INVESTMENT ADVISORY AND
MANAGEMENT AGREEMENT
This INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT is dated as of the 1st
day of November, 2005 between JNL Investors Series Trust, a Massachusetts
business trust, (the "Trust") and Xxxxxxx National Asset Management, LLC, a
Michigan limited liability company (the "Adviser").
WHEREAS, the Trust is authorized to issue separate Funds, each Fund having
its own investment objective or objectives, policies and limitations; and
WHEREAS, the Trust on behalf of its investment Funds listed on Schedule A
hereto ("Fund") desires to retain Adviser to perform investment advisory
services, on the terms and conditions set forth herein; and
WHEREAS, the Adviser agrees to serve as the investment adviser and business
manager for the Funds on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the mutual covenants contained herein
and for other good and valuable consideration, the Trust and the Adviser agree
as follows:
1. APPOINTMENT
The Trust hereby appoints the Adviser to provide certain investment
advisory services to the Funds for the period and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein provided.
In the event the Trust designates one or more Funds other than the Fund
with respect to which the Trust wishes to retain the Adviser to render
investment advisory services hereunder, it shall notify the Adviser in writing.
If the Adviser is willing to render such services, it shall notify the Trust in
writing, whereupon such Funds shall become a Fund hereunder, and be subject to
this Agreement.
2. DUTIES
The Adviser shall manage the affairs of the Trust including, but not
limited to, continuously providing the Trust with investment advice and business
management, including investment research, advice and supervision, determining
which securities shall be purchased or sold by each Fund, effecting purchases
and sales of securities on behalf of each Fund (and determining how voting and
other rights with respect to securities owned by each Fund shall be exercised).
The management of the Funds by the Adviser shall be subject to the control of
the Trustees of the Trust (the "Trustees") and in accordance with the
objectives, policies and principles for each Fund set forth in the Trust's
Registration Statement and its current Prospectus and Statement of Additional
Information, as amended from time to time, the requirements of the Investment
Company Act of 1940, as amended (the "Act") and other applicable law, as well as
to the factors affecting the Trust's status as a regulated investment company
under the Internal Revenue Code of 1986, as amended, (the "Code") and the
regulations thereunder and the status of the diversification requirements set
forth in Section 851 of the Code and the regulations thereunder. In performing
such duties, the Adviser shall (i) provide such office space, bookkeeping,
accounting, clerical, secretarial, and administrative services (exclusive of,
and in addition to, any such service provided by any others retained by the
Trust or any of its Funds) and such executive and other personnel as shall be
necessary for the operations of each Fund, (ii) be responsible for the financial
and accounting records required to be maintained by each Fund (including those
maintained by the Trust's custodian), and (iii) oversee the performance of
services provided to each Fund by others, including the custodian, transfer
agent, shareholder servicing agent and sub-adviser, if any. The Trust
acknowledges that the Adviser also acts as the investment adviser of other
investment companies.
With respect to the JNL Money Market Fund, the Adviser hereby accepts the
responsibilities for making the determinations required by Rule 2a-7 under the
Act to be made by the Trustees of the Trust and which are delegable by the
Trustees pursuant to Paragraph (e) of such Rule, to the extent that the Trustees
may hereinafter delegate such responsibilities to the Adviser.
The Adviser may delegate certain of its duties under this Agreement with
respect to a Fund to a sub-adviser or sub-advisers, subject to the approval of
the Trustees, by entering into sub-advisory agreements (the "Sub-Advisory
Agreements") with one or more sub-advisers. The Adviser is solely responsible
for payment of any fees or other charges arising from such delegation and the
Trust shall have no liability therefor. Consistent with the provisions of the
Act and any applicable exemption thereto, the Trust may enter into Sub-Advisory
Agreements or amend Sub-Advisory Agreements without the approval of the
shareholders of the affected Fund.
To the extent required by the laws of any state in which the Trust is
subject to an expense guarantee limitation, if the aggregate expenses of any
Fund in any fiscal year exceed the specified expense limitation ratios for that
year (calculated on a daily basis), Adviser agrees to waive such portion of its
advisory fee in excess of the limitation, but such waiver shall not exceed the
full amount of the advisory fee for such year except as may be elected by
Adviser in its discretion. For this purpose, aggregate expenses of a Fund shall
include the compensation of Adviser and all other normal expenses and charges,
but shall exclude interest, taxes, brokerage fees on Fund transactions, fees and
expenses incurred in connection with the distribution of Trust shares, and
extraordinary expenses including litigation expenses. In the event any amounts
are so contributed by Adviser to the Trust, the Trust agrees to reimburse
Adviser, provided that such reimbursement does not result in increasing the
Trust's aggregate expenses above the aforementioned expense limitation ratios.
3. EXPENSES
The Adviser shall pay all of its expenses arising from the performance of
its obligations under this Agreement and shall pay any salaries, fees and
expenses of the Trustees and any officers of the Trust who are employees of the
Adviser. The Adviser shall not be required to pay any other expenses of the
Trust, including, but not limited to direct charges relating to the purchase and
sale of Fund securities, interest charges, fees and expenses of independent
attorneys and auditors, taxes and governmental fees, cost of stock certificates
and any other expenses (including clerical expenses) of issue, sale, repurchase
or redemption of shares, expenses of registering and qualifying shares for sale,
expenses of printing and distributing reports and notices to shareholders,
expenses of data processing and related services, shareholder recordkeeping and
shareholder account service, expenses of printing and filing reports and other
documents filed with governmental agencies, expenses of printing and
distributing Prospectuses, fees and disbursements of transfer agents and
custodians, expenses of disbursing dividends and distributions, fees and
expenses of Trustees who are not employees of the Adviser or its affiliates,
membership dues in the investment company trade association, insurance premiums
and extraordinary expenses such as litigation expenses.
4. COMPENSATION
As compensation for services performed and the facilities and personnel
provided by the Adviser under this Agreement, the Trust will pay to the Adviser,
a fee, accrued daily and payable monthly on the average daily net assets in the
Funds, in accordance with Schedule B.
Upon any termination of this Agreement on a day other than the last day of
the month, the fee for the period from the beginning of the month in which
termination occurs to the date of termination shall be prorated according to the
proportion which such period bears to the full month.
5. PURCHASE AND SALE OF SECURITIES
The Adviser shall purchase securities from or through and sell securities
to or through such persons, brokers or dealers (including affiliated brokers or
dealers) as the Adviser shall deem appropriate to carry out the policies with
respect to Fund transactions as set forth in the Trust's Registration Statement
and its current Prospectus or Statement of Additional Information, as amended
from time to time, or as the Trustees may direct from time to time.
Nothing herein shall prohibit the Trustees from approving the payment by
the Trust of additional compensation to others for consulting services,
supplemental research and security, and economic analysis.
6. TERM OF AGREEMENT
This Agreement will become effective as to a Fund upon execution or, if
later, the date that initial capital for such Series is first provided to it. If
approved by the affirmative vote of a majority of the outstanding voting
securities (as defined by the Act) of a Fund with respect to such Fund, voting
separately from any other Fund of the Trust, this Agreement shall continue in
full force and effect with respect to such Fund for two years from the date
thereof and thereafter from year to year, PROVIDED such continuance is approved
at least annually (i) by the Trustees by vote cast in person at a meeting called
for the purpose of voting on such renewal, or by the vote of a majority of the
outstanding voting securities (as defined by the Act) of such Fund with respect
to which renewal is to be effected, and (ii) by a majority of the non-interested
Trustees by a vote cast in person at a meeting called for the purpose of voting
on such renewal. Any approval of this Agreement or the renewal thereof with
respect to a Fund by the vote of a majority of the outstanding voting securities
of that Fund, or by the Trustees which shall include a majority of the
non-interested Trustees, shall be effective to continue this Agreement with
respect to that Fund notwithstanding (a) that this Agreement or the renewal
thereof has not been so approved as to any other Fund, or (b) that this
Agreement or the renewal thereof has not been so approved by the vote of a
majority of the outstanding voting securities of the Trust as a whole. However,
the addition or deletion of a Fund reflecting changes that have been formally
approved by resolution by the Board of Trustees will not require approval by the
Board of Trustees.
7. TERMINATION
This Agreement may be terminated at any time as to a Fund, without payment
of any penalty, by the Trustees or by the vote of a majority of the outstanding
voting securities (as defined in the Act) of such Fund on sixty (60) days'
written notice to the Adviser. Similarly, the Adviser may terminate this
Agreement without penalty on like notice to the Trust provided, however, that
this Agreement may not be terminated by the Adviser unless another investment
advisory agreement has been approved by the Trust in accordance with the Act, or
after six months' written notice, whichever is earlier. This Agreement shall
automatically terminate in the event of its assignment (as defined in the Act).
8. REPORTS
The Adviser shall report to the Trustees, or to any committee or officers
of the Trust acting pursuant to the authority of the Trustees, at such times and
in such detail as shall be reasonable and as the Trustees may deem appropriate
in order to enable the Trustees to determine that the investment policies of
each Fund are being observed and implemented and that the obligations of the
Adviser under this Agreement are being fulfilled. Any investment program
undertaken by the Adviser pursuant to this Agreement and any other activities
undertaken by the Adviser on behalf of the Trust shall at all times be subject
to any directives of the Trustees or any duly constituted committee or officer
of the Trust acting pursuant to the authority of the Trustees.
The Adviser shall furnish all such information as may reasonably be
necessary for the Trustees to evaluate the terms of this Agreement.
9. RECORDS
The Trust is responsible for maintaining and preserving for such period or
periods as the Securities and Exchange Commission may prescribe by rules and
regulations, such accounts, books and other documents that constitute the
records forming the basis for all reports, including financial statements
required to be filed pursuant to the Act and for the Trust's auditor's
certification relating thereto. The Trust and the Adviser agree that in
furtherance of the recordkeeping responsibilities of the Trust under Section 31
of the Act and the rules thereunder, the Adviser will maintain records and
ledgers and will preserve such records in the form and for the period prescribed
in Rule 31a-2 of the Act for each Fund.
The Adviser and the Trust agree that all accounts, books and other
records maintained and preserved by each as required hereby shall be subject at
any time, and from time to time, to such reasonable periodic, special and other
examinations by the Securities and Exchange Commission, the Trust's auditors,
the Trust or any representative of the Trust, or any governmental agency or
other instrumentality having regulatory authority over the Trust. It is
expressly understood and agreed that the books and records maintained by the
Adviser on behalf of each Fund shall, at all times, remain the property of the
Trust.
10. LIABILITY AND INDEMNIFICATION
In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties ("disabling conduct") hereunder on
the part of the Adviser (and its officers, directors, agents, employees,
controlling persons, shareholders and any other person or entity affiliated with
Adviser), Adviser shall not be subject to liability to the Trust or to any
shareholder of the Trust for any act or omission in the course of, or connected
with, rendering services hereunder including, without limitation, any error of
judgment or mistake of law or for any loss suffered by any of them in connection
with the matters to which this Agreement relates, except to the extent specified
in Section 36(b) of the Act concerning loss resulting from a breach of fiduciary
duty with respect to the receipt of compensation for services. Except for such
disabling conduct or liability incurred under Section 36(b) of the Act, the
Trust shall indemnify Adviser (and its officers, directors, agents, employees,
controlling persons, shareholders and any other person or entity affiliated with
Adviser) from any liability arising from Adviser's conduct under this Agreement.
Indemnification to Adviser or any of its personnel or affiliates shall be
made when (i) a final decision on the merits is rendered by a court or other
body before whom the proceeding was brought, that the person to be indemnified
was not liable by reason of disabling conduct or Section 36(b) or, (ii) in the
absence of such a decision, a reasonable determination, based upon a review of
the facts, that the person to be indemnified was not liable by reason of
disabling conduct, by (a) the vote of a majority of a quorum of Trustees who are
neither "interested persons" of the Trust as defined in Section 2(a)(19) of the
Act nor parties to the proceeding ("disinterested, non-party Trustees"), or (b)
an independent legal counsel in a written opinion. The Trust may, by vote of a
majority of the disinterested, non-party Trustees, advance attorneys' fees or
other expenses incurred by officers, Trustees, investment advisers or principal
underwriters, in defending a proceeding upon the undertaking by or on behalf of
the person to be indemnified to repay the advance unless it is ultimately
determined that such person is entitled to indemnification. Such advance shall
be subject to at least one of the following: (1) the person to be indemnified
shall provide a security for the undertaking, (2) the Trust shall be insured
against losses arising by reason of any lawful advances, or (3) a majority of a
quorum of the disinterested, non-party Trustees, or an independent legal counsel
in a written opinion shall determine, based on a review of readily available
facts, that there is reason to believe that the person to be indemnified
ultimately will be found entitled to indemnification.
11. MISCELLANEOUS
Anything herein to the contrary notwithstanding, this Agreement shall not
be construed to require, or to impose any duty upon either of the parties, to do
anything in violation of any applicable laws or regulations.
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of the Commonwealth of Massachusetts, and notice is hereby given that
this instrument is executed on behalf of the Trustees as Trustees, and is not
binding upon any of the Trustees, officers, or shareholders of the Trust
individually but binding only upon the assets and property of the Trust. With
respect to any claim by the Adviser for recovery of that portion of the
investment management fee (or any other liability of the Trust arising
hereunder) allocated to a particular Fund, whether in accordance with the
express terms hereof or otherwise, the Adviser shall have recourse solely
against the assets of that Fund to satisfy such claim and shall have no recourse
against the assets of any other Fund for such purpose.
IN WITNESS WHEREOF, the Trust and the Adviser have caused this Agreement to
be executed by their duly authorized officers as of the date first above
written.
JNL INVESTORS SERIES TRUST
Attest: By:
-----------------------------------
Xxxxx X. Xxxx Xxxxxx X. Xxxxxx
Secretary President
XXXXXXX NATIONAL ASSET
MANAGEMENT, LLC
Attest: By:
-----------------------------------
Xxxxx X. Xxxx Xxxx X. Xxxxx
Secretary Chief Financial Officer
SCHEDULE A
DATED NOVEMBER 1, 2005
(Fund)
JNL Money Market Fund
SCHEDULE B
DATED NOVEMBER 1, 2005
ADVISORY FEE
(ANNUAL RATE BASED
ON AVERAGE NET ASSETS
FUND ASSETS OF EACH FUND)
JNL Money Market Fund $0 to $750 million 0.20%
Over $750 million 0.18%
