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Exhibit 99.B5(B)(xix)
NASL SERIES TRUST
SUBADVISORY AGREEMENT
AGREEMENT made this 31st day of December, 1996, between NASL Financial
Services, Inc., a Massachusetts corporation ("NASL Financial" or the "Adviser"),
and Pilgrim Xxxxxx & Associates, Ltd. a Delaware 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
v. provide assistance to the Trust's Custodian or other agent
regarding the fair value of securities held by the Portfolios
for which market quotations are not readily available.
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,
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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. On occasions when the Subadviser deems the purchase or sale of a
security to be in the best interest of the Portfolio as well as other
clients of the Subadviser, the Subadviser to the extent permitted by
applicable laws and regulations, may, but shall be under no obligatioin
to, aggregate the securities to be purchased or sold to attempt to
obtain a more favorable price or lower brokerage commissions and
efficient execution. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the
transactiion, will be made by the Subadviser in the manner the
Subadviser considers to be the most equitable and consistent with its
fiduciary obligations to the Portfolio and to its other clients.
e. 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. 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 officer, directors, employees or
agents shall be liable to the Adviser or Trust for any loss suffered by the
Adviser or Trust or the Trust's shareholders resulting from any error of
judgment or mistake of law 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
partners or employees; and neither the Subadviser nor any of its 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
officers, directors, employees or agents.
5. SUPPLEMENTAL ARRANGEMENTS
The Subadviser may (at its own cost) employ, retain, or otherwise avail
itself of the services and facilities of persons and entities within its own
organization or any other organization for the purpose of providing the
Subadviser, Adviser and the Trust with such information, advice or assistance,
including but not limited to advice regarding economic factors and trends and
advice as to transactions in specific securities, as the Subadviser may deem
necessary, appropriate, or convenient for the discharge of its obligtions
hereunder.
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 officers, directors 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
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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 reasonably request or require pursuant to applicable laws and
regulations.
8. DURATION AND TERMINATION OF AGREEMENT
This Agreement shall become effective with respect to Pilgrim Xxxxxx
Growth Portfolio the day and year first above written and with respect to any
other Portfolio, as of the date it is added to Appendix A. 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) ("Independent Trustees") 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 may, if it so elects, continue
to act as investment subadviser with respect to such Portfolio in accordance
with Rule 15a-4 under the Investment Company Act 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, including a majority of the
Independent Trustees, 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 is assigned or
terminates for any other reason. This Agreement shall also terminate upon
written notice to the other party that the other party to this Agreement is in
material breach of this Agreement, unless the other party in material breach of
this Agreement cures such breach to the reasonable satisfaction of the party
alleging the breach within thirty days after written notice.
9. PROVISION OF CERTAIN INFORMATION BY SUBADVISER AND ADVISER
a. The Subadviser will promptly notify the Adviser in writing of the
occurrence of any of the following events:
(1) 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;
(2) 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
(3) any change in actual control or management of the Subadviser or any
change in the portfolio manager of any Portfolio.
b. The Adviser will promptly notify the Subadviser in writing of the
occurrence of any of the following events:
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(1) the Adviser fails to be registered as an investment adviser under the
Investment Advisers Act or under the laws of any jurisdiction in which
the Adviser is required to be registered as an investment adviser in
order to perform its obligations under this Agreement;
(2) the Adviser 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
(3) any change in actual control or management of the Adviser or
termination of the Adviser as investment adviser to the Trust.
10. SERVICES TO OTHER CLIENTS
The services provided by the Subadviser hereunder are not to be deemed
exclusive, and the Subadviser shall be free to furnish similar services to
others so long as its services under this Agreement are not impaired thereby.
Nothing in this Agreement shall limit or restrict the right of any director,
officer, or employee of the Subadviser to engage in any other business or to
devote his or her time and attention in part to the management or other aspects
of any other business, whether of a similar nature or a dissimilar nature, nor
to limit or restrict the right of the Subadviser to engage in any other business
or to render services of any kind to any other corporation, firm, individual or
association.
11. AMENDMENTS TO THE AGREEMENT
Except to the extent permitted by the Investment Company Act or the
rules and regulations thereunder or pursuant to any exemptive order issued
thereunder, this Agreement may be amended by the parties only if such amendment,
if material, is specifically approved by the vote of a majority of the
outstanding voting securities of each of the Portfolios affected by the
amendment (unless such approval is not required by Section 15 of the Investment
Company Act as interpreted by the staff of the Securities and Exchange
Commission) and by the vote of a majority of the Independent Trustees of the
Trust 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.
12. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement of the
parties.
13. HEADINGS
The headings in the sections of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.
14. 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 on the date delivered or mailed in accordance with this paragraph.
15. 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.
16. GOVERNING LAW
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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.
17. 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: ______________________________
by: ______________________________
[SEAL] Pilgrim Xxxxxx & Associates, Ltd.
by: ______________________________
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APPENDIX A
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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"):
Pilgrim Xxxxxx Growth Portfolio: .60% of the first $50,000,000, .60%
between $50,000,000 and $200,000,000, .50% between $200,000,000 and
$500,000,000 and .50% 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.
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