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EX-99.B5-t
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 PACIFIC INVESTMENT MANAGEMENT
COMPANY, a Delaware general partnership 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;
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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
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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. Aggregation of Orders. Provided the investment objectives of the Fund
are adhered to, the Adviser agrees that the Sub-Adviser may aggregate
sales and purchase orders of securities held in the Fund with similar
orders being made simultaneously for other accounts managed by the
Sub-Adviser or with accounts of the affiliates of the Sub-Adviser, if in
the Sub-Adviser's reasonable judgment such aggregation shall result in an
overall economic benefit to the Fund, taking into consideration the
advantageous selling or purchase price, brokerage commission and other
expenses. The Adviser acknowledges that the determination of such
economic benefit to the Fund by the Sub-Adviser is subjective and
represents the Sub-Adviser's evaluation that the Fund is benefited by
relatively better purchase or sales prices, lower commission expenses and
beneficial timing of transactions or a combination of these and other
factors.
5. Futures and Options. Provided the investment objectives of the Fund are
adhered to, the Sub-Adviser's investment authority shall include the
authority to purchase, sell, cover open positions, and generally to deal
in financial futures contracts and options thereon.
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The Adviser will (i) open and maintain brokerage accounts for financial
futures and options (such accounts hereinafter referred to as "brokerage
accounts") on behalf of and in the name of the Fund and (ii) execute for
and on behalf of the Fund, standard customer agreements with a broker or
brokers. The Sub-Adviser may, using such of the securities and other
property in the Fund as the Sub-Adviser deems necessary or desirable,
direct the Adviser to deposit on behalf of the Fund, original and
maintenance brokerage deposits and otherwise direct payments of cash, cash
equivalents and securities and other property into such brokerage accounts
and to such brokers as the Sub-Adviser deems desirable or appropriate.
Upon the solicitation of the Adviser, the Sub-Adviser delivered to the
Adviser a copy of its Disclosure Document, as amended, dated July 3,
1997, on file with the Commodity Futures Trading Commission. The Adviser
hereby acknowledges receipt of such copy.
6. 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.
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 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.
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 therefor, a sub-advisory
fee, accrued daily and payable monthly on the average daily net assets in
the Fund or Funds excluding the net assets representing capital
contributed by Xxxxxxx National Life Insurance Company 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.
The Sub-Adviser represents and warrants that in no event shall the
Sub-Adviser provide similar investment advisory services to any client
comparable to the Fund being managed under this Agreement at a composite
rate of compensation less than that provided for herein.
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. 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
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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.
10. 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.
11. Indemnification. Notwithstanding Section 10 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, 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 is based upon the willful misfeasance, bad faith or negligence or
breach of this Agreement by Sub-Adviser or its agents, or may be based
upon any untrue statement of a material fact provided in writing by the
Sub-Adviser specifically for inclusion in the Prospectus, or any amendment
or supplement thereto, or the 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; 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, negligence in the performance
of its duties, or by reason of its breach of this Agreement.
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 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,
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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 meanings of such terms in the 1940
Act.)
13. 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.
14. 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.
15. Proprietary Rights. Sub-Adviser represents, and the Trust and the
Adviser acknowledge, that Sub-Adviser is the sole owner of the names
"Pacific Investment Management Company" and "PIMCO" and certain logos
associated with such names (the "PIMCO Marks").
The use by the Trust and the Adviser, or their affiliates, on their own
behalf or on behalf of the JNL/PIMCO Total Return Bond Series, of any
PIMCO Marks or any representations regarding Sub-Adviser in any disclosure
document, advertisement, sales literature or other materials promoting the
JNL/PIMCO Total Return Bond 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, regarding any PIMCO Marks, PIMCO,
or the JNL/PIMCO Total Return Bond Series, which has been previously
approved by Sub-Adviser.
Sub-Adviser acknowledges and agrees that it will not use the name the
JNL/PIMCO Total Return Bond 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 parties hereby acknowledge that the Trust has adopted the name the
"JNL/PIMCO Total Return Bond Series" through the permission of
Sub-Adviser.
16. 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.
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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.
17. 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.
18. Applicable Law. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Michigan.
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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
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Name: Xxxxxx X. Xxxxxxx
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Title: President
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PACIFIC INVESTMENT MANAGEMENT COMPANY
By: PIMCO Management, Inc., a general
partner
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
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Title: Managing Director
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SCHEDULE A
(Fund)
JNL/PIMCO TOTAL RETURN BOND SERIES
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SCHEDULE B
(Compensation)
JNL/PIMCO TOTAL RETURN BOND SERIES
Average Daily Net Assets Annual Rate
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Amounts over $0: .25%
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