You should read this entire Proxy Statement/Prospectus carefully. For additional information, you should consult the Plan of Reorganization, a copy of which is attached hereto as Appendix A.
This Proxy Statement/Prospectus is soliciting members with amounts invested in the Acquired Fund as of July 6, 2015 to approve the Plan of Reorganization, whereby the Acquired Fund will be reorganized into the Acquiring Fund. (The Acquired Fund and Acquiring Fund are each sometimes referred to herein as a “Fund” and collectively, the “Funds.”)
The Acquired Fund’s shares are divided into two classes, designated Class A shares and Class B shares (“Acquired Fund Shares”). The Acquiring Fund has one share class (“Acquiring Fund Shares”).
A comparison of the investment objective(s), principal investment policies and strategies and principal risks of the Acquired Fund and the Acquiring Fund is included in “Comparison of Investment Objectives, Principal Policies and Strategies” and “Comparison of Principal Risk Factors” below. The Funds have identical distribution procedures, purchase procedures, exchange rights and redemption procedures, which are discussed in “Additional Information about the Acquiring Fund” below. Each Fund offers its shares to Separate Accounts and certain other eligible investors. Shares of each Fund are offered and redeemed at their net asset value without any sales load. You will not incur any sales loads or similar transaction charges as a result of the Reorganization.
The Reorganization is expected to be effective as of the close of business on September 18, 2015, or on such later date as may be deemed necessary in the judgment of the VF LLC Board and the Board of Trustees of JNLST in accordance with the Plan of Reorganization (the “Closing Date”). As a result of the Reorganization, a member invested in shares of the Acquired Fund would become an owner of shares of the Acquiring Fund. Such member would hold, immediately after the Closing Date, Class A shares of the Acquiring Fund having an aggregate value equal to the aggregate value of the Acquired Fund Shares that were held by the member as of the Closing Date. Similarly, each Contract Owner whose Contract values are invested indirectly in shares of the Acquired Fund would become indirectly invested in shares of the Acquiring Fund. The Contract value of each such Contract Owner would be invested indirectly, immediately after the Closing Date, in Class A shares of the Acquiring Fund having an aggregate value equal to the aggregate value of the Acquired Fund shares in which the Contract Owner invested indirectly as of the Closing Date. JNLST believes that there will be no adverse tax consequences to Contract Owners as a result of the Reorganization. Please see “Additional Information about the Reorganization – Federal Income Tax Consequences of the Reorganization” below for further information.
The VF LLC’s Board of Managers (the “VF LLC Board”) unanimously approved the Plan of Reorganization with respect to the MC 25 Fund. Accordingly, the VF LLC Board is submitting the Plan of Reorganization for approval by the Acquired Fund’s members. In considering whether to approve the proposal (“Proposal”), you should review the Proposal for the Acquired Fund in which you were invested on the Record Date (as defined under “Voting Information”). In addition, you should review the information in this Proxy Statement/Prospectus that relates to the
Proposal and the Plan of Reorganization generally. The VF LLC Board recommends that you vote “FOR” the Proposal to approve the Plan of Reorganization.
This Proposal requests the approval of MC 25 Fund members of the Plan of Reorganization pursuant to which the MC 25 Fund will be reorganized into the S&P 4 Fund.
(expenses that you pay each year as a percentage of the value of your investment)
This example is intended to help you compare the costs of investing in the Funds with the cost of investing in other mutual funds. This example does not reflect fees and expenses related to the Contracts, and the total expenses would be higher if they were included. The example assumes that:
Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Each Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs. These costs, which are not reflected in annual fund operating expenses or in the example, affect a Fund’s performance. For the fiscal year-ended December 31, 2014, the portfolio turnover rates for the MC 25 Fund and S&P 4 Fund were 100% and 4%, respectively, of the average value of each Fund.
The following table compares the investment adviser of the S&P 4 Fund with the investment adviser and sub-adviser of the MC 25 Fund.
The following table compares the investment objectives and principal investment policies and strategies of the S&P 4 Fund with those of the MC 25 Fund. A Board may change the investment objective of a Fund without a vote of the Fund’s members/shareholders. For more detailed information about each Fund’s investment strategies and risks, see Appendix B.
An investment in a Fund is not guaranteed. As with any mutual fund, the value of a Fund’s shares will change, and an investor could lose money by investing in a Fund. The following table compares the principal risks of an investment in each Fund. For additional information about each principal risk and other applicable risks, see Appendix B.
Each Fund is subject to certain fundamental policies and restrictions that may not be changed without shareholder approval. The following table compares the fundamental policies of the S&P 4 Fund with those of the MC 25 Fund.
The performance information shown below provides some indication of the risks of investing in each Fund by showing changes in the Fund’s performance from year to year and by showing how each Fund’s average annual returns compared with those of broad-based securities market indices which have performance characteristics similar to those of the Funds. Past performance is not an indication of future performance.
The returns shown in the bar chart and table do not include charges imposed under the Contracts. If these amounts were reflected, returns would be less than those shown.
The following table shows the capitalization of each Fund as of December 31, 2014 and of the S&P 4 Fund on a pro forma combined basis as of December 31, 2014 after giving effect to the proposed Reorganization. The actual net assets of the MC 25 Fund and the S&P 4 Fund on the Closing Date will differ due to fluctuations in net asset values, subsequent purchases, and redemptions of shares. No assurance can be given as to how many Class A shares of the S&P 4 Fund will be received by members of MC 25 Fund on the Closing Date, and the following table should not be relied upon to reflect the number of shares of the S&P 4 Fund that will actually be received.
(b) The adjustment to the pro forma shares outstanding number represents a decrease in shares outstanding of the MC 25 Fund to reflect the exchange of shares of the S&P 4 Fund.
The Reorganization provides for the acquisition of all the assets and all the liabilities of the MC 25 Fund by the S&P 4 Fund. If the Reorganization had taken place on December 31, 2014, the MC 25 Fund would have received 52,187,647 Class A shares of the S&P 4 Fund.
After careful consideration, the VF LLC Board of Managers unanimously approved the Plan of Reorganization with respect to the MC 25 Fund. Accordingly, the VF LLC Board has submitted the Plan of Reorganization for approval by the MC 25 Fund’s members. The VF LLC Board recommends that you vote “FOR” this Proposal.
The terms of the Plan of Reorganization are summarized below. The summary is qualified in its entirety by reference to the Plan, a copy of which is attached as Appendix A.
If members of the Acquired Fund approve the Plan of Reorganization, then the assets of the Acquired Fund will be acquired by, and in exchange for, Class A shares of the Acquiring Fund and the liabilities of the Acquired Fund will be assumed by the Acquiring Fund. The Acquired Fund will then be terminated by VF LLC, and the Class A shares of the Acquiring Fund distributed to the members of the Acquired Fund in the redemption of the Acquired Fund shares. Immediately after completion of the Reorganization, the number of shares of the Acquiring Fund then held by former members of the Acquired Fund may be different than the number of shares of the Acquired Fund that had been held immediately before completion of the Reorganization, but the total investment will remain the same (i.e., the total value of the Acquiring Fund Class A shares held immediately after the completion of the Reorganization will be the same as the total value of the Acquired Fund shares formerly held immediately before completion of the Reorganization).
It is anticipated that the Reorganization will be consummated as of the close of business on September 18, 2015, or on such later date as may be deemed necessary in the judgment of the VF LLC Board and the Board of Trustees of JNLST in accordance with the Plan of Reorganization (the “Closing Date”), subject to the satisfaction of all conditions precedent to the closing. It is not anticipated that the Acquired Fund will hold any investment that the Acquiring Fund would not be permitted to hold (“non-permitted investments”).
The members of the Acquired Fund will receive Class A shares of the Acquiring Fund in accordance with the procedures provided for in the Plan of Reorganization. Each such share will be fully paid and non-assessable by JNLST when issued and will have no preemptive or conversion rights.
JNLST may issue an unlimited number of full and fractional shares of beneficial interest of the Acquiring Fund and divide or combine such shares into a greater or lesser number of shares without thereby changing the proportionate beneficial interests in JNLST. Each share of the Acquiring Fund represents an equal proportionate interest in that Fund with each other share. JNLST reserves the right to create and issue any number of Fund shares. In that case, the shares of the Acquiring Fund would participate equally in the earnings, dividends, and assets of the Fund. Upon liquidation of the Acquiring Fund, shareholders are entitled to share pro rata in the net assets of the Fund available for distribution to shareholders. The Acquiring Fund is a series of JNLST.
JNLST currently offers only class of shares, Class A, for the Acquiring Fund. JNLST has adopted, in the manner prescribed under Rule 12b-1 under the 1940 Act, a plan of distribution pertaining to the Class A shares of the Acquiring Fund. The maximum distribution and/or service (12b-1) fee for the Acquiring Fund’s Class A shares is equal to an annual rate of 0.20% of the average daily net assets attributable to those shares. Because these distribution/service fees are paid out of the Acquiring Fund’s assets on an ongoing basis, over time these fees will increase your cost of investing and may cost more than paying other types of charges. Furthermore, the Acquiring Fund is a fund-of-funds which invests in other investment companies that may also have distribution and/or service (12b-1) fees.
At a meeting of VF LLC’s Board of Managers (in this section, the “VF LLC Board”) held on June 2-3, 2015, the VF LLC Board, including the Managers who are not “interested persons” (as that term is defined in the 1940 Act) of VF LLC (“Independent Managers”), considered written memoranda and other supporting materials and discussed the potential benefits to the members of the Acquired Fund under the proposed Reorganization. The VF LLC Board considered that the Reorganization is part of an overall rationalization of VF LLC’s offerings, and is designed to eliminate inefficiencies arising from offering overlapping funds with similar investment objectives and investment strategies that serve as investment options for the Contracts issued by the Insurance Companies and certain qualified and nonqualified plans. The Reorganization also seeks to increase assets under management in the Acquiring Fund and seeks to achieve additional economies of scale. The objective of the Reorganization is to seek to ensure that a consolidated family of investments offers a streamlined, complete, and competitive set of underlying investment options to serve the interests of members and Contract Owners. Approval of the Reorganization requires the affirmative vote of a majority of the outstanding voting securities of the Acquired Fund. In determining whether to recommend approval of the Reorganization, the VF LLC Board considered many factors, including:
In summary, in determining whether to recommend approval of the Reorganization, the VF LLC Board considered factors including (1) the terms and conditions of the Reorganization and whether the Reorganization would result in dilution of the Acquired Fund’s members’ and the Acquiring Fund’s shareholders, Contract Owners’, and plan participants’ interests; (2) the compatibility of the Funds’ investment objectives, investment strategies and investment restrictions, as well as member services offered by the Funds; (3) the expense ratios and information regarding the fees and expenses of the Funds; (4) the advantages and disadvantages to the Acquired Fund’s members and the Acquired Fund shareholders, Contract Owners, and plan participants of having a larger asset base in the Combined Fund; (5) the relative historical performance of the Funds and similarly managed strategies; (6) the management of the Funds; (7) the federal income tax consequences of the Reorganization; and (8) the costs of the Reorganization. No one factor was determinative. The VF LLC Board also considered alternative options available for the Acquired Fund.
For the reasons described above, the VF LLC Board, including the Independent Managers, determined that the Reorganization would be in the best interests of the Acquired Fund and the Acquiring Fund and that the interests of the Acquired Fund’s and the Acquiring Fund’s Contract Owners and other investors would not be diluted as a result of the Reorganization. At the VF LLC Board meeting held on June 2-3, 2015, the VF LLC Board voted unanimously to approve the Reorganization and recommended its approval by Contract Owners and others with beneficial interests in the Acquired Fund.
A Fund’s performance may be affected by one or more risk factors. For a detailed description of a Fund’s risk factors, please see Appendix B “More Information on Strategies and Risk Factors.”
Contract Owners with premiums or contributions allocated to the investment divisions of the Separate Accounts as well as others that are invested in Acquired Fund shares generally will not recognize gain or loss for Federal income tax purposes as a result of the Reorganization.
Contract Owners and other investors are urged to consult their tax advisers as to the specific consequences to them of the Reorganization, including the applicability and effect of state, local, foreign and other taxes.
If the Reorganization is not approved by members, the Funds will continue to operate as they currently do and the VF LLC Board will consider what actions are appropriate and in the best interests of Contract Owners that have assets invested in the Funds.
This section provides information about JNLST and the Adviser for the Acquiring Fund.
JNLST is organized as a Massachusetts business trust and is registered with the SEC as an open-end management investment company. Under Massachusetts law and the JNLST’s Agreement and Declaration of Trust (“Declaration of Trust”) and By-Laws, the management of the business and affairs of JNLST is the responsibility of its Board of Trustees. The Acquiring Fund is a series of JNLST.
Jackson National Asset Management, LLC (“JNAM”), 1 Corporate Way, Lansing, Michigan 48951, is the investment adviser to JNLST and provides JNLST with professional investment supervision and management. JNAM is a wholly owned subsidiary of Jackson National, which is in turn a wholly owned subsidiary of Prudential plc, a publicly traded company incorporated in the United Kingdom. Prudential plc is not affiliated in any manner with Prudential Financial Inc., a company whose principal place of business is in the United States of America. Prudential plc is also the ultimate parent of M&G Investment Management Limited, PPM America, Inc. and Eastspring Investments (Singapore) Limited.
JNAM acts as investment adviser to JNLST pursuant to an Investment Advisory and Management Agreement. The Investment Advisory and Management Agreement continues in effect for each Fund from year to year after its initial two-year term so long as its continuation is approved at least annually by (i) a majority of the Trustees who are not parties to such agreement or interested persons of any such party except in their capacity as Trustees of JNLST, and (ii) the shareholders of the affected Fund or the Board of Trustees. It may be terminated at any time upon 60 days’ notice by JNAM, or by a majority vote of the outstanding shares of a Fund with respect to that Fund, and will terminate automatically upon its assignment. The Investment Advisory and Management Agreement provides that JNAM shall not be liable for any error of judgment, or for any loss suffered by any Fund in connection with the matters to which the agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the part of JNAM in the performance of its obligations and duties, or by reason of its reckless disregard of its obligations and duties under the agreement. As compensation for its services, JNLST pays JNAM a fee in respect of each Fund as described in that Fund’s Prospectus.
JNAM and JNLST, together with other investment companies of which JNAM is investment adviser, have been granted an exemption from the SEC that allows JNAM to hire, replace or terminate unaffiliated sub-advisers with the approval of the Board of Trustees, but without the approval of shareholders. The order also allows JNAM to materially amend a sub-advisory agreement with unaffiliated sub-advisers with the approval of the Board of Trustees, but without shareholder approval. However, any amendment to an advisory agreement between the Adviser and JNLST that would result in an increase in the management fee rate specified in that agreement (i.e., the aggregate management fee) charged to a Fund will be submitted to shareholders for approval. Under the terms of the exemption, if a new sub-adviser is hired by JNAM, shareholders in the affected Fund will receive information about the new sub-adviser within 90 days of the change. The order allows the Funds to operate more efficiently and
with greater flexibility. JNAM provides the following oversight and evaluation services to the Funds, including, but not limited to the following services: performing initial due diligence on prospective sub-advisers for the Funds; monitoring the performance of sub-advisers; communicating performance expectations to the sub-advisers; and ultimately recommending to the Board of Trustees whether a sub-adviser’s contract should be renewed, modified or terminated.
JNAM does not receive a management fee for its services as investment adviser to the Acquiring Fund.
Despite not receiving an investment management fee, the Acquiring Fund pays to JNAM (“Administrator”) an Administrative Fee as an annual percentage of the average daily net assets of the Fund as set forth below.
In return for the Administrative Fee, the Administrator provides or procures all necessary administrative functions and services for the operation of the Funds. In addition, the Administrator, at its own expense, arranges and pays for routine legal, audit, fund accounting, custody (except overdraft and interest expense), printing and mailing, a portion of the Chief Compliance Officer costs and all other services necessary for the operation of each Fund. Each Fund is responsible for trading expenses, including brokerage commissions, interest and taxes, and other non-operating expenses. Each Fund is also responsible for nonrecurring and extraordinary legal fees, registration fees, licensing costs, a portion of the Chief Compliance Officer costs, Independent Trustees liability insurance, the fees and expenses of the Independent Trustees and of independent legal counsel to the Independent Trustees.
The following table describes the Acquiring Fund’s portfolio managers, and each portfolio manager’s business experience. Information about the portfolio managers’ compensation, other accounts they manage and their ownership of securities of the Acquiring Fund is available in JNLST’s Statement of Additional Information dated April 27, 2015, as supplemented.
Jackson National Life Distributors LLC (the “Distributor”), 7601 Technology Way, Denver, Colorado 80237, is the principal underwriter to the Trust. JNLST has adopted, in accord with the provisions of Rule 12b-1 under the 1940 Act, a Distribution Plan (“Plan”). The Board of Trustees of JNLST, including all of the Independent Trustees, must approve, at least annually, the continuation of the Plan. Under the Plan, certain funds of JNLST will pay a Rule 12b-1 fee at an annual rate of up to 0.20% of the Fund’s average daily net assets attributed to interests, to be used to pay or reimburse distribution and administrative or other service expenses with respect to interests. The Distributor, as principal underwriter, to the extent consistent with existing law and the Plan, may use the Rule 12b-1 fee to reimburse fees or to compensate broker-dealers, administrators, or others for providing distribution, administrative or other services.
The Distributor also has certain relationships with the sub-advisers of the Acquired Fund, the Acquiring Fund and their affiliates. The Distributor receives payments from certain of the sub-advisers to assist in defraying the costs of certain promotional and marketing meetings in which they participate. The amounts paid depend on the nature of the meetings, the number of meetings attended, the costs expected to be incurred, and the level of the sub-adviser’s participation. A brokerage affiliate of the Distributor participates in the sales of shares of retail mutual funds advised by certain of the sub-advisers and receives selling and other compensation from them in connection with those activities, as described in the prospectus or statement of additional information for those funds. In addition, the Distributor acts as distributor of the Contracts issued by the Insurance Companies.
Only Separate Accounts, registered investment companies, and qualified and certain non-qualified plans of the Insurance Companies may purchase shares of the Acquiring Fund. If an investor invests in the Fund under a Contract or a plan that offers a Contract as a plan option through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and the salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary’s web-site for more information.
Shares of JNLST are currently sold to Separate Accounts of the Insurance Companies to fund the benefits under certain Contracts; to qualified and certain unqualified retirement plans; and to other regulated investment companies that in turn are sold to Separate Accounts. The Separate Accounts, through their various sub-accounts, invest in designated Funds and purchase and redeem the shares of the Funds at their net asset value (“NAV”). There is no sales charge.
Shares of the Acquiring Fund are not available to the general public directly. The Acquiring Fund is managed by a sub-adviser who also may manage publicly available mutual funds having similar names and investment objectives. While the Acquiring Fund may be similar to, and may in fact be modeled after, publicly available mutual funds, purchasers should understand that the Acquiring Fund is not otherwise directly related to any publicly available mutual fund. Consequently, the investment performance of publicly available mutual funds and any Acquiring Fund may differ substantially.
The NAV per share of the Acquiring Fund is determined at the close of regular trading on the New York Stock Exchange (normally 4:00 p.m., Eastern Time) each day that the New York Stock Exchange is open. Calculations of the NAV per share of the Acquiring Fund may be suspended by the JNLST’s Board of Trustees. The NAV per share is calculated by adding the value of all securities and other assets of a Fund, deducting its liabilities, and dividing by the number of shares outstanding. Purchase orders must be received by the Insurance Company, as the agent of the Funds, by the close of the regular trading session of the New York Stock Exchange on any given day in order to obtain that day’s NAV per share. Generally, the value of exchange-listed or -traded securities is based on their respective market prices, bonds are valued based on prices provided by an independent pricing service and short-term debt securities are valued at amortized cost, which approximates market value.
The JNLST Board of Trustees has adopted procedures pursuant to which JNAM may determine, subject to JNLST Board verification, the “fair value” of a security for which a current market price is not available or the current market price is considered unreliable or inaccurate. Under these procedures, in general the “fair value” of a security shall be the amount, determined by JNAM in good faith that the owner of such security might reasonably expect to receive upon its current sale.
The JNLST Board of Trustees has established a pricing committee to review fair value determinations. The pricing committee will also review restricted and illiquid security values, securities and assets for which a current market price is not readily available, and securities and assets for which there is reason to believe that the most recent market price does not accurately reflect current value (e.g., disorderly market transactions) and determine/review fair values pursuant to the “Pricing Policies and Procedures” adopted by the Board of Trustees of JNLST.
The Acquiring Fund may invest in securities primarily listed on foreign exchanges and that trade on days when the Acquiring Fund does not price its shares. As a result, the Acquiring Fund’s NAV may change on days when shareholders are not able to purchase or redeem the Acquiring Fund’s shares.
Because the calculation of the Acquiring Fund’s NAV does not take place contemporaneously with the determination of the closing prices of the majority of foreign portfolio securities used in the calculation, there exists a risk that the value of foreign portfolio securities will change after the close of the exchange on which they are traded, but before calculation of the Acquiring Fund’s NAV (“time-zone arbitrage”). Accordingly, the JNLST’s procedures for pricing of portfolio securities also authorize JNAM, subject to verification by the JNLST Trustees, to determine the “fair value” of such foreign securities for purposes of calculating the Acquiring Fund’s NAV. When fair valuing such foreign securities, JNAM will adjust the closing prices of all foreign securities held in the Acquiring Fund’s portfolio, based upon an adjustment factor for each such security provided by an independent pricing service, in order to reflect the “fair value” of such securities for purposes of determining the Acquiring Fund’s NAV. When fair-value pricing is employed, the foreign securities prices used to calculate the Acquiring Fund’s NAV may differ from quoted or published prices for the same securities.
These procedures seek to minimize the opportunities for time zone arbitrage in the Acquiring Fund that invests all or substantial portions of its assets in foreign securities, thereby seeking to make the Fund significantly less attractive to “market timers” and other investors who might seek to profit from time zone arbitrage and seeking to reduce the
potential for harm to other Fund investors resulting from such practices. However, these procedures may not completely eliminate opportunities for time zone arbitrage because it is not possible to predict in all circumstances whether post-closing events will have a significant impact on securities prices.
All investments in JNLST are credited to the shareholder’s account in the form of full and fractional shares of the designated Fund (rounded to the nearest 1/1000 of a share). JNLST does not issue share certificates.
The interests of the Acquiring Fund’s long-term shareholders may be adversely affected by certain short-term trading activity by other Contract Owners invested in the Separate Accounts. Such short-term trading activity, when excessive, has the potential to interfere with efficient portfolio management, generate transaction and other costs, dilute the value of Acquiring Fund shares held by long-term shareholders and have other adverse effects on the Acquiring Fund. This type of excessive short-term trading activity is referred to herein as “market timing.” The Acquiring Fund is not intended as a vehicle for market timing. The JNLST Board of Trustees has adopted the policies and procedures set forth below with respect to frequent trading of Acquiring Fund shares.
The Acquiring Fund, directly and through its service providers, and the insurance company and qualified retirement plan service providers (collectively, “service providers”) with the cooperation of the insurance companies takes various steps designed to deter and curtail market timing. For example, regarding round trip transfers, redemptions by a shareholder from a sub-account investing in the Acquiring Fund is permitted; however, once a complete or partial redemption has been made from a sub-account that invests in the Acquiring Fund, through a sub-account transfer, shareholders will not be permitted to transfer any value back into that sub-account (and the Acquiring Fund) within fifteen (15) calendar days of the redemption. We will treat as short-term trading activity any transfer that is requested into a sub-account that was previously redeemed within the previous fifteen (15) calendar days, whether the transfer was requested by the shareholders or a third party authorized by the shareholder. The Insurance Companies have entered into agreements with JNLST to provide upon request certain information on the trading activities of Contract Owners in an effort to help curtail market timing.
In addition to identifying any potentially disruptive trading activity, the Acquiring Fund’s Board of Trustees has adopted a policy of “fair value” pricing to discourage investors from engaging in market timing or other excessive trading strategies for the Acquiring Fund. The JNLST’s “fair value” pricing policy applies to all Funds where a significant event has occurred. The Acquiring Fund’s “fair value” pricing policy is described under “Investment in JNLST Shares” above.
The practices and policies described above are intended to deter and curtail market timing in the Acquiring Fund. However, there can be no assurance that these policies, together with those of the Insurance Companies, and any other insurance company that may invest in the Acquiring Fund in the future, will be totally effective in this regard.
Investors redeem shares to make benefit or withdrawal payments under the terms of the Contracts or other arrangements. Redemptions typically are processed on any day on which JNLST and the New York Stock Exchange are open for business and are effected at net asset value next determined after the redemption order, in proper form, is received by the Insurance Company. Redemption requests must be received by the Insurance Company, as the agent of the Funds, by the close of the regular trading session of the New York Stock Exchange on any given business day in order to obtain that day’s NAV per share.
JNLST may suspend the right of redemption only under the following unusual circumstances:
| · | When the New York Stock Exchange is closed (other than weekends and holidays) or trading is restricted; |
| · | When an emergency exists, making disposal of portfolio securities or the valuation of net assets not reasonably practicable; or |
| · | During any period when the SEC has by order permitted a suspension of redemption for the protection of shareholders. |
The Funds generally distribute most or all of their net investment income and their net realized gains, if any, no less frequently than annually. Dividends and other distributions by a Fund are automatically reinvested at net asset value in shares of the distributing class of that Fund.
The Acquiring Fund intends to continue to qualify as a “regulated investment company” under Subchapter M of the Code. The Acquiring Fund intends to distribute all its net investment income and net capital gains to shareholders and, therefore, does not expect to be required to pay any federal income or excise taxes. The interests in the Acquiring Fund are owned by one or more Separate Accounts that hold such interests pursuant to Contracts and by various funds of the VF LLC and JNLST, which are regulated investment companies under Subchapter M of the Code, by qualified and certain non-qualified pension plans and by Jackson National.
The Acquiring Fund is treated as a corporation separate from JNLST for purposes of the Code. Therefore, the assets, income, and distributions of the Acquiring Fund are considered separately for purposes of determining whether or not the Acquiring Fund qualifies for treatment as a regulated investment company.
Because the shareholders of the Acquiring Fund are Separate Accounts of variable insurance contracts, qualified and unqualified retirement plans and certain other registered investment companies, there are no tax consequences to those shareholders for buying, holding, exchanging and selling shares of the Acquiring Fund. Distributions from the Acquiring Fund are not taxable to those shareholders. However, owners of Contracts should consult the applicable Separate Account Prospectus for more detailed information on tax issues related to the Contracts.
The Acquiring Fund intends to comply with the diversification requirements currently imposed by the Code and U.S. Treasury regulations thereunder, on separate accounts of insurance companies as a condition of maintaining the tax-advantaged status of the Contracts issued by Separate Accounts. The Investment Advisory and Management Agreement require the Acquiring Fund to be operated in compliance with these diversification requirements. The Sub-Adviser may depart from the investment strategy of the Acquiring Fund only to the extent necessary to meet these diversification requirements.
The financial highlights table is intended to help you understand the financial performance of the Acquired Fund and the Acquiring Fund for the period of the Acquired Fund and the Acquiring Fund’s operations. The total returns in the table represent the rate that an investor would have earned or lost on an investment in the Acquired Fund or the Acquiring Fund (assuming reinvestment of all dividends and distributions). The following table provides selected per share data for one share of the Acquired Fund and the Acquiring Fund. The information does not reflect any charges imposed under a Contract. If charges imposed under a variable contract were reflected, the returns would be lower. You should refer to the appropriate Contract prospectus regarding such charges.
The annual information below has been derived from financial statements audited by KPMG LLP, an independent registered public accounting firm, and should be read in conjunction with the financial statements and notes thereto, together with the report of KPMG LLP thereon, in the Annual Report. Each Fund’s financial statements are included in the Annual Reports, which are available upon request.
JNL Variable Fund LLC
Financial Highlights
For a Share Outstanding
| | | | | | Increase (Decrease)from
Investment Operations | | | Distributionsfrom | | | | | | | | SupplementalData | | Ratios |
Period
Ended | | Net Asset
Value,Beginning of Period | | | Net Investment Income (Loss)(a) | | | Net Realized & Unrealized Gains (Losses) | | | Total from Investment Operations | | | Net Investment Income | | | Net Realized Gains on Investment Transactions | | | Net Asset Value, End of Period | | | Total Return(b) | | Net Assets,
End of Period
(in thousands) | | | Portfolio
Turnover | | | Net Expenses
to Average Net Assets | | | Net Investment
Income (Loss) to Average
Net
Assets | |
| JNL/MellonCapital25 Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Class A | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 12/31/2014 | | | 19.60 | | | | 0.47 | | | | (0.02 | ) | | | 0.45 | | | | (0.44 | ) | | | (2.02 | ) | | | 17.59 | | | | 2.09 | | | | | 963,396 | | | | 100 | | | | 0.64 | | | | 2.37 | |
| 12/31/2013 | | | 15.21 | | | | 0.44 | | | | 5.12 | | | | 5.56 | | | | (0.44 | ) | | | (0.73 | ) | | | 19.60 | | | | 36.86 | | (c) | | | 1,043,106 | | | | 81 | | | | 0.64 | | | | 2.48 | |
| 12/31/2012 | | | 13.26 | | | | 0.50 | | | | 1.83 | | | | 2.33 | | | | (0.31 | ) | | | (0.07 | ) | | | 15.21 | | | | 17.70 | | | | | 677,199 | | | | 84 | | | | 0.64 | | | | 3.50 | |
| 12/31/2011 | | | 12.50 | | | | 0.33 | | | | 0.78 | | | | 1.11 | | | | (0.35 | ) | | | – | | | | 13.26 | | | | 8.87 | | | | | 588,267 | | | | 100 | | | | 0.64 | | | | 2.48 | |
| 12/31/2010 | | | 10.40 | | | | 0.36 | | | | 2.01 | | | | 2.37 | | | | (0.27 | ) | | | – | | | | 12.50 | | | | 22.85 | | | | | 544,590 | | | | 109 | | | | 0.65 | | | | 3.11 | |
| Class B | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 12/31/2014 | | | 19.79 | | | | 0.51 | | | | (0.01 | ) | | | 0.50 | | | | (0.48 | ) | | | (2.02 | ) | | | 17.79 | | | | 2.30 | | | | | 653 | | | | 100 | | | | 0.44 | | | | 2.57 | |
| 12/31/2013 | | | 15.34 | | | | 0.48 | | | | 5.16 | | | | 5.64 | | | | (0.46 | ) | | | (0.73 | ) | | | 19.79 | | | | 37.11 | | (c) | | | 638 | | | | 81 | | | | 0.44 | | | | 2.67 | |
| 12/31/2012 | | | 13.37 | | | | 0.54 | | | | 1.84 | | | | 2.38 | | | | (0.34 | ) | | | (0.07 | ) | | | 15.34 | | | | 17.90 | | | | | 562 | | | | 84 | | | | 0.44 | | | | 3.71 | |
| 12/31/2011 | | | 12.59 | | | | 0.35 | | | | 0.80 | | | | 1.15 | | | | (0.37 | ) | | | – | | | | 13.37 | | | | 9.15 | | | | | 501 | | | | 100 | | | | 0.44 | | | | 2.66 | |
| 12/31/2010 | | | 10.46 | | | | 0.39 | | | | 2.03 | | | | 2.42 | | | | (0.29 | ) | | | – | | | | 12.59 | | | | 23.16 | | | | | 423 | | | | 109 | | | | 0.45 | | | | 3.30 | |
| (a) | Calculated using the average shares method. |
| (b) | Total return assumes reinvestment of all distributions for the period. Total return does not reflect payment of the expenses that apply to the variable accounts or any annuity charges. |
| (c) | Total return for the Fund includes class action settlement proceeds. The return for Class A and Class B, respectively, without the class action settlement proceeds was as follows: JNL/Mellon Capital 25 Fund - 36.79% and 37.04%. |
JNL Series Trust Master Feeder Funds and Fund of Funds
Financial Highlights
For a Share Outstanding
| | | | | Increase (Decrease)from
Investment Operations | | | Distributionsfrom | | | | | | | | | SupplementalData | | | Ratios(a)(b) | |
Period
Ended | | Net Asset
Value,Beginning of Period | | | Net Investment Income (Loss)(c) | | | Net Realized & Unrealized Gains (Losses) | | | Total from Investment Operations | | | Net Investment Income | | | Net Realized Gains on Investment Transactions | | | Net Asset Value, End of Period | | | Total Return(d) | | | Net Assets,
End of Period
(in thousands) | | | Portfolio
Turnover(e) | | | Net Expenses
to Average Net Assets | | | Total
Expenses to
Average
Net Assets | | | Net Investment
Income (Loss) to Average
Net
Assets | |
| JNL/S&P4 Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Class A | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 12/31/2014 | | | 16.76 | | | | 0.15 | | | | 2.26 | | | | 2.41 | | | | (0.36 | ) | | | (0.34 | ) | | | 18.47 | | | | 14.40 | | | | 4,983,650 | | | | 4 | | | | 0.05 | | | | 0.05 | | | | 0.84 | |
| 12/31/2013 | | | 12.00 | | | | 0.18 | | | | 5.04 | | | | 5.22 | | | | (0.10 | ) | | | (0.36 | ) | | | 16.76 | | | | 43.63 | | | | 3,090,538 | | | | 4 | | | | 0.05 | | | | 0.05 | | | | 1.21 | |
| 12/31/2012 | | | 10.92 | | | | 0.12 | | | | 1.64 | | | | 1.76 | | | | (0.22 | ) | | | (0.46 | ) | | | 12.00 | | | | 16.23 | | | | 1,284,464 | | | | 10 | | | | 0.05 | | | | 0.05 | | | | 0.97 | |
| 12/31/2011 | | | 10.86 | | | | 0.11 | | | | 0.53 | | | | 0.64 | | | | (0.53 | ) | | | (0.05 | ) | | | 10.92 | | | | 5.87 | | | | 1,009,149 | | | | 13 | | | | 0.05 | | | | 0.05 | | | | 0.97 | |
| 12/31/2010 | | | 9.55 | | | | 0.09 | | | | 1.23 | | | | 1.32 | | | | – | | | | (0.01 | ) | | | 10.86 | | | | 13.79 | | | | 843,945 | | | | 10 | | | | 0.05 | | | | 0.05 | | | | 0.90 | |
| (a) | Annualized for periods less than one year. |
| (b) | Ratios of net investment income and expenses to average net assets do not include the impact of each Master Fund’s and Underlying Funds’ expenses. |
| (c) | Calculated using the average shares method. |
| (d) | Total return assumes reinvestment of all distributions for the period. Total return does not reflect payment of the expenses that apply to the variable accounts or any annuity charges. |
| (e) | Portfolio turnover is not annualized for periods of less than one year. Portfolio turnover rate is based on the Feeder Funds’ or Fund of Funds’ purchases or sales of the Master Fund or Underlying Funds, respectively. |
The following information applies to the Reorganization of the Acquired Fund and Acquiring Fund for which you are entitled to vote.
The Meeting will be held at 10:30 a.m. Eastern Time, on August 31, 2015, at 1 Corporate Way, Lansing, Michigan 48951, together with any adjournment thereof. The Meeting is being held to consider and vote on the Plan of Reorganization, which provides for the reorganization of the MC 25 Fund into the S&P 4 Fund, and any other business that may properly come before the Meeting. Only members of the Acquired Fund are entitled to vote on this matter.
A copy of the Plan of Reorganization is attached hereto as Appendix A of this Proxy Statement/Prospectus.
The VF LLC Board fixed the close of business on July 6, 2015, as the Record Date for the determination of members entitled to notice of, and to vote at, the Meeting or any adjournment thereof.
The Amended and Restated Operating Agreement for the VF LLC, as amended on December 3, 2014 (the “Operating Agreement”), provides that the presence in person or by proxy of members entitled to cast the majority of votes shall constitute a quorum. Prior to the date upon which the Meeting is to be held, the Board may postpone the Meeting one or more times for any reason by giving notice to each member entitled to vote at the Meeting of the place, date and hour at which the Meeting will be held. Such notice shall be given not fewer than two (2) days before the date of the Meeting. The Meeting may be adjourned by the chairperson of the Meeting from time to time to reconvene at the same or some other place as determined by the chairperson of the Meeting for any reason, including failure of the Proposal to receive sufficient votes for approval. No member vote shall be required for any adjournment. No notice need be given that the Meeting has been adjourned other than by announcement at the Meeting. Any business that might have been transacted at the original Meeting may be transacted at any adjourned Meeting.
The Operating Agreement further provides that votes may be cast in person or by proxy. No proxy shall be valid after eleven months from its date, unless otherwise provided in the proxy. Every proxy shall be in writing, subscribed by the member or the member’s duly authorized attorney, and dated, but need not be sealed, witnessed or acknowledged.
The Operating Agreement does not confer on members a right to vote on consolidation or termination of a portfolio of the VF LLC. However, SEC rules under the Act require approval by a majority of the outstanding shares of the Acquired Fund where, among other things, a reorganization would result in a change to a fundamental investment policy or a change in investment advisory or sub-advisory contracts. Thus a majority of the outstanding voting securities of the Acquired Fund is required to approve its Reorganization.
Where a vote of the “majority of the outstanding voting securities” of a Fund is required to approve a Proposal, it shall mean the lesser of (i) 67% or more of the shares of the Fund 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 Fund are present in person or represented by proxy, or (ii) more than 50% of the outstanding shares of the Fund. The approval of a 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.
The VF LLC is organized as a Delaware limited liability company and JNLST is organized as a Massachusetts business trust. Shares of the VF LLC and JNLST currently are sold only to Separate Accounts of the Insurance Companies to fund the benefits of variable insurance contracts, to qualified and certain non-qualified employee benefit plans of Jackson National or directly to the Insurance Companies. In addition, shares of the VF LLC and JNLST are sold to certain funds of the JNLST and the Jackson Variable Series Trust organized as funds-of-funds. Although the Insurance Companies legally own all of the shares of the Fund held in their respective Separate Accounts that relate to the Contracts, a portion of the value of each Contract is invested by the Insurance Companies, as provided in the Contract, in shares of one or more funds.
Contract Owners have the right under the interpretations of the 1940 Act to instruct the relevant Insurance Company how to vote the shares attributable to their Contract. Contract Owners at the close of business on the Record Date will be entitled to notice of the Meeting and to instruct the relevant Insurance Company how to vote at the Meeting or any adjourned session. The Insurance Company will vote all such shares in accordance with the voting instructions timely given by the Contract Owners with assets invested in the Acquired Fund. Shares for which the Insurance Company receives a voting instruction card that is signed, dated and timely returned but is not marked to indicate voting instructions will be treated as an instruction to vote the Shares in favor of the Proposal. Shares for which the Insurance Company receives no timely voting instructions from a Contract Owner will be voted by the applicable Insurance Company either for or against approval of the applicable Proposal, or as an abstention, in the same proportion as the Shares for which Contract Owners have provided voting instructions to the Insurance Company. The Insurance Companies and their affiliates will vote their own shares and shares held by other regulated investment companies in the same proportion as voting instructions timely given by Contract Owners. As a result, a small number of Contract Owners may determine the outcome of the vote.
Contract Owners may use the enclosed voting instructions form as a ballot to give their voting instructions for those shares attributable to their Contract as of the Record Date. The Insurance Companies have fixed the close of business on August 27, 2015 as the last day on which voting instructions will be accepted, other than those provided in person at the Meeting.
The Board of the VF LLC is soliciting proxies from members of the Acquired Fund. The Insurance Companies are the shareholders of record and are soliciting voting instructions from their Contract Owners as to how to vote at the Meeting. In addition to the mailing of these proxy materials, voting instructions may be solicited by letter, facsimile, telephone or personal contact by officers or employees of the VF LLC, JNLST, JNAM or officers or employees of the Insurance Companies.
JNAM, as the VF LLC’s administrator, has retained the services of Computershare Fund Services (“Computershare”), 280 Oser Avenue, New York, New York 11788, to assist in the tabulation of voting instructions. The anticipated cost of the services to be provided by Computershare in connection with this proxy solicitation is approximately $54,884.
The costs of printing and mailing of the Notice, this Proxy Statement/Prospectus, and the accompanying voting instruction card, and the solicitation of Contract Owner voting instructions, will be paid by JNAM. The VF LLC does not expect to bear any significant expenses in connection with the Meeting or the solicitation of proxies and voting instructions.
Any authorized voting instructions will be valid for any adjournment of the Meeting. If the management of the VF LLC 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 are
cast for the Proposal. Accordingly, an instruction to abstain from voting on the 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 Insurance Companies a superseding voting instruction form or written notice of revocation. Only the Contract Owner executing the voting instructions can revoke them. The Insurance Companies will vote the shares of the Acquired Fund in accordance with all properly executed and un-revoked voting instructions.
The Insurance Companies will vote on the Reorganization as instructed by their Contract Owners. As of July 6, 2015, the VF LLC Board of Managers and officers of the VF LLC, as a group, beneficially owned less than 1% of the outstanding shares of the Acquired Fund. [Note: to be confirmed after 7/6/2015]
Because the shares of the Funds are sold only to the Insurance Companies, certain funds of JNLST and the Jackson Variable Series Trust organized as funds-of-funds, and certain qualified and nonqualified retirement plans, the Insurance Companies, through the Separate Accounts which hold shares in the VF LLC and JNLST as funding vehicles for the Contracts and certain retirement plans, are the owner of record of substantially all of the shares of the VF LLC and JNLST. In addition, Jackson National, through its general account, is the beneficial owner of shares in certain of the Funds, in some cases representing the initial capital contributed at the inception of a Fund, and in other cases representing investments made for other corporate purposes. The table below shows the number of outstanding shares of the Acquired Fund as of the Record Date that are entitled to vote at the Meeting.
| Fund | Total Number of Outstanding Shares |
| MC 25 Fund | |
As of the Record Date, July 6, 2015, the following persons owned 5% or more of the shares of the Acquired Fund either beneficially or of record:
| Contract Owner’s Name/Address | Percent Ownership of Shares of the Fund | Percent Ownership of Shares of the Combined Fund (assuming the Reorganization occurs) |
| JNL/Mellon Capital 25 Fund |
| | | |
| | | |
* * * * *
PLAN OF REORGANIZATION
JNL VARIABLE FUND LLC
JNL/MELLON CAPITAL 25 FUND
JNL SERIES TRUST
JNL/S&P 4 FUND
This Plan of Reorganization has been entered into on September 18, 2015, by JNL VARIABLE FUND LLC (the “VF LLC”), a Delaware limited liability corporation, on behalf of its JNL/MELLON CAPITAL 25 FUND (the “MC 25 Fund,” or the “Acquired Fund”), and JNL SERIES TRUST (the “JNLST”), a Massachusetts business trust, on behalf of its JNL/S&P 4 FUND (the “S&P 4 Fund,” or the “Acquiring Fund”).
WHEREAS, the VF LLC and JNLST are both registered with the U.S. Securities and Exchange Commission in accord with the provisions of the Investment Company Act of 1940, as amended (the “1940 Act”), each as an open-end management investment company, and each has established several separate series of shares (“funds”), with each fund having its own assets and investment policies;
WHEREAS the VF LLC’s Board of Managers, including a majority of the Managers who are not interested persons of the VF LLC, has determined that the transaction described herein is fair and reasonable, that participation in the transaction described herein is in the best interests of the Acquired Fund, and that the interests of the existing shareholders of the Acquired Fund will not be diluted as a result of the transactions described herein;
WHEREAS the JNLST’s Board of Trustees, including a majority of the Trustees who are not interested persons of JNLST, has determined that the transaction described herein is fair and reasonable, that participation in the transaction described herein is in the best interests of the Acquiring Fund, and that the interests of the existing shareholders of the Acquiring Fund will not be diluted as a result of the transactions described herein;
WHEREAS Article III, Section 3 of the VF LLC’s Amended and Restated Operating Agreement, adopted December 3, 2014 (the “Operating Agreement”), authorizes the Board of Managers to combine the assets and liabilities held with respect to any two or more funds into assets and liabilities held with respect to a single fund;
WHEREAS Article IV, Section 3 of the JNLST’s Declaration of Trust, dated June 1, 1994 (the “JNLST Declaration of Trust”), authorizes the Board of Trustees to conduct the business of JNLST and carry on its operations; and
WHEREAS the VF LLC’s Board of Managers, including a majority of the Managers who are not interested persons of the VF LLC, has approved the reorganization of the Acquired Fund with and into the Acquiring Fund, subject to the approval of the shareholders of the Acquired Fund;
WHEREAS this Plan of Reorganization is intended to be and is adopted as a plan of reorganization within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, all the assets, liabilities and interests of the Acquired Fund shall be transferred on the Closing Date to the Acquiring Fund, as described below; provided, however, that such transaction shall not occur unless and until this Plan of Reorganization shall have first been approved by a majority of the outstanding voting securities of the Acquired Fund as provided in Section 2(a)(42) of the 1940 Act; and provided further that the VF LLC Board of Managers may terminate this Plan of Reorganization at or prior to the Closing Date:
| 1. | The Closing Date shall be September 18, 2015, or if the New York Stock Exchange or another primary trading market for portfolio securities of the Acquired Fund or the Acquiring Fund (each, an “Exchange”) is closed to trading or trading thereon is restricted, or trading or the reporting of trading on an Exchange or elsewhere is disrupted so that, in the judgment of either the VF LLC Board of Managers or the JNLST Board of Trustees, accurate appraisal of the value of either the Acquired Fund’s or the Acquiring Fund’s net assets and/or the net asset value per Class A share of Acquiring Fund shares is impracticable, the |
| | Closing Date shall be postponed until the first business day after the day when such trading has been fully resumed and such reporting has been restored; |
| 2. | On or before the Closing Date, and before effecting the reorganization transaction described herein, JNLST shall have received a satisfactory written opinion of legal counsel as to such transaction that the securities to be issued in connection with such transaction have been duly authorized and, when issued in accordance with this Plan of Reorganization, will have been validly issued and fully paid and will be non-assessable by JNLST on behalf of the Acquiring Fund. |
| 3. | In exchange for all of its shares of the Acquired Fund, each shareholder of such Acquired Fund shall receive a number of shares, including fractional shares, of the Acquiring Fund equal in dollar value to the number of whole and fractional shares that such shareholder owns in such Acquired Fund. Each shareholder of such Acquired Fund shall thereupon become a shareholder of the Acquiring Fund. |
| 4. | For purposes of this transaction, the value of the shares of the Acquiring Fund and the Acquired Fund shall be determined as of 4:00 p.m., Eastern Time, on the Closing Date. Those valuations shall be made in the usual manner as provided in the relevant prospectus of the VF LLC or JNLST. |
| 5. | Upon completion of the foregoing transactions, the Acquired Fund shall be terminated and no further shares shall be issued by it. The classes of the VF LLC’s shares representing such Acquired Fund shall thereupon be closed and the shares previously authorized for those classes shall be reclassified by the VF LLC Board of Managers. The VF LLC’s Board of Managers and management of the VF LLC shall take whatever actions may be necessary under Delaware law and the 1940 Act to effect the termination of the Acquired Fund. |
| 6. | The costs and expenses associated with the Reorganization relating to the solicitation of proxies, including preparing, filing, printing, and mailing of the proxy statement and related disclosure documents and the costs and expenses related to obtaining a consent of independent registered public accounting firm will be borne by Jackson National Asset Management, LLC, and no sales or other charges will be imposed on Contract Owners in connection with the Reorganization. The legal expenses associated with the Reorganization, including the legal fees incurred in connection with the analysis under the Internal Revenue Code of 1986 (the “Code”) of the tax treatment of this transaction will be borne by the S&P 4 Fund. Each Fund will bear its proportionate share of the transaction expenses associated with the Reorganization. |
| | |
| 7. | The obligations of the Acquried Fund and the Acquiring Fund to complete the transactions described herein shall be subject to receipt by the Acquired Fund and the Acquring Fund of an opinion of tax counsel substantially to the effect that, on the basis of existing provisions of the Code, U.S. Treasury Regulations promulgated thereunder, current administrative rules, pronouncements and court decisions, and subject to certain qualifications, the Reoranization is more likely than not to qualify as a tax-free reorganizaiton under Section 368(a)(1) of the Code. The delivery of such opinion is conditioned upon receipt by tax counsel of representations it shall request from the Acquired Fund and the Acquiring Fund. |
| | |
A copy of the Operating Agreement for the VF LLC is on file with the Secretary of the State of Delaware. A copy of the JNLST Declaration of Trust is on file with the Secretary of the Commonwealth of Massachusetts. Notice is hereby given that this instrument is executed on behalf of the Trustees as Trustees, and is not binding on any of the Trustees, officers, or shareholders of JNLST individually, but only binding on the assets and properties of JNLST.
IN WITNESS WHEREOF, JNL Variable Fund LLC, on behalf of the MC 25 Fund and JNL Series Trust on behalf of the S&P 4 Fund has caused this Plan of Reorganization to be executed and attested in the City of Chicago, State of Illinois, on the date first written above.
| | JNL SERIES TRUST |
| | |
| | By: | |
| | | Mark D. Nerud, President and CEO |
| | | |
| | Attest: | |
| | | Susan S. Rhee, Vice President |
| | | |
| | JNL VARIABLE FUND LLC |
| | |
| | By: | |
| | | Mark D. Nerud, President and CEO |
| | | |
| | Attest: | |
| | | Susan S. Rhee, Vice President |
More Information on Strategies and Risk Factors
JNL/S&P 4 Fund (Class A)
Investment Objective. The investment objective of the JNL/S&P 4 Fund is capital appreciation.
Principal Investment Strategies. The Fund seeks to achieve its objective by investing in Class A shares of the following four Underlying Funds (Class A) on each Stock Selection Date:
| · | 25% in the JNL/S&P Competitive Advantage Fund; |
| · | 25% in the JNL/S&P Dividend Income & Growth Fund; |
| · | 25% in the JNL/S&P Intrinsic Value Fund; and |
| · | 25% in the JNL/S&P Total Yield Fund. |
* The Funds are referred to as the “Underlying Funds” and are also described in the Fund’s Prospectus.
The Fund is a “non-diversified” fund, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”), and may invest more of its assets in fewer issuers than “diversified” mutual funds.
Principal Risks of Investing in the Fund. An investment in the Fund is not guaranteed. As with any mutual fund, the value of the Fund’s shares will change, and you could lose money by investing in the Fund. The following descriptions of the principal risks does not provide any assurance either of the Fund’s investment in any particular type of security, or assurance of the Fund’s success in its investment selections, techniques and risk assessments. As a managed portfolio the Fund may not achieve its investment objective for a variety of reasons including changes in the financial condition of issuers (due to such factors as management performance, reduced demand or overall market changes), fluctuations in the financial markets, declines in overall securities prices, or the Sub-Adviser’s investment techniques otherwise failing to achieve the Fund’s investment objective. A variety of specific factors may influence its investment performance, such as the following:
| · | Limited management, trading cost and rebalance risk |
| · | Non-diversification risk |
Please see the “Glossary of Risks” section below for a description of these risks. There may be other risks that are not listed herein that could cause the value of your investment in the Fund to decline and that could prevent the Fund from achieving its stated investment objective. This document does not describe all of the risks of every technique, investment strategy or temporary defensive position that the Fund may use. For additional information regarding the risks of investing in the Fund, please refer to the Fund’s Statement of Additional Information.
Additional Information About the Other Investment Strategies, Other Investments and Risks of the Fund (Other than Principal Strategies/Risks). There may be additional risks that may affect the Fund’s ability to achieve its stated investment objective. Those additional risks are:
| · | Temporary defensive positions and large cash positions risk |
JNL/Mellon Capital 25 Fund
Class A and B
Investment Objective. The investment objective of the JNL/Mellon Capital 25 Fund (“25 Fund”) is total return through a combination of capital appreciation and dividend income.
Principal Investment Strategies. The 25 Fund seeks to achieve its objective by investing in the common stocks of 25 companies selected from a pre-screened subset of the stocks listed on the New York Stock Exchange (“NYSE”). The 25 companies are selected only once annually on each Stock Selection Date. The Stock Selection Date will be on or about January 1st of each year. The Sub-Adviser generally uses a buy and hold strategy, trading only around each Stock Selection Date, when cash flow activity occurs in the Fund and for dividend reinvestment. The Sub-Adviser may also trade for mergers if the original stock is not the surviving company.
Companies which, as of the Stock Selection Date, will be removed from the NYSE will be removed from the universe of securities from which the 25 Fund stocks are selected.
The 25 companies are selected through the following five-step process on each Stock Selection Date:
| · | The Sub-Adviser selects all the dividend-paying common stocks listed on the NYSE (excluding financial, transportation and utility stocks, American Depositary Receipts, limited partnerships, limited liability companies, other companies that share similar tax structures and treatments, or any stock included in the Dow Jones Industrial Average); |
| · | Those common stocks are then ranked from highest to lowest market capitalization, and the Sub-Adviser selects the 400 highest market capitalization stocks; |
| · | Those 400 common stocks are then ranked, in terms of dividend yield, from highest to lowest, and the Sub-Adviser selects the 75 highest dividend-yielding stocks; |
| · | From the remaining 75 stocks, the Sub-Adviser eliminates the 50 highest dividend-yielding stocks and selects the remaining 25 companies; |
| · | The Sub-Adviser allocates approximately equal amounts of the 25 Fund to the 25 companies selected for the portfolio; and |
| · | The Sub-Adviser reviews the liquidity profile of the companies selected, and, when deemed appropriate, will remove the illiquid securities that may cause undue market impact and replace them with the next highest ranked companies with better liquidity. |
Between Stock Selection Dates, when cash inflows and outflows require, the Sub-Adviser makes new purchases and sales of common stocks of the 25 selected companies in approximately the same proportion that such stocks are then held in the 25 Fund (determined based on market value).
Certain provisions of the 1940 Act and the Internal Revenue Code of 1986, as amended, may limit the ability of the Fund to invest in certain securities in excess of certain percentage limitations. Any amount that cannot be allocated due to these limitations will be allocated among the remaining portfolio securities.
Principal Risks of Investing in the Fund. An investment in the Fund is not guaranteed. As with any mutual fund, the value of the Fund’s shares will change, and you could lose money by investing in the Fund. The following descriptions of the principal risks do not provide any assurance either of the Fund’s investment in any particular type of security, or assurance of the Fund’s success in its investment selections, techniques and risk assessments. As a managed portfolio, the Fund may not achieve its investment objective for a variety of reasons including changes in the financial condition of issuers (due to such factors as management performance, reduced demand or overall market changes), fluctuations in the financial markets, declines in overall securities prices, or the Sub-Adviser’s investment techniques otherwise failing to achieve the Fund’s investment objective. A variety of specific factors may influence its investment performance, such as the following:
| · | Foreign regulatory risk |
| · | Limited management, trading cost and rebalance risk |
| · | Non-diversification risk |
Please see the “Glossary of Risks” section below for a description of these risks. There may be other risks that are not listed herein that could cause the value of your investment in the Fund to decline and that could prevent the Fund from achieving its stated investment objective. This document does not describe all of the risks of every technique, investment strategy or temporary defensive position that the Fund may use. For additional information regarding the risks of investing in the Fund, please refer to the Fund’s Statement of Additional Information.
Additional Information About the Other Investment Strategies, Other Investments and Risks of the Fund (Other than Principal Strategies/Risks). To effectively manage cash inflows and outflows, the 25 Fund may maintain a cash position of up to 5% of net assets under normal circumstances primarily consisting of shares of money market mutual funds including an affiliated JNL Money Market Fund and investments in other investment companies (such as exchange traded funds) to the extent permitted under the 1940 Act. The 25 Fund may also invest to some degree in money market instruments.
The performance of the 25 Fund depends on the Sub-Adviser’s ability to effectively implement the investment strategies of this Fund and will also depend on the performance of the stocks selected that meet the stock selection criteria.
There may be additional risks that may affect the Fund’s ability to achieve its stated investment objective. Those additional risks are:
| · | Foreign securities risk |
| · | Investment strategy risk |
Glossary of Risks
Accounting risk – The Fund makes investment decisions in part, on information drawn from the financial statements of issuers. Financial statements may not be accurate and may reflect differing approaches of auditing and reporting standards, foreign and other jurisdictional requirements, for example, and may affect the ability to identify appropriate investment opportunities.
Company risk – Investments in U.S. and/or foreign traded equity securities may fluctuate more than the values of other types of securities in response to changes in a particular company’s financial conditions. For example, poor earnings performance of a company may result in a decline in its stock price.
Concentration risk – To the extent that the Fund focuses on particular countries, regions, industries, sectors, issuers, types of investment or limited number of securities from time to time, the Fund may be subject to greater risks of adverse economic, business or political developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments.
Industry
Companies within an industry are often faced with the same economic conditions, government regulations, availability of basic resources or supplies, or other events that affect that industry, and their common stock may react similarly and move in unison to these and other market conditions. As a result, stocks within a certain industry in which the Fund invests may be more volatile, and carry greater risk of adverse developments affecting many of the Fund’s holdings, than a mixture of stocks of companies from a wide variety of industries.
Geographic
To the extent that the Fund has a significant level of investment in issuers in particular countries, the Fund’s performance is expected to be closely tied to social, political and economic conditions within countries in those regions and to be more volatile than the performance of more geographically diversified funds. The economies and financial markets of certain regions can be highly interdependent and may decline all at the same time. In addition, certain areas are prone to natural disasters such as earthquakes, volcanoes, droughts or tsunamis and are economically sensitive to environmental events.
Security
The Fund’s portfolio may invest in a limited number of securities. As compared to other Funds, this could subject the Fund to additional risk if one of the portfolio securities declines in price, or if certain sectors of the market experience a downturn. It may take additional time to sell all or part of a Fund’s investment in a particular security, and consequently, concentrating portfolio investments may also limit the ability of the Fund to take advantage of other investment opportunities.
Credit risk – The Fund could lose money if the issuer or guarantor of a fixed income security, or the counterparty to a derivatives contract, repurchase agreement or a loan of portfolio securities, is unable or unwilling to make timely principal and/or interest payments, or to otherwise honor its obligations. Changes in an issuer’s financial strength, the market’s perception of the issuer’s financial strength or in a security’s credit rating, which reflects a third party’s assessment of the credit risk presented by a particular issuer, may affect debt securities’ value. When a fixed-income security is not rated, the Fund’s investment manager may have to assess the risk of the security itself. The Fund may incur substantial losses on debt securities that are inaccurately perceived to present a different amount of credit risk by the market, the investment manager or the rating agencies than such securities actually do. In addition, to the extent the Fund invests in municipal bonds, they are subject to the risk that litigation, legislation or other political events, local business or economic conditions, or the bankruptcy of the issuer could have a significant effect on an issuer’s ability to make payments of principal and/or interest
Equity securities risk – Common and preferred stocks represent equity ownership in a company. Stock markets are volatile, and equity securities generally have greater price volatility than fixed-income securities. The price of equity or equity-related securities will fluctuate and can decline and reduce the value of a portfolio investing in equity or equity-related securities. The value of equity or equity-related securities purchased by the Fund could decline if the financial condition of the companies the Fund invests in decline or if overall market and economic conditions
deteriorate. They may also decline due to factors that affect a particular industry or industries, such as labor shortages or an increase in production costs and competitive conditions within an industry. In addition, they may decline due to general market conditions that are not specifically related to a company or industry, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or generally adverse investor sentiment.
Foreign regulatory risk – The Adviser is an indirect wholly-owned subsidiary of Prudential plc, a publicly traded company incorporated in the United Kingdom and is not affiliated in any manner with Prudential Financial Inc., a company whose principal place of business is in the United States of America. Through its ownership structure, the Adviser has a number of global financial industry affiliated entities. As a result of this structure, and the asset management and financial industry business activities of the Adviser and its affiliates, the Adviser and the Funds may be prohibited or limited in effecting transactions in certain securities. The Adviser and the Funds may encounter trading limitations or restrictions because of aggregation issues or other foreign regulatory requirements. Foreign regulators or foreign laws may impose position limits on securities held by the Funds, and the Funds may be limited as to which securities they may purchase or sell, as well as the timing of such purchases or sales. These foreign regulatory limits may increase the Funds’ expenses and may limit the Funds’ performance.
Foreign securities risk – These risks include, among others, adverse fluctuations in foreign currency values as well as adverse political, social and economic developments, such as political upheaval, acts of terrorism, financial troubles, or natural disasters. Such events may adversely affect the value of securities issued by companies in foreign countries or regions. This risk is especially high in emerging markets. In addition, the economies of certain foreign markets may not compare favorably with the economy of the United States with respect to such issues as growth of gross national product, reinvestment of capital, resources and balance of payments position. There may be less publicly available information and more volatile or less liquid markets. Investments in foreign securities could be affected by restrictions on receiving the investment proceeds from a foreign country, confiscatory foreign tax laws, and potential difficulties in enforcing contractual obligations. Transactions may be subject to less efficient settlement practices, including extended clearance and settlement periods. Foreign accounting may be less revealing than U.S. accounting practices and regulation may be inadequate or irregular. Investments in emerging market countries and/or their securities markets may present market, credit, currency, liquidity, legal, political, technical and other risks different from, or greater than, the risks of investing in developed countries. In addition, the risks associated with investing in a narrowly defined geographic area are generally more pronounced with respect to investments in emerging market countries.
Investment strategy risk – The investment manager uses the principal investment strategies and other investment strategies to seek to achieve the Fund’s investment objective. Investment decisions made by the investment manager in using these investment strategies may not produce the returns expected by the investment manager, may cause the Fund’s shares to lose value or may cause the Fund to underperform other funds with similar investment objectives.
Limited management, trading cost and rebalance risk – The Fund’s strategy of investing according to specific, mechanical criteria and applied on a specific date each year may prevent a Fund from responding to market fluctuations, or changes in the financial condition or business prospects of the selected companies during the year. As compared to other mutual funds, this could subject the Fund to more risk if one of the selected stocks declines in price or if certain sectors of the market, or economy, experience downturns. The strategy may also prevent taking advantage of trading opportunities available to other funds.
Liquidity risk – Investments in securities that are difficult to purchase or sell (illiquid or thinly-traded securities) may reduce returns if the Fund is unable to sell the securities at an advantageous time or price or achieve its desired level of exposure to a certain sector. “Illiquid security” typically is defined as a security that cannot be sold or disposed of within seven (7) days, at price or value at which it is carried by the Fund. Liquidity risk arises, for example, from small average trading volumes, trading restrictions, or temporary suspensions of trading. Small capitalization companies and companies domiciled in emerging markets pose greater liquidity and volatility risks of price fluctuations. Certain securities that were liquid when purchased may later become illiquid, particularly in times of overall economic distress. Illiquid securities may also be difficult to value, may be required to be fair valued according to the valuation procedures approved by the Boards of Trustees, and may reflect a discount, which may be significant, from the market price of comparable securities for which a liquid market exists. Liquidity risk may also refer to the risk that the Fund will not be able to pay redemption proceeds within the allowable time period
because of unusual market conditions, an unusually high volume of redemption requests, or other reasons. To meet redemption requests, the Fund may be forced to sell securities at an unfavorable time and/or under unfavorable conditions.
Market risk – Stock market risk refers to the fact that stock (equities) prices typically fluctuate more than the values of other types of securities, typically in response to changes in the particular company’s financial condition and factors affecting the market in general. Over time, the stock market tends to move in cycles, with periods when stock prices rise, and periods when stock prices decline. A slower-growth or recessionary economic environment could have an adverse effect on the price of the various stocks held by the Fund. Consequently, a broad-based market drop may also cause a stock’s price to fall.
Bond market risk generally refers to credit risk and interest rate risk. Credit risk is the actual or perceived risk that the issuer of the bond will not pay the interest and principal payments when due. Bond value typically declines if the issuer’s credit quality deteriorates. Interest rate risk is the risk that interest rates will rise and the value of bonds will fall. A broad-based market drop may also cause a bond’s price to fall.
Securities may also decline in value due to factors affecting securities markets generally, such as real or perceived adverse economic, political or regulatory conditions, inflation, changes in interest or currency rates or adverse investor sentiment, or due to factors affecting particular industries represented in the securities markets, such as competitive conditions. Changes in the financial condition of a single issuer can impact a market as a whole, and adverse market conditions may be prolonged and may not have the same impact on all types of securities. In addition, the markets may not favor a particular kind of security, such as dividend-paying securities, and may not favor equities or bonds at all.
Non-diversification risk – The Fund is “non-diversified.” As such, the Fund may invest in a limited number of issuers. Under a definition provided by the Investment Company Act of 1940, as amended (the “1940 Act”), non-diversified funds may invest in fewer securities, or in larger proportions of the securities of single companies or industries. If these securities were to decline in value, there could be a substantial loss of the investment. In addition, because of the investment strategies, the Fund may hold a smaller number of issuers than if it were “diversified.” With a smaller number of different issuers, there is more risk than holding a larger number of issuers, since changes in the financial condition or market status of a single issuer may cause greater fluctuation total return and share price of a non-diversified portfolio.
Temporary defensive positions and large cash positions risk – In anticipation of, or in response to, adverse market or other conditions, or atypical circumstances such as unusually large cash inflows or redemptions, and Sub-Adviser transitions, the Fund may temporarily hold all or a significant portion, without limitation, of its assets in cash, cash equivalents, affiliated and unaffiliated money market funds, or high quality debt instruments. During periods in which the Fund employs such a temporary defensive strategy or holds large cash positions, it will not be pursuing, and will not achieve, its investment objective. Taking a defensive or large cash position may reduce the potential for appreciation of the portfolio and may affect performance.
Underlying funds risk– The risks associated with investing in the Fund are closely related to the risks associated with the securities and other investments held by the Underlying Funds. The ability of the Fund to achieve its investment objective will depend in part upon the investment manager’s ability to allocate investments in the Underlying Funds and their ability to achieve their investment objectives. There can be no assurance that the investment objective of any Underlying Fund will be achieved. The extent to which the investment performance and risks associated with the Fund correlates to those of a particular Underlying Fund will depend upon the extent to which the Fund’s assets are allocated from time to time for investment in the Underlying Fund, which will vary. The Fund also will bear its pro-rata portion of the operating expenses of the Underlying Funds, including Management and Administrative Fees and 12b-1 fees.
JULY 20, 2015
JNL SERIES TRUST
JNL/Mellon Capital 25 Fund
(a series of JNL Variable Fund LLC)
(the “Acquired Fund”)
AND
JNL/S&P 4 Fund
(a series of JNL Series Trust)
(the “Acquiring Fund”)
1 Corporate Way
Lansing, Michigan 48951
(517) 381-5500
| Acquisition of the assets and assumption of the liabilities of: | By and in exchange for shares of: |
| JNL/Mellon Capital 25 Fund | JNL/S&P 4 Fund |
This Statement of Additional Information (the “SAI”) relates specifically to the proposed reorganization of the Acquired Fund into the Acquiring Fund under which the Acquiring Fund would acquire all of the assets of the Acquired Fund in exchange solely for shares of the Acquiring Fund and that Acquiring Fund’s assumption of all of the Acquired Fund’s liabilities (the “Reorganization”). This SAI is available to separate accounts, registered investment companies, and qualified and non-qualified plans of Jackson National Life Insurance Company or Jackson National Life Insurance Company of New York with amounts allocated to an Acquired Fund and to other shareholders of the Acquired Fund as of July 6, 2015.
This SAI consists of the cover page, the information set forth below and the following described documents, each of which is incorporated by reference herein and accompanies this SAI:
(1) The Acquired Fund’s Statement of Additional Information dated April 27, 2015, as supplemented (File Nos. 333-68105 and 811-09121);
(2) The Acquiring Fund’s Statement of Additional Information dated April 27, 2015, as supplemented (File Nos. 033-87244 and 811-8894);
(3) The Annual Report to Shareholders of the Acquired Fund for the fiscal year ended December 31, 2014 (File Nos. 333-68105 and 811-09121);
(4) The Annual Report to Shareholders of the Acquiring Fund for the fiscal year ended December 31, 2014 (File Nos. 033-87244 and 811-8894);
This SAI is not a prospectus. A Proxy Statement and Prospectus dated July 20, 2015, relating to the Reorganization (the “Proxy Statement/Prospectus”) may be obtained, without charge, by writing to JNLST at 1 Corporate Way, Lansing, Michigan 48951 or calling (517) 381-5500. This SAI should be read in conjunction with the Proxy Statement/Prospectus.
PRO FORMA FINANCIAL INFORMATION
JNL/Mellon Capital 25 Fund merging into JNL/S&P 4 Fund
The unaudited pro forma information provided herein should be read in conjunction with the annual reports of JNL/Mellon Capital 25 Fund (“MC 25 Fund”) and JNL/S&P 4 Fund (“S&P 4 Fund”) dated December 31, 2014. All of the member reports are on file with the SEC and are available at no charge.
The unaudited pro forma information set forth below for the twelve months ended December 31, 2014 is intended to present supplemental data as if the proposed Reorganization of MC 25 Fund (the “Acquired Fund”) into S&P 4 Fund (the “Acquiring Fund”) (collectively, the “Funds”) had occurred as of January 1, 2014. The Reorganization is intended to combine the Acquired Fund with a similar fund currently advised by Jackson National Asset Management, LLC (“JNAM” or “Funds Management”). The Acquiring Fund is advised by JNAM. Subject to member approval, the Reorganization is expected to be effective as of the close of business on September 18, 2015, or on a later date agreed upon by the VF LLC and JNLST (the “Closing Date”).
The Reorganization provides for the acquisition of all the assets and all the liabilities of the Acquired Fund by the Acquiring Fund, in a tax-free exchange for shares of the Acquiring Fund at net asset value. Following the Reorganization, the Acquiring Fund will be the accounting and performance survivor. As a result of the Reorganization, shareholders of the Acquired Fund would become shareholders of the Acquiring Fund.
The costs and expenses associated with the Reorganization relating to obtaining a consent of independent registered public accounting firm will be borne by Jackson National Asset Management, LLC, and no sales or other charges will be imposed on Contract Owners in connection with the Reorganization. The legal expenses associated with the Reorganization, including the legal fees incurred in connection with the analysis under the Internal Revenue Code of 1986 (the “Code”) of the tax treatment of this transaction will be borne by the S&P 4 Fund. Each Fund will bear its proportionate share of the transaction expenses associated with the Reorganization. Such expenses are estimated to be $143,259.
The Funds currently have the same adviser, administrator, distributor, and fund accounting agent. Each service provider has entered into an agreement with JNAM which governs the provision of services to the Funds. Such agreements contain the same terms with respect to each Fund.
As of December 31, 2014, the net assets of the Acquired Fund and the Acquiring Fund were $964,049,101 and $4,983,650,440, respectively. The net assets of the pro forma combined fund as of December 31, 2014 would have been $5,947,556,282 had the Reorganization occurred on that date. The actual net assets of the Acquired Fund and the Acquiring Fund on the Closing Date will differ due to fluctuations in net asset values, subsequent purchases, and redemptions of shares. No assurance can be given as to how many shares of the Acquiring Fund will be received by members of the Acquired Fund on the Closing Date.
On a pro forma basis for the twelve months ended December 31, 2014, the proposed Reorganization would result in a decrease of $2,887,847 in management fees, a decrease of $1,025,184 in administrative fees, and a decrease of $2,048,987 in 12b-1 distribution fees had the Reorganization occurred on January 1, 2014. No significant accounting policies will change as a result of the proposed reorganization, specifically, policies regarding valuation and Subchapter M compliance.
The proposed Reorganization is not expected to be a taxable event for federal income tax purposes for Contract Owners. It is expected that the Reorganization will be a tax-free transaction under Section 368(a)(1) of the Code for the Funds. The Reorganization is not expected to result in any material adverse federal income tax consequences to the shareholders of the Acquired Fund.
If the Reorganization is consummated, the combined Acquiring Fund would seek to continue to qualify as a regulated investment company, if such qualification is in the best interests of shareholders, by complying with the provisions available to certain investment companies, as defined in applicable sections of the Code, and make distributions of substantially all of its investment company taxable income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. In addition, the Acquired Fund and Acquiring Fund will make any required income or capital gain distributions prior to consummation of this Reorganization, in accordance with provisions of the Code relating to tax free reorganizations of investment companies. Accordingly, no provision for federal income taxes is required.
As of December 31, 2014, the Acquired Fund and the Acquiring Fund had no net capital loss carryforwards.
C-4
PART C
OTHER INFORMATION
Item 15. Indemnification
Article VIII of the Registrant's Agreement and Declaration of Trust provides that each of its Trustees and Officers (including persons who serve at the Registrant's request as directors, officers or trustees of another organization in which the Registrant has any interest as a shareholder, creditor or otherwise) (each, a "Covered Person") shall be indemnified by the Registrant against all liabilities and expenses that may be incurred by reason of being or having been such a Covered Person, except that no Covered Person shall be indemnified against any liability to the Registrant or its shareholders to which such Covered Person would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such Covered Person's office.
Article VI of the Registrant's By-Laws provides the following:
The Trust shall provide any indemnification required by applicable law and shall indemnify Trustees, officers, agents and employees as follows:
(a) The Trust shall indemnify any current or former Trustee, officer and agents of the Trust (including persons who serve at the Trust's request as directors, officers or trustees of another organization in which the Trust as any interest as a shareholder, creditor or otherwise) (hereinafter referred to as a "Covered Person") who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than action by or in the right of the Trust) by reason of the fact that such person is or was such Trustee or officer or an employee or agent of the Trust, or is or was serving at the request of the Trust as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding to the fullest extent authorized and in the manner permitted by applicable federal and state law, provided he or she acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Trust, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not reasonably believe his or her actions to be in or not opposed to the best interests of the Trust, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person's conduct was unlawful.
(b) The Trust shall indemnify any current and former Trustee or officer of the Trust who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Trust to procure a judgment in its favor by reason of the fact that such person is or was such Trustee or officer or an employee or agent of the Trust, or is or was serving at the request of the Trust as a director, officer, employee or agent of another corporation, partnership, joint venture, Trust or other enterprise to the fullest extent authorized and in the manner permitted by applicable federal and state law, against expenses (including attorneys' fees), actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit.
(c) To the extent that a Trustee or officer of the Trust has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subparagraphs (a) or (b) above or in defense of any claim, issue or matter therein, such person shall be indemnified to the fullest extent authorized and in the manner permitted by applicable federal and state law against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith, without the necessity for the determination as to the standard of conduct as provided in subparagraph (d).
(d) Expenses incurred in defending a civil or criminal action, writ or proceeding may be paid by the Trust in advance of the final disposition of such action, suit or proceeding, as authorized in the particular case, upon receipt of an undertaking by or on behalf of the Trustee or officer to repay such amount unless it shall ultimately be determined that such person is entitled to be indemnified by the Trust as authorized herein. Such determination must be made by disinterested Trustees or independent legal counsel. Prior to any payment being made pursuant to this paragraph, a majority of a quorum of the disinterested, non-party Trustees of the Trust, or an independent legal counsel in a written opinion, shall determine, based on a review of readily available facts that there is reason to believe that the indemnitee ultimately will be found entitled to indemnification.
(e) The Trust shall advance the expenses of Covered Persons who are parties to any Proceeding to the fullest extent authorized, and in the manner permitted, by applicable federal and state law. For purposes of this paragraph, "Proceeding" means any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative.
(f) Pursuant and subject to Article VI, the Trust shall indemnify each Covered Person against, or advance the expenses of any Covered Person for, the amount of any deductible provided in any liability insurance policy maintained by the Trust.
(g) Agents and employees of the Trust who are not Trustees or officers of the Trust may be indemnified under the same standards and procedures set forth above, in the discretion of the Board.
(h) Any indemnification pursuant to this Article shall not be deemed exclusive of any other rights to which those indemnified may be entitled and shall continue as to a person who has ceased to be a Trustee or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.
(i) Nothing in the Declaration or in these By-Laws shall be deemed to protect any Trustee or officer of the Trust against any liability to the Trust or to its Shareholders to which such person would otherwise be subject by reason of willful malfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such person's office.
(j) The Trust shall have the power to purchase and maintain insurance on behalf of any person against any liability asserted against or incurred by such person, whether or not the Trust would have the power to indemnify such person against such liability under the provisions of this Article. Nevertheless, insurance will not be purchased or maintained by the Trust if the purchase or maintenance of such insurance would result in the indemnification of any person in contravention of any rule or regulation and/or interpretation of the Securities and Exchange Commission.
The foregoing indemnification arrangements are subject to the provisions of Section 17(h) of the Investment Company Act of 1940.
Insofar as indemnification by the Registrant for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted against the Registrant by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
In addition to the above indemnification, Jackson National Life Insurance Company extends its indemnification of its own officers, directors and employees to cover such persons' activities as officers, trustees or employees of the Registrant.
Item 16. Exhibits
| | (1) | | | Agreement and Declaration of Trust of Registrant dated June 1, 1994.1 | | | |
| | | | | | | |
| | (2) | (a) | | Amended and Restated By-Laws of Registrant, approved and adopted on November 27, 2012.14 | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | (3) | | | Not Applicable | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | (4) | | | Plan of Reorganization; filed as Appendix A to the Combined Proxy Statement and Prospectus set forth as Part A to this Registration Statement on Form N-14. | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | (5) | | | Provisions of instruments defining the rights of holders of the securities being registered are contained in the Registrant's Amended and Restated Agreement and Declaration of Trust and By-laws (Exhibits (1) and (2)). | | | | | | | | | | |
| | | | | | | | | | |
| | (6) | (a) | | Jackson National Asset Management, LLC ("JNAM") | | | | | | | | | | |
| | | | | | | | | | |
| | | | (i) | Amended and Restated Investment Advisory and Management Agreement between JNAM and Registrant effective December 1, 2012.14 | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | (ii) | Investment Advisory Agreement between JNAM, and JNL/AQR Managed Futures Strategy Fund Ltd., effective June 10, 2011.9 | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | (iii) | Investment Advisory Agreement between JNAM, and JNL/BlackRock Global Allocation Fund Ltd., effective June 10, 2011.9 | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | (iv) | Amendment, effective January 1, 2013, to Amended and Restated Investment Advisory and Management Agreement between JNAM and Registrant effective December 1, 2012.14 | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | (v) | Amendment, effective April 29, 2013, to Amended and Restated Investment Advisory and Management Agreement between JNAM and Registrant effective December 1, 2012.14 | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | (vi) | Amendment, effective May 30, 2013, to Amended and Restated Investment Advisory and Management Agreement between JNAM and Registrant effective December 1, 2012.16 | | | | | | | | | | |
| | | | | | | | | | |
| | | | (vii) | Amendment, effective May 30, 2013, to Investment Advisory Agreement between JNAM, and JNL/AQR Managed Futures Strategy Fund Ltd., effective June 10, 2011.16 | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | (viii) | Amendment, effective May 30, 2013, to Investment Advisory Agreement between JNAM, and JNL/BlackRock Global Allocation Fund Ltd., effective June 10, 2011.16 | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | (ix) | Amended and Restated Investment Advisory and Management Agreement between JNAM and Registrant effective July 1, 2013.16 | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | (x) | Amended and Restated Investment Advisory Agreement between JNAM, and JNL/AQR Managed Futures Strategy Fund Ltd., effective July 1, 2013.16 | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | (xi) | Amended and Restated to Investment Advisory Agreement between JNAM, and JNL/BlackRock Global Allocation Fund Ltd., effective July 1, 2013.16 | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | (xii) | Investment Advisory Agreement between JNAM, and JNL/BlackRock Commodity Securities Strategy Fund Ltd., effective July 1, 2013.16 | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | (xiii) | Investment Advisory Agreement between JNAM, and JNL/Ivy Asset Strategy Fund Ltd., effective July 1, 2013.16 | | | | | | | | | | |
| | | | | | | | | | |
| | | | (xiv) | Amendment, effective September 16, 2013, to Amended and Restated Investment Advisory and Management Agreement between JNAM and Registrant effective July 1, 2012.16 | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | (xv) | Amendment, effective April 28, 2014, to Amended and Restated Investment Advisory and Management Agreement between JNAM and Registrant effective July 1, 2012. 18 | | | | | | | | | |
| | | | | | | | | | | | | |
| | | (xvi) | Investment Advisory Agreement between JNAM, and JNL/AllianceBernstein Dynamic Asset Allocation Fund Ltd., effective April 28, 2014.18 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | (xvii) | Amendment, effective June 4, 2014, to Amended and Restated Investment Advisory and Management Agreement between JNAM and Registrant effective July 1, 2012.20 | | | | | | | | | |
| | | | | | | | | | | | | |
| | | (xviii) | Amendment, effective September 15, 2014, to Amended and Restated Investment Advisory and Management Agreement between JNAM and Registrant effective July 1, 2012.20 | | | | | | | | | |
| | | | | | | | | | | | | |
| | | (xix) | Amendment, effective June 4, 2014, to Investment Advisory Agreement between JNAM, and JNL/AllianceBernstein Dynamic Asset Allocation Fund Ltd., effective April 28, 2014.20 | | | | | | | | | |
| | | | | | | | | | | | | |
| | | (xx) | Amendment, effective June 4, 2014, to Amended and Restated Investment Advisory Agreement between JNAM, and JNL/AQR Managed Futures Strategy Fund Ltd., effective July 1, 2013.20 | | | | | | | | | |
| | | | | | | | | | | | | |
| | | (xxi) | Amendment, effective June 4, 2014, to Amended and Restated to Investment Advisory Agreement between JNAM, and JNL/BlackRock Global Allocation Fund Ltd., effective July 1, 2013.20 | | | | | | | | | |
| | | | | |
| | | (xxii) | Amendment, effective June 4, 2014, to Investment Advisory Agreement between JNAM, and JNL/BlackRock Commodity Securities Strategy Fund Ltd., effective July 1, 2013.20 | |
| | | | | |
| | | (xxiii) | Amendment, effective June 4, 2014, to Investment Advisory Agreement between JNAM, and JNL/Ivy Asset Strategy Fund Ltd., effective July 1, 2013.20 | |
| | | | | |
| | | (xxiv) | Amendment, effective April 27, 2015, to Amended and Restated Investment Advisory and Management Agreement between JNAM and Registrant effective July 1, 2012.22 | |
| | | | | | | | | | |
| | (7) | (a) | (i) | Participation Agreement between Registrant, Jackson National Life Insurance Company, American Funds Insurance Series, and Capital Research and Management Company dated May 1, 2010.5 | | | | | | |
| | | | | | | | | | | |
| | | | (ii) | First Amendment, dated January 18, 2012, to the Master Fund Participation Agreement between Registrant, Jackson National Life Insurance Company, American Funds Insurance Series, and Capital Research and Management Company dated May 1, 2010.21 | | | | | | | |
| | | | | | | | | | | | |
| | | | (iii) | Second Amendment, dated December 31, 2014, to the Master Fund Participation Agreement between Registrant, Jackson National Life Insurance Company, American Funds Insurance Series, and Capital Research and Management Company dated May 1, 2010.22 | | | | | | | |
| | | | | | | | | | | |
| | | (b) | (i) | Participation Agreement between Registrant, Jackson National Life Insurance Company of New York, American Funds Insurance Series, and Capital Research and Management Company dated May 1, 2010.5 | | | | | | |
| | | | | | | |
| | | | (ii) | First Amendment, dated January 18, 2012, to the Master Fund Participation Agreement between Registrant, Jackson National Life Insurance Company of New York, American Funds Insurance Series, and Capital Research and Management Company dated May 1, 2010.21 | | | | | | | | |
| | | | | | | | | | |
| | | | (iii) | Second Amendment, dated December 31, 2014, to the Master Fund Participation Agreement between Registrant, Jackson National Life Insurance Company of New York, American Funds Insurance Series, and Capital Research and Management Company dated May 1, 2010.22 | | | | | |
| | | | | | | | | | |
| | | (c) | (i) | Participation Agreement among Jackson National Life Insurance Company on behalf of itself and certain of its separate accounts; the Registrant, Jackson National Asset Management, LLC; American Funds Insurance Series; Capital Research and Management Company; and American Funds Service Company, effective April 30, 2012.12 | | |
| | | | | | | |
| | | | (ii) | First Amendment, dated September 16, 2013, to Participation Agreement among Jackson National Life on behalf of itself and certain of its separate accounts; the Registrant; JNAM; American Funds Insurance Series; Capital Research and Management Company; and American Funds Service Company, effective April 30, 2012.17 | | |
| | | | | | | | | | |
| | | (d) | (i) | Participation Agreement among Jackson National Life Insurance Company of New York on behalf of itself and certain of its separate accounts; the Registrant, Jackson National Asset Management, LLC; American Funds Insurance Series; Capital Research and Management Company; and American Funds Service Company, effective April 30, 2012. 12 | | |
| | | | | | | |
| | | | (ii) | First Amendment, dated September 16, 2013, to Participation Agreement among JNLNY on behalf of itself and certain of its separate accounts; the Registrant; JNAM; American Funds Insurance Series; Capital Research and Management Company; and American Funds Service Company, effective April 30, 2012. 17 | | |
| | | | | | | |
| | | (e) | (i) | Participation Agreement, among the Registrant, on behalf of itself or its separate series, iShares Trust and iShares U.S. ETF Trust, and iShares, Inc., iShares MSCI Russia Capped Index Fund, Inc., iShares U.S. ETF Company, Inc. and iShares Sovereign Screened Global Bond Fund, Inc., each on behalf of its respective iShares series, effective April 28, 2014.18 | | | | | |
| | | | | | | | | | |
| | | (f) | (i) | Investing Fund Agreement, between Market Vectors ETF Trust on behalf of each series of the Trust listed on Annex A of Agreement, and Registrant, on behalf of each of its series, effective April 28, 2014.18 | | | | | |
| | | | | | | | | | |
| | | (g) | (i) | Purchasing Fund Agreement, between State Street Bank and Trust Company, in its capacity as trustee and on behalf of the SPDR® Dow Jones Industrial Average ETF Trust and SPDR® S&P 500® ETF Trust, and the Registrant on behalf of their current and any future series as an investing fund, effective April 28, 2014.18 | | | | | |
| | | | | | | | | | |
| | | | (ii) | Investing Fund Agreement, between The Select Sector SPDR Trust, SPDR Series Trust and SPDR Index Shares Funds, and the Registrant on behalf of their current and any future series as an investing fund, effective April 28, 2014.18 | | | | | |
| | | | | | | | | | |
| | | (h) | (i) | 12(d)(1) Investing Agreement between Registrant, on behalf of itself and its separate series listed on Schedule A of the Agreement, and the investment trusts listed on Schedule B of the Agreement (the "Vanguard Trusts"), on behalf of themselves and their respective series listed on Schedule B (each, a "Vanguard Fund"), effective April 28, 2014.18 | | | | | |
| | | | | | | | | | |
| | | (i) | (i) | Amended and Restated Distribution Agreement between Registrant and Jackson National Life Distributors, Inc., effective April 29, 2013.14 | | | | | |
| | | | | | | | | | |
| | | | (ii) | Amendment, effective May 30, 2013, to Amended and Restated Distribution Agreement between Registrant and Jackson National Life Distributors, Inc., effective April 29, 2013.16 | | | | | |
| | | | | | | | | | |
| | | | (iii) | Amendment, effective September 16, 2013, to Amended and Restated Distribution Agreement between Registrant and Jackson National Life Distributors, Inc., effective April 29, 2013.16 | | | | | |
| | | | | | | | | | |
| | | | (iv) | Amendment, effective April 28, 2014, to Amended and Restated Distribution Agreement between Registrant and Jackson National Life Distributors, Inc., effective April 29, 2013.18 | | | | | |
| | | | | | | | | | |
| | | | (v) | Amendment, effective June 4, 2014, to Amended and Restated Distribution Agreement between Registrant and Jackson National Life Distributors, Inc., effective April 29, 2013.20 | | | | | |
| | | | | | | | | | |
| | | | (vi) | Amendment, effective September 15, 2014, to Amended and Restated Distribution Agreement between Registrant and Jackson National Life Distributors, Inc., effective April 29, 2013.20 | | | | | |
| | | | | | | | | | |
| | | | (vii) | Amendment, effective April 27, 2015, to Amended and Restated Distribution Agreement between Registrant and Jackson National Life Distributors, Inc., effective April 29, 2013.22 | | | | | |
| | | | | | | | | | |
| | (8) | | | Not Applicable. | | | | | |
| | | | | | | | | | |
| | (9) | (a) | (i) | Master Global Custody Agreement between Registrant and JPMorgan Chase Bank, N.A. ("JPMorgan Chase"), dated August 12, 2009.3 | | | | | |
| | | | | | | | | | |
| | | | (ii) | Settled Securities Class Action Services Addendum, dated August 12, 2009, which supplements the Master Global Custody Agreement between Registrant and JPMorgan Chase, dated August 12, 2009.3 | | | | | |
| | | | | | | | | | |
| | | | (iii) | International Proxy Voting Addendum, dated August 12, 2009, to the Master Global Custody Agreement between Registrant and JPMorgan Chase, dated August 12, 2009.3 | | | | | |
| | | | | | | | | | |
| | | | (iv) | Mutual Fund Rider, dated August 12, 2009, to the Master Global Custody Agreement between Registrant and JPMorgan Chase, dated August 12, 2009.3 | | | | | |
| | | | | | | | | | |
| | | | (v) | Amendment, dated September 28, 2009, to the Master Global Custody Agreement between Registrant and JPMorgan Chase, dated August 12, 2009.4 | | | | | |
| | | | | | | | | | |
| | | | (vi) | Amendment, dated May 1, 2010, to the Master Global Custody Agreement between Registrant and JPMorgan Chase, dated August 12, 2009.5 | | | | | |
| | | | | | | | | | |
| | | | (vii) | Amendment, dated October 11, 2010, to the Master Global Custody Agreement between Registrant and JPMorgan Chase, dated August 12, 2009.6 | | | | | |
| | | | | | | | | | |
| | | | (viii) | Amendment, effective April 29, 2011, to the Master Global Custody Agreement between Registrant and JPMorgan Chase, dated August 12, 2009.8 | | | | | |
| | | | | | | | | | |
| | | | (ix) | Amendment, effective August 29, 2011, to the Master Global Custody Agreement between Registrant and JPMorgan Chase, dated August 12, 2009.9 | | | | | |
| | | | | | | | | | |
| | | | (x) | Amendment, effective October 1, 2011, to the Master Global Custody Agreement between Registrant and JPMorgan Chase, dated August 12, 2009.10 | | | | | |
| | | | | | | | | | |
| | | | (xi) | Amendment, effective December 12, 2011, to the Master Global Custody Agreement between Registrant and JPMorgan Chase, dated August 12, 2009.10 | | | | | |
| | | | | | | | | | |
| | | | (xii) | Amendment, effective April 30, 2012, to the Master Global Custody Agreement between Registrant and JPMorgan Chase, dated August 12, 2009.12 | | | | | |
| | | | | | | | | | |
| | | | (xiii) | Amendment, effective August 29, 2012, to the Master Global Custody Agreement between Registrant and JPMorgan Chase, dated August 12, 2009.14 | | | | | |
| | | | | | | | | | |
| | | | (xiv) | Amendment, effective April 29, 2013, to the Master Global Custody Agreement between Registrant and JPMorgan Chase, dated August 12, 2009.14 | | | | | |
| | | | | | | | | | |
| | | | (xv) | Amendment, effective September 16, 2013, to the Master Global Custody Agreement between Registrant and JPMorgan Chase, dated August 12, 2009.16 | | | | | |
| | | | | | | | | | |
| | | | (xvi) | Amendment, effective April 28, 2014, to the Master Global Custody Agreement between Registrant and JPMorgan Chase, dated August 12, 2009.18 | | | | | |
| | | | | | | | | | |
| | | | (xvii) | Amendment, effective September 2, 2014, to the Master Global Custody Agreement between Registrant and JPMorgan Chase, dated August 12, 2009.20 | | | | | |
| | | | | | | | | | |
| | | | (xviii) | Amendment, effective September 15, 2014, to the Master Global Custody Agreement between Registrant and JPMorgan Chase, dated August 12, 2009.20 | | | | | |
| | | | | | | | | | |
| | | | (xix) | Amendment, effective April 27, 2015, to the Master Global Custody Agreement between Registrant and JPMorgan Chase, dated August 12, 2009.22 | | | | | |
| | | | | | | | | | |
| | | (b) | (i) | Master Global Custody Agreement between JPMorgan Chase, and JNL/AQR Managed Futures Strategy Fund Ltd. and JNL/BlackRock Global Allocation Fund, Ltd., effective June 16, 2011; Settled Securities Class Action Services Addendum, dated June 16, 2011; and International Proxy Voting Addendum, dated June 16, 2011.9 | | | | | |
| | | | | | | | | | |
| | | | (ii) | Amendment, effective December 13, 2012, to the Master Global Custody Agreement between, and JNL/AQR Managed Futures Strategy Fund Ltd. and JNL/BlackRock Global Allocation Fund, Ltd. dated June 16, 2011 to add JNL ASF, LLC as a party.16 | | | | | |
| | | | | | | | | | |
| | | | (iii) | Amendment, effective April 22, 2013, to the Master Global Custody Agreement between, JNL/AQR Managed Futures Strategy Fund Ltd., JNL/BlackRock Global Allocation Fund, Ltd., and JNL ASF, LLC dated June 16, 2011 to add JNL ASF II (SBP), LLC as a party.16 | | | | | |
| | | | | | | | | | |
| | | | (iv) | Amendment, effective July 1, 2013, to the Master Global Custody Agreement between, JNL/AQR Managed Futures Strategy Fund Ltd., JNL/BlackRock Global Allocation Fund, Ltd., JNL ASF, LLC, and JNL ASF II (SBP), LLC dated June 16, 2011 to add JNL/BlackRock Commodity Securities Strategy Fund Ltd., JNL/Ivy Asset Strategy Fund Ltd., Curian/AQR Risk Parity Fund Ltd., and Curian/Van Eck International Gold Fund Ltd. as parties.16 | | | | | |
| | | | | | | | | | |
| | | | (v) | Amendment, effective April 28, 2014, to the Cayman Custody Agreement dated June 16, 2011 to add JNL/AllianceBernstein Dynamic Asset Allocation Fund Ltd. and Curian/Neuberger Berman Risk Balanced Commodity Strategy Fund Ltd. as parties.18 | | | | | |
| | | | | | | | | | |
| | | | (vi) | Addendum, effective April 27, 2015, to the Cayman Custody Agreement dated June 16, 2011 to reflect name changes for certain entities. 22 | | | |
| | | | | | | | | | |
| | | (c) | (i)(A) | Holding Account Agreement between Registrant and The Bank of Nova Scotia, acting through its ScotiaMocatta division, dated September 28, 2009.4 | | | | | |
| | | | | | | | | | |
| | | | (ii)(B) | Amendment, dated July 1, 2013, to Holding Account Agreement between Registrant and The Bank of Nova Scotia, acting through its ScotiaMocatta division, dated September 28, 2009.16 | | | | | |
| | | | | | | | | | |
| | | (d) | (i)(A) | Custody Agreement between Registrant and State Street Bank and Trust, dated December 31, 2010.7 | | | | | |
| | | | | | | | | | |
| | | | (i)(B) | Amendment, effective September 2, 2014, to the Custody Agreement between Registrant and State Street, dated December 31, 2010.20 | | | | | |
| | | | | | | | | | |
| | | | (i)(C) | Amendment dated April 16, 2015 to Custody Agreement between Registrant and State Street Bank, dated December 31, 2010.22 | | | | | |
| | | | | | | | | | |
| | | | (ii)(A) | Class Action Services Agreement, effective September 2, 2014, related to the Custody Agreement between Registrant and State Street, dated December 31, 2010.20 | | | | | |
| | | | | | | | | | |
| | | | (ii)(B) | Amendment dated April 14, 2015 to Class Action Services Agreement, effective September 2, 2014, related to the Custody Agreement between Registrant and State Street Bank, dated December 31, 2010.22 | | | | | |
| | | | | | | | | | |
| | (10) | (a) | (i) | Distribution Plan, effective April 29, 2013.14 | | | | | |
| | | | | | | | | | |
| | | | (ii) | Amendment, effective May 30, 2013, to Distribution Plan, effective April 29, 2013.16 | | | | | |
| | | | | | | | | | |
| | | | (iii) | Amendment, effective September 16, 2013, to Distribution Plan, effective April 29, 2013.16 | | | | | |
| | | | | | | | | | |
| | | | (iv) | Amendment, effective April 28, 2014, to Distribution Plan, effective April 29, 2013.18 | | | | | |
| | | | | | | | | | |
| | | | (v) | Amendment, effective June 4, 2014, to Distribution Plan, effective April 29, 2013.20 | | | | | |
| | | | | | | | | | |
| | | | (vi) | Amendment, effective September 15, 2014, to Distribution Plan, effective April 29, 2013.20 | | | | | |
| | | | | | | | | | |
| | | | (vii) | Amendment, effective April 27, 2015, to Distribution Plan, effective April 29, 2013.22 | | | | | |
| | | | | | | | | | |
| | | (b) | (i) | Multiple Class Plan, effective April 29, 2013.14 | | | | | |
| | | | | | | | | | |
| | | | (ii) | Amendment, effective September 16, 2013, to Multiple Class Plan, effective April 29, 2013.16 | | | | | |
| | | | | | | | | | |
| | | | (iii) | Amendment, effective April 28, 2014, to Multiple Class Plan, effective April 29, 2013.18 | | | | | |
| | | | | | | | | | |
| | | | (iv) | Amendment, effective September 15, 2014, to Multiple Class Plan, effective April 29, 2013.20 | | | | | |
| | | | | | | | | | |
| | | | (v) | Amendment, effective April 27, 2015, to Multiple Class Plan, effective April 29, 2013.22 | | | | | |
| | | | | | | | | | |
| | (11) | | | Opinion and Consent of Counsel regarding legality of shares being registered, attached hereto. | | | | | |
| | | | | | | | | | |
| | (12) | | | Opinion and Consent of Counsel regarding tax matters and consequences to shareholders discussed in the Prospectus, to be filed by amendment. | | | | | |
| | | | | | | | | | |
| | (13) | (a) | (i) | Amended and Restated Administration Agreement between Registrant and JNAM, effective February 28, 2012.12 | | | | | |
| | | | | | | | | | |
| | | | (ii) | Amendment, effective March 1, 2012, to Amended and Restated Administration Agreement between Registrant and JNAM, effective February 28, 2012.13 | | | | | |
| | | | | | | | | | |
| | | | (iii) | Amendment, effective April 30, 2012, to Amended and Restated Administration Agreement between Registrant and JNAM, effective February 28, 2012.12 | | | | | |
| | | | | | | | | | |
| | | | (iv) | Amendment, effective April 29, 2013, to Amended and Restated Administration Agreement between Registrant and JNAM, effective February 28, 2012.14 | | | | | |
| | | | | | | | | | |
| | | | (v) | Amendment, effective May 30, 2013, to Amended and Restated Administration Agreement between Registrant and JNAM, effective February 28, 2012.16 | | | | | |
| | | | | | | | | | |
| | | | (vi) | Amended and Restated Administration Agreement between Registrant and JNAM, effective July 1, 2013.16 | | | | | |
| | | | | | | | | | |
| | | | (vii) | Amendment, effective September 5, 2013, to Amended and Restated Administration Agreement between Registrant and JNAM, effective July 1, 2013.16 | | | | | |
| | | | | | | | | | |
| | | | (viii) | Amendment, effective September 16, 2013, to Amended and Restated Administration Agreement between Registrant and JNAM, effective July 1, 2013.16 | | | | | |
| | | | | | | | | | |
| | | | (ix) | Amendment, effective April 28, 2014, to Amended and Restated Administration Agreement between Registrant and JNAM, effective July 1, 2013.18 | | | | | |
| | | | | | | | | | |
| | | | (x) | Amendment, effective June 4, 2014, to Amended and Restated Administration Agreement between Registrant and JNAM, effective July 1, 2013.20 | | | | | |
| | | | | | | | | | |
| | | | (xi) | Amendment, effective September 15, 2014, to Amended and Restated Administration Agreement between Registrant and JNAM, effective July 1, 2013.20 | | | | | |
| | | | | | | | | | |
| | | | (xii) | Amendment, effective April 27, 2015, to Amended and Restated Administration Agreement between Registrant and JNAM, effective July 1, 2013.22 | | | | | |
| | | | | | | | | | |
| | | (b) | (i) | Administration Agreement between JNAM and JNL/BlackRock Commodity Securities Strategy Fund Ltd., effective July 1, 2013.16 | | | | | |
| | | | | | | | | | |
| | | | (ii) | Amendment, effective June 4, 2014, to Administration Agreement between JNAM and JNL/BlackRock Commodity Securities Strategy Fund Ltd., effective July 1, 2013.20 | | | | | |
| | | | | | | | | | |
| | | (c) | | Amended and Restated Expense Limitation Agreement, dated January 1, 2011, between Registrant and JNAM.8 | | | | | |
| | | | | | | | | | |
| | | (d) | (i) | Amended and Restated Transfer Agency Agreement between Registrant and JNAM, dated February 28, 2012.12 | | | | | |
| | | | | | | | | | |
| | | | (ii) | Amendment, effective April 30, 2012, to Amended and Restated Transfer Agency Agreement between Registrant and JNAM dated February 28, 2012.12 | | | | | |
| | | | | | | | | | |
| | | | (iii) | Amendment, effective April 29, 2013, to Amended and Restated Transfer Agency Agreement between Registrant and JNAM dated February 28, 2012.14 | | | | | |
| | | | | | | | | | |
| | | | (iv) | Amendment, effective September 16, 2013, to Amended and Restated Transfer Agency Agreement between Registrant and JNAM dated February 28, 2012.16 | | | | | |
| | | | | | | | | | |
| | | | (v) | Amendment, effective April 28, 2014, to Amended and Restated Transfer Agency Agreement between Registrant and JNAM dated February 28, 2012.18 | | | | | |
| | | | | | | | | | |
| | | | (vi) | Amendment, effective September 15, 2014, to Amended and Restated Transfer Agency Agreement between Registrant and JNAM dated February 28, 2012.20 | | | | | |
| | | | | | | | | | |
| | | | (vii) | Amendment, effective April 27, 2015, to Amended and Restated Transfer Agency Agreement between Registrant and JNAM dated February 28, 2012.22 | | | | | |
| | | | | | | | | | |
| | | (e) | | Anti-Money Laundering Agreement between Registrant and Jackson National Life, dated November 27, 2012.15 | | | | | |
| | | | | | | | | | |
| | | (f) | (i) | Management Fee Waiver Agreement (for certain Master-Feeder Funds), dated May 1, 2010, between Registrant and JNAM.5 | | | | | |
| | | | | | | | | | |
| | | | (ii) | Amendment, dated August 29, 2011, to Management Fee Waiver Agreement (for certain Master-Feeder Funds), dated May 1, 2010, between Registrant and JNAM.9 | | | | | |
| | | | | | | | | | |
| | | | (iii) | Amendment, dated June 3, 2013, to Management Fee Waiver Agreement (for certain Master-Feeder Funds), dated May 1, 2010, between Registrant and JNAM.16 | | | | | |
| | | | | | | | | | |
| | | | (iv) | Amendment, dated April 27, 2015, to Management Fee Waiver Agreement (for certain Master-Feeder Funds), dated May 1, 2010, between Registrant and JNAM.22 | | | | | |
| | | | | | | | | | |
| | | (g) | (i) | Management Fee Waiver Agreement (for certain funds), effective April 30, 2012, between Registrant and JNAM.11 | | | | | |
| | | | | | | | | | |
| | | | (ii) | Amendment, dated June 3, 2013, to Management Fee Waiver Agreement (for certain funds), dated May 1, 2010, between Registrant and JNAM.16 | | | | | |
| | | | | | | | | | |
| | | | (iii) | Amendment, dated March 16, 2015, to Management Fee Waiver Agreement (for certain funds), dated May 1, 2010, between Registrant and JNAM.22 | | | | | |
| | | | | | | | | | |
| | | | (iv) | Amendment, dated April 27, 2015, to Management Fee Waiver Agreement (for certain funds), dated May 1, 2010, between Registrant and JNAM.22 | | | | | |
| | | | | | | | | | |
| | (14) | | | Consent of Independent Registered Public Accounting Firm, attached hereto. | | | | | |
| | | | | | | | | | |
| | (15) | | | None. | | | | | |
| | | | | | | | | | |
| | (16) | | | Powers of Attorney, dated June 4, 2015, attached hereto. | | | | | |
| | | | | | | | | | |
| | (17) | | | Form of Voting Instructions and Proxy Card, attached hereto. | | | | | |
| | | | | | | | | | |
1 | Incorporated by reference to Registrant's Post-Effective Amendment No. 5 to its registration statement on Form N-1A (033-87244; 811-8894) ("Registration Statement") filed with the Securities and Exchange Commission ("SEC") on June 26, 1996. |
2 | Incorporated by reference to Registrant's Post-Effective Amendment No. 44 to its Registration Statement on Form N-1A filed with the SEC on September 18, 2006. |
3 | Incorporated by reference to Registrant's Post-Effective Amendment No. 73 to its Registration Statement on Form N-1A filed with the SEC on September 23, 2009. |
4 | Incorporated by reference to Registrant's Post-Effective Amendment No. 74 to its Registration Statement on Form N-1A filed with the SEC on December 18, 2009. |
5 | Incorporated by reference to Registrant's Post-Effective Amendment No. 78 to its Registration Statement on Form N-1A filed with the SEC on April 30, 2010. |
6 | Incorporated by reference to Registrant's Post-Effective Amendment No. 83 to its Registration Statement on Form N-1A filed with the SEC on October 8, 2010. |
7 | Incorporated by reference to Registrant's Post-Effective Amendment No. 86 to its Registration Statement on Form N-1A filed with the SEC on January 3, 2011. |
8 | Incorporated by reference to Registrant's Post-Effective Amendment No. 89 to its Registration Statement on Form N-1A filed with the SEC on April 29, 2011. |
9 | Incorporated by reference to Registrant's Post-Effective Amendment No. 95 to its Registration Statement on Form N-1A filed with the SEC on August 26, 2011. |
10 | Incorporated by reference to Registrant's Post-Effective Amendment No. 99 to its Registration Statement on Form N-1A filed with the SEC on December 9, 2011. |
11 | Incorporated by reference to Registrant's Post-Effective Amendment No. 101 to its Registration Statement on Form N-1A filed with the SEC on December 22, 2011. |
12 | Incorporated by reference to Registrant's Post-Effective Amendment No. 104 to its Registration Statement on Form N-1A filed with the SEC on April 26, 2012. |
13 | Incorporated by reference to Registrant's Post-Effective Amendment No. 106 to its Registration Statement on Form N-1A filed with the SEC on August 24, 2012. |
14 | Incorporated by reference to Registrant's Post-Effective Amendment No. 108 to its Registration Statement on Form N-1A filed with the SEC on December 19, 2012. |
15 | Incorporated by reference to Registrant's Post-Effective Amendment No. 111 to its Registration Statement on Form N-1A filed with the SEC on April 26, 2013. |
16 | Incorporated by reference to Registrant's Post-Effective Amendment No. 116 to its Registration Statement on Form N-1A filed with the SEC on September 13, 2013. |
17 | Incorporated by reference to Registrant's Post-Effective Amendment No. 118 to its Registration Statement on Form N-1A filed with the SEC on December 20, 2013. |
18 | Incorporated by reference to Registrant's Post-Effective Amendment No. 121 to its Registration Statement on Form N-1A filed with the SEC on April 25, 2014. |
19 | Incorporated by reference to Registrant's Post-Effective Amendment No. 123 to its Registration Statement on Form N-1A filed with the SEC on June 17, 2014. |
20 | Incorporated by reference to Registrant's Post-Effective Amendment No. 125 to its Registration Statement on Form N-1A filed with the SEC on September 12, 2014. |
21 | Incorporated by reference to Registrant's Post-Effective Amendment No. 127 to its Registration Statement on Form N-1A filed with the SEC on January 16, 2015. |
22 | Incorporated by reference to Registrant's Post-Effective Amendment No. 129 to its Registration Statement on Form N-1A filed with the SEC on April 24, 2015. |
Item 17. Undertakings
(1) The undersigned Registrant agrees that prior to any public reoffering of the securities registered through the use of a prospectus which is a part of this Registration Statement by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c) under the Securities Act of 1933, as amended (the "1933 Act"), the reoffering prospectus will contain the information called for by the applicable registration form for reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed under paragraph (1) above will be filed as a part of an amendment to the Registration Statement and will not be used until the amendment is effective, and that, in determining any liability under the 1933 Act, each post-effective amendment shall be deemed to be a new registration statement for the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering of them.
(3) The Registrant agrees to file an executed copy of the opinion of counsel supporting the tax consequences of the proposed reorganization as an amendment to this Registration Statement within a reasonable time after receipt of such opinion.
SIGNATURES
As required by the Securities Act of 1933, as amended (the "1933 Act"), this Registration Statement has been signed on behalf of the Registrant, in the City of Lansing and the State of Michigan on the 18th day of June 2015.
| JNL SERIES TRUST | |
| /s/ Susan S. Rhee | |
| Susan S. Rhee | |
| Vice President, Counsel, and Secretary | |
| | |
| As required by the 1933 Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. | |
| | | |
/s/ Michael Bouchard by Susan S. Rhee* | June 18, 2015 | |
| Michael Bouchard | | |
| Trustee | | |
| | | |
/s/ Ellen Carnahan by Susan S. Rhee* | June 18, 2015 | |
| Ellen Carnahan | | |
| Trustee | | |
| | | |
/s/ William Crowley by Susan S. Rhee* | June 18, 2015 | |
| William Crowley | | |
| Trustee | | |
| | | |
/s/ Michelle Engler by Susan S. Rhee* | June 18, 2015 | |
| Michelle Engler | | |
| Trustee | | |
| | | |
/s/ John Gillespie by Susan S. Rhee* | June 18, 2015 | |
| John Gillespie | | |
| Trustee | | |
| | | |
/s/ Richard D. McLellan by Susan S. Rhee* | June 18, 2015 | |
| Richard D. McLellan | | |
| Trustee | | |
| | | |
/s/ Mark D. Nerud by Susan S. Rhee* | June 18, 2015 | |
| Mark D. Nerud | | |
| President and Trustee | | |
| | | |
/s/ Gerard A. M. Oprins by Susan S. Rhee* | June 18, 2015 | |
| Gerard A. M. Oprins | | |
| Treasurer and Chief Financial Officer (Principal Financial Officer) | | |
| | | |
/s/ William R. Rybak by Susan S. Rhee* | June 18, 2015 | |
| William R. Rybak | | |
| Trustee | | |
| | | |
/s/ Edward Wood by Susan S. Rhee* | June 18, 2015 | |
| Edward Wood | | |
| Trustee | | |
| | | |
/s/ Patricia A. Woodworth by Susan S. Rhee* | June 18, 2015 | |
| Patricia A. Woodworth | | |
| Trustee | | |
| | | |
| * By Susan S. Rhee, Attorney In Fact | | |
EXHIBIT LIST
Exhibit
Number | Exhibit
Description |
| (11) | Opinion and Consent of Counsel regarding legality of shares being registered |
| (14) | Consent of Independent Registered Public Accounting Firm |
| (16) | Powers of Attorney, dated June 4, 2015 |
| (17) | Form of Voting Instructions and Proxy Card |
