940 Act and the rules hereunder) of the
outstanding voting securities of such Portfolio, or upon 60 days' written
notice, by the Sub-Adviser. This Agreement will also terminate automatically
in the event of its assignment (as defined in the 1940 Act and the rules
thereunder).
8. SERVICES TO OTHER COMPANIES OR ACCOUNTS
The Adviser understands that the Sub-Adviser now acts, will continue to
act and may act in the future as investment manager or adviser to fiduciary and
other managed accounts, and as investment manager or adviser to other
investment companies, including any offshore entitled, or accounts, and the
Adviser has no objection to the Sub-Adviser's so acting, provided that whenever
a Portfolio and one or more other investment companies or accounts managed or
advised by the Sub-Adviser have available funds for investment, investments
suitable and appropriate for each will be allocated in accordance with a
formula believed to equitable to each company and account. The Adviser
recognizes that in some cases this procedure may adversely affect the size of
the position obtainable for a Portfolio. In addition, the Adviser understands
that the persons employed by the Sub-Adviser to assist in the performance of
the Sub-Adviser's duties under this Agreement will not devote their full time
to such service and nothing contained
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in this Agreement shall be deemed to limit or restrict the right of the
Sub-Adviser or any affiliate of the Sub-Adviser to engage in and devote time
and attention to other businesses or to render services of whatever kind or
nature.
9. REPRESENTATIONS
Each of the parties hereto represents that the Agreement has been duly
authorized, executed and delivered by all required corporate action and that
this Agreement does not violate any existing agreements or relationships
between such party and any other party.
The Adviser represents that, to the best of its knowledge, the
post-effective amendment to the Registration Statement for the Fund filed with
the Securities and Exchange Commission contains, as of the date hereof, no
untrue 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.
The Sub-Adviser represents that it has reviewed the post-effective
amendment to the Registration Statement for the Fund 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, 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. The Sub-Adviser further
represents and warrants that it is a duly registered investment adviser under
the Advisers Act and a duly registered investment adviser in all states in
which the Sub-Adviser is required to be registered.
10. USE OF NAME
(a) The Adviser may use (and shall cause any of its affiliates including
the Fund to use) the name "Xxxxxx Investment Management, Inc.", "Xxxxxx
Investment Management", "Xxxxxx Management" or "Xxxxxx" only for so long as
this Agreement or any extension, renewal, or amendment hereof remains in
effect. At such times as this agreement shall no longer be in effect, the
Adviser shall cease (and shall cause its affiliates to cease using) to use
such a name or any other name indicating that it is advised by or otherwise
connected with the Sub-Adviser and shall promptly change its name accordingly.
The Adviser acknowledges that the Fund has included the term "Xxxxxx" in the
names of the Portfolios through permission of the Sub-Adviser, and agrees that
the Sub-Adviser reserves to itself and any successor to its business the right
to grant the non-exclusive right to use the aforementioned names or any similar
names to any other corporation or entity, including but not limited to any
investment company of which the Sub-Adviser or any subsidiary or affiliate
thereof or any successor to the business of any thereof shall be the investment
adviser.
(b) The Adviser will not, and will cause its affiliates to not, refer to
the Sub-Adviser or any affiliate in any prospectus, proxy statement or sales
literature except with the written permission of the Sub-Adviser.
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(c) The Adviser will permit the Portfolio to be used as a funding vehicle
only for Policies issued by Xxxxxxx National Life Insurance Company or any of
its affiliates.
(d) The Adviser will not (and will cause its affiliates to not) engage in
marketing programs (written or otherwise) directed toward the Xxxxxx Capital
Managers contract ("PCM") which explicitly solicit transfers from PCM to the
Adviser's products or those of its affiliates. The Adviser will not (and will
cause its affiliates to not) create or use marketing materials which provide
direct comparisons between PCM and the Adviser's products or those of any of
its affiliates. The Adviser will not (and will cause its affiliates to not)
reimburse voluntarily, or enter into any contract or policy after the date
hereof providing for the reimbursement of any deferred sales charges to
encourage the transfer of assets from PCM to the Adviser's products or those of
any affiliate. For the purposes of this Section 10(d), the term affiliate
shall not include independent agents who are not employees of the Adviser or
its corporate affiliates.
11. MISCELLANEOUS
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 Trust personally, but bind
only the assets of Trust, and persons dealing with the Fund must look solely to
the assets of Trust belonging to such Fund for the enforcement of any claims
against the Trust.
In the event the Fund designates one or more series other than the
Portfolio with respect to which the Fund and the Adviser wish to retain the
Sub-Adviser to render investment advisory services hereunder, they shall notify
the Sub-Adviser in writing. If the Sub-Adviser is willing to render such
services, it shall notify the Trust and the Adviser in writing, whereupon such
series shall become a Portfolio hereunder, and be subject to this Agreement.
If the foregoing is in accordance with your understanding, kindly indicate
your acceptance of this Agreement by signing and returning the enclosed copy of
this Agreement.
Very truly yours,
XXXXXXX NATIONAL FINANCIAL SERVICES, INC.
By: ____________________________________
Accepted:
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XXXXXX INVESTMENT MANAGEMENT, INC.
By:_______________________________
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EXHIBIT A
SUB-ADVISORY FEES
Portfolio Annual Rate
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JNL/Xxxxxx Growth Series 1st $150m 0.50%
next $150m 0.45%
over $300m 0.35%
JNL/Xxxxxx Value Equity Series 1st $150m 0.50%
next $150m 0.45%
over $300m 0.35%
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