Exhibit D
SUB-INVESTMENT ADVISORY AGREEMENT
This Sub-Investment Advisory Agreement (this "Agreement") is entered into
as of May 1, 2003 by and between Xxxxx Street Advisors, LLC, a Delaware limited
liability company ("Investment Manager") and Janus Capital Management LLC, a
Delaware limited liability company ("JCM").
RECITALS
a. Investment Manager has entered into an Investment Management Agreement
dated May 1, 2003 (the "Investment Management Agreement") with Northwestern
Mutual Series Fund, Inc. (the "Fund"), to act as investment manager to the Janus
Capital Appreciation Portfolio, which is a series of the Fund (the "Portfolio").
b. The Investment Management Agreement provides that Investment Manager may
engage a sub-investment adviser to furnish investment information and advice to
assist Investment Manager in carrying out its responsibilities under the
Investment Management Agreement.
c. Investment Manager and the Directors of the Fund desire to retain JCM to
render investment management services to Investment Manager in the manner and on
the terms set forth in this Agreement.
AGREEMENT
In consideration of the mutual covenants and agreements set forth in this
Agreement, Investment Manager and JCM agree as follows:
1. Sub-Investment Adviser Services.
(a) JCM shall, subject to the control of the Directors of the Fund and
to the supervision of Investment Manager, have exclusive authority to manage the
investment and reinvestment of the assets of the Portfolio, including cash,
provided that such management is in accordance with the Fund's articles of
incorporation, by-laws, prospectus and Statement of Additional Information and
in its registration statements under the Investment Company Act of 1940 (the
"1940 Act"), Investment Manager acknowledges that JCM has authority to trade
every day the market is open. JCM makes no representation or warranty, express
or implied, that any level of performance or investment results will be achieved
by the Portfolio or that the Portfolio will perform comparably with any standard
or index, including other clients of JCM, whether public or private.
(b) JCM shall furnish Investment Manager with monthly, quarterly, and
annual reports concerning transactions and performance of the Portfolio in such
form as may be mutually agreed upon. Upon prior notice, JCM shall permit the
financial statements, books
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and records with respect to the Portfolio to be inspected and audited by
Investment Manager (and/or the independent accountants for Investment Manager or
the Fund) at all reasonable times during normal business hours. JCM shall also
provide Investment Manager with such other information and reports as may
reasonably be requested by Investment Manager from time to time, other than
proprietary information and provided JCM shall not be responsible for Portfolio
accounting, nor shall it be required to generate information derived from
Portfolio accounting data.
(c) JCM has provided to Investment Manager a copy of JCM's Form ADV as
filed with the Securities and Exchange Commission. JCM shall provide to
Investment Manager a list of persons who JCM wishes to have authorized to give
written and/or oral instructions to Custodians of Fund assets for the Portfolio.
(d) JCM shall be responsible for the preparation and filing of
Schedule 13G and Form 13F on behalf of the Portfolio. JCM shall not be
responsible for the preparation or filing of any reports required of the
Portfolio by any governmental or regulatory agency, except as expressly agreed
to in writing. JCM shall vote proxies received in connection with securities
held by the Portfolio.
(e) JCM shall have no responsibility to monitor certain limitations or
restrictions, including without limitation, the 90%-source test, for which JCM
determines it has not been provided sufficient information in accordance with
Section 2 of this Agreement or otherwise. All such monitoring shall be the
responsibility of Investment Manager.
(f) JCM shall supply Investment Manager with such certifications and
other documents with respect to information over which Sub-Adviser has control
or as reasonable and as are necessary to assure compliance by the Portfolio with
the Xxxxxxxx-Xxxxx Act of 2002.
2. Obligations of Investment Manager and the Portfolio.
(a) Investment Manager has provided to JCM the information and
documents listed on the attached Exhibit A. Throughout the term of this
Agreement, Investment Manager shall continue to provide such information and
documents to JCM, including any amendments, updates or supplements to such
information or documents, before or at the time the amendments, updates or
supplements become effective. Investment Manager shall timely furnish JCM with
such additional information as may be reasonably necessary for or requested by
JCM to perform its responsibilities pursuant to this Agreement.
(b) Investment Manager shall be responsible for setting up and
maintaining brokerage accounts and other accounts JCM deems advisable to allow
for the purchase or sale of various forms of securities pursuant to this
Agreement.
(c) As permitted under the Shareholder Communications Act of 1985, as
amended, Investment Manager has elected Objecting Beneficial Owner status
(restricting custodian from disclosing Portfolio holdings to third parties) with
respect to its relationship with
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the custodian identified pursuant to Exhibit A. Throughout the term of this
Agreement, the Investment Manager shall maintain Objecting Beneficial Owner
status and, upon written request of JCM, shall provide written confirmation of
such status.
(d) Investment Manager hereby represents it is in compliance with all
currently applicable anti-money laundering laws, rules and regulations
including, but not limited to, the U.S.A. PATRIOT Act of 2001, P.L. 107-56.
3. Custodian. The Portfolio assets shall be maintained in the custody of
the custodian identified pursuant to Exhibit A. Any assets added to the
Portfolio shall be delivered directly to such custodian. JCM shall have no
liability for the acts or omissions of any custodian of the Portfolio's assets.
JCM shall have no responsibility for the segregation requirement of the 1940 Act
or other applicable law.
4. Broker Dealers. Absent written instructions from Investment Manager to
the contrary, JCM shall place all orders for the purchase and sale of investment
instruments for the Portfolio with brokers or dealers selected by JCM, which may
include brokers or dealers affiliated with JCM. Purchase or sell orders for the
Portfolio may be aggregated with contemporaneous purchase or sell orders of
other clients of JCM. JCM shall use its best efforts to obtain execution of
Portfolio transaction at prices that are advantageous to the Portfolio and at
commission rates that are reasonable in relation to the benefits received.
However, JCM may select brokers or dealers on the basis that they provide
brokerage, research, or other services or products to the Portfolio and/or other
accounts serviced by JCM. JCM may place portfolio transactions with a broker or
dealer with whom it has negotiated a commission in excess of the commission
another broker or dealer would have charged for effecting that transaction if
JCM determines in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research provided by such broker or
dealer, viewed in terms of either that particular transaction or the overall
responsibilities that JCM and its affiliates have with respect to the Portfolio
and to accounts over which they exercise investment discretion, and not all such
services or products will necessarily be used by JCM in managing the Portfolio.
As permitted by Section 28(e) of the Securities Exchange Act of 1934 (the "1934
Act"), JCM may cause the Portfolio to pay a broker-dealer, which provides
"brokerage and research services" (as defined in the 0000 Xxx) to JCM, an amount
of commission for effecting a securities transaction for the Portfolio which may
be in excess of the commission which another broker-dealer would have charged
for effecting that same transaction. In addition, consistent with best
execution, JCM may execute Portfolio transactions through brokers and dealers
that sell shares of mutual funds advised by JCM or recommend to their customers
that they purchase shares of such funds. If JCM determines that any product or
service furnished by a broker has a mixed use, such that it also serves
functions that do not assist in the investment decision-making process, JCM may
allocate the costs of such service or product accordingly. The portion of the
product or service that JCM determines will assist it in the investment
decision-making process may be paid for in brokerage commission dollars. This
allocation may create a conflict of interest for JCM.
5. Fees. Investment Manager shall pay to JCM a monthly fee in accordance
with the attached Exhibit B. Investment Manager shall calculate the fee for each
month during which
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JCM provides investment management services based upon the average daily net
assets of the Portfolio (including cash or cash equivalents) for each such
month. The fee shall be payable to JCM by the fifteenth day of each month. The
fee for the first month during which JCM provides investment management services
shall be based upon the number of days the account was open in that month.
Similarly, if this Agreement is terminated, the fee shall be based upon the
number of days the account was open during the month in which the Agreement is
terminated.
6. Expenses. Investment Manager, the Fund and the Portfolio shall assume
and pay their respective organizational, operational, and business expenses not
specifically assumed or agreed to be paid by JCM pursuant to this Agreement. JCM
shall pay its own organizational, operational, and business expenses but shall
not be obligated to pay any expenses of Investment Manager, the Fund, or the
Portfolio, including without limitation: (a) interest and taxes; (b) brokerage
commissions and other costs in connection with the purchase or sale of
securities or other investment instruments for the Portfolio; and (c) custodian
fees and expenses. Any reimbursement of management fees required by any expense
limitation provision and any liability arising out of a violation of Section
36(b) of the 1940 Act shall be the sole responsibility of Investment Manager.
7. Representations and Warranties.
(a) Investment Manager represents and warrants the following:
(i) Investment Manager has been duly incorporated and is validly
existing and in good standing as a limited liability company
under the laws of the state of Delaware.
(ii) Investment Manager has all requisite corporate power and
authority under the laws of Delaware and federal securities
laws to execute, deliver and to perform this Agreement.
(iii) All necessary corporate proceedings of Investment Manager
have been duly taken to authorize the execution, delivery
and performance of this Agreement by Investment Manager.
(iv) Investment Manager is a registered investment adviser under
the 1940 Act and is in compliance with all other
registrations required.
(v) Investment Manager has complied, in all material respects,
with all registrations required by, and will comply, in all
material respects, with all applicable rules and regulations
of, the Securities and Exchange Commission.
(vi) Investment Manager has authority under the Investment
Management Agreement to execute, deliver and perform this
Agreement.
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(vii) Investment Manager has received a copy of Part II of JCM's
Form ADV no less than 48 hours prior to entering into this
Agreement.
(b) JCM represents and warrants the following:
(i) JCM has been duly incorporated and is validly existing and
in good standing as a limited liability company under the
laws of the state of Delaware.
(ii) JCM has all requisite corporate power and authority under
the laws of Delaware and federal securities laws to execute,
deliver and to perform this Agreement.
(iii) All necessary corporate proceedings of JCM have been duly
taken to authorize the execution, delivery and performance
of this Agreement by JCM.
(iv) JCM is a registered investment adviser under the 1940 Act
and is in compliance with all other registrations required.
(v) JCM has complied, in all material respects, with all
registrations required by, and will comply, in all material
respects, with all applicable rules and regulations, of the
Securities and Exchange Commission.
8. Confidentiality and Proprietary Rights. Investment Manager will not,
directly or indirectly, and will not permit its affiliates employees, officers,
directors, agents, contractors, or the Portfolio to, in any form or by any
means, use, disclose, or furnish, to any person or entity, records or
information concerning the business of JCM, except as necessary for the
performance of its duties under this Agreement or the Investment Management
Agreement, or as required by law upon prior written notice to JCM. JCM or its
affiliates are the sole owners of the name and xxxx "Janus." Investment Manager
shall not, and shall not permit the Portfolio to, without prior written consent
of JCM, use the name or xxxx "Xxxxx" or make representations regarding JCM or
its affiliates. All references contained in this Agreement to "the name or xxxx
`Janus'" shall include but not be limited to the Janus logo, the website
xxx.xxxxx.xxx and any and all electronic links relating to such website.
Investment Manager will make no use of the name or xxxx "Xxxxx" except as
expressly provided in this Agreement or expressly authorized by JCM in writing.
All goodwill associated with the name and xxxx "Janus" shall inure to the
benefit of JCM or its affiliates. Upon termination of this Agreement for any
reason, Investment Manager shall immediately cease, and Investment Manager shall
cause the Portfolio to immediately cease any and all use of any Xxxxx xxxx(s).
9. Non-Exclusivity.
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(a) JCM, its affiliates, or any of their directors, officers,
employees, or agents may buy, sell, or trade any securities or other investment
instruments for their own account or for the account of others for whom it or
they may be acting, provided that such activities will not adversely affect or
otherwise impair the performance by JCM of its responsibilities under this
Agreement. JCM and its affiliates may act as investment manager to or provide
other services with respect to various investment companies and other managed
accounts, which advice or services, including the nature of such services, may
differ from or be identical to advice given or action taken with respect to the
Portfolio. In the event of such activities, the transactions and associated
costs will be allocated among such clients (including the Portfolio) in a manner
that JCM believes to be equitable to the accounts involved and consistent with
such accounts' objectives, policies, and limitations.
(b) JCM shall be subject to a written code of ethics adopted by it
pursuant to Rule 17j-1(b) of the 1940 Act, and shall not be subject to any other
code of ethics, including Investment Manager's code of ethics, unless
specifically adopted by JCM.
(c) JCM may provide advice to or take action with respect to other
clients, which advice or action, including the timing and nature of such action,
may differ from or be identical to advice given or action taken with respect to
the Portfolio. Except as necessary to perform this Agreement, JCM shall be
deemed to be an independent contractor and shall have no authority, unless
otherwise provided or authorized, to act for or represent the Portfolio or
Investment Manager in any way or otherwise be deemed an agent of the Portfolio
or Investment Manager. Investment Manager and JCM shall not be considered as
partners or participants in a joint venture.
10. Liability. Except as may otherwise be provided by the 1940 Act, or
other federal securities laws, neither JCM nor any of its affiliates, officers,
directors, shareholders, employees, or agents shall be liable for any loss,
liability, cost, damage, or expense (including reasonable attorneys' fees and
costs) (collectively referred to in this Agreement as "Losses"), including
without limitation, Losses in connection with pricing information or other
information provided by JCM, except for Losses directly resulting from JCM's
gross negligence, bad faith, or willful misconduct. Investment Manager and the
Fund shall, jointly and severally, hold harmless and indemnify JCM, its
affiliates, directors, officers, shareholders, employees or agents for any Loss
not directly resulting from JCM's gross negligence, bad faith, or willful
misconduct. The obligations contained in this Section 10 shall survive
termination of this Agreement.
11. Duration.
(a) This Agreement shall remain in full force and effect for two years
from the date it is entered into, and is then renewable annually upon approval
by (i) the majority of those members of the Fund's Directors who are not
interested persons of the Fund, the Investment Manager, or JCM, cast in person
at a meeting called for the purpose of voting on such approval, and (ii) the
Fund's Directors or vote of a majority of outstanding voting securities of the
applicable Portfolio; provided, however, that if this Agreement or the
continuation of this
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Agreement is not approved, JCM may continue to render services under this
Agreement in the manner and to the extent permitted by the 1940 Act and
applicable regulations.
(b) This Agreement may be terminated as to a Portfolio at any time,
without penalty, by JCM, by the Fund's Directors or by a majority of the
outstanding voting securities of the applicable Portfolio, on sixty days'
written notice to the other party. This Agreement will immediately terminate in
the event of its assignment. Investment Manager shall provide advance written
notice of any anticipated assignment. (As used in this Agreement, the terms
"majority of the outstanding voting securities," "interested persons," and
"assignment" have the same meaning as such terms have in the 1940 Act.)
12. Amendment. This Agreement may be amended only in accordance with
applicable law, and only by a written instrument signed by all the parties to
this Agreement.
13. General.
(a) This Agreement constitutes the entire understanding of the parties
with respect to its subject matter, shall supersede all prior understandings
agreements, contracts or other documents, and shall continue in full force and
effect until terminated.
(b) If any provision of this Agreement is held to be invalid or
unenforceable to any extent, the remainder of this Agreement shall be enforced
to the greatest extent permitted by law.
(c) This Agreement shall be governed by applicable federal law and the
laws of the State of Colorado without regard to choice of laws principals.
Investment Manager and the Fund consent to the venue of the Denver District
Court of the County of Denver, State of Colorado, or the United States District
Court for the District of Colorado and agree that all lawsuits arising from this
Agreement shall be conducted only in such courts, unless such courts refuse to
accept jurisdiction.
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(d) This Agreement may be executed in two or more counterparts which
together shall constitute one document.
XXXXX STREET ADVISORS, LLC
By: /s/ XXXX X. XXXX
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Name: Xxxx X. Xxxx
Title: President
JANUS CAPITAL MANAGEMENT LLC
By: /s/ XXXXXX X. XXXX
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Name: Xxxxxx X. Xxxx
Title: Vice President
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Exhibit A
Information and documentation provided by Investment Manager:
1. A copy of the Portfolio's registration statement.
2. Copies of the Portfolio's prospectus and statement of additional
information.
3. Copies of the Fund's organizational documents, Bylaws, and as applicable to
the Portfolio, minutes of meetings of the Directors of the Fund.
4. Notice of the Portfolio's custodian designated to hold assets in the
Portfolio.
5. A list of the countries approved by the Directors in accordance with Rule
17f-5 in which Portfolio assets may be maintained and a list of those
countries available immediately.
6. Certified copies of financial statements or reports prepared for the Fund,
including the Portfolio, by certified or independent public accountants.
7. Copies of any financial statement or reports made by the Portfolio to its
shareholders or to any governmental body or securities exchange.
8. Reports as to the composition of assets in the Fund, cash requirements and
cash available for investment in the Portfolio.
9. Copies of Investment Manager's liquidity procedures, cross-trade
procedures, repurchase agreement procedures, 10f-3, 17a-7 and 17e-1
procedures and other procedures that may affect the duties of JCM.
10. An Internal Revenue Service Form W-9 completed by the Fund.
11. A Qualified Institutional Investor Certification completed by the Fund.
12. A list of persons authorized to act on behalf of the Portfolio.
13. A list of "affiliates" of the Fund, as such term is used in the 1940 Act,
including all broker-dealers affiliated with the Fund.
14. Applicable Commodities Futures Trading Commission exemptions, notifications
and/or related documentation.
15. A list of established futures accounts.
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Exhibit B
Fee Rate
(as a % of average daily net asset value)
.55% on the first $100 million
.50% on the next $00 million
.45% over $500 million
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