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
WNL 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:
_______________________________________________________________
WNL SERIES TRUST
5555 SAN FELIPE
HOUSTON, TEXAS 77056
TELEPHONE (800) 910-4455
NOTICE OF SPECIAL MEETING
OF SHAREHOLDERS
TO BE HELD APRIL 16, 1998
NOTICE IS HEREBY GIVEN to the holders ("Shareholders") of the shares of the
Salomon Brothers U.S. Government Securities Portfolio (the "Portfolio") of the
WNL Series Trust, a Massachusetts business trust (the "Trust"), that a Special
Meeting of the Shareholders of the Portfolio (the "Meeting") will be held at the
offices of Western National Life Insurance Company, 5555 San Felipe, Suite 900,
Houston, Texas 77056, on Thursday, April 16, 1998, at 9:30 a.m., local time, for
the following purposes:
1. To approve or disapprove a new Sub-Advisory Agreement among Salomon
Brothers Asset Management Inc, WNL Investment Advisory Services, Inc. and WNL
Series Trust;
2. To transact such other business as may properly come before the Meeting.
Holders of record of the Shares of the Portfolio at the close of business on
March 2, 1998 are entitled to notice of, and to vote at, the Meeting and any
adjournment thereof.
By order of the Board of Trustees,
Kurt Fredland, Vice President and Assistant
Secretary
March 16, 1998
THE TRUST WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL REPORT
TO A SHAREHOLDER UPON REQUEST. ANY SUCH REQUEST SHOULD BE DIRECTED TO THE TRUST
BY CALLING (800) 910-4455 OR BY WRITING TO THE TRUST AT 5555 SAN FELIPE, SUITE
900, HOUSTON, TEXAS 77056.
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND
SIGN SUCH PROXY CARD(S), AND RETURN IT (THEM) IN THE ENVELOPE PROVIDED, WHICH IS
ADDRESSED FOR YOUR CONVENIENCE AND NEEDS NO POSTAGE IF MAILED IN THE UNITED
STATES.
IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION, WE ASK THAT
YOU MAIL YOUR PROXY PROMPTLY.
THE TRUSTEES OF THE TRUST RECOMMEND THAT YOU CAST YOUR VOTE:
FOR APPROVAL OF THE NEW SUB-ADVISORY AGREEMENT.
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY CARD(S) PROMPTLY.
PROXY STATEMENT
WNL SERIES TRUST
5555 SAN FELIPE
HOUSTON, TEXAS 77056
TELEPHONE (800) 910-4455
SPECIAL MEETING OF SHAREHOLDERS
APRIL 16, 1998
This Proxy Statement is furnished in connection with the solicitation by the
Board of Trustees (the "Trustees" or "Board") of the WNL Series Trust (the
"Trust"), of which the Salomon Brothers U.S. Government Securities Portfolio
(the "Portfolio") is a separate series, of proxies to be voted at a Special
Meeting of Shareholders of the Portfolio, and at all adjournments thereof (the
"Meeting"), to be held at the offices of Western National Life Insurance
Company, 5555 San Felipe, Suite 900, Houston, Texas 77056, on Thursday, April
16, 1998, at 9:30 a.m., local time. The approximate mailing date of this Proxy
Statement and accompanying voting instruction form is March 18, 1998.
The Trustees have fixed the close of business on March 2, 1998 as the record
date (the "Record Date") for the determination of holders of shares of
beneficial interest ("Shares") of the Portfolio ("Shareholders") entitled to
vote at the Meeting. Shareholders on the Record Date will be entitled to one
vote for each full Share held and a fractional vote for each fractional Share.
As of the Record Date, there were 429,327.416 Shares of the Portfolio
outstanding. See page 10 for information concerning the substantial Shareholders
of the Shares of the Trust.
The primary purpose of the Meeting is to permit the Portfolio's Shareholders to
consider a New Sub-Advisory Agreement (defined below). Such consideration is
necessary because on November 28, 1997 Travelers Group Inc. ("Travelers") and
Salomon Inc ("Salomon") consummated a merger agreement whereby Salomon merged
with and into Smith Barney Holdings Inc. ("SBHI"), a wholly-owned subsidiary of
Travelers, with Salomon continuing as the surviving entity and changing its name
to Salomon Smith Barney Holdings Inc. ("Salomon Smith Barney"). SBHI merged with
and into Salomon Smith Barney (the two mergers collectively, the "Transaction").
Prior to the closing of the Transaction, Salomon was the ultimate parent
corporation of Salomon Brothers Asset Management Inc ("Sub-Adviser") which
serves as sub-adviser to the Portfolio. As a result of the Transaction,
Travelers became the ultimate parent corporation of the Sub-Adviser. The
Portfolio's New Sub-Advisory Agreement which the Stockholders will be asked to
approve is substantially identical to the Portfolio's Existing Agreement
(defined below), except for the dates of execution, effectiveness and
termination. Approval of the new agreement is necessary because the closing of
the Transaction could be deemed to result in the termination of the Existing
Agreement pursuant to the Investment Company Act of 1940 (the "1940 Act").
Travelers and Salomon have received exemptive relief from the Securities and
Exchange Commission which permits the New Sub-Advisory Agreement to go into
effect without Shareholder approval and allows the Sub-Adviser to collect fees
pursuant to the New Sub-Advisory 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
Sub-Advisory Agreement.
THE TRUST WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL REPORT
TO A SHAREHOLDER UPON REQUEST. ANY SUCH REQUEST SHOULD BE DIRECTED TO THE TRUST
BY CALLING (800) 910-4455 OR BY WRITING TO THE TRUST AT 5555 SAN FELIPE, SUITE
900, HOUSTON, TEXAS 77056.
VOTING
The Declaration of Trust provides that a majority of the Shares of the Trust
entitled to vote at such meeting, represented in person or by proxy, must be
present to constitute a quorum at any meeting of Shareholders.
At any meeting of Shareholders, any holder of Shares entitled to vote thereat
may vote by proxy, provided that no proxy shall be voted at any meeting unless
it shall have been placed on file with the Secretary, or with such other officer
or agent of the Trust as the Secretary may direct, for the verification prior to
the time at which such vote shall be taken. Pursuant to a resolution of a
majority of the Trustees, proxies may be solicited in the name of one or more
Trustees or one or more of the officers of the Trust. Only Shareholders of
record shall be entitled to vote and each full Share shall be entitled to one
vote and fractional Shares shall be entitled to fractional votes. When any Share
is held jointly by several persons, any one of them may vote at any meeting in
person or by proxy in respect of such Share, but if more than one of them shall
be present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Share. 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.
If the holder of any such Share is a minor or a person of unsound mind, and
subject to guardianship or to the legal control of any other person as regards
the charge or management of such Share, he may vote by his guardian or such
other person appointed or having such control, and such vote may be given in
person or by proxy. A proxy shall be revocable at will but the revocation of a
proxy shall not be effective until written notice thereof has been given to the
Secretary, or other officer or agent of the Trust as the Secretary may direct.
Properly executed proxies will be voted as indicated or "for" any proposal for
which no choice is indicated.
With respect to Proposal 1, a vote of the "majority of the outstanding voting
securities" of the Portfolio, which shall mean the lesser of (i) 67% or more of
the Shares of the Portfolio 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 Portfolio are present in person or represented by proxy, or (ii) more than
50% of the outstanding Shares of the Portfolio, is necessary to approve the New
Sub-Advisory Agreement between the Sub-Adviser, the Adviser and the Trust. The
Proposal will be approved only if a sufficient number of votes are cast in favor
of the Proposal. Accordingly, votes to abstain and votes against will have the
same effect in determining whether the Proposal is approved.
The Trust was established to be used exclusively as the underlying investment
for certain variable annuity contracts ("Variable Contracts") to be issued by
Western National Life Insurance Company ("Western National Life"). All shares of
the Portfolio are owned by Western National Life and WNL Separate Account A, a
separate account of Western National Life. Pursuant to current interpretations
of the 1940 Act, Western National Life will solicit voting instructions from the
owners of Variable Contracts invested in the Portfolio with respect to matters
to be acted upon at the Meeting. All Shares of the Portfolio will be voted by
Western National Life in accordance with voting instructions received from such
Variable Contract owners. Western National Life will vote all of the Shares of
the Portfolio in the same proportion as the voting instructions given by
Variable Contract owners, on the issues presented.
Western National Life has fixed the close of business on April 13, 1998, as the
last day on which voting instructions will be accepted. This Proxy is solicited
by the Trustees.
THE TRUSTEES RECOMMEND THAT YOU CAST YOUR VOTE FOR THE APPROVAL OF THE NEW
SUB-ADVISORY AGREEMENT.
The Trust knows of no business other than that described in Proposal 1 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 the Proposal
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.
PROPOSAL 1: APPROVAL OF NEW SUB-ADVISORY AGREEMENT
INTRODUCTION
THE ADVISER AND SUB-ADVISER
WNL Investment Advisory Services, Inc., (the "Adviser") serves as investment
adviser to each of the portfolios of the Trust (including the Portfolio)
pursuant to an Investment Advisory Agreement, dated August 23, 1995, which was
initially approved by the Board of Trustees, including a majority of the
non-interested Trustees, on April 18, 1995 (the "Investment Advisory Agreement")
and approved by the Shareholders of the Trust on May 17, 1996. The Adviser's
address is 5555 San Felipe, Suite 900, Houston, Texas 77056. The Adviser also
serves as the Trust's administrator. Under the Investment Advisory Agreement,
the Adviser is obligated to formulate a continuing program for the investment of
the assets of each portfolio of the Trust in a manner consistent with each
portfolio's investment objectives, policies and restrictions and to determine
from time to time securities to be purchased, sold, retained or lent by the
Trust and to implement those decisions. The Investment Advisory Agreement also
provides that the Adviser shall manage the Trust's business and affairs and
shall provide such services required for effective administration of the Trust
as are not provided by employees or other agents engaged by the Trust. The
Investment Advisory Agreement further provides that the Adviser shall furnish
the Trust with office space and necessary personnel, pay ordinary office
expenses, pay all executive salaries of the Trust and furnish, without expense
to the Trust, the services of such members of its organization as may be duly
elected officers or Trustees of the Trust. The Investment Advisory Agreement
provides that the Adviser may retain sub-advisers, at the Adviser's own cost and
expense, for the purpose of managing the investment of the assets of one or more
portfolios of the Trust. The Investment Advisory Agreement states that the
Adviser is not obligated to provide services that are the subject of any
separate agreement or arrangement between the parties.
The Adviser retains the Sub-Adviser to act as sub-adviser for the Portfolio
pursuant to a sub-advisory agreement dated August 23, 1995 (the "Existing
Agreement").
As a result of the Transaction described below, Salomon, the ultimate parent
corporation of the Sub-Adviser, 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
Agreement.
As required by the 1940 Act, the Existing 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 the Portfolio's Shareholders approve a new sub-advisory agreement
between the Sub-Adviser, Adviser and the Trust (the "New Sub-Adviser
Agreement"). The New Sub-Advisory Agreement is substantially identical to the
Existing Agreement. A description of the New Sub-Advisory Agreement, including
the services to be provided by the Sub-Adviser thereunder, is set forth below.
INFORMATION CONCERNING THE SUB-ADVISER
The Sub-Adviser 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"). The
Sub-Adviser has served as sub-adviser to the Portfolio pursuant to the Existing
Agreement since the commencement of operations of the Portfolio. As of December
31, 1997, the Sub-Adviser and its worldwide investment advisory affiliates
managed approximately $26 billion of assets, of which the Sub-Adviser managed
approximately $19.3 billion.
Following the Transaction described below, the Sub-Adviser became a wholly-owned
subsidiary of Salomon Smith Barney Holdings Inc. ("Salomon Smith Barney"), which
in turn is a wholly-owned subsidiary of Travelers. The principal business
addresses of the Sub-Adviser and Salomon Smith Barney are 7 World Trade Center,
New York, New York 10048 and 388 Greenwich Street, New York, New York 10013,
respectively.
The names, titles and principal occupations of the current directors and
executive officers of the Sub-Adviser are set forth in the following table:
Name TITLE AND PRINCIPAL OCCUPATION
- ---- ------------------------------
Thomas W. Brock Chairman, Chief Executive Officer
and Managing Director of the Sub-
Adviser 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 the Sub-
Adviser and Managing Director of
Salomon Brothers Inc
Rodney B. Berens Managing Director and Member of the
Board of the Sub-Adviser and
Managing Director and Member of the
Management Board of Salomon Brothers
Inc
Vilas V. Gadkari Managing Director and Member of the
Board of the Sub-Adviser and
Managing Director of Salomon Brothers
Inc
Zachary Snow Secretary of the Sub-Adviser 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 pursuant to the Merger Agreement entered into between
Travelers and Salomon dated as of September 24, 1997. 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 the Adviser that it anticipates that the Sub-Adviser will
continue to provide the same level of sub-advisory services as has been provided
to the Portfolio 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), 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.
Management of the Trust is aware of no circumstances arising from the
Transaction that might result in an unfair burden being imposed on the
Portfolio. 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 AGREEMENT AND NEW SUB-ADVISORY AGREEMENT
The Existing Agreement and the New Sub-Advisory Agreement are substantially
identical, except for the dates of execution, effectiveness and termination. The
following description of the New Sub-Advisory Agreement is qualified in its
entirety by reference to the form of New Sub-Advisory Agreement marked to
indicate the changes from the Existing Agreement and is attached hereto as Annex
A.
Services to be Performed
The Existing Agreement for the Portfolio was initially approved by a majority of
the Trustees, including a majority of the Disinterested Trustees, voting in
person at a meeting called for that purpose on April 18, 1995. The Existing
Agreement was last approved by the Shareholders of the Portfolio at a meeting
held on May 17, 1996.
The Existing Agreement provides that the Sub-Adviser shall (a) make, in
consultation with the Adviser and the Trust's Board of Trustees, investment
strategy decisions for the Trust, (b) manage the investing and reinvesting of
the Trust's assets and (c) place purchase and sale orders on behalf of the
Trust. The services to be performed will be identical under the New Sub-Advisory
Agreement.
The net assets of the Portfolio as of February 27, 1998, were $4,380,250.27.
Expenses and Sub-Advisory Fee
The New Sub-Advisory Agreement provides that the Sub-Adviser shall, at its
expense, provide office space, office facilities and personnel reasonably
necessary for performance of the services to be provided by the Sub-Adviser
pursuant to the agreement.
THE RATE USED TO DETERMINE SUB-ADVISORY FEES PAYABLE BY THE PORTFOLIO PURSUANT
TO THE NEW SUB-ADVISORY AGREEMENT IS IDENTICAL TO THE RATE UNDER THE EXISTING
AGREEMENT.
The fee rate is .225 of 1% on an annualized basis of net assets under
management. The aggregate amount of compensation paid by the Adviser to the
Sub-Adviser for its services to the Portfolio for the year ended December 31,
1997, was $5,756.
Limitation of Liability
As set forth more fully in Annex A, the indemnity provisions under the New
Sub-Advisory Agreement are the same as those under the Existing Agreement. The
Sub-Adviser shall indemnify the Adviser against any loss, liability, claim,
damage or expense but only with respect to the Sub-Adviser's willful
misfeasance, bad faith or gross negligence in the performance of its duties
under the sub-advisory agreement.
Duration and Termination
The New Sub-Advisory 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 (a) by the vote of a
"majority of the outstanding voting securities" (as defined in the 1940 Act) or
by the Trust's Board of Trustees and (b) by the vote, cast in person at a
meeting called for the purpose, of a majority of the Trust's Trustees who are
not parties to the Sub-Advisory Agreement or "interested persons" (as defined in
the 1940 Act) of any such party. The termination provisions under the New
Sub-Advisory Agreement are the same as those under the Existing Agreement and
provide that the agreement may be terminated at any time, without the payment of
any penalty, by (i) a vote of a majority of the Trust's entire Board of Trustees
on 60 days' written notice to the Sub-Adviser or (ii) by the Sub-Adviser on 60
days' written notice to the Adviser or (iii) by the Adviser on 60 days' written
notice to the Sub-Adviser. The New Sub-Advisory Agreement shall terminate
automatically (a) in the event of its assignment (as defined in the 1940 Act) or
(b) in the event of the termination of the Advisory Agreement.
The Table below provides information with respect to the investment companies
with similar investment objectives to the Portfolio for which the Sub-Adviser
provides management, advisory or sub-advisory services.
<TABLE>
<CAPTION>
<S> <C> <C>
NAME OF FUND ASSET SIZE ANNUAL FEE RATE
- ------------ ---------- ---------------
(as of 1/31/98) (as a percentage of
average daily net
assets)
Salomon Brothers U.S.
Government Income Fund(1) $14,617,292 .60%
Salomon Brothers U.S. Government
Series, an investment portfolio
of New England Zenith Fund(2) $22,500,603 first $200 million - .225%
next $300 million - .150%
over $500 million - .100%
U.S. Government Securities Trust,
an investment portfolio of
NASL Series Trust(2) $259,000,623 first $200 million - .225%
next $300 million - .150%
over $500 million - .100%
U.S. Government Securities Fund,
an investment portfolio of North
American Funds(2) $82,311,500 first $200 million - .225%
next $300 million - .15%
over $500 million - .10%
Salomon Brothers/JNL U.S. Government
& Quality Bond Series, an investment
portfolio of JNL Series Trust(2) $27,843,620 first $150 million - .225%
next $150 million - .175%
next $200 million - .150%
over $500 million - .100%
<FN>
- -------------------- (1) With respect to this Fund, the Sub-Adviser serves as
investment adviser. 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 subadviser and,
accordingly the sponsoring investment adviser pays the Sub-Adviser a fee at the
annual rate specified in the Table out of the total advisory fee.
</FN>
</TABLE>
BOARD OF TRUSTEES' EVALUATION
The Board, including the non-interested Trustees, determined that the approval
of the New Sub-Advisory 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 New
Sub-Advisory Agreement was approved by the Trustees at its meeting held on
November 20, 1997.
The Trustees were presented with materials furnished by the Sub-Adviser and
Travelers. Those materials included financial statements as well as other
written information regarding the Sub-Adviser and Travelers and their personnel,
operations and financial condition.
In evaluating the New Sub-Advisory Agreement, the Trustees focused primarily on
the nature, quality and scope of the operations and services to date provided by
the Sub-Adviser, which are expected to continue with no change in fees, and the
fact that the agreement is substantially identical to the Existing Agreement.
The Board also considered the commitment of Travelers to maintain the services
provided to the Portfolio by the Sub-Adviser. The Board also took into account
the following factors: (i) the qualifications of Sub-Adviser to provide
sub-advisory services, including the credentials and investment experience of
their respective officers and employees; (ii) the range of services provided by
the Sub-Adviser; and (iii) the appropriateness of the sub-advisory fees.
In addition to the foregoing primary considerations, the Board considered the
likelihood of the Sub-Adviser's and Travelers financial stability following the
Transaction, particularly in light of the overall experience and reputation of
the Sub-Adviser and Travelers and their financial stability, and whether there
are any aspects of the Transaction likely to affect the ability of the
Sub-Adviser to retain and attract qualified personnel following the Transaction.
Based upon its review, the Board concluded that the New Sub-Advisory Agreement
is in the best interest of the Portfolio and the Portfolio'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 Sub-Advisory Agreement. At its meeting
held on February 27, 1998, the Board of Trustees, including the Disinterested
Trustees, called a Special Meeting of Shareholders and recommended that the New
Sub-Advisory Agreement be submitted for approval by the Shareholders of the
Portfolio.
In the event that Shareholders of the Portfolio do not approve the New
Sub-Advisory Agreement, the Board of Trustees of the Trust would seek to obtain
for the Portfolio interim investment advisory services at the lesser of cost or
the current fee rate either from the Sub-Adviser or from another advisory
organization. Thereafter, the Board of Trustees of the Trust would either
negotiate a new sub-advisory agreement with an advisory organization selected by
the Board of Trustees or make appropriate arrangements, in either event subject
to approval of the Shareholders of the Portfolio.
SHAREHOLDER APPROVAL
To become effective, the New Sub-Advisory Agreement must be approved by a
majority of the outstanding voting securities of the Portfolio. The "vote of a
majority of the outstanding voting securities" is defined under "Voting" above.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" APPROVAL OF THE NEW SUB-ADVISORY
AGREEMENT.
SUBSTANTIAL SHAREHOLDERS
As of the Record Date, Western National Life and WNL Separate Account A, a
separate account of Western National Life, were known to the Board of Trustees
and the management of the Trust to own of record 100% of the Shares. On that
date, the officers and trustees of the Trust owned no Variable Contracts.
EXPENSES
All expenses of preparing, printing and mailing the enclosed form of proxy, the
accompanying Notice and this Proxy Statement will be paid by Travelers.
YOU ARE REQUESTED TO FILL IN, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
BY ORDER OF THE BOARD OF TRUSTEES,
KURT FREDLAND
Vice President and Assistant Secretary
Dated: March 16, 1998
Houston, Texas
ANNEX A
MARKED TO INDICATE
CHANGES FROM THE
EXISTING AGREEMENT
WNL SERIES TRUST
SUB-ADVISORY AGREEMENT
AGREEMENT dated and effective as of November 28, 1997, among SALOMON
--------------------------
BROTHERS ASSET MANAGEMENT INC, a Delaware corporation (the "Sub-Adviser"), WNL
INVESTMENT ADVISORY SERVICES, INC., a Delaware corporation (the "Adviser"), and
WNL SERIES TRUST, a Massachusetts business trust (the "Trust").
WHEREAS, the Adviser has entered into an Investment Advisory Agreement (the
"Advisory Agreement") dated August 23, 1995 with the Trust, an open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"), pursuant to which the Adviser provides
investment advisory services to the Trust; and
WHEREAS, the Adviser has the authority to delegate its investment advisory
responsibilities under the Advisory Agreement to one or more sub-advisers; and
WHEREAS, the Adviser desires to retain the Sub-Adviser to provide
investment advisory services to the Salomon Brothers U.S. Government Securities
Portfolio of the Trust.
NOW, THEREFORE, the parties hereto agree as follows:
1. The Adviser employs the Sub-Adviser, subject to the direction and
control of the Trustees of the Trust, including without limitation any approval
of the Trustees of the Trust required by the 1940 Act, to (a) make, in
consultation with the Adviser and the Trust's Board of Trustees, investment
strategy decisions for the Trust, (b) manage the investing and reinvesting of
the Trust's assets and (c) place purchase and sale orders on behalf of the
Trust. The Sub-Adviser shall have the sole ultimate discretion over investment
decisions for the Trust.
2. (a) The Adviser shall provide (or cause the Trust's custodian to
provide) timely information to the Sub-Adviser regarding such matters as the
composition of assets in the Portfolio, cash requirements and cash available for
investment in that Portfolio, and all other information as may be reasonably
necessary for the Sub-Adviser to perform its responsibilities hereunder.
(b) The Adviser agrees to furnish the Sub-Adviser with minutes of
meetings of the Board of Trustees of the Trust applicable to the Trust to the
extent they may affect the duties of the Sub-Adviser, and with copies of any
financial statements or reports made by the Trust to its shareholders, and any
further materials or information which the Sub-Adviser may reasonably request to
enable it to perform its functions under this Agreement.
3. (a) The Sub-Adviser shall, at its expense, provide office space, office
facilities and personnel reasonably necessary for performance of the services to
be provided by the Sub-Adviser pursuant to this Agreement.
(b) Except as provided in subparagraph 3(a) hereof, the Trust shall be
responsible for all of the Trust's expenses and liabilities, including
organizational and offering expenses; expenses for legal, accounting and
auditing services; taxes and governmental fees, dues and expenses incurred in
connection with membership in investment company organizations; costs of
printing and distributing shareholder reports, proxy materials, prospectuses,
stock certificates and distribution of dividends; charges of the Trust's
custodians and sub-custodians, administrators and sub-administrators,
registrars, transfer agents, dividend disbursing agents and dividend
reinvestment plan agents; payment for portfolio pricing services to a pricing
agent, if any; registration and filing fees of the Securities and Exchange
Commission (the "SEC"); any expenses of registering or qualifying securities of
the Trust for sale in the various states; freight and other charges in
connection with the shipment of the Trust's portfolio securities; fees and
expenses of non-interested Trustees; travel expenses or an appropriate portion
thereof of Trustees and officers of the Trust who are directors, officers or
employees of the Sub-Adviser to the extent that such expenses relate to
attendance at meetings of the Board of Trustees or any committee thereof; costs
of shareholders meetings; insurance; interest; brokerage costs, and litigation
and other extraordinary or non-recurring expenses.
4. The Sub-Adviser shall make investments for the Trust's account in
accordance with the investment objectives, policies and limitations set forth in
the Trust's Declaration of Trust, as amended from time to time (the
"Declaration"), the Registration Statement, as in effect from time to time (the
"Registration Statement"), filed with the SEC by the Trust under the 1940 Act
and the Securities Act of 1933, as amended (the "1933 Act"), the provisions of
the Internal Revenue Code of 1986, as amended, and policy decisions adopted by
the Trust's Board of Trustees from time to time. Copies of any amendments to the
documents referred to in the preceding sentence shall be promptly furnished to
the Sub-Adviser. The Sub-Adviser shall advise the Trust's officers and Board of
Trustees, at such times as the Trust's Board of Trustees may specify, of
investments made for the Trust's account and shall, when requested by the
Trust's officers or Board of Trustees, supply the reasons for making such
investments.
5. The Sub-Adviser may contract with or consult with such banks, other
securities firms, brokers or other parties, without additional expense to the
Trust, as it may deem appropriate regarding investment advice, research and
statistical data, clerical assistance or otherwise.
6. The Sub-Adviser is authorized on behalf of the Trust, from time to time
when deemed to be in the best interests of the Trust and to the extent permitted
by applicable law, to select brokers (including Salomon Brothers Inc. or any
other brokers affiliated with the Sub-Adviser) for the execution of trades for
the Trust.
7. The Sub-Adviser is authorized, for the purchase and sale of the Trust's
portfolio securities, to employ such dealers and brokers as may, in the judgment
of the Sub-Adviser, implement the policy of the Trust to obtain the best results
taking into account such factors as price, including dealer spread, the size,
type and difficulty of the transaction involved, the firm's general execution
and operational facilities and the firm's risk in positioning the securities
involved. Consistent with this policy, the Sub-Adviser is authorized to direct
the execution of the Trust's portfolio transactions to dealers and brokers
furnishing statistical information or research deemed by the Sub-Adviser to be
useful or valuable to the performance of its investment advisory functions for
the Trust. Information so received will be in addition to and not in lieu of the
services required to be performed by the Sub-Adviser. It is understood that the
expenses of the Sub-Adviser will not necessarily be reduced as a result of the
receipt of such information or research.
8. In consideration of the services to be rendered by the Sub-Adviser under
this Agreement, the Adviser shall pay the Sub-Adviser the fee as set forth in
Exhibit A of this Agreement. If the fee payable to the Sub-Adviser pursuant to
this paragraph 8 and Exhibit A hereto begins to accrue before the end of any
month or if this Agreement terminates before the end of any month, the fee for
the period from such date to the end of such month or from the beginning of such
month to the date of termination, as the case may be, shall be prorated
according to the proportion which such period bears to the full month in which
such effectiveness or termination occurs. For purposes of calculating each such
monthly fee, the value of the Trust's net assets shall be computed at the time
and in the manner specified in the Registration Statement.
9. The Sub-Adviser shall provide marketing support to the Adviser in
connection with the sale of Trust shares and/or the sale of variable annuity and
variable life insurance contracts issued by Western National Life Insurance
Company and its affiliates which may invest in the Trust (collectively, the
"Life Company"), as reasonably requested by the Adviser. Such support shall
include, but not necessarily be limited to, presentations by representatives of
the Sub-Adviser at investment seminars, conferences and other industry meetings.
Any materials utilized by the Adviser which contain any information relating to
the Sub-Adviser shall be submitted to the Sub-Adviser for approval prior to use,
not less than five (5) business days before such approval is needed by the
Adviser. Any materials utilized by the Sub-Adviser which contain any information
relating to the Adviser, the Life Company (including any information relating to
its separate accounts or variable annuity or variable life insurance contracts)
or the Trust shall be submitted to the Adviser for approval prior to use, not
less than five (5) business days before such approval is needed by the
Sub-Adviser.
10. The Sub-Adviser represents and warrants that it is duly registered and
authorized as an investment adviser under the Investment Advisers Act of 1940,
as amended, and the Sub-Adviser agrees to maintain effective all requisite
registrations, authorizations and licenses, as the case may be, until
termination of this Agreement.
11. The Adviser shall indemnify and hold harmless the Sub-Adviser, its
officers and directors and each person, if any, who controls the Sub-Adviser
within the meaning of Section 15 of the 1933 Act (any and all such persons shall
be referred to as "Indemnified Party"), against any loss, liability, claim,
damage or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, claim, damages or expense and reasonable counsel
fees incurred in connection therewith), arising by reason of any matter to which
this Sub-Advisory Agreement relates. However, in no case (i) is this indemnity
to be deemed to protect any particular Indemnified Party against any liability
to which such Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of reckless disregard of its obligations and duties under this
Sub-Advisory Agreement or (ii) is the Adviser to be liable under this indemnity
with respect to any claim made against any particular Indemnified Party unless
such Indemnified Party shall have notified the Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the
Sub-Adviser or such controlling persons.
The Sub-Adviser shall indemnify and hold harmless the Adviser and each of
its directors and officers and each person if any who controls the Adviser
within the meaning of Section 15 of the 1933 Act, against any loss, liability,
claim, damage or expense described in the foregoing indemnity, but only with
respect to the Sub-Adviser's willful misfeasance, bad faith or gross negligence
in the performance of its duties under this Sub-Advisory Agreement. In case any
action shall be brought against the Adviser or any person so indemnified, in
respect of which indemnity may be sought against the Sub-Adviser, the
Sub-Adviser shall have the rights and duties given to the Adviser, and the
Adviser and each person so indemnified shall have the rights and duties given to
the Sub-Adviser by the provisions of subsections (i) and (ii) of this section.
12. This Agreement shall become effective as of the date of its execution
and continue in effect for two years from the date of execution, and thereafter
for successive annual periods, provided that such continuance is specifically
approved at least annually (a) by the vote of a majority of the Trust's
outstanding voting securities (as defined in the 1940 Act) or by the Trust's
Board of Trustees and (b) by the vote, cast in person at a meeting called for
the purpose, of a majority of the Trust's Trustees who are not parties to this
Agreement or "interested persons" (as defined in the 1940 Act)of any such party.
This Agreement may be terminated at any time, without the payment of any
penalty, by (i) a vote of a majority of the Trust's entire Board of Trustees on
60 days' written notice to the Sub-Adviser or (ii) by the Sub-Adviser on 60
days' written notice to the Adviser or (iii) by the Adviser on 60 days' written
notice to the Sub-Adviser. This Agreement shall terminate automatically (a) in
the event of its assignment (as defined in the 1940 Act) or (b) in the event of
the termination of the Advisory Agreement.
13. Nothing herein shall be deemed to limit or restrict the right of the
Sub-Adviser, or any affiliate of the Sub-Adviser, or any employee of the
Sub-Adviser, to engage in any other business or to devote time and attention to
the management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
firm, individual or association. Nothing herein shall be construed as
constituting the Sub-Adviser an agent of the Adviser or the Trust.
14. This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts, provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
15. Any notice hereunder shall be in writing and shall be delivered in
person or by telex or facsimile (followed by delivery in person) to the parties
at the addresses set forth below.
If to the Sub-Adviser:
Salomon Brothers Asset Management Inc
Seven World Trade Center
New York, New York 10048
Tel: (212) 783-7000
Fax: (212) 783-4764
Attn: _____________________________
(b) If to the Adviser:
WNL Investment Advisory Services, Inc.
5555 San Felipe, Suite 900
Houston, Texas 77056
Tel: (713) 888-7807
Fax: (713) 888-7894
Attn: Dwight Cramer
or to such other address as to which the recipient shall have informed the other
party in writing.
Unless specifically provided elsewhere, notice given as provided above
shall be deemed to have been given, if by personal delivery, on the day of such
delivery, and, if by facsimile and mail, on the date on which such facsimile is
sent and mailed.
16. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument. This Agreement will become binding on
the parties hereto upon their execution of the attached Exhibit A to this
Agreement.
EXHIBIT A
WNL SERIES TRUST
SUB-ADVISORY COMPENSATION
For all services rendered by Sub-Adviser hereunder, Adviser shall pay to
Sub-Adviser and Sub-Adviser agrees to accept as full compensation for all
services rendered hereunder, monthly a fee of:
Salomon Brothers U.S. Government Securities Portfolio
.225 of 1% on an annualized basis of net assets under management.
WNL SERIES TRUST
By:___________________________________
Title:
WNL INVESTMENT ADVISORY SERVICES, INC.
By:___________________________________
Title:
SALOMON BROTHERS ASSET MANAGEMENT INC
By:___________________________________
Title:
A copy of the document establishing the Trust is filed with the Secretary of the
Commonwealth of Massachusetts. This Agreement is executed by officers not as
individuals and is not binding upon any of the Trustees, officers or
shareholders of the Trust individually but only upon the assets of each
Portfolio.
PROXY
SALOMON BROTHERS U.S. GOVERNMENT SECURITIES PORTFOLIO
OF
WNL SERIES TRUST
SPECIAL MEETING OF SHAREHOLDERS
APRIL 16, 1998
KNOW ALL MEN BY THESE PRESENTS that the undersigned shareholder(s) of the
Salomon Brothers U.S. Government Securities Portfolio of WNL 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 16, 1998 at the offices of Western
National Life Insurance Company, 5555 San Felipe, Suite 900, Houston, Texas at
9:30 a.m., local time, and at any adjournment thereof ("Meeting"), as follows:
1. To approve a new Sub-Advisory Agreement among Salomon Brothers Asset
Management Inc, WNL Investment Advisory Services, Inc. and WNL Series
Trust.
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
Western National Life Insurance Company
___________________________________________________
Name of Insurance Company
___________________________________________________
Name and Title of Authorized Officer
___________________________________________________
Signature of Authorized Officer
SALOMON BROTHERS U.S. GOVERNMENT SECURITIES PORTFOLIO
Name(s) of Separate Account(s)
of the Insurance Company
Owning Shares in this Portfolio:
WNL SEPARATE ACCOUNT A
__________________________________
__________________________________
__________________________________
TOTAL SHARES OF THIS PORTFOLIO
OWNED AND BEING VOTED BY THE
INSURANCE COMPANY:
__________________________________
SALOMON BROTHERS U.S. GOVERNMENT SECURITIES PORTFOLIO ("Portfolio")
INSTRUCTIONS TO WESTERN NATIONAL LIFE INSURANCE COMPANY
FOR THE SPECIAL MEETING OF SHAREHOLDERS OF
WNL SERIES TRUST TO BE HELD ON APRIL 16, 1998
INSTRUCTIONS SOLICITED ON BEHALF OF
WESTERN NATIONAL LIFE INSURANCE COMPANY
The undersigned hereby instructs Western National Life Insurance Company (the
"Company") to vote all shares of the above-referenced Portfolio of WNL 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 16, 1998, at the offices of Western National Life Insurance Company, 5555
San Felipe, Suite 900, Houston, Texas 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 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.
Dated:_________________, 1998
__________________________________________________
Signature(s)
INSTRUCTIONS SOLICITED ON BEHALF OF WESTERN NATIONAL LIFE INSURANCE COMPANY
WESTERN NATIONAL LIFE INSURANCE COMPANY WILL VOTE SHARES REPRESENTED BY UNITS
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 one of the boxes below.
FOR AGAINST ABSTAIN
---- ----------- -------
1. To approve a new Sub-Advisory Agreement [ ] [ ] [ ]
among Salomon Brothers Asset Management
Inc, WNL Investment Advisory Services,
Inc. and WNL Series Trust.
IMPORTANT: Please sign on the reverse side.
