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SUPPLEMENT TO PROSPECTUS OF
NORTH AMERICAN SENIOR FLOATING RATE FUND
Dated April 13, 1999
CypressTree Asset Management Corporation ("CAM") has informed the Fund that
CypressTree Investments, Inc. ("CypressTree"), CAM's parent company, expects to
sell substantially all of CypressTree's assets, including all of the stock of
CAM, the Fund's investment adviser, and all of the stock of CypressTree Funds
Distributors, Inc. ("CFD"), the Fund's distributor, to American General
Corporation. The acquisition by American General Corporation of CypressTree's
assets (the "Acquisition") is expected to occur in March of 2000. American
General Corporation is a part of American General Financial Group, a financial
services company with approximately $115 billion in assets and over $6 billion
in total stockholders' equity.
The Acquisition will result in the termination of (i) the investment
advisory agreement between CAM and the Fund, (ii) the subadvisory agreement
between CAM and CypressTree Investment Management Company, Inc. ("CIMCO"), and
(iii) the distribution agreement between North American Funds and CFD.
At a meeting of the Board of Directors of the Fund (the "Board") on
February 27, 2000, the Board took several actions described below.
Investment Advisory, Subadvisory, and Distribution Agreements
The Board approved an interim investment advisory agreement between CAM
(operating under its new name of American General Asset Management Corp.
("AGAM")) and the Fund, in order to allow AGAM to continue to serve as
investment adviser to the Fund after the Acquisition. Under the Investment
Company Act, however, AGAM may continue to serve as the investment adviser for
the Fund beyond an interim period of 150 days only if shareholders of the Fund
approve a new investment advisory agreement. Accordingly, the Board has voted to
call a special meeting of shareholders for June 1, 2000 (the "June Shareholder
Meeting") to vote on adoption of a new two-year investment advisory agreement
with AGAM.
The Board also approved an interim subadvisory agreement between CAM and
CIMCO, in order to allow CIMCO to continue to serve as subadviser to the Fund
after the Acquisition. Under the Investment Company Act, however, CIMCO may
continue to serve as the investment adviser for the Fund beyond an interim
period of 150 days only if shareholders of the Fund approve a new investment
advisory agreement. Shareholders will be asked to approve a new two-year
subadvisory agreement with CIMCO at the June Shareholder Meeting.
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CFD, under its new name American General Funds Distributors, Inc. ("AGFD"),
will continue to serve as the distributor of the Fund's shares since the
Acquisition. The Board approved a new distribution agreement substantially
similar to the Fund's previous distribution agreement with CFD (shareholder
approval of the new distribution agreement is not required under the Investment
Company Act).
Board of Directors
Bradford K. Gallagher, Chairman of the Board and President of CAM, is
expected to resign from the Board upon consummation of the Acquisition. Alice
T. Kane, President of American General Fund Group, was appointed by the Board as
a Director of the Fund and Chairman of the Board, effective upon the resignation
of Mr. Gallagher. Additionally, the Board nominated six additional Directors to
be proposed for election, along with Ms. Kane, at the June Shareholder Meeting.
Two of these nominees would replace current Directors (Arthur S. Loring and
William F. Achtmeyer) who are expected to resign effective upon their
successors' election. If shareholders approve the nominees, the Board will
increase in size from five to nine Directors.
Fee Waiver
Effective March 7, 2000, CFD has voluntarily agreed to waive its fees such
that Distribution Fees and Total Fund Operating Expenses will equal 0.05% and
1.40%, respectively, for its Class B Shares, and 0.05% and 1.40%, respectively,
for its Class C Shares. This voluntary waiver will continue until further
notice.
March 7, 2000
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