<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Confidential, for Use of the
[_] Preliminary Proxy Statement Commission Only (as Permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
PACIFIC SELECT FUND
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
PACIFIC SELECT FUND
700 Newport Center Drive
Newport Beach, California 92660
Thomas C. Sutton
Chairman of the Board
January 26, 2000
Dear Variable Contract Owner:
We are pleased to enclose a Notice and Proxy Statement for the special
meeting of the shareholders of the Managed Bond and Government Securities
Portfolios of Pacific Select Fund (the "Fund").
The meeting is scheduled to be held at 1:30 p.m. Pacific time on March 13,
2000 at the offices of Pacific Life Insurance Company ("Pacific Life"), located
at 700 Newport Center Drive, Newport Beach, California 92660. Please take the
time to read the proxy statement and cast your vote.
The purpose of the meeting is to seek your approval of a new portfolio
management agreement ("New Portfolio Management Agreement") between the Fund,
Pacific Life, and Pacific Investment Management Company ("PIMCO"). As described
in more detail in the accompanying materials, you will be asked to approve the
New Portfolio Management Agreement due to a transaction affecting PIMCO that,
under applicable law, terminates the current portfolio management agreement
among the Fund, Pacific Life, and PIMCO. Following the transaction, PIMCO will
continue to serve as the Portfolio Manager for the Portfolios, provided
shareholder approval is obtained.
Please note that the terms of the New Portfolio Management Agreement are
substantially similar in all material respects to the terms of the existing
portfolio management agreement. Moreover, we have been informed that the
transaction should not result in any material changes in the investment
philosophy, policies, or strategies of the Portfolio and that the level and
quality of the services provided by PIMCO will not change. In this connection,
it is expected that the same investment professionals at PIMCO who currently
manage the Portfolios' assets will continue to do so following the transaction.
The Trustees of the Fund have concluded that the New Portfolio Management
Agreement is in the best interests of each Portfolio and its shareholders and
recommend that shareholders vote in favor of the New Portfolio Management
Agreement.
We appreciate your participation and prompt response in this matter and
thank you for your continued support.
Sincerely,
/s/ THOMAS C. SUTTON
Thomas C. Sutton
<PAGE>
PACIFIC SELECT FUND
700 Newport Center Drive
Newport Beach, California 92660
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
March 13, 2000
To the Shareholders of the Managed Bond and Government Securities Portfolios of
the Pacific Select Fund:
A special meeting of the shareholders of the Managed Bond Portfolio and
Government Securities Portfolio (the "Portfolios") of Pacific Select Fund (the
"Fund") will be held on the 13th day of March, 2000 at 1:30 p.m. Pacific time,
at the offices of Pacific Life Insurance Company ("Pacific Life") at 700
Newport Center Drive, Newport Beach, California 92660, or any adjournment
thereof, for the following purposes:
1. To approve or disapprove a new Portfolio Management Agreement with
Pacific Investment Management Company ("PIMCO"); and
2. To transact such other business as may properly come before the
Meeting or any adjournment thereof.
The Board of Trustees has fixed the close of business on January 14, 2000 as
the record date for determining shareholders entitled to notice of, and to vote
at, the meeting and any adjournment thereof.
You are cordially invited to attend the meeting. Shareholders who do not
expect to attend the meeting are requested to complete, sign, and return the
enclosed proxy promptly, or vote electronically at https://vote.proxy-
direct.com, or vote telephonically by calling 1-800-597-7836. The enclosed
proxy is being solicited by the Board of Trustees of the Fund.
Please respond--your vote is important. Whether or not you plan to attend the
meeting, please vote electronically or by telephone or mail. If you vote by
mail, only voting instructions received at the address shown on the enclosed
postage paid envelope will be counted.
By Order of the Board of Trustees
By:
___________________________________
Audrey L. Milfs,
Secretary
Newport Beach, California
January 26, 2000
<PAGE>
PACIFIC SELECT FUND
700 NEWPORT CENTER DRIVE
NEWPORT BEACH, CALIFORNIA 92660
----------------
PROXY STATEMENT
----------------
SPECIAL MEETING OF SHAREHOLDERS
OF THE
PACIFIC SELECT FUND
MARCH 13, 2000
SOLICITATION OF PROXIES
This statement is furnished in connection with the solicitation of proxies
on behalf of the Board of Trustees of Pacific Select Fund (the "Fund") for use
at a special meeting of shareholders of the Managed Bond and Government
Securities Portfolios (the "Portfolios") of the Fund to be held at 1:30 p.m.
Pacific time on March 13, 2000 at the offices of Pacific Life Insurance Company
("Pacific Life"), located at 700 Newport Center Drive, Newport Beach,
California 92660, and at any adjournment of the meeting, for the purposes set
forth in the accompanying Notice of Special Meeting of Shareholders ("Notice").
The primary purpose of the meeting is for shareholders of each Portfolio, as
set forth in the attached Notice, to consider and approve a new portfolio
management agreement ("New Portfolio Management Agreement") with Pacific
Investment Company ("PIMCO"), each Portfolio's current portfolio manager. The
date of the first mailing of this proxy statement will be on or about January
31, 2000.
PROPOSAL I
APPROVAL OF A NEW PORTFOLIO MANAGEMENT AGREEMENT
Introduction
Pacific Life acts as investment adviser to the Portfolios under an
investment advisory agreement ("Advisory Agreement") between the Fund (on
behalf of the Portfolios) and Pacific Life. As permitted by the Advisory
Agreement, Pacific Life may hire another advisory firm as sub-adviser, or
"portfolio manager", for each of the Fund's portfolios, whose fees Pacific Life
(and not the Fund) pays out of its investment advisory fee.
PIMCO, located at 840 Newport Center Drive, Suite 300, Newport Beach,
California 92660, has served as portfolio manager for the Portfolios since
January 4, 1988.
PIMCO will undergo a change of control as a result of the consummation of
the transaction described below, resulting in the automatic termination of the
current portfolio management agreement (the "Portfolio Management Agreement")
with respect to each Portfolio. It is proposed that PIMCO continue to serve as
portfolio manager of the Portfolios following completion of the transaction.
<PAGE>
Therefore, in connection with the transaction and as required by the
Investment Company Act of 1940, as amended (the "1940 Act"), shareholders of
each Portfolio are asked in Proposal I to approve a New Portfolio Management
Agreement among the Fund, Pacific Life, and PIMCO, which is substantially
identical to the Portfolio Management Agreement. The Board of Trustees of the
Fund recommends that shareholders approve the New Portfolio Management
Agreement, which is attached as Appendix A.
Description of the Transaction
PIMCO is a subsidiary partnership of PIMCO Advisors L.P. ("PIMCO Advisors").
The general partners of PIMCO Advisors are PIMCO Partners, G.P. ("Partners
G.P.") and PIMCO Advisors Holdings L.P. ("PAH"). Partners G.P. is a general
partnership between PIMCO Holding LLC, a Delaware limited liability company and
an indirect wholly-owned subsidiary of Pacific Life, and PIMCO Partners LLC
("Partners LLC"), a California limited liability company controlled by the
current managing directors and two former managing directors of PIMCO
("Managing Directors"). PAH is a publicly traded Delaware limited partnership
and its primary source of income is its proportionate share of the income of
PIMCO Advisors. Partners G.P. is the sole general partner of PAH. The address
of all of the above entities, with the exception of Pacific Life, is
800 Newport Center Drive, Newport Beach, California 92660.
On October 31, 1999, PIMCO Advisors, PAH, Partners G.P., certain of their
affiliates, Allianz of America, Inc. ("Allianz of America") and certain other
parties named therein entered into an Implementation and Merger Agreement (the
"Merger Agreement") pursuant to which Allianz of America will acquire majority
ownership of PIMCO Advisors (the "Transaction").
The Merger Agreement provides for the acquisition of PAH by Allianz of
America through a merger of a subsidiary of Allianz of America with and into
PAH. In the merger, each of the outstanding limited partnership and general
partner units in PAH will be converted into the right to receive in cash an
amount per unit equal to $38.75, subject to a downward adjustment if the
aggregate annualized investment advisory and subadvisory fees for all accounts
managed by PIMCO Advisors and its subsidiaries, expressed as a "revenue run-
rate," declines (excluding market-based changes) below a specified level (the
"Unit Transaction Price"). In no event will the Unit Transaction Price be
reduced below $31.00 per unit. As a result of the merger, PAH will become an
indirect wholly-owned subsidiary of Allianz of America.
Following the merger, subsidiaries of Allianz of America will, in a series
of transactions, acquire for cash additional partnership interests in PIMCO
Advisors, bringing its ownership interest in PIMCO Advisors to approximately
70%, including the approximately 44% interest held through PAH. As part of the
Transaction, a subsidiary of Allianz of America will acquire Partners G.P.
through an acquisition of the managing general partner interest in Partners
G.P. from Partners LLC (the managing general partner of Partners G.P.) for
approximately $5.5 million and of the member interests in Partners G.P. that
are indirectly owned by Pacific Life. Pacific Life, which through subsidiaries
owns approximately a 30% interest in PIMCO Advisors, will retain an indirect
interest in PIMCO Advisors following the closing. As a result of the
Transaction, Allianz of America will control PIMCO Advisors, having acquired
approximately 70% of the outstanding partnership interests in PIMCO Advisors
for a total consideration of approximately $3.3 billion, while the remainder
will continue to be owned by Pacific Life.
In connection with the closing, Allianz of America will enter into a
put/call arrangement for the possible disposition of Pacific Life's indirect
interest in PIMCO Advisors. The put option held by Pacific Life will allow it
to require Allianz of America, on the last business day of each calendar
quarter following the closing of the Transaction, to purchase at a formula-
based price all of the PIMCO Advisors units owned directly or indirectly by
Pacific Life. The call option held by Allianz of America will allow it,
beginning January 31, 2003 or upon a change in control of Pacific Life, to
require Pacific Life to sell or cause to be sold to Allianz of America, at the
same price, all of the PIMCO Advisors units owned directly or indirectly by
Pacific Life.
2
<PAGE>
By virtue of the put/call arrangement described above, as well as Pacific
Life's interest in PIMCO Advisors, Pacific Life may be considered to have a
material interest in the Transaction.
The Transaction is expected to be completed by the end of the first quarter
of 2000, although there is no assurance that the Transaction will be completed.
Completion of the Transaction is subject to a number of conditions customary to
transactions of this kind, including (i) the approval of the public unitholders
of PAH, (ii) the receipt of certain regulatory approvals and (iii) PIMCO
Advisors' revenue run-rate (excluding market-based changes) for all accounts
managed by PIMCO Advisors and its subsidiaries being at least 75% of the
September 30, 1999 revenue run-rate amount. Approval of the New Portfolio
Management Agreement by the shareholders of the Portfolios will count toward
satisfaction of condition (iii) described in the preceding sentence. If the
Transaction is not completed for any reason, the Portfolio Management Agreement
will remain in effect. In the event the New Portfolio Management Agreement is
not approved by the Portfolios' shareholders and the Transaction is completed,
the Board of Trustees will consider appropriate action.
Pursuant to the Merger Agreement, PIMCO Advisors and PIMCO will enter into
employment, retention and incentive arrangements with key employees of PIMCO
Advisors and PIMCO. These benefits include new employment agreements, retention
and incentive awards vesting over a term of years and restricted stock grants.
In addition, certain key employees of PIMCO Advisors' investment advisory
subsidiaries will receive payments in respect of previously existing non-
competition arrangements in connection with the acquisition by Allianz of
America of the PIMCO Advisors units on which such arrangements were based.
Post-Transaction Structure and Operations
Upon completion of the Transaction, PIMCO Advisors and its subsidiaries,
including PIMCO, will be controlled by Allianz of America. Allianz of America
is a holding company that owns several insurance and financial service
companies and is a subsidiary of Allianz AG. Allianz of America will control
PIMCO Advisors through its interest in Pacific-Allianz Partners LLC
("PacPartners LLC"), which will be the sole general partner of PIMCO Advisors
following the Transaction. While Allianz of America will control PacPartners
LLC, Pacific Life will hold a portion of its continuing interest in PIMCO
Advisors through an interest in PacPartners LLC. Allianz of America, through
subsidiaries, will be the managing member of PacPartners LLC and will have the
full authority and control over all actions taken by PacPartners LLC as the
general partner of PIMCO Advisors, provided that Pacific Life's consent is
required for certain extraordinary actions.
Operationally, PIMCO is expected to remain independent and to lead the
global fixed income investment efforts of Allianz. In this regard, PIMCO will
coordinate its activities with Allianz Asset Management ("AAM"), a subsidiary
of Allianz AG that coordinates global Allianz asset management activities. To
permit the provision of advisory services to non-U.S. clients of Allianz AG,
PIMCO personnel, including personnel with portfolio management responsibility
for the Portfolios, may become affiliated with AAM or other Allianz-controlled
advisory firms. PIMCO also may call upon the research capabilities and
resources of Allianz AG and its advisory affiliates in connection with
providing investment advice to its clients. PIMCO is currently expected to
continue to operate in the United States under its existing name.
Both William S. Thompson Jr., the current Chief Executive Officer of PIMCO,
and William H. Gross, the current Chief Investment Officer of PIMCO, will have
roles on the Executive Committee of AAM, with Mr. Thompson serving as the
Executive Committee's Deputy Chairman. Messrs. Thompson and Gross will enter
into employment contracts with a term of seven years following the Transaction.
Other key employees, including Managing Directors of PIMCO, have also
contractually agreed to remain with PIMCO for significant periods following the
Transaction.
3
<PAGE>
Description of Allianz AG and Its Affiliates
Allianz AG, the parent of Allianz of America, is a publicly traded German
corporation, which together with its subsidiaries, comprises the world's second
largest insurance group as measured by premium income. Allianz AG is a leading
provider of financial services, particularly in Europe, and is represented in
68 countries world-wide through subsidiaries, branch and representative
offices, and other affiliated entities. The Allianz group currently has assets
under management of more than $390 billion, and in its last fiscal year wrote
approximately $50 billion in gross insurance premiums. After completion of the
Transaction, PIMCO and the Allianz group combined will have over $650 billion
in assets under management. Allianz AG's address is: Koniginstrasse 28, D-
80802, Munich, Germany.
Significant institutional shareholders of Allianz currently include Dresdner
Bank AG, Deutsche Bank AG, Munich Reinsurance and HypoVereinsbank. Following
completion of the Transaction, Dresdner Bank AG and Deutsche Bank AG, as well
as certain broker-dealers that might be deemed to be affiliated with these
entities, such as Bankers Trust Company, BT Alex Brown, Inc., Deutsche Bank
Securities, Inc. and Dresdner Kleinwort Benson North America LLC (collectively,
the "Affiliated Brokers"), may be considered to be affiliated persons of PIMCO.
Once the Transaction is completed, absent an SEC exemption or other relief, the
Portfolios generally would be precluded from effecting principal transactions
with the Affiliated Brokers, and their ability to purchase securities being
underwritten by an Affiliated Broker or to utilize the Affiliated Brokers for
agency transactions would be subject to restrictions. PIMCO does not believe
that the applicable restrictions on transactions with the Affiliated Brokers
described above will materially adversely affect its ability, post-closing, to
provide services to the Portfolios, the Portfolios' ability to take advantage
of market opportunities, or the Portfolios' overall performance. Other
portfolios of the Fund for which PIMCO (or an affiliate) does not serve as
portfolio manager would not, in general, be subject to these same restrictions
post-closing.
Effect of the Transaction on Management of the Portfolios
PIMCO has received structural and contractual protections as terms of the
Transaction that ensure PIMCO's operational autonomy and continuity of
management. PIMCO is confident that Allianz AG is committed to the people and
process that have led to PIMCO's success over the years. Accordingly, the
Transaction should have no immediate impact, other than as already noted above,
on the management of the Portfolios or PIMCO's capacity to provide the type,
quality, or quantity of services that it currently provides, and the Portfolios
should continue to receive the same high quality of service after the
Transaction. As discussed below, however, PIMCO believes that the Transaction
offers the potential to enhance significantly its future ability to deliver
quality portfolio management services.
The Benefits of the Transaction
PIMCO anticipates that the Transaction with Allianz AG will benefit PIMCO
and the Portfolios in a variety of ways, including the following:
. PIMCO's investment expertise will be enhanced because of the business
experience and relationships that Allianz AG has built around the globe,
particularly in Europe.
. PIMCO's access to European markets and business opportunities will be
greatly enhanced by Allianz AG's experience and relationships. The
combined global resources of PIMCO and Allianz AG will allow PIMCO to
take advantage of the growth in international markets and the explosive
potential for premier money managers in the global marketplace.
4
<PAGE>
. Allianz AG has a team of fixed income professionals in place that
currently manage more than $100 billion in assets. Integration of these
professionals and assets with PIMCO provides an excellent opportunity for
furthering PIMCO's global fixed income expertise.
. The rotation of many of PIMCO's key investment professionals through
international offices and overseas personnel through PIMCO's offices will
result in more seasoned professionals with global experience.
. The combination will provide additional career opportunities for PIMCO
professionals, furthering PIMCO's ability to attract and retain high
caliber investment and other professionals.
. Allianz AG seeks to grow to become among the top five providers of its
services in the world's key markets, which is a key factor in PIMCO's
decision to proceed with the Transaction. The combined entity will be the
sixth largest investment manager in the world. The Transaction will
significantly increase assets under PIMCO's management, and will offer
the opportunity for continued growth in the future.
The Current Portfolio Management Agreement
The current Portfolio Management Agreement, dated November 15, 1994, was
last approved by the Board of Trustees, including a majority of the Trustees
who are not parties to the Portfolio Management Agreement or interested persons
of any such party, at a meeting held on November 15, 1999. The shareholders of
the Portfolios last approved the Portfolio Management Agreement on December 17,
1996.
The Portfolio Management Agreement may be terminated by the Portfolios to
which it pertains without penalty upon not less than 60 days' notice by the
Board of Trustees or by a vote of the holders of a majority of the Portfolio's
outstanding shares voting as a single class, or upon not less than 60 days'
notice by PIMCO. The Portfolio Management Agreement terminates automatically in
the event of its "assignment" (as defined in the 1940 Act).
PIMCO receives a monthly fee from the Portfolios at an annual rate based on
the combined average daily net assets of the Portfolios as set forth in
Appendix B, which also sets forth the aggregate portfolio management fees paid
to PIMCO during the Portfolios' last fiscal year. Information about PIMCO, its
principal executive officer and directors, and its other investment company
clients is presented in Appendix C.
Consistent with the requirements of the 1940 Act, the current Portfolio
Management Agreement provides that PIMCO generally is not liable to the
Portfolios for any mistake in judgment, or otherwise, except by reason of
willful misfeasance, bad faith or gross negligence in the performance of
PIMCO's duties or by reason of its reckless disregard of its obligations and
duties under the Portfolio Management Agreement.
The New Portfolio Management Agreement
The New Portfolio Management Agreement is substantially identical to the
Portfolio Management Agreement, and PIMCO has advised the Portfolios that it
currently anticipates that the same persons responsible for management of the
Portfolios under the Portfolio Management Agreement will continue to be
responsible for management of the Portfolios under the New Portfolio Management
Agreement. The Fund has been advised that PIMCO does not anticipate that the
Transaction will cause any reduction in the quality or types of services now
provided to the Portfolios or have any adverse effect on PIMCO's ability to
fulfill its obligations to the Portfolios. The New Portfolio Management
Agreement recognizes that PIMCO may, from time to time, seek research
assistance and rely on other investment management resources of its affiliated
companies, and the Portfolios will disclose that a portion of the advisory fees
received by PIMCO may be paid to those affiliates in return for such services
provided. These arrangements will have no impact on PIMCO's continuing
responsibility for the management of the Portfolios and will not cause any
increase in the overall fees or expenses borne by the Portfolios.
5
<PAGE>
The New Portfolio Management Agreement requires PIMCO to provide, subject to
the supervision of the Board of Trustees, investment advice and investment
services to the Portfolios and to furnish advice and recommendations with
respect to investment of the Portfolios' assets and the purchase or sale of
their portfolio securities.
PIMCO also provides investment research and analysis. No change is
anticipated in the investment philosophies and practices currently followed by
the Portfolios. There will be no change in advisory fees for the Portfolio or
in portfolio management fees paid to PIMCO.
At the November 15, 1999 meeting of the Board of Trustees, the New Portfolio
Management Agreement was approved unanimously by the Board of Trustees,
including all of the Trustees who are not parties to the New Portfolio
Management Agreement or "interested persons" (as defined in the 1940 Act) of
any such party (other than as Trustees of the Fund). The New Portfolio
Management Agreement, as approved by the Board of Trustees, is submitted for
approval by the shareholders of the Portfolios. The New Portfolio Management
Agreement must be voted upon by each Portfolio.
If the New Portfolio Management Agreement is approved by shareholders of the
Portfolios, it will take effect immediately after the closing of the
Transaction. The New Portfolio Management Agreement will remain in effect for
two years from the date it takes effect and, unless earlier terminated, will
continue from year to year thereafter, provided that each such continuance is
approved annually, with respect to each Portfolio, (i) by the Board of Trustees
or by the vote of a majority of the outstanding shares of the Portfolios, and,
in either case, (ii) by a majority of the Trustees who are not parties to the
New Portfolio Management Agreement or interested persons of any such party
(other than as Trustees of the Fund).
Section 15(f) of the 1940 Act
Allianz AG, PIMCO, and Pacific Life have advised the Fund's Board of
Trustees that they intend to comply with Section 15(f) of the 1940 Act, which
provides a non-exclusive safe harbor for an investment adviser (including a
portfolio manager) to an investment company or any of the investment adviser's
(or portfolio manager's) affiliated persons (as defined under the 1940 Act) to
receive any amount or benefit in connection with a change of control of the
investment adviser so long as two conditions are met.
First, for a period of three years after the Transaction, at least 75% of
the board members of the investment company for which the adviser provides
advisory services must not be "interested persons" of the investment adviser or
its predecessor adviser. The Board of Trustees as constituted currently meets
this requirement and intends to continue to do so for the three-year period
following the completion of the Transaction.
Second, an "unfair burden" must not be imposed upon the investment company
as a result of such Transaction or any express or implied terms, conditions or
understandings applicable thereto. The term "unfair burden" is defined in
Section 15(f) to include any arrangement during the two-year period after the
Transaction whereby the investment adviser (or predecessor or successor
advisers), or any interested person of any such adviser, receives or is
entitled to receive any compensation, directly or indirectly, from such an
investment company or its shareholders (other than fees for bona fide
investment advisory or other services) or from any other person in connection
with the purchase or sale of securities or other property to, from or on behalf
of such investment company (other than bona fide ordinary compensation as
principal underwriter for such investment company). No such compensation
agreements are contemplated in connection with the Transaction. The Board of
Trustees of the Fund has been advised that PIMCO is not aware of any
circumstances arising from the Transaction that might result in an unfair
burden being imposed on the Fund. Moreover, Allianz of America and each of the
other parties to the Merger Agreement have agreed to use their reasonable best
efforts to ensure compliance with Section 15(f) as it applies to the
Transaction during the applicable time periods.
6
<PAGE>
Board Recommendations
The Board of Trustees has determined that in approving the New Portfolio
Management Agreement on behalf of the Portfolios, the Fund can best assure
itself that services currently provided to the Portfolios by PIMCO and its
officers and employees will continue without interruption after the
Transaction. The Board believes that, like the Portfolio Management Agreement,
the New Portfolio Management Agreement will enable the Portfolios to obtain
high quality services at a cost that is appropriate, reasonable, and in the
best interests of each Portfolio and its shareholders.
In determining whether it was appropriate to approve the New Portfolio
Management Agreement and to recommend approval to shareholders, the Board of
Trustees, including the Trustees who are not parties to the New Portfolio
Management Agreement or interested persons of such parties, considered various
materials and representations provided by PIMCO, including information
concerning compensation and employment arrangements to be implemented in
connection with the Transaction, and considered a report provided by Allianz,
and was advised by independent legal counsel with respect to these matters.
Information considered by the Trustees included, among other things, the
following: (1) PIMCO's representation that the same persons responsible for
management of the Portfolios under the Portfolio Management Agreement currently
are expected to continue to manage the Portfolios under the New Portfolio
Management Agreement, thus helping to ensure continuity of management; (2) that
the compensation to be received by PIMCO under the New Portfolio Management
Agreement is the same as the compensation paid under the current Portfolio
Management Agreement, which the Board previously determined to be fair and
reasonable; (3) the fairness of the compensation payable to PIMCO under the New
Portfolio Management Agreement; (4) PIMCO's representation that it will not
seek to increase the rate of sub-advisory fees paid by the Portfolios for a
period of at least two years following the Transaction; (5) the commonality of
the terms and provisions of the New Portfolio Management Agreement with the
terms of the current Portfolio Management Agreement; (6) representations made
by PIMCO concerning the potential impact of affiliated brokerage relationships
on its ability to provide services to the Portfolios, and on the Portfolios'
ability to engage in portfolio transactions; (7) the representations by PIMCO
and Allianz AG that the integration of Allianz AG's and PIMCO's operations
could produce benefits to shareholders through expansion of PIMCO's investment
expertise through the addition of Allianz AG's fixed income investment
professionals, business expertise and global relationships, the expansion of
PIMCO's investment research capabilities and the ability to enhance the quality
of services provided to shareholders; (8) the nature and quality of the
services rendered by PIMCO under the New Portfolio Management Agreement; (9)
the results achieved by PIMCO for the Portfolios; and (10) the high quality of
the personnel, operations, financial condition, investment management
capabilities, methodologies, and performance of PIMCO.
Based upon its review, the Board of Trustees determined that, by approving
the New Portfolio Management Agreement, the Portfolios can best be assured that
services from PIMCO will be provided without interruption. The Board also
determined that the New Portfolio Management Agreement is in the best interests
of each Portfolio and its shareholders. Accordingly, after consideration of the
above factors, and such other factors and information it considered relevant,
the Board unanimously approved the New Portfolio Management Agreement and voted
to recommend its approval by each Portfolio's shareholders.
The Board of Trustees of the Fund recommends that shareholders vote "FOR"
Proposal I.
7
<PAGE>
II. OTHER MATTERS
Other Matters
The Fund's Board of Trustees knows of no other matters to be brought before
the meeting other than as set forth above. If, however, any other matters
properly come before the meeting, it is the intention of the persons named in
the enclosed form of voting instruction to vote on such matters in accordance
with their best judgment.
Required Vote
Approval of Proposal I requires the vote of a majority of the outstanding
shares of each Portfolio that are eligible to vote at the meeting. With respect
to each Portfolio, a majority of the outstanding shares means the lesser of (a)
67% or more of the shares of that Portfolio present at the meeting, if 50% or
more of the shares of the Portfolio are represented in person or by proxy; or
(b) 50% or more of the shares of the Portfolio.
Shareholder Voting
As of the close of business on January 14, 2000, the record date, there were
106,197,859.980 outstanding shares of the Managed Bond Portfolio and
42,444,085.700 outstanding shares of the Government Securities Portfolio.
Shares of the Portfolios have equal rights and privileges with all other shares
of the Portfolios and entitle their holders to one vote per share, with
proportional voting for fractional shares. The shares of the Portfolios are
offered as an investment medium for variable annuity contracts and variable
life insurance policies ("contracts") of Pacific Life.
Pacific Life is the owner of the shares underlying the variable contracts,
but is soliciting voting instructions from contract owners having contract
value invested in the Portfolios as to how the shares will be voted. No
contract owner is entitled to give voting instructions with respect to 5% or
more of the outstanding shares of either Portfolio. Pacific Life owns 100% of
each Portfolio.
Pacific Life will vote shares of the Portfolios held by each of its separate
accounts in accordance with instructions received from owners of its variable
contracts. Pacific Life also will vote shares of the Portfolios held in each
such separate account for which it has not received timely instructions in the
same proportion as it votes shares held by that separate account for which it
has received instructions. Pacific Life will vote shares held by its general
account in the same proportion as other votes cast by all of its separate
accounts in the aggregate. Shareholders and variable contract owners permitted
to give instructions, and the number of shares for which such instruction may
be given to be voted at the meeting and any adjournment thereof, will be
determined as of the record date.
Shares held by shareholders present in person or represented by proxy at the
meeting will be counted both for the purpose of determining the presence of a
quorum and for calculating the votes cast on any proposal before the meeting.
Shares represented by timely and properly executed voting instructions will be
voted as specified. Executed voting instructions that are unmarked will be
voted in favor of the proposals set forth in the notice.
Voting instructions may be revoked at any time prior to their exercise by
written notice, by execution of subsequent voting instructions or by attending
the meeting and voting in person. However, attendance at the meeting, by
itself, will not serve to revoke voting instructions. An abstention on any
proposal by a shareholder will be counted for purposes of establishing a
quorum, but has the same effect as a negative vote.
In the event that a sufficient number of votes to approve the proposal is
not received, Pacific Life may propose one or more adjournments of the meeting
to permit further solicitation of voting instructions, or for
8
<PAGE>
any other purpose. A vote may be taken on any proposal prior to an adjournment
if sufficient votes have been received for approval. Any adjournment will
require the affirmative vote of a majority of those shares represented at the
meeting in person or by voting instructions. Unless otherwise instructed,
proxies will be voted in favor of any adjournment. At any subsequent
reconvening of the meeting, voting instructions will (unless previously
revoked) be exercised in the same manner as they would have been exercised at
the meeting.
Variable contract owners may vote by written ballot, electronically at
https://vote.proxy-direct.com, or by calling 1-800-597-7836. When a contract
owner elects to vote electronically or by telephone, the contract owner will be
prompted to provide a control number which will appear on the voting
instruction. If the control number is correctly entered, the contract owner
will be provided with an explanation of the process. The contract owner will
then have the opportunity to give his or her instructions on the proposal.
Information about Pacific Life
Pacific Life, located at 700 Newport Center Drive, Newport Beach, California
92660, is a stock life insurance company domiciled in California. Pacific
Life's operations include both life insurance and annuity products, as well as
financial and retirement services.
As of September 30, 1999, Pacific Life had $105.9 billion of individual life
insurance in force and total admitted assets of approximately $44.1 billion.
Pacific Life is authorized to conduct life insurance and annuity business in
the District of Columbia and all states except New York.
Pacific Life was organized on January 2, 1868, under the name "Pacific
Mutual Life Insurance Company of California" and reorganized as "Pacific Mutual
Life Insurance Company" on July 22, 1936. On September 1, 1997, Pacific Life
converted from a mutual life insurance company to a stock life insurance
company. Pacific Life is a subsidiary of Pacific Life Corporation, a holding
company which is a subsidiary of Pacific Mutual Holding Company, a mutual
holding company.
Trustees and Officers
None of the Trustees and officers of the Fund is an officer or employee of
PIMCO. As of the record date, the officers and Trustees of the Fund as a group
beneficially owned less than 1% of the outstanding shares of either Portfolio.
Information about the Distributor
Pacific Mutual Distributors, Inc. ("PMD"), 700 Newport Center Drive, Newport
Beach, California 92660, a subsidiary of Pacific Life, serves as the Fund's
distributor. At present, PMD receives no commissions from the Fund for its
services, although it may in the future.
Expenses of the Meeting
The cost of the meeting, including the solicitation of voting instructions,
will be paid by PIMCO. The principal solicitation will be by mail, but voting
instructions also may be solicited electronically and by telephone. Alamo
Direct, 280 Oser Avenue Hauppauge, New York 11788-3610, has been retained to
assist with proxy solicitation activities (including assembly and mailing of
materials to shareholders). The Fund will forward to record owners proxy
materials for any beneficial owners that such record owners may represent.
Shareholder Proposals
The Fund does not hold regular shareholders' meetings. Shareholders wishing
to submit proposals for inclusion in a proxy statement for a subsequent
shareholders' meeting should send their written proposals to the Secretary of
the Fund at the address set forth on the cover of this proxy statement.
9
<PAGE>
Proposals must be received a reasonable time prior to the date of a meeting
of shareholders to be considered for inclusion in the proxy materials for a
meeting. Timely submission of a proposal does not, however, necessarily mean
that the proposal will be included. Persons named as proxies for any subsequent
shareholders' meeting will vote in their discretion with respect to proposals
submitted on an untimely basis.
Shareholder Reports
An annual report for the Fund dated December 31, 1998 and semi-annual
reports for the Fund dated June 30, 1999 are available without charge upon
request by calling for life insurance policyholders: (800) 800-7681 or for
annuity contract holders: 800-722-2333, or by writing the Fund at 700 Newport
Center Drive, Newport Beach, California 92660.
PLEASE TAKE A FEW MOMENTS TO COMPLETE YOUR VOTING INSTRUCTION. YOU MAY DO SO
EITHER ELECTRONICALLY, BY TELEPHONE OR BY MAILING THE VOTING INSTRUCTION. IF
YOU VOTE BY MAIL, ONLY VOTING INSTRUCTIONS RECEIVED AT THE ADDRESS SHOWN ON THE
ENCLOSED POSTAGE PAID ENVELOPE WILL BE COUNTED.
By Order of the Board of Trustees
Audrey L. Milfs
Secretary
January 26, 2000
10
<PAGE>
APPENDIX A
PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT made this day of , 2000 among Pacific Life
Insurance Company, a California Company ("Pacific Life"), Pacific Investment
Management Company, ("PIMCO"), a Delaware general partnership, and Pacific
Select Fund, a Massachusetts Business Trust (the "Fund").
WHEREAS, Pacific Select Fund, is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end, diversified management
investment company and is authorized to issue separate series, each of which
will offer a separate class of shares of beneficial interest, each series
having its own investment objective, policies and limitations;
WHEREAS, the Fund currently offers multiple series, two of which are
designated as the Managed Bond and Government Securities Portfolios, such
Portfolios together with any other Portfolios subsequently established by the
Fund, with respect to which the Fund and Adviser desire to retain the Portfolio
Manager to render investment advisory services hereunder, and with respect to
which the Portfolio Manager is willing to do so, being herein collectively
referred to also as the "Portfolios"; and
WHEREAS, the Fund has retained Pacific Life to render investment management
and administrative services to the Portfolios;
WHEREAS, Pacific Life represents and warrants that it is a duly registered
investment adviser under the Investment Advisers Act of 1940 ("Advisers Act"),
as amended;
WHEREAS, PIMCO represents and warrants that it is a duly registered
investment adviser under the Investment Advisers Act, as amended; and
WHEREAS, Pacific Life and the Fund desire to retain PIMCO to furnish
portfolio management services to the Managed Bond Portfolio and Government
Securities Portfolio in connection with Pacific Life's investment management
activities on behalf of the Portfolios, and PIMCO is willing to furnish such
services to Pacific Life and the Fund;
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between Pacific Life, PIMCO and the Fund as follows:
1. Appointment. Pacific Life and the Fund hereby appoint PIMCO to act as
Portfolio Manager to the Managed Bond Portfolio and Government Securities
Portfolio, (the "Portfolios"), for the periods and on the terms set forth in
this Agreement. PIMCO accepts such appointment and agrees to furnish the
services herein set forth, for the compensation herein provided.
In the event the Fund designates one or more classes other than the
Portfolios with respect to which Pacific Life and the Fund desire to retain
PIMCO to render portfolio management services hereunder, they shall notify
PIMCO in writing. If PIMCO is willing to render such services, it shall notify
Pacific Life and the Fund in writing, whereupon such class shall become a
Portfolio hereunder, and be subject to this Agreement.
2. Portfolio Manager Duties. Subject to the supervision of the Fund's Board
of Trustees and Pacific Life, the Portfolio Manager will provide a continuous
investment program for the Portfolios and determine the composition of the
assets of the Portfolios, including determination of the purchase, retention,
or sale of the securities, cash, and other investments, including futures
contracts and options thereon, for the Portfolios. The Portfolio Manager will
provide investment research and analysis, which may consist of computerized
investment methodology, and will conduct a continuous program of evaluation,
investment, sales, and reinvestment of the Portfolio's assets by determining
the securities and other investments that shall be purchased, entered into,
sold, closed, or exchanged for the Portfolios, when these transactions should
be executed, and what portion of the assets of the Portfolios should be held in
the various securities and other
A-1
<PAGE>
investments in which it may invest, and the Portfolio Manager is hereby
authorized to execute and perform such services on behalf of the Portfolios. To
the extent permitted by the investment policies of the Portfolios, the
Portfolio Manager shall make decisions for the Portfolios as to foreign
currency matters and make determinations as to the retention or disposition of
foreign currencies or securities or other instruments denominated in foreign
currencies, or derivative instruments based upon foreign currencies, including
forward foreign currency contracts and options and futures on foreign
currencies and shall execute and perform the same on behalf of the Portfolios.
The Portfolio Manager is authorized to exercise tender offers, exchange offers
and to vote proxies on behalf of the Fund, each as the Portfolio Manager
determines is in the best interest of the Fund. In performing these duties, the
Portfolio Manager:
(a) Will (1) manage the Portfolios in a manner that complies with
requirements imposed upon regulated investment companies under Subchapter M of
the Internal Revenue Code and (2) manage the Portfolios so as to ensure
compliance by the Portfolios with the diversification requirements of Section
817(h) of the Internal Revenue Code and Regulations issued thereunder. Pacific
Life will notify the Portfolio Manager of any amendments to the Section 817(h)
of the Internal Revenue Code and Regulations issued thereunder. In managing the
Portfolios in accordance with these requirements, the Portfolio Manager shall
be entitled to receive and act upon advice of counsel to the Fund, counsel to
Pacific Life, or counsel to the Portfolio Manager that is also acceptable to
Pacific Life.
(b) Shall conform with (1) the 1940 Act and all rules and regulations
thereunder, and releases and interpretations related thereto (including any no-
action letters and exemptive orders which have been granted by the SEC to the
Fund, Pacific Life or the Portfolio Manager), (2) with all other applicable
federal and state laws and regulations pertaining to investment vehicles
underlying variable annuity and/or variable life insurance contracts, provided
Pacific Life informs Portfolio Manager of applicable state insurance laws
relating to the investment and management of the Portfolios and notifies
Portfolio Manager of any changes thereto, (3) with any applicable procedures,
policies and guidelines adopted by the Fund's Board of Trustees, (4) with the
Portfolio's objectives, investment policies and investment restrictions as
stated in the Fund's Prospectus and Statement of Additional Information, and
(5) with the provisions of the Fund's Registration Statement filed on Form N-1A
under the Securities Act of 1933 (the "1933 Act") and the 1940 Act, as
supplemented or amended from time to time. Until Pacific Life delivers any
supplements or amendments to the Portfolio Manager, the Portfolio Manager shall
be fully protected in relying on the Fund's Registration Statement previously
furnished to the Portfolio Manager by Pacific Life.
(c) Will: (i) use its best efforts to identify each position in the
Portfolios that constitutes stock in a Passive Foreign Investment Company
("PFIC"), as that term is defined in Section 1296 of the Internal Revenue Code,
and (ii) make such determinations and inform Pacific Life at least annually,
(or more often and by such date(s) as Pacific Life shall request), of any stock
in a PFIC.
(d) Is responsible, in connection with its responsibilities under this
Section 2, for decisions to buy and sell securities and other investments for
the Portfolios, for broker-dealer and futures commission merchant ("FCM")
selection, and for negotiation of commission rates. The Portfolio Manager's
primary consideration in effecting a security or other transaction will be to
obtain the best execution for the Portfolios, taking into account the factors
specified in the Prospectus and Statement of Additional Information for the
Fund, as they may be amended or supplemented from time to time. Subject to such
policies as the Board of Trustees may determine and consistent with Section
28(e) of the Securities Exchange Act of 1934, the Portfolio Manager shall not
be deemed to have acted unlawfully or to have breached any duty created by this
Agreement or otherwise solely by reason of its having caused the Portfolio to
pay a broker or dealer, acting as agent, for effecting a portfolio transaction
at a price in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Portfolio Manager
determines in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Portfolio Manager's (or its affiliates) overall responsibilities with respect
to the Portfolios and to its other clients as to which it exercises investment
discretion. To the extent consistent with these standards, and in accordance
with Section 11(a) of the Securities Exchange Act of 1934 and Rule 11a2-2(T)
thereunder, and subject to any other applicable laws and
A-2
<PAGE>
regulations including Section 17(e) of the 1940 Act, the Portfolio Manager is
further authorized to place orders on behalf of the Portfolios through the
Portfolio Manager if the Portfolio Manager is registered as a broker or dealer
with the SEC or as a FCM with the Commodities Futures Trading Commission
("CFTC"), to any of its affiliates that are brokers or dealers or FCMs or such
other entities which provide similar services in foreign countries, or to such
brokers and dealers that also provide research or statistical research and
material, or other services to the Portfolios or the Portfolio Manager. Such
allocation shall be in such amounts and proportions as the Portfolio Manager
shall determine consistent with the above standards, and, upon request, the
Portfolio Manager will report on said allocation to Pacific Life and Board of
Trustees of the Fund, indicating the brokers, dealers or FCMs to which such
allocations have been made and the basis therefor.
(e) May from time to time seek research assistance and rely on
investment management resources available to it through its affiliated
companies, but in no case shall such reliance relieve the Portfolio Manager of
any of its obligations hereunder, nor shall the Portfolios be responsible for
any additional fees or expenses hereunder as a result.
(f) May, on occasions when the purchase or sale of a security is deemed
to be in the best interest of a Portfolio as well as any other investment
advisory clients, to the extent permitted by applicable laws and regulations,
but shall not be obligated to, aggregate the securities to be so sold or
purchased with those of its other clients where such aggregation is not
inconsistent with the policies set forth in the Fund's Registration Statement.
In such event, allocation of the securities so purchased or sold, as well as
the expenses incurred in the transaction, will be made by the Portfolio Manager
in a manner that is fair and equitable in the judgment of the Portfolio Manager
in the exercise of its fiduciary obligations to the Fund and to such other
clients.
(g) Will, in connection with the purchase and sale of securities for the
Portfolios, together with Pacific Life, arrange for the transmission to the
custodian and recordkeeping agent for the Fund, on a daily basis, such
confirmation(s), trade tickets, and other documents and information, including,
but not limited to, Cusip, Sedol, or other numbers that identify securities to
be purchased or sold on behalf of the Portfolio, as may be reasonably necessary
to enable the custodian and recordkeeping agent to perform its administrative
and recordkeeping responsibilities with respect to the Portfolios, and with
respect to portfolio securities to be purchased or sold through the Depository
Trust Company, will arrange for the automatic transmission of the confirmation
of such trades to the Fund's custodian, and recordkeeping agent, and, if
required, Pacific Life.
(h) Will assist the custodian and recordkeeping agent for the Fund in
determining or confirming, consistent with the procedures and policies stated
in the Registration Statement for the Fund, the value of any portfolio
securities or other assets of the Portfolios for which the custodian and
recordkeeping agent seeks assistance from the Portfolio Manager or identifies
for review by the Portfolio Manager.
(i) Will make available to the Fund and Pacific Life promptly upon
request, any of the Portfolio's investment records and ledgers maintained by
the Portfolio Manager (which shall not include the records and ledgers
maintained by the custodian and recordkeeping agent for the Fund), as are
necessary to assist the Fund and Pacific Life to comply with requirements of
the 1940 Act and Pacific Life's Act, as well as other applicable laws, and will
furnish to regulatory authorities having the requisite authority any
information or reports in connection with such services which may be requested
in order to ascertain whether the operations of the Fund are being conducted in
a manner consistent with applicable laws and regulations.
(j) Will regularly report to the Fund's Board of Trustees on the
investment program for the Portfolios and the issuers and securities
represented in the Portfolios' portfolios, and will furnish the Fund's Board of
Trustees with respect to the Portfolios such periodic and special reports as
the Trustees and Pacific Life may reasonably request, including, but not
limited to, the monthly compliance checklist, monthly tax compliance worksheet,
reports regarding compliance with the Fund's procedures pursuant to Rules 17e-
1, 17a-7, 10f-3 and 12d3-1 under the Investment Company Act of 1940,
fundamental investment restrictions, procedures for opening brokerage accounts
and commodity trading accounts, liquidity determination of
securities purchased pursuant to Rule 144A and 4(2) commercial paper, and
compliance with the Portfolio Manager's Code of Ethics, and such other
procedures or requirements that Pacific Life may request from time to time.
A-3
<PAGE>
(k) Will not disclose or use any records or information obtained
pursuant to this Agreement (excluding investment research and investment
advice) in any manner whatsoever except as expressly authorized in this
Agreement or in the ordinary course of business in connection with placing
orders for the purchase and sale of securities or obtaining investment licenses
in various countries or the opening of custody accounts and dealing with
settlement agents in various countries, and will keep confidential any
information obtained pursuant to the Agreement, and disclose such information
only if the Board of Trustees of the Fund has authorized such disclosure, or if
such disclosure is required by applicable federal or state law or regulations
or regulatory authorities having the requisite authority. The Fund and Pacific
Life will not disclose or use any records or information respecting the
Portfolio Manager obtained pursuant to this Agreement in any manner whatsoever
except as expressly authorized in this Agreement, and will keep confidential
any information obtained pursuant to this Agreement, and disclose such
information only as expressly authorized in this Agreement, if the Board of
Trustees of the Fund has authorized such disclosure, or if such disclosure is
required by applicable federal or state law or regulations or regulatory
authorities having the requisite authority.
(l) Shall not permit any employee of the Portfolio Manager to have any
material connection with the handling of the Portfolios if such employee has:
(i) been convicted, in the last ten (10) years, of any felony or
misdemeanor involving the purchase or sale of any security or arising out of
such person's conduct as an underwriter, broker, dealer, investment adviser,
municipal securities dealer, government securities broker, government
securities dealer, transfer agent, or entity or person required to be
registered under the Commodity Exchange Act, or as an affiliated person,
salesman, or employee of any investment company, bank, insurance company, or
entity or person required to be registered under the Commodity Exchange Act; or
(ii) been permanently or temporarily enjoined by reason of any
misconduct, by order, judgment, or decree of any court of competent
jurisdiction from acting as an underwriter, broker, dealer, investment adviser,
municipal securities dealer, government securities broker, government
securities dealer, transfer agent, or entity or person required to be
registered under the Commodity Exchange Act, or as an affiliated person,
salesman or employee of any investment company, bank, insurance company, or
entity or person required to be registered under the Commodity Exchange Act, or
from engaging in or continuing any conduct or practice in connection with any
such activity or in connection with the purchase or sale of any security.
(m) Shall provide to Pacific Life a copy of Portfolio Manager's Form ADV
as filed with the Securities and Exchange Commission and a list of persons who
Portfolio Manager wishes to have authorized to give written and/or oral
instructions to Custodians of Fund assets for the Portfolios.
3. Expenses. During the term of this Agreement, PIMCO will pay all expenses
incurred by it, its staff and their activities, in connection with its
portfolio management under this Agreement. This does not include costs payable
by the Fund, the Custodian or Pacific Life.
4. Compensation. For the services provided and the expenses borne by the
Portfolio Manager pursuant to this Agreement, Pacific Life will pay to the
Portfolio Manager a fee based on the aggregate average daily net assets of the
Managed Bond Portfolio and the Government Securities Portfolio, at an annual
rate equal to .50% of the Portfolio's aggregate average daily net assets on the
first $25 million, .375% of the Portfolios' aggregate average daily net assets
on the next $25 million, and .25% of the Portfolios' aggregate average daily
net assets in excess of $50 million. This fee shall be computed and accrued
daily and payable monthly.
5. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, PIMCO hereby agrees that all records which it maintains for
the Portfolios are the property of the Fund and further agrees to surrender
promptly to the Fund any of such records upon the Fund's request. PIMCO further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
the records required to be maintained by Rule 31a-1 under the 1940 Act and to
preserve the records required by Rule 204-2 under the Investment Advisers Act
of 1940 ("Advisers Act") for the period specified in the Rule.
A-4
<PAGE>
6. Indemnification. PIMCO agrees to indemnify and hold harmless, Pacific
Life, any affiliated person within the meaning of Section 2(a)(3) of the 1940
Act ("affiliated person") of Pacific Life and each person, if any who, within
the meaning of Section 15 of the Securities Act of 1933 (the "1933 Act"),
controls ("controlling person") Pacific Life against any and all losses,
claims, damages, liabilities or litigation (including legal and other
expenses), to which Pacific Life or such affiliated person or controlling
person may become subject under the 1933 Act, 1940 Act, the Advisers Act, under
any other statute, at common law or otherwise, arising out of PIMCO's
responsibilities as Portfolio Manager of the Fund which (1) may be based upon
any misfeasance, malfeasance, or nonfeasance by PIMCO, any of its employees or
representatives or any affiliate of or any person acting on behalf of PIMCO, or
(2) may be based upon any untrue statement or alleged untrue statement of a
material fact contained in a registration statement or prospectus covering the
shares of the Fund or any Portfolios or any amendment thereof or any supplement
thereto or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, if such a statement or omission was made in reliance upon written
information furnished to Pacific Life, the Fund or any affiliated person of the
Fund by PIMCO or any affiliated person of PIMCO; provided, however, that in no
case is PIMCO's indemnity in favor of Pacific Life or any affiliated person or
controlling person of Pacific Life deemed to protect such person against any
liability to which any such person would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of his
duties or by reason of his reckless disregard of obligation and duties under
this Agreement.
Pacific Life agrees to indemnify and hold harmless PIMCO, any affiliated
person within the meaning of Section 2(a) (3) of the 1940 Act ("affiliated
person") of PIMCO and each person, if any, who, within the meaning of Section
15 of the 1933 Act controls ("controlling person") PIMCO against any and all
losses, claims, damages, liabilities or litigation (including legal and other
expenses) to which PIMCO or such affiliated person or controlling person may
become subject under the 1933 Act, the 1940 Act, the Advisers Act, under any
other statute, at common law or otherwise, arising out of Pacific Life's
responsibilities as Investment Adviser of the Fund which (1) may be based upon
any misfeasance, malfeasance, or nonfeasance by Pacific Life, any of its
employees or representatives or any affiliate of or any person acting on behalf
of Pacific Life or (2) may be based upon any untrue statement or alleged untrue
statement of a material fact contained in a registration statement or
prospectus covering shares of the Fund or any Portfolios or any amendment
thereof or any supplement thereto or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading unless such statement or omission was made in
reliance upon written information furnished to Pacific Life or any affiliated
person of Pacific Life by PIMCO or any affiliated person of PIMCO; provided
however, that in no case is the indemnity of Pacific Life in favor of PIMCO, or
any affiliated person or controlling person of PIMCO deemed to protect such
person against any liability to which any such person would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence in the
performance of his duties or by reason of his reckless disregard of obligations
and duties under this Agreement.
Except as may otherwise be required by the 1940 Act or the rules thereunder,
the Fund agrees that PIMCO, any affiliated person within the meaning of Section
2(a)(3) of the 1940 Act of PIMCO and each person, if any, who, within the
meaning of Section 15 of the 1933 Act controls PIMCO shall not be liable, or
subject to any damages, expenses or losses, in connection with any act or
omission connected with or arising out of any investment advisory services
rendered under this Agreement, except by reason of willful misfeasance, bad
faith or gross negligence in the performance of PIMCO's duties or by reason of
reckless disregard of PIMCO's obligations and duties under this Agreement.
7. Control. Notwithstanding any other provision of the Agreement, it is
understood and agreed that the Fund shall at all times retain the ultimate
responsibility for and control of all functions performed pursuant to this
Agreement and reserve the right to direct, approve or disapprove any action
hereunder taken on its behalf by PIMCO.
8. Services Not Exclusive. It is understood that the services of PIMCO are
not exclusive, and nothing in this Agreement shall prevent PIMCO from providing
similar services to other clients, including investment
A-5
<PAGE>
companies (whether or not their investment objectives and policies are similar
to those of the Portfolios) or from engaging in other activities.
9. Duration and Termination. This Agreement shall become effective as of the
"Closing Date" as that term is defined in the Agreement and Plan of
Consolidation for PIMCO Advisers L.P., dated July 11, 1994 (the "Effective
Date"). Unless terminated as provided herein, the Agreement shall remain in
full force and effect for two years from such date and continue on an annual
basis with respect to each Portfolios unless terminated in accordance with the
following sentence; provided that such annual continuance is specifically
approved each year by (a) the vote of a majority of the entire Board of
Trustees of the Fund, or by the vote of a majority of the outstanding voting
securities of each Portfolios (as defined in the 1940 Act), and (b) the vote of
a majority of those Trustees who are not parties to this Agreement or
interested persons (as such term is defined in the 1940 Act) of any such party
to this Agreement cast in person at a meeting called for the purpose of voting
on such approval. In the event this Agreement is not approved in the manner
described in the preceding sentence, the paragraph numbered six (6), of this
Agreement shall remain in effect as well as any applicable provision of this
paragraph numbered nine (9) and PIMCO shall not provide any services for such
Portfolios or receive any fees on account of such Portfolios that fail to so
approve of this Agreement. Notwithstanding the foregoing, this Agreement may be
terminated: (a) by Pacific Life at any time without penalty, upon sixty (60)
days' written notice to PIMCO and the Fund (b) at any time without payment of
any penalty by the Fund, upon the vote of a majority of the Fund's Board of
Trustees or a majority of the outstanding voting securities of each Portfolios,
upon sixty (60) day's written notice to PIMCO, or (c) by PIMCO at any time
without penalty by PIMCO, upon sixty (60) day's written notice to Pacific Life
and the Fund. In the event of termination for any reason, all records of each
Portfolios for which the Agreement is terminated shall promptly be returned to
Pacific Life or the Fund, free from any claim or retention of rights by PIMCO:
the Agreement shall automatically terminate in the event of its assignment (as
such term is defined in the 1940 Act).
10. Amendments. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought and no amendment of this Agreement shall be effective
until approved by an affirmative vote of (i) the holders of a majority of the
outstanding voting securities of the Portfolios, and (ii) the Trustees of the
Fund, including a majority of the Trustees of the Fund 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, if such approval is required by
applicable law.
11. Use of Name. It is understood that the name Pacific Select or any
derivative thereof or logo associated with that name is the valuable property
of Pacific Life and its affiliates, and that the Fund and/or the Portfolios
have the right to use such name (or derivative or logo) only so long as Pacific
Life is Investment Manager to the Fund and/or the Portfolios. Upon termination
of the Investment Management Agreement between the Fund (or Portfolios) and
Pacific Life, the Fund (or Portfolios) shall forthwith cease to use such name
(or derivative or logo) and, in the case of the Fund, shall promptly amend its
Agreement and Declaration of Trust to change its name.
It is understood that the name (PIMCO) Pacific Investment Management Company
or any derivative thereof or logo associated with that name is the valuable
property of PIMCO and its affiliates and that the Fund and/or the Portfolios
have the right to use such name (or derivative or logo) in offering materials
of the Fund with the approval of PIMCO and for so long as PIMCO is Portfolio
Manager to the Fund and/or the Portfolios. Upon termination of this Agreement
between the Fund (or Portfolios), Pacific Life, and PIMCO, the Fund (or
Portfolios) shall forthwith cease to use such name (or derivative or logo).
12. Miscellaneous.
a. This Agreement shall be governed by the laws of the State of
California, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act or rules or orders of the SEC
thereunder.
A-6
<PAGE>
b. The captions of this Agreement are included for convenience only and
in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.
c. To the extent permitted under Section 9 of the Agreement, this
Agreement may not be assigned by any party without the prior written consent
of the other parties.
d. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby, and to this extent, the provisions of this
Agreement shall be deemed to be severable.
e. Nothing herein shall be construed as constituting PIMCO as an agent
of the Fund or Pacific Life.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
PACIFIC LIFE
INSURANCE COMPANY
Date: By
- ---------------------------- -----------------------------
PACIFIC INVESTMENT
MANAGEMENT COMPANY
Date: By
- ---------------------------- -----------------------------
PACIFIC SELECT FUND
Date: By
- ---------------------------- -----------------------------
A-7
<PAGE>
APPENDIX B
PIMCO currently receives a monthly investment sub-advisory fee from Pacific
Life at an annual rate based on the combined average daily net assets of the
Portfolios as set forth below. PIMCO received the indicated aggregate sub-
advisory fees from Pacific Life during the last fiscal year:
<TABLE>
<CAPTION>
Aggregate
Sub-Advisory Fiscal Year
Fund(s) Fee Rate Fees End
------- -------- ------------ -----------------
<S> <C> <C> <C>
Pacific Select Fund
Government Securities Annual rate of 0.50% $ 817,241 December 31, 1999
Portfolio of combined average
daily net assets on first
$25 million; 0.375% on
next $25 million; 0.25% on
remaining assets
Management Bond Annual rate of 0.50% $2,463,247 December 31, 1999
Portfolio of combined average
daily net assets on first
$25 million; 0.375% on
next $25 million; 0.25% on
remaining assets
</TABLE>
B-1
<PAGE>
APPENDIX C
Information About PIMCO
The address of PIMCO is 840 Newport Center Drive, Suite 300, Newport Beach,
California 92660. PIMCO is registered as an investment adviser under the
Investment Advisers Act of 1940 and is registered as a commodity trading
advisor with the Commodity Futures Trading Commission.
PIMCO's directors and principal executive officer, their principal
occupations and dates of service are shown below. The address of each director
and officer is 840 Newport Center Drive, Suite 300, Newport Beach, California
92660.
<TABLE>
<CAPTION>
Name
Length of Service with
PIMCO Position and Principal Occupation
---------------------- ---------------------------------
<C> <S>
William S. Thompson, Jr. .. Managing Director, Chief Executive Officer and
April 1993 to Present Executive Committee Member, PIMCO; Managing
Director, Chief Executive Officer and Director,
PIMCO Management, Inc.; Member of Management Board
and Executive Committee, PIMCO Advisors L.P.;
President, Chief Executive Officer and Member,
PIMCO Partners LLC.
William R. Benz, II........ Managing Director, PIMCO; Managing Director and
June 1986 to Present Director, PIMCO Management, Inc.; Member of PIMCO
Partners LLC.
Robert Wesley Burns........ Managing Director and Executive Committee Member,
February 1987 to Present PIMCO; Managing Director and Director, PIMCO
Management, Inc.; Member of PIMCO Partners LLC.
Chris P. Dialynas.......... Managing Director, PIMCO; Managing Director and
July 1983 to Present Director, PIMCO Management, Inc.; Member of PIMCO
Partners LLC.
Mohamed A. El-Erian........ Managing Director, PIMCO; Managing Director and
May 1999 to Present Director, PIMCO Management, Inc.
William H. Gross........... Managing Director, PIMCO; Managing Director and
June 1971 to Present Director, PIMCO Management, Inc.; Director and
Vice President, StocksPLUS Management, Inc.;
Member of Management Board, PIMCO Advisors L.P.;
Member of PIMCO Partners LLC.
John L. Hague ............. Managing Director and Executive Committee Member,
September 1987 to Present PIMCO; Managing Director and Director, PIMCO
Management, Inc.; Member of PIMCO Partners LLC.
Pasi M. Hamalainen......... Managing Director, PIMCO; Managing Director and
January 1994 to Present Director, PIMCO Management, Inc.
Brent R. Harris............ Managing Director and Executive Committee Member,
June 1985 to Present PIMCO; Managing Director and Director, PIMCO
Management, Inc.; Director and Vice President,
StocksPLUS Management, Inc.; Member of Management
Board and Executive Committee, PIMCO Advisors
L.P.; Member of PIMCO Partners LLC.
Brent L. Holden............ Managing Director, PIMCO; Managing Director and
December 1989 to Present Director, PIMCO Management, Inc.
Margaret E. Isberg......... Managing Director, PIMCO; Managing Director and
August 1983 to Present Director, PIMCO Management, Inc.; Member of PIMCO
Partners LLC.
John S. Loftus............. Managing Director, PIMCO; Managing Director and
August 1986 to Present Director, PIMCO Management, Inc.
</TABLE>
C-1
<PAGE>
<TABLE>
<CAPTION>
Name
Length of Service with
PIMCO Position and Principal Occupation
---------------------- ---------------------------------
<C> <S>
Dean S. Meiling........... Managing Director, PIMCO; Managing Director and
December 1976 to Present Director, PIMCO Management, Inc.; Member of PIMCO
Partners LLC.
James F. Muzzy............ Managing Director and Executive Committee Member,
September 1971 to Present PIMCO; Managing Director and Director, PIMCO
Management, Inc.; Director and Vice President,
StocksPLUS Management, Inc.; Member of PIMCO
Partners LLC.
William F. Podlich, III... Managing Director, PIMCO; Managing Director and
June 1966 to Present Director, PIMCO Management, Inc.; Member of
Management Board, PIMCO Advisors L.P.; Member of
PIMCO Partners LLC.
William C. Powers......... Managing Director, PIMCO; Managing Director and
January 1991 to Present Director, PIMCO Management, Inc.; Member of PIMCO
Partners LLC.
Ernest L. Schmider........ Managing Director and Secretary, PIMCO; Managing
March 1994 to Present Director, Director and Secretary, PIMCO Management,
Inc; Director and Assistant Secretary, StocksPLUS
Management, Inc.; Senior Vice President, PIMCO
Advisors L.P.; Secretary, PIMCO Partners LLC.
Lee R. Thomas............. Managing Director, PIMCO; Managing Director and
April 1995 to Present Director, PIMCO Management, Inc.; Member of PIMCO
Partners LLC.
Benjamin L. Trosky........ Managing Director, PIMCO; Managing Director and
October 1990 to Present Director, PIMCO Management, Inc.; Member of
Management Board, PIMCO Advisors L.P.; Member of
PIMCO Partners LLC.
</TABLE>
Other Investment Company Clients
PIMCO also serves as investment adviser or subadviser to the following
investment companies, at the fee rates set forth below, which had the indicated
net assets at September 30, 1999.
<TABLE>
<CAPTION>
APPROXIMATE
NAME OF FUND ADVISORY FEE RATE ASSETS
------------ ----------------- --------------
<C> <S> <C>
PIMCO FUNDS: PACIFIC INVESTMENT
MANAGEMENT SERIES
Money Market Fund....................... Annual rate of 0.15% of average $ 560,587,313
daily net assets
Short-Term Fund......................... Annual rate of 0.25% of average 633,444,433
daily net assets
Low Duration Fund....................... Annual rate of 0.25% of average 4,612,199,034
daily net assets
Low Duration Fund II.................... Annual rate of 0 .25% of average 465,267,930
daily net assets
Low Duration Fund III................... Annual rate of 0.25% of average 25,361,958
daily net assets
Low Duration Mortgage Fund.............. Annual rate of 0.25% of average 4,157,459
daily net assets
Moderate Duration Fund.................. Annual rate of 0.25% of average 331,844,959
daily net assets
Real Return Bond Fund................... Annual rate of 0.25% of average 117,197,203
daily net assets
</TABLE>
C-2
<PAGE>
<TABLE>
<CAPTION>
APPROXIMATE
NAME OF FUND ADVISORY FEE RATE ASSETS
------------ ----------------- ---------------
<S> <C> <C>
Total Return Fund....................... Annual rate of 0.25% of average $29,253,953,837
daily net assets
Total Return Fund II.................... Annual rate of 0.25% of average 1,196,259,061
daily net assets
Total Return Fund III................... Annual rate of 0.25% of average 593,041,215
daily net assets
Total Return Mortgage Fund.............. Annual rate of 0.25% of average 4,011,669
daily net assets
High Yield Fund......................... Annual rate of 0.25% of average 3,547,311,498
daily net assets
Long-Term US Government Fund............ Annual rate of 0.25% of average 367,846,155
daily net assets
Short Duration Municipal Income Fund.... Annual rate of 0.20% of average 10,504,759
daily net assets
Municipal Bond Fund..................... Annual rate of 0.25% of average 55,389,116
daily net assets
California Intermediate Municipal Bond
Fund................................... Annual rate of 0.25% of average 3,123,929
daily net assets
New York Intermediate Municipal Bond
Fund................................... Annual rate of 0.25% of average 3,011,706
daily net assets
Global Bond Fund........................ Annual rate of 0.25% of average 289,770,362
daily net assets
Global Bond Fund II..................... Annual rate of 0.25% of average 42,715,021
daily net assets
Foreign Bond Fund....................... Annual rate of 0.25% of average 577,679,632
daily net assets
International Bond Fund................. Annual rate of 0.25% of average 980,127,949
daily net assets
Emerging Markets Bond Fund.............. Annual rate of 0.45% of average 17,340,723
daily net assets
Emerging Markets Bond Fund II........... Annual rate of 0.45% of average 217,093,611
daily net assets
Strategic Balanced Fund................. Annual rate of 0.40% of average 167,190,375
daily net assets
Convertible Bond Fund................... Annual rate of 0.40% of average 38,753,114
daily net assets
StocksPLUS Fund......................... Annual rate of 0.40% of average 1,385,857,599
daily net assets
PIMCO VARIABLE INSURANCE TRUST
Money Market Portfolio.................. Annual rate of 0.30% of average $ N/A
daily net assets
Short-Term Bond Portfolio............... Annual rate of 0.35% of average N/A
daily net assets
</TABLE>
C-3
<PAGE>
<TABLE>
<CAPTION>
APPROXIMATE
NAME OF FUND ADVISORY FEE RATE ASSETS
------------ ----------------- ------------
<S> <C> <C>
Low Duration Bond Portfolio............. Annual rate of 0.40% of average $ 5,098,362
daily net assets
Total Return Bond Portfolio............. Annual rate of 0.40% of average 3,208,009
daily net assets
Total Return Bond Portfolio II.......... Annual rate of 0.40% of average 5,099,211
daily net assets
High Yield Bond Portfolio............... Annual rate of 0.50% of average 131,180,580
daily net assets
Foreign Bond Portfolio.................. Annual rate of 0.60% of average 5,031,932
daily net assets
StocksPLUS Growth & Income Portfolio.... Annual rate of 0.40% of average 169,524,872
daily net assets
Long-Term US Government Bond Portfolio.. Annual rate of 0.40% of average 6,906,274
daily net assets
Real Return Bond Portfolio.............. Annual rate of 0.40% of average N/A
daily net assets
FRANK RUSSELL INVESTMENT
MANAGEMENT COMPANY
Fixed Income I Fund..................... Annual rate of 0.25% of net $158,880,504
assets based on the average of
ending monthly market values over
3 months, paid in arrears
Diversified Bond Fund................... Annual rate of 0.25% of net 121,645,371
assets based on the average of
ending monthly market values over
3 months, paid in arrears
Fixed Income III Fund................... Annual rate of 0.25% of net 158,140,598
assets based on the average of
ending monthly market values over
3 months, paid in arrears
Multistrategy Bond Fund................. Annual rate of 0.25% of net 193,102,561
assets based on the average of
ending monthly market values over
3 months, paid in arrears
RUSSELL INSURANCE FUNDS
Core Bond Fund.......................... Annual rate of 0.25% of net $ 33,478,757
assets based on the average of
ending monthly market values over
3 months, paid in arrears
THE HARBOR GROUP
Harbor Bond Fund........................ Annual rate of 0.50% of average $622,475,175
daily net assets on first $25
million; 0.375% of average daily
net assets on next $25 million;
0.25% of average daily net assets
over $50 million
PRUDENTIAL SECURITIES TARGET
PORTFOLIO TRUST
Intermediate Term Bond Portfolio........ Annual rate of 0.25% of average $113,010,679
daily net assets
Total Return Bond Portfolio............. Annual rate of 0.25% of average 66,889,600
daily net assets
</TABLE>
C-4
<PAGE>
<TABLE>
<CAPTION>
APPROXIMATE
NAME OF FUND ADVISORY FEE RATE ASSETS
------------ ----------------- --------------
<S> <C> <C>
PIMCO COMMERCIAL MORTGAGE SECURITIES
TRUST, INC.
PIMCO Commercial Mortgage
Securities Trust, Inc.................. Annual rate of 0.725% of average $ 148,074,899
weekly net assets paid quarterly
AMERICAN SKANDIA TRUST
Total Return Bond Portfolio............. Annual rate of 0.30% of average $1,035,861,299
daily net assets on first $150
million; 0.25% of average daily
net assets on assets over $150
million paid monthly
Limited Maturity Bond Portfolio......... Annual rate of 0.30% of average 421,807,622
daily net assets on first $150
million; 0.25% of average daily
net assets on assets over $150
million paid monthly
Master Trust Total Return............... Annual rate of 0.25% of average 170,012,653
daily net assets
FREMONT MUTUAL FUNDS, INC.
Total Return Fund....................... Annual rate of 0.25% of average $ 187,068,687
daily net assets paid quarterly
Global Bond Fund........................ Annual rate of 0.30% of average 24,283,647
daily net assets paid quarterly
PAINEWEBBER MANAGED INVESTMENTS TRUST
Low Duration US Government Income Fund.. Annual rate of 0.25% of average $ 122,967,595
daily net assets
PAINEWEBBER SERIES TRUST
Strategic Fixed Income.................. Annual rate of 0.25% of average $ 7,298,286
daily net assets
PAINEWEBBER MANAGED ACCOUNTS SERVICES
PORTFOLIO TRUST
PACE Government Securities Fixed
Income................................. Annual rate of 0.25% of average $ 197,767,164
daily net assets
PACE Strategic Fixed Income
Investments............................ Annual rate of 0.25% of average 230,222,525
daily net assets
JACKSON NATIONAL LIFE SERIES TRUST
JNL/PIMCO Total Return Bond Series...... Annual rate of 0.25% of average $ 9,753,810
daily net assets excluding the
value of client contributed
capital
FORWARD GLOBAL FUND
Forward Global Fund..................... Annual rate of 0.35% of average $ 30,263,618
daily net assets on amounts under
$200 million and 0.30% on amounts
over $200 million
</TABLE>
C-5
<PAGE>
<TABLE>
<CAPTION>
APPROXIMATE
NAME OF FUND ADVISORY FEE RATE ASSETS
------------ ----------------- ------------
<S> <C> <C>
PRUDENTIAL INVESTMENTS FUND MANAGEMENT
LLC
Prudential Diversified Moderate Growth..... 0.25% of average daily net assets $ 23,259,990
computed daily and paid monthly
Prudential Diversified Conservative
Growth.................................... 0.25% of average daily net assets 28,956,072
computed daily and paid monthly
Prudential Diversified Conservative
Portfolio................................. 0.25% of average daily net assets 30,034,833
computed daily and paid monthly
MANULIFE
Manulife Global Bond Trust................. Annual rate of 0.375% on first $161,197,318
$50 million; 0.35% on $50-200
million; 0.30% on $200-500
million; 0.25% excess over $500
million of daily net assets
computed daily and paid monthly
Manulife Total Return Trust................ Annual rate of 0.30% on first $50 190,550,262
million; 0.30% on $50-150
million; 0.25% on $150-200
million; 0.25% on $200-500
million and over of daily net
assets computed daily and paid
monthly
SALOMON SMITH BARNEY/CONSULTING GROUPS
CAPITAL MARKET FUND
Intermediate Fixed Income Investment
Portfolio................................. Annual rate of 0.25%, multiplied $270,423,858
by a fraction, the numerator of
which is the average daily value
of allocated assets and the
denominator of which is the
average daily value of the
Portfolio's total assets computed
daily
</TABLE>
C-6
<PAGE>
PACIFIC SELECT FUND
The undersigned owner of a variable life insurance policy or
variable annuity contract (collectively, "variable contracts") issued
or administered by Pacific Life Insurance Company ("Pacific Life") and
funded by separate accounts of Pacific Life hereby instructs Pacific
Life, on behalf of the pertinent separate accounts, to vote the shares
of the applicable portfolio(s) of the Pacific Select Fund, (the "Fund")
attributable to his or her variable contract at the special meeting of
shareholders of the Fund to be held at 1:30 p.m., Pacific time, on
March 13, 2000, at 700 Newport Center Drive, Newport Beach, California,
92660, and at any adjournment thereof, as indicated below with respect
to the matters referred to in the proxy statement for the meeting, and
in the discretion of Pacific Life upon such other matters as may
properly come before the meeting or any adjournment thereof.
THIS VOTING INSTRUCTION IS SOLICITED BY THE BOARD OF TRUSTEES OF THE
FUND. The Board of Trustees recommends a vote FOR the proposal.
XXXXXX X XXXXXXXXXXX X
Please date and sign. All
designated owners of the
variable contract(s) shown
must sign hereon. If as an
attorney, executor, trustee,
guardian or other
representative or as an
officer of a corporation or
partnership, please add title
as such. Receipt of the
Notice of Meeting and Proxy
Statement is hereby
acknowledged.
Dated _________ , 2000
______________________________
______________________________
Signature(s) of contract
owner(s)
- -------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT!
TO VOTE ELECTRONICALLY GO TO OUR WEBSITE: HTTPS://VOTE.PROXY-DIRECT.COM
TO VOTE BY TELEPHONE CALL: 1-800-597-7836
YOUR VOTING CONTROL NUMBER: XXX XXXX XXXX XXX
- -------------------------------------------------------------------------------
Voting Instructions--Please Select One Of These Voting Methods:
Vote by Paper Ballot: Please read your proxy statement including the proposal.
Vote by filling in the appropriate box on the ballot which represents your vote
on the proposal. Please sign and return your ballot in the enclosed return
envelope. Only voting instructions received at the address shown on the envelope
will be counted.
Vote by Telephone or Electronically: If you wish to vote by telephone or
electronically, see enclosed instructions.
Portfolio Portfolio
Managed Bond Portfolio XXXXXX.XXXX Government Securities XXXXXX.XXXX
The voting instruction will be voted as marked. IF NOT MARKED, THIS VOTING
INSTRUCTION WILL BE VOTED FOR THE PROPOSAL. If you do not vote or this voting
instruction is not returned properly executed, your votes will be cast by
Pacific Life on behalf of the pertinent separate account in the same
proportion as it votes shares held by that separate account for which it has
received instructions. PLEASE MARK VOTES AS IN THIS EXAMPLE: [_]
I. To approve a New Portfolio Management Agreement between Pacific
Investment Management Company ("PIMCO"), Pacific Life Insurance Company,
and the Fund.;
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Managed Bond [_] [_] [_] Government Securities [_] [_] [_]
YOU MAY VOTE ELECTRONICALLY, BY TELEPHONE OR BY MAIL. IF YOU VOTE BY MAIL, ONLY
SIGNED AND DATED VOTING INSTRUCTIONS RECEIVED AT THE ADDRESS SHOWN ON THE
ENCLOSED ENVELOPE WILL BE COUNTED!
<PAGE>
YOUR VOTE IS IMPORTANT!
And now you can Vote on the Phone or Internet.
<TABLE>
<S> <C>
Vote by Internet: Read your Proxy Statement and the proposal. Go to our
website: https://vote.proxy-direct.com and follow the on-screen directions. You
-----------------------------
will use the control number listed on your voting instructions to access and
vote on the proposal.
Vote by Telephone: Read your Proxy Statement and the proposal. Using a touch
tone telephone, dial our toll free automated number at 1-800-597-7836. You will
Graphic of telephone and keypad here use your control number listed on your voting instructions to access and vote on
the proposal. You may register your vote 24 hours a day.
After dialing, you will be asked to enter your control number. You will then hear that
you have reached the Pacific Select Fund telephone voting site.
You will be prompted to enter your vote using the instructions listed below. If you
have a voting interest in both the Managed Bond and Government Securities Portfolios,
you will be asked to enter your vote separately for each Portfolio.
. To vote FOR Proposal I, press 1
. To vote AGAINST press 9
. To ABSTAIN press 0
Once you have completed your vote, you will be asked to confirm your selection.
REMEMBER!
. READ YOUR PROXY STATEMENT.
PL Logo . HAVE YOUR VOTING INSTRUCTION CARD AND CONTROL NUMBER.
. IF YOU VOTE BY PHONE OR INTERNET DO NOT RETURN YOUR VOTING
---
INSTRUCTION CARD.
THANK YOU FOR VOTING
</TABLE>
