SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. ___)
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ X ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
JNL Series Trust
______________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
Blazzard, Grodd & Hasenauer, P.C.
______________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
_______________________________________________________________
2) Aggregate number of securities to which transaction applies:
_______________________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11. (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
_______________________________________________________________
4) Proposed maximum aggregate value of transaction:
_______________________________________________________________
5) Total fee paid:
_______________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
_______________________________________________________________
2) Form, Schedule or Registration Statement No.:
_______________________________________________________________
3) Filing Party:
_______________________________________________________________
4) Date Filed:
_______________________________________________________________
JNL SERIES TRUST
JNL AGGRESSIVE GROWTH SERIES
JNL CAPITAL GROWTH SERIES
JNL GLOBAL EQUITIES SERIES
JNL/ALGER GROWTH SERIES
JNL/EAGLE CORE EQUITY SERIES
JNL/EAGLE SMALLCAP EQUITY SERIES
JNL/PUTNAM GROWTH SERIES
JNL/PUTNAM VALUE EQUITY SERIES
PPM AMERICA/JNL BALANCED SERIES
PPM AMERICA/JNL HIGH YIELD BOND SERIES
PPM AMERICA/JNL MONEY MARKET SERIES
SALOMON BROTHERS/JNL GLOBAL BOND SERIES
SALOMON BROTHERS/JNL U.S. GOVERNMENT & QUALITY BOND SERIES
T. ROWE PRICE/JNL ESTABLISHED GROWTH SERIES
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
T. ROWE PRICE/JNL MID-CAP GROWTH SERIES
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 24, 1998
NOTICE IS HEREBY GIVEN that a Special Meeting (the "Meeting") of shareholders
("Shareholders") of JNL Series Trust, a Massachusetts business trust ("Trust"),
will be held at the offices of Jackson National Life Insurance Company, 5901
Executive Drive, Lansing, Michigan 48911 on April 24, 1998, at 9:30 a.m., local
time, to consider and act upon the following proposals and to transact such
other business as may properly come before the Meeting or any adjournments
thereof:
1. To elect two trustees to serve until their respective successors are
elected and have qualified;
2.a. (SALOMON BROTHERS/JNL U.S. GOVERNMENT & QUALITY BOND SERIES ONLY)
To approve or disapprove a new Sub-Advisory Agreement between Jackson
National Financial Services, Inc. and Salomon Brothers Asset Management Inc;
2.b. (SALOMON BROTHERS/JNL GLOBAL BOND SERIES ONLY)
To approve or disapprove a new Sub-Advisory Agreement between Jackson
National Financial Services, Inc. and Salomon Brothers Asset Management Inc and
a new Sub-Advisory Consulting Agreement among Jackson National Financial
Services Inc., Salomon Brothers Asset Management Inc and Salomon Brothers Asset
Management Limited;
3. a. To approve or disapprove the modification of the investment policy of each
Series of the Trust concerning diversification, as described in the accompanying
Proxy Statement;
3. b. To approve or disapprove the elimination of the investment policy of each
Series of the Trust concerning percentage ownership of securities, as described
in the accompanying Proxy Statement;
4. To ratify or reject the Board of Trustees' selection of Price Waterhouse LLP
as the independent accountants of the Trust for the year ending December 31,
1998;
5. To transact such other business as may properly come before the meeting or
any adjournment thereof.
Only Shareholders of record at the close of business on February 27, 1998, the
record date for this Meeting, shall be entitled to notice of, and to vote at,
the Meeting or any adjournments thereof.
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
THE TRUSTEES RECOMMEND THAT YOU CAST YOUR VOTE:
IN FAVOR OF THE NOMINEES FOR THE BOARD OF TRUSTEES LISTED IN THE PROXY
STATEMENT; FOR THE NEW SUB-ADVISORY AGREEMENT; FOR THE NEW SUB-ADVISORY
AGREEMENT AND THE NEW SUB-ADVISORY CONSULTING AGREEMENT; FOR THE MODIFICATION OF
THE INVESTMENT POLICY CONCERNING DIVERSIFICATION; FOR THE ELIMINATION OF THE
INVESTMENT POLICY RESTRICTING PERCENTAGE OWNERSHIP OF SECURITIES; FOR THE
RATIFICATION OF PRICE WATERHOUSE LLP AS INDEPENDENT ACCOUNTANTS FOR THE TRUST.
By Order of the Board of Trustees,
March __, 1998
Lansing, Michigan THOMAS J. MEYER
Secretary
THE TRUST'S ANNUAL REPORT TO SHAREHOLDERS, WHICH INCLUDES AUDITED FINANCIAL
STATEMENTS OF THE TRUST AS OF DECEMBER 31, 1997, MAY BE OBTAINED WITHOUT CHARGE
BY CALLING (800) 322-8257 OR WRITING TO THE JNL SERIES TRUST SERVICE CENTER,
P.O. BOX 25127, LANSING, MI 48909.
JNL SERIES TRUST
JNL AGGRESSIVE GROWTH SERIES
JNL CAPITAL GROWTH SERIES
JNL GLOBAL EQUITIES SERIES
JNL/ALGER GROWTH SERIES
JNL/EAGLE CORE EQUITY SERIES
JNL/EAGLE SMALLCAP EQUITY SERIES
JNL/PUTNAM GROWTH SERIES
JNL/PUTNAM VALUE EQUITY SERIES
PPM AMERICA/JNL BALANCED SERIES
PPM AMERICA/JNL HIGH YIELD BOND SERIES
PPM AMERICA/JNL MONEY MARKET SERIES
SALOMON BROTHERS/JNL GLOBAL BOND SERIES
SALOMON BROTHERS/JNL U.S. GOVERNMENT & QUALITY BOND SERIES
T. ROWE PRICE/JNL ESTABLISHED GROWTH SERIES
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
T. ROWE PRICE/JNL MID-CAP GROWTH SERIES
5901 EXECUTIVE DRIVE, LANSING, MICHIGAN 48911
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
APRIL 24, 1998
The enclosed proxy is being solicited by and on behalf of the Board of Trustees
(the "Trustees" or "Board") of JNL Series Trust, a Massachusetts business trust
("Trust"), which consists of separate Series (each a "Series" and collectively
the "Series"). This proxy is for use at a Special Meeting ("Meeting") of
shareholders ("Shareholders") of certain Series to be held jointly at the
offices of Jackson National Life Insurance Company, 5901 Executive Drive,
Lansing, Michigan 48911, on April 24, 1998, at 9:30 a.m., local time, or any
adjournments thereof, for the purposes set forth in the accompanying Notice of
Special Meeting of Shareholders (the "Notice").
The Notice, this Proxy Statement, and the accompanying proxy card(s) were first
mailed to Shareholders on or about March 19, 1998.
The Trustees have fixed the close of business on February 27, 1998 as the record
date (the "Record Date") for the determination of holders of shares of
beneficial interest ("Shares") of the Trust entitled to vote at the Meeting.
Shareholders on the Record Date will be entitled to one vote for each full Share
held and to a proportionate fractional vote for each fractional Share.
As of the Record Date, there were ________________ Shares of the JNL Aggressive
Growth Series, _____________ Shares of the JNL Capital Growth Series,
____________ Shares of the JNL Global Equities Series, _____________ Shares of
the JNL/Alger Growth Series, _______________ Shares of the JNL/Eagle Core Equity
Series, ______________ Shares of the JNL/Eagle SmallCap Equity Series,
_______________ Shares of the JNL/Putnam Growth Series, _______________ Shares
of the JNL/Putnam Value Equity Series, _____________ Shares of the PPM
America/JNL Balanced Series, _____________ Shares of the PPM America/JNL High
Yield Bond Series, _______________ Shares of the PPM America/JNL Money Market
Series, _______________ Shares of the Salomon Brothers/JNL Global Bond Series,
______________ Shares of the Salomon Brothers/JNL U.S. Government & Quality Bond
Series, ______________ Shares of the T. Rowe Price/JNL Established Growth
Series, _______________ Shares of the
T. Rowe Price/JNL International Equity Investment Series, ______________ Shares
of the T. Rowe Price/JNL Mid-Cap Growth Series outstanding.
VOTING
The Agreement and Declaration of Trust for the JNL Series Trust dated June 1,
1994 (the "Declaration of Trust") provides that thirty percent of the aggregate
number of Shares in any Series that are entitled to vote shall be necessary to
constitute a quorum for the transaction of business by that Series at a
Shareholders' meeting.
The Declaration of Trust further provides that Shares may be voted in person or
by proxy. A proxy with respect to Shares held in the name of two or more persons
shall be valid if executed by any one of them unless at or prior to the exercise
of the proxy the Trust receives a specific written notice to the contrary from
any one of them. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its exercise,
and the burden of proving invalidity shall rest on the challenger. At all
meetings of Shareholders, unless inspectors of election have been appointed, all
questions relating to the qualification of voters and the validity of proxies
and the acceptance or rejection of votes shall be decided by the chairman of the
meeting. Unless otherwise specified in the proxy, the proxy shall apply to all
Shares of each Series of the Trust owned by the Shareholder.
Shares which represent interests in a particular Series of the Trust vote
separately on those matters which pertain only to that series. The voting
requirement for passage of a particular proposal depends on the nature of the
particular proposal. With respect to Proposal 1, an affirmative vote of a
plurality of the Shares is required to approve the Proposal. With respect to
Proposals 2(a), 2(b), 3(a) and 3(b), a vote of the "majority of the
outstanding voting securities" of a Series, which shall mean the lesser of (i)
67% or more of the Shares of the Series entitled to vote thereon present in
person or by proxy at the Meeting if holders of more than 50% of the outstanding
Shares of the Series are present in person or represented by proxy, or (ii) more
than 50% of the outstanding Shares of the Series, is necessary to approve each
of the Proposals. With respect to Proposal 4, an affirmative vote of a majority
of the Shares is required to approve the Proposal.
The Trust was established to be used exclusively as the underlying investment
for certain variable annuity contracts ("Variable Contracts") to be issued by
Jackson National Life Insurance Company ("Jackson National Life"). All shares of
each Series of the Trust are owned by Jackson National Life. Pursuant to current
interpretations of the Investment Company Act of 1940, as amended (the "1940
Act"), Jackson National Life will solicit voting instructions from owners of
Variable Contracts with respect to matters to be acted upon at the Meeting. All
Shares of each Series of the Trust will be voted by Jackson National Life in
accordance with voting instructions received from such Variable Contract owners.
Jackson National Life will vote all of the Shares which it is entitled to vote
in the same proportion as the voting instructions given by Variable Contract
owners, on the issues presented, including Shares which are attributable to
Jackson National Life's interest in the Trust. Jackson National Life has fixed
the close of business on April 20, 1998, as the last day on which voting
instructions will be accepted.
The costs of the Meeting will be paid by Jackson National Life and by Travelers
Group Inc. ("Travelers"). This Proxy is solicited by the Trustees.
THE TRUSTEES RECOMMEND THAT YOU CAST YOUR VOTE:
IN FAVOR OF THE NOMINEES FOR THE BOARD OF TRUSTEES LISTED IN THE PROXY
STATEMENT; FOR THE NEW SUB-ADVISORY AGREEMENT; FOR THE NEW SUB-ADVISORY
AGREEMENT AND THE NEW SUB-ADVISORY CONSULTING AGREEMENT; FOR THE MODIFICATION OF
THE INVESTMENT POLICY CONCERNING DIVERSIFICATION; FOR THE ELIMINATION OF THE
INVESTMENT POLICY RESTRICTING PERCENTAGE OWNERSHIP OF SECURITIES; AND FOR THE
RATIFICATION OF PRICE WATERHOUSE LLP AS INDEPENDENT ACCOUNTANTS FOR THE TRUST.
The Trust knows of no business other than that described in Proposals 1, 2, 3
and 4 of the Notice which will be presented for consideration at the Meeting. If
any other matters are properly presented, it is the intention of the persons
named as proxies to vote proxies in accordance with their best judgment. In the
event a quorum is present at the Meeting but sufficient votes to approve any of
the Proposals are not received, the persons named as proxies may propose one or
more adjournments of such Meeting to permit further solicitation of proxies
provided they determine that such an adjournment and additional solicitation is
reasonable and in the interest of Shareholders based on a consideration of all
relevant factors, including the nature of the relevant proposal, the percentage
of votes then cast, the percentage of negative votes then cast, the nature of
the proposed solicitation activities and the nature of the reasons for such
further solicitation.
This Proxy Statement and the accompanying form of proxy will first be mailed to
Shareholders on or about March 19, 1998.
PROXY SUMMARY TABLE
The Proposals are to be voted upon by Shareholders of the Series as follows:
<TABLE>
<CAPTION>
PROPOSALS SERIES TO WHICH EACH PROPOSAL APPLIES
--------- -------------------------------------
<S> <C>
1. Election of Trustees JNL AGGRESSIVE GROWTH SERIES
JNL CAPITAL GROWTH SERIES
JNL GLOBAL EQUITIES SERIES
JNL/ALGER GROWTH SERIES
JNL/EAGLE CORE EQUITY SERIES
JNL/EAGLE SMALLCAP EQUITY SERIES
JNL/PUTNAM GROWTH SERIES
JNL/PUTNAM VALUE EQUITY SERIES
PPM AMERICA/JNL BALANCED SERIES
PPM AMERICA/JNL HIGH YIELD BOND SERIES
PPM AMERICA/JNL MONEY MARKET SERIES
SALOMON BROTHERS/JNL GLOBAL BOND SERIES
SALOMON BROTHERS/JNL U.S. GOVERNMENT & QUALITY BOND SERIES
T. ROWE PRICE/JNL ESTABLISHED GROWTH SERIES
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
T. ROWE PRICE/JNL MID-CAP GROWTH SERIES
2.a. Approval of a new sub- SALOMON BROTHERS/JNL
advisory agreement between U.S. GOVERNMENT AND QUALITY BOND SERIES
Jackson National Financial
Services, Inc. and Salomon
Brothers Asset Management Inc
2.b. Approval of a new sub-advisory SALOMON BROTHERS/JNL GLOBAL BOND SERIES
agreement between Jackson
National Financial Services,
Inc. and Salomon Brothers Asset
Management Inc and a new sub-
advisory consulting agreement
among Jackson National
Financial Services Inc.,
Salomon Brothers Asset
Management Inc and Salomon
Brothers Asset Management
Limited
3.a. Modification of the investment JNL AGGRESSIVE GROWTH SERIES
policy of the Trust concerning JNL CAPITAL GROWTH SERIES
diversification, as described JNL GLOBAL EQUITIES SERIES
in the Proxy Statement JNL/ALGER GROWTH SERIES
JNL/EAGLE CORE EQUITY SERIES
JNL/EAGLE SMALLCAP EQUITY SERIES
JNL/PUTNAM GROWTH SERIES
JNL/PUTNAM VALUE EQUITY SERIES
PPM AMERICA/JNL BALANCED SERIES
PPM AMERICA/JNL HIGH YIELD BOND SERIES
PPM AMERICA/JNL MONEY MARKET SERIES
SALOMON BROTHERS/JNL GLOBAL BOND SERIES
SALOMON BROTHERS/JNL U.S. GOVERNMENT & QUALITY BOND SERIES
T. ROWE PRICE/JNL ESTABLISHED GROWTH SERIES
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
T. ROWE PRICE/JNL MID-CAP GROWTH SERIES
3.b. Elimination of the investment JNL AGGRESSIVE GROWTH SERIES
policy of the Trust restricting JNL CAPITAL GROWTH SERIES
percentage ownership of JNL GLOBAL EQUITIES SERIES
securities, as described in the JNL/ALGER GROWTH SERIES
Proxy Statement JNL/EAGLE CORE EQUITY SERIES
JNL/EAGLE SMALLCAP EQUITY SERIES
JNL/PUTNAM GROWTH SERIES
JNL/PUTNAM VALUE EQUITY SERIES
PPM AMERICA/JNL BALANCED SERIES
PPM AMERICA/JNL HIGH YIELD BOND SERIES
PPM AMERICA/JNL MONEY MARKET SERIES
SALOMON BROTHERS/JNL GLOBAL BOND SERIES
SALOMON BROTHERS/JNL U.S. GOVERNMENT & QUALITY BOND SERIES
T. ROWE PRICE/JNL ESTABLISHED GROWTH SERIES
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
T. ROWE PRICE/JNL MID-CAP GROWTH SERIES
4. Ratification of Price JNL AGGRESSIVE GROWTH SERIES
Waterhouse LLP as independent JNL CAPITAL GROWTH SERIES
accountants for the Trust JNL GLOBAL EQUITIES SERIES
JNL/ALGER GROWTH SERIES
JNL/EAGLE CORE EQUITY SERIES
JNL/EAGLE SMALLCAP EQUITY SERIES
JNL/PUTNAM GROWTH SERIES
JNL/PUTNAM VALUE EQUITY SERIES
PPM AMERICA/JNL BALANCED SERIES
PPM AMERICA/JNL HIGH YIELD BOND SERIES
PPM AMERICA/JNL MONEY MARKET SERIES
SALOMON BROTHERS/JNL GLOBAL BOND SERIES
SALOMON BROTHERS/JNL U.S. GOVERNMENT & QUALITY BOND SERIES
T. ROWE PRICE/JNL ESTABLISHED GROWTH SERIES
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
T. ROWE PRICE/JNL MID-CAP GROWTH SERIES
</TABLE>
PROPOSAL 1: ELECTION OF TRUSTEES
The Trustees
The Trust may, but is not required to, hold annual meetings of shareholders for
the election of Trustees. The current Board of Trustees has selected and
nominated all nominees for election as Trustees at this Special Meeting of
Shareholders. The two individuals named in the table below have been nominated
for election as Trustees, each to hold office until his successor is duly
elected and has qualified.
The Declaration of Trust provides that the Board shall consist of not less than
three trustees. Following the Meeting, the Trust does not contemplate holding
regular meetings of Shareholders to elect Trustees or otherwise. In the event a
vacancy occurs on the Board by reason of death, resignation or a reason other
than removal by the Shareholders, the remaining Trustees shall appoint a person
to fill the vacancy for the entire unexpired term. The Trust has no procedure to
consider persons recommended by Variable Contract owners for nomination to the
Board of Trustees of the Trust.
When an investment company does not hold regular annual meetings, it is a
requirement under the 1940 Act and a policy of the Trust that holders of record
of not less than two-thirds of the outstanding shares of the investment company
may file a declaration in writing or may vote at a special meeting of
shareholders for the purpose of removing a Trustee. The Board will be required
to promptly call a special meeting of shareholders for the purpose of voting
upon the question of removal of any such Trustee(s) when required to do so by
the record holders of not less than 10% of the total outstanding shares of the
Trust. In addition, the Board will comply with the requirements of Section 16(c)
of the 1940 Act with respect to communications with Shareholders.
Each of the nominees named below has agreed to serve as a Trustee if elected;
however should any nominee become unable or unwilling to accept nomination or
election, the proxies will be voted for one or more substitute nominees
designated by the Board of Trustees.
The following is a list of the names, ages, principal occupations respecting the
Trustee nominees. Mr. Hopping is currently a Trustee of the Trust.
Name and Age Principal Occupations or Employment in
Past 5 Years
____________________ ____________________________________________
Andrew B. Hopping*
Age: 39 President and Chief Executive Officer,
August 1997 to present, Vice President,
Treasurer & Chief Financial Officer,
August 1996 to August 1997, JNL Series
Trust; Director, June 1997 to present,
President and Chief Executive Officer, July
1997 to present, Jackson National Financial
Services, Inc.; Director, July 1997 to
present, Vice President, Chief Financial
Officer and Financial Principal, July 1997
to present, Jackson National Life
Distributors, Inc.; Director, September 1997
to present; Senior Vice President, November
1995 to Present, Jackson National Life
Insurance Company of New York; Chief
Financial Officer; December 1997 to present,
Senior Vice President, June 1994 to
present, Jackson National Life Insurance
Company; Executive Vice President, 1991 to
June 1994, Countrywide Credit
Robert A. Fritts* Treasurer and Chief Financial Officer,
Age: 49 August 1997 to present, Vice President,
December 1994 to present, Assistant
Treasurer, February 1996 to August 1997,
Assistant Secretary, December 1994 to
February 1996, JNL Series Trust; Vice
President and Assistant Secretary, November
1995 to present, Jackson National Life
Insurance Company of New York; Assistant
Treasurer, 1980 to May 1995, Vice President
and Controller-Financial Operations, May
1995 to present, Jackson National Life
Insurance Company; Vice President,
Controller and Assistant Treasurer, December
1994 to December 1997, Jackson National
Capital Management Funds.
__________________
* "Interested persons" as defined in the 1940 Act.
The following is a list of the names, ages, principal occupations and other
information respecting the current Trustees (other than Mr. Hopping).
Name and Age Principal Occupations or Employment in Past
5 Years
____________________ ____________________________________________
Joseph Frauenheim Consultant
Age 63
Richard McLellan Attorney, Dykema Gossett PLLC.
Age 54
Peter McPherson President, Michigan State University.
Age 57
Trustees who are "interested persons" receive no compensation from the Trust.
Disinterested Trustees will be paid the sum of $4,000 for each meeting of the
Board which they attend, or any committee meeting if held on a day on which no
board meeting is held.
For the year ended December 31, 1997, the Disinterested Trustees received the
following fees for service as Trustee:
<TABLE>
<CAPTION>
Pension or
Aggregate Retirement Benefits Total Compensation
Compensation from Accrued As Part of From Trust and
Fund Trustee Trust Trust Expenses Complex
- ------------ ----- -------------- -------
<S> <C> <C> <C>
Joseph Frauenheim $23,500 0 $23,500
Richard McLellan 10,500 0 10,500
Peter McPherson 23,500 0 23,500
</TABLE>
During the last fiscal year, the Board of Trustees held seven meetings.
The Board of Trustees has appointed an Audit Committee comprised of Mr. Hopping,
Mr. Frauenheim and Mr. Fritts. The Audit Committee held one meeting during the
last fiscal year. The Audit Committee makes recommendations to the Board
concerning the selection of the Trusts' independent accountants and reviews with
such accountants the scope and results of the Trusts' annual audit. Mr. Hopping
and Mr. Fritts are "interested persons" of the Trust as defined in the 1940 Act.
The officers of the Trust serve for one year or until their respective
successors are chosen and qualified. The Trust's officers currently receive no
compensation from the Trust but are also officers of the Jackson National
Financial Services, Inc. and certain of its affiliates and receive compensation
in such capacities.
The following table sets forth certain information concerning the current
principal executive officers of the Trust.
Positions and Other Principal Occupations
Name and Age Offices with Trust in Past 5 Years
______________ ___________________ ____________________________________
Andrew B. Hopping President and Chief Director, June 1997 to present,
Age: 39 Executive Officer President and Chief Executive
and Trustee Officer, July 1997 to present,
Jackson National Financial Services,
Inc,; Director, July 1997 to
present, Vice President, Chief
Financial Officer and FINOP, July
1997 to present; Jackson National
Life Distributors, Inc.; Director,
September 1997 to present; Senior
Vice President, November 1995 to
present, Jackson National Life
Insurance Company of New York; Chief
Financial Officer, December 1997 to
present, Senior Vice President, June
1994 to present, Jackson National
Life Insurance Company; Executive
Vice President, 1991 to June 1994,
Countrywide Credit.
Robert A. Fritts Vice President, Vice President, Assistant Secretary,
Age: 49 Treasurer and Chief November 1995 to present; Jackson
Financial Officer National Life Insurance Company of
New York; Assistant Treasurer,
1980 to May 1995, Vice President and
Controller-Financial Operations,
May 1995 to present, Jackson
National Life Insurance Company;
Vice President, Controller and
Assistant Treasurer, December
1994 to December 1997, Jackson
National Capital Management Funds.
Thomas J. Meyer Vice President, Vice President, General Counsel
Age: 51 Counsel and and Secretary, June 1995 to present,
Secretary Jackson National Life Distributors,
Inc.; Vice President, Secretary and
General Counsel, November 1995 to
present, Jackson National Life
Insurance Company of New York;
Secretary, September 1994 to present,
Vice President, and General Counsel,
March 1985 to present, Jackson
National Life Insurance Company;
Secretary and Chief Legal Officer,
November 1991 to January 1998, Vice
President, September 1994 to January
1998, Director, June 1995 to January
1998, Jackson National Financial
Services, Inc.; Vice President and
Secretary, 1992 to December 1997,
Jackson National Capital Management
Funds.
Mark D. Nerud Vice President Chief Operating Officer and
Age: 31 and Assistant Treasurer, July 1997 to present,
Treasurer Jackson National Financial Services,
Inc.; Chief Operating Officer, July
1997 to present, Jackson National
Life Distributors, Inc.; Assistant
Vice President - Mutual Funds
Operations, March 1997 to present,
Assistant Controller, October 1996
to October 1997, Senior Manager -
Mutual Fund Operations, April 1996
to October 1996, Jackson National
Life Insurance Company; Manager -
Mutual Fund Accounting, May 1993 to
April 1996, Voyager Asset Manager
Company; Manager - Financial
Services, June 1988 to May 1993,
KPMG Peat Marwick.
Amy D. Eisenbeis Vice President Chief Legal Officer, Vice President
Age: 33 and Assistant and Secretary, January 1998 to
Secretary present, Assistant Secretary, June
1997 to January 1998, Jackson
National Financial Services, Inc.;
Associate General Counsel, July 1995
to present, Jackson National Life
Insurance Company, Staff Attorney,
January 1994 to July 1995, Waddell &
Reed, Inc.; Staff Attorney, October
1991 to January 1994, Security
Benefit Life Insurance Company.
On the Record Date, the officers and Trustees of the Trust, as a group, owned
Variable Contracts representing less than 1% of the outstanding Shares of the
Trust.
REQUIRED VOTE
An affirmative vote of a plurality of the Shares, present in person or
represented by proxy is required to elect the nominees. It is the intention of
the persons named in the enclosed proxy to vote the Shares represented by them
for the election of the nominees listed below unless the proxy is marked
otherwise.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE "IN FAVOR" OF THE NOMINEES FOR THE BOARD
OF TRUSTEES LISTED IN THIS PROXY STATEMENT.
PROPOSALS 2.A. AND 2.B.
2.a. TO BE VOTED ON BY SHAREHOLDERS OF SALOMON BROTHERS/JNL U.S. GOVERNMENT &
QUALITY BOND SERIES ONLY:
To approve or disapprove a new Sub-Advisory Agreement between Jackson National
Financial Services, Inc. and Salomon Brothers Asset Management Inc;
2. b. TO BE VOTED ON BY SHAREHOLDERS OF SALOMON BROTHERS/JNL GLOBAL BOND SERIES
ONLY:
To approve or disapprove a new Sub-Advisory Agreement between Jackson National
Financial Services, Inc. and Salomon Brothers Asset Management Inc and a new
Sub-Advisory Consulting Agreement among Jackson National Financial Services
Inc., Salomon Brothers Asset Management Inc and Salomon Brothers Asset
Management Limited.
INTRODUCTION
Jackson National Financial Services, Inc.(the "Adviser") serves as investment
adviser to the Trust pursuant to the Amended Investment Advisory and Management
Agreement, dated August 17, 1995 (the "Investment Advisory Agreement"). The
Adviser's address is 5901 Executive Drive, Lansing, Michigan 48911. Under the
Investment Advisory Agreement, the Adviser may delegate certain of its duties to
a sub-adviser or sub-advisers. The Investment Advisory Agreement further
provides that the Adviser is solely responsible for payment of any fees or other
charges arising from such delegation.
Salomon Brothers Asset Management Inc ("SBAM") currently serves as sub-adviser
to each of the Salomon Brothers/JNL U.S. Government & Quality Bond Series and
the Salomon Brothers/JNL Global Bond Series (collectively, the "Salomon Series'
or individually the "Series") pursuant to a sub-advisory agreement dated
February 8, 1995 (the "Existing SBAM Agreement").
As a result of the Transaction described below, Salomon Inc ("Salomon"), the
ultimate parent corporation of SBAM and Salomon Brothers Asset Management
Limited ("SBAM Limited"), was reconstituted as Salomon Smith Barney and became a
wholly-owned subsidiary of Travelers. The Transaction could be deemed to result
in an "assignment", as defined in the 1940 Act, of the Existing SBAM Agreement.
As required by the 1940 Act, the Existing SBAM Agreement provides for its
automatic termination in the event of its "assignment," as defined in the 1940
Act. Therefore, in connection with the Transaction, the Board of Trustees is
proposing that each Series' Shareholders approve a new sub-advisory agreement
between the Adviser and SBAM (the "New SBAM Agreement"). The New SBAM Agreement
is substantially identical to the Existing SBAM Agreement. A description of the
New SBAM Agreement, including the services to be provided by SBAM thereunder, is
set forth below.
Travelers and Salomon have received exemptive relief from the Securities and
Exchange Commission which permits the New SBAM Agreement to go into effect
without Shareholder approval and allows the Sub-Adviser to collect fees pursuant
to the New SBAM Agreement, such fees to be held in escrow pending Shareholder
approval which must occur within 150 days following the closing of the
Transaction. Therefore, in order to ensure continuity in the management of the
Portfolio, Shareholders are being asked to approve the New SBAM Agreement.
INFORMATION CONCERNING SBAM
SBAM is a corporation organized under the laws of Delaware on December 24, 1987
and is registered as an investment adviser pursuant to the Investment Advisers
Act of 1940, as amended (the "Advisers Act"). SBAM has served as sub-adviser to
the Salomon Series pursuant to the Existing SBAM Agreement since commencement of
operations. As of December 31, 1997, SBAM and its worldwide investment advisory
affiliates managed approximately $26 billion of assets, of which SBAM managed
approximately $19.3 billion.
SBAM is a wholly-owned subsidiary of Salomon Brothers Holding Company Inc,
("SBHC"), which in turn is a wholly-owned subsidiary of Salomon. The principal
business address of each of the foregoing entities is 7 World Trade Center, New
York, New York 10048.
The names, titles and principal occupations of the current directors and
executive officers of SBAM are set forth in the following table:
NAME TITLE AND PRINCIPAL OCCUPATION
- ---- ------------------------------
Thomas W. Brock Chairman, Chief Executive Officer
and Managing Director of SBAM and
Managing Director and Member of
the Management Board of Salomon
Brothers Inc
Michael S. Hyland President, Managing Director and
Member of the Board of SBAM and
Managing Director of Salomon
Brothers Inc
Rodney B. Berens Managing Director and Member of the
Board of SBAM and Managing Director
and Member of the Management Board
of Salomon Brothers Inc
Vilas V. Gadkari Managing Director and Member of the
Board of SBAM and Managing Director
of Salomon Brothers Inc
Zachary Snow Secretary of SBAM and Managing
Director of Counsel of Salomon
Brothers Inc
The business address of each person listed above other than Mr. Gadkari is 7
World Trade Center, New York, New York 10048 and the business address of Mr.
Gadkari is Victoria Plaza, 111 Buckingham Palace Road, London, England SWIW OSB.
THE TRANSACTION
On November 28, 1997, a wholly-owned subsidiary of Travelers was merged into
Salomon, with Salomon continuing as the surviving entity and changing its name
to Salomon Smith Barney Holdings Inc.("Salomon Smith Barney") pursuant to a
Merger Agreement entered into between Travelers and Salomon (the "Transaction").
SBHI merged with and into Salomon Smith Barney, with Salomon Smith Barney as the
survivor. In connection with the Transaction, Travelers issued 1.695 shares of
its common stock in exchange for each outstanding share of Salomon common stock.
Salomon preferred stockholders received one newly issued share of a
corresponding series of Travelers preferred stock with terms substantially
identical to those of the respective series of Salomon preferred stock they were
exchanging. The total value of the Transaction was approximately $9 billion.
Travelers has advised each Series that it anticipates that SBAM will continue to
provide the same level of sub-advisory services as has been provided to each
Series prior to consummation of the Transaction.
Travelers is a publicly traded financial services holding company whose
principal business address is 388 Greenwich Street, New York, New York 10013.
Travelers is a diversified, integrated financial services company engaged in
investment and asset management services, consumer finance services, and life
and property-casualty insurance services. Travelers' investment services include
investment banking, asset management, retail brokerage and other financial
services provided through SBHI and certain of its subsidiaries.
SECTION 15(f) OF THE 1940 ACT
Section 15(f) of the 1940 Act is available to the parties in connection with the
Transaction. Section 15(f) provides in substance that when a sale of a
controlling interest in an investment adviser occurs (under the Transaction, the
sub-adviser, SBAM and sub-advisory consultant, SBAM Limited), the investment
adviser or any of its affiliated persons may receive any amount or benefit in
connection therewith as long as two conditions are satisfied. First, an "unfair
burden" must not be imposed on the investment company as a result of the
transaction relating to the sale of such interest, or any express or implied
terms, conditions or understandings applicable thereto. The term "unfair burden"
(as defined in the 1940 Act) includes any arrangement during the two-year period
after the transaction whereby the investment adviser (or predecessor or
successor adviser), or any "interested person" (as defined in the 1940 Act) of
any such adviser, receives or is entitled to receive any compensation, directly
or indirectly, from the investment company or its security holders (other than
fees for bona fide investment advisory or other services) or from any person in
connection with the purchase or sale of securities or other property to, from or
on behalf of the investment company. The Board of Trustees is aware of no
circumstances arising from the Transaction that might result in an unfair burden
being imposed on the Salomon Series. The second condition of Section 15(f) is
that during the three-year period following the consummation of a transaction,
at least 75% of the investment company's board of directors must not be
"interested persons" (as defined in the 1940 Act) of the new sub-adviser or its
predecessor. The current composition of the Board of Trustees is in compliance
with this condition.
EXISTING SBAM AGREEMENTS AND NEW SBAM AGREEMENTS
The Existing SBAM Agreement and the New SBAM Agreement are substantially
identical, except for the dates of execution, effectiveness and termination. The
following description of the New SBAM Agreement is qualified in its entirety by
reference to the form of New SBAM Agreement marked to indicate the changes from
the Existing SBAM Agreement and is attached hereto as Exhibit A.
Services to be Performed
Pursuant to the New SBAM Agreement, SBAM will continue to manage and supervise
each Series' investment program.
Expenses and Advisory Fees
The New SBAM Agreement provides that each Series is responsible for all of its
expenses and liabilities, except that SBAM is responsible for certain expenses
in connection with maintaining a staff within its organization to furnish the
above services to the Salomon Series.
FOR EACH SALOMON SERIES, THE RATE USED TO DETERMINE FEES PAYABLE BY THE SERIES
PURSUANT TO THE NEW SBAM AGREEMENT IS IDENTICAL TO THE RATE IN THE EXISTING SBAM
AGREEMENT. Consequently, the Adviser will pay SBAM a fee at a rate under its New
SBAM Agreement which is identical to the fee rate for the Existing SBAM
Agreement, which is set forth in the table below. SBAM remitted a certain
percentage of such fees to SBAM Limited (with respect to the Salomon
Brothers/JNL Global Bond Series), pursuant to the Sub-Advisory Consulting
Agreement (see Proposal 2.b. below).
<TABLE>
<CAPTION>
SERIES SUB-ADVISORY FEE
------ ----------------
$0 to $50 to $100 to $150 to $300 to Over
(*M -- MILLION) $50 M $100 M $150 M $300 M $500 M $500 M
- --------------- ----- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Salomon Brothers/JNL Global Bond Series*.................. .375% .35% .35% .30% .30% .25%
Salomon Brothers/JNL U.S. Government & Quality .225% .225% .225% .175% .15% .10%
Bond Series...............................................
<FN>
* In connection with the Sub-Advisory Consulting Agreement between the
Adviser, SBAM and SBAM Ltd, SBAM will pay SBAM Ltd a portion of its
advisory fee. The amount payable to SBAM Ltd will be equal to the fee
payable under SBAM's Sub-Advisory Agreement multiplied by the portion of
the assets of the Series that SBAM Ltd has been delegated to manage divided
by the current value of the net assets of this Series.
</FN>
</TABLE>
The aggregate amount of compensation paid by the Adviser to SBAM for its
services to the Salomon Brothers/JNL U.S. Government & Quality Bond Series and
to the Salomon Brothers/JNL Global Bond Series for the year ended December 31,
1997, was $38,076 and $94,086, respectively.
Limitation of Liability
As set forth more fully in Exhibit A, the New SBAM Agreement is identical to
the Existing SBAM Agreement and provides that, in the absence of willful
misfeasance, bad faith, gross negligence or by reckless disregard for its
obligations thereunder ("disabling conduct"), SBAM shall not be liable to
the Adviser for any error of judgment or mistake of law or for any loss
suffered by the Series in connection with, the performance of its duties
thereunder.
Duration and Termination
The New SBAM Agreement will have an initial term of two years, and thereafter
will continue in effect for successive annual periods provided such continuance
is specifically approved at least annually by the Board of Trustees or by a vote
of a "majority of the outstanding voting securities" (as defined in the 1940
Act) of the respective Series. The New SBAM Agreement may be terminated, without
penalty, on sixty days' written notice by the Trust or by the Adviser or on
ninety days' written notice by SBAM. The New SBAM Agreement will terminate
automatically in the event of its "assignment" (as defined in the 1940 Act).
The Table below provides information with respect to the investment companies
with similar investment objectives to each Series for which SBAM provides
management, advisory or sub-advisory services.
<TABLE>
<CAPTION>
<S>
NAME OF FUND ANNUAL FEE RATE ASSET SIZE
- ------------ --------------- ----------
(as of 1/31/98)
COMPARABLE TO SALOMON BROTHERS/JNL
U.S. GOVERNMENT & QUALITY BOND
SERIES
Salomon Brothers U.S. Government
<S> <C> <C>
Income Fund (GIF) (1) .60% $14,617,292
Salomon Brothers U.S. Government first $200 million-.225%
Series, an investment portfolio next $300 million-.150%
of New England Zenith Fund (2) over $500 million-.100% $22,500,603
U.S. Government Securities Trust, first $200 million-.225%
an investment Portfolio of NASL next $300 million-.150%
Series Trust (2) over $500 million-.100% $259,000.623
U.S. Government Securities Fund, first $200 million-.225%
an investment portfolio of North next $300 million-.15%
American Funds (2) over $500 million-.10% $82,311,505
Salomon Brothers U.S. Government .225% $4,080,901
Securities Portfolio, an
investment portfolio of WNL
Series Trust
COMPARABLE TO SALOMON BROTHERS/JNL
GLOBAL BOND SERIES
Salomon Brothers Strategic Bond
Fund (SBD) (1) .75% $90,783,706
Salomon Brothers Asset Management SBAM Limited is paid by
Limited (SBAM Limited) acts as SBAM, out of its
Subadviser to this Fund management fee, an
amount equal to the fee
payable under the
management contract
between SBAM and the
Fund multiplied by the
current value of net
assets of the Fund that
SBAM allocates to SBAM
Limited.
Salomon Brothers Strategic Bond first $50 million-.35%
Opportunity Series, an investment next $150 million-.30%
portfolio of New England Zenith next $300 million-.25%
Fund (2) over $500 million-.10% $75,430,414
Strategic Bond Trust, an first $50 million-.35%
investment portfolio of NASL next $150 million-.30%
Series Trust (2) next $300 million-.25%
over $500 million-.20% $378,739,696
Strategic Income Fund, an first $50 million-.35%
investment portfolio of North next $150 million-.30%
American Funds (2) next $300 million-.25%
over $500 million-.20% $86,026,728
</TABLE>
(1) For the last fiscal year, the Sub-Adviser waived certain management fees
and voluntarily absorbed certain expenses.
(2) With respect to this Fund, the Sub-Adviser serves as subadvisers and,
accordingly the sponsoring investment adviser pays the Sub-Adviser a
portion of the total advisory fee.
ADDITIONAL INFORMATION FOR PROPOSAL 2.B.
ONLY SHAREHOLDERS OF SALOMON BROTHERS/JNL GLOBAL BOND SERIES WILL VOTE ON
PROPOSAL 2.B.
INTRODUCTION
SBAM Limited provides certain sub-advisory services relating to currency
transactions and investments in non-dollar denominated debt securities for the
benefit of the Salomon Brothers/JNL Global Bond Series pursuant to a sub-
advisory consulting agreement currently in place between the Adviser, SBAM, and
SBAM Limited dated August 17, 1995 (the "Existing SBAM Limited Agreement").
As required by the 1940 Act, the Existing SBAM Limited Agreement provides for
its automatic termination in the event of its "assignment", as defined in such
Act, as well as in the event of the termination of the sub-advisory agreement
between SBAM and the Adviser. As discussed under Proposal 2.a. above,
consummation of the Transaction could be deemed to result in the assignment (and
technical termination) of the Existing SBAM Agreement and the Existing SBAM
Limited Agreement. For a discussion of the Transaction, see "The Transaction"
above. Therefore, the Board of Trustees is proposing that Shareholders of the
Salomon Brothers/JNL Global Bond Series approve a new sub- advisory consulting
agreement between SBAM and SBAM Limited (the "New SBAM Limited Agreement"). The
New SBAM Limited Agreement proposed for the Salomon Brothers/JNL Global Bond
Series is substantially identical to the Existing SBAM Limited Agreement. A
description of the New SBAM Limited Agreement proposed for the Series, including
the services to be provided by SBAM Limited thereunder, is set forth below.
Travelers and Salomon have received exemptive relief from the Securities and
Exchange Commission which permits the New SBAM Limited Agreement to go into
effect without Shareholder approval and allows the Sub-Adviser to collect fees
pursuant to the New SBAM Limited Agreement, such fees to be held in escrow
pending Shareholder approval which must occur within 150 days following the
closing of the Transaction. Therefore, in order to ensure continuity in the
management of the Portfolio, Shareholders are being asked to approve the New
SBAM Limited Agreement.
INFORMATION CONCERNING SBAM LIMITED
SBAM Limited is a company organized under the laws of England. SBAM Limited
provides certain advisory services to SBAM relating to currency transactions and
investments in non-dollar denominated debt securities for the benefit of the
Series. SBAM Limited is a wholly-owned subsidiary of Salomon Brothers Europe
Limited, which in turn is a wholly-owned subsidiary of Salomon (International)
Finanz AG, which in turn is a wholly-owned subsidiary of SBHC, which is a
wholly-owned subsidiary of Salomon, and therefore is an affiliate of SBAM. The
principal business address of Salomon Brothers Europe Limited is Victoria Plaza,
111 Buckingham Palace Road, London SWIW OSB, England, and the principal business
address of Salomon (International) Finanz AG is Schipfe 2, 8001 Zurich,
Switzerland. SBAM Limited is a member of the Investment Management Regulatory
Organization Limited in the United Kingdom and is registered as an investment
adviser pursuant to the Advisers Act. The principal business address of SBAM
Limited is Victoria Plaza, 111 Buckingham Palace Road, London SWIW OSB, England.
The names, titles and principal occupations of the current directors and
executive officers of SBAM Limited are set forth in the following table. The
business address of each person listed below except for Messrs. Hyland and Brock
is Victoria Plaza, 111 Buckingham Palace Road, London SWIW OSB, England. The
business address of Messrs. Hyland and Brock is 7 World Trade Center, New York,
New York 10048.
NAME TITLE AND PRINCIPAL OCCUPATION
- ---- ------------------------------
Michael S. Hyland Director/Chairman of SBAM Limited
and Managing Director of Salomon
Brothers Inc
Thomas W. Brock Director of SBAM Limited and
Managing Director and Member of
the Management Board of Salomon
Brothers Inc.
Vilas V. Gadkari Chief Investment Officer and
Director of SBAM Limited and
Managing Director of Salomon
Brothers Inc.
Joseph V. McDevitt Chief Operating Officer and Director
of SBAM Limited
Susan H. Dean Finance Officer of SBAM Limited
Beatrice J. Doran Vice President and Counsel of SBAM Limited
Upon consummation of the Transaction, SBAM Limited became an indirect wholly-
owned subsidiary of Travelers (as discussed under "The Transaction" in Proposal
2.a. above). Travelers has advised the Salomon Brothers/JNL Global Bond Series
that it anticipates that SBAM Limited will continue to provide the same level of
sub-advisory consulting services as has been provided to the Series prior to
consummation of the Transaction.
SECTION 15(f) OF THE 1940 ACT
Section 15(f) of the 1940 Act is available in connection with Travelers'
acquisition of indirect control of SBAM Limited. For a discussion of Section
15(f) see "Section 15(f) of the 1940 Act" under Proposal 2.a. above.
EXISTING AND NEW SBAM LIMITED AGREEMENTS
The Existing SBAM Limited Agreement and the New SBAM Limited Agreement are
substantially identical. The following description of the New SBAM Limited
Agreement is qualified in its entirety by reference to the form of New SBAM
Limited Agreement which is marked to indicate changes from the Existing SBAM
Limited Agreement and is attached hereto as Exhibit B.
Services to be Performed
Pursuant to the New SBAM Limited Agreement, SBAM Limited, subject to the
supervision of SBAM and the Adviser, will continue to manage such investments
and determine the composition of such assets of the Salomon Brothers/JNL Global
Bond Series as may be agreed from time to time by SBAM and SBAM Limited. As is
the case with respect to the Existing SBAM Limited Agreement, it is anticipated
that SBAM Limited primarily will provide sub-advisory services with respect to
currency transactions and non-dollar denominated debt securities pursuant to the
New SBAM Limited Agreement.
Expenses and Advisory Fees
SBAM, and not the Salomon Brothers/JNL Global Bond Series, is responsible for
paying SBAM Limited its sub-advisory fee under the New SBAM Limited Agreement.
The rate of compensation of SBAM Limited payable by SBAM under the Existing SBAM
Agreement is a portion of the fee (such portion herein referred to as the
"Subadvisory Consulting Fee") payable to SBAM under the New SBAM Agreement. The
Subadvisory Consulting Fee shall be an amount equal to the fee payable under the
Sub-Advisory Agreement multiplied by the current value of the net assets of the
Designated Portion of the Series and divided by the current value of the net
assets of the Designated Portion of the Series and divided by the current value
of the net assets of the Series. THE RATE USED TO DETERMINE FEES PAYABLE BY SBAM
TO SBAM LIMITED PURSUANT TO THE NEW SBAM LIMITED AGREEMENT IS IDENTICAL TO THE
RATE IN THE EXISTING SBAM LIMITED AGREEMENT. The aggregate amount of the fee
paid to SBAM Limited for the Salomon Brothers/JNL Global Bond Series' most
recent fiscal year under the Existing SBAM Limited Agreement was
$____________________.
Duration and Termination
The New SBAM Limited Agreement will have an initial term of two years, and
thereafter will continue in effect for successive annual periods but only so
long as such continuance is specifically approved at least annually by (1) a
vote of the holders of a majority of the outstanding voting securities of the
Series (as defined in the 1940 Act) or by the Trust's Board of Trustees and (2)
a majority of the Trustees of the Trust who are not parties to this Agreement or
interested persons of any such parties (other than as Trustees of the Trust), by
vote cast in person at a meeting duly called for the purpose of voting on such
approval. The New SBAM Limited Agreement may be terminated, without penalty, on
sixty days' written notice by the Trust or by the Adviser or on ninety days'
written notice by SBAM Limited. The New SBAM Limited Agreement will terminate
automatically in the event of its "assignment" (as defined in the 1940 Act and
the rules thereunder).
The Table of Comparable Fund Information below provides information with respect
to the investment companies with similar investment objectives to the Salomon
Brothers/JNL Global Bond Series for which SBAM Limited provides sub- advisory
services.
<TABLE>
<CAPTION>
NAME OF FUND ANNUAL FEE RATE ASSET SIZE
- ------------ --------------- ----------
(AS OF 1/31/98)
COMPARABLE TO SALOMON BROTHERS/JNL
GLOBAL SERIES
Salomon Brothers Strategic Bond
<S> <C> <C>
Fund (1) .75% $90,783,706
Salomon Brothers Asset Management SBAM Limited is paid by
Limited (SBAM Limited) acts as SBAM, out of its
Subadviser to this Fund management fee, an
amount equal to the fee
payable under the
management contract
between SBAM and the
Fund multiplied by the
current value of net
assets of the Fund that
SBAM allocates to SBAM
Limited.
Salomon Brothers Strategic Bond first $50 million-.35%
Opportunity Series, an investment next $150 million-.30%
portfolio of New England Zenith next $300 million-.25%
Fund (2) over $500 million-.10% $75,430,414
Strategic Bond Trust, an first $50 million-.35%
investment portfolio of NASL next $150 million-.30%
Series Trust (2) next $300 million-.25%
over $500 million-.20% $378,739,696
Strategic Income Fund, an first $50 million-.35%
investment portfolio of North next $150 million-.30%
American Funds (2) next $300 million-.25%
over $500 million-.20% $86,026,728
</TABLE>
(1) For the last fiscal year, the Sub-Adviser waived certain management fees
and voluntarily absorbed certain expenses.
(2) With respect to this Fund, the Sub-Adviser serves as subadvisers and,
accordingly the sponsoring investment adviser pays the Sub-Adviser a
portion of the total advisory fee.
BOARD OF TRUSTEES' EVALUATION
The Board, including the non-interested Trustees, determined that the approval
of the New SBAM Agreement and the New SBAM Limited Agreement on behalf of the
Trust will enable the Trust to continue to obtain services of high quality at
costs deemed appropriate, reasonable and in the best interests of the Trust and
its Shareholders. The Agreements were approved by the Trustees at its meeting
held on November 7, 1997.
The Trustees were also presented with materials furnished by SBAM, SBAM Limited
and Travelers. Those materials included financial statements as well as other
written information regarding SBAM Limited and Travelers and their personnel,
operations and financial condition.
In evaluating the New SBAM Agreement and the New SBAM Limited Agreement, the
Trustees focused primarily on the nature, quality and scope of the operations
and services to date provided by SBAM and SBAM Limited, which are expected to
continue with no change in fees, and the fact that the agreements are
substantially identical to the existing agreements. The Board also considered
the commitment of Travelers to maintain the services provided to the Salomon
Series by SBAM and SBAM Limited. A representative of SBAM attended the Board
meeting by telephone to discuss the current intentions of Travelers with respect
to SBAM and SBAM Limited. The Board also took into account the following
factors: (i) the qualifications of SBAM and SBAM Limited to provide sub-advisory
and sub-advisory consulting services, including the credentials and investment
experience of their respective officers and employees; (ii) the range of
services provided by SBAM and SBAM Limited; and (iii) the appropriateness of the
sub-advisory and sub-advisory consulting fees.
In addition to the foregoing primary considerations, the Board considered the
likelihood of SBAM's, SBAM Limited's and Travelers's financial stability
following the Transaction, particularly in light of the overall experience and
reputation of SBAM, SBAM Limited and Travelers and their financial stability,
and whether there are any aspects of the Transaction likely to affect the
ability of SBAM and SBAM Limited to retain and attract qualified personnel
following the Transaction.
Based upon its review, the Board concluded that the New SBAM Sub-Advisory
Agreement and the New SBAM Limited Agreement are in the best interest of the
Trust and the Trust's Shareholders. Accordingly, after consideration of the
above factors, and such other factors and information that it deemed relevant,
the Board, including a majority of the non-interested Trustees, approved the New
SBAM Agreement and New SBAM Limited Agreement and voted to recommend their
approval to the Shareholders of the Trust.
REQUIRED VOTE
Approval of Proposals 2.a. and 2.b. requires the vote of a majority of the
outstanding voting securities of a Series as described under "Voting" herein. If
these Proposals are not approved, the Trustees of the Trust will formulate or
consider alternative plans with regard to the provision of sub-advisory and
sub-advisory consulting services to the Salomon Series.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" APPROVAL OF THE NEW SUB-ADVISORY
AGREEMENT AND "FOR" APPROVAL OF NEW SUB-ADVISORY CONSULTING AGREEMENT.
PROPOSAL 3
Proposal 3.a. APPROVAL OR DISAPPROVAL OF A MODIFICATION OF THE INVESTMENT POLICY
REGARDING DIVERSIFICATION
The Trust has previously adopted certain restrictions and policies relating to
the investment of assets of the Series and their activities which are described
in the Trust's Statement of Additional Information. Certain of these investment
restrictions are fundamental policies and may not be changed without the
approval of the holders of a majority of the outstanding voting shares of each
Series affected as defined in "Voting", above. A change in policy affecting only
one Series may be implemented with the approval of a majority of the outstanding
voting shares of such Series.
Investment Restriction No. 1
Investment Restriction No. 1 currently provides that no Series may:
(1) Own more than 10% of the outstanding voting securities of any one
issuer and, as to fifty percent (50%) of the value of the total assets for
JNL Capital Growth, JNL Aggressive Growth, Lazard/JNL Small Cap Value and
Lazard/JNL Mid Cap Value Series, and as to seventy-five percent (75%) of
the value of the total assets of the other Series, purchase the securities
of any one issuer (except cash items and "Government securities" as defined
under the Investment Company Act of 1940, as amended (the "1940 Act")), if
immediately after and as a result of such purchase, the value of the
holdings of a Series in the securities of such issuer exceeds 5% of the
value of such Series' total assets. With respect to the other 50% of the
value of its total assets, JNL Capital Growth, JNL Aggressive Growth,
Lazard/JNL Small Cap Value and Lazard/JNL Mid Cap Value Series may invest
in the securities of as few as two issuers (not to exceed 25% in any one
issuer).
Subject to shareholder approval, as described above, the Board of Trustees at
its meeting on February 5, 1998, voted to replace Investment Restriction No. 1,
above, by adding new language to the section of the Trust's Statement of
Additional Information entitled "INVESTMENT RESTRICTIONS APPLICABLE TO ALL
SERIES", to read as follows:
"It shall be a fundamental policy that each Series, except the JNL Capital
Growth, Lazard/JNL Small Cap Value and Lazard/JNL Mid-Cap Value, shall be a
'diversified company', as such term is defined in the 1940 Act."
The purpose of the proposed modification is to clarify the language regarding
diversification. The adoption of this proposal is unlikely to have any impact on
the investment techniques employed by the Series.
Proposal 3.b. APPROVAL OR DISAPPROVAL OF THE ELIMINATION OF AN INVESTMENT
RESTRICTION PERTAINING TO LIMITATIONS ON THE PERCENTAGE OF SECURITIES WHICH MAY
BE BOUGHT OR HELD BY A SERIES OF THE TRUST
Investment Restriction No. 8.
Investment Restriction No. 8 currently provides that no Series may:
(8) Purchase or retain the securities of any issuer if any of the officers,
trustees or directors of all Series or the investment adviser or
sub-adviser owns beneficially more than 1/2 of 1% of the securities of such
issuer and together they own more than 5% of the securities of such issuer.
Investment Restriction No. 8 had been required by state "blue sky" laws. With
the adoption of the National Securities Markets Improvement Act of 1996, such
Investment Restriction is no longer required. Therefore, subject to shareholder
approval as described above, the Board of Trustees at its meeting on February 5,
1998, voted to eliminate this investment restriction.
REQUIRED VOTE
Approval of Proposals 3.a. and 3.b. requires the vote of a majority of the
outstanding voting securities of a Series as described under "Voting"
herein.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" THE MODIFICATION OF THE INVESTMENT
POLICY CONCERNING DIVERSIFICATION AND "FOR" THE ELIMINATION OF THE INVESTMENT
RESTRICTION REGARDING PERCENTAGE OWNERSHIP OF SECURITIES.
PROPOSAL 4
RATIFICATION OR REJECTION OF SELECTION
OF INDEPENDENT ACCOUNTANTS
The Board of Trustees, including a majority of the disinterested Trustees, has
selected Price Waterhouse LLP, 100 East Wisconsin Avenue, Milwaukee, Wisconsin
53202, as independent accountants to be employed by the Trust for the year
ending December 31, 1998, to report on the financial statements of the Trust. No
member of Price Waterhouse LLP or any associate thereof has any direct or
indirect financial interest in the Trust or any of its affiliates. Price
Waterhouse LLP has served the Trust as independent accountants since the
inception of the Trust in 1995.
Audit services performed by Price Waterhouse LLP for the Trust during the year
ended December 31, 1997 consisted of the examination of the financial statements
of the Trust, consultation on financial accounting and reporting matters, review
and consultation regarding various filings with the Securities and Exchange
Commission and attendance at one meeting of the Audit Committee.
REQUIRED VOTE
An affirmative vote of the holders of a majority of Shares present in person or
represented by proxy at the meeting is required to ratify the selection of Price
Waterhouse LLP as independent accountants.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" RATIFICATION OF PRICE WATERHOUSE
LLP AS INDEPENDENT ACCOUNTANTS FOR THE TRUST.
SUBSTANTIAL SHAREHOLDERS
As of the Record Date, all of the Shares of the Trust were owned by Jackson
National Life, Jackson National Separate Account - I, a separate account of
Jackson National Life and Jackson National Separate Account-II, a separate
account of Jackson National Life. Their shares will be voted in accordance with
voting instructions received from Variable Contract owners as described under
"Voting." As of the Record Date, the Officers and Trustees of the Trust together
owned Variable Contracts which represent less than 1% of the outstanding shares
of the Trust.
REPORTS TO SHAREHOLDERS AND FINANCIAL STATEMENTS
The Trust's Annual Report to Shareholders, which includes audited financial
statements of the Trust as of December 31, 1997, may be obtained without charge
by calling (800) 322-8257 or writing to the JNL Series Trust Service Center,
P.O. Box 25127, Lansing, MI 48909.
OTHER BUSINESS
The Trustees know of no other business to be brought before the Meeting.
However, if any other matters properly come before the Meeting, it is the
intention that proxies that do not contain specific instructions to the contrary
will be voted on such matters in accordance with the judgment of the persons
therein designated.
All Shareholders are urged to mark, date, sign and return the Proxy Card in the
enclosed envelope, which requires no postage if mailed in the United States.
By Order of the Board of Trustees,
Thomas J. Meyer
Secretary
Dated: March ___, 1998
Lansing, Michigan
EXHIBIT A
MARKED TO INDICATE
CHANGES FROM
EXISTING SUB-
ADVISORY AGREEMENT
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT executed as of November 28, 1997, by and between JACKSON NATIONAL
------------------
FINANCIAL SERVICES, INC., a Delaware corporation and registered investment
adviser ("Adviser"), and SALOMON BROTHERS ASSET MANAGEMENT INC, a Delaware
corporation and registered investment adviser ("Sub-Adviser").
WHEREAS, Adviser is the investment manager for the JNL Series Trust (the
"Trust"), an open-end management investment company registered under the
Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, Adviser desires to retain Sub-Adviser as Adviser's agent to
furnish investment advisory services to the investment portfolios of the Trust
listed on Schedule A hereto (each a "Fund" and collectively the "Funds").
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. Appointment. Adviser hereby appoints Sub-Adviser to provide certain
sub-investment advisory services to the Funds for the period and on the terms
set forth in this Agreement. Sub-Adviser accepts such appointments and agrees to
furnish the services herein set forth for the compensation herein provided.
2. Delivery of Documents. Adviser has or will furnish Sub-Adviser with
copies properly certified or authenticated of each of the following:
(a) the Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of The Commonwealth of Massachusetts on June 1,
1994, and all amendments thereto or restatements thereof (such
Declaration, as presently in effect and as it shall from time to time
be amended or restated, is herein called the "Declaration of Trust");
(b) the Trust's By-Laws and amendments thereto;
(c) resolutions of the Trust's Board of Trustees authorizing the
appointment of Sub-Adviser and approving this Agreement;
(d) the Trust's Notification of Registration on Form N-8A under the 1940
Act as filed with the Securities and Exchange Commission (the "SEC")
and all amendments thereto;
(e) the Trust's Registration Statement on Form N-1A under the Securities
Act of 1933, as amended ("1933 Act") and under the 1940 Act as filed
with the SEC and all amendments thereto insofar as such Registration
Statement and such amendments relate to the Funds; and
(f) the Trust's most recent prospectus and Statement of Additional
Information for the Funds (collectively called the "Prospectus").
Adviser will promptly furnish the Sub-Adviser from time to time with
copies of all amendments of or supplements to the foregoing.
3. Management. Subject always to the supervision of Trust's Board of
Trustees and the Adviser, Sub-Adviser will establish an investment program in
respect of, and make investment decisions for, all assets of the Funds and place
all orders for the purchase and sale of securities, all on behalf of the Funds.
In the performance of its duties, Sub-Adviser will undertake the duties to the
Fund set forth below, and will monitor the Funds' investments, and will comply
with the provisions of Trust's Declaration of Trust and By- Laws, as amended
from time to time, the Trust's Registration Statement, as amended and filed with
the SEC, and the stated investment objectives, policies and restrictions of the
Funds. Sub-Adviser and Adviser will each make its officers and employees
available to the other from time to time at reasonable times to review the
investment policies of the Funds and to consult with each other regarding the
investment affairs of the Funds. Sub-Adviser will report from time to time as
reasonably requested to the Board of Trustees and to Adviser with respect to the
implementation of such program. Sub-Adviser is responsible for compliance with
the provisions of Section 817(h) of the Internal Revenue Code of 1986, as
amended, applicable to the Funds.
The Sub-Adviser further agrees that it:
(a) will use the same skill and care in providing such services as it uses
in providing services to other fiduciary accounts for which it has
investment responsibilities;
(b) will conform with all applicable Rules and Regulations of the
Securities and Exchange Commission in all material respects and in
addition will conduct its activities under this Agreement in all
matters and respects in accordance with any applicable regulations of
any governmental authority pertaining to its investment advisory
activities;
(c) will place orders pursuant to its investment determinations for the
Funds either directly with the issuer or with any broker or dealer. In
placing orders with brokers and dealers, the Sub- Adviser will attempt
to obtain the best combination of prompt execution of orders in an
effective manner and at the most favorable price. Consistent with this
obligation, when the execution and price offered by two or more
brokers or dealers are comparable Sub-Adviser may, in its discretion,
purchase and sell portfolio securities to and from brokers and dealers
who provide the Sub-Adviser with research advice and other services.
In no instance will portfolio securities be purchased from or sold to
the Adviser, Sub-Adviser or any entity which to the knowledge of the
Adviser or Sub-Adviser is an affiliated person of either the Trust,
Adviser, or Sub-Adviser, except as may be permitted under the 1940
Act;
(d) will report regularly to Adviser and to the Board of Trustees and will
make appropriate persons available for the purpose of reviewing the
representatives of Adviser and the Board of Trustees on a regular
basis at reasonable times the management of the Funds, including,
without limitation, review of the general investment strategies of the
Funds, the performance of the Funds in relation to standard industry
indices, interest rate considerations and general conditions affecting
the marketplace and will provide various other reports from time to
time as reasonably requested by Adviser;
(e) will prepare and maintain such books and records with respect to the
Funds' securities transactions and will furnish Adviser and Trust's
Board of Trustees such periodic and special reports as the Board or
Adviser may reasonably request;
(f) will treat confidentially and as proprietary information of Trust all
such records and other information relative to Trust maintained by the
Sub-Adviser, and will not use such records and information for any
purpose other than performance of its responsibilities and duties
hereunder, except after prior notification to and approval in writing
by Trust, which approval shall not be unreasonably withheld and may
not be withheld where the Sub-Adviser may be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or when so
requested by Trust;
(g) will receive the research and recommendations of Adviser with respect
to the investment and reinvestment of the assets of the Funds.
4. Expenses. During the term of this Agreement, Sub-Adviser, at its
expense, will furnish (i) all necessary investment and management facilities,
including salaries of personnel required for it to execute its duties and (ii)
administrative facilities, including bookkeeping, clerical personnel and
equipment necessary for the efficient conduct of the investment affairs of the
Funds as set forth in this Agreement.
5. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's request.
Sub-Adviser further agrees to preserve for the periods prescribed by Rule 31a- 2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act.
6. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, Adviser will pay the Sub-Adviser, and the Sub-
Adviser agrees to accept as full compensation therefor, a sub-advisory fee,
accrued daily and payable monthly, in accordance with Schedule B hereto. From
time to time, the Sub-Adviser may agree to waive or reduce some or all of the
compensation to which it is entitled under this Agreement.
7. Services to Others. Adviser understands, and has advised the Trust's
Board of Trustees, that Sub-Adviser now acts, or may in the future act, as an
investment adviser to fiduciary and other managed accounts, and as investment
adviser or sub-investment adviser to other investment companies. Adviser has no
objection to Sub-Adviser acting in such capacities, provided that whenever the
Funds and one or more other investment advisory clients of Sub-Adviser have
available funds for investment, investments suitable and appropriate for each
will be allocated in a manner believed by Sub-Adviser to be equitable to each,
but Sub-Adviser cannot assure, and assumes no responsibility for equality among
all accounts and customers. Sub-Adviser shall be permitted to bunch or aggregate
orders for the Fund(s) with orders for other funds and accounts, and
transactions in such securities will be made insofar as feasible, for all funds
and accounts in a manner deemed equitable to all. Adviser recognizes, and has
advised Trust's Board of Trustees, that in some cases this procedure may
adversely affect the size of the position or price that the participating
Fund(s) may obtain in a particular security. In addition, Adviser understands,
and has advised Trust's Board of Trustees, that the persons employed by
Sub-Adviser to assist in Sub-Adviser's duties under this Agreement will not
devote their full time to such service and nothing contained in this Agreement
will be deemed to limit or restrict the right of Sub-Adviser or any of its
affiliates to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature.
By reason of the Sub-Adviser's investment advisory activities and the
investment banking and other activities of its affiliates, the Sub-Adviser may
acquire confidential information or be restricted from initiating transactions
in certain securities. The Adviser acknowledges and agrees that the Sub- Adviser
will not be free to divulge to the Adviser, or to act upon, any such
confidential information with respect to the Sub-Adviser's performance of this
Agreement and that, due to such a restriction, the Sub-Adviser may not initiate
a transaction the Sub-Adviser otherwise might have initiated.
8. Limitation of Liability. Adviser will not take any action against
Sub-Adviser to hold Sub-Adviser liable for any error of judgment or mistake of
law or for any loss suffered by the Fund in connection with the performance of
Sub-Adviser's duties under this Agreement, except for a loss resulting from
Sub-Adviser's willful misfeasance, bad faith, or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
9. Indemnification. Adviser and the Sub-Adviser each agree to indemnify the
other against any claim against, loss or liability to such other party
(including reasonable attorneys' fees) arising out of any action on the part of
the indemnifying party which constitutes willful misfeasance, bad faith or gross
negligence.
10. Duration and Termination. This Agreement will become effective upon
execution and, unless sooner terminated as provided herein, will continue in
effect for two years from such date.
Thereafter, if not terminated as to a Fund, this Agreement will continue in
effect as to a Fund for successive periods of 12 months, provided that such
continuation is specifically approved at least annually by the Trust's Board of
Trustees or by vote of a majority of the outstanding voting securities of such
Fund. Notwithstanding the foregoing, this Agreement may be terminated as to the
Fund at any time, without the payment of any penalty, on sixty days' written
notice by the Trust or by Adviser or on ninety days' written notice by the
Sub-Adviser. This Agreement will immediately terminate in the event of its
assignment. (As used in this Agreement, the terms "majority of the outstanding
voting securities", "interested persons" and "assignment" have the same meaning
of such terms in the 1940 Act.)
11. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
12. Notice. Any notice under this Agreement shall be in writing, addressed
and delivered or mailed, postage prepaid, to the other party at such address as
such other party may designate for the receipt of such notice.
13. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement is held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement will be binding upon
and shall inure to the benefit of the parties hereto.
The name "JNL Series Trust" and "Trustees of JNL Series Trust" refer
respectively to the Trust created by, and the Trustees, as trustees but not
individually or personally, acting from time to time under the Declaration of
Trust, to which reference is hereby made and a copy of which is on file at the
office of the Secretary of State of the Commonwealth of Massachusetts and
elsewhere as required by law, and to any and all amendments thereto so filed or
hereafter filed. The obligations of the "JNL Series Trust" entered in the name
or on behalf thereof by any of the Trustees, representatives or agents are made
not individually but only in such capacities and are not binding upon any of the
Trustees, Shareholders or representatives of Trust personally, but bind only the
assets of Trust, and persons dealing with the Fund must look solely to the
assets of Trust belonging to such Fund for the enforcement of any claims against
Trust.
14. Applicable Law. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Michigan.
15. Proprietary Rights. Adviser agrees and acknowledges that Sub- Adviser
is the sole owner of the name and mark "Salomon Brothers Asset Management Inc"
and that all use of any designation comprised in whole or part of Salomon
Brothers Asset Management Inc under this Agreement shall inure to the benefit of
Sub-Adviser. The Sub-Adviser hereby authorizes the use of the name and mark
Salomon Brothers Asset Management Inc as set forth in Schedule A on behalf of
the Funds. Adviser shall not, and Adviser shall use its best efforts to cause
the Funds not to, without the prior written consent of Sub- Adviser, make
representations regarding Sub-Adviser in any disclosure document, advertisement
or sales literature or other materials promoting the Funds. Upon expiration or
termination of this Agreement for any reason, Adviser shall as promptly as
practicable cause the Funds to cease, all use of any designation comprised in
whole or in part of Salomon Brothers Asset Management Inc as soon as reasonably
practicable.
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this
Agreement to be executed as of the day and year first above written.
JACKSON NATIONAL FINANCIAL
SERVICES, INC.
By:___________________________
Name:_________________________
Title:________________________
SALOMON BROTHERS ASSET MANAGEMENT
INC
By:____________________________
Name:__________________________
Title:_________________________
SCHEDULE A
FUNDS
Salomon Brothers/JNL U.S. Government & Quality Bond Series
Salomon Brothers/JNL Global Bond Series
SCHEDULE B
COMPENSATION
Salomon Brothers/JNL U.S. Government & Quality Bond Series
Average Daily Net Assets Annual Rate
------------------------ -----------
$0 to $50 million: .225%
$50 million to $150 million: .225%
$150 million to $300 million: .175%
$300 million to $500 million: .150%
Amounts over $500 million: .100%
Salomon Brothers/JNL Global Bond Series
Average Daily Net Assets Annual Rate
------------------------ -----------
$0 to $50 million: .375%
$50 million to $150 million: .350%
$150 million to $300 million: .300%
$300 million to $500 million: .300%
Amounts of $500 million: .250%
EXHIBIT B
MARKED TO INDICATE
CHANGES FROM THE
EXISTING SUB-
ADVISORY CONSULTING
AGREEMENT
SUBADVISORY CONSULTING AGREEMENT
Agreement dated as of November 28, 1997, by and among JACKSON NATIONAL
------------------
FINANCIAL SERVICES, INC., a Delaware corporation and registered investment
adviser ("JNFSI"), SALOMON BROTHERS ASSET MANAGEMENT INC, a Delaware corporation
and registered investment adviser ("SBAM") and SALOMON BROTHERS ASSET MANAGEMENT
LIMITED, a company incorporated under the laws of England and registered
investment adviser ("SBAM Limited").
WHEREAS, pursuant to the Sub-Advisory Agreement dated as of February 8,
1995 between SBAM and JNFSI (the "Sub-Advisory Agreement"), SBAM is the Sub-
Adviser to the Salomon Brothers/JNL Global Bond Series (the "Fund") a portfolio
of JNL Series Trust (the "Trust"), an open-end management investment company
comprised of thirteen separate portfolios of investments;
WHEREAS, SBAM desires to retain SBAM Limited to assist SBAM in furnishing
an investment program to the Fund;
NOW, THEREFORE, in consideration of the mutual agreements herein made,
JNFSI, SBAM and SBAM Limited agree as follows:
1. SBAM hereby employs SBAM Limited to serve as Sub-Adviser Consultation to
SBAM with respect to such portion of the assets of the Fund as SBAM shall
allocate (the "Designated Portion"), it being contemplated that all of such
assets are to be invested in the securities of non-U.S. issuers. SBAM Limited
will have full power to direct the investment and reinvestment of the assets of
the Designated Portion of the Fund in accordance with the requirements of the
Sub-Advisory Agreement, and subject always to the supervision of the Trust's
Board of Trustees and JNFSI. SBAM Limited hereby accepts such employment and
agrees, for the compensation herein provided, to assume all obligations herein
set forth.
2. SBAM will pay SBAM Limited, as full compensation for all services
provided under this Subadvisory Consulting Agreement, a portion of the fee (such
portion herein referred to as the "Subadvisory Consulting Fee") payable to SBAM
under the Sub-Advisory Agreement. The Subadvisory Consulting Fee shall be an
amount equal to the fee payable under the Sub-Advisory Agreement multiplied by
the current value of the net assets of the Designated Portion of the Fund and
divided by the current value of the net assets of the Fund. The Subadvisory
Consulting Fee shall be accrued for each calendar day in the period commencing
as of the date first above written and ending on the date on which this
Subadvisory Consulting Agreement terminates and the sum of the daily fee
accruals shall be paid to SBAM Limited by SBAM at such times and for such
periods as SBAM Limited and SBAM shall agree.
3. In compliance with the requirements of Rule 31a-3 under the Investment
Company Act of 1940, as amended, ("1940 Act"), SBAM Limited hereby agrees that
all records which it maintains for the Trust are the property of the Trust and
further agrees to surrender promptly to the Trust any of such records upon the
Trust's request. SBAM Limited 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.
4. This Agreement shall become effective as of the date first above written
and shall remain in force for two years from the date hereof, and for such
successive annual periods thereafter but only so long as each such continuance
is specifically approved at least annually by (1) a vote of the holders of a
majority of the outstanding voting securities of the Fund (as defined in the
1940 Act) or by the Trust's Board of Trustees and (2) a majority of the Trustees
of the Trust who are not parties to this Agreement or interested persons of any
such parties (other than as Trustees of the Trust), by vote cast in person at a
meeting duly called for the purpose of voting on such approval.
5. This Agreement may be terminated at any time without the payment of any
penalty; (1) by a vote of a majority of the entire Board of Trustees of the
Trust on sixty (60) days' written notice to SBAM Limited and SBAM; (2) by vote
of the holders of a majority of the outstanding voting securities of the Fund
(as defined in the 1940 Act) on sixty (60) days' written notice to SBAM Limited
and SBAM; or (3) by JNFSI, SBAM Limited or SBAM on 60 days' written notice to
the Trust.
This Agreement shall automatically terminate in the event of its
assignment, the term "assignment" for this purpose having the meaning defined in
Section 2(a)(4) of the 1940 Act and the rules thereunder.
6. Nothing contained herein shall limit the obligations of SBAM under the
Sub-Advisory Agreement.
7. SBAM and SBAM Limited agree to indemnify JNFSI against any claim
against, loss or liability to JNFSI (including reasonable attorneys' fees)
arising out of any action or omission on the part of SBAM and/or SBAM Limited
which constitutes willful misfeasance, bad faith or gross negligence. JNFSI
agrees to indemnify SBAM and SBAM Limited against any claim against, loss or
liability to SBAM and/or SBAM Limited (including reasonable attorneys' fees)
arising out of any action or omission on the part of JNFSI which constitutes
willful misfeasance, bad faith or gross negligence.
8. To the extent that state law is not preempted by the provisions of any
law of the United States heretofore or hereafter enacted, as the same may be
amended from time to time, this Agreement shall be administered, construed and
enforced in accordance with the laws of the State of Michigan.
IN WITNESS WHEREOF, the parties hereto have caused this Subadvisory
Consulting Agreement to be executed by their officers thereunto duly authorized.
JACKSON NATIONAL FINANCIAL
SERVICES, INC.
By:_____________________________
Name:________________________
Title:_______________________
SALOMON BROTHERS ASSET
MANAGEMENT INC
By:______________________________
Name:_________________________
Title:________________________
SALOMON BROTHERS ASSET
MANAGEMENT LIMITED
By:_______________________________
Name:__________________________
Title:_________________________
PROXY
[___________ SERIES]
OF
JNL SERIES TRUST
SPECIAL MEETING OF SHAREHOLDERS
APRIL 24, 1998
KNOW ALL MEN BY THESE PRESENTS that the undersigned shareholder(s) of the
_______________________ Series of JNL Series Trust ("Trust"),hereby appoints
_______________________, or any one of them true and lawful attorneys, with
power of substitution of each, to vote all shares which the undersigned is
entitled to vote, at the Special Meeting of Shareholders of the Trust to be held
on April 24, 1998 at the offices of Jackson National Life Insurance Company,
5901 Executive Drive, Lansing, Michigan 48911 on April 24, 1998, at 9:30 a.m.,
local time, and at any adjournment thereof ("Meeting"), as follows:
1. To elect two trustees to serve until their respective successors are
elected and have qualified: Robert A. Fritts and Andrew B. Hopping
FOR electing both WITHHOLDING AUTHORITY ABSTAIN FROM
( ) ( ) ( )
nominees listed except to vote for all nominees
as indicated below listed
To withhold authority to vote for any individual nominee, please write his name
below and the number of shares withholding authority to vote for such nominee:
Name of Nominee Amount of Shares Withholding Authority
- -------------------------------- --------------------------------------
- -------------------------------- --------------------------------------
2.a. (SALOMON BROTHERS/JNL U.S. GOVERNMENT & QUALITY BOND SERIES ONLY}
To approve a new Sub-Advisory Agreement between Jackson National Financial
Services, Inc. and Salomon Brothers Asset Management Inc
FOR ( ) AGAINST ( ) ABSTAIN ( )
2.b. (SALOMON BROTHERS/JNL GLOBAL BOND SERIES ONLY)
To approve a new Sub-Advisory Agreement between Jackson National Financial
Services, Inc. and Salomon Brothers Asset Management Inc and a new
Sub-Advisory Consulting Agreement among Jackson National Financial Services
Inc., Salomon Brothers Asset Management Inc and Salomon Brothers Asset
Management Limited
FOR ( ) AGAINST ( ) ABSTAIN ( )
3.a. To approve the modification of the investment policy of each Series of the
Trust concerning diversification, as described in the accompanying Proxy
Statement
FOR ( ) AGAINST ( ) ABSTAIN ( )
3.b. To approve the elimination of the investment policy of each Series of the
Trust concerning percentage ownership of securities, as described in the
accompanying Proxy Statement
FOR ( ) AGAINST ( ) ABSTAIN ( )
4. To ratify the Board of Trustees' selection of Price Waterhouse LLP as the
independent accountants of the Trust for the year ending December 31, 1998
FOR ( ) AGAINST ( ) ABSTAIN ( )
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Meeting.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR ANY PROPOSAL FOR
WHICH NO CHOICE IS INDICATED.
Dated: ____________________, 1998
Jackson National Life Insurance Company
___________________________________________________
Name of Insurance Company
___________________________________________________
Name and Title of Authorized Officer
___________________________________________________
Signature of Authorized Officer
____________________________ SERIES
Name(s) of Separate Account(s)
of the Insurance Company
Owning Shares in this Series:
______ SEPARATE ACCOUNT
__________________________________
__________________________________
__________________________________
TOTAL SHARES OF THIS SERIES
OWNED AND BEING VOTED BY THE
INSURANCE COMPANY:
__________________________________
_____________________ SERIES ("Series")
INSTRUCTIONS TO JACKSON NATIONAL LIFE INSURANCE COMPANY
FOR THE SPECIAL MEETING OF SHAREHOLDERS OF
JNL SERIES TRUST TO BE HELD ON APRIL 24, 1998
INSTRUCTIONS SOLICITED ON BEHALF OF
JACKSON NATIONAL LIFE INSURANCE COMPANY
The undersigned hereby instructs Jackson National Life Insurance Company (the
"Company") to vote all shares of the above-referenced Series of JNL SERIES TRUST
(the "Trust") represented by units held by the undersigned at a special meeting
of shareholders of the Trust to be held at 9:30 a.m., local time, on April 24,
1998, at the offices of Jackson National Life Insurance Company, 5901 Executive
Drive, Lansing, Michigan and at any adjournment thereof, as indicated on the
reverse side.
Dated:______________________________________, 1998
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing as
attorney, executor, administrator, trustee, guardian, or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please sign
the partnership name and indicate your title. If you are a partner signing for a
partnership, please sign the partnership name and your name. Joint owners should
each sign this proxy. Please sign, date and return.
__________________________________________________
Signature(s)
INSTRUCTIONS SOLICITED ON BEHALF OF JACKSON NATIONAL LIFE INSURANCE COMPANY
JACKSON NATIONAL LIFE INSURANCE COMPANY WILL VOTE SHARES HELD ON BEHALF OF THE
CONTRACT OWNER AS INDICATED BELOW OR FOR ANY PROPOSAL FOR WHICH NO CHOICE IS
INDICATED.
RECEIPT OF THE NOTICE OF THE SPECIAL MEETING AND THE ACCOMPANYING PROXY
STATEMENT IS HEREBY ACKNOWLEDGED.
IF THIS INSTRUCTION FORM IS SIGNED AND RETURNED AND NO SPECIFICATION IS MADE,
THE COMPANY SHALL VOTE FOR ALL PROPOSALS. IF THIS INSTRUCTION CARD IS NOT
RETURNED OR IS RETURNED UNSIGNED, THE COMPANY SHALL VOTE THE SHARES IN THE SAME
PROPORTION AS IT VOTES THE SHARES FOR WHICH IT HAS RECEIVED INSTRUCTIONS.
Please vote by filling in the appropriate box below, using blue or black ink or
dark pencil. Do not use red ink.
FOR WITHHOLDING ABSTAIN
AUTHORITY
- ---- ---------- -------
[ ] [ ] [ ] 1. To elect two trustees to serve until their
respective successors are elected and have
qualified: Robert A. Fritts and Andrew B.
Hopping
Both nominees listed above (except as marked to
the contrary below).
----------------------------------------------
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE(S) WRITE THE NAME(S) ON
THE LINE PROVIDED ABOVE.)
FOR AGAINST ABSTAIN
- ---- ----------- -------
[ ] [ ] [ ] 2.a. To approve a new Sub-Advisory Agreement
between Jackson National Financial Services,
Inc. and Salomon Brothers Asset Management
Inc
[ ] [ ] [ ] 2.b. To approve a new Sub-Advisory Agreement
between Jackson National Financial Services,
Inc. and Salomon Brothers Asset Management
Inc and a new Sub-Advisory Consulting
Agreement among Jackson National Financial
Services, Inc., Salomon Brothers Asset
Management Inc and Salomon Brothers Asset
Management Limited
[ ] [ ] [ ] 3.a. To approve the modification of the
investment policy of each Series of the
Trust concerning diversification, as
described in the accompanying Proxy Statement
[ ] [ ] [ ] 3.b. To approve the elimination of the investment
policy of each Series of the Trust concerning
percentage ownership of securities, as
described in the accompanying Proxy Statement
[ ] [ ] [ ] 4. To ratify the Board of Trustees' selection of
Price Waterhouse LLP as the independent
accountants of the Trust for the year ending
December 31, 1998
IMPORTANT: Please sign on the reverse side.
