EX-99.23(d)(124)
INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT is effective this 3rd day of August, 2007, by and between
XXXXXXX NATIONAL ASSET MANAGEMENT, LLC, a Michigan limited liability company and
registered investment adviser ("Adviser"), and XXXXXX INVESTMENT MANAGEMENT,
LLC, a Delaware 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");
WHEREAS, the Adviser represents that it has entered into an Investment
Advisory and Management Agreement (the "Management Agreement") dated as of
January 31, 2001 with the Trust; 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").
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 appointment 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 prior to the
commencement of the Sub-Adviser's services:
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").
During the term of this Agreement, the Adviser agrees to furnish the
Sub-Adviser at its principal office all proxy statements, reports to
shareholders, sales literature or other materials prepared for distribution
to shareholders of each Fund, prospects of each Fund or the public that
refer to the Fund in any way, prior to the use thereof, and the Adviser
shall not use any such materials if the Sub-Adviser reasonably objects in
writing within five business days (or such other period as may be mutually
agreed) after receipt thereof. The Sub-Adviser's right to object to such
materials is limited to the portions of such materials that expressly
relate to the Sub-Adviser, its services and its clients. The Adviser agrees
to use its reasonable best efforts to ensure that materials prepared by its
employees or agents or its affiliates that refer to the Sub-Adviser or its
clients in any way are consistent with those materials previously approved
by the Sub-Adviser as referenced in the first sentence of this paragraph.
Sales literature may be furnished to the Sub-Adviser by e-mail, first class
or overnight mail, facsimile transmission equipment or hand delivery.
Adviser will furnish the Sub-Adviser with copies of all amendments of or
supplements to the foregoing within a reasonable time before they become
effective. Any amendments or supplements that impact the management of the
Funds will not be deemed effective with respect to the Sub-Adviser until
the Sub-Adviser's approval thereof.
3. MANAGEMENT. Subject always to the supervision of the Adviser, who in turn
is subject to the supervision of the Trust's Board of Trustees, Sub-Adviser
will furnish 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, including foreign or domestic securities
or other property (including financial futures, options and other
instruments of any type), all on behalf of the Funds. In the performance of
its duties, Sub-Adviser will satisfy its fiduciary duties to the Funds (as
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, and the stated investment objectives, policies and
restrictions of the Funds, which may be amended from time to time.
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 Funds and to consult with each other regarding the
investment affairs of the Funds. Sub-Adviser will report to the Board of
Trustees and to Adviser with respect to the implementation of such program.
Sub-Adviser, solely with respect to the assets of the Funds which are under
its management pursuant to this Agreement, and based on information
obtained from the Funds' administrator, custodian and other service
providers, shall take reasonable steps to comply with the diversification
provisions of Section 817(h) of the Internal Revenue Code of 1986, as
amended ("IRC"), and its accompanying Regulation, Treas. Reg. Section
1.817-5, applicable to the Funds.
Adviser will not act in a manner that would result in Sub-Adviser failing
to maintain the required diversification and if the failure to diversify is
inadvertent, Xxxxxxx National Life Insurance Company and any of its
affiliates investing in the Funds, as owner of the assets in the Funds,
shall in good faith and in conjunction with Sub-Adviser follow the
procedures specified in Treas. Reg. Section 1.817-5(a)(2) and Revenue
Procedure 92-25 (or its successor) to request relief from the Commissioner
of Internal Revenue Service, and that in such an event Adviser shall work
in conjunction with Sub-Adviser in the preparation of any request for
relief or closing agreement and, to the extent that Adviser is seeking
indemnification under Section 11 hereof, no filings or agreements shall be
made with the Commissioner of Internal Revenue Service without the prior
written approval of Sub-Adviser.
The Adviser agrees that the Sub-Adviser shall not be liable for any failure
to recommend the purchase or sale of any security on behalf of any Fund on
the basis of any information which might cause such purchase or sale to, in
the Sub-Adviser's opinion, constitute a violation of any federal or state
laws, rules or regulations.
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 comply with all applicable Rules and Regulations of the SEC and
CFTC/NFA 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 report regularly to Adviser and to the Trust's Board of Trustees
as reasonably agreed between the Adviser and Sub-Adviser 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 agreed to by the Adviser and Sub-Adviser,
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 the specified benchmarks and will provide various
other reports from time to time as reasonably requested by Adviser;
d) Will provide to the Adviser (i) a monthly compliance checklist
developed for each Fund by Adviser and Sub-Adviser, and (ii) quarterly
reports developed for each Fund by Adviser and Sub-Adviser;
e) Will prepare and maintain such books and records with respect to each
Fund's securities transactions in accordance with Section 7 herein,
and will furnish Adviser and Trust's Board of Trustees such periodic
and special reports as the Adviser may reasonably request;
f) Will prepare and cause to be filed in a timely manner Form 13F and, if
required, Schedule 13G with respect to securities held for the account
of the Funds subject to Sub-Adviser's supervision;
g) Will act upon reasonable instructions from Adviser;
h) Will treat confidentially and as proprietary information of Trust all
such records and other information relative to the 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, PROVIDED, HOWEVER, that notwithstanding the
foregoing, Sub-Adviser may disclose such information as required by
applicable law, regulation or upon request by a regulator or auditor
of Sub-Adviser;
i) Will vote proxies received in connection with securities held by the
Funds consistent with its fiduciary duties hereunder; and
j) May not consult with any other sub-adviser of the Trust concerning
transactions in securities or other assets for any investment
portfolio of the Trust, including the Funds, except that such
consultations are permitted between the current and successor
sub-advisers of the Funds in order to effect an orderly transition of
sub-advisory duties so long as such consultations are not concerning
transactions prohibited by Section 17(a) of the 1940 Act.
4. CUSTODY OF ASSETS. Sub-Adviser shall at no time have the right to
physically possess the assets of the Funds or have the assets registered in
its own name or the name of its nominee, nor shall Sub-Adviser in any
manner acquire or become possessed of any income, whether in kind or cash,
or proceeds, whether in kind or cash, distributable by reason of selling,
holding or controlling such assets of the Funds. In accordance with the
preceding sentence, Sub-Adviser shall have no responsibility with respect
to the collection of income, physical acquisition or the safekeeping of the
assets of the Funds. All such duties of collection, physical acquisition
and safekeeping shall be the sole obligation of the custodian.
5. BROKERAGE. The Sub-Adviser is responsible for decisions to buy and sell
securities for each Fund, broker-dealer selection, and negotiation of
brokerage commission rates. Sub-Adviser shall have the express authority to
negotiate, open, continue and terminate brokerage accounts and other
brokerage arrangements with respect to all portfolio transactions entered
into by Sub-Adviser on behalf of the Funds. Sub-Adviser will provide copies
of futures agreements entered into by the Funds to the Adviser, if
applicable. It is the Sub-Adviser's general policy in selecting a broker to
effect a particular transaction to seek to obtain "best execution", which
means prompt and efficient execution of the transaction at the best
obtainable price with payment of commissions which are reasonable in
relation to the value of the brokerage services provided by the broker.
Consistent with this policy, the Sub-Adviser, in selecting broker-dealers
and negotiating commission rates, will take all relevant factors into
consideration, including, but not limited to: the best price available; the
reliability, integrity and financial condition of the broker-dealer; the
size of and difficulty in executing the order; the broker's execution
capabilities and any research provided by the broker that aids the
Sub-Adviser's investment decision-making process. Subject to such policies
and procedures as the Trust's Board of Trustees may determine, the
Sub-Adviser shall have discretion to effect investment transactions for
each Fund through broker-dealers (including, to the extent permissible
under applicable law, broker-dealer affiliates) who provide brokerage
and/or research services, as such services are defined in section 28(e) of
the Securities Exchange Act of 1934, as amended (the "1934 Act"), and to
cause such Fund to pay any such broker-dealers an amount of commission for
effecting a portfolio investment transaction in excess of the amount of
commission another broker-dealer would have charged for effecting that
transaction, if the Sub-Adviser determines in good faith that such amount
of commission is reasonable in relation to the value of the brokerage or
research services provided by such broker-dealer, viewed in terms of either
that particular investment transaction or the Sub-Adviser's overall
responsibilities with respect to such Fund and other accounts to which the
Sub-Adviser exercises investment discretion (as such term is defined in
section 3(a)(35) of the 1934 Act). Allocation of orders placed by the
Sub-Adviser on behalf of a Fund to such broker-dealers shall be in such
amounts and proportions as the Sub-Adviser shall determine in good faith in
conformity with its responsibilities under applicable laws, rules and
regulations. The Sub-Adviser will submit reports on brokerage placements to
the Adviser as reasonably requested by the Adviser, in such form as may be
mutually agreed to by the parties hereto, indicating the broker-dealers to
whom such allocations have been made and the basis therefore.
6. EXPENSES. The Sub-Adviser shall bear all expenses incurred by it in
connection with the performance of its services under this Agreement. Each
Fund will bear certain other expenses to be incurred in its operation,
including, but not limited to, investment advisory fees, and administration
fees; fees for necessary professional and brokerage services; costs
relating to local administration of securities; and fees for any pricing
services. All other expenses not specifically assumed by the Sub-Adviser
hereunder or by the Adviser under the Management Agreement are borne by the
applicable Fund or the Trust.
7. 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 shall be available for inspection by the Trust and
Adviser upon their reasonable request and agrees to provide the Trust with
copies of 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
related to each Fund's portfolio transactions. The Adviser shall maintain
all books and records not related to the Fund's portfolio transactions.
8. 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 therefore, a sub-advisory fee accrued
daily and payable monthly on the average daily net assets in the Funds in
accordance with Schedule B hereto.
9. 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
or accounts. 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 suitable and appropriate for each will be allocated
in a manner believed by Sub-Adviser to be equitable to each. Sub-Adviser
may group orders for a Fund with orders for other funds and accounts to
obtain the efficiencies that may be available on larger transactions when
it determines that investment decisions are appropriate for each
participating account. Sub-Adviser cannot assure that such policy will not
adversely affect the price paid or received by a Fund. Adviser recognizes,
and has advised Trust's Board of Trustees, that in some cases this
procedure may adversely affect the size and the opportunities of the
position that the participating Fund may obtain in a particular security.
In addition, Adviser understands, and has advised the 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.
10. LIMITATION OF LIABILITY. Sub-Adviser, its officers, directors, employees,
agents or affiliates will not be subject to any liability to the Adviser or
the Funds or their directors, officers, employees, agents or affiliates for
any error of judgment or mistake of law or for any loss suffered by the
Funds, any shareholder of the Funds or the Adviser in connection with the
matters to which this Agreement relates, 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 ("Disabling Conduct"). Federal
and State securities laws may impose liabilities under certain
circumstances on persons who act in good faith, and therefore nothing
herein shall in any way constitute a waiver or limitation of any right
which Adviser may have under any applicable laws.
11. INDEMNIFICATION. Except for Disabling Conduct, the Adviser shall indemnify
the Sub-Adviser (and its affiliates, employees, directors and officers)
against any claim, damages, loss or liability (including reasonable
attorneys' fees) arising out of the Sub-Adviser's conduct under this
Agreement. The Sub-Adviser shall indemnify the Adviser against any claim,
damages, loss or liability (including reasonable attorneys' fees) arising
out of the Sub-Adviser's conduct under this Agreement which result from
Disabling Conduct by the Sub-Adviser, any of its employees or
representatives, or any affiliate of the Sub-Adviser.
12. DURATION AND TERMINATION. This Agreement will become effective as to a Fund
upon execution or, if later, on 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 the date of its execution.
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 sixty 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.) Section 10 and 11 herein shall survive the termination of
this Agreement.
13. ACKNOWLEDGEMENTS OF ADVISER. Adviser acknowledges and agrees that:
(a) It is excluded from the definition of a commodity pool operator under
CFTC Rule 4.5, and in connection with such exemption has filed a
notice of eligibility and will provide the Sub-Adviser with a copy of
such notice of eligibility before the execution of this Agreement;
(b) The Adviser hereby acknowledges that not less than forty-eight (48)
hours before the date it has executed this Agreement, it received from
the Sub-Adviser a copy of Part II of Sub-Advisers Form ADV, as
required by Rule 204-(3) of the Investment Advisers Act of 1940, as
amended; and
(c) 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 1013(d), the term
affiliate shall not include independent agents who are not employees
of the Adviser or its corporate affiliates.
14. OBLIGATIONS OF ADVISER. The Adviser agrees to provide or complete, as the
case may be, the following prior to the commencement of the Sub-Adviser's
investment advisory services as specified under this Agreement:
(a) A list of first tier affiliates and second tier affiliates (i.e.,
affiliates of affiliates) of the Fund;
(b) A list of restricted securities for each Fund (including CUSIP, Sedol
or other appropriate security identification); and
(c) A copy of the current compliance procedures for each Fund.
The Adviser also agrees to promptly update the above referenced items in
order to ensure their accuracy, completeness and/or effectiveness.
15. CONFIDENTIAL TREATMENT. It is understood that any information or
recommendation supplied by, or produced by, Sub-Adviser in connection with
the performance of its obligations hereunder is to be regarded as
confidential and for use only by the Adviser and the Trust. Furthermore,
except as required by law (including, but not limited to semi-annual,
annual or other filings made under the 0000 Xxx) or as agreed to by the
Adviser and Sub-Adviser, the Adviser and Trust will not disclose any list
of securities held by the Fund until it is either filed with the Securities
& Exchange Commission or mailed out to shareholders, which filing or
mailing shall not be made sooner than 30 days after quarter end in any
manner whatsoever except as expressly authorized in this Agreement, except
that the top 10 holdings may be disclosed 15 days after month end. In
addition, at the end of each quarter, the Adviser may disclose to certain
third party data or service providers to the Fund, who have entered into a
confidentiality agreement with the Adviser, a list of securities purchased
or sold by the Fund during the quarter.
16. ENTIRE AGREEMENT; AMENDMENT OF THIS AGREEMENT. This Agreement constitutes
the entire agreement between the parties with respect to the Funds. 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.
17. 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
designated herein.
a) TO ADVISER:
Xxxxxxx National Life Insurance Company
0 Xxxxxxxxx Xxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
b) TO SUB-ADVISER:
Xxxxxx Investment Management, LLC
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
18. MISCELLANEOUS. The captions in this Agreement are included for convenience
of reference only and in no way define or limit 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 or agents of Trust personally, but bind only the assets
of Trust, and persons dealing with the Funds must look solely to the assets
of Trust belonging to such Fund for the enforcement of any claims against
the Trust.
19. APPLICABLE LAW. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Michigan.
20. COUNTERPART SIGNATURES. This Agreement may be executed in several
counterparts, including via facsimile, each of which shall be deemed an
original for all purposes, including judicial proof of the terms hereof,
and all of which together shall constitute and be deemed one and the same
agreement.
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this
Agreement to be executed as of this 3rd day of August 2007.
XXXXXXX NATIONAL ASSET MANAGEMENT, LLC
By: /s/ Xxxx X. Xxxxx
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Name: XXXX X. XXXXX
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Title: PRESIDENT
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XXXXXX INVESTMENT MANAGEMENT, LLC
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
--------------------------------
Title: Senior Managing Director
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SCHEDULE A
AUGUST 3, 2007
(Funds)
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JNL/Xxxxxx Equity Fund
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JNL/Xxxxxx Midcap Growth Fund
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SCHEDULE B
AUGUST 3, 2007
(Compensation)
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JNL/XXXXXX EQUITY FUND
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Average Daily Net Assets ANNUAL RATE
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$0 to $150 Million 0.45%
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$150 Million to $300 Million 0.35%
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Amounts over $300 Million 0.30%
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JNL/XXXXXX MIDCAP GROWTH FUND
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Average Daily Net Assets ANNUAL RATE
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$0 to $250 Million 0.475%
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Amounts over $250 Million 0.40%
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