1
EX-99.B5-s
INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT is effective this 17th day of December, 1997, by and
between XXXXXXX NATIONAL FINANCIAL SERVICES, INC., a Delaware Corporation and
registered investment adviser ("Adviser"), and LAZARD ASSET MANAGEMENT, a
division of Lazard Freres & Co. LLC, a New York limited liability company, 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, the Trust is authorized to issue separate series, each series
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 series of the Trust listed on
Schedule A hereto ("Fund").
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 Fund 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 series other than the
Fund 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 series
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) 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;
2
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 Fund; and
f) the Trust's most recent prospectus and Statement of
Additional Information (collectively called the "Prospectus").
Adviser will 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 furnish an investment program
in respect of, and make investment decisions for, all assets of the Fund
and place all orders for the purchase and sale of securities, all on
behalf of the Fund. In the performance of its duties, Sub-Adviser will
satisfy its fiduciary duties to the Fund (as set forth below), and will
monitor the Fund's investments, and will comply with the provisions of
Trust's Declaration of Trust and By-Laws, as amended from time to time,
and the stated investment objectives, policies and restrictions of the
Fund. 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 Fund and to consult with each other regarding
the investment affairs of the Fund. Sub-Adviser will report 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 Fund.
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
Securities and Exchange Commission 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 place orders pursuant to its investment determinations
for the Fund either directly with the issuer or with any broker or
dealer, including an affiliated broker-dealer which is a member of a
national securities exchange as permitted in accordance with
guidelines established by the Board of Trustees. 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
2
3
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 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 a regular basis at reasonable times the management of the Fund,
including, without limitation, review of the general investment
strategies of the Fund, the performance of the Fund 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 Fund's securities transactions and will furnish Adviser and
Trust's Board of Trustees such periodic and special reports as the
Board or Adviser may request;
f) will act upon instructions from Adviser not inconsistent with
the fiduciary duties hereunder;
g) 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; and
h) will vote proxies received in connection with securities held
by the Fund consistent with its fiduciary duties hereunder.
4. Expenses. During the term of this Agreement, Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage
commission, if any) purchased for the Fund.
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 on the average daily net assets in
the Fund or Funds in
3
4
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.
The Sub-Adviser represents and warrants that the Sub-Adviser shall not
enter into a subadvisory agreement with a new mutual fund specifically
designed for variable insurance products with total relationship assets
under management less than the Trust to provide substantially similar
investment management services subject to substantially similar mandate,
guidelines and restrictions at a fee rate which produces a fee less than
the fee produced by the rate set forth in schedule B for the level of
assets in the Trust. This provision shall not apply to any accounts of
the Sub-Adviser, its employees or members or any client that has a
personal or familial relationship with the Sub-Adviser or its employees
or members.
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 Fund and one or more other
investment advisory clients of Sub-Adviser have available funds for
investment, investments selected for each will be allocated in a manner
believed by Sub-Adviser to be equitable to each. Adviser recognizes, and
has advised Trust's Board of Trustees, that in some cases this procedure
may adversely affect the size of the position that the participating Fund
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.
8. Standard of Care and Limitation of Liability. The Sub-Adviser shall
exercise its best judgment and shall act in good faith in rendering the
services pursuant to this Agreement.
Sub-Adviser, its officers, directors, employees, agents or affiliates
will not be subject to any liability to the Adviser or the Fund or their
directors, officers, employees, agents or affiliates 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. Notwithstanding Section 8 of this Agreement, the
Sub-Adviser agrees to indemnify and hold harmless the Adviser, any
affiliated person of the Adviser, and each person, if any, who, within the
meaning of Section 15 of the 1933 Act, controls ("controlling person") the
Adviser (all of such persons being referred to as "Adviser Indemnified
Persons") against any and all losses, claims, damages, liabilities, or
litigation (including reasonable legal and other expenses) to which an
Adviser Indemnified Person may become subject under the 1933 Act, 1940
Act, the Investment Advisers Act of 1940, the Internal Revenue Code,
4
5
under any other statute, at common law or otherwise, arising out of the
Sub-Adviser's responsibilities as Sub-Adviser to the Fund and to the Trust
which (1) may be based upon any misfeasance, malfeasance, or nonfeasance
by the Sub-Adviser, any of its employees or representatives, or any
affiliate of or any person acting on behalf of the Sub-Adviser, (2) may
be based upon a failure to comply with Section 3 of this Agreement, or
(3) may be based upon any untrue statement or alleged untrue statement of
a material fact contained in the Prospectus, or any amendment or
supplement thereto, or the omission or alleged omission to state therein
a material fact known or which should have been 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 Trust, or any
affiliated person of the Adviser or Trust by the Sub-Adviser or any
affiliated person of the Sub-Adviser; provided, however, that in no case
shall the indemnity 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.
Notwithstanding the foregoing in Sections 8 and 9 the Sub-Adviser may be
liable to the Adviser and the Trust for Acts of good faith under law and
nothing contained herein shall constitute a waiver or limitation of
rights that the Adviser or Trust may have under federal or state
securities laws.
10. 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 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, and in either event approved also by a majority
of the Trustees of the Trust who are not interested persons of the Trust,
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 Trust 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.)
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
5
6
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 the Trust personally,
but bind only the assets of the Trust, and persons dealing with the Fund
must look solely to the assets of the Trust belonging to such Fund for
the enforcement of any claims against Trust.
14. 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 is has reviewed the
post-effective amendment to the Registration Statement for the Trust
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,
directly or indirectly, 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 which was required to
be stated therein or necessary to make the statements contained therein
not misleading.
15. Proprietary Rights. Adviser and the Trust represent, and the Sub-Adviser
acknowledges, that Adviser, the Trust and/or an affiliated party of the
Adviser or the Trust are the sole owner(s) of the names "JNL Series
Trust", "Xxxxxxx National Financial Services, Inc.", "Xxxxxxx National
Life Insurance Company", "JNL" and certain logos associated with such
names (the "JNL Marks"). Sub-Adviser represents, and the Trust and the
Adviser acknowledge, that Sub-Adviser is the sole owner of the names
"Lazard Asset Management" and certain logos associated with such name
(the "Lazard Marks").
The use by the Sub-Adviser, or its affiliates of any JNL Marks or any
representations regarding Adviser, the Trust or any affiliates thereof in
any disclosure document, advertisement, sales literature or other
materials shall remain subject to the approval of Adviser; provided,
however, that (i) Adviser's review of any material pursuant to this
Agreement shall be conducted in a reasonable and timely manner; (ii)
Adviser's approval under this Agreement shall not be unreasonably
withheld; and (iii) Adviser's approval under this Agreement shall not be
required with respect to any use which has been
6
7
previously approved by Adviser. Sub-Adviser acknowledges and agrees
that it will not use the names Lazard/JNL Small Cap Value Series or
Lazard/JNL Mid Cap Value Series on its own behalf, or in relation to any
investment company for which Sub-Adviser or its successors and any
subsidiary or affiliate thereof acts as investment adviser, without the
express written permission of the Trust or the Adviser, respectively,
except that Sub-Adviser may state that it acts as a sub-advisor to the
Trust and the Adviser.
The use by the Trust and the Adviser, or their affiliates, on their own
behalf or on behalf of the Lazard/JNL Small Cap Value Series or
Lazard/JNL Mid Cap Value Series, of any Lazard Marks or any
representations regarding Sub-Adviser in any disclosure document,
advertisement, sales literature or other materials promoting the
Lazard/JNL Small Cap Value Series or Lazard/JNL Mid Cap Value Series
shall remain subject to the approval of Sub-Adviser; provided, however,
that (i) Sub-Adviser's review of any material pursuant to this Agreement
shall be conducted in a reasonable and timely manner; (ii) Sub-Adviser's
approval under this Agreement shall not be unreasonably withheld; and
(iii) Sub-Adviser's approval under this Agreement shall not be required
with respect to any use which has been previously approved by
Sub-Adviser, including, but not limited to, any use which has been
derived from disclosure contained in the Trust's or the Adviser's most
recent Prospectus and/or Statement of Additional Information, or any
supplements thereto.
The parties hereby acknowledge that the Trust has adopted the names
"Lazard/JNL Small Cap Value Series" and "Lazard/JNL Mid Cap Value Series"
through the permission of Sub-Adviser.
16. Applicable Law. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Michigan.
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this
Agreement to be executed as of this 17th day of December, 1997.
XXXXXXX NATIONAL FINANCIAL
SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxx
----------------------
Title: President
----------------------
LAZARD ASSET MANAGEMENT
By: /s/
------------------------
Name:
-----------------------
Title:
-----------------------
7
8
SCHEDULE A
(Fund)
LAZARD/JNL SMALL CAP VALUE SERIES
LAZARD/JNL MID CAP VALUE SERIES
8
9
SCHEDULE B
(Compensation)
LAZARD/JNL SMALL CAP VALUE SERIES
Average Daily Net Assets Annual Rate
---------------------------- -----------
0 to $50 Million: .625%
$50 Million to $150 Million: .575%
$150 Million to $300 Million: .525%
Amounts over $300 Million: .475%
LAZARD/JNL MID CAP VALUE SERIES
Average Daily Net Assets Annual Rate
---------------------------- -----------
0 to $50 Million: .55%
$50 Million to $150 Million: .525%
$150 Million to $300 Million: .475%
Amounts over $300 Million: .45%
9
