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NORTH AMERICAN FUNDS VARIABLE PRODUCT SERIES II
(formerly known as American General Series Portfolio Company 3)
SUPPLEMENT DATED OCTOBER 23, 2000
TO PROSPECTUS DATED JANUARY 3, 2000 (AS REVISED JANUARY 19, 2000)
AND STATEMENT OF ADDITIONAL INFORMATION DATED JANUARY 3, 2000
Prospectus
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Fund Name Changes (Prospectus page 1)
As of October 1, 2000, the name of the Series Company (American General Series
Portfolio Company 3, or AGSPC 3) has been changed to North American Funds
Variable Product Series II, or NAFVPS II. Therefore, all references to the funds
shall be changed from the "Old Fund Name" to the "New Fund Name" as shown below.
<TABLE>
<CAPTION>
OLD FUND NAME NEW FUND NAME
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<S> <C>
American General Core Bond Fund North American-AG Core Bond Fund
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American General International Growth Fund North American International Growth Fund
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American General Large Cap Growth Fund North American-Goldman Sachs Large Cap Growth Fund
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American General Mid Cap Growth Fund North American-INVESCO Mid Cap Growth Fund
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American General Small Cap Growth Fund North American-J.P. Morgan Small Cap Growth Fund
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American General Large Cap Value Fund North American-State Street Large Cap Value Fund
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American General Mid Cap Value Fund North American-Neuberger Berman Mid Cap Value Fund
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American General Small Cap Value Fund North American-Small Cap Value Fund
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American General Socially Responsible Fund North American-AG Socially Responsible Fund
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American General High Yield Bond Fund North American-AG High Yield Bond Fund
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American General Strategic Bond Fund North American-AG Strategic Bond Fund
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American General Money Market Fund North American-AG 2 Money Market Fund
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American General Aggressive Growth Lifestyle Fund North American-AG Aggressive Growth Lifestyle Fund
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American General Moderate Growth Lifestyle Fund North American-AG Moderate Growth Lifestyle Fund
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American General Conservative Growth Lifestyle Fund North American-AG Conservative Growth Lifestyle Fund
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</TABLE>
North American - AG Aggressive Growth Lifestyle Fund, North American - AG
Conservative Growth Lifestyle Fund, and North American - AG Moderate Growth
Lifestyle Fund (Prospectus pages 4, 8, and 17):
INVESTMENT STRATEGY
Prior to May 3, 2000, the Lifestyle Funds invested solely in different
portfolios of NAFVPS II. As of that date, the Lifestyle Funds began investing in
the Series Company Funds of NAFVPS I and/or NAFVPS II. NAFVPS I and II are
related investment companies for purposes of investment and investors services,
and VALIC serves as investment adviser to both, although each offers a unique
selection of mutual funds. The Underlying Funds in which the Lifestyle Funds
invest shall be chosen in accordance with projected asset allocation ranges for
each particular Lifestyle Fund. These asset allocation ranges are shown below:
Asset Allocation Ranges for the North American - AG Aggressive Growth Fund:
International Equity Securities 15% - 35%
Domestic Equity Securities 60% - 80%
Bonds 5% - 15%
Asset Allocation Ranges for the North American - AG Conservative Growth Fund:
International Equity Securities 5% - 15%
Domestic Equity Securities 20% - 50%
Bonds 45% - 65%
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Asset Allocation Ranges for the North American - AG Moderate Growth Fund:
International Equity Securities 10% - 20%
Domestic Equity Securities 35% - 65%
Bonds 25% - 45%
BENCHMARK INFORMATION
Each Lifestyle Fund currently compares its performance to a blended benchmark,
calculated by including the pro rata portion of the respective indices for each
of the Underlying Funds, and the S&P 500(R) Index. In order to simplify
calculation and reflect a collective benchmark which is more representative of
the investment ranges and focus on equities, the benchmark for each Lifestyle
Fund has been changed to a combination of the Wilshire 5000, Morgan Stanley
Capital International(R) Europe, Australasia, Far East ("MSCI EAFE") Index, and
Lehman Brothers Aggregate Index.
North American International Growth Fund (Prospectus page 10)
INVESTMENT SUB-ADVISER
Thompson, Siegel & Walmsley, Inc.
North American - INVESCO MidCap Growth Fund (Prospectus page 15)
INVESTMENT SUB-ADVISER
INVESCO Funds Group, Inc.
INVESTMENT OBJECTIVE
Seeks capital appreciation principally through investments in medium
capitalization equity securities, such as common and preferred stocks and
securities convertible into common stocks. This investment objective can be
changed by the Board of Trustees, without the approval of the Fund shareholders.
INVESTMENT STRATEGY
Replace the second sentence with: Medium capitalization (mid-size) companies
generally have a value range between approximately $2 and $15 billion at the
time of purchase. The Fund may also purchase preferred stocks, convertible
securities, and bonds. The Fund may purchase American Depositary Receipts
("ADRs") but does not consider ADRs to be foreign securities. The Fund may
invest up to 25% in foreign securities.
HOW VALIC IS PAID FOR ITS SERVICES (Prospectus page 31)
Replace Mid Cap Growth Fund fees with the following:
0.80% of the first $50 million;
0.75% on the next $50 million
0.70% on the next $150 million;
0.65% on the next $250 million; and
0.60% on the assets over $500 million.
BROWN CAPITAL MANAGEMENT, INC. (Prospectus page 33)
Delete the paragraph about Brown Capital Management, Inc.
GOLDMAN SACHS ASSET MANAGEMENT (Prospectus page 34)
Delete any references to Kent A. Clark. He is no longer a part of the Large Cap
Growth Fund portfolio management team.
J.P. MORGAN INVESTMENT MANAGEMENT, INC. (Prospectus page 34)
Replace the second paragraph under J.P. Morgan Investment Management, Inc. with
the following:
Investment decisions are made by a team that consists of portfolio managers and
analysts. The team meets regularly to review portfolio holdings and to discuss
purchase and sale activity.
JACOBS ASSET MANAGEMENT (Prospectus page 34)
Delete the paragraph about Jacobs Asset Management
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INVESCO FUNDS GROUP, INC. ("INVESCO") (add to page 34 of the Prospectus)
7800 East Union Avenue, Denver, Colorado, 80237
As of approximately September 29, 2000, INVESCO became the investment sub-
adviser for the North American - INVESCO MidCap Growth Fund. Timothy J. Miller
and Thomas Wald are primarily responsible for the day-to-day management of the
Fund's portfolio holdings. Both Mr. Miller and Mr. Wald are Chartered Financial
Analysts. Mr. Miller is the leader of INVESCO's growth team and the lead
portfolio manager. He is a director and senior vice president of INVESCO, which
he joined in 1992. Mr. Miller holds an M.B.A. from the University of Missouri -
St. Louis and a B.S.B.A. from St. Louis University.
Thomas Wald, co-portfolio manager, joined INVESCO in 1997 and is now a vice
president. Prior to joining INVESCO, Mr. Wald was employed by Munder Capital
Management. Mr. Wald holds an M.B.A. from the Wharton School at the University
of Pennsylvania and a B.A. from Tulane University.
INVESCO, the investment advisor for the INVESCO family of mutual funds, was
founded in 1932 and manages over $41.8 billion in 45 INVESCO mutual funds as of
March 31, 2000. INVESCO is an indirect wholly owned subsidiary of AMVESCAP PLC,
an international investment management company based in London, with money
managers located in Europe, North and South America, and the Far East.
THOMPSON, SIEGEL & WALMSLEY, INC. ("TS&W") (add to page 34 of the Prospectus)
5000 Monument Avenue, Richmond, Virginia 23230
TS&W became the investment sub-adviser for the North American International
Growth Fund on July 24, 2000. Jacobs Asset Management, L.P. ("JAM") was the sub-
adviser for the Fund from September 1, 1998 through July 24, 2000. The president
of JAM, Daniel Jacobs, decided to retire. Therefore, effective July 24, 2000,
JAM's parent company, United Asset Management Corporation ("UAM"), merged the
assets and business of JAM into another of its subsidiaries, TS&W, located at
5000 Monument Avenue, Richmond, Virginia 23230.
TS&W specializes in the management of large-cap value equities, international
equities, and fixed-income assets. As of June 19, 2000, TS&W had approximately
$4.8 billion in assets under management. TS&W is the investment advisor for
several UAM Funds. UAM is being acquired by Old Mutual plc, a UK-based financial
services group, in a transaction that should be completed during the fourth
quarter, 2000.
Statement of Additional Information
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North American - INVESCO MidCap Growth Fund Investment Restrictions (SAI pages
17 and 18)
Fundamental Investment Restrictions:
Add "With respect to 75% of the Fund's total assets, or as allowed by federal
law" to the beginning of fundamental investment restriction number 1.
Change fundamental investment restriction number 9 to: "The Fund may borrow
money, pledge assets, and enter into reverse repurchase agreements, or employ
similar investment techniques, as permitted by applicable law, provided the
borrowing does not exceed 33 1/3% of the Fund's total assets."
Non-Fundamental Investment Restrictions:
Delete non-fundamental investment restriction numbers 1 and 6.
Change the illiquid securities limitation from 10% to 15% in non-fundamental
investment restriction number 7.
Change the foreign securities limitation from 10% to 25% in non-fundamental
investment restriction number 8 and delete any reference to ADRs.
ADMINISTRATIVE SERVICE AGREEMENT (add to page 56 of the SAI below Distribution
and Service Agreement)
The Series Company has entered into an Administrative Service Agreement
("Service Agreement") with VALIC for the provision of recordkeeping and
shareholder services to retirement and employee benefit plans. Under the terms
of the Service Agreement, the Series Company pays VALIC monthly, a fee equal to
0.25% of the aggregate net asset value of each Fund, other than the Lifestyle
Funds, on an annual basis. Under the Service Agreement, VALIC provides
recordkeeping services, including the establishment and maintenance of plan and
participant accounts and records; participant services, including the provision
of customer service representatives to respond to participant inquiries and
process telephone transactions; and plan services, including the production of
plan documentation and summary plan descriptions.
VA 10832-E
