SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. ___)
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ X ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
JNL VARIABLE FUND LLC
JNL VARIABLE FUND III LLC
______________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
Blazzard, Grodd & Hasenauer, P.C.
______________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
_______________________________________________________________
2) Aggregate number of securities to which transaction applies:
_______________________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11. (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
_______________________________________________________________
4) Proposed maximum aggregate value of transaction:
_______________________________________________________________
5) Total fee paid:
_______________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
_______________________________________________________________
2) Form, Schedule or Registration Statement No.:
_______________________________________________________________
3) Filing Party:
_______________________________________________________________
4) Date Filed:
_______________________________________________________________
JNL (R) VARIABLE FUND LLC
JNL/First Trust The Dow(sm) Target 5 Series
JNL/First Trust The Dow(sm) Target 10 Series
JNL/First Trust The S&P (R) Target 10 Series
JNL/First Trust Global Target 15 Series
JNL/First Trust Target 25 Series
JNL/First Trust Target Small-Cap Series
JNL/First Trust Technology Sector Series
JNL/First Trust Pharmaceutical/Healthcare Sector Series
JNL/First Trust Financial Sector Series
JNL/First Trust Energy Sector Series
JNL/First Trust Leading Brands Sector Series
JNL/First Trust Communications Sector Series
JNL VARIABLE FUND III LLC
JNL/First Trust The Dow(sm) Target 10 Series
225 West Wacker Drive
Suite 1200
Chicago, Illinois 60606
NOTICE OF JOINT SPECIAL
MEETING OF INTEREST
HOLDERS TO BE HELD ON
MARCH 9, 2000
NOTICE IS HEREBY GIVEN that a Joint Special Meeting of interest holders of
JNL/First Trust The Dow Target 5 Series, JNL/First Trust The Dow Target 10
Series, JNL/First Trust The S&P Target 10 Series, JNL First Trust Global Target
15 Series, JNL/First Trust Target 25 Series, JNL/First Trust Target Small-Cap
Series, JNL/First Trust Technology Sector Series, JNL/First Trust
Pharmaceutical/Healthcare Sector Series, JNL/First Trust Financial Sector
Series, JNL/First Trust Energy Sector Series, JNL/First Trust Leading Brands
Sector Series and JNL/First Trust Communications Sector Series of JNL VARIABLE
FUND LLC and JNL/First Trust The Dow Target 10 Series of JNL VARIABLE FUND III
LLC will be held in the offices of the Funds' investment adviser, Jackson
National Financial Services, LLC, located at 5901 Executive Drive, Lansing,
Michigan 48911 on March 9, 2000 at 10:00 a.m., local time. The purpose of the
Meeting is to consider and act upon the following proposals and to transact such
other business as may properly come before the Meeting or any adjournments
thereof:
1. ALL SERIES OF JNL VARIABLE FUND LLC
To approve or disapprove a New Sub-Advisory Agreement between Jackson National
Financial Services, LLC and First Trust Advisors L.P., such New Sub-Advisory
Agreement to contain the same terms and conditions as the current Sub-Advisory
Agreement except for the dates of execution, effectiveness and termination.
2. JNL/FIRST TRUST THE DOW TARGET 10 SERIES OF JNL VARIABLE FUND III LLC
To approve or disapprove a New Sub-Advisory Agreement between Jackson National
Financial Services, LLC and First Trust Advisors L.P., such New Sub-Advisory
Agreement to contain the same terms and conditions as the current Sub-Advisory
Agreement except for the dates of execution, effectiveness and termination.
3. To transact such other business as may properly come before the Meeting or
any adjournment thereof.
Only interest holders of record at the close of business on December 22, 1999,
the record date for this Meeting, shall be entitled to notice of, and to vote
at, the Meeting or any adjournment thereof.
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR VOTING INSTRUCTIONS FORM PROMPTLY.
By Order of the Board of Managers,
THOMAS J. MEYER
Secretary
January __, 2000
Lansing, Michigan
EACH FUND'S ANNUAL REPORT TO INTEREST HOLDERS, WHICH INCLUDES AUDITED FINANCIAL
STATEMENTS OF EACH RESPECTIVE FUND AS OF DECEMBER 31, 1999, MAY BE OBTAINED
WITHOUT CHARGE BY CALLING (800) 766-4683 OR WRITING TO THE JNL VARIABLE FUND LLC
SERVICE CENTER, P.O. BOX 378002, DENVER, COLORADO 80237-8002.
JNL (R) VARIABLE FUND LLC
JNL/First Trust The Dow(sm) Target 5 Series
JNL/First Trust The Dow(sm) Target 10 Series
JNL/First Trust The S&P (R) Target 10 Series
JNL/First Trust Global Target 15 Series
JNL/First Trust Target 25 Series
JNL/First Trust Target Small-Cap Series
JNL/First Trust Technology Sector Series
JNL/First Trust Pharmaceutical/Healthcare Sector Series
JNL/First Trust Financial Sector Series
JNL/First Trust Energy Sector Series
JNL/First Trust Leading Brands Sector Series
JNL/First Trust Communications Sector Series
JNL VARIABLE FUND III LLC
JNL/First Trust The Dow(sm) Target 10 Series
225 West Wacker Drive
Suite 1200
Chicago, Illinois 60606
PROXY STATEMENT
SPECIAL MEETING OF INTEREST HOLDERS
MARCH 9, 2000
This joint proxy statement is furnished in connection with the solicitation by
the Board of Managers (the "Managers" or "Board") of the JNL Variable Fund LLC
and the JNL Variable Fund III LLC (together, the "Funds") of proxies to be voted
at a joint special Meeting of holders of interest ("Interest holders") of
JNL/First Trust The Dow Target 5 Series, JNL/First Trust The Dow Target 10
Series, JNL/First Trust The S&P Target 10 Series, JNL First Trust Global Target
15 Series, JNL/First Trust Target 25 Series, JNL/First Trust Target Small-Cap
Series, JNL/First Trust Technology Sector Series, JNL/First Trust
Pharmaceutical/Healthcare Sector Series, JNL/First Trust Financial Sector
Series, JNL/First Trust Energy Sector Series, JNL/First Trust Leading Brands
Sector Series and JNL/First Trust Communications Sector Series of JNL VARIABLE
FUND LLC and JNL/First Trust The Dow Target 10 Series of JNL VARIABLE FUND III
LLC (collectively referred to herein as the "Series"), to be held on March 9,
2000, at 10:00 a.m., local time, in the offices of the Funds' investment
adviser, Jackson National Financial Services, LLC (the "Adviser"), 5901
Executive Drive, Lansing, Michigan 48911, and at any adjournments thereof, for
the purposes set forth in the accompanying Notice of Joint Special Meeting of
Interest Holders (the "Notice").
The Notice, this Proxy Statement and the accompanying voting instructions forms
were first mailed to variable annuity contract owners on or about February ___,
2000.
The Board of Managers of each Fund has determined that the use of this joint
Proxy Statement for each Fund is in the best interest of each Fund and its
investors in light of the same matters being considered and voted on by the
Interest Holders. The cost of preparing, printing and mailing the Notice, Proxy
Statement, and accompanying voting instructions form, and all other costs in
connection with the solicitation of proxies will be paid by First Trust Advisors
L.P. ("First Trust"), the sub-adviser to each Fund. In addition to the mailing
of these proxy materials, proxies may be solicited by letter, telephone or
electronic means such as e-mail, or in person by an officer of the Fund, by
officers or employees of the Adviser or officers, agents or employees of Jackson
National Life Insurance Company ("Jackson National").
VOTING INSTRUCTIONS
Each Fund is organized as a Delaware limited liability company and, as such,
does not issue shares of stock. Instead, ownership rights are contained in
membership interests (the "Interests"). Interests of the Series are sold only to
separate accounts of Jackson National to fund the benefits of variable annuity
contracts issued by Jackson National. Although Jackson National, through its
separate accounts, legally owns all of the Interests of each Series of the
Funds, Jackson National will vote all such Interests in accordance with the
voting instructions timely given by the owners ("Contract owners") of the
contracts with assets invested in a Series of the Fund. Because Contract owners
are indirectly invested in one or more Series through their contracts and have
the right to instruct Jackson National how to vote Interests of these Series on
all matters requiring a vote of Interest holders, Contract owners should
consider themselves Interest holders for purposes of this Proxy Statement.
Contract owners at the close of business on December 22, 1999 (the "record
date") will be entitled to notice of the Meeting and to instruct Jackson
National how to vote at the Meeting or any adjourned session.
Contract owners may use the voting instructions form as a ballot to give Jackson
National the voting instructions for those Interests attributable to their
contracts as of the record date. When the Contract owner completes the voting
instructions form and sends it to Jackson National, Jackson National votes the
shares attributable to the variable annuity contract of the Contract owner in
accordance with the Contract owner's instructions. If the Contract owner merely
signs and returns the form, Jackson National will vote those shares in favor of
the proposal. If the Contract owner does not return the form, Jackson National
will vote those shares in the same proportion as shares for which instructions
were received from other Contract owners. Jackson National has fixed the close
of business on March 6, 2000 as the last day on which voting instructions will
be accepted.
Any authorized voting instructions will be valid for any adjournment of the
Meeting. If the management of the Funds receives an insufficient number of votes
to approve the proposals, the Meeting may be adjourned to permit the
solicitation of additional votes. Those persons named as proxies in the voting
instructions have the discretion to vote for any such adjournment. The approval
of the proposal depends upon whether a sufficient number of votes is cast for
the proposal. Accordingly, an instruction to abstain from voting on any proposal
has the same practical effect as an instruction to vote against the proposal.
Any person giving voting instructions may revoke them at any time prior to
exercising them by submitting to the Secretary of the Fund, a superseding voting
instruction form or written notice of revocation. Only the Contract owner
executing the voting instructions can revoke them. Jackson National will vote
the Interests of the Series of the Funds in accordance with all properly
executed and unrevoked voting instructions.
OUTSTANDING SHARES
As of December 22, 1999, there were issued and outstanding the following number
of Interests for each Series:
<TABLE>
<CAPTION>
INTERESTS
SERIES OUTSTANDING
JNL VARIABLE FUND LLC
<S> <C> <C>
JNL/First Trust The Dow Target 5 Series 530,586.730
JNL/First Trust The Dow Target 10 Series 931,863.366
JNL/First Trust The S&P Target 10 Series 899,958.637
JNL/First Trust Global Target 15 Series 320,677.566
JNL/First Trust Target 25 Series 299,005.735
JNL/First Trust Target Small-Cap Series 266,382.988
JNL/First Trust Technology Sector Series 534,040.128
JNL/First Trust Pharmaceutical/Healthcare Sector Series 466,170.680
JNL/First Trust Financial Sector Series 335,101.544
JNL/First Trust Energy Sector Series 165,226.020
JNL/First Trust Leading Brands Sector Series 260,902.789
JNL/First Trust Communications Sector Series 388,517.170
JNL VARIABLE FUND III LLC
JNL/First Trust The Dow Target 10 Series 140,066.910
</TABLE>
To the knowledge of the Funds, as of December 22, 1999, the following Contract
owners were known to own beneficially more than 5% of the Interests of each
Series listed:
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT OF
OF BENEFICIAL BENEFICIAL PERCENTAGE OF
SERIES OWNER OWNERSHIP SERIES INTERESTS
------ ----- --------- ----------------
<S> <C> <C> <C> <C>
[INSERT CHART]
</TABLE>
As of December 22, 1999, the Managers and officers of the Funds, in the
aggregate, beneficially owned under variable annuity contracts less than 1% of
the Interests of each Series.
Each Series of each Fund has only one Interest holder. The sole Interest holder
of each Series of the JNL Variable Fund LLC is Jackson National Separate Account
I and the sole Interest holder of The Dow Target 10 Series of JNL Variable Fund
III LLC is Jackson National Separate Account III.
For the Interest holders to approve the proposal described in this proxy for a
Series, the proposal must receive the favorable vote of a majority of the
outstanding voting Interests of the Series. When used in this proxy statement,
"a majority of the outstanding voting Interests" means the affirmative vote of
the lesser of:
(1) 67% or more of the issuer's voting Interests present at the Meeting if the
holders of more than 50% of the issuer's outstanding voting Interests are
present in person or represented by proxy; or
(2) more than 50% of the issuer's outstanding voting Interests.
Interests beneficially held by Contract owners present in person or proxy at the
Meeting will be counted for the purpose of calculating the votes cast on the
issue before the Meeting. Any proposal that is approved by Interest holders of a
Series will be implemented with respect to that Series notwithstanding the
outcome of the vote on any other Series.
Each Interest in a Series is entitled to one vote and fractional votes will be
counted. The number of Interests of a Series attributable to each owner of a
contract is determined by dividing, as of the record date, the value of the
accumulation units under the contract in the corresponding investment option by
the net asset value of one Interest of the applicable Series.
PROPOSALS 1 AND 2. APPROVAL OF NEW SUB-ADVISORY
AGREEMENTS
GENERAL
First Trust provides investment sub-advisory services to all Series of the Funds
pursuant to Sub-Advisory Agreements betweeh the Adviser and First Trust.
The Sub-Advisory Agreements between the Adviser and First Trust were approved by
the Board of Managers of each Fund on February 11, 1999 and by Interest holders
of each Series on _________________, 1999. The Sub-Advisory Agreements for JNL
Variable Fund LLC and JNL Variable Fund III LLC are attached hereto as
Appendices B and C, respectively. First Trust is an Illinois limited
partnership, is registered as an investment adviser under the Investment
Advisers Act of 1940 ("Advisers Act") and is located at 1001 Warrenville Road,
Lisle, Illinois 60532. First Trust has been providing sub-advisory services to
each Series since their inception. First Trust serves as sub-adviser for 27
mutual funds and is also the portfolio supervisor of unit investment trusts
sponsored by Nike Securities L.P., some of which are substantially similar to
the Series of the Funds. For additional information regarding these similar
funds, including their asset size and the advisory fees, please see Appendix A.
Nike Securities L.P., 1001 Warrenville Road, Lisle, Illinois 60532, specializes
in the underwriting, trading and distribution of unit investment trusts and
other securities. Nike Securities L.P. has sponsored or underwritten
approximately $24 billion of investment company shares.
The principal executive officer and general partner of First Trust and their
respective principal occupations is set forth in the chart below. The mailing
address of the officer and general partner is 1001 Warrenville Road, Suite 300,
Lisle, Illinois 60532.
<TABLE>
<CAPTION>
NAME AND POSITION WITH FIRST TRUST PRINCIPAL OCCUPATION
---------------------------------- --------- ----------
<S> <C>
Ronald Dean McAlister, President1 Managing Director, Nike Securities
Nike Securities Corporation, General Partner Providing investment advisory and broker/dealer
services through its various interests
</TABLE>
THE CHANGE OF CONTROL
Each Fund is registered and regulated as an investment company under the
Investment Company Act of 1940 (the "1940 Act"). The 1940 Act provides that an
investment company's investment advisory or sub-advisory agreement terminates
automatically upon its "assignment." Under the 1940 Act, a direct or indirect
transfer of a controlling block of the voting securities of any person
controlling an investment adviser or sub-adviser is deemed to be an assignment.
As described further below, the control of First Trust has changed and the
existing sub-advisory contracts have terminated as a result of that change.
First Trust is a limited partnership with one limited partner, Grace Partners of
DuPage L.P., 290 South County Farm Road, 3rd floor, Wheaton, Illinois 60187, and
one general partner, Nike Securities Corporation ("Nike Securities"). Grace
Partners of DuPage L.P. is a limited partnership with one general partner, Nike
Securities, and a number of limited partners. Nike Securities is an Illinois
corporation that was controlled by Robert Donald Van Kampen. On October 29,
1999, Mr. Van Kampen passed away. At the time of his death, the stock of Nike
Securities was held by two members of the Van Kampen family and two trusts of
which Van Kampen family members were the beneficiaries. More specifically,
Kristen Joy Wisen owns 25%, Karla Van Kampen-Pierre owns 25% and the Robert D.
Van Kampen Trust and the Judith Van Kampen Trust each owned 25% of Nike
Securities. Pursuant to a voting agreement, Mr. Van Kampen had power to vote the
shares held by Mrs. Wisen, Mrs. Van Kampen-Pierre and the Judith Van Kampen
Trust. Mr. Van Kampen therefore had the power to vote approximately 75% of the
securities of Nike Securities. Upon his death this voting power transferred to
his wife, Judith Van Kampen. The 1940 Act presumes that beneficial ownership of
more than 25% of a company's stock gives the owner "control" over the company.
This technical change of control has caused each Fund's existing sub-advisory
agreement with First Trust to terminate on October 29, 1999.
- --------
1 Limited partner of Grace Partners of DuPage L.P., the limited partner of
First Trust.
To provide for continuity of investment sub-advisory services to the Funds and
their Series as a result of the change in control of First Trust, the Board,
including the Managers who are not "interested" persons of the Fund, First Trust
or Nike Securities at a meeting held on December 16, 1999, voted to approve new
sub-advisory agreements (the "New Sub-Advisory Agreements") with First Trust
pursuant to Rule 15a-4 under the 1940 Act, as amended. Under that Rule, as
amended, the New Sub-Advisory Agreements will terminate on March 26, 2000, if
they are not approved by Interest holders. During the period from October 29,
1999 to March 26, 2000, First Trust agreed to continue to provide services to
each Series on the same terms as in the existing sub-advisory agreements. The
Board of Managers of the Funds is now asking Interest holders of each Series to
approve the New Sub-Advisory Agreement for their respective Series.
MATERIAL TERMS OF THE NEW SUB-ADVISORY AGREEMENTS
Under the New Sub-Advisory Agreements, First Trust will continue to provide
investment portfolio management services to each Series. Approval of the New
Sub-Advisory Agreements will not increase the sub-advisory fee rate paid by a
Series. There have been no changes to the sub-advisory agreements since the
Interest holders initially approved these agreements. In effect, the New
Sub-Advisory Agreements are identical to the agreements that were in effect
prior to the technical change of control in First Trust. Therefore, the
following description of the New Sub-Advisory Agreements also describes the
agreements that were in force prior to the technical change in control. The
discussion of the New Sub-Advisory Agreements, however, is only a summary of the
form of the contracts attached to the proxy statement as Appendix B.
Under the terms of the New Sub-Advisory Agreements, First Trust will continue to
manage the investment and reinvestment of the assets of each Series, subject to
the oversight and supervision of the Adviser and the Boards of Managers of the
Funds.
First Trust is responsible for supervising and directing the investments of each
Series in accordance with each Series' investment objective, program and
restrictions. First Trust is also responsible for effecting all security
transactions on behalf of each Series.
The New Sub-Advisory Agreement also provides that First Trust, its directors,
officers, employees, and certain other persons performing specific functions for
the Series will only be liable to the Series for losses resulting from willful
misfeasance, bad faith, gross negligence, or reckless disregard of duty.
The New Sub-Advisory Agreement also provides that First Trust is responsible for
compliance with the provisions of Section 817(h) of the Internal Revenue Code of
1986, as amended ("Code"), applicable to each Series (relating to the
diversification requirements applicable to investments in variable annuity
contracts). The Adviser is obligated to pay First Trust out of the advisory fee
it receives from each Series the following fees (the fee percentages are
identical for each Series):
Assets Fees
------ ----
$0 to $500 million .35%
$500 million to $1 billion .30%
Over $1 billion .25%
Unless modified or terminated, the New Sub-Advisory Agreements will continue
with respect to each Series for two years, and thereafter from year to year but
only so long as such continuance is specifically approved at least annually by
the Boards of Managers, including a majority of the Managers who are not parties
to such agreements or interested parties of any such party (the "Disinterested
Managers"), or by the affirmative vote of a majority of the outstanding voting
Interests of the applicable Series. Each New Sub-Advisory Agreement also
provides that it may be terminated at any time without penalty upon 60 days'
notice by the Fund or Adviser, or on 90 days'-written notice by First Trust.
Each agreement automatically terminates in the event of its assignment.
BOARD OF MANAGERS' EVALUATION
The Managers have considered several factors relating to the New Sub-Advisory
Agreements with First Trust and believe that it would be in the best interests
of the Funds, each Series and their Interest holders that the New Sub-Advisory
Agreements with First Trust be approved to permit First Trust to continue to
serve as each Series' sub-adviser. In making this determination, the Managers
considered First Trust's qualifications as an investment sub-adviser, the
sub-adviser's performance history, the nature of the services provided in the
past and to be provided to each Series by First Trust, and First Trust's
investment strategy. The Managers also considered the fact that the change in
control is not expected to result in any changes to the investment philosophy at
First Trust or the management of First Trust of each Series' investments. The
Managers approved the sub-advisory fee to be paid and believe the New
Sub-Advisory Agreements and the proposed sub-advisory fees to be reasonable and
fair, and the appointment of First Trust to be in the best interests of the
Interest holders.
BOARD OF MANAGERS' RECOMMENDATIONS
The Managers, including all of the independent Managers, recommend that Interest
holders vote FOR the proposals.
OTHER BUSINESS
Management does not intend to present and does not have reason to believe that
others will present any other items of business at the Meeting. However, if
other matters are properly presented to the Meeting for a vote, the proxies will
be voted upon such matters in accordance with the judgment of the persons acting
under the proxies.
The Funds are not required to hold and will not ordinarily hold annual Interest
holders' meetings.
Pursuant to rules adopted by the SEC, an Interest holder may include in proxy
statements relating to annual and other meetings of the Interest holders of a
Fund certain proposals for action by Interest holders which he or she intends to
introduce at such meetings; provided, among other things, that any such proposal
must be received by the Fund a reasonable time before a solicitation of proxies
is made for such meeting. Timely submission of a proposal does not necessarily
mean that the proposal will be included.
IF YOU CANNOT BE PRESENT IN PERSON, YOU ARE REQUESTED TO FILL IN, SIGN AND
RETURN THE ENCLOSED VOTING INSTRUCTIONS FORM PROMPTLY. NO POSTAGE IS REQUIRED IF
MAILED IN THE UNITED STATES.
Thomas J. Meyer
Secretary
Dated: January __, 2000
Lansing, Michigan
APPENDIX A
The charts below set forth the asset size as of December 31, 1999 and fee rate
of each open-end investment company or series thereof which First Trust advises
or sub-advises that has a similar investment methodology to the Series listed.
<TABLE>
<CAPTION>
JNL VARIABLE FUND LLC
<S> <C> <C>
SERIES: JNL/First Trust The Dow Target 5 Series
SIMILAR FUNDS ASSET SIZE FEE RATE
Advisory Fee Sub-Advisory Fee
SERIES: JNL/First Trust The Dow Target 10 Series
SIMILAR FUNDS ASSET SIZE FEE RATE
Advisory Fee Sub-Advisory Fee
SERIES: JNL/First Trust The S&P Target 10 Series
SIMILAR FUNDS ASSET SIZE FEE RATE
Advisory Fee Sub-Advisory Fee
SERIES: JNL/First Trust Global Target 15 Series
SIMILAR FUNDS ASSET SIZE FEE RATE
Advisory Fee Sub-Advisory Fee
SERIES: JNL/First Trust Target 25 Series
SIMILAR FUNDS ASSET SIZE FEE RATE
Advisory Fee Sub-Advisory Fee
SERIES: JNL/First Trust Target Small-Cap Series
SIMILAR FUNDS ASSET SIZE FEE RATE
Advisory Fee Sub-Advisory Fee
SERIES: JNL/First Trust Technology Sector Series
SIMILAR FUNDS ASSET SIZE FEE RATE
Advisory Fee Sub-Advisory Fee
SERIES: JNL/First Trust Pharmaceutical/Healthcare Sector Series
SIMILAR FUNDS ASSET SIZE FEE RATE
Advisory Fee Sub-Advisory Fee
SERIES: JNL/First Trust Financial Sector Series
SIMILAR FUNDS ASSET SIZE FEE RATE
Advisory Fee Sub-Advisory Fee
SERIES: JNL/First Trust Energy Sector Series
SIMILAR FUNDS ASSET SIZE FEE RATE
Advisory Fee Sub-Advisory Fee
SERIES: JNL/First Trust Leading Brands Sector Series
SIMILAR FUNDS ASSET SIZE FEE RATE
Advisory Fee Sub-Advisory Fee
SERIES: JNL/First Trust Communications Sector Series
SIMILAR FUNDS ASSET SIZE FEE RATE
Advisory Fee Sub-Advisory Fee
JNL VARIABLE FUND III LLC
SERIES: JNL/First Trust The Dow Target 10 Series
SIMILAR FUNDS ASSET SIZE FEE RATE
Advisory Fee Sub-Advisory Fee
</TABLE>
APPENDIX B
INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT is effective this ______ day of _______________, 199___, by
and between JACKSON NATIONAL FINANCIAL SERVICES, LLC., a Michigan limited
liability company and registered investment adviser ("Adviser"), and First Trust
Advisers L.P., an Illinois limited partnership and registered investment adviser
("Sub-Adviser").
WHEREAS, Adviser is the investment manager for the JNL Variable Fund LLC
(the "Fund"), an open-end management investment company registered under the
Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Fund 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 Fund listed on
Schedule A hereto ("Series").
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 Series 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
Series 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 Series 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 Fund's Certificate of Formation, as filed with the Secretary of
State of the State of Delware on October 13, 1998, and all amendments
thereto or restatements thereof (such Certificate of Formation, as
presently in effect and as it shall from time to time be amended or
restated, is herein called the "Certificate of Formation");
b) the Fund's Operating Agreement and amendments thereto;
c) resolutions of the Fund's Management Board authorizing the appointment
of Sub-Adviser and approving this Agreement;
d) the Fund'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 Fund'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 Series; and
f) the Fund'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 Fund's Management Board
and the Adviser, Sub-Adviser will furnish an investment program in respect
of, and make investment decisions for, all assets of the Series and place
all orders for the purchase and sale of securities, all on behalf of the
Series. In the performance of its duties, Sub-Adviser will satisfy its
fiduciary duties to the Series (as set forth below), and will monitor the
Series's investments, and will comply with the provisions of Fund's
Certificate of Formation and Operating Agreement, as amended from time to
time, and the stated investment objectives, policies and restrictions of
the Series. 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 Series and to consult with each other
regarding the investment affairs of the Series. Sub-Adviser will report to
Management Board 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 Series.
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 SEC 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
Series 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 Management Board. 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 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 Fund, Adviser, or
Sub-Adviser, except as may be permitted under the 1940 Act;
d) will report regularly to Adviser and to the Management Board and will
make appropriate persons available for the purpose of reviewing with
representatives of Adviser and the Management Board on a regular basis
at reasonable times the management of the Series, including, without
limitation, review of the general investment strategies of the Series,
the performance of the Series 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
Series's securities transactions and will furnish Adviser and Fund's
Management Board such periodic and special reports as the Management
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 Fund all
such records and other information relative to Fund 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 Fund, 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 Fund; and
h) will vote proxies received in connection with securities held by the
Series consistent with its fiduciary duties hereunder.
4. Expenses. During the term of this Agreement, Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage
commission, if any) purchased for the Series.
5. Books and Records. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Fund are the property of the Fund and further agrees to
surrender promptly to the Fund any of such records upon the Fund's request.
Sub-Adviser further agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records required to be maintained by Rule
31a-1 under the 1940 Act.
6. Compensation. For the services provided and the expenses assumed pursuant
to this Agreement, Adviser will pay the Sub-Adviser, and the Sub-Adviser
agrees to accept as full compensation therefor, a sub-advisory fee, accrued
daily and payable monthly on the average daily net assets in the Series,
excluding the net assets representing capital contributed by Jackson
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 Series being managed under this Agreement at a composite
rate of compensation less than that provided for herein.
7. Services to Others. Adviser understands, and has advised the Fund's
Management Board, 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 Series 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 Fund's Management
Board, that in some cases this procedure may adversely affect the size of
the position that the participating Series may obtain in a particular
security. In addition, Adviser understands, and has advised Fund's
Management Board, that the persons employed by Sub-Adviser to assist in
Sub-Adviser's duties under this Agreement will not devote their full time
to such service and nothing contained in this Agreement will be deemed to
limit or restrict the right of Sub-Adviser or any of its affiliates to
engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.
8. Standard of Care and Limitation of Liability. The Sub-Adviser shall
exercise its best judgment and shall act in good faith in rendering the
services pursuant to this Agreement.
9. Indemnification. 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 Series and
to the Fund which (1) may be based upon any misfeasance, malfeasance, or
nonfeasance by the Sub-Adviser, any of its employees or representatives, or
any affiliate of or any person acting on behalf of the Sub-Adviser, (2) may
be based upon a failure to comply with Section 3 of this Agreement, or (3)
may be based upon any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus, or any amendment or supplement
thereto, or the omission or alleged omission to state therein a material
fact known or which should have been known to the Sub-Adviser and was
required to be stated therein or necessary to make the statements therein
not misleading, if such a statement or omission was made in reliance upon
information furnished to the Adviser, the Fund, or any affiliated person of
the Adviser or Fund by the Sub-Adviser or any affiliated person of the
Sub-Adviser; provided, however, that in no case shall the indemnity in
favor of an Adviser Indemnified Person be deemed to protect such person
against any liability to which any such person would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence in the
performance of its duties, or by reason of its reckless disregard of its
obligations and duties under this Agreement.
10. Duration and Termination. This Agreement will become effective as to a
Series upon execution or, if later, the date that initial capital for such
Series 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 Series, this Agreement will continue in effect as
to a Series for successive periods of 12 months, provided that such
continuation is specifically approved at least annually by the Fund's
Management Board or by vote of a majority of the outstanding voting
securities of such Series, and in either event approved also by a majority
of the Members of the Fund's Management Board who are not interested
persons of the Fund, or of the Adviser, or of the Sub-Adviser.
Notwithstanding the foregoing, this Agreement may be terminated as to a
Series at any time, without the payment of any penalty, on sixty days'
written notice by the Fund or Adviser, or on ninety days' written notice by
the Sub-Adviser. This Agreement will immediately terminate in the event of
its assignment. (As used in this Agreement, the terms "majority of the
outstanding voting securities", "interested persons" and "assignment" have
the same meanings of such terms in the 1940 Act.)
11. Amendment of this Agreement. No provision of this Agreement may be changed,
waived, discharged or terminated orally; but only by an instrument in
writing signed by the party against which enforcement of the change,
waiver, discharge or termination is sought.
12 Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as
such other party may designate for the receipt of such notice.
13. Miscellaneous. The captions in this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect. If any provision
of this Agreement is held or made invalid by a court decision, statute,
rule or otherwise, the remainder of this Agreement will be binding upon and
shall inure to the benefit of the parties hereto.
The name "JNL Variable Fund LLC" and "Members of the JNL Variable Fund
LLC's Management Board" refer respectively to the Fund created by, and the
Members of the Management Board, as members but not individually or
personally, acting from time to time under, the Operating Agreement, to
which reference is hereby made, and to any and all amendments thereto. The
obligations of the JNL Variable Fund LLC entered in the name or on behalf
thereof by any of the Members of the JNL Variable Fund LLC Management
Board, representatives or agents are made not individually but only in such
capacities and are not binding upon any of the Members, Shareholders or
representatives of the Fund personally, but bind only the assets of the
Fund, and persons dealing with the Series must look solely to the assets of
the Fund belonging to such Series for the enforcement of any claims against
Fund.
14. Representations and Warranties of the Sub-Adviser.
The Sub-Adviser hereby represents that this Agreement does not violate any
existing agreements between the Sub-Adviser and any other party.
The Sub-Adviser further represents and warrants that it is a duly
registered investment adviser under the Investment Advisers Act of 1940, as
amended and has provided to the Adviser a copy of its most recent Form ADV
as filed with the Securities and Exchange Commission.
The Sub-Adviser further represents that is has reviewed the post-effective
amendment to the Registration Statement for the Fund filed with the
Securities and Exchange Commission that contains disclosure about the
Sub-Adviser, and represents and warrants that, with respect to the
disclosure about the Sub-Adviser or information relating, directly or
indirectly, to the Sub-Adviser, such Registration Statement contains, as of
the date hereof, no untrue statement of any material fact and does not omit
any statement of a material fact which was required to be stated therein or
necessary to make the statements contained therein not misleading.
15. Applicable Law. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Michigan.
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this
Agreement to be executed as of this ____ day of _________________, 199_.
JACKSON NATIONAL FINANCIAL
SERVICES, LLC
By:
----------------------------------------
Name: Andrew B. Hopping
----------------------------------------
Title: President
----------------------------------------
FIRST TRUST ADVISERS L.P
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
SCHEDULE A
SERIES
DATED _______
JNL/First Trust The Dow(SM) Target 5 Series
JNL/First Trust The Dow(SM) Target 10 Series
JNL/First Trust The S&P(R) Target 10 Series
JNL/First Trust Global Target 15 Series
JNL/First Trust Target 25 Series
JNL/First Trust Target Small-Cap Series
JNL/First Trust Technology Sector Series
JNL/First Trust Pharmaceutical/Healthcare Sector Series
JNL/First Trust Financial Sector Series
JNL/First Trust Energy Sector Series
JNL/First Trust Leading Brands Sector Series
JNL/First Trust Communications Sector Series
SCHEDULE B
COMPENSATION
DATED ______
JNL/FIRST TRUST THE DOW(SM) TARGET 5 SERIES
Average Daily Net Assets Annual Rate
$0 to $500 million .35%
$500 million to $1 billion .30%
Over $1 billion .25%
JNL/FIRST TRUST THE DOW(SM) TARGET 10 SERIES
Average Daily Net Assets Annual Rate
$0 to $500 million .35%
$500 million to $1 billion .30%
Over $1 billion .25%
JNL/FIRST TRUST THE S&P(R) TARGET 10 SERIES
$0 to $500 million .35%
$500 million to $1 billion .30%
Over $1 billion .25%
JNL/FIRST TRUST GLOBAL TARGET 15 SERIES
Average Daily Net Assets Annual Rate
$0 to $500 million .35%
$500 million to $1 billion .30%
Over $1 billion .25%
JNL/FIRST TRUST TARGET 25 SERIES
Average Daily Net Assets Annual Rate
$0 to $500 million .35%
$500 million to $1 billion .30%
Over $1 billion .25%
JNL/FIRST TRUST TARGET SMALL-CAP SERIES
Average Daily Net Assets Annual Rate
$0 to $500 million .35%
$500 million to $1 billion .30%
Over $1 billion .25%
JNL/FIRST TRUST TECHNOLOGY SECTOR SERIES
Average Daily Net Assets Annual Rate
$0 to $500 million .35%
$500 million to $1 billion .30%
Over $1 billion .25%
JNL/FIRST TRUST PHARMACEUTICAL/HEALTHCARE SECTOR SERIES
Average Daily Net Assets Annual Rate
$0 to $500 million .35%
$500 million to $1 billion .30%
Over $1 billion .25%
JNL/FIRST TRUST FINANCIAL SECTOR SERIES
Average Daily Net Assets Annual Rate
$0 to $500 million .35%
$500 million to $1 billion .30%
Over $1 billion .25%
JNL/FIRST TRUST ENERGY SECTOR SERIES
Average Daily Net Assets Annual Rate
$0 to $500 million .35%
$500 million to $1 billion .30%
Over $1 billion .25%
JNL/FIRST TRUST COMMUNICATIONS SECTOR SERIES
Average Daily Net Assets Annual Rate
$0 to $500 million .35%
$500 million to $1 billion .30%
Over $1 billion .25%
JNL/FIRST TRUST LEADING BRANDS SERIES
Average Daily Net Assets Annual Rate
$0 to $500 million .35%
$500 million to $1 billion .30%
Over $1 billion .25%
APPENDIX C
INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT is dated as of May 26, 1999, by and between JACKSON NATIONAL
FINANCIAL SERVICES, LLC., a Michigan limited liability company and registered
investment adviser ("Adviser"), and FIRST TRUST ADVISORS L.P., an Illinois
limited partnership and registered investment adviser ("Sub-Adviser").
WHEREAS, Adviser is the investment manager for the JNL Variable Fund III
LLC (the "Fund"), an open-end management investment company registered under the
Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Fund 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 Fund listed on
Schedule A hereto ("Series").
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 Series 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
Series 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 Series 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 Fund's Certificate of Formation, as filed with the Secretary of
the State of Delaware on October 13, 1998, and all amendments thereto
or restatements thereof (such Certificate of Formation, as presently
in effect and as it shall from time to time be amended or restated, is
herein called the "Certificate of Formation");
b) the Fund's Operating Agreement and amendments thereto;
c) resolutions of the Fund's Board of Managers authorizing the
appointment of Sub-Adviser and approving this Agreement;
d) the Fund'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 Fund'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 Series; and
f) the Fund'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 Fund's Board of Managers
and the Adviser, Sub-Adviser will furnish an investment program in respect
of, and make investment decisions for, all assets of the Series and place
all orders for the purchase and sale of securities, all on behalf of the
Series. In the performance of its duties, Sub-Adviser will satisfy its
fiduciary duties to the Series (as set forth below), and will monitor the
Series' investments, and will comply with the provisions of Fund's
Certificate of Formation and Operating Agreement, as amended from time to
time, and the stated investment objectives, policies and restrictions of
the Series. 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 Series and to consult with each other
regarding the investment affairs of the Series. Sub-Adviser will report to
Board of Managers 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 Series.
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 SEC 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
Series 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 Managers. 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 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 Fund, Adviser, or
Sub-Adviser, except as may be permitted under the 1940 Act;
d) will report regularly to Adviser and to the Board of Managers and will
make appropriate persons available for the purpose of reviewing with
representatives of Adviser and the Board of Managers on a regular
basis at reasonable times the management of the Series, including,
without limitation, review of the general investment strategies of the
Series, the performance of the Series 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
Series' securities transactions and will furnish Adviser and Fund's
Board of Managers such periodic and special reports as the Board of
Managers 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 Fund all
such records and other information relative to Fund 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 Fund, 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 Fund; and
h) will vote proxies received in connection with securities held by the
Series consistent with its fiduciary duties hereunder.
4. Expenses. During the term of this Agreement, Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage
commission, if any) purchased for the Series.
5. Books and Records. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Fund are the property of the Fund and further agrees to
surrender promptly to the Fund any of such records upon the Fund's request.
Sub-Adviser further agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records required to be maintained by Rule
31a-1 under the 1940 Act.
6. Compensation. For the services provided and the expenses assumed pursuant
to this Agreement, Adviser will pay the Sub-Adviser, and the Sub-Adviser
agrees to accept as full compensation therefor, a sub-advisory fee, accrued
daily and payable monthly on the average daily net assets in the Series,
excluding the net assets representing capital contributed by Jackson
National Separate Account III, 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 Series being managed under this Agreement at a composite
rate of compensation less than that provided for herein.
7. Services to Others. Adviser understands, and has advised the Fund's Board
of Managers, 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 Series 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 Fund's Board of
Managers, that in some cases this procedure may adversely affect the size
of the position that the participating Series may obtain in a particular
security. In addition, Adviser understands, and has advised Fund's Board of
Managers, that the persons employed by Sub-Adviser to assist in
Sub-Adviser's duties under this Agreement will not devote their full time
to such service and nothing contained in this Agreement will be deemed to
limit or restrict the right of Sub-Adviser or any of its affiliates to
engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.
8. Standard of Care and Limitation of Liability. The Sub-Adviser shall
exercise its best judgment and shall act in good faith in rendering the
services pursuant to this Agreement.
9. Indemnification. 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 Series and
to the Fund which (1) may be based upon any misfeasance, malfeasance, or
nonfeasance by the Sub-Adviser, any of its employees or representatives, or
any affiliate of or any person acting on behalf of the Sub-Adviser, (2) may
be based upon a failure to comply with Section 3 of this Agreement, or (3)
may be based upon any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus, or any amendment or supplement
thereto, or the omission or alleged omission to state therein a material
fact known or which should have been known to the Sub-Adviser and was
required to be stated therein or necessary to make the statements therein
not misleading, if such a statement or omission was made in reliance upon
information furnished to the Adviser, the Fund, or any affiliated person of
the Adviser or Fund by the Sub-Adviser or any affiliated person of the
Sub-Adviser; provided, however, that in no case shall the indemnity in
favor of an Adviser Indemnified Person be deemed to protect such person
against any liability to which any such person would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence in the
performance of its duties, or by reason of its reckless disregard of its
obligations and duties under this Agreement.
10. Duration and Termination. This Agreement will become effective as to a
Series upon execution or, if later, the date that initial capital for such
Series 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 Series, this Agreement will continue in effect as
to a Series for successive periods of 12 months, provided that such
continuation is specifically approved at least annually by the Fund's Board
of Managers or by vote of a majority of the outstanding voting securities
of such Series, and in either event approved also by a majority of the
Members of the Fund's Board of Managers who are not interested persons of
the Fund, or of the Adviser, or of the Sub-Adviser. Notwithstanding the
foregoing, this Agreement may be terminated as to a Series at any time,
without the payment of any penalty, on sixty days' written notice by the
Fund or Adviser, or on ninety days' written notice by the Sub-Adviser. This
Agreement will immediately terminate in the event of its assignment. (As
used in this Agreement, the terms "majority of the outstanding voting
securities", "interested persons" and "assignment" have the same meanings
of such terms in the 1940 Act.)
11. Amendment of this Agreement. No provision of this Agreement may be changed,
waived, discharged or terminated orally; but only by an instrument in
writing signed by the party against which enforcement of the change,
waiver, discharge or termination is sought.
12. Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as
such other party may designate for the receipt of such notice.
13. Miscellaneous. The captions in this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect. If any provision
of this Agreement is held or made invalid by a court decision, statute,
rule or otherwise, the remainder of this Agreement will be binding upon and
shall inure to the benefit of the parties hereto.
The name "JNL Variable Fund III LLC" and "Members of the JNL Variable Fund
III LLC's Board of Managers" refer respectively to the Fund created by, and
the Members of the Board of Managers, as members but not individually or
personally, acting from time to time under, the Operating Agreement, to
which reference is hereby made, and to any and all amendments thereto. The
obligations of the JNL Variable Fund III LLC entered in the name or on
behalf thereof by any of the Members of the JNL Variable Fund III LLC Board
of Managers, representatives or agents are made not individually but only
in such capacities and are not binding upon any of the Members, interest
holders or representatives of the Fund personally, but bind only the assets
of the Fund, and persons dealing with the Series must look solely to the
assets of the Fund belonging to such Series for the enforcement of any
claims against Fund.
14. Representations and Warranties of the Sub-Adviser.
The Sub-Adviser hereby represents that this Agreement does not violate any
existing agreements between the Sub-Adviser and any other party.
The Sub-Adviser further represents and warrants that it is a duly
registered investment adviser under the Investment Advisers Act of 1940, as
amended and has provided to the Adviser a copy of its most recent Form ADV
as filed with the Securities and Exchange Commission.
The Sub-Adviser further represents that is has reviewed the post-effective
amendment to the Registration Statement for the Fund filed with the
Securities and Exchange Commission that contains disclosure about the
Sub-Adviser, and represents and warrants that, with respect to the
disclosure about the Sub-Adviser or information relating, directly or
indirectly, to the Sub-Adviser, such Registration Statement contains, as of
the date hereof, no untrue statement of any material fact and does not omit
any statement of a material fact which was required to be stated therein or
necessary to make the statements contained therein not misleading.
15. Applicable Law. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Michigan.
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this
Agreement to be executed as of this 26th day of May, 1999
JACKSON NATIONAL FINANCIAL
SERVICES, LLC
By: /s/ Andrew B. Hopping
---------------------
` Name: Andrew B. Hopping
---------------------
Title:President
---------------------
FIRST TRUST ADVISORS L.P.
By: /s/ Ronald McAlister
---------------------
` Name: Ronald McAlister
---------------------
Title:President
---------------------
SCHEDULE A
Dated May 26, 1999
(Series)
JNL/First Trust The Dow(SM) Target 10 Series
SCHEDULE B
Dated May 26, 1999
(Compensation)
JNL/First Trust The Dow(SM) Target 10 Series
Average Daily Net Assets Annual Rate
$0 to $500 million .35%
$500 million to $1 billion .30%
Over $1 billion .25%
PROXY
[___________ SERIES]
OF
JNL VARIABLE FUND LLC
SPECIAL MEETING OF INTEREST HOLDERS
MARCH 9, 2000
KNOW ALL MEN BY THESE PRESENTS that the undersigned interest holder(s) of
the _________________ Series of JNL Variable Fund LLC ("Fund"), hereby appoints
_______________________, or any one of them true and lawful attorneys, with
power of substitution of each, to vote all interests which the undersigned is
entitled to vote, at the Special Meeting of Interest Holders of the Fund to be
held at the offices of Jackson National Financial Services, LLC, 5901 Executive
Drive, Lansing, Michigan 48911 on March 9, 2000, at 10:00 a.m., local time, and
at any adjournment thereof ("Meeting"), as follows:
1. To approve a New Sub-Advisory Agreement between Jackson National Financial
Services, LLC and First Trust Advisors L.P., such New Sub-Advisory
Agreement to contain the same terms and conditions as the current
Sub-Advisory Agreement except for the dates of execution, effectiveness and
termination.
FOR ( ) AGAINST ( ) ABSTAIN ( )
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Meeting.
THE INTERESTS REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR ANY PROPOSAL
FOR WHICH NO CHOICE IS INDICATED.
Dated: ____________________, 2000
Jackson National Life Insurance Company
___________________________________________________
Name of Insurance Company
___________________________________________________
Name and Title of Authorized Officer
___________________________________________________
Signature of Authorized Officer
____________________________ SERIES
Name(s) of Separate Account(s)
of the Insurance Company
Owning Interests in this Series:
______ SEPARATE ACCOUNT
__________________________________
_________________________________
__________________________________
TOTAL INTERESTS OF THIS SERIES
OWNED AND BEING VOTED BY THE
INSURANCE COMPANY:
__________________________________
_____________________ SERIES ("Series")
INSTRUCTIONS TO JACKSON NATIONAL LIFE INSURANCE COMPANY
FOR THE SPECIAL MEETING OF INTEREST HOLDERS OF
JNL VARIABLE FUND LLC TO BE HELD ON MARCH 9, 2000
INSTRUCTIONS SOLICITED ON BEHALF OF
JACKSON NATIONAL LIFE INSURANCE COMPANY
The undersigned hereby instructs Jackson National Life Insurance Company (the
"Company") to vote all interests of the above-referenced Series of JNL Variable
Fund LLC (the "Fund") represented by units held by the undersigned at a special
meeting of interest holders of the Fund to be held at 10:00 a.m., local time, on
March 9, 2000, at the offices of JNL Financial Services, LLC, 5901 Executive
Drive, Lansing, Michigan and at any adjournment thereof, as indicated on the
reverse side.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing as
attorney, executor, administrator, trustee, guardian, or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please sign
the partnership name and your name and title. Joint owners should each sign this
proxy. Please sign, date and return.
Dated:______________________________________, 2000
__________________________________________________
Signature(s)
INSTRUCTIONS SOLICITED ON BEHALF OF JACKSON NATIONAL LIFE INSURANCE COMPANY
JACKSON NATIONAL LIFE INSURANCE COMPANY WILL VOTE INTERESTS HELD ON BEHALF OF
THE CONTRACT OWNER AS INDICATED BELOW OR FOR ANY PROPOSAL FOR WHICH NO CHOICE IS
INDICATED.
RECEIPT OF THE NOTICE OF THE SPECIAL MEETING AND THE ACCOMPANYING PROXY
STATEMENT IS HEREBY ACKNOWLEDGED.
IF THIS INSTRUCTION FORM IS SIGNED AND RETURNED AND NO SPECIFICATION IS MADE,
THE COMPANY SHALL VOTE FOR ALL PROPOSALS. IF THIS INSTRUCTION CARD IS NOT
RETURNED OR IS RETURNED UNSIGNED, THE COMPANY SHALL VOTE THE INTERESTS IN THE
SAME PROPORTION AS IT VOTES THE SHARES FOR WHICH IT HAS RECEIVED INSTRUCTIONS.
Please vote by filling in the boxes below.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. To approve a New Sub-Advisory Agreement
between Jackson National Financial Services,
LLC and First Trust Advisors L.P., such New
Sub-Advisory Agreement to contain the same
terms and conditions as the current Sub-Advisory
Agreement except for the dates of execution,
effectiveness and termination.
</TABLE>
IMPORTANT: Please sign on the reverse side.
PROXY
JNL/FIRST TRUST THE DOW TARGET 10 SERIES
OF
JNL VARIABLE FUND III LLC
SPECIAL MEETING OF INTEREST HOLDERS
MARCH 9, 2000
KNOW ALL MEN BY THESE PRESENTS that the undersigned interest holder(s) of
the JNL/First Trust The Dow Target 10 Series of JNL Variable Fund III LLC
("Fund"), hereby appoints _______________________, or any one of them true and
lawful attorneys, with power of substitution of each, to vote all interests
which the undersigned is entitled to vote, at the Special Meeting of Interest
Holders of the Fund to be held at the offices of Jackson National Financial
Services, LLC, 5901 Executive Drive, Lansing, Michigan 48911 on March 9, 2000,
at 10:00 a.m., local time, and at any adjournment thereof ("Meeting"), as
follows:
1. To approve a New Sub-Advisory Agreement between Jackson National Financial
Services, LLC and First Trust Advisors L.P., such New Sub-Advisory
Agreement to contain the same terms and conditions as the current
Sub-Advisory Agreement except for the dates of execution, effectiveness and
termination.
FOR ( ) AGAINST ( ) ABSTAIN ( )
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Meeting.
THE INTERESTS REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR ANY PROPOSAL
FOR WHICH NO CHOICE IS INDICATED.
Dated: ____________________, 2000
Jackson National Life Insurance Company
___________________________________________________
Name of Insurance Company
___________________________________________________
Name and Title of Authorized Officer
___________________________________________________
Signature of Authorized Officer
JNL/FIRST TRUST THE DOW TARGET 10 SERIES
Name(s) of Separate Account(s)
of the Insurance Company
Owning Interests in this Series:
______ SEPARATE ACCOUNT
__________________________________
_________________________________
__________________________________
TOTAL INTERESTS OF THIS SERIES
OWNED AND BEING VOTED BY THE
INSURANCE COMPANY:
__________________________________
JNL/FIRST TRUST THE DOW TARGET 10 SERIES ("Series")
INSTRUCTIONS TO JACKSON NATIONAL LIFE INSURANCE COMPANY
FOR THE SPECIAL MEETING OF INTEREST HOLDERS OF
JNL/FIRST TRUST THE DOW TARGET 10 SERIES OF
JNL VARIABLE FUND III LLC TO BE HELD ON MARCH 9, 2000
INSTRUCTIONS SOLICITED ON BEHALF OF
JACKSON NATIONAL LIFE INSURANCE COMPANY
The undersigned hereby instructs Jackson National Life Insurance Company (the
"Company") to vote all interests of the above-referenced Series of JNL Variable
Fund III LLC (the "Fund") represented by units held by the undersigned at a
special meeting of interest holders of the Fund to be held at 10:00 a.m., local
time, on March 9, 2000, at the offices of JNL Financial Services, LLC, 5901
Executive Drive, Lansing, Michigan and at any adjournment thereof, as indicated
on the reverse side.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing as
attorney, executor, administrator, trustee, guardian, or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please sign
the partnership name and your name and title. Joint owners should each sign this
proxy. Please sign, date and return.
Dated:______________________________________, 2000
__________________________________________________
Signature(s)
INSTRUCTIONS SOLICITED ON BEHALF OF JACKSON NATIONAL LIFE INSURANCE COMPANY
JACKSON NATIONAL LIFE INSURANCE COMPANY WILL VOTE INTERESTS HELD ON BEHALF OF
THE CONTRACT OWNER AS INDICATED BELOW OR FOR ANY PROPOSAL FOR WHICH NO CHOICE IS
INDICATED.
RECEIPT OF THE NOTICE OF THE SPECIAL MEETING AND THE ACCOMPANYING PROXY
STATEMENT IS HEREBY ACKNOWLEDGED.
IF THIS INSTRUCTION FORM IS SIGNED AND RETURNED AND NO SPECIFICATION IS MADE,
THE COMPANY SHALL VOTE FOR ALL PROPOSALS. IF THIS INSTRUCTION CARD IS NOT
RETURNED OR IS RETURNED UNSIGNED, THE COMPANY SHALL VOTE THE INTERESTS IN THE
SAME PROPORTION AS IT VOTES THE SHARES FOR WHICH IT HAS RECEIVED INSTRUCTIONS.
Please vote by filling in the boxes below.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. To approve a New Sub-Advisory Agreement
between Jackson National Financial Services,
LLC and First Trust Advisors L.P., such
New Sub-Advisory Agreement to contain the
same terms and conditions as the current
Sub-Advisory Agreement except for the
dates of execution, effectiveness and
termination.
</TABLE>
IMPORTANT: Please sign on the reverse side.
