INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT is effective this ______ day of ______________, 2006, by and
between XXXXXXX NATIONAL ASSET MANAGEMENT, LLC, a Michigan limited liability
company and registered investment adviser ("Adviser"), and WESTERN ASSET
MANAGEMENT COMPANY, a [INSERT STATE] corporation 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, Adviser desires to retain Sub-Adviser as Adviser's agent to
furnish investment advisory services to the investment portfolios of the Trust
listed on Schedule A hereto (each a "Fund" and collectively the "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 appointments and agrees to
furnish the services herein set forth for the compensation herein provided.
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 Funds; and
(f) the Trust's most recent prospectus and Statement of
Additional Information for the Funds (collectively called
the "Prospectus").
Adviser will promptly furnish the Sub-Adviser from time to time with copies
of all amendments of or supplements to the foregoing.
3. MANAGEMENT. Subject always to the supervision of Trust's Board of
Trustees and the Adviser, Sub-Adviser will establish 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, all on behalf of the Funds.
In the performance of its duties, Sub-Adviser will undertake the duties to the
Fund set forth below, and will monitor the Funds' investments, and will comply
with the provisions of Trust's Declaration of Trust and By-Laws, as amended from
time to time, the Trust's Registration Statement, as amended and filed with the
SEC, and the stated investment objectives, policies and restrictions of the
Funds. Sub-Adviser and Adviser will each make its officers and employees
available to the other from time to time at reasonable times to review the
investment policies of the Funds and to consult with each other regarding the
investment affairs of the Funds. Sub-Adviser will report from time to time as
reasonably requested 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 Funds.
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 other 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 will conduct its activities under
this Agreement in all matters and respects 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 Funds either directly with the issuer or with any
broker or dealer. 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. In no instance will
portfolio securities be purchased from or sold to the
Adviser, Sub-Adviser or any entity which to the knowledge of
the Adviser or Sub-Adviser is an affiliated person of either
the Trust, Adviser, or Sub-Adviser, except as may be
permitted under the 1940 Act;
(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 regular basis at reasonable times 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 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 Funds' securities transactions and will
furnish Adviser and Trust's Board of Trustees such periodic
and special reports as the Board or Adviser may reasonably
request;
(f) 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,
except after prior notification to and approval in writing
by Trust, 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 Trust;
(g) will receive the research and recommendations of Adviser
with respect to the investment and reinvestment of the
assets of the Funds.
4. EXPENSES. During the term of this Agreement, Sub-Adviser, at its
expense, will furnish (i) all necessary investment and management facilities,
including salaries of personnel required for it to execute its duties and (ii)
administrative facilities, including bookkeeping, clerical personnel and
equipment necessary for the efficient conduct of the investment affairs of the
Funds as set forth in this Agreement.
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 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, 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.
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
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,
but Sub-Adviser cannot assure, and assumes no responsibility for equality among
all accounts and customers. Sub-Adviser shall be permitted to bunch or aggregate
orders for the Fund(s) with orders for other funds and accounts, and
transactions in such securities will be made insofar as feasible, for all funds
and accounts in a manner deemed equitable to all. Adviser recognizes, and has
advised Trust's Board of Trustees, that in some cases this procedure may
adversely affect the size of the position or price that the participating
Fund(s) may obtain in a particular security. 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.
By reason of the Sub-Adviser's investment advisory activities and the
investment banking and other activities of its affiliates, the Sub-Adviser may
acquire confidential information or be restricted from initiating transactions
in certain securities. The Adviser acknowledges and agrees that the Sub-Adviser
will not be free to divulge to the Adviser, or to act upon, any such
confidential information with respect to the Sub-Adviser's performance of this
Agreement and that, due to such a restriction, the Sub-Adviser may not initiate
a transaction the Sub-Adviser otherwise might have initiated.
8. LIMITATION OF LIABILITY. Adviser will not take any action against
Sub-Adviser to hold Sub-Adviser liable 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, 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. Adviser and the Sub-Adviser each agree to indemnify the
other against any claim against, loss or liability to such other party
(including reasonable attorneys' fees) arising out of any action on the part of
the indemnifying party which constitutes willful misfeasance, bad faith or gross
negligence.
10. DURATION AND TERMINATION. This Agreement will become effective upon
execution 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. Notwithstanding the foregoing, this Agreement may be terminated as to the
Fund at any time, without the payment of any penalty, on sixty days' written
notice by the Trust or by 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 meaning
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. 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 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
Trust.
14. APPLICABLE LAW. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Michigan.
15. PROPRIETARY RIGHTS. Adviser agrees and acknowledges that Sub-Adviser is
the sole owner of the name and xxxx "Xxxxxxx Xxxxxxxx Asset Management Inc" and
that all use of any designation comprised in whole or part of Salomon Brothers
Asset Management Inc under this Agreement shall inure to the benefit of
Sub-Adviser. The Sub-Adviser hereby authorizes the use of the name and xxxx
Xxxxxxx Brothers Asset Management Inc as set forth in Schedule A on behalf of
the Funds. Adviser shall not, and Adviser shall use its best efforts to cause
the Funds not to, without the prior written consent of Sub-Adviser, make
representations regarding Sub-Adviser in any disclosure document, advertisement
or sales literature or other materials promoting the Funds. Upon expiration or
termination of this Agreement for any reason, Adviser shall as promptly as
practicable cause the Funds to cease, all use of any designation comprised in
whole or in part of Salomon Brothers Asset Management Inc as soon as reasonably
practicable.
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this Agreement
to be executed as of this _____ day of ___________, 2006.
XXXXXXX NATIONAL ASSET MANAGEMENT, LLC
By:
-------------------------------------
Name: XXXXXX X. XXXXXXX
--------------------------------------
Title: PRESIDENT
--------------------------------------
WESTERN ASSET MANAGEMENT COMPANY
By:
-------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
SCHEDULE A
DATED ____________, 2006
(Funds)
JNL/WAMCO U. S. Government & Quality Bond Fund
JNL/WAMCO Strategic Bond Fund
JNL/WAMCO High Yield Bond Fund
SCHEDULE B
DATED _____________, 2006
(Compensation)
JNL/WAMCO HIGH YIELD BOND FUND
Average Daily Net Assets Annual Rate
0 to $50 Million: .35%
$50 Million to $100 Million: .30%
Amounts over $100 Million: .25%
JNL/WAMCO STRATEGIC BOND FUND
Average Daily Net Assets Annual Rate
0 to $50 Million: .375%
$50 Million to $150 Million: .350%
$150 Million to $300 Million: .300%
$300 Million to $500 Million: .300%
Amounts over $500 Million: .250%
JNL/WAMCO U. S. GOVERNMENT & QUALITY BOND FUND
Average Daily Net Assets Annual Rate
0 to $50 Million: .225%
$50 Million to $150 Million: .225%
$150 Million to $300 Million: .175%
$300 Million to $500 Million: .150%
Amounts over $500 Million: .100%
