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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)2))
[X] 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/PIMCO TOTAL RETURN BOND SERIES
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 14, 2000
NOTICE IS HEREBY GIVEN that a Special Meeting (the "Meeting") of shareholders
("Shareholders") of the JNL/PIMCO Total Return Bond Series 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 March 14, 2000 at 10:00 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 approve a New Investment Sub-Advisory Agreement between Jackson National
Financial Services, LLC and Pacific Investment Management Company, which is
substantially identical to the current Investment Sub-Advisory Agreement.
2. 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 January 21, 2000, 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 VOTING INSTRUCTIONS CARD PROMPTLY.
By Order of the Board of Trustees,
February 18, 2000
Lansing, Michigan THOMAS J. MEYER
Secretary
JNL SERIES TRUST
JNL/PIMCO TOTAL RETURN BOND SERIES
5901 EXECUTIVE DRIVE
LANSING, MICHIGAN 48911
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
MARCH 14, 2000
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 the JNL/PIMCO Total Return Bond Series (the
"Series") to be held at the offices of Jackson National Life Insurance Company,
5901 Executive Drive, Lansing, Michigan 48911 ("Jackson National Life"), on
March 14, 2000, at 10:00 a.m., local time, or at 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 voting instructions card
were first mailed to variable annuity contract owners on or about February 22,
2000.
The Trustees have fixed the close of business on January 21, 2000 as the record
date (the "Record Date") for the determination of holders of shares of
beneficial interest ("Shares") of the JNL/PIMCO Total Return Bond Series 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 871,928.566 Shares of the JNL/PIMCO Total
Return Bond Series outstanding. See page 13 for information concerning the
substantial Shareholders of the Shares of the Series.
The cost of preparing, printing and mailing the Notice, Proxy Statement, and
accompanying voting instructions card, and all other costs in connection with
the solicitation of proxies will be paid by Pacific Investment Management
Company ("PIMCO"), the sub-adviser to the Series. In addition to the mailing of
these proxy materials, proxies may be solicited by letter, telephone or
electronic means such as e-mail, or in person by an officer of the Trust, by
officers or employees of Jackson National Financial Services, LLC (the
"Adviser") or officers, agents or employees of Jackson National Life.
THE TRUST'S ANNUAL REPORT TO SHAREHOLDERS, WHICH INCLUDES AUDITED FINANCIAL
STATEMENTS OF THE TRUST AS OF DECEMBER 31, 1999, MAY BE OBTAINED WITHOUT CHARGE
BY CALLING (800) 766-4683 OR WRITING TO THE JNL SERIES TRUST SERVICE CENTER,
P.O. BOX 378002, DENVER, COLORADO 80237-8002.
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 Shares
entitled to vote shall be a quorum for the transaction of business at a
Shareholders' meeting and 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 its 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. A proxy shall be revocable at any time prior to its exercise by a
written notice addressed to and received by the Secretary of the Trust. Unless
otherwise specified in the proxy, the proxy shall apply to all Shares of each
Series of the Trust owned by the Shareholder.
With respect to Proposal 1, a vote of the "majority of the outstanding voting
securities" of the Series is necessary to approve the Proposal, 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.
Shares of the Trust are sold only to separate accounts of Jackson National Life
to fund the benefits of variable annuity contracts ("Variable Contracts") issued
by Jackson National Life. Although Jackson National Life, through its separate
accounts, legally owns all Shares of the Series, Jackson National Life will vote
all such Shares in accordance with the voting instructions timely given by the
owners ("Contract owners") of the Variable Contracts with assets invested in the
Series. Because Contract owners are indirectly invested in the Series through
their Variable Contracts and have the right to instruct Jackson National Life
how to vote shares of the Series on all matters requiring a vote of
shareholders, Contract owners should consider themselves shareholders for the
purposes of this Proxy Statement. Contract owners at the close of business on
the Record Date will be entitled to notice of the Meeting and to instruct
Jackson National Life how to vote at the Meeting or at any adjourned session.
Contract owners may use the voting instructions card as a ballot to give Jackson
National Life the voting instructions for those shares attributable to their
Variable Contracts as of the Record Date. When the Contract owner completes the
voting instructions card and sends it to Jackson National Life, Jackson National
Life votes the shares attributable to the Variable Contract of the Contract
owner in accordance with the Contract owner's instructions. If the Contract
owner merely signs and returns the form, Jackson National Life will vote those
shares in favor of the proposal. If the Contract owner does not return the form,
Jackson National Life will vote those shares in the same proportion as shares
for which instructions were received from other Contract Owners. Jackson
National Life has fixed the close of business on March 9, 2000 as the last day
on which voting instructions will be accepted.
Any authorized voting instructions will be valid for any adjournment of the
Meeting. If the management of the Trust receives an insufficient number of votes
to approve the proposal, the Meeting may be adjourned to permit the solicitation
of additional votes. Those persons named as proxies in the voting instructions
have the discretion to vote for any such adjournment. The approval of the
proposal depends upon whether a sufficient number of votes is cast for the
proposal. Accordingly, an instruction to abstain from voting on any proposal has
the same practical effect as an instruction to vote against the proposal.
Any person giving voting instructions may revoke them at any time prior to
exercising them by submitting to the Secretary of the Trust a superseding voting
instruction card or written notice of revocation. Only the Contract owner
executing the voting instructions card can revoke it. Jackson National Life will
vote the shares of the Series in accordance with all properly executed and
unrevoked voting instructions.
THE TRUSTEES RECOMMEND THAT YOU CAST YOUR VOTE:
FOR THE NEW INVESTMENT SUB-ADVISORY AGREEMENT BETWEEN JACKSON NATIONAL FINANCIAL
SERVICES, LLC AND PIMCO.
PROPOSAL 1: APPROVAL OF NEW INVESTMENT SUB-ADVISORY AGREEMENT
Introduction. The Adviser serves as investment adviser to the Trust pursuant to
the Amended Investment Advisory and Management Agreement, ("Investment Advisory
Agreement") dated August 17, 1995. The Adviser's address is 5901 Executive
Drive, Lansing, Michigan 48911. The Adviser also serves as the Trust's
Administrator. 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.
PIMCO, located at 840 Newport Center Drive, Suite 300, Newport Beach, California
92660, has served as investment sub-adviser to the JNL/PIMCO Total Return Bond
Series pursuant to an Investment Sub-Advisory Agreement dated December 17, 1997,
between the Adviser and PIMCO (the "Sub-Advisory Agreement").
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 Insurance Company ("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 (the "Managing Directors"). PAH is a publicly traded Delaware limited
partnership and its primary source of income is its proportionate share of the
net 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. Pacific Life is
located at 700 Newport Center Drive, Newport Beach, California 92660.
PIMCO will undergo a "change in control" as a result of the consummation of the
transaction described below, resulting in the assignment, and therefore
automatic termination of the Sub-Advisory Agreement with respect to the Series.
It is proposed that PIMCO continue to serve as investment sub-adviser of the
Series following completion of the transaction. Therefore, in connection with
the transaction and as required by the Investment Company Act of 1940, as
amended (the "1940 Act"), Shareholders of the Series are being asked in Proposal
1 to approve a New Investment Sub-Advisory Agreement (the "New Sub-Advisory
Agreement") between the Series and PIMCO which is substantially identical to the
current Sub-Advisory Agreement. The Board recommends that Shareholders approve
the New Sub-Advisory Agreement, a form of which is attached as Appendix A.
DESCRIPTION OF THE TRANSACTION. 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.
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 including,
among others, (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 Sub-Advisory Agreement by the
Shareholders of the Series will help satisfy condition (iii) described in the
preceding sentence by maintaining PIMCO's advisory relationship with the Series.
If the Transaction is not completed for any reason, the Sub-Advisory Agreement
will remain in effect. In the event the New Sub-Advisory Agreement is not
approved by the Series' Shareholders and the Transaction is completed, the Board
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, and its subsidiaries, through
its managing member 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
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 AG. 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 certain of the Funds, 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 Advisors is
expected to become a unit of AAM. PIMCO Advisors and its subsidiaries, including
PIMCO, are currently expected to continue to operate in the United States under
their existing names.
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, of PIMCO and PIMCO Advisors, including the Managing Directors,
have also contractually agreed to remain with PIMCO for significant periods
following the Transaction.
DESCRIPTION OF ALLIANZ AG AND ITS AFFILIATES. Allianz AG, the parent of
Allianz of America, is a publicly traded German Aktiengesellschaft (a German
publicly-traded company) 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 AG currently include, among
others, 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 Series generally would be precluded from effecting principal
transactions with the Affiliated Brokers, and its 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 Series, the Series' ability to take advantage of market
opportunities, or the Series' overall performance. Other series of the Trust for
which PIMCO (or an affiliate) does not serve as investment sub-adviser would
not, in general, be subject to these same restrictions post-closing.
ANTICIPATED IMPACT OF THE TRANSACTION ON MANAGEMENT OF THE SERIES. 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
Series or PIMCO's capacity to provide the type, quality, or quantity of services
that it currently provides, and the Series 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 investment advisory
services.
THE BENEFITS OF THE TRANSACTION. PIMCO anticipates that the Transaction
with Allianz AG will benefit PIMCO and the Series in a variety of ways,
including the following:
o 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.
o Allianz AG has a team of fixed income professionals in place that
currently manages 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.
o 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.
o The combination will provide additional career opportunities for PIMCO
professionals, furthering PIMCO's ability to attract and retain the
best people.
o Allianz AG has a stated growth strategy to be 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. Strong relative investment results depend on a
sound, disciplined investment process and effective execution; size
can be a benefit to both.
SECTION 15(f) OF THE 1940 ACT. Section 15(f) provides a non-exclusive safe
harbor for an investment adviser to an investment company or any affiliated
persons to receive any amount or benefit in connection with a "change in
control" of the investment adviser as long as two conditions are satisfied.
First, an "unfair burden" must not be imposed on investment company clients of
the adviser as a result of the transaction, or any express or implied terms,
conditions or understandings applicable to the transaction. 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 such an investment company or its
security holders (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.
The Board has been advised that PIMCO is aware of no circumstances arising from
the Transaction that might result in an unfair burden being imposed on the
Series. The second condition of Section 15(f) is that during the three-year
period after the transaction, at least 75% of each such investment company's
board of directors must not be "interested persons" (as defined in the 1940 Act)
of the investment adviser (or predecessor or successor adviser). The Board, as
currently constituted, complies with this requirement. Allianz of America and
each of the other parties to the Agreement have agreed to use reasonable best
efforts to ensure compliance with Section 15(f) as it applies to the Transaction
during the applicable time periods.
THE SUB-ADVISORY AGREEMENT. PIMCO has served as sub-adviser to the Series
since its inception. The Sub-Advisory Agreement was approved by Jackson National
Life, by vote of its "seed money" on March 2, 1998. If the Transaction is not
consummated, PIMCO will continue to serve as sub-adviser to the Series
under the current Sub-Advisory Agreement. The Sub-Advisory Agreement was last
approved by the Board, including a majority of the Trustees who are not parties
to the Sub-Advisory Agreement or interested persons of any such party, at a
meeting held on December 16, 1999.
Under the terms of the Sub-Advisory Agreement, PIMCO is responsible for making
investment decisions and placing orders for the purchase and sale of the Series'
investments directly with the issuers or with brokers or dealers selected by it
at its discretion. PIMCO also furnishes to the Board, which has overall
responsibility for the business and affairs of the Series, periodic reports on
the investment performance of the Series.
PIMCO is obligated to manage the Series in accordance with applicable laws and
regulations. The investment advisory services of PIMCO to the Series are not
exclusive under the terms of the Sub-Advisory Agreement. PIMCO is free to, and
does, render investment advisory services to others.
Consistent with the requirements of the 1940 Act, the Sub-Advisory Agreement
provides that PIMCO generally is not liable to the Series 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 Sub-Advisory
Agreement.
The Sub-Advisory Agreement may be terminated by the Series without penalty upon
60 days' notice by the Board or Adviser or by a vote of the holders of a
majority of the Series' outstanding shares voting as a single class, or upon 60
days' notice by PIMCO. As noted above, the Sub-Advisory Agreement terminates
automatically in the event of its "assignment" (as defined in the 1940 Act).
PIMCO currently receives a monthly investment sub-advisory fee from the
Series at an annual rate based on average daily net assets of the Series as set
forth below. PIMCO received the indicated aggregate sub-advisory fees from the
Series during the last fiscal year:
<TABLE>
<CAPTION>
Aggregate Sub- Fiscal Year
Fund Fee Rate Advisory Fees End
- ------ -------- -------------- ------------
<S> <C> <C> <C>
JNL Series Trust
JNL/PIMCO Total Return Annual rate of 0.25% $13,749__ December 31, 1999
Bond Series of average daily net
assets excluding the
value of client
contributed capital
</TABLE>
Information about PIMCO, its principal executive officer and directors, fees
charged to PIMCO's other investment company clients, and PIMCO's brokerage
policies is presented in Appendix B.
The New Sub-Advisory Agreement. The New Sub-Advisory Agreement is
substantially identical to the current Sub-Advisory Agreement. As noted
previously, PIMCO does not anticipate that the Transaction will cause any
reduction in the quality or types of services now provided to the Series or have
an adverse effect on PIMCO's ability to fulfill its obligations to the Series.
No change is anticipated in the investment philosophies and practices currently
followed by the Series. There will be no change in sub-advisory fees for the
Series. PIMCO has advised the Series that it currently anticipates that the same
persons responsible for management of the Series under the Sub-Advisory
Agreement will continue to be responsible for management of the Series under the
New Sub-Advisory Agreement. The New Sub-Advisory 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 Series will disclose
that a portion of the sub-advisory fees received by PIMCO from the Series 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 Series and will not cause any increase in the overall fees or
expenses borne by the Series.
At the December 16, 1999 meeting of the Board, the New Sub-Advisory Agreement
was approved unanimously by the Board, including all of the Trustees who are not
parties to the New Sub-Advisory Agreement or "interested persons" (as defined in
the 1940 Act) of any such party (other than as Trustees of the Trust). The New
Sub-Advisory Agreement, as approved by the Board, is submitted for approval by
the Shareholders of the Series.
If the New Sub-Advisory Agreement is approved by Shareholders of the Series, it
will take effect immediately upon the closing of the Transaction. The New
Sub-Advisory Agreement will remain in effect for two years from the date it
takes effect and, unless earlier terminated, will continue from year to year
with respect to the Series thereafter, provided that each such continuance is
approved annually, with respect to the contract and Series (i) by the Board or
by the vote of a majority of the outstanding voting securities of the Series,
and, in either case, (ii) by a majority of the Trustees who are not parties to
the New Sub-Advisory Agreement or "interested persons" of any such party (other
than as Trustees of the Trust).
EVALUATION BY THE BOARD OF TRUSTEES. The Board has determined that, in
approving the New Sub-Advisory Agreement on behalf of the Series, the Trust can
best assure itself that services currently provided to the Series by PIMCO, its
officers and employees, will continue without interruption after the
Transaction. The Board believes that, like the current Sub-Advisory Agreement,
the New Sub-Advisory Agreement will enable the Series to obtain high quality
services at a cost that is appropriate, reasonable, and in the best interests of
the Series and its Shareholders.
In determining whether it was appropriate to approve the New Sub-Advisory
Agreement and to recommend approval to Shareholders, the Board, including the
Trustees who are not parties to the New Sub-Advisory 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 AG, and was advised by 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 Series currently are expected to continue to manage the Series
under the New Sub-Advisory Agreement, thus helping to ensure continuity of
management; (2) the compensation to be received by PIMCO under the New
Sub-Advisory Agreement is the same as the compensation paid under the current
Sub-Advisory Agreement, which the Board previously has determined to be fair and
reasonable; (3) PIMCO's representation that it will not seek to increase the
rate of sub-advisory fees paid by the Series for a period of at least two years
following the Transaction; (4) the commonality of the terms and provisions of
the New Sub-Advisory Agreement with the terms of the current Sub-Advisory
Agreement; (5) representations made by PIMCO concerning the potential impact of
affiliated brokerage relationships on its ability to provide services to the
Series, and on the Series' ability to engage in portfolio transactions; (6) the
representations by PIMCO and Allianz AG that integration of Allianz AG's and
PIMCO's operations could produce benefits to shareholders through economies of
scale, expansion of PIMCO's investment expertise through the addition of Allianz
AG's fixed income investment 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; (7) the nature and
quality of the services rendered by PIMCO under the current Sub-Advisory
Agreement; (8) the fairness of the compensation payable to PIMCO under the
Sub-Advisory Agreement; (9) the results achieved by PIMCO for the Series; 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 determined that, by approving the New
Agreement, the Series can best be assured that services from PIMCO will be
provided without interruption. The Board also determined that the New
Sub-Advisory Agreement is in the best interests of the Series 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 Sub-Advisory Agreement and voted to recommend its approval by
the Series' Shareholders.
THE BOARD OF THE TRUST, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" APPROVAL OF THE NEW SUB-ADVISORY AGREEMENT AS PROVIDED
UNDER PROPOSAL 1. UNMARKED PROXIES WILL BE SO VOTED.
PROPOSAL 2: OTHER BUSINESS
The Trustees do not know of any matters to be presented at the Meeting other
than those set forth in this proxy statement. If other business should properly
come before the Meeting, proxies will be voted in accordance with the judgment
of the persons named in the accompanying proxy.
SUBSTANTIAL SHAREHOLDERS. As of the Record Date, all of the Shares of the Trust
were owned by Jackson National Life and its separate accounts. 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.
REQUIRED VOTE. Approval of Proposal 1 requires the vote of a "majority of
the outstanding voting securities" of the Series, as defined in the 1940 Act,
which means the vote of 67% or more of the voting securities of the Series
present at the Meeting, if the holders of more than 50% of the outstanding
shares of the Series are present or represented by proxy, or the vote of more
than 50% of the outstanding voting Series, whichever is less.
SHAREHOLDER PROPOSALS. The Trust 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 Trust at the address set forth on the cover of
this proxy statement.
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.
PROMPT EXECUTION AND RETURN OF THE ENCLOSED VOTING INSTRUCTIONS CARD IS
REQUESTED. A SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE.
By Order of the Board of Trustees
Thomas J. Meyer, Secretary
February 18, 2000
Lansing, Michigan
APPENDIX A
INVESTMENT SUB-ADVISORY AGREEMENT
MARKED TO SHOW CHANGES
FROM CURRENT INVESTMENT
SUB-ADVISORY AGREEMENT:
DELETIONS IN BRACKETS;
ADDITIONS UNDERLINED
This AGREEMENT is effective this __ day of __________, 2000
-----
[17th day of December, 1997], by and between JACKSON NATIONAL FINANCIAL
SERVICES, INC., a Delaware Corporation and registered investment adviser
("Adviser"), and PACIFIC INVESTMENT MANAGEMENT COMPANY, a Delaware general
partnership 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, the Trust is authorized to issue separate series, each series
having its own investment objective or objectives, policies and limitations;
WHEREAS, Adviser desires to retain Sub-Adviser as Adviser's agent to
furnish investment advisory services to the series of the Trust listed on
Schedule A hereto ("Fund").
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 Fund for the period and on the
terms set forth in this Agreement. Sub-Adviser accepts such appointment and
agrees to furnish the services herein set forth for the compensation herein
provided.
In the event the Adviser designates one or more series other than the Fund
with respect to which the Adviser wishes to retain the Sub-Adviser to
render investment advisory services hereunder, it shall notify the
Sub-Adviser in writing. If the Sub-Adviser is willing to render such
services, it shall notify the Adviser in writing, whereupon such series
shall become a Fund hereunder, and be subject to this Agreement.
2. Delivery of Documents. Adviser has or will furnish Sub-Adviser with copies
properly certified or authenticated of each of the following:
a) the 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 Fund; and
f) the Trust's most recent prospectus and Statement of Additional
Information (collectively called the "Prospectus").
Adviser will furnish the Sub-Adviser from time to time with copies of
all amendments of or supplements to the foregoing.
3. Management. Subject always to the supervision of Trust's Board of Trustees
and the Adviser, Sub-Adviser will furnish an investment program in respect
of, and make investment decisions for, all assets of the Fund and place all
orders for the purchase and sale of securities, all on behalf of the Fund.
In the performance of its duties, Sub-Adviser will satisfy its fiduciary
duties to the Fund (as set forth below), and will monitor the Fund's
investments, and will comply with the provisions of Trust's Declaration of
Trust and By-Laws, as amended from time to time, and the stated investment
objectives, policies and restrictions of the Fund. Sub-Adviser and Adviser
will each make its officers and employees available to the other from time
to time at reasonable times to review investment policies of the Fund and
to consult with each other regarding the investment affairs of the Fund.
Sub-Adviser will report 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 Fund.
The Sub-Adviser further agrees that it:
a) will use the same skill and care in providing such services as it uses
in providing services to fiduciary accounts for which it has
investment responsibilities;
b) will conform with all applicable Rules and Regulations of the
Securities and Exchange Commission in all material respects and in
addition will conduct its activities under this Agreement in
accordance with any applicable regulations of any governmental
authority pertaining to its investment advisory activities;
c) will place orders pursuant to its investment determinations for the
Fund either directly with the issuer or with any broker or dealer,
including an affiliated broker-dealer which is a member of a national
securities exchange as permitted in accordance with guidelines
established by the Board of Trustees. In placing orders with brokers
and dealers, the Sub-Adviser will attempt to obtain the best
combination of prompt execution of orders in an effective manner and
at the most favorable price. Consistent with this obligation, when the
execution and price offered by two or more brokers or dealers are
comparable Sub-Adviser may, in its discretion, purchase and sell
portfolio securities to and from brokers and dealers who provide the
Sub-Adviser with research advice and other services. In no instance
will portfolio securities be purchased from or sold to the Adviser,
Sub-Adviser or any affiliated person of either the 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 with
representatives of Adviser and the Board of Trustees on a regular
basis at reasonable times the management of the Fund, including,
without limitation, review of the general investment strategies of the
Fund, the performance of the Fund 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
Fund's securities transactions and will furnish Adviser and Trust's
Board of Trustees such periodic and special reports as the Board or
Adviser may request;
f) will act upon instructions from Adviser not inconsistent with the
fiduciary duties hereunder;
g) will treat confidentially and as proprietary information of 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; and
h) will vote proxies received in connection with securities held by the
Fund consistent with its fiduciary duties hereunder.
4. Aggregation of Orders. Provided the investment objectives of the Fund are
adhered to, the Adviser agrees that the Sub-Adviser may aggregate sales and
purchase orders of securities held in the Fund with similar orders being
made simultaneously for other accounts managed by the Sub-Adviser or with
accounts of the affiliates of the Sub-Adviser, if in the Sub-Adviser's
reasonable judgment such aggregation shall result in an overall economic
benefit to the Fund, taking into consideration the advantageous selling or
purchase price, brokerage commission and other expenses. The Adviser
acknowledges that the determination of such economic benefit to the Fund by
the Sub-Adviser is subjective and represents the Sub-Adviser's evaluation
that the Fund is benefitted by relatively better purchase or sales prices,
lower commission expenses and beneficial timing of transactions or a
combination of these and other factors.
5. Futures and Options. Provided the investment objectives of the Fund are
adhered to, the Sub-Adviser's investment authority shall include the
authority to purchase, sell, cover open positions, and generally to deal in
financial futures contracts and options thereon.
The Adviser will (i) open and maintain brokerage accounts for financial
futures and options (such accounts hereinafter referred to as "brokerage
accounts") on behalf of and in the name of the Fund and (ii) execute for
and on behalf of the Fund, standard customer agreements with a broker or
brokers. The Sub-Adviser may, using such of the securities and other
property in the Fund as the Sub-Adviser deems necessary or desirable,
direct the Adviser to deposit on behalf of the Fund, original and
maintenance brokerage deposits and otherwise direct payments of cash, cash
equivalents and securities and other property into such brokerage accounts
and to such brokers as the Sub-Adviser deems desirable or appropriate.
Upon the solicitation of the Adviser, the Sub-Adviser delivered to the
Adviser a copy of its Disclosure Document, as amended, dated July 3, 1997,
on file with the Commodity Futures Trading Commission. The Adviser hereby
acknowledges receipt of such copy.
6. Expenses. During the term of this Agreement, Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage
commission, if any) purchased for the Fund.
7. 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.
8. Compensation. For the services provided and the expenses assumed pursuant
to this Agreement, Adviser will pay the Sub-Adviser, and the Sub-Adviser
agrees to accept as full compensation therefor, a sub-advisory fee, accrued
daily and payable monthly on the average daily net assets in the Fund or
Funds excluding the net assets representing capital contributed by Jackson
National Life Insurance Company in accordance with Schedule B hereto. From
time to time, the Sub-Adviser may agree to waive or reduce some or all of
the compensation to which it is entitled under this Agreement.
The Sub-Adviser represents and warrants that in no event shall the
Sub-Adviser provide similar investment advisory services to any client
comparable to the Fund being managed under this Agreement at a composite
rate of compensation less than that provided for herein.
9. 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 Fund and one or more other investment advisory clients of
Sub-Adviser have available funds for investment, investments selected for
each will be allocated in a manner believed by Sub-Adviser to be equitable
to each. Adviser recognizes, and has advised Trust's Board of Trustees,
that in some cases this procedure may adversely affect the size of the
position that the participating Fund 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.
10. Standard of Care and Limitation of Liability. The Sub-Adviser shall
exercise its best judgment and shall act in good faith in rendering the
services pursuant to this Agreement.
Sub-Adviser, its officers, directors, employees, agents or affiliates will
not be subject to any liability to the Adviser or the Fund or their
directors, officers, employees, agents or affiliates 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.
11. Indemnification. Notwithstanding Section 10 of this Agreement, the
Sub-Adviser agrees to indemnify and hold harmless the Adviser, any
affiliated person of the Adviser, and each person, if any, who, within the
meaning of Section 15 of the 1933 Act, controls ("controlling person") the
Adviser (all of such persons being referred to as "Adviser Indemnified
Persons") against any and all losses, claims, damages, liabilities, or
litigation (including reasonable legal and other expenses) to which an
Adviser Indemnified Person may become subject under the 1933 Act, 1940 Act,
the Investment Advisers Act of 1940, the Internal Revenue Code, under any
other statute, at common law or otherwise, arising out of the Sub-Adviser's
responsibilities as Sub-Adviser to the Fund and to the Trust which is based
upon the willful misfeasance, bad faith or negligence or breach of this
Agreement by Sub-Adviser or its agents, or may be based upon any untrue
statement of a material fact provided in writing by the Sub-Adviser
specifically for inclusion in the Prospectus, or any amendment or
supplement thereto, or the omission to state therein a material fact known
or which should have been known to the Sub-Adviser and was required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that in no case shall the indemnity in favor of an
Adviser Indemnified Person be deemed to protect such person against any
liability to which any such person would otherwise be subject by reason of
willful misfeasance, bad faith, negligence in the performance of its
duties, or by reason of its breach of this Agreement.
12. Duration and Termination. This Agreement will become effective as to a Fund
upon execution or, if later, on the date that initial capital for such Fund
is first provided to it and, unless sooner terminated as provided herein,
will continue in effect for two years from such date. Thereafter, if not
terminated as to a 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,
and in either event approved also by a majority of the Trustees of the
Trust who are not interested persons of the Trust, or of the Adviser, or of
the Sub-Adviser. Notwithstanding the foregoing, this Agreement may be
terminated as to a Fund at any time, without the payment of any penalty, on
sixty days' written notice by the Trust or Adviser, or on sixty days'
written notice by the Sub-Adviser. This Agreement will immediately
terminate in the event of its assignment. (As used in this Agreement, the
terms "majority of the outstanding voting securities", "interested persons"
and "assignment" have the same meanings of such terms in the 1940 Act.)
13. 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.
14. 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.
15. Proprietary Rights. Sub-Adviser represents, and the Trust and the Adviser
acknowledge, that Sub-Adviser is the sole owner of the names "Pacific
Investment Management Company" and "PIMCO" and certain logos associated
with such names (the "PIMCO Marks").
The use by the Trust and the Adviser, or their affiliates, on their own
behalf or on behalf of the JNL/PIMCO Total Return Bond Series, of any PIMCO
Marks or any representations regarding Sub-Adviser in any disclosure
document, advertisement, sales literature or other materials promoting the
JNL/PIMCO Total Return Bond Series shall remain subject to the approval of
Sub-Adviser; provided, however, that (i) Sub-Adviser's review of any
material pursuant to this Agreement shall be conducted in a reasonable and
timely manner; (ii) Sub-Adviser's approval under this Agreement shall not
be unreasonably withheld; and (iii) Sub-Adviser's approval under this
Agreement shall not be required with respect to any use which has been
previously approved by Sub-Adviser, including, but not limited to, any use
which has been derived from disclosure contained in the Trust's or the
Adviser's most recent Prospectus and/or Statement of Additional
Information, or any supplements thereto, regarding any PIMCO Marks, PIMCO,
or the JNL/PIMCO Total Return Bond Series, which has been previously
approved by Sub-Adviser.
Sub-Adviser acknowledges and agrees that it will not use the name the
JNL/PIMCO Total Return Bond Series on its own behalf, or in relation to any
investment company for which Sub-Adviser or its successors and any
subsidiary or affiliate thereof acts as investment adviser, without the
express written permission of the Trust or the Adviser, respectively,
except that Sub-Adviser may state that it acts as a sub-advisor to the
Trust and the Adviser.
The parties hereby acknowledge that the Trust has adopted the name the
"JNL/PIMCO Total Return Bond Series" through the permission of Sub-Adviser.
16. 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 the Trust personally, but bind only the assets of the
Trust, and persons dealing with the Fund must look solely to the assets of
the Trust belonging to such Fund for the enforcement of any claims against
Trust.
17. Representations and Warranties of the Sub-Adviser.
The Sub-Adviser hereby represents that this Agreement does not violate any
existing agreements between the Sub-Adviser and any other party.
The Sub-Adviser further represents and warrants that it is a duly
registered investment adviser under the Investment Advisers Act of 1940, as
amended and has provided to the Adviser a copy of its most recent Form ADV
as filed with the Securities and Exchange Commission.
The Sub-Adviser further represents that it has reviewed the post-effective
amendment to the Registration Statement for the Trust filed with the
Securities and Exchange Commission that contains disclosure about the
Sub-Adviser, and represents and warrants that, with respect to the
disclosure about the Sub-Adviser or information relating, directly or
indirectly, to the Sub-Adviser, such Registration Statement contains, as of
the date hereof, no untrue statement of any material fact and does not omit
any statement of a material fact which was required to be stated therein or
necessary to make the statements contained therein not misleading.
18. Research Services. PIMCO 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 PIMCO of
---------------------------------------------------------------------------
any of its obligations hereunder, nor shall the Series be responsible for
---------------------------------------------------------------------------
any additional fees or expenses hereunder as a result.
------------------------------------------------------
19. Applicable Law. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Michigan.
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this
Agreement to be executed as of this _____ day of ________, 2000 [17th day of
----
December, 1997].
JACKSON NATIONAL FINANCIAL
SERVICES, INC.
By:
-----------------------------------
Name:
--------------------------------
Title:
-------------------------------
PACIFIC INVESTMENT MANAGEMENT COMPANY
By:
----------------------------------
Name:
-----------------------------
Title:
-----------------------------
SCHEDULE A
(Fund)
JNL/PIMCO TOTAL RETURN BOND SERIES
SCHEDULE B
(Compensation)
JNL/PIMCO TOTAL RETURN BOND SERIES
Average Daily Net Assets Annual Rate
-------------------------------------
Amounts over $0: .25%
APPENDIX B
----------
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 POSITION AND PRINCIPAL OCCUPATION
- ---- ---------------------------------
<S> <C>
William S. Thompson, Jr. Managing Director, Chief Executive Officer and Executive
April 1993 to Present 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 Director,
June 1986 to Present PIMCO Management, Inc.; Member of PIMCO Partners LLC.
Robert Wesley Burns Managing Director and Executive Committee Member, PIMCO;
February 1987 to Present Managing Director and Director, PIMCO Management, Inc.;
Member of PIMCO Partners LLC.
Chris P. Dialynas Managing Director, PIMCO; Managing Director and Director,
July 1980 to Present PIMCO Management, Inc.; Member of PIMCO Partners LLC.
Mohamed A. El-Erian Managing Director, PIMCO; Managing Director and Director,
May 1999 to Present PIMCO Management, Inc.
William H. Gross Managing Director, PIMCO; Managing Director and Director,
June 1971 to Present 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, PIMCO;
September 1987 to Present Managing Director and Director, PIMCO Management, Inc.;
Member of PIMCO Partners LLC.
Pasi M. Hamalainen Managing Director, PIMCO; Managing Director and Director,
January 1994 to Present PIMCO Management, Inc.
Brent R. Harris Managing Director and Executive Committee Member, PIMCO;
June 1985 to Present 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 Director,
December 1989 to Present PIMCO Management, Inc.
Margaret E. Isberg Managing Director, PIMCO; Managing Director and Director,
August 1983 to Present PIMCO Management, Inc.; Member of PIMCO Partners LLC.
John S. Loftus Managing Director, PIMCO; Managing Director and Director,
August 1986 to Present PIMCO Management, Inc.
Dean S. Meiling Managing Director, PIMCO; Managing Director and Director,
December 1976 to Present PIMCO Management, Inc.; Member of PIMCO Partners LLC.
James F. Muzzy Managing Director and Executive Committee Member, PIMCO;
September 1971 to Present 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 Director,
June 1971 to Present 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 Director,
January 1991 to Present PIMCO Management, Inc.; Member of PIMCO Partners LLC.
Ernest L. Schmider Managing Director and Secretary, PIMCO; Managing Director,
March 1994 to Present 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 Director,
April 1995 to Present PIMCO Management, Inc.; Member of PIMCO Partners LLC.
Benjamin L. Trosky Managing Director, PIMCO; Managing Director and Director,
October 1990 to Present 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>
NAME OF FUND ADVISORY FEE RATE APPROXIMATE ASSETS
- ------------ ----------------- ------------------
<S> <C> <C>
PIMCO VARIABLE INSURANCE TRUST
Total Return Bond Portfolio Annual rate of 0.40% of $3,208,009
average daily net assets
Total Return Bond Portfolio II Annual rate of 0.40% of $5,099,211
average daily net assets
PRUDENTIAL SECURITIES TARGET
PORTFOLIO TRUST
Total Return Bond Portfolio Annual rate of 0.25% of $66,889,600
average daily net assets
AMERICAN SKANDIA TRUST
Total Return Bond Portfolio Annual rate of 0.30% of $1,035,861,299
average daily net assets on
first $150 million; 0.25%
of average daily net assets
on assets over $150 million
paid monthly
</TABLE>
JNL SERIES TRUST-BROKERAGE POLICIES
PIMCO receives research services from many broker-dealers with which it
places portfolio transactions. Consistent with applicable law, PIMCO may cause
the Series to pay a broker-dealer which provides brokerage and research services
to PIMCO an amount of disclosed commission for effecting a securities
transaction for the Series in excess of the commission which another broker-
dealer would have charged for effecting that transaction. These research
services, which in some cases also may be purchased for cash, include such items
as general economic and securities market reviews, industry and company reviews,
evaluations of securities and recommendations as to the purchase and sale of
securities. Some of these services are of value to PIMCO in advising various of
its clients (including the Series), although not all of these services are
necessarily of value in managing the Series. The management fees paid by the
Series are not reduced because PIMCO and its affiliates receive such services.
Consistent with the Conduct Rules of the National Association of Securities
Dealers, Inc. and subject to seeking the most favorable price and execution
available and such other policies as the Trustees may determine, PIMCO may also
consider sales of shares of the Series as a factor in the selection of broker-
dealers to execute portfolio transactions for the Series.
PROXY
JNL/PIMCO TOTAL RETURN BOND SERIES
OF
JNL SERIES TRUST
SPECIAL MEETING OF SHAREHOLDERS
MARCH 14, 2000
KNOW ALL MEN BY THESE PRESENTS that the undersigned shareholder(s) of the
JNL/PIMCO Total Return Bond 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
at the offices of Jackson National Life Insurance Company, 5901 Executive Drive,
Lansing, Michigan 48911 on March 14, 2000, at 10:00 a.m., local time, and at any
adjournment thereof ("Meeting"), as follows:
1. To approve a New Investment Sub-Advisory Agreement between Jackson National
Financial Services, LLC and Pacific Investment Management Company, which is
substantially identical to the current Investment Sub-Advisory Agreement.
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: ____________________, 2000
Jackson National Life Insurance Company
___________________________________________________
Name of Insurance Company
___________________________________________________
Name and Title of Authorized Officer
___________________________________________________
Signature of Authorized Officer
JNL/PIMCO TOTAL RETURN BOND 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:
JNL/PIMCO Total Return Bond Series ("Series")
INSTRUCTIONS TO JACKSON NATIONAL LIFE INSURANCE COMPANY
FOR THE SPECIAL MEETING OF SHAREHOLDERS OF
JNL/PIMCO TOTAL RETURN BOND SERIES OF
JNL SERIES TRUST TO BE HELD ON MARCH 14, 2000
INSTRUCTIONS SOLICITED ON BEHALF OF
JACKSON NATIONAL LIFE INSURANCE COMPANY
The undersigned hereby instructs Jackson National Life Insurance Company (the
"Company") to vote all 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 10:00 a.m., local time, on March 14,
2000, at the offices of Jackson National Life Insurance Company, 5901 Executive
Drive, Lansing, Michigan 48911 and at any adjournment thereof, as indicated on
the reverse side.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing as
attorney, executor, administrator, trustee, guardian, or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please sign
the partnership name and your name and title. Joint owners should each sign this
proxy. Please sign, date and return.
Dated:______________________________________, 2000
__________________________________________________
Signature(s)
INSTRUCTIONS SOLICITED ON BEHALF OF JACKSON NATIONAL LIFE INSURANCE COMPANY
JACKSON NATIONAL LIFE INSURANCE COMPANY WILL VOTE 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 CARD 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 box below.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
---- ------- --------
<S> <C> <C> <C>
1. To approve a New Investment Sub-Advisory Agreement [ ] [ ] [ ]
between Jackson National Financial Services, LLC
and Pacific Investment Management Company, which is
substantially identical to the current Investment
Sub-Advisory Agreement.
</TABLE>
IMPORTANT: Please sign on the reverse side.
