EX-99.23(e)(3)
AMENDED DISTRIBUTION AGREEMENT
This Agreement is executed on December 15, 2006 by and between JNL Investors
Series Trust (the "Trust") and Xxxxxxx National Life Distributors, LLC ("JNLD")
and, as provided in Section 15 below, shall become effective on the effective
date of the registration statement of the Trust on Form N-1A (the "Registration
Statement"), as amended from time to time under the Investment Company Act of
1940, as amended (the "1940 Act").'
WHEREAS, the Trust is an open-end, management investment company registered
under the 1940 Act; and
WHEREAS, the Trust is authorized to issue shares of beneficial interest
("Shares") in separate funds (the "Funds") with each such Fund representing
interests in a separate portfolio of securities and other assets; and
WHEREAS, the Trust has adopted a Multiple Class Plan pursuant to Rule 18f-3
under the 1940 Act, whereby a Fund may issue one or more classes of Shares; and
WHEREAS, pursuant to Rule 12b-1 under the 1940 Act, the Trust has adopted a
Distribution Plan for Class A Shares of the Funds, (the "Class A Distribution
Plan") under which, subject to and in accordance with the terms thereof, the
Trust may use assets of Class A Shares of the Funds to reimburse (1) certain
distribution expenses that are intended to result in the sale of such Class A
Shares of the Funds and (2) certain shareholder and administrative service
expenses; and
WHEREAS, pursuant to Rule 12b-1 under the 1940 Act, the Trust has adopted a
Distribution Plan for Class C Shares Funds (the "Class C Distribution Plan"),
under which, subject to and in accordance with the terms thereof, the Trust may
use assets of Class C Shares of the Funds to reimburse (1) certain distribution
expenses that are intended to result in the sale of such Class C Shares of the
Funds and (2) certain shareholder and administrative service expenses; and
WHEREAS, in furtherance of the purposes of Class A Distribution Plan and Class C
Distribution Plan (collectively, the "Distribution Plans"), the Trust wishes to
enter into a distribution agreement with JNLD with respect to the Funds listed
in the current prospectus(es), which may from time to time be amended; and
WHEREAS, the Trust is required pursuant to section 352 of the USA PATRIOT ACT
and regulations of the Department of Treasury thereunder to develop and
implement an anti-money laundering compliance program ("AML Program") reasonably
designed to prevent the Trust from being used to launder money or finance
terrorist activities, including achieving and monitoring compliance with the
applicable requirements of the Bank Secrecy Act, as amended, and implementing
regulations of the Department of Treasury; and
WHEREAS, the Trust has no employees and does not itself conduct any operations
relating to transactions with shareholders that could be the subject of an AML
Program, and conducts such operations solely through its affiliated principal
underwriter, JNLD; and
WHEREAS, JNLD is itself subject to the requirement under section 352 of the USA
PATRIOT ACT to develop and implement an AML Program, and compliance with
applicable regulations of the Department of the Treasury, including but not
limited to the Office of Foreign Assets Control (OFAC) and JNLD has provided
copies of its written policy and procedures to the Trust; and
WHEREAS, JNLD wishes to render the services hereunder to the Trust;
NOW THEREFORE, in consideration of the mutual promises and covenants hereinafter
set forth, the parties hereto agree as follows:
1. APPOINTMENT AND ACCEPTANCE. The Trust hereby appoints JNLD as
distributor of the Shares of the Funds set forth in the current prospectus(es)
on the terms and for the period set forth in this Agreement, and JNLD hereby
accepts such appointment and agrees to render the services and undertake the
duties set forth herein.
2. GENERAL PROVISIONS.
(a) In performing its duties as distributor, JNLD shall act in conformity
with the registration statement of the Trust on Form N-1A (the "Registration
Statement"), as amended from time to time and with any instructions received
from the Board of Trustees of the Trust (the "Board of Trustees"), the
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the 1940
Act, and all other applicable Federal and State laws and regulations.
(b) JNLD has appointed a Chief Compliance Officer and has and will operate
in compliance with the applicable requirements of NASD Conduct Rule 3013, and
shall cooperate fully with the Trust and its designated officers and Chief
Compliance Officer in fulfilling the Trust's obligations under Rule 38a-1 under
the 1940 Act.
(c) JNLD holds itself available to receive orders for the purchase or
redemption of Shares and shall accept or reject orders to purchase or redeem
such Shares on behalf of the Trust in accordance with the provisions of the
Registration Statement, and shall transmit such orders as are so accepted to the
Trust's transfer agent promptly for processing.
(d) JNLD shall not be obligated to sell any certain number of Shares.
However, the Trust and each Fund retain the right to make direct sales of its
Shares without sales charges consistent with the terms of the then current
prospectus(es) and statement(s) of additional information and applicable law,
and to engage in other legally authorized transactions in its Shares which do
not involve the sale of Shares to the general public. Such transactions are
initiated by the Trust and may include the reorganization of the Trust or any
Funds, and transactions involving the merger or combination of the Trust or any
Funds with other trusts or funds.
(e) Offering Price. Shares shall be offered for sale at a price equivalent
to the net asset value per share of that series and class plus any applicable
percentage of the public offering price as sales commission or as otherwise set
forth in the Trust's then current prospectus(es). The Trust receives 100% of
such net asset value. On each business day on which the New York Stock Exchange
is open for business, the Trust shall furnish JNLD with the net asset value of
the Shares of each available series and class which shall be determined in
accordance with the Trust's then effective prospectus(es). All Shares shall be
sold in the manner set forth in the Trust's then effective prospectus(es) and
statement of additional information (the "SAI"), and in compliance with
applicable law.
3. JNLD EXPENSES. During the term of this Agreement, JNLD shall bear all
its expenses incurred in complying with this Agreement including the following
expenses:
(a) costs of sales presentations, preparation and delivery of advertising
and sales literature, and any other marketing efforts by JNLD in connection with
the distribution or sale of Shares;
(b) any compensation paid to employees of JNLD in connection with the
distribution or sale of the Shares; and
(c) development, preparation, printing and mailing of prospectuses, SAIs or
supplements, sales literature, other promotional material describing and/or
relating to the Fund, and reports or communications which the Trust has prepared
for distribution.
Notwithstanding anything in this Agreement to the contrary, JNLD may be
reimbursed for expenses or may pay for expenses incurred under this Agreement to
the extent permitted by the terms of the Distribution Plans.
4. SALE OF SHARES BY JNLD
(a) All orders received by JNLD and transmitted to the Trust shall be
subject to acceptance and confirmation by the Trust.
(b) JNLD shall be entitled to charge a sales commission on the sale or
redemption, as appropriate, of each Fund and Class of Shares in the amount of
any initial, deferred or contingent deferred sales charge as set forth in
Subsection 6 below and the Trust's then effective prospectus(es). JNLD may allow
any sub-agents or dealers such commissions or discounts from and not exceeding
the total sales commission as JNLD shall deem advisable, so long as any such
commissions or discounts are set forth in the Trust's current prospectus(es) to
the extent required by the applicable Federal and State securities laws. JNLD
may also make payments to sub-agents or dealers from JNLD's own resources,
subject to the following conditions: (a) any such payments shall not create any
obligation for or recourse against the Fund or any series or class, and (b) the
terms and conditions of any such payments are consistent with the Trust's
prospectus(es) and applicable Federal and State securities laws and are
disclosed in the Trust's prospectus(es) or SAI to the extent such laws may
require.
5. DISTRIBUTION PLANS
(a) As used herein, the term "12b-1 Fee" means the (1) distribution charges
against Fund Class A Shares assets and Fund Class C Shares assets to reimburse
certain distribution expenses that are intended to result in the sale of such
Class A Shares and Class C Shares of the Funds and (2) service charges against
Fund Class A Shares assets and Fund Class C Shares assets to compensate
intermediaries for providing services or maintaining shareholder accounts.
(b) In accordance with the terms of Class A Distribution Plan, JNLD shall
provide distribution and other shareholder services for Class A Shares Funds of
the types contemplated under Class A Distribution Plan and reviewed from time to
time by the Board of Trustees with respect to the Class A Shares of the Funds
shown in the current prospectus(es), and may arrange for and compensate others
for providing or assisting in providing such distribution and shareholder
services. The Trust, on behalf of each Fund of Class A Shares that is subject to
the 12b-1 Fee as shown in the current prospectus(es) shall reimburse JNLD for
(1) distribution expenses incurred in promoting the sale of the Fund's Class A
Shares and (2) for shareholder services at rates of up to the maximum 12b-1 Fee
rate per annum of the average daily net assets attributable to the Class A
Shares provided for in the Class A Distribution Plan as it may be amended from
time to time, and in current amounts as shown in the current prospectus(es).
Each Fund's Class A Shares shall bear exclusively its own costs of such
distribution and service fee reimbursements. Such distribution and service
expenses and fees shall be calculated and accrued daily and paid within
forty-five (45) days of the end of each fiscal quarter of the Fund. In no event
shall such payments exceed JNLD's actual service expenses and fees for that
quarter.
(c) In accordance with the terms of Class C Distribution Plan, JNLD shall
provide distribution and other shareholder services for Class C Shares Funds of
the types contemplated under Class C Distribution Plan and reviewed from time to
time by the Board of Trustees with respect to the Class C Shares of the Funds
shown in the current prospectus(es), and may arrange for and compensate others
for providing or assisting in providing such distribution and shareholder
services. The Trust, on behalf of each Fund of Class C Shares that is subject to
the 12b-1 Fee as shown in the current prospectus(es) shall reimburse JNLD for
(1) distribution expenses incurred in promoting the sale of the Fund's Class C
Shares and (2) for shareholder services at rates of up to the maximum 12b-1 Fee
rate per annum of the average daily net assets attributable to the Class C
Shares provided for in the Class C Distribution Plan as it may be amended from
time to time, and in current amounts as shown in the current prospectus(es).
Each Fund's Class C Shares shall bear exclusively its own costs of such
distribution and services reimbursements. Such distribution and shareholder
service expenses and fees shall be calculated and accrued daily and paid within
forty-five (45) days of the end of each fiscal quarter of the Fund. In no event
shall such payments exceed JNLD's actual distribution and service expenses and
fees for that quarter.
(d) The Trust's distribution and service fees, 12b-1 Fees, and the current
level of payments to JNLD shall be as set out in Subsection 6 below and as
provided for in the then current prospectuses of the Funds and the Trust, and
shall take effect immediately upon the effectiveness of the Registration
Statements or amendments thereto wherein they are described in detail. To the
extent practicable, the Trust shall provide JNLD with copies of all filings of
the Registration Statements or amendments thereto five (5) business days prior
to filing, but in no event later than the date of filing with the SEC.
(e) With respect to the sales commission on the redemption of Shares of
each Fund and Class of Shares as provided in Subsection 4(b) above, the Trust
shall cause the Trust's shareholder services agent (the "Transfer Agent") to
withhold from redemption proceeds payable to holders of the Shares all
Contingent Deferred Sales Charge ("CDSC") properly payable by such holders in
accordance with the terms of the Trust's then current prospectus(es) and SAI(s).
Upon receipt of an order for redemption, the Transfer Agent shall direct the
Trust's custodian to transfer such redemption proceeds to a general trust
account. The Trust shall then cause the Transfer Agent to pay over to JNLD or
JNLD's assigns from the general trust account such CDSCs properly payable by
such holders as promptly as possible after the settlement date for each such
redemption of Shares. CDSCs shall be payable without offset, defense or
counterclaim (it being understood that nothing in this sentence shall be deemed
a waiver by us of any claim the Trust may have against JNLD.) JNLD may direct
that the CDSCs payable to JNLD be paid to any other person, as permitted by
applicable law.
(f) As provided in each of the Distribution Plans, consistent with avoiding
the layering of sales charges to investors, and subject to all of the other
terms of the Distribution Plans, the Trust shall bear the distribution and
service expenses, as provided above, of a registered management investment
company in the form of a fund of funds, to the extent that the expenses are
attributable to the fund of funds' sale of its shares and use of sale proceeds
to purchase shares of the Trust.
6. COMMISSIONS, SERVICE FEES, AND SALES CHARGES.
(a) CLASS A SHARES.
(i) COMMISSIONS AND SERVICE FEES.
(1) Except for sales of Shares of Xxxxxxx Perspective Money
Market Fund and in certain other situations (including among
others, purchases by officers, directors, registered
representatives, employees and their immediate family members,
etc.), there is an up front commission for the sale of Class A
Shares.
(2) Trail Commissions and Service Fees.
o For Class A Shares purchased with an up front
commission, there is an additional annual trail
commission and service fee of 0.25% which is paid
monthly.
o For Xxxxxxx Perspective Money Market Fund, where no up
front commission is payable, there will be an annual
trail commission and service fee of 0.25% which is paid
monthly.
o For Class A Shares of $1 million or more purchased
without a front-end load, there is an additional annual
trail commission and service fee of 0.25%. The trail
commission and service fee is paid out of the 12b-1
Fees on the entire fund value monthly after the Shares
are purchased.
(ii) SALES CHARGES.
(1) There is a front-end load on investments in Class A
Shares in the amount of less than $1 million. There is no
front-end load on investments in Class A Shares in the amount of
$1 million or more.
(2) A 1.00% CDSC may apply to the original purchase price,
or current value if less, of any Class A Shares of $1 million or
more purchased without a front-end load if redeemed within the
contingency period of one (1) year following their purchase.
Shares not subject to CDSC will be sold first and the rest of the
Shares will be redeemed in the order they were purchased. The
CDSC is waived in certain circumstances, as described in the
prospectus(es) for the Funds and accompanying statements of
additional information SAI(s).
(b) CLASS C SHARES.
(i) COMMISSIONS AND SERVICE FEES.
(1) The purchase of Class C Shares involves an up front
commission.
(2) For Class C Shares purchased with an up front
commission, there is an additional annual trail commission of
0.75% and a 0.25% service fee for the first ten(10) years which
is paid monthly. After the end of year ten, the Class C Shares
are automatically converted into Class A Shares and the annual
trail commission and service fee is reduced to 0.25% in total.
(ii) SALES CHARGES.
(1) There is no front-end load on investments in Class C
Shares.
(2) A 1.00% CDSC may apply to the original purchase price,
or current value if less, of any Class C Shares if redeemed
within the contingency period of one (1) year following their
purchase. Shares not subject to CDSC will be sold first and the
rest of the Shares will be redeemed in the order they were
purchased. The CDSC is waived in certain circumstances, as
described in the prospectus(es) for the Funds and accompanying
SAI(s).
7. RESERVATION OF RIGHT NOT TO SELL. The Trust reserves the right to refuse
at any time or times to sell any of its Shares for any reason deemed adequate by
it.
8. TERMS AND CONDITIONS OF SALES. Shares shall be offered for sale only in
those jurisdictions where they have been properly registered or are exempt from
registration, and only to those groups of people which the Board may from time
to time determine to be eligible to purchase such Shares.
9. ORDERS AND PAYMENT FOR SHARES. Orders for Shares shall be directed to
the Fund's Transfer Agent, for acceptance on behalf of the Fund. At or prior to
the time of delivery of any of the Trust's Shares, JNLD shall pay or cause to be
paid to the custodian of the Fund's assets, for the Trust's account, an amount
in cash equal to the net asset value of such Shares. Sales of Shares shall be
deemed to be made when and where accepted by the Fund's Transfer Agent. The
Fund's custodian and Transfer Agent shall be identified in its prospectus(es).
10. PURCHASES FOR JNLD'S OWN ACCOUNT. JNLD shall not purchase Trust Shares
for JNLD's own account for purposes of resale to the public, but JNLD may
purchase Shares for JNLD's own investment account upon JNLD's written assurance
that the purchase is for investment purposes and that the Shares will not be
resold except through redemption by the Trust.
11. SALE OF SHARES TO AFFILIATES. JNLD may sell Trust Shares at net asset
value to certain of its, and the Trust's affiliated persons pursuant to the
applicable provisions of the Federal securities statutes and rules or
regulations thereunder (the "Rules and Regulations"), including Rule 22d-1 under
the 1940 Act, as amended from time to time.
12. CONSTRUCTION OF AGREEMENT.
(a) No provision of this Agreement is intended to or shall be construed as
protecting JNLD against any liability to the Trust or to the Trust's security
holders to which JNLD would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties
under this Agreement.
(b) Terms or words used in the Agreement, which also occur in the
Declaration of Trust or Bylaws of the Trust, shall have the same meaning herein
as given to such terms or words in the Declaration of Trust or Bylaws of the
Trust.
13. CONDUCT OF BUSINESS. Other than the Trust's currently effective
prospectus(es), JNLD shall not issue any sales material or statements except
literature or advertising which conforms to the requirements of Federal and
State securities laws and regulations and which have been filed, where
necessary, with the appropriate regulatory authorities. JNLD shall make
available to the Trust with copies of all such materials prior to their use and
no such material shall be published if the Trust shall reasonably and promptly
object.
JNLD shall comply with the applicable Federal and State laws and
regulations where Trust Shares are offered for sale and conduct JNLD's affairs
with the Trust and with dealers, brokers or investors in accordance with NASD
Conduct Rules.
14. REDEMPTION OR REPURCHASE WITHIN SEVEN DAYS. If Shares are tendered to
the Trust for redemption or repurchase by the Trust within seven (7) business
days after JNLD's acceptance of the original purchase order for such Shares,
JNLD shall revise the dollar amounts relevant to the Class A Distribution Plan
and the Class C Distribution Plan accordingly.
15. EFFECTIVE DATE AND TERMINATION OF THIS AGREEMENT. This Agreement shall
become effective at the date and time that the Trust's Post-Effective Amendment
to its Registration Statement, reflecting the underwriting arrangements provided
by this Agreement, shall become effective under the Securities Act, and shall,
unless terminated as provided herein, continue in force for two (2) years from
that date, and from year to year thereafter, provided that such continuance for
each successive year is specifically approved in advance at least annually by
either the Board of Trustees or by the vote of a majority (as defined in the
0000 Xxx) of the outstanding voting securities of the applicable Funds or Class
of Shares of the Trust and, in either event, by the vote of a majority of the
Trustees of the Trust who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for the purpose of
voting upon such approval. As used in the preceding sentence, the words
"interested persons" shall have the meaning set forth in Section 2(a)(19) of the
1940 Act.
This Agreement may be terminated at any time by the Trust, any Fund, or
Class without the payment of any penalty by giving JNLD at least thirty (30)
days' previous written notice of such intention to terminate. This Agreement may
be terminated by JNLD at any time by giving the Trust at least thirty (30) days'
previous written notice of such intention to terminate.
This Agreement shall terminate automatically in the event of its
assignment. As used in the preceding sentence, the word "assignment" shall have
the meaning set forth in Section 2(a)(4) of the 1940 Act.
16. NOTICES. Notices of any kind to be given to JNLD by the Trust shall be
in writing and shall be duly given if mailed, first class postage prepaid, or
delivered to 0000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, XX 00000 or at such
other address or to such individual as shall be specified by JNLD to the Trust.
Notices of any kind to be given to the Trust shall be in writing and shall be
duly given if mailed, first class postage prepaid, or delivered to Xxx Xxxxxxxxx
Xxx, Xxxxxxx, Xxxxxxxx 00000 or at such other address or to such individual as
shall be specified by the Trust.
17. NON-EXCLUSIVITY. The services of JNLD to the Trust under this Agreement
are not to be deemed exclusive, and JNLD shall be free to render similar
services or other services to others so long as its services hereunder are not
impaired thereby.
18. REPORTS. JNLD shall prepare reports for the Board of Trustees on a
quarterly basis or more frequent basis showing such information as shall be
reasonably requested by the Board of Trustees from time to time and in
compliance with the requirements relating to Rule 12b-1, as provided in the
Distribution Plans for each Class of Shares, JNLD shall provide the distribution
expenses reports separately from the service fees-related reports to the extent
that expenses can be so identified.
19. INDEPENDENT CONTRACTOR. JNLD shall for all purposes herein provided be
deemed to be an independent contractor and, unless otherwise expressly provided
or authorized, shall have no authority to act for or represent the Trust in any
way other than as specifically set forth herein. It is understood and agreed
that JNLD, by separate agreement with the Trust, may also serve the Trust in
other capacities.
20. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
21. GOVERNING LAW. This Agreement shall be governed by the laws of
Michigan, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Exchange Act, the Securities Act, or any
rule or order of the Securities and Exchange Commission or any national or
regional self-regulatory organization, such as the National Association of
Securities Dealers.
22. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby and, to this extent, the provisions of
this Agreement shall be deemed to be severable.
23. AML PROGRAM. Pursuant to section 352 of the USA PATRIOT ACT, JNLD
agrees to implement and operate an "AML" Program on behalf of the Trust (the
"Trust AML Program") as such Program pertains to shareholder transactions
effected through services provided by JNLD. JNLD agrees that the Trust AML
Program will be reasonably designed to prevent the Trust from being used for
money laundering or the financing of terrorist activities and to achieve and
monitor compliance with the applicable requirements of the Bank Secrecy Act (31
U.S.C. xx.xx. 5311 et seq.) and the implementing regulations of the Department
of Treasury. JNLD represents that in addition to its obligations to the Trust
pursuant to this Agreement it has established and will maintain a written AML
Program as required by NASD Conduct Rule 3011.
24. RECORDS. JNLD agrees to maintain and preserve reasonable records
pertaining to the implementation and operation of the Trust's AML Program. JNLD
consents, upon reasonable notice, (a) to make information and records regarding
the operation of the Trust's AML Program available to the Securities and
Exchange Commission (the "SEC") for review and (b) to make the Trust's AML
Program available for inspection by the SEC and to any other regulatory agency
with jurisdiction over such programs.
25. MISCELLANEOUS. The addition or deletion of a Fund from the scope of
this Agreement reflecting changes that have been formally approved by resolution
by the Board of Trustees will not require approval by the Board of Trustees.
This Agreement shall supersede all Distribution Agreements and Amendments
previously in effect between the parties. As used herein, the terms "net asset
value," "offering price," "investment company," "open-end investment company,"
"principal underwriter," "interested person," and "majority of the outstanding
voting securities" shall have the meanings set forth in the Securities Act or
the 1940 act and the Rules and Regulations thereunder and the term "assignment"
shall have the meaning as set forth in the 1940 Act and the Rules and
Regulations thereunder.
26. INDEMNIFICATION. Nothing herein shall be deemed to protect JNLD against
any liability to the Trust or to shareholders to which JNLD would otherwise be
subject by reason of willful misfeasance, bad faith or negligence in the
performance of JNLD's obligations and duties hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
ATTEST: JNL INVESTORS SERIES TRUST
By: By:
--------------------------- ---------------------------------
Name: Xxxx X. Xxxxx
Title: President and Chief Executive Officer
ATTEST: XXXXXXX NATIONAL LIFE
DISTRIBUTORS, INC.
By: By:
--------------------------- -----------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Executive Vice President
