<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
MANUFACTURERS INVESTMENT TRUST
(Name of Registrant as Specified In Its Charter)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:
- --------------------------------------------------------------------------------
<PAGE> 2
MANUFACTURERS INVESTMENT TRUST
73 TREMONT STREET
BOSTON, MASSACHUSETTS 02108
March 22, 2000
Dear Variable Annuity and Variable Life Contract Owners:
In an effort to enhance the quality of the portfolio allocation process for
the Lifestyle Trusts of Manufacturers Investment Trust (the "Trust"), Management
has proposed a new subadvisory consulting agreement for these portfolios as well
as certain related changes to the Trust Advisory Agreement and the Manufacturers
Adviser Corporation ("MAC") subadvisory agreement.
To consider and vote on the proposals described in the enclosed Notice of
Special Meeting of Shareholders of the Lifestyle Trusts, a Special Meeting of
such Shareholders will be held at 73 Tremont Street, Boston, Massachusetts
02108, on APRIL 28, 2000 AT 10:00 A.M., EASTERN STANDARD TIME.
We encourage you to read the attached materials in their entirety. The
following is an overview of the proposals for which you are being asked to
provide voting instructions.
NEW SUBADVISORY CONSULTING AGREEMENT FOR THE LIFESTYLE TRUSTS
Shareholders of each of the Lifestyle Trusts are being asked to consider a
new subadvisory consulting agreement between MAC and State Street Global
Advisors ("SSgA") for services related to the Lifestyle Trusts. The purpose of
this agreement is to enhance MAC's portfolio allocation process for the
Lifestyle Trusts through the use of SSgA's expertise in statistical analysis.
SSgA is a leading investment management firm worldwide with over $672 billion in
assets under management. SSgA overseas a wide variety of investments including
active and passive equities, bonds, currency and asset allocation mandates. If
approved by shareholders, the subadvisory consulting fee for each Lifestyle
Trust would be at an annual rate of 0.075% of the first $100 million of the
average daily value of the net assets of such Lifestyle Trust and 0.050% of the
excess over $100 million.
The proposal will not be effected as to a Lifestyle Trust unless
shareholders of that Portfolio also approve the other two proposals described
below.
<PAGE> 3
AMENDMENT TO ADVISORY AGREEMENT AND MAC SUBADVISORY AGREEMENT
Shareholders of the Lifestyle Trusts are also being asked to consider
providing for an advisory fee paid to Manufacturers Securities Services, LLC
("Manulife Securities" or the "Adviser") by each of the Lifestyle portfolios to
provide for the subadvisory consulting fee set forth above (currently, no
advisory fee is imposed).
The purpose of imposing an advisory fee on the Lifestyle Trusts is to
exclusively provide for a subadvisory consulting fee to SSgA or to any successor
subadviser providing services to the Lifestyle Trusts. The entire advisory fee
will be used to fund such subadvisory consulting fees and the Adviser will not
retain any of the fee.
In conjunction with imposition of an advisory fee on the Lifestyle Trusts,
shareholders are also being requested to approve a subadvisory fee for the
Lifestyle Trusts. The subadvisory fee would be paid by the Adviser to MAC and
would not be an additional expense of the Lifestyle Trusts. The purpose of the
subadvisory fee is to permit MAC to pay SSgA the subadvisory consulting fee.
(The Adviser would pay MAC a subadvisory fee and MAC in turn would pay SSgA a
subadvisory consulting fee in the same amount.)
Please note that neither the MAC subadvisory fee nor the SSgA subadvisory
consulting fee would be paid directly by the Lifestyle Trusts. Rather, only the
advisory fee would be paid by the Lifestyle Trusts. Therefore, the total cost of
each of these proposals to the Lifestyle Trusts is the advisory fee described
above.
* * * *
Although you are not a shareholder of the Trust, your purchase payments and
the earnings on such purchase payments under your variable annuity or variable
life contracts issued by The Manufacturers Life Insurance Company of North
America ("Manulife North America"), The Manufacturers Life Insurance Company of
New York ("Manulife New York") and The Manufacturers Life Insurance Company of
America ("Manufacturers America") are invested in shares of one or more of the
portfolios of the Trust through subaccounts of separate accounts established by
Manulife North America, Manulife New York and Manufacturers America for such
purposes. Since the value of your contract depends in part on the investment
performance of the shares of the applicable portfolio of the Trust, you have the
right to instruct Manulife North America, Manulife New York or Manufacturers
America, as appropriate, how the shares of the Trust attributable to your
contract are voted. The number of votes for which
<PAGE> 4
you may give instructions for any portfolio of the Trust is determined by
dividing your contract value (or the reserve for a contract after its maturity
date) allocated to the subaccount in which shares of such portfolio are held by
the value per share of that portfolio of the Trust. Fractional votes are
counted. Manulife North America, Manulife New York and Manufacturers America
will vote all shares of the Trust issued to such companies in proportion to the
timely instructions received from owners of the contracts participating in
separate accounts registered under the Investment Company Act of 1940.
Enclosed you will find a Notice of Special Meeting of Shareholders, a Proxy
Statement for the Trust, and a Voting Instructions Form for each Trust portfolio
in which your contract values were invested as of March 1, 2000. The number of
shares that represents your voting interest (determined as explained above)
appears in each Voting Instructions Form. The Proxy Statement provides
background information and describes, in detail, each of the matters to be voted
on at the Meeting.
BOARD OF TRUSTEES OF THE TRUST HAS UNANIMOUSLY VOTED IN FAVOR OF EACH
PROPOSAL AND RECOMMENDS THAT YOU VOTE FOR THEIR APPROVAL.
IN ORDER FOR SHARES TO BE VOTED AT THE MEETING BASED ON YOUR INSTRUCTIONS,
WE URGE YOU TO READ THE PROXY STATEMENT AND THEN COMPLETE AND MAIL YOUR VOTING
INSTRUCTIONS FORM(S) IN THE ATTACHED POSTAGE-PAID ENVELOPE, ALLOWING SUFFICIENT
TIME FOR THEM TO BE RECEIVED BY APRIL 27, 2000.
If you have any questions regarding any of the proposals, please call (800)
344-1029.
Sincerely,
/s/ Matthew R. Schiffman
Matthew R. Schiffman
President
Manufacturers Investment Trust
<PAGE> 5
MANUFACTURERS INVESTMENT TRUST
73 TREMONT STREET
BOSTON, MASSACHUSETTS 02108
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF THE LIFESTYLE TRUSTS
To the Shareholders of
The Lifestyle Trusts of Manufacturers Investment Trust:
Notice is hereby given that a Special Meeting of Shareholders of the
Lifestyle Trusts (the "Meeting") of Manufacturers Investment Trust (the "Trust")
will be held at 73 Tremont Street, Boston, Massachusetts 02108, on April 28,
2000 at 10:00 a.m., Eastern Standard Time. A Proxy Statement which provides
information about the purpose of the Meeting is included with this notice. The
Meeting will be held for the following purposes:
<TABLE>
<S> <C>
Proposal 1 Approval of an Amendment to the Advisory Agreement
between the Trust and Manufacturers Securities
Services, providing for an advisory fee with respect
to each Lifestyle Trust. (Only shareholders of each
of the Lifestyle Trusts will vote on Proposal 1).
Proposal 2 Approval of an Amendment to the Subadvisory Agreement
between Manufacturers Securities Services, LLC and
Manufacturers Adviser Corporation providing for a
subadvisory fee with respect to each Lifestyle Trust.
(Only shareholders of each of the Lifestyle Trusts
will vote on Proposal 2).
Proposal 3 Approval of a Subadvisory Consulting Agreement
between Manufacturers Adviser Corporation and State
Street Global Advisors with respect to each Lifestyle
Trust. (Only shareholders of each of the Lifestyle
Trusts will vote on Proposal 3).
</TABLE>
Any other business that may properly come before the Meeting.
NONE OF THE PROPOSALS WILL BE IMPLEMENTED AS TO A PORTFOLIO UNLESS
SHAREHOLDERS OF THAT PORTFOLIO APPROVE ALL THREE PROPOSALS.
The Board of Trustees has recently reviewed and unanimously endorsed the
proposals set forth in the accompanying Proxy Statement.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS THAT SHAREHOLDERS VOTE FOR
PROPOSALS 1, 2 AND 3.
<PAGE> 6
Each shareholder of record at the close of business on March 1, 2000 is
entitled to receive notice of and to vote at the Meeting.
Sincerely yours,
/s/ James D. Gallagher
James D. Gallagher
Secretary
March 22, 2000
Boston, Massachusetts
<PAGE> 7
MANUFACTURERS INVESTMENT TRUST
------------------------
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
OF THE LIFESTYLE TRUSTS
TO BE HELD APRIL 28, 2000
------------------------
MARCH 22, 2000
<PAGE> 8
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROXY STATEMENT
General.................................................... 1
Summary of Proposals....................................... 2
Voting Information......................................... 4
Proposal 1: Approval of an Amendment to the Advisory
Agreement between the Trust and Manufacturers
Securities Services, LLC providing for an
advisory fee with respect to each Lifestyle
Trust.......................................... 6
Proposal 2: Approval of an Amendment to the Subadvisory
Agreement between Manufacturers Securities
Services, LLC and Manufacturers Adviser
Corporation providing for a subadvisory fee
with respect to each Lifestyle Trust........... 17
Proposal 3: Approval of a Subadvisory Consulting Agreement
between Manufacturers Adviser Corporation and
State Street Global Advisors with respect to
each Lifestyle Trust........................... 22
Information Applicable to Each of the Advisory Agreement,
the MAC Subadvisory Agreement and the SSgA Subadvisory
Consulting Agreement..................................... 27
Other Matters.............................................. 36
Exhibit A -- Amendment to Advisory Agreement............... A-1
Exhibit B -- Amendment to MAC Subadvisory Agreement........ B-1
Exhibit C -- Subadvisory Consulting Agreement.............. C-1
</TABLE>
i
<PAGE> 9
MANUFACTURERS INVESTMENT TRUST
73 TREMONT STREET
BOSTON, MASSACHUSETTS 02108
------------------------
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
OF THE LIFESTYLE TRUSTS
TO BE HELD APRIL 28, 2000
------------------------
GENERAL
This Proxy Statement is furnished in connection with the solicitation by
the Board of Trustees (the "Board") of Manufacturers Investment Trust (the
"Trust") of proxies to be used at a special meeting of shareholders of the
Lifestyle Trusts to be held at 73 Tremont Street, Boston, Massachusetts 02108,
on April 28, 2000, at 10:00 a.m., Eastern Standard Time (the "Meeting"). This
Proxy Statement is first being mailed on or about March 22, 2000. Pursuant to
the Trust's Agreement and Declaration of Trust, the Board has designated March
1, 2000 as the record date for determining shareholders eligible to vote at the
Meeting (the "Record Date"). All shareholders of record of the Lifestyle Trusts
at the close of business on March 1, 2000 are entitled to one vote for each
share of beneficial interest of the Trust held.
The Trust is a no-load open-end investment company, commonly known as a
mutual fund, registered under the Investment Company Act of 1940, as amended
(the "1940 Act"). The Trust currently offers shares in 39 portfolios with one
series of shares for each portfolio. The special meeting of shareholders
involves only five series of shares, each relating to one of the following:
Lifestyle Aggressive 1000 Trust, Lifestyle Growth 820 Trust, Lifestyle Balanced
640 Trust, Lifestyle Moderate 460 Trust, Lifestyle Conservative 280 Trust. A
series of shares of the Trust is referred to in this Proxy Statement as a
"Portfolio" and, collectively, as the "Portfolios," and the five Portfolios
listed above are referred to herein as the "Lifestyle Trusts."
<PAGE> 10
SUMMARY OF PROPOSALS
<TABLE>
<CAPTION>
SHAREHOLDERS OF THE
PROPOSAL TRUST WHO WILL VOTE
NUMBER PROPOSAL ON THE PROPOSAL
-------- -------- -------------------
<S> <C> <C>
Proposal 1 Approval of an Amendment to the Shareholders of
Advisory Agreement between the each Lifestyle
Trust and Manufacturers Securities Trust will vote
Services, LLC ("Manulife separately on this
Securities" or the "Adviser") proposal.
providing for an advisory fee with
respect to each Lifestyle Trust.
Proposal 2 Approval of an Amendment to the Shareholders of
Subadvisory Agreement between the each Lifestyle
Adviser and Manufacturers Adviser Trust will vote
Corporation ("MAC") providing for separately on this
a subadvisory fee with respect to proposal.
each Lifestyle Trust.
Proposal 3 Approval of a Subadvisory Shareholders of
Consulting Agreement between MAC each Lifestyle
and State Street Global Advisors Trust will vote
("SSgA") with respect to each separately on this
Lifestyle Trust. proposal.
</TABLE>
NONE OF THE PROPOSALS WILL BE IMPLEMENTED AS TO A PORTFOLIO UNLESS
SHAREHOLDERS OF THAT PORTFOLIO APPROVE ALL THREE PROPOSALS.
SHAREHOLDERS OF THE LIFESTYLE TRUSTS
The Trust does not sell its shares directly to the public, but sells its
shares generally only to insurance companies and their separate accounts as the
underlying investment medium for variable annuity and life contracts
("contracts"). Only shares of a particular Portfolio are entitled to vote on
matters which affect only the interests of that Portfolio. As of the record date
for the Special Meeting of Shareholders, the Lifestyle Trusts' shares were
legally owned by: (i) The Manufacturers Life Insurance Company of North America
("Manulife North America"), (ii) The Manufacturers Life Insurance Company of New
York ("Manulife New York"), (iii) The Manufacturers Life Insurance Company of
America ("Manufacturers America") and (iv) The Manufacturers Life Insurance
Company (U.S.A.) ("Manufacturers U.S.A."). The parent of each of Manulife North
America, Manulife New York, Manufacturers America and Manufacturers U.S.A. is
The Manufacturers Life Insurance Company ("Manulife"), a Canadian stock life
insurance company. Manulife and its subsidiaries are wholly owned by
2
<PAGE> 11
Manulife Financial Corporation, collectively known as Manulife Financial. The
principal offices of Manulife Financial are located at 200 Bloor Street East,
Toronto, Ontario, Canada M4W1E5.
Manulife North America. Manulife North America is a stock life insurance
company organized under the laws of Delaware whose principal address is 500
Boylston, Suite 400, Boston, Massachusetts 02116. Manulife North America holds
shares of the Trust directly and attributable to variable annuity contracts in
The Manufacturers Life Insurance Company of North America Separate Account A and
variable life contracts in The Manufacturers Life Insurance Company of North
America Separate Account B, both of which are separate accounts registered under
the 1940 Act, as well as in an unregistered separate account.
Manulife New York. Manulife New York is a stock life insurance company
organized under the laws of New York whose principal address is 100 Summit Lake
Drive, Second Floor, Valhalla, New York 10595. Manulife New York holds shares of
the trust directly and attributable to variable annuity contracts in The
Manufacturers Life Insurance Company of New York Separate Account A and variable
life contracts in The Manufacturers Life Insurance Company of New York Separate
Account B, both of which are separate accounts registered under the 1940 Act, as
well as in an unregistered separate account.
Manufacturers America. Manufacturers America is a stock life insurance
company originally organized under the laws of Pennsylvania and redomesticated
under the laws of Michigan in 1992 whose principal address is 200 Bloor Street
East, Toronto, Ontario, Canada M4W 1E5. Manufacturers America holds shares of
the Trust directly and attributable to variable annuity contracts in Separate
Account Two of The Manufacturers Life Insurance Company of America and variable
life contracts in Separate Accounts Three and Four, all of which are separate
accounts registered under the 1940 Act.
Manufacturers U.S.A. Manufacturers U.S.A. is a stock life insurance
company originally organized under the laws of Maine and redomesticated under
the laws of Michigan in 1992 whose principal address is 200 Bloor Street East,
Toronto, Ontario, Canada M4W 1E5. Manufacturers U.S.A. holds shares of the Trust
in various unregistered separate accounts that are made available exclusively to
qualified plans.
SHAREHOLDER VOTING
Manulife North America, Manulife New York, Manufacturers America and
Manufacturers U.S.A. have the right to vote upon matters that
3
<PAGE> 12
may be voted upon at a special shareholders' meeting. The companies will vote
all shares of the Portfolios of the Trust issued to such companies in proportion
to the timely instructions received from owners of the contracts participating
in the separate accounts described above which are registered under the 1940
Act. The companies, in connection with their solicitation of voting
instructions, are furnishing this Proxy Statement to the owners of contracts
participating in registered separate accounts holding shares of the Portfolios
to be voted on the Proposals included in this Proxy Statement.
THE TRUST WILL FURNISH, WITHOUT CHARGE, A COPY OF THE TRUST'S ANNUAL REPORT
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999 TO ANY SHAREHOLDER UPON REQUEST. TO
OBTAIN A REPORT, PLEASE CONTACT THE TRUST BY CALLING (800) 344-1029 OR BY
WRITING TO THE TRUST AT 73 TREMONT STREET, BOSTON, MASSACHUSETTS 02108, ATTN.
GORDON SHONE.
VOTING INFORMATION
Proxies from the shareholders of each Lifestyle Trust are being solicited
by the Board for the Special Meeting of Shareholders of the Lifestyle Trusts to
be held on April 28, 2000 at 73 Tremont Street, Boston, Massachusetts 02108 at
10:00 a.m., Eastern Standard Time, or at such later time as necessary by
adjournment. All valid proxies will be voted in accordance with specifications
thereon, or in the absence of specification, for approval of the Proposals.
Voting Instructions. Voting instructions may be revoked at any time prior
to the voting of the shares represented thereby: (i) mailing written
instructions addressed to the Secretary of the Trust at 73 Tremont Street,
Boston, Massachusetts 02108, or (ii) signing and returning a new voting
instructions form, in each case if received by the Trust by April 27, 2000. ALL
PROPERLY EXECUTED VOTING INSTRUCTIONS RECEIVED BY APRIL 27, 2000 WILL BE VOTED
AS SPECIFIED IN THE VOTING INSTRUCTION, OR, IF NO SPECIFICATION IS MADE, IN
FAVOR OF THE PROPOSALS REFERRED TO IN THIS PROXY STATEMENT.
Quorum; Definition of a Majority of Outstanding Voting Securities.
Shareholders of the Lifestyle Trusts of record at the close of business on March
1, 2000 (the "Record Date") will be entitled to vote at the Meeting or any
adjournment of the Meeting. The holders of 30% of the shares outstanding of each
Portfolio at the close of business on that date present in person or by proxy
will constitute for that Portfolio a quorum for the Meeting; however, a majority
of the outstanding voting securities of each Portfolio entitled to vote at the
close of business on that date is required to approve each Proposal, except as
noted herein. As used in this Proxy
4
<PAGE> 13
Statement, the vote of a "Majority of the Outstanding Voting Securities" means
the affirmative vote of the lesser of:
(1) 67% or more of the voting securities of the Trust or a Portfolio,
as applicable, present at the Meeting, if the holders of more than 50% of
the outstanding voting securities of the Trust or a Portfolio, as
applicable, are present in person or by proxy or
(2) more than 50% of the outstanding voting securities of the Trust or
a Portfolio, as applicable.
Shareholders are entitled to one vote for each share held and fractional votes
for fractional shares held. No shares have cumulative voting rights.
In the event the necessary quorum to transact business or the vote required
to approve a Proposal is not obtained at the Meeting, the persons named as
proxies may propose one or more adjournments of the Meeting in accordance with
applicable law, to permit further solicitation of proxies. Any such adjournment
as to a matter will require the affirmative vote of the holders of a majority of
the Trust's shares cast at the Meeting. The persons named as proxies will vote
in favor of such adjournment those proxies which they are entitled to vote in
favor of the Proposals and will vote against any such adjournment those proxies
to be voted against the Proposals.
Abstentions. Abstentions are counted as shares eligible to vote at the
Meeting in determining whether a quorum is present, but do not count as votes
cast with respect to a Proposal. Under the 1940 Act, the affirmative vote
necessary to approve a matter under consideration may be determined with
reference to a percentage of votes present at the Meeting, which would have the
effect of treating abstentions as if they were votes against a Proposal.
Cost of Preparation and Distribution of Proxy Materials. The cost of the
preparation and distribution of these proxy materials will be borne by the
Lifestyle Trusts. In addition to the solicitation of proxies by the use of the
mails, proxies may be solicited by officers and employees of the Trust, Manulife
Securities or its agents or affiliates, personally or by telephone. Brokerage
houses, banks and other fiduciaries may be requested to forward soliciting
materials to their principals and to obtain authorization for the execution of
proxies. For those services, they will be reimbursed by the Trust for their
out-of-pocket expenses.
Voting for Each Portfolio. Shares of a particular Portfolio vote
separately on matters which pertain only to that Portfolio. All of the Proposals
will be voted on separately by shareholders of each of the Lifestyle Trusts.
5
<PAGE> 14
As of the Record Date, the number of votes eligible to be cast at the
Meeting with respect to each Lifestyle Trust is as follow:
<TABLE>
<CAPTION>
VOTES HELD BY VOTES HELD BY VOTES HELD BY VOTES HELD BY
NUMBER OF MANULIFE MANULIFE MANUFACTURERS MANUFACTURERS
PORTFOLIO ELIGIBLE VOTES NORTH AMERICA NEW YORK AMERICA U.S.A.
- --------- -------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Lifestyle Aggressive
1000 Trust......... 7,029,183 4,149,565 405,434 323,316 2,150,868
Lifestyle Growth 820
Trust.............. 29,272,445 20,337,191 1,901,274 1,492,078 5,541,902
Lifestyle Balanced
640 Trust.......... 31,048,074 21,302,704 2,191,073 660,666 6,893,631
Lifestyle Moderate
460 Trust.......... 11,846,918 9,448,091 908,492 95,640 1,394,695
Lifestyle
Conservative 280
Trust.............. 7,500,711 5,858,291 514,164 62,267 1,065,989
</TABLE>
Trustees and officers of the Trust, in the aggregate, own or have the right
to provide voting instructions for less than 1% of each Lifestyle Trust's
outstanding shares.
As of March 1, 2000, the percentage ownership of the outstanding shares of
each Lifestyle Trust (by shareholder) is indicated below:
<TABLE>
<CAPTION>
MANULIFE NORTH MANULIFE MANUFACTURERS MANUFACTURERS
PORTFOLIO AMERICA NEW YORK AMERICA U.S.A.
- --------- -------------- -------- ------------- -------------
<S> <C> <C> <C> <C>
Lifestyle Aggressive 1000
Trust.......................... 59.03% 5.77% 4.60% 30.60%
Lifestyle Growth 820 Trust....... 69.48% 6.50% 5.10% 18.93%
Lifestyle Balanced 640 Trust..... 68.61% 7.06% 2.13% 22.20%
Lifestyle Moderate 460 Trust..... 79.75% 7.67% 0.81% 11.77%
Lifestyle Conservative 280
Trust.......................... 78.10% 6.85% 0.83% 14.21%
</TABLE>
PROPOSAL 1
APPROVAL OF AN AMENDMENT TO THE ADVISORY
AGREEMENT BETWEEN THE TRUST AND MANULIFE
SECURITIES PROVIDING FOR AN ADVISORY FEE
IN CONNECTION WITH EACH LIFESTYLE TRUST
Manulife Securities serves as investment adviser for the Trust and for each
of the Portfolios of the Trust pursuant to an investment advisory agreement,
dated January 1, 1996, as amended and restated May 1, 1999, between Manulife
Securities and the Trust (the "Advisory Agreement"). As Adviser to the Trust,
Manulife Securities is responsible for, among other things, administering the
business and affairs of the Trust and selecting, contracting with, compensating
and monitoring subadvisers to manage the investment and reinvestment of the
assets of the Portfolios. Manulife
6
<PAGE> 15
Securities does not currently manage any of the Portfolios' assets on a day-
to-day basis.
Currently, no advisory fee is assessed on the Lifestyle Trusts. The Board,
including all of the Trustees who are not "interested persons" (as defined in
the 1940 Act) of any party to the Advisory Agreement (the "Disinterested
Trustees") approved, on December 17, 1999, an amendment to the Advisory
Agreement which would impose an advisory fee payable to Manulife Securities by
each of the Lifestyle Trusts at an annual rate of 0.075% of the first $100
million of the average daily value of the net assets of each Lifestyle Trust and
0.050% of the excess over $100 million.
The advisory fee for each Lifestyle Trust would be paid daily to the
Adviser. The daily fee would be computed by multiplying the fraction of one over
the number of calendar days in the year by the applicable annual rate described
in the preceding paragraph, and multiplying this product by the net assets of
each Lifestyle Trust as determined in accordance with the Trust's prospectus and
statement of additional information as of the close of business on the previous
business day on which the Trust was open for business.
Currently, an expense reimbursement is in effect whereby Manulife
Securities reimburses all Lifestyle Trusts expenses other than the expenses of:
(a) the underlying portfolios, (b) advisory fees, (c) taxes, (d) portfolio
brokerage commissions, (e) interest, (f) litigation and (g) indemnification
expenses and other extraordinary expenses of the Lifestyle Trusts. This expense
reimbursement may be terminated at any time by Manulife Securities upon notice
to the Trust.
Manulife Securities anticipates that when net assets of each Lifestyle
Trust exceed $100 million (and, therefore, the effective annual advisory fee for
each Lifestyle Trust is reduced below 0.075%) that the amount of expenses
reimbursed will be reduced. Manulife Securities anticipates that if total
expenses of a Lifestyle Trust (excluding the expenses of the underlying
portfolios and absent reimbursement) exceed 0.075%, it will reduce the expense
reimbursement by an amount such that total expenses of each Lifestyle Trust
including the advisory fee but excluding: (a) the expenses of the underlying
portfolios, (b) taxes, (c) portfolio brokerage, (d) interest, (e) litigation and
(f) indemnification expenses and other extraordinary expenses not incurred in
the ordinary course of the Trust's business, equal 0.075%. If the total expenses
of a Lifestyle Trust (excluding the expenses of the underlying portfolios and
absent reimbursement) are equal to or less then 0.075%, then no expenses will be
reimbursed by Manulife Securities. Manulife Securities, continues, however, to
reserve the right to eliminate the
7
<PAGE> 16
entire expense reimbursement (or any part thereof) at any time upon notice to
the Trust.
The purpose of imposing an advisory fee on the Lifestyle Trusts is to
permit the subadviser to the Lifestyle Trusts, Manufacturers Adviser Corporation
("MAC") to enter into a subadvisory consulting agreement with State Street
Global Advisors ("SSgA") which would permit SSgA to assist in the management of
the Lifestyle Trusts. The entire advisory fee would be used exclusively to
provide for a subadvisory consulting fee to SSgA or to any successor subadviser
providing services to the Lifestyle Trusts. The services to be provided to the
Lifestyle Trusts by SSgA are described under Proposal 3.
The following is a schedule of the fees and expenses that each Lifestyle
Trust paid for the fiscal year ended December 31, 1999 (as an annual percentage
of the current value of the net assets of each of the Portfolios):
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
FOR FISCAL YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
TOTAL ANNUAL
OTHER OPERATING
PORTFOLIO ADVISORY FEE EXPENSES* EXPENSES
- --------- --------------- --------------- ------------------
<S> <C> <C> <C>
Lifestyle Aggressive 1000
Trust...................... No Advisory Fee 1.090% 1.090%
Lifestyle Growth 820 Trust... No Advisory Fee 1.030% 1.030%
Lifestyle Balanced 640
Trust...................... No Advisory Fee 0.940% 0.940%
Lifestyle Moderate 460
Trust...................... No Advisory Fee 0.900% 0.900%
Lifestyle Conservative 280
Trust...................... No Advisory Fee 0.810% 0.810%
</TABLE>
- ---------------
* Other Expenses include underlying portfolio expenses, custody fees,
registration fees, legal fees, audit fees, trustees' fees, insurance fees and
other miscellaneous expenses. Advisory fees are reduced or Manulife Securities
reimburses the Trust if the total of all expenses (excluding the expenses of
the underlying portfolios, advisory fees, taxes, portfolio brokerage
commissions, interest, litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the Trust's
business) applicable to a Lifestyle Trust exceed a specified annual rate
(currently 0%). The expense limitations may be terminated at any time by
Manulife Securities upon notice to the Trust. After reimbursement, for the
fiscal year ended December 31, 1999, "Other Expenses" and "Total Annual
Operating Expenses" were 1.060%, 0.990%, 0.910%, 0.860% and 0.780%,
respectively, for the Lifestyle Aggressive 1000 Trust, the Lifestyle
8
<PAGE> 17
Growth 820 Trust, the Lifestyle Balanced 640 Trust, the Lifestyle Moderate 460
Trust and the Lifestyle Conservative 280 Trust.
The following is a schedule of the fees and expenses that each Lifestyle
Trust can expect to incur under the Advisory Agreement based on the net assets
of each Lifestyle Trust as of December 31, 1999 reflecting the proposed
amendment to the Lifestyle Trust advisory fee:
PRO FORMA
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
(UNAUDITED)
<TABLE>
<CAPTION>
TOTAL
ANNUAL
ADVISORY OTHER OPERATING
PORTFOLIO FEE EXPENSES* EXPENSES**
- --------- -------- --------- -----------
<S> <C> <C> <C>
Lifestyle Aggressive 1000 Trust.......... 0.075% 1.090% 1.165%
Lifestyle Growth 820 Trust............... 0.057% 1.030% 1.087%
Lifestyle Balanced 640 Trust............. 0.057% 0.940% 0.997%
Lifestyle Moderate 460 Trust............. 0.066% 0.900% 0.966%
Lifestyle Conservative 280 Trust......... 0.075% 0.810% 0.885%
</TABLE>
- ---------------
* Other Expenses include underlying portfolio expenses, custody fees,
registration fees, legal fees, audit fees, trustees' fees, insurance fees and
other miscellaneous expenses.
** Manulife Securities has voluntarily agreed to pay certain expenses of each
Lifestyle Trust (excluding the expenses of the underlying portfolios) as
noted above. This voluntary expense reimbursement may be terminated at any
time. After reimbursement, such expenses would be as follows, assuming the
new expense reimbursement described above is in effect:
<TABLE>
<CAPTION>
ADVISORY OTHER TOTAL ANNUAL
TRUST PORTFOLIO FEE EXPENSES OPERATING EXPENSES
--------------- -------- -------- ------------------
<S> <C> <C> <C>
Lifestyle Aggressive 1000 Trust... 0.075% 1.060% 1.135%
Lifestyle Growth 820 Trust........ 0.057% 1.008% 1.065%
Lifestyle Balanced 640 Trust...... 0.057% 0.928% 0.985%
Lifestyle Moderate 460 Trust...... 0.066% 0.869% 0.935%
Lifestyle Conservative 280
Trust........................... 0.075% 0.780% 0.855%
</TABLE>
EXAMPLES: The following actual and pro forma Examples are intended to help
a shareholder compare the cost of investing in each of the Lifestyle Trust with
the cost of investing in other mutual fund portfolios. The
9
<PAGE> 18
Examples assume that the shareholder invests $10,000 in a particular Lifestyle
Trust for the time periods indicated and then redeems all of the shares at the
end of those periods. The Examples also assume that a shareholder's investment
has a 5% return each year and that such Portfolio's operating expense levels
remain the same as set forth in the corresponding expense table above. Although
a shareholder's actual costs may be higher or lower, based on these assumptions
the shareholders costs would be:
SHAREHOLDER EXPENSES
(UNAUDITED)
<TABLE>
<CAPTION>
PORTFOLIO ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
- --------- -------- ----------- ---------- ---------
<S> <C> <C> <C> <C>
Lifestyle Aggressive 1000
Trust........................ $111 $347 $601 $1329
Lifestyle Growth 820 Trust..... 105 328 569 1259
Lifestyle Balanced 640 Trust... 96 300 520 1155
Lifestyle Moderate 460 Trust... 92 287 498 1108
Lifestyle Conservative 280
Trust........................ 83 258 450 1002
</TABLE>
PRO FORMA
SHAREHOLDER EXPENSES*
(UNAUDITED)
<TABLE>
<CAPTION>
PORTFOLIO ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
- --------- -------- ----------- ---------- ---------
<S> <C> <C> <C> <C>
Lifestyle Aggressive 1000
Trust........................ $119 $370 $641 $1415
Lifestyle Growth 820 Trust..... 111 346 599 1325
Lifestyle Balanced 640 Trust... 102 317 551 1221
Lifestyle Moderate 460 Trust... 99 308 534 1185
Lifestyle Conservative 280
Trust........................ 90 282 490 1090
</TABLE>
- ---------------
* Reflects expenses an investor can expect to incur under the Advisory Agreement
reflecting the proposed Lifestyle advisory fee.
THE EXAMPLES ASSUME REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. THE
EXAMPLES SET FORTH ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE
EXPENSES OR ANNUAL RETURN OF SHARES OF A PORTFOLIO; ACTUAL EXPENSES AND ANNUAL
RETURN MAY BE GREATER OR LESS THAN THOSE SHOWN. There can be no assurance that
the foregoing pro forma expense ratios would have been the actual expense ratios
for the Portfolios had the proposed amendment to the Advisory Agreement been in
effect for the period indicated above, or that the foregoing pro forma expense
ratios reflect the actual expense ratios that will be incurred by the Portfolios
indicated above if the proposed amendment to the Advisory Agreement is approved.
The purpose of these tables is to assist
10
<PAGE> 19
shareholders in understanding the expenses a shareholder in each of the
Portfolios will bear. Please note, however, that the variable contracts issued
by Manulife North America, Manulife New York, Manufacturers America and
Manufacturers U.S.A. provide for charges, including sales charges, not reflected
in the above tables.
DESCRIPTION OF ADVISORY AGREEMENT
Duties of the Adviser and Expenses Paid by the Adviser. Under the terms of
the Advisory Agreement, the Adviser administers the business and affairs of the
Trust. The Adviser is responsible for performing or paying for various
administrative services for the Trust, including providing at the Adviser's
expense:
- office space and all necessary office facilities and equipment, and
- individuals who are directors, officers or employees of the Adviser to
serve (if duly elected or appointed) as Trustees, President, Treasurer or
Secretary of the Trust, without remuneration from or other cost to the
Trust.
The Adviser shall, at the Trust's expense, perform all administrative,
compliance, financial, accounting, bookkeeping and recordkeeping functions,
except for those functions that may be performed by a third party pursuant to a
custodian, transfer agency or service agreement executed by the Trust. The
Adviser shall also furnish to the Trust, at the Trust's expense, any personnel
necessary for these functions.
The Adviser pays the cost of any advertising or sales literature relating
solely to the Trust, the cost of printing and mailing Prospectuses to persons
other than current holders of Trust shares or of variable contracts funded by
Trust shares.
In addition to providing the services described above, the Adviser selects,
contracts with, and compensates subadvisers to manage the investment and
reinvestment of the assets of the Trust portfolios. The Adviser monitors the
compliance of such subadvisers with the investment objectives and related
policies of each Portfolio, and reviews the performance of such subadvisers and
reports periodically on such performance to the Trustees of the Trust.
Expense Reimbursement. Advisory fees are reduced or the Adviser reimburses
each Lifestyle Trust if the total of all expenses (excluding advisory fees,
taxes, portfolio brokerage commissions, interest, litigation and indemnification
expenses and other extraordinary expenses not incurred in the ordinary course of
the Trust's business) applicable to a Lifestyle Trust
11
<PAGE> 20
exceeds 0% of the average annual net assets of the Lifestyle Trust (other than
the expenses of Trust Portfolios in which the Lifestyle Trusts invest). The
expense limitation will continue in effect unless otherwise terminated by the
Adviser upon notice to the Trust. This voluntary expense reimbursement may be
terminated at any time and is expected to be reduced as noted above.
Adviser Compensation. Under the current Advisory Agreement, the Adviser
receives no fee for services from the Lifestyle Trusts. As noted above, the
proposed amendment would provide for a fee for each Lifestyle Trust at an annual
rate of 0.075% of the first $100 million of the average daily value of the net
assets of each Lifestyle Trust and 0.05% of assets in excess of such amount. The
fee, which is accrued and paid daily, is calculated for each day by multiplying
the daily equivalent of the annual percentage by the value of each Lifestyle
Trust's net assets at the close of business on the previous business day of the
Portfolio.
If the amendment to the Advisory Agreement had been in effect for the
Trust's fiscal year ended December 31, 1999, the Lifestyle Trusts would have
paid advisory fees to the Adviser as follows:
<TABLE>
<CAPTION>
ADVISORY FEE AS
A PERCENTAGE OF AVERAGE
DOLLAR AMOUNT ANNUAL NET ASSETS
------------- -----------------------
<S> <C> <C>
Lifestyle Aggressive 1000 Trust..... $ 55,674 0.075%
Lifestyle Growth 820 Trust.......... $200,276 0.057%
Lifestyle Balanced 640 Trust........ $208,199 0.057%
Lifestyle Moderate 460 Trust........ $101,046 0.066%
Lifestyle Conservative 280 Trust.... $ 71,388 0.075%
</TABLE>
Additional Information Regarding the Advisory Agreement. For additional
information regarding the Advisory Agreement see "Information Applicable to Each
of the Advisory Agreement, the MAC Subadvisory Agreement and the SSgA
Subadvisory Consulting Agreement" below.
OTHER INVESTMENT COMPANIES ADVISED BY THE ADVISER
The Adviser does not currently act as adviser to any other investment
companies having similar investment objectives and policies to those of the
Lifestyle Trusts.
BROKERAGE TRANSACTIONS
A description of the brokerage transactions for the Lifestyle Trusts is set
forth under "INFORMATION APPLICABLE TO EACH OF THE ADVISORY AGREEMENT, THE MAC
SUBADVISORY AGREEMENT
12
<PAGE> 21
AND THE SSgA SUBADVISORY CONSULTING AGREEMENT" below.
PAYMENTS TO AFFILIATE OF THE ADVISER
MAC, a Colorado corporation, is the subadviser to the Pacific Rim Emerging
Markets Trust, the Quantitative Equity Trust, the Real Estate Securities Trust,
the Equity Index Trust, the Money Market Trust and the Lifestyle Trusts. MAC is
an indirect wholly-owned subsidiary of Manulife and is an affiliate of the
Adviser (other than by reason of serving as a subadviser to a Portfolio).
As compensation for its services, MAC receives fees from the Adviser
computed separately for each Portfolio for which MAC is the subadviser. For the
year ended December 31, 1999, the Adviser paid to MAC aggregate subadvisory fees
of $1,826,838, allocated as follows:
<TABLE>
<CAPTION>
% OF AVERAGE ANNUAL
PORTFOLIO $ AMOUNT NET ASSETS
- --------- -------- -------------------
<S> <C> <C>
Pacific Rim Emerging Markets
Trust............................. $186,468 0.392%
Quantitative Equity Trust........... 731,320 0.211%
Real Estate Securities Trust........ 384,622 0.241%
Equity Index Trust.................. 88,099 0.100%
Money Market Trust.................. 436,329 0.054%
Lifestyle Aggressive 1000 Trust..... N/A N/A
Lifestyle Growth 820 Trust.......... N/A N/A
Lifestyle Balanced 640 Trust........ N/A N/A
Lifestyle Moderate 460 Trust........ N/A N/A
Lifestyle Conservative 280 Trust.... N/A N/A
</TABLE>
SHAREHOLDER AND BOARD APPROVAL OF THE ADVISORY AGREEMENT
The Advisory Agreement was most recently approved by the Board of Trustees
on March 26, 1999.
The Advisory Agreement was most recently submitted to and approved by
shareholders of the Trust at a meeting of the shareholders held on April 27,
1999. This approval occurred in connection with the approval of various
amendments to the Agreement including certain advisory fee changes.
13
<PAGE> 22
DURATION OF THE ADVISORY AGREEMENT
If shareholders approve the proposed amendment to the Advisory Agreement,
it will become effective May 1, 2000. The initial term of the Advisory
Agreement, as amended, with respect to each Lifestyle Trust will continue until
May 1, 2002, and thereafter will continue in effect with respect to each
Lifestyle Trust for successive annual periods provided such continuance is
approved at least annually by (1) a majority of the Trustees of the Trust or the
holders of a Majority of the Outstanding Voting Securities of each Lifestyle
Trust; and (2) a majority of the Disinterested Trustees.
EVALUATION BY THE BOARD OF TRUSTEES
At its meeting held on December 17, 1999, the Board of Trustees, including
all of the Disinterested Trustees (with the advise and assistance of independent
legal counsel), approved the amendment to the Advisory Agreement. The Board
recommends that shareholders also approve such amendment.
In connection with the approval of the amendment to the Advisory Agreement
the Board considered numerous factors, including:
(i) the nature, quality and scope of the services provided by the
Adviser;
(ii) performance information regarding the Lifestyle Trust relative to
funds with similar objectives and policies;
(iii) performance information regarding the Lifestyle Trusts;
(iv) the cost and expected profitability to Manulife Securities of
providing portfolio management services to the Lifestyle Trusts, and
(v) the proposed advisory fee and expense ratio for each of the
Lifestyle Trusts in relation to the fees and expense ratios of other
comparable investment companies.
The Board was also provided with an analysis of its fiduciary obligations.
At the meeting held on December 17, 1999, the Board reviewed its fiduciary
duties and discussed the information provided regarding Manulife Securities.
Representatives of Manulife Securities gave a presentation and responded to
questions from the Trustees. There was an extended discussion of, and
questioning about, Manulife Securities' plans for the Lifestyle Trusts.
14
<PAGE> 23
MANAGEMENT AND CONTROL OF THE ADVISER
Manulife Securities, the successor to NASL Financial Services, Inc., is a
Delaware limited liability company whose principal offices are located at 73
Tremont Street, Boston, Massachusetts 02108. Manulife Securities is a subsidiary
of Manulife North America, the parent of which is Manulife, a Canadian life
insurance company. Manulife and its subsidiaries are wholly owned by Manulife
Financial Corporation, collectively known as Manulife Financial. Both Manulife
and Manulife Financial Corporation are based in Toronto, Canada. Manulife
Securities is registered as an investment adviser under the Investment Advisers
Act of 1940, as amended, and as a broker-dealer under the Securities Exchange
Act of 1934, and it is a member of the National Association of Securities
Dealers, Inc. (the "NASD"). Manulife Securities does not serve as investment
adviser to any other investment company.
The table below provides information regarding the directors and executive
officers of The Manufacturers Life Insurance Company of North America, the
controlling and managing member of Manulife Securities.
<TABLE>
<CAPTION>
POSITION WITH
NAME AND POSITION WITH MANULIFE NORTH AMERICA*
PRINCIPAL BUSINESS ADDRESS THE TRUST AND PRINCIPAL OCCUPATION
- -------------------------- ------------- ----------------------------------
<S> <C> <C>
John D. Richardson Trustee Director of Manulife North
200 Bloor Street East America; Senior Executive Vice
Toronto, Ontario President and General Manager,
Canada M4W 1E5 U.S. Operations, Manulife
Financial
John D. DesPrez III Trustee Director and Chairman of the
73 Tremont Street Board, Manulife North America;
Boston, MA 02108 Executive Vice President, U.S.
Operations, Manulife Financial
James R. Boyle None Director and President, Manulife
500 Boylston Street North America; Senior Vice
Boston, MA 02116 President, U.S. Annuities,
Manulife Financial
James D. Gallagher Secretary Vice President, Secretary and
73 Tremont Street General Counsel, Manulife North
Boston, MA 02108 America; Vice President, Legal
Services, Manulife Financial
John G. Vrysen Treasurer Vice President and Chief Actuary,
73 Tremont Street Manulife North America; Vice
Boston, MA 02108 President and Chief Financial
Officer, U.S. Operations, Manulife
Financial
David W. Libbey None Vice President, Treasurer and
500 Boylston Street Chief Financial Officer, Manulife
Boston, MA 02116 North America
</TABLE>
15
<PAGE> 24
<TABLE>
<CAPTION>
POSITION WITH
NAME AND POSITION WITH MANULIFE NORTH AMERICA*
PRINCIPAL BUSINESS ADDRESS THE TRUST AND PRINCIPAL OCCUPATION
- -------------------------- ------------- ----------------------------------
<S> <C> <C>
Janet L. Sweeney None Vice President, Corporate
73 Tremont Street Services, Manulife North America;
Boston, MA 02108 Vice President, Human Resources,
U.S. Operations, Manulife
Financial
Kevin S. Hill None Vice President, Business
500 Boylston Street Implementation, Manulife North
Boston, MA 02116 America
Brian A. Kroll None Vice President, Product
500 Boylston Street Development, Manulife North
Boston, MA 02116 America
Jonnie M. Smith None Vice President, Customer Service
500 Boylston Street and Administration, Manulife North
Boston, MA 02116 America
</TABLE>
- ---------------
* Each officer of Manulife North America serves until his successor is chosen
and qualified or until he sooner dies, resigns, is removed or becomes
disqualified.
REQUIRED VOTE
Approval of the amendment to the Advisory Agreement will require the
affirmative vote of a Majority of the Outstanding Voting Securities of each
Lifestyle Trust.
NONE OF THE PROPOSALS WILL BE IMPLEMENTED AS TO A PORTFOLIO UNLESS
SHAREHOLDERS OF THAT PORTFOLIO APPROVE ALL THREE PROPOSALS.
THE BOARD HAS UNANIMOUSLY RECOMMENDED APPROVAL OF THE AMENDMENT TO THE
ADVISORY AGREEMENT.
THE BOARD, INCLUDING THE DISINTERESTED TRUSTEES, RECOMMENDS THAT
SHAREHOLDERS OF EACH LIFESTYLE TRUST VOTE "FOR" PROPOSAL 1.
16
<PAGE> 25
PROPOSAL 2
APPROVAL OF AN AMENDMENT TO THE SUBADVISORY AGREEMENT BETWEEN THE ADVISER AND
MAC INCREASING THE SUBADVISORY FEE WITH RESPECT TO EACH LIFESTYLE TRUST
MAC currently serves as subadviser for the Pacific Rim Emerging Markets
Trust, Quantitative Equity Trust, Real Estate Securities Trust, Equity Index
Trust, Money Market Trust, Lifestyle Aggressive 1000 Trust, Lifestyle Growth 820
Trust, Lifestyle Balanced 640 Trust, Lifestyle Moderate 460 Trust, Lifestyle
Conservative 280 Trust (the "MAC Portfolio(s)") pursuant to a subadvisory
agreement with the Adviser dated October 1, 1996 as amended December 31, 1996
(the "MAC Subadvisory Agreement").
At a meeting held December 17, 1999, the Board, including the Disinterested
Trustees, approved an amendment to the subadvisory agreement between the Adviser
and MAC with respect to the Lifestyle Trusts. The amendment to the MAC
Subadvisory Agreement would, subject to shareholder approval, increase the
subadvisory fees paid by the Adviser to MAC with respect to each Lifestyle
Trust, effective May 1, 2000 as noted below under "Proposed Subadvisory Fee."
BECAUSE THE SUBADVISORY FEE WITH RESPECT TO EACH LIFESTYLE TRUST IS PAID BY THE
ADVISER OUT OF ITS ADVISORY FEE, APPROVAL OF THE AMENDMENT TO THE MAC
SUBADVISORY AGREEMENT WILL NOT INCREASE DIRECTLY OR INDIRECTLY THE ADVISORY FEE
OR ANY OTHER EXPENSES BORNE BY ANY LIFESTYLE TRUST. HOWEVER, AS DISCUSSED UNDER
PROPOSAL 1, SHAREHOLDERS ARE ALSO BEING ASKED TO APPROVE AN ADVISORY FEE
INCREASE FOR EACH LIFESTYLE TRUST.
The purpose of paying a subadvisory fee to MAC with respect to the
Lifestyle Trusts is to permit MAC to enter into a subadvisory consulting
agreement with SSgA which will permit SSgA to assist in the management of the
Lifestyle Trusts. The MAC subadvisory fee would be used to pay SSgA (or any
successor entity providing similar services) a subadvisory consulting fee. The
services to be provided to the Lifestyle Trusts by SSgA are described under
Proposal 3.
SUBADVISORY FEES
As compensation for its services, MAC receives fees from the Adviser
computed separately for each MAC Portfolio. The fee for each MAC Portfolio is
stated as an annual percentage of the current value of the net assets of the MAC
Portfolio. The fee, which is accrued daily and payable monthly, is calculated
for each day by multiplying the fraction of one over the number of calendar days
in the year by the annual percentage prescribed
17
<PAGE> 26
for the Portfolio, and multiplying this product by the value of the net assets
of that Portfolio at the close of business on the previous business day of the
Trust.
Current Subadvisory Fees. Pursuant to the MAC Subadvisory Agreement, MAC
does not currently receive a fee for providing investment management services to
the Lifestyle Trusts.
Proposed Subadvisory Fees. If the amendment to the MAC Subadvisory
Agreement is approved by shareholders of the applicable Lifestyle Trust, the
Adviser would be obligated to pay MAC, out of the advisory fee it receives from
each Lifestyle Trust, a subadvisory fee for each Lifestyle Trust at an annual
rate of 0.075% of the first $100 million of the average daily value of the net
assets of each Lifestyle Trust and 0.050% of the excess over $100 million.
The subadvisory fee for each Lifestyle Trusts would accrue for each
calendar day and the sum of the daily fee accruals would be paid monthly to the
MAC. The daily fee accruals would be computed by multiplying the fraction of one
over the number of calendar days in the year by the applicable annual rate
described in the preceding paragraph, and multiplying this product by the net
assets of each Lifestyle Trust as determined in accordance with the Trust's
prospectus and statement of additional information as of the close of business
on the previous business day on which the Trust was open for business.
If the amendment to the MAC Subadvisory Agreement had been in effect for
the Trust's fiscal year ended December 31, 1999, the Adviser would have paid
subadvisory fees to MAC as follows:
<TABLE>
<CAPTION>
SUBADVISORY FEE
AS A PERCENTAGE
OF AVERAGE ANNUAL
DOLLAR AMOUNT NET ASSETS
------------- -----------------
<S> <C> <C>
Lifestyle Aggressive 1000 Trust.... $ 55,674 0.075%
Lifestyle Growth 820 Trust......... $200,276 0.057%
Lifestyle Balanced 640 Trust....... $208,199 0.057%
Lifestyle Moderate 460 Trust....... $101,046 0.066%
Lifestyle Conservative 280 Trust... $ 71,388 0.075%
</TABLE>
DESCRIPTION OF MAC SUBADVISORY AGREEMENT
Duties of MAC. Under the terms of the MAC Subadvisory Agreement, MAC
manages the investment and reinvestment of the assets of each MAC Portfolio,
subject to the supervision of the Trust's Trustees. MAC
18
<PAGE> 27
formulates a continuous investment program for each such Portfolio consistent
with its investment objectives and policies outlined in the Prospectus. MAC
implements such programs by purchases and sales of securities and regularly
reports or causes reports to be made to the Adviser and the Trustees of the
Trust with respect to the implementation of such programs. MAC, at its expense,
furnishes all necessary investment and management facilities, including salaries
of personnel required for it to execute its duties, as well as administrative
facilities, including bookkeeping, clerical personnel, and equipment necessary
for the conduct of the investment affairs of the MAC Portfolios.
Additional Information Regarding the MAC Subadvisory Agreement. For
additional information regarding the Subadvisory Agreement see "INFORMATION
APPLICABLE TO EACH OF THE ADVISORY AGREEMENT, THE MAC SUBADVISORY AGREEMENT AND
THE SSgA SUBADVISORY CONSULTING AGREEMENT" below.
OTHER INVESTMENT COMPANIES ADVISED BY MAC
MAC does not currently act as adviser to any other investment companies
having similar investment objectives and policies to those of the Lifestyle
Trusts.
BROKERAGE TRANSACTIONS
A description of the brokerage transactions for the Lifestyle Trusts is set
forth under "INFORMATION APPLICABLE TO EACH OF THE ADVISORY AGREEMENT, THE MAC
SUBADVISORY AGREEMENT AND THE SSgA SUBADVISORY CONSULTING AGREEMENT" below.
SHAREHOLDER AND BOARD APPROVAL OF THE SUBADVISORY AGREEMENTS
The MAC Subadvisory Agreement was approved most recently by the Board on
September 30, 1999 and was approved by the sole shareholder of each of the
Lifestyle Trusts on January 1, 1997 in connection with the organization of the
Lifestyle Trusts.
The amendment to the MAC Subadvisory Agreement was approved by the Board,
including a majority of the Disinterested Trustees, on December 17, 1999.
19
<PAGE> 28
DURATION OF THE ADVISORY AGREEMENT
If shareholders approve the proposed amendment to the MAC Subadvisory
Agreement, it will become effective May 1, 2000. The initial term of the MAC
Subadvisory Agreement, as amended, with respect to the Lifestyle Trusts will
continue until May 1, 2002, and thereafter will continue in effect for
successive annual periods with respect to each Lifestyle Trust provided such
continuance is approved at least annually by (1) a majority of the Trustees of
the Trust or the holders of a Majority of the Outstanding Voting Securities of
each Lifestyle Trust; and (2) a majority of the Disinterested Trustees.
EVALUATION BY THE BOARD OF TRUSTEES
The Board considered numerous factors in connection with the approval of
the amendment to the MAC Subadvisory Agreement, including:
(i) the nature and quality of the services provided by MAC,
(ii) performance information regarding the Lifestyle Trusts relative
to funds with similar objectives and policies,
(iii) the cost and expected profitability to MAC of providing
portfolio management services to the Lifestyle Trusts, and
(iv) whether the proposed subadvisory fees and expense ratio of the
Lifestyle Trusts would be consistent with the fees and expense ratios of
other comparable portfolios.
The Board was also provided with an analysis of its fiduciary obligations.
At the meeting held on December 17, 1999, the Board reviewed its fiduciary
duties and discussed the information provided regarding MAC. Representatives of
MAC gave a presentation and responded to questions from the Trustees. There was
an extended discussion of, and questioning about, MAC's plans for the Lifestyle
Trusts. Throughout the review process, the Disinterested Trustees had the
assistance of independent legal counsel.
MANAGEMENT AND CONTROL OF MAC
MAC, a Colorado corporation founded in 1970, is an indirect wholly-owned
subsidiary of Manulife, the parent of the Adviser. Manulife and its subsidiaries
are wholly owned by Manulife Financial Corporation, collectively known as
Manulife Financial. As a result, MAC is an "affiliated person" (as defined in
the 1940 Act) of the Adviser. The principal offices of MAC, Manulife and
Manulife Financial Corporation are located at 200 Bloor Street East, Toronto,
Ontario, Canada M4W 1E5.
The principal executive officers and directors of MAC and their principal
occupations are shown below. The business address of each such
20
<PAGE> 29
person, unless otherwise stated, is 200 Bloor Street East, Toronto, Ontario,
Canada M4W 1E5.
<TABLE>
<CAPTION>
NAME POSITION WITH MAC PRINCIPAL OCCUPATION
- ------------------------ ------------------- ----------------------------
<S> <C> <C>
James Boyle Director President, Manulife North
500 Boylston Street America; Senior Vice
Boston, MA 02116 President, U.S. Annuities,
Manulife Financial
Felix Chee Director and Executive Vice President and
President Chief Investment Officer,
Manulife Financial
Jacqueline Di Giovanni Director Vice President, U.S. Group
Pension Marketing and
Communications, Manulife
Financial
Roy Firth Director President and Chief
393 University Avenue Executive Officer, Elliott &
Toronto, Ontario Page Limited
Canada M4G 1E6
Malcolm Benn Vice President and Managing Director, North
Chief Investment American Fixed Income,
Officer Manulife Financial
Toni Evans Compliance Officer Assistant Vice President,
Investment Division --
Compliance, Manulife
Financial
Cindy Forbes Vice President, Vice President and Chief
Treasurer and Chief Financial Officer, Manulife
Financial Officer Financial
James Gallagher* Secretary and Vice President, Legal
73 Tremont Street General Counsel Services, Manulife
Boston, MA 02108 Financial; President,
Manulife New York
</TABLE>
- ---------------
* Secretary of the Trust.
REQUIRED VOTE
Approval of the amendment to the MAC Subadvisory Agreement with respect to
each Lifestyle Trust will require the vote of the Majority of the Outstanding
Voting Securities of each such Portfolio.
NONE OF THE PROPOSALS WILL BE IMPLEMENTED AS TO A PORTFOLIO UNLESS
SHAREHOLDERS OF THAT PORTFOLIO APPROVE ALL THREE PROPOSALS.
THE BOARD, INCLUDING THE DISINTERESTED TRUSTEES, RECOMMENDS THAT
SHAREHOLDERS OF EACH OF THE LIFESTYLE TRUSTS VOTE "FOR" PROPOSAL 2.
21
<PAGE> 30
PROPOSAL 3
APPROVAL OF A SUBADVISORY CONSULTING AGREEMENT BETWEEN MAC AND SSGA
WITH RESPECT TO EACH LIFESTYLE TRUST
At a meeting held on December 17, 1999, the Board, including the
Disinterested Trustees, voted to approve a subadvisory consulting agreement
between Manufacturers Adviser Corporation ("MAC") and State Street Global
Advisors ("SSgA") with respect to the Lifestyle Trusts.
The purpose of the SSgA subadvisory consulting agreement is to permit SSgA
to assist MAC in the management of the Lifestyle Trusts. It is anticipated that
SSgA would enhance MAC's portfolio allocation process for the Lifestyle Trusts
through the use of SSgA's expertise in statistical analysis. The services that
SSgA would provide are described below under "Description of Subadvisory
Consulting Agreement."
DESCRIPTION OF SUBADVISORY CONSULTING AGREEMENT
The description in this Proposal 3 of the SSgA Subadvisory Consulting
Agreement is a summary only and is qualified in its entirety by reference to the
form of the Subadvisory Consulting Agreement attached hereto as Exhibit A.
Services Provided by SSgA
a. SSgA will provide the MAC the following information and services as may
be requested by the Subadviser from time to time:
i. SSgA will, using SSgA's "Statistical Process Control Methodology":
- track the performance of each of the portfolios in which the
Lifestyle Trusts invest (the "nonLifestyle Trust portfolios") on an
ongoing basis and identify changes in returns of these Portfolios;
- compare performance of the nonLifestyle Trust Portfolios to the
performance of comparable portfolios;
- calculate the probability that the subadvisers to the nonLifestyle
Trust Portfolios will outperform their performance benchmarks;
ii. SSgA will provide computer models and statistical information to
assist MAC in making asset allocation determinations for the
22
<PAGE> 31
Lifestyle Trusts. SSgA will also, if requested by the Subadviser, make such
asset allocation determinations.
b. SSgA, at its expense, will furnish all necessary investment and
management facilities, including salaries of personnel required for it to
execute its duties faithfully under this Agreement, and (ii) administrative
facilities, including bookkeeping, clerical personnel and equipment necessary to
execute its obligations under this Agreement.
Subadvisory Fees
If the SSgA Subadvisory Consulting Agreement is approved by shareholders of
the applicable Lifestyle Trust, the Subadviser will pay SSgA, as full
compensation for all services provided under the Subadvisory Consulting
Agreement, a subadvisory consulting fee at an annual rate of 0.075% of the first
$100 million of the average daily value of the net assets of each Lifestyle
Trust and 0.050% of the excess over $100 million.
The Subadvisory Consulting fee for the Lifestyle Trusts would be accrued
for each calendar day and the sum of the daily fee accruals would be paid
monthly to SSgA. The daily fee accruals will be computed by multiplying the
fraction of one over the number of calendar days in the year by the applicable
annual rate described in the preceding paragraph, and multiplying this product
by the net assets of each Lifestyle Trust as determined in accordance with the
Trust's prospectus and statement of additional information as of the close of
business on the previous business day on which the Trust was open for business.
If the amendment to the SSgA Subadvisory Consulting Agreement had been in
effect for the Trust's fiscal year ended December 31, 1999, the MAC would have
paid subadvisor consulting fees to SSgA as follows:
<TABLE>
<CAPTION>
SUBADVISORY
CONSULTING
FEE AS A
PERCENTAGE OF
AVERAGE ANNUAL
DOLLAR AMOUNT NET ASSETS
------------- --------------
<S> <C> <C>
Lifestyle Aggressive 1000 Trust...... $ 55,674 0.075%
Lifestyle Growth 820 Trust........... $200,276 0.057%
Lifestyle Balanced 640 Trust......... $208,199 0.057%
Lifestyle Moderate 460 Trust......... $101,046 0.066%
Lifestyle Conservative 280 Trust..... $ 71,388 0.075%
</TABLE>
23
<PAGE> 32
Additional Information Regarding the SSgA Subadvisory Consulting Agreement
For additional information regarding the SSgA Subadvisory Consulting
Agreement see "INFORMATION APPLICABLE TO EACH OF THE ADVISORY AGREEMENT, THE MAC
SUBADVISORY AGREEMENT AND THE SSgA SUBADVISORY CONSULTING AGREEMENT" below.
OTHER INVESTMENT COMPANIES ADVISED BY SSGA
SSgA does not currently act as adviser to other investment companies having
similar investment objectives and policies to those of the Lifestyle Trusts.
BROKERAGE TRANSACTIONS
A description of the brokerage transactions for the Lifestyle Trusts is set
forth under "INFORMATION APPLICABLE TO EACH OF THE ADVISORY AGREEMENT, THE MAC
SUBADVISORY AGREEMENT AND THE SSgA SUBADVISORY CONSULTING AGREEMENT" below.
MANAGEMENT AND CONTROL OF SSGA
SSgA is located at Two International Place, Boston, Massachusetts 02110.
SSgA is a division of State Street Bank and Trust Company ("State Street").
State Street's principal address is 225 Franklin Street, Boston, Massachusetts
02110. State Street has been in the business of providing investment advisory
services since 1978. As of December 31, 1999, State Street had approximately
$672 billion in assets under management. State Street is a "bank" as defined
under the Investment Advisers Act of 1940, as amended, and is therefore not
required to be registered thereunder as an investment adviser. State Street
currently acts as the custodian and bookkeeping agent of all Trust assets. For
the year ended December 31, 1999, the Trust paid State Street $6,488,375 for
these services. SSgA also provides investment advisory services to the Growth
Trust, a series of the Trust. For the period May 1, 1999 to December 31, 1999,
the Adviser paid subadvisory fees of $1,191,649 to SSgA.
The principal and executive officers and directors of State Street
Corporation, State Street's parent corporation and their principal occupations
are shown below. The business address of each officer and director is 225
Franklin Street, Boston, MA 02110.
24
<PAGE> 33
<TABLE>
<CAPTION>
POSITION WITH STATE
NAME STREET CORPORATION PRINCIPAL OCCUPATION
- ---------------------------- ------------------- --------------------------
<S> <C> <C>
Marshall N. Carter Director, Chairman Chairman and Chief
and Chief Executive Executive Officer
Officer
David A. Spina Director, President President and Chief
and Chief Operating Operating Officer
Officer
Tenley E. Albright, M.D. Director Chairman, Western
Resources, Inc.
I. MacAllister Booth Director Retired Chairman,
President and Chief
Executive Officer,
Polaroid Corporation
James I. Cash, Jr. Director James E. Robison Professor
of Business Administration
at Harvard University
Truman S. Casner Director Partner, Ropes & Gray
Nader F. Darehshori Director Chairman, President and
Chief Executive Officer,
Houghton Mifflin Company
Arthur L. Goldstein Director Chairman and Chief
Executive Officer, Ionics
Incorporated
David P. Gruber Director Retired Chairman and Chief
Executive Officer, Wyman-
Gordon Company
John M. Kucharski Director Retired Chairman, EG&G,
Inc.
Charles R. LaMantia Director Retired Chairman and Chief
Executive Officer, Arthur
D. Little, Inc.
David B. Perini Director Retired Chairman, Perini
Corporation
Dennis J. Picard Director Retired Chairman, Ratheon
Company
Alfred Poe Director Chairman and Chief
Executive Officer,
MenuDirect Corporation
Bernard W. Reznicek Director President, Premier Group,
and National Director,
Utility Marketing of
Central States Indemnity
Co. of Omaha
Richard Sergel Director President and Chief
Executive Officer, New
England Electric System
</TABLE>
25
<PAGE> 34
<TABLE>
<CAPTION>
POSITION WITH STATE
NAME STREET CORPORATION PRINCIPAL OCCUPATION
- ---------------------------- ------------------- --------------------------
<S> <C> <C>
Diana Chapman Walsh Director President, Wellesley
College
Robert E. Weissman Executive Director Chairman and Chief
Executive Officer, IMS
Health Incorporated
</TABLE>
BOARD OF TRUSTEE CONSIDERATION
At its meeting held on December 17, 1999, the Board of Trustees, including
a majority of the Trustees who are not "interested persons" (as defined in the
1940 Act) of any party to the Subadvisory Consulting Agreement (with the advice
and assistance of independent legal counsel), approved the Subadvisory
Consulting Agreement.
The Board considered numerous factors in connection with the approval of
the Subadvisory Consulting Agreement as it applies to each of the Lifestyle
Trusts, including, but not limited to:
(i) the nature and quality of the services to be provided by SSgA,
(ii) the background and experience of the investment personnel who
will perform services for the Lifestyle Trusts,
(iii) the fees to be paid to SSgA and other comparable investment
companies,
(iv) performance information regarding each Lifestyle Trust and other
comparable investment companies, and
(v) the proposed subadvisory consulting fee in relation to the fees
of other comparable portfolios.
The Board was also provided with an analysis of its fiduciary obligations.
At the meeting held on December 17, 1999, the Board reviewed its fiduciary
duties and discussed the information provided regarding SSgA. Representatives of
SSgA gave a presentation and responded to questions from the Trustees. There was
an extended discussion of, and questioning about, SSgA's plans for the Lifestyle
Trusts.
DURATION OF THE SSGA SUBADVISORY CONSULTING AGREEMENT
If shareholder approve the proposed SSgA subadvisory consulting agreement,
it will become effective May 1, 2000. The initial term of the Agreement will
continue until May 1, 2002, and thereafter will continue in effect for
successive annual periods provided such continuance is approved at least
annually by (1) a majority of the Trustees of the Trust or the holders of
26
<PAGE> 35
a Majority of the Outstanding Voting Securities of each Lifestyle Trust; and (2)
a majority of the Disinterested Trustees.
REQUIRED VOTE
Approval of the Subadvisory Consulting Agreement with respect to each
Lifestyle Trust will require a vote of a Majority of the Outstanding Voting
Securities of each such Portfolio.
* * * *
INFORMATION APPLICABLE TO EACH OF THE ADVISORY AGREEMENT, THE MAC
SUBADVISORY AGREEMENT AND THE SSGA SUBADVISORY CONSULTING AGREEMENT
The following information is applicable to the Advisory Agreement, the MAC
Subadvisory Agreement and the SSgA Subadvisory Consulting Agreement and should
be read in conjunction with Proposals 1-3 above.
EXPENSES PAID BY THE TRUST
Subject to the expense limitations discussed above, the Trust is
responsible for the payment of all expenses of its organization, operations and
business, except those that the Adviser or subadvisers have agreed to pay
pursuant to the Advisory or any of the subadvisory agreements. Expenses borne by
the Trust include:
- reimbursement of the Adviser's expense of providing administrative,
compliance, financial, accounting, bookkeeping and recordkeeping
functions to the Trust,
- charges and expenses of the custodian, independent accountants and
transfer, bookkeeping and dividend disbursing agent appointed by the
Trust;
- brokers' commissions;
- issue and transfer taxes on securities transactions to which the Trust is
a party;
- taxes and fees payable by the Trust;
- legal fees and expenses in connection with the affairs of the Trust,
including registering and qualifying its shares with regulatory
authorities and in connection with any litigation; and
27
<PAGE> 36
- costs for printing annual and semi annual reports, prospectuses and proxy
statements and mailing these documents to shareholders (including holders
of variable contracts funded by Trust shares).
TERMS OF THE ADVISORY AGREEMENT, THE MAC SUBADVISORY AGREEMENT AND THE SSGA
SUBADVISORY CONSULTING AGREEMENT
The Advisory Agreement, the MAC Subadvisory Agreement and the SSgA
Subadvisory Consulting Agreement (collectively, the "Agreements") will initially
continue in effect as to a Portfolio for a period no more than two years from
the date of its execution (or the execution of an amendment making the agreement
applicable to that Portfolio) and thereafter if such continuance is specifically
approved at least annually either (a) by the Trustees or (b) by the vote of a
Majority of the Outstanding Voting Securities of the Trust. In either event,
such continuance shall also be approved by the vote of the majority of the
Trustees who are not interested persons of any party to the Agreements.
Any required shareholder approval of any continuance of any of the
Agreements shall be effective with respect to any Portfolio if a Majority of the
Outstanding Voting Securities of that Portfolio vote to approve such continuance
even if such continuance may not have been approved by a majority of the
outstanding voting securities of (a) any other Portfolio affected by the
Agreement or (b) all of the Portfolios of the Trust.
Failure of Shareholders to Approve Continuance of an Agreement
If the outstanding voting securities of any Portfolio fail to approve any
continuance of an Agreement, the Adviser may continue to act as investment
adviser or subadviser with respect to such Portfolio pending the required
approval of the continuance of such Agreement or a new agreement with either the
Adviser (or subadviser) or a different adviser (or subadviser), or other
definitive action. In the case of the Adviser, the compensation received during
such period will be no more than (a) its actual costs incurred in furnishing
investment advisory and management services to such portfolio or (b) the amount
it would have received under the Advisory Agreement in respect of such
Portfolio, whichever is less.
Termination of the Agreements
The Agreements may be terminated at any time without the payment of any
penalty on 60 days' written notice to the other party or parties to the
Agreements, and also to the Trust in the case of the MAC Subadvisory
28
<PAGE> 37
Agreement and SSgA Subadvisory Consulting Agreement. The following parties may
terminate the Agreements:
- the Trustees of the Trust;
- a Majority of the Outstanding Voting Securities of the Trust, or with
respect to any Portfolio, a majority of the outstanding voting securities
of such Portfolio;
- the Adviser,
- in the case of the MAC Subadvisory Agreement, by MAC;
- in the case of the SSgA Subadvisory Consulting Agreement, by MAC or SSgA.
The Agreements will automatically terminate, without the payment of any penalty,
in the event of their assignment. The MAC Subadvisory Agreement will
automatically terminate in the event the Advisory Agreement between the Trust
and Manulife Securities terminates for any reason. The SSgA Subadvisory
Consulting Agreement will automatically terminate in the event the Subadvisory
Agreement between MAC and Manulife Securities terminates for any reason with
respect to the Lifestyle Trusts or in the event the Advisory Agreement between
Manulife Securities and the Trust terminates for any reason with respect to the
Lifestyle Trusts.
Amendments to the Agreements
The Advisory Agreement and the MAC Subadvisory Agreement may be amended by
the parties to the agreement provided the amendment is approved by the vote of a
Majority of the Outstanding Voting Securities of the Trust and by the vote of a
majority of the Trustees of the Trust, including a majority of the Trustees of
the Trust who are not interested persons of the Trust, the Adviser or the
applicable subadviser.
The SSgA Subadvisory Consulting Agreement may be amended by the parties to
the agreement provided the amendment is approved by the vote of the Trustees of
the Trust, including a majority of the Trustees of the Trust who are not
interested persons of the Trust, the Adviser, MAC or SSgA.
Any required shareholder approval of any amendment shall be effective with
respect to any portfolio if a Majority of the Outstanding Voting Securities of
that Portfolio vote to approve the amendment, even if the amendment may not have
been approved by a Majority of the Outstanding Voting Securities of (a) any
other Portfolio affected by the amendment or (b) all the Portfolios of the
Trust.
29
<PAGE> 38
Limitation of Liability
Each Agreement provides that no Trustee, shareholder, officer, employee or
agent of the Trust shall be held to any personal liability, nor shall their
private property be held for the satisfaction of any obligation or claim or
otherwise, in connection with the affairs of the Trust or any Portfolio. Only
the assets belonging to the Trust or to a particular Portfolio with respect to
which such obligation or claim arose, shall be liable.
PORTFOLIO BROKERAGE
Pursuant to the subadvisory agreements for each of the Trust Portfolios,
the subadvisers are responsible for placing all orders for the purchase and sale
of portfolio securities of the Trust. The subadvisers have no formula for the
distribution of the Trust's brokerage business; rather, they place orders for
the purchase and sale of securities with the primary objective of obtaining the
most favorable overall results for the applicable portfolio of the Trust. The
cost of securities transactions for each Portfolio will consist primarily of
brokerage commissions or dealer or underwriter spreads. Fixed-income securities
and money market instruments are generally traded on a net basis and do not
normally involve either brokerage commissions or transfer taxes.
Occasionally, securities may be purchased directly from the issuer. For
securities traded primarily in the over-the-counter market, the subadvisers
will, where possible, deal directly with dealers who make a market in the
securities unless better prices and execution are available elsewhere. Such
dealers usually act as principals for their own account.
Selection of Brokers or Dealers to Effect Trades
In selecting broker/dealers through whom to effect transactions, the
subadvisers will give consideration to a number of factors, including;
- price, dealer spread or commission, if any,
- the reliability, integrity and financial condition of the broker-dealer,
- size of the transaction,
- difficulty of execution, and
- brokerage and research services provided.
Consideration of these factors by a subadviser, either in terms of a
particular transaction or the subadviser's overall responsibilities with respect
to the Trust and any other accounts managed by the subadviser, could result in
the applicable portfolio of the Trust paying a commission or spread on a
30
<PAGE> 39
transaction that is in excess of the amount of commission or spread another
broker/dealer might have charged for executing the same transaction.
Soft Dollar Considerations
In selecting brokers or dealers, the subadvisers will also give
consideration to the value and quality of any research, statistical, quotation
or valuation services provided by the broker or dealer. In placing a purchase or
sale order, a subadviser may use a broker whose commission in effecting the
transaction is higher than that of some other broker if the subadviser
determines in good faith that the amount of the higher commission is reasonable
in relation to the value of the brokerage and research services provided by such
broker, viewed in terms of either the particular transaction or the subadviser's
overall responsibilities with respect to the Trust and any other accounts
managed by the subadviser. A subadviser may receive products or research that
are used for both research and other purposes, such as administration or
marketing. In such case, the subadviser will make a good faith determination as
to the position attributable to research. Only the portion attributable to
research will be paid through Trust brokerage. The portion not attributable to
research will be paid by the subadviser.
Brokerage and research services provided by brokers or dealers include
advice, either directly or through publications or writings, as to:
- the value of securities,
- the advisability of purchasing or selling securities,
- the availability of securities or purchasers or sellers of securities,
and
- analyses and reports concerning (a) issuers, (b) industries, (c)
securities, (d) economic, political and legal factors and trends and (e)
portfolio strategy.
Research services are received primarily in the form of written reports,
computer generated services, telephone contacts and personal meetings with
security analysts. In addition, such services may be provided in the form of
meetings arranged with corporate and industry spokespersons, economists,
academicians and government representatives. In some cases, research services
are generated by third parties but are provided to the subadviser by or through
a broker.
To the extent research services are used by the subadvisers in rendering
investment advice to the Trust, such services would tend to reduce the
subadvisers' expenses. However, the subadvisers do not believe that an exact
dollar value can be assigned to these services. Research services received by
31
<PAGE> 40
the subadvisers from brokers/dealers executing transactions for the Trust will
be available also for the benefit of other portfolios managed by the
subadvisers.
Sales Volume Considerations
Consistent with the foregoing considerations and the Rules of Fair Practice
of the NASD, sales of contracts for which the broker or dealer or an affiliate
thereof is responsible may be considered as a factor in the selection of such
brokers or dealers. A higher cost broker or dealer will not be selected,
however, solely on the basis of sales volume, but will be selected in accordance
with the criteria set forth above.
Brokerage Commissions Paid to Affiliated Brokers
For the year ended December 31, 1999, the following brokers were affiliated
brokers of the listed Portfolios.
<TABLE>
<CAPTION>
BROKER PORTFOLIO EXPLANATION
- -------------------------- -------------------------- --------------------------
<S> <C> <C>
Fund Management Aggressive Growth Trust Affiliated brokers due to
Company, Inc. Mid Cap Growth Trust the position of A I M
A I M Distributors, Inc. Capital Management, Inc.
as subadviser to these
Portfolios.
Nomura Securities Small Company Value Trust Affiliated brokers due to
Nomura Securities the position of AXA
International Rosenberg Investment
DLJ Management LLC as
Paribas subadviser to this
BNP Portfolio.
Fidelity Capital Markets Overseas Trust Affiliated brokers due to
FBSI Mid Cap Blend Trust the position of Fidelity
Large Cap Growth Trust Management Trust Company
as subadviser to these
Portfolios.
Diversified Bond Trust FMTC resigned as
Income & Value Trust subadviser to the
Diversified Bond and
Income & Value Trusts on
May 1, 1999.
Buck Investment Services, International Small Cap Affiliated brokers due to
Inc. Trust the position of Founders
Dreyfus Financial Services Balanced Trust Asset Management, LLC as
Corp. subadviser to these
Dreyfus Investment Portfolios.
Services Corp.
Dreyfus Service
Corporation
Mellon Financial Markets,
Inc.
</TABLE>
32
<PAGE> 41
<TABLE>
<CAPTION>
BROKER PORTFOLIO EXPLANATION
- -------------------------- -------------------------- --------------------------
<S> <C> <C>
Franklin Templeton Emerging Small Company Affiliated brokers due to
Distributors Inc. Trust the position of Franklin
Templeton Franklin International Value Trust Advisers, Inc. as
Investment Services Inc. subadviser to the Emerging
Small Company Trust and
the position of Templeton
Investment Counsel, Inc.
as subadviser to the
International Value Trust.
Fred Alger & Company Mid Cap Growth Trust Affiliated broker due to
Incorporated the position of Fred Alger
Management, Inc. as
subadviser to this
Portfolio prior to May 1,
1999.
J.P. Morgan Securities Overseas Trust Affiliated brokers due to
Inc. the position of J.P.
J.P. Morgan Securities Morgan Investment
Ltd. Management, Inc. as
subadviser to this
portfolio prior to May 1,
1999.
Morgan Stanley & Co. Inc. Global Equity Trust Affiliated brokers due to
Morgan Stanley Value Trust the position of Morgan
International Limited High Yield Trust Stanley Asset Management
Dean Witter Reynolds, Inc. as subadviser to the
Discover Brokerage Direct, Global Equity Trust and
Inc. the position of Miller
AB Asesores Anderson & Sherrerd, LLP
as subadviser to the Value
Trust and the High Yield
Trust.
Dresdner Bank Global Bond Trust Affiliated broker due to
the position of Oechsle
International Advisors,
LLC as subadviser to this
Portfolio prior to May 1,
1999.
PIMCO Funds Distributors Global Bond Trust Affiliated broker due to
LLC Total Return Trust the position of Pacific
Investment Management
Company as subadviser to
these Portfolios.
</TABLE>
33
<PAGE> 42
<TABLE>
<CAPTION>
BROKER PORTFOLIO EXPLANATION
- -------------------------- -------------------------- --------------------------
<S> <C> <C>
Citicorp Financial U.S. Government Securities Affiliated broker due to
Services Trust the position of Salomon
Corp. Strategic Bond Trust Asset Management Inc. as
Citicorp Investment subadviser to these
Services Portfolios.
Citicorp Securities
Services,
Inc.
Citicorp Securities, Inc.
Copeland Equities, Inc.
Liberty Brokerage
PFS Distributors, Inc.
PFS Investments Inc.
The Robinson-Humphrey
Company
Salomon Reinvestment
Company Inc
Salomon Smith Barney Inc.
Smith Annuity Services,
Inc.
Smith Barney Puerto Rico
Inc.
Tower Square Securities,
Inc.
Travelers Distribution
Company
Tribeca Investments,
L.L.C.
State Street Brokerage Growth Trust Affiliated broker due to
Services, a division of the position of State
State Street Capital Street Global Advisors as
Markets, LLC subadviser to this
Portfolio.
Robert Fleming International Stock Trust Affiliated broker due to
Jardine Fleming the position of Rowe
Ord Minnet Price- Fleming
International, Inc. as
subadviser to this
Portfolio.
</TABLE>
For the fiscal year ended December 31, 1999, the Trust paid brokerage
commissions in connection with portfolio transactions of $21,888,117, including
the following brokerage commissions paid to affiliated brokers in connection
with the Global Equity, International Stock, Mid Cap Growth, Overseas and Small
Company Value Trusts:
<TABLE>
<CAPTION>
PORTFOLIO YEAR ENDED 12/31/99
- --------- -------------------
<S> <C>
Global Equity Trust.................... $ 2,508
International Stock Trust.............. 4,378
Mid Cap Growth Trust................... 471,395
Overseas Trust......................... 19,623
Small Company Value Trust.............. 8,761
</TABLE>
34
<PAGE> 43
For the year ended December 31, 1999, brokerage commissions were paid to
Morgan Stanley and Company, Inc. by the GLOBAL EQUITY TRUST as follows:
<TABLE>
<CAPTION>
% OF PORTFOLIO'S
BROKERAGE % OF AGGREGATE
COMMISSIONS $ AMOUNT OF
REPRESENTED TRANSACTIONS
PORTFOLIO COMMISSIONS FOR THE PERIOD FOR THE PERIOD
- --------- ----------- --------------------- --------------
<S> <C> <C> <C>
Global Equity
Trust.............. $2,508 0.18% 0.01%
</TABLE>
For the year ended December 31, 1999, brokerage commissions were paid to
Jardine Fleming by the INTERNATIONAL STOCK TRUST as follows:
<TABLE>
<CAPTION>
% OF PORTFOLIO'S
BROKERAGE % OF AGGREGATE
COMMISSIONS $ AMOUNT OF
REPRESENTED TRANSACTIONS
PORTFOLIO COMMISSIONS FOR THE PERIOD FOR THE PERIOD
- --------- ----------- --------------------- --------------
<S> <C> <C> <C>
International Stock
Trust.............. $4,138 1.17% 0.02%
</TABLE>
For the year ended December 31, 1999, brokerage commissions were paid to
Robert Fleming by the INTERNATIONAL STOCK TRUST as follows:
<TABLE>
<CAPTION>
% OF PORTFOLIO'S
BROKERAGE % OF AGGREGATE
COMMISSIONS $ AMOUNT OF
REPRESENTED TRANSACTIONS
PORTFOLIO COMMISSIONS FOR THE PERIOD FOR THE PERIOD
- --------- ----------- --------------------- --------------
<S> <C> <C> <C>
International Stock
Trust.............. $ 240 0.07% 0.00%
</TABLE>
For the year ended December 31, 1999, brokerage commissions were paid to
Fred Alger & Company Incorporated by the MID CAP GROWTH TRUST as follows:
<TABLE>
<CAPTION>
% OF PORTFOLIO'S
BROKERAGE % OF AGGREGATE
COMMISSIONS $ AMOUNT OF
REPRESENTED TRANSACTIONS
PORTFOLIO COMMISSIONS FOR THE PERIOD FOR THE PERIOD
- --------- ----------- --------------------- --------------
<S> <C> <C> <C>
Mid Cap Growth
Trust.............. $471,395 39.33% 2.15%
</TABLE>
For the year ended December 31, 1999, brokerage commissions were paid to
Fidelity Capital Markets by the OVERSEAS TRUST as follows:
<TABLE>
<CAPTION>
% OF PORTFOLIO'S
BROKERAGE % OF AGGREGATE
COMMISSIONS $ AMOUNT OF
REPRESENTED TRANSACTIONS
PORTFOLIO COMMISSIONS FOR THE PERIOD FOR THE PERIOD
- --------- ----------- --------------------- --------------
<S> <C> <C> <C>
Overseas Trust....... $ 445 0.04% 0.00%
</TABLE>
35
<PAGE> 44
For the year ended December 31, 1999, brokerage commissions were paid to JP
Morgan Securities by the OVERSEAS TRUST as follows:
<TABLE>
<CAPTION>
% OF PORTFOLIO'S
BROKERAGE % OF AGGREGATE
COMMISSIONS $ AMOUNT OF
REPRESENTED TRANSACTIONS
PORTFOLIO COMMISSIONS FOR THE PERIOD FOR THE PERIOD
- --------- ----------- --------------------- --------------
<S> <C> <C> <C>
Overseas Trust....... $19,178 1.78% 0.09%
</TABLE>
For the year ended December 31, 1999, brokerage commissions were paid to
DLJ by the SMALL COMPANY VALUE TRUST as follows:
<TABLE>
<CAPTION>
% OF PORTFOLIO'S
BROKERAGE % OF AGGREGATE
COMMISSIONS $ AMOUNT OF
REPRESENTED TRANSACTIONS
PORTFOLIO COMMISSIONS FOR THE PERIOD FOR THE PERIOD
- --------- ----------- --------------------- --------------
<S> <C> <C> <C>
Small Company Value
Trust.............. $8,761 1.92% 0.04%
</TABLE>
OTHER MATTERS
The Board does not know of any matters to be presented at the Meeting other
than those mentioned in this Proxy Statement. If any other matters properly come
before the Meeting, the shares represented by proxies will be voted in
accordance with the best judgment of the person or persons voting the proxies.
The Trust is not required to hold annual meetings of shareholders and,
therefore, it cannot be determined when the next meeting of shareholders will be
held. Shareholder proposals to be presented at any future meeting of
shareholders of the Trust must be received by the Trust a reasonable time before
the Trust's solicitation of proxies for that meeting in order for such proposals
to be considered for inclusion in the proxy materials related to that meeting.
36
<PAGE> 45
The Trust does not have a principal underwriter or administrator since
shares are sold only to insurance companies and their separate accounts as the
underlying investment medium for variable contracts. However, Manulife
Securities and an affiliated broker/dealer serve as principal underwriter of
certain contracts issued by affiliates of the Trust.
BY ORDER OF THE BOARD OF TRUSTEES
March 22, 2000
Boston, Massachusetts
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, SHAREHOLDERS
WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO COMPLETE, SIGN,
DATE AND RETURN THE PROXY CARD IN THE ENCLOSED ENVELOPE.
37
<PAGE> 46
EXHIBIT A
MANUFACTURERS INVESTMENT TRUST
AMENDMENT TO AMENDED AND RESTATED ADVISORY AGREEMENT
AMENDMENT made this day of , 2000, to the
Amended and Restated Advisory Agreement dated January 1, 1996, as amended and
restated May 1, 1999 between Manufacturers Investment Trust, a Massachusetts
business trust (the "Trust") and Manufacturers Securities Services, LLC, a
Delaware limited liability company ("MSS" or the "Adviser"). In consideration of
the mutual covenants contained herein, the parties agree as follows:
1. CHANGE IN APPENDIX A
Appendix A to this Agreement is revised to reflect the increase in the
advisory fee for the Lifestyle Aggressive 1000 Portfolio, the Lifestyle Growth
820 Portfolio, the Lifestyle Balanced 640 Portfolio, the Lifestyle Moderate 460
Portfolio and the Lifestyle Conservative 280 Portfolio (collectively, the
"Lifestyle Trusts") as set forth in Appendix A to this Amendment.
2. EFFECTIVE DATE
This Amendment shall become effective with respect to a Lifestyle Trust on
the later to occur of: (i) approval by shareholders of such Lifestyle Trust,
(ii) disclosure of the terms of the Amendment in the prospectus of the Trust and
(iii) execution of the Amendment.
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<PAGE> 47
MANUFACTURERS INVESTMENT TRUST
By:
-------------------------------------------------------------------------------
Matthew R. Schiffman, President
MANUFACTURERS SECURITIES SERVICES, LLC
By: The Manufacturers Life Insurance Company
of North America, its managing member
By:
-------------------------------------------------------------------------------
James R. Boyle, President
By:
-------------------------------------------------------------------------------
James D. Gallagher, Vice President,
Secretary and General Counsel
A-2
<PAGE> 48
APPENDIX A
1. Lifestyle Conservative 280 Trust: 0.075% of the first $100 million of
current net assets of the Portfolio and 0.05% of the excess over $100 million.
2. Lifestyle Moderate 460 Trust: 0.075% of the first $100 million of
current net assets of the Portfolio and 0.05% of the excess over $100 million.
3. Lifestyle Balanced 640 Trust: 0.075% of the first $100 million of
current net assets of the Portfolio and 0.05% of the excess over $100 million.
4. Lifestyle Growth 820 Trust: 0.075% of the first $100 million of current
net assets of the Portfolio and 0.05% of the excess over $100 million.
5. Lifestyle Aggressive 1000 Trust: 0.075% of the first $100 million of
current net assets of the Portfolio and 0.05% of the excess over $100 million.
The Percentage Fee for each Portfolio shall be paid daily to the Adviser.
The daily fee will be computed by multiplying the fraction of one over the
number of calendar days in the year by the applicable annual rate described in
the preceding paragraph, and multiplying this product by the net assets of the
Portfolio as determined in accordance with the Trust's prospectus and statement
of additional information as of the close of business on the previous business
day on which the Trust was open for business.
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<PAGE> 49
EXHIBIT B
AMENDMENT TO SUBADVISORY AGREEMENT
MANUFACTURERS ADVISER CORPORATION
AMENDMENT made as of this day of , 2000 to the
Subadvisory Agreement dated October 1, 1996 as amended December 31, 1996 (the
"Agreement"), between Manufacturer's Securities Services, LLC, a Delaware
limited partnership (formerly, NASL Financial Services, Inc.) (the "Adviser"),
and Manufacturers Adviser Corporation, a Colorado corporation (the
"Subadviser"). In consideration of the mutual covenants contained herein, the
parties agree as follows:
1. CHANGE IN APPENDIX A
Section 3 of the Agreement, "Compensation of Subadviser," is hereby amended
to increase the fee the Adviser pays to the Subadviser with respect to the
Lifestyle Aggressive 1000 Portfolio, the Lifestyle Growth 820 Portfolio, the
Lifestyle Growth 640 Portfolio, the Lifestyle Moderate 460 Portfolio and the
Lifestyle Conservative 280 Portfolio as specified in Appendix A to this
Amendment:
2. EFFECTIVE DATE
This Amendment shall become effective with respect to each Portfolio on the
later to occur of: (i) approval by shareholders of such Lifestyle portfolio,
(ii) disclosure of the terms of the Amendment in the prospectus of the
Manufacturers Investment Trust, and (iii) execution of the Amendment.
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<PAGE> 50
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed under seal by their duly authorized officers as of the date first
mentioned above.
MANUFACTURERS SECURITIES SERVICES, LLC
By: The Manufacturers Life Insurance Company
of North America, its managing member
By:
-------------------------------------------------------------------------------
James R. Boyle, President
By:
-------------------------------------------------------------------------------
James D. Gallagher, Vice President,
Secretary and General Counsel
MANUFACTURERS ADVISER CORPORATION
By:
-------------------------------------------------------------------------------
Cindy Forbes, Vice President
By:
-------------------------------------------------------------------------------
James D. Gallagher, Secretary
B-2
<PAGE> 51
APPENDIX A
The Subadviser shall serve as investment subadviser for the following
portfolio of the Trust. The Adviser will pay the Subadviser, as full
compensation for all services provided under this Agreement, the fee computed
separately for each such Portfolio at an annual rate as follows (the "Subadviser
Percentage Fee"):
1. Lifestyle Conservative 280 Trust: 0.075% of the first $100 million
of the average daily value of the net assets of the Portfolio and 0.05% of
the excess over $100 million.
2. Lifestyle Moderate 460 Trust: 0 .075% of the first $100 million of
the average daily value of the net assets of the Portfolio and 0.05% of the
excess over $100 million.
3. Lifestyle Balanced 640 Trust: 0.075% of the first $100 million of
the average daily value of the net assets of the Portfolio and 0.05% of the
excess over $100 million.
4. Lifestyle Growth 820 Trust: 0.075% of the first $100 million of the
average daily value of the net assets of the Portfolio and 0.05% of the
excess over $100 million.
5. Lifestyle Aggressive 1000 Trust: 0.075% of the first $100 million
of the average daily value of the net assets of the Portfolio and 0.05% of
the excess over $100 million.
The Subadviser Percentage Fee for each Portfolio shall be accrued for each
calendar day and the sum of the daily fee accruals shall be paid monthly to the
Subadviser. The daily fee accruals will be computed by multiplying the fraction
of one over the number of calendar days in the year by the applicable annual
rate described in the preceding paragraph, and multiplying this product by the
net assets of the Portfolio as determined in accordance with the Trust's
prospectus and statement of additional information as of the close of business
on the previous business day on which the Trust was open for business.
If this Agreement becomes effective or terminates before the end of any
month, the fee (if any) for the period from the effective date to the end of
such month or from the beginning of such month to the date of termination, as
the case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.
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<PAGE> 52
EXHIBIT C
MANUFACTURERS INVESTMENT TRUST
SUBADVISORY CONSULTING AGREEMENT
AGREEMENT made this day of 2000, between Manufacturers
Adviser Corporation, a Colorado Corporation (the "Subadviser"), and State Street
Global Advisors, a division of State Street Bank and Trust Company, a
Massachusetts trust company ("SSgA"). In consideration of the mutual covenants
contained herein, the parties agree as follows:
1. APPOINTMENT OF SSGA
SSgA undertakes to provide the services described in Section 2 below in
connection with the Subadviser's management of the Lifestyle Aggressive 1000
Trust, the Lifestyle Growth 820 Trust, the Lifestyle Balanced 640 Trust, the
Lifestyle Moderate 460 Trust, and the Lifestyle Conservative 280 Trust
(collectively, the "Lifestyle Trusts"), subject to the supervision of the
Trustees of Manufacturers Investment Trust (the "Trust") and the adviser to the
Trust, Manufacturers Securities Services, LLC (the "Adviser"). SSgA will be an
independent contractor and will have no authority to act for or represent the
Trust or Subadviser in any way except as expressly authorized in this Agreement
or another writing by the Trust and Subadviser.
SSgA represents that it is a "bank" as such term is defined in the
Investment Advisers Act and, therefore, is not required to be registered under
the Investment Advisers Act.
2. SERVICES TO BE RENDERED BY SSGA
a. SSgA will provide the Subadviser the following information and services
as may be requested by the Subadviser from time to time:
ii. SSgA will, using SSgA's "Statistical Process Control Methodology"
and the resources provided by its Office of the Fiduciary Adviser:
- track the performance of each of the investment portfolios in which
the Lifestyle Trusts invest (the "nonLifestyle Trust portfolios") on
an ongoing basis and identify changes in returns of these
portfolios;
- compare performance of the nonLifestyle Trust portfolios to the
performance of comparable portfolios;
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<PAGE> 53
- calculate the probability that the subadvisers to the nonLifestyle
Trust portfolios will outperform their performance benchmarks;
iii. SSgA will provide computer models, including its Growth Value
Rotation Model, and statistical information to assist the Subadviser in
making asset allocation determinations for the Lifestyle Trusts. SSgA will
also, if requested by the Subadviser, make such asset allocation
determinations.
b. SSgA, at its expense, will furnish all necessary (i) investment and
management facilities, including salaries of personnel required for it to
execute its duties faithfully under this Agreement, and (ii) administrative
facilities, including bookkeeping, clerical personnel and equipment necessary to
execute its obligations under this Agreement.
3. COMPENSATION OF SSGA
The Subadviser will pay SSgA with respect to each Lifestyle Trust the
compensation specified in Appendix A to this Agreement.
4. LIABILITY OF SSGA
Neither SSgA nor any of its directors, officers or employees shall be
liable to the Adviser, the Subadviser or the Trust for any error of judgment or
mistake of law or for any loss suffered by the Adviser, the Subadviser or the
Trust in connection with the matters to which this Agreement relates except for
losses resulting from willful misfeasance, bad faith or gross negligence in the
performance of, or from the reckless disregard of, the duties of SSgA or any of
its directors.
5. CONFLICTS OF INTEREST
It is understood that trustees, officers, agents and shareholders of the
Trust are or may be interested in SSgA as trustees, officers, partners or
otherwise; that employees, agents and partners of SSgA are or may be interested
in the Trust as trustees, officers, shareholders or otherwise; that SSgA may be
interested in the Trust; and that the existence of any such dual interest shall
not affect the validity hereof or of any transactions hereunder except as
otherwise provided in the Agreement and Declaration of Trust of the Trust and
the partnership agreement of SSgA, respectively, or by specific provision of
applicable law.
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<PAGE> 54
6. REGULATION
SSgA shall submit to all regulatory and administrative bodies having
jurisdiction over the services provided pursuant to this Agreement any
information, reports or other material which any such body by reason of this
Agreement may request or require pursuant to applicable laws and regulations.
7. DURATION AND TERMINATION OF AGREEMENT
This Agreement shall become effective with respect to each Lifestyle Trust
on the later of:
(i) its execution,
(ii) the date of the meeting of the Board of Trustees of the Trust, at
which meeting this Agreement is approved as described below,
(iii) the date of the meeting of the shareholders of the Lifestyle
Trust at which meeting this Agreement is approved by the vote of a majority
of the outstanding voting securities (as defined in the Investment Company
Act of 1940 ("Investment Company Act")) of the shareholders of the
Lifestyle Trust,
(iv) disclosure of the terms of this Agreement with respect to the
Lifestyle Trust in the prospectus of Manufacturers Investment Trust, and
(v) May 1, 2000.
The Agreement will continue in effect for a period more than two years from
the date of its execution with respect to each Lifestyle Trust only so long as
such continuance is specifically approved at least annually either (i) by the
Trustees of the Trust or (ii) by a majority of the outstanding voting securities
of the Lifestyle Trusts, provided that in either event such continuance shall
also be approved by the vote of a majority of the Trustees of the Trust who are
not interested persons (as defined in the Investment Company Act) of any party
to this Agreement cast in person at a meeting called for the purpose of voting
on such approval.
Any required shareholder approval of the Agreement, or of any continuance
of the Agreement, shall be effective with respect to any Lifestyle Trust if a
majority of the outstanding voting securities of the series (as defined in Rule
18f-2(h) under the Investment Company Act) of shares of that Lifestyle Trust
votes to approve the Agreement or its continuance, notwithstanding that the
Agreement or its continuance may not have been approved
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<PAGE> 55
by a majority of the outstanding voting securities of (a) any other Lifestyle
Trust affected by the Agreement or (b) all the Lifestyle Trusts.
If any required shareholder approval of this Agreement or any continuance
of the Agreement is not obtained, SSgA will continue to provide the services
described herein with respect to the affected Lifestyle Trust pending the
required approval of the Agreement or its continuance or of a new contract with
SSgA or a different adviser or other definitive action; provided, that the
compensation received by SSgA in respect of such Lifestyle Trust during such
period is in compliance with Rule 15a-4 under the Investment Company Act.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Trustees of the Trust, by the vote of a majority of the
outstanding voting securities of the Trust, or with respect to any Lifestyle
Trust by the vote of a majority of the outstanding voting securities of such
portfolio, on sixty days' written notice to the Subadviser and SSgA, or by the
Subadviser or SSgA on sixty days' written notice to the Trust and the other
party. This Agreement will automatically terminate, without the payment of any
penalty, in the event of its assignment (as defined in the Investment Company
Act), in the event the Subadvisory Agreement between the Subadviser and the
Adviser terminates for any reason with respect to the Lifestyle Trusts or in the
event the Advisory Agreement between the Adviser and the Trust terminates for
any reason with respect to the Lifestyle Trusts.
8. PROVISION OF CERTAIN INFORMATION BY SSGA
SSgA will promptly notify the Adviser and the Subadviser in writing of the
occurrence of any of the following events:
a. SSgA fails to be a "bank" as such term is defined under the
Investment Advisers Act;
b. SSgA is served or otherwise receives notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by any
court, public board or body, involving the affairs of the Trust; and
c. any change in control of SSgA within the meaning of the Investment
Company Act.
9. SERVICES TO OTHER CLIENTS
The Subadviser understands, and has advised the Trust's Board of Trustees,
that SSgA now acts, or may in the future act, as an investment adviser to
fiduciary and other managed accounts and as investment adviser or subadviser to
other investment companies. Further, the Subadviser under-
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<PAGE> 56
stands, and has advised the Trust's Board of Trustees that SSgA and its
affiliates may give advice and take action for its accounts, including
investment companies, which differs from advice given on the timing or nature of
action taken for the Lifestyle Trusts. SSgA is not obligated to initiate
transactions for a Lifestyle Trust in any security which SSgA, its partners,
affiliates or employees may purchase or sell for their own accounts or other
clients.
10. AMENDMENTS TO THE AGREEMENT
This Agreement may be amended by the parties only if such amendment is
specifically approved by the vote of a majority of the Trustees of the Trust and
by the vote of a majority of the Trustees of the Trust who are not interested
persons of any party to this Agreement cast in person at a meeting called for
the purpose of voting on such approval. Any required shareholder approval shall
be effective with respect to any Lifestyle Trust if a majority of the
outstanding voting securities of that Lifestyle Trust vote to approve the
amendment, notwithstanding that the amendment may not have been approved by a
majority of the outstanding voting securities of (a) any other Lifestyle Trust
affected by the amendment or (b) all the Lifestyle Trusts of the Trust.
11. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement of the
parties.
12. HEADINGS
The headings in the sections of this Agreement are inserted for convenience
of reference only and shall not constitute a part hereof.
13. NOTICES
All notices required to be given pursuant to this Agreement shall be
delivered or mailed to the last known business address of the Trust, SSgA or the
Subadviser, as applicable, or by registered mail or a private mail or delivery
service providing the sender with notice of receipt. Notice shall be deemed
given on the date delivered or mailed in accordance with this paragraph.
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<PAGE> 57
14. SEVERABILITY
Should any portion of this Agreement for any reason be held to be void in
law or in equity, the Agreement shall be construed, insofar as is possible, as
if such portion had never been contained herein.
15. GOVERNING LAW
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of The Commonwealth of Massachusetts, or any of the
applicable provisions of the Investment Company Act. To the extent that the laws
of The Commonwealth of Massachusetts, or any of the provisions in this
Agreement, conflict with applicable provisions of the Investment Company Act,
the latter shall control.
16. LIMITATION OF LIABILITY
The Agreement and Declaration of Trust dated September 28, 1988, a copy of
which, together with all amendments thereto (the "Declaration"), is on file in
the office of the Secretary of The Commonwealth of Massachusetts, provides that
the name "Manufacturers Investment Trust" refers to the Trustees under the
Declaration collectively as Trustees, but not as individuals or personally; and
no Trustee, shareholder, officer, employee or agent of the Trust shall be held
to any personal liability, nor shall resort be had to their private property,
for the satisfaction of any obligation or claim, in connection with the affairs
of the Trust or any portfolio thereof, but only the assets belonging to the
Trust, or to the particular portfolio with respect to which such obligation or
claim arose, shall be liable.
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<PAGE> 58
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers as of the date first
mentioned above.
MANUFACTURERS ADVISER CORPORATION
By:
-------------------------------------------------------------------
By:
-------------------------------------------------------------------
STATE STREET GLOBAL ADVISORS, A DIVISION OF
STATE STREET BANK AND TRUST COMPANY
By:
-------------------------------------------------------------------
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<PAGE> 59
APPENDIX A
The Subadviser will pay SSgA, as full compensation for all services
provided under this Agreement a subadvisory consulting fee for each Lifestyle
Trust at an annual rate as follows:
<TABLE>
<CAPTION>
FIRST EXCESS OVER
PORTFOLIOS $100 MILLION $100 MILLION
- ---------- ------------ ------------
<S> <C> <C>
Lifestyle Aggressive 1000 Trust......... 0.075% 0.050%
Lifestyle Growth 820 Trust.............. 0.075% 0.050%
Lifestyle Balanced 640 Trust............ 0.075% 0.050%
Lifestyle Moderate 460 Trust............ 0.075% 0.050%
Lifestyle Conservative 280 Trust........ 0.075% 0.050%
</TABLE>
The subadvisory consulting fee for each Lifestyle Trust is accrued for each
calendar day and the sum of the daily fee accruals will be paid monthly to SSgA.
The daily fee accruals will be computed by multiplying the fraction of one over
the number of calendar days in the year by the applicable annual rate described
in the preceding paragraph, and multiplying this product by the net assets of
the applicable Lifestyle Trust as determined in accordance with the Trust's
prospectus and statement of additional information as of the close of business
on the previous business day on which the Trust was open for business.
If this Agreement becomes effective or terminates before the end of any
month, the fee (if any) for the period from the effective date to the end of
such month or from the beginning of such month to the date of termination, as
the case may be, will be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.
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