<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
IDS Life Series Fund, Inc.
IDS Life Variable Annuity Fund A
IDS Life Variable Annuity Fund B
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
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<PAGE>
IDS LIFE FUNDS
NOTICE OF REGULAR MEETING OF SHAREHOLDERS
TO BE HELD JUNE 16, 1999
IDS Life Series Fund, Inc.
-Equity Portfolio
-Government Securities Portfolio
-Income Portfolio
-International Equity Portfolio
-Managed Portfolio
-Money Market Portfolio
IDS Life Variable Annuity Fund A
IDS Life Variable Annuity Fund B
Your Fund will hold a regular meeting of owners (referred to in this proxy
statement as "shareholders") at 10:30 a.m. on June 16, 1999, at the First Bank
Building, 650 South 3(rd) Avenue, Minneapolis, MN in Conference Room B on the
11th floor. This will be a joint meeting with all of the Funds listed above. You
were a shareholder on April 18, 1999 and should vote on each proposal. Please
read the proxy statement. Board members recommend that you vote FOR each
proposal.
Please vote immediately by mail, telephone or internet, even if you plan to
attend the meeting. Just follow the instructions on the enclosed card. You must
vote separately for each Fund you own. The mailing address for the principal
executive offices of the Fund is IDS Tower 10, Minneapolis, MN 55440-0010.
April 18, 1999
<PAGE>
PROXY STATEMENT
This is a combined proxy statement for all of the Funds listed on the first
page. There are four sections to this proxy statement:
<TABLE>
<CAPTION>
SECTION PAGE
- ------------------------------------------------------------------------- ---------
<S> <C>
A - Overview............................................................. 3
B - Fund Proposals....................................................... 4
C - Proxy Voting and Shareholder Meeting Information..................... 10
D - Fund Information..................................................... 12
</TABLE>
Please be sure to read the proxy statement before you vote. You will receive a
separate card for each Fund you own. It is important that you return your vote
for each Fund. This proxy statement was first mailed to shareholders the week of
April 18, 1999.
PLEASE VOTE IMMEDIATELY.
YOUR PROMPT RESPONSE WILL SAVE YOUR FUND THE COST OF ADDITIONAL MAILINGS.
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN.
CONTRACT HOLDERS
You have the right to instruct IDS Life Insurance Company ("IDS Life") or IDS
Life Insurance Company of New York ("IDS Life of New York") on how to vote the
shares held under your contract. You can do so by mail, telephone or internet.
Just follow the instructions on the enclosed card. IDS Life and IDS Life of New
York will vote any Fund shares for which they do not receive voting instructions
in proportionately the same manner - either For, Against or Abstain - as shares
for which they do receive instructions.
2
<PAGE>
SECTION A - OVERVIEW
The Board of Directors/Managers (the "Board") of the Funds is asking for your
vote on the following proposals. The proposals are described in detail in
Section B.
<TABLE>
<CAPTION>
------------------------------------------------------------------
<S> <C> <C> <C> <C>
PROPOSAL FUNDS AFFECTED
- ----------------------------------------------------------------------------------
(1) Elect Board members All Funds
- -------------------------------------------------------------------------
(2) Ratify the selection of independent All Funds
auditors
- -------------------------------------------------------------------------
(3) Change investment policies
regarding:
A: Borrowing or A: All Funds
lending money to
other funds
B: Prohibited B: All Life Series Funds
conflict of
interest
C: Senior securities C: All Life Series Funds
D: Transactions with D: Government Securities, International,
affiliates Managed
E: Other investment E: Money Market
companies
F: Pledging or F: Money Market
mortgaging
G: Exploration G: Money Market
programs
H: Control or manage H: Money Market
I: Concentration I: Equity, Income, Annuity Funds A&B
- -------------------------------------------------------------------------
(4) Transact other business All Funds
- -------------------------------------------------------------------------
</TABLE>
3
<PAGE>
SECTION B - FUND PROPOSALS
PROPOSAL 1: ELECTION OF BOARD MEMBERS
WHO ARE THE NOMINEES FOR THE BOARD? The persons nominated to serve on the Board
are listed below. Mr. Burwell, Ms. Keffeler, Mr. Kling and Mr. McBurney are
nominees for each of the eight Funds. Mr. Jensen is a nominee for the six funds
making up Life Series Fund. Mr. Alvero is a nominee for Annuity Funds A&B. Board
members Edward Landes, Carl Platou and Gordon Ritz will be retiring and are not
standing for reelection.
Each Board member will serve until the next regular shareholders' meeting or
until he or she reaches the mandatory retirement age established by the Board.
Under the current Board policy, members may serve until the meeting following
their 72(nd) birthday. All of the nominees have agreed to serve. If an
unforeseen event prevents a nominee from serving, your vote will be cast for the
election of a substitute selected by the Board. Information on each nominee
follows. Election requires a vote by a majority of the Fund's shares voted at
the meeting.
FOR ALL FUNDS:
<TABLE>
<S> <C> <C>
RODNEY P. BURWELL Born in 1939
Chairman, Xerxes Corporation (fiberglass storage tanks). Director,
Fairview Corporation, Strategist Funds.
JEAN B. KEFFELER Born in 1945
Independent management consultant. Director, National Computer
Systems, Strategist Funds.
RICHARD W. KLING* Board member since 1994 Born in 1940
President, IDS Life Series Fund, Inc. Chairman of the Board and
President, IDS Life Variable Annuity Funds A&B. President and
Director, IDS Life. Senior Vice President - Products and Director,
American Express Financial Corporation ("AEFC").
THOMAS R. MCBURNEY Born in 1938
President, McBurney Management Advisors. Director, The Valspar
Corporation (paints), Wenger Corporation, Allina, Space Center
Enterprises, Greenspring Corporation, Strategist Funds.
</TABLE>
4
<PAGE>
<TABLE>
<S> <C> <C>
FOR LIFE SERIES FUND ONLY:
JAMES M. JENSEN* Board member since 1998 Born in 1955
Vice President - Insurance Product Development and Management,
AEFC. Vice President - Insurance Product Development, IDS Life.
FOR ANNUITY FUNDS A&B ONLY:
GUMER C. ALVERO* Board member since 1998 Born in 1967
Vice President, AEFC. Vice President and General Manager -
Variable Annuity Products Group, AEFA.
</TABLE>
*Interested person by reason of being an officer, director, securityholder
and/or employee of IDS Life, AEFC or American Express Company ("American
Express").
The Board does not have standing audit, nominating or compensation committees.
For the year ended Jan. 31, 1999, the Board held 4 meetings. Average attendance
at the Board was % and no nominee attended less than 75% of the meetings
of the Board except for ( %). Board members affiliated with IDS
Life or AEFC are not paid by the Funds.
None of the nominees own any of the outstanding shares of the Funds.
WHO ARE THE FUND OFFICERS? Besides Mr. Kling, who is President/Chairman, the
Fund's other officers are:
LORRAINE R. HART, born in 1951. Vice President Investments since 1989. Vice
President - Insurance Investments, AEFC. Vice President - Investments, IDS Life.
JEFFREY S. HORTON, born in 1961. Vice President and Treasurer since 1998. Vice
President and Corporate Treasurer, AEFC. Vice President and Treasurer, IDS Life.
TIMOTHY S. MEEHAN, born in 1957. Secretary since 1995. Vice President, Group
Counsel and Secretary, AEFC.
WILLIAM A. STOLTZMANN, born in 1948. General Counsel and Assistant
Secretary since 1990. Vice President and Assistant General Counsel, AEFC. Vice
President, General Counsel and Secretary, IDS Life.
5
<PAGE>
PHILIP C. WENTZEL, born in 1961. Controller since 1998. Vice President -
Finance, Risk Management Products, AEFC. Vice President and Controller, IDS
Life.
In addition, for IDS Life Series Fund:
PAUL F. KOLKMAN, born in 1946. Vice President and Actuary since 1987. Vice
President - Actuarial Finance, AEFC. Director and Executive Vice President, IDS
Life.
Officers serve at the pleasure of the Board. All officers are salaried employees
of IDS Life or AEFC and receive no compensation from the Funds.
PROPOSAL 2: RATIFY OR REJECT THE
SELECTION OF INDEPENDENT AUDITORS
IDS LIFE SERIES FUND, INC. The Board has selected KPMG Peat Marwick LLP to
serve as the independent auditors for the Fund. This selection was made by the
members of the Board who are not officers of the Fund or associated with IDS
Life or AEFC.
ANNUITY FUNDS A&B. The Board has selected Ernst & Young LLP to serve as the
independent auditors for the Fund. This selection was made by the members of the
Board who are not officers of the Fund or associated with IDS Life or AEFC.
The audit services provided to the Fund include the examination of the annual
financial statements and assistance in connection with filings with the
Securities and Exchange Commission (the "SEC"). Representatives of KPMG Peat
Marwick and of Ernst & Young are expected to be at the meetings and will have
the opportunity to make a statement and answer questions.
RECOMMENDATION AND VOTE REQUIRED. The Board recommends that you vote to ratify
the selection of the independent auditors. Ratification of the selection
requires a vote by a majority of the shares present or represented at the
meeting. If the selection of the independent auditors is not ratified, the Board
will consider what further action must be taken.
PROPOSAL 3: APPROVE OR REJECT
CHANGES IN INVESTMENT POLICIES
The Fund has some investment policies that are fundamental. This means the
policies can be changed only with the approval of shareholders. A few
6
<PAGE>
of these policies are no longer required to be fundamental, some need changes
and others are no longer required at all. The Board recommends making the
following changes to the Fund's fundamental investment policies:
A. CHANGE THE POLICY SO THAT THE FUND MAY BORROW OR LEND MONEY TO OTHER FUNDS
ADVISED BY AEFC. (Applies to: ALL FUNDS) If approved by shareholders, the Fund
and all other Funds advised by AEFC or its affiliates intend to file a request
for an exemptive order with the SEC that will permit them to participate in a
borrowing and lending program. The Fund's existing policies do not allow these
arrangements. If shareholders approve this proposal, the Board will adopt a new
investment policy so that the Fund may borrow from and lend money to the other
Funds.
- - WHY WOULD THE FUND WANT TO BORROW OR LEND MONEY? Normally, the Fund has
enough cash on hand to satisfy all requests from shareholders who want to
sell shares. However, sometimes the Fund may be short on cash while waiting
for security trades to settle (typically a three business-day process). The
Fund may use a bank line of credit to meet such an unusual event but it may
be less costly to borrow from another Fund. It also benefits the Fund to lend
money to an associated Fund on a short-term basis if it has cash available.
The only circumstance under which the Fund would borrow or lend money is
short-term cash needs to meet redemption requests.
B. ELIMINATE THE POLICY ADDRESSING A POTENTIAL CONFLICT OF INTEREST. (Applies
to: EQUITY, GOVERNMENT SECURITIES, INCOME, INTERNATIONAL, MANAGED, MONEY MARKET)
The Fund has a fundamental policy that prohibits it from buying securities of
any company if an officer or board member of the Fund or of the Fund's
investment adviser individually owns more than 1/2 of 1% of the securities of
that company and together they own more than 5% of those securities. This policy
originated with state securities laws designed to avoid conflicts of interest.
These laws do not apply to the Fund. Both the Fund and AEFC have Codes of Ethics
that address conflicts of interest. Under these Codes, procedures are in place
to keep individuals who would stand to gain from the Fund's investments in an
inappropriate way from doing so. The Board believes that Codes of Ethics are a
better way to address these types of conflicts of interest because they can be
tailored to the specific operating structures of an organization and to provide
appropriate flexibility. The elimination of this policy will not change the way
the Fund's assets are invested.
7
<PAGE>
C. MODIFY THE POLICY PROHIBITING ISSUANCE OF SENIOR SECURITIES. (Applies to:
EQUITY, GOVERNMENT SECURITIES, INCOME, INTERNATIONAL, MANAGED, MONEY MARKET) The
Fund has a fundamental policy that prohibits it from issuing any senior
security. The Board recommends that shareholders vote to replace the current
policy with the following limitation: "THE FUND WILL NOT ISSUE SENIOR
SECURITIES, EXCEPT AS PERMITTED UNDER THE INVESTMENT COMPANY ACT OF 1940." The
purpose of this change is to develop a standardized policy for all Funds.
Generally a senior security is an obligation of the Fund that takes priority
over the claims of the Fund's shareholders. The law prohibits the Fund from
issuing most types of senior securities, but permits doing so if certain
conditions are met. For example, the Fund may enter into a transaction that
obligates it to pay money at a future date if cash is set aside to cover the
obligation. This type of transaction may be considered a senior security. The
revised policy will not change the way the Fund's assets are invested.
D. ELIMINATE THE POLICY PROHIBITING TRANSACTIONS WITH AFFILIATES. (Applies to:
GOVERNMENT SECURITIES, INTERNATIONAL, MANAGED) The Fund has a fundamental policy
limiting its ability to purchase securities from, or sell securities to, the
Fund's advisor or any officer or board member of the Fund or the advisor. The
Board believes that this policy should be eliminated because these transactions
are prohibited by law and therefore the policy is not necessary.
E. RECLASSIFY AS NONFUNDAMENTAL THE FUND'S POLICY ON INVESTING IN OTHER
INVESTMENT COMPANIES. (Applies to: MONEY MARKET) The Fund has a fundamental
policy prohibiting it from investing in other investment companies, such as
country-specific funds, except by purchases in the open market where the
dealer's or sponsor's profit is the regular commission. The Board recommends
that this policy be changed to non-fundamental to conform with the standard
policy used by the other Funds. Changing this policy to non-fundamental will not
have any impact on the Fund's investment practices.
F. ELIMINATE THE POLICY PROHIBITING THE FUND FROM PLEDGING OR
MORTGAGING. (Applies to: MONEY MARKET) The Fund has a fundamental policy that
it may not pledge or mortgage more than 15% of its assets as collateral for
loans or for other purposes. This requirement is based on a state law that no
longer applies. While the Board recommends elimination of the policy on pledging
or mortgaging assets, the Fund continues to have a fundamental policy limiting
its ability to borrow. The elimination of this policy will not change the way
the Fund's assets are invested.
8
<PAGE>
G. ELIMINATE THE POLICY PROHIBITING INVESTMENT IN EXPLORATION AND DEVELOPMENT
PROGRAMS. (Applies to: MONEY MARKET) The Fund has a fundamental policy that it
may not invest in any oil, gas or other mineral exploration or development
programs. This requirement is based on a state law that no longer applies. The
elimination of this policy will not change the way the Fund's assets are
invested.
H. ELIMINATE THE POLICY PROHIBITING INVESTMENTS FOR THE PURPOSE OF EXERCISING
CONTROL OR MANAGING THE COMPANY. (Applies to: MONEY MARKET) The Fund has a
fundamental policy that it may not invest in any company for purposes of
exercising control or management. This requirement is based on a state law that
no longer applies. The elimination of this policy will not change the way the
Fund's assets are invested.
I. CHANGE THE POLICY REGARDING CONCENTRATION. (Applies to: EQUITY, INCOME,
ANNUITY FUND A, ANNUITY FUND B) The Board recommends that shareholders vote to
replace the current policy with the following limitation: "THE FUND WILL NOT
CONCENTRATE IN ANY ONE INDUSTRY." According to the current interpretation by the
SEC, this means no more than 25% of a Fund's assets, based on current market
value at time of purchase, can be invested in any one industry. The purpose of
this proposed change is to develop a standardized policy for all Funds. The
revised policy will not change the way the Fund's assets are invested.
WHAT DOES THE BOARD RECOMMEND AND HOW MANY VOTES ARE NEEDED? The Board
recommends that shareholders approve the proposed changes in the fundamental
policies. The changes must be approved by the lesser of (a) a majority of the
Fund's outstanding shares or (b) 67% of the shares voted at the meeting, so long
as more than 50% of the shares actually vote. If the changes are not approved,
the Fund will continue to operate in accordance with its current investment
policies.
9
<PAGE>
SECTION C - PROXY VOTING AND
SHAREHOLDER MEETING INFORMATION
This section includes information about proxy voting and the shareholder
meetings.
VOTING. Each share is entitled to one vote. For those of you who cannot come to
the meeting, the Board is asking permission to vote for you. The shares will be
voted as you instruct either by mail, telephone or internet. Signed cards
returned without instructions will be voted in favor of all proposals.
Shares issued by the Fund vote together with shares of other Funds issued by the
same corporation on the election of board members and ratification of
independent auditors. Shares vote by Fund on the changes of fundamental
investment policies. All votes count toward a quorum, regardless of how they are
voted (For, Against or Abstain). Abstentions are treated as a vote against a
proposal. Broker non-votes (shares for which the underlying owner has not voted
and the broker holding the shares does not have authority to vote) will be
counted toward a quorum. In determining whether a proposal received the
affirmative vote of 67% of the shares voted at the meeting, broker non-votes
will be disregarded in the calculation. In determining whether a proposal
received the affirmative vote of 50% of the outstanding shares, broker non-votes
will be treated as a vote against the proposal.
In voting for Board members, Life Series Fund shareholders may vote all shares
cumulatively. This means that you have the right to give each nominee an equal
number of votes or divide the votes among the nominees as you wish. You have as
many votes as the number of shares you own, including fractional shares,
multiplied by the number of members to be elected. If you elect to withhold
authority for any individual nominee or nominees, you may do so by marking the
box labeled "Exception," and by striking the name of any excepted nominee, as is
further explained on the card itself. If you do withhold authority, the proxies
will not vote shares equivalent to the proportionate number applicable to the
names for which authority is withheld.
REVOKING YOUR PROXY. If your plans change and you can attend the meeting,
simply inform the Secretary at the meeting that you will be voting your shares
in person. Also, if you change your mind after you vote, you may change your
vote or revoke it by mail, telephone or internet.
JOINT PROXY STATEMENT/SIMULTANEOUS MEETINGS. This joint proxy statement reduces
the preparation, printing and mailing costs of sending separate proxy statements
for each Fund. The regular meeting of shareholders will be a joint meeting for
all Funds. All the meetings will be held simultaneously. If any shareholder
objects to the holding of simultaneous meetings,
10
<PAGE>
the shareholder may move for an adjournment of his or her Fund's meeting to a
time immediately after the simultaneous meetings so that a meeting of that Fund
may be held separately. If a shareholder makes this motion, the persons named as
proxies will consider the reasons for the objection in deciding whether to vote
in favor of the adjournment.
SOLICITATION OF PROXIES. The Board is asking for your vote as promptly as
possible. The Fund will pay the expenses for the proxy material and the postage
for Life Series Fund. IDS Life will pay the expenses for the proxy material and
the postage for Annuity Funds A&B. Supplementary solicitations may be made by
mail, telephone, electronic means or personal contact by financial advisors. The
expenses of supplementary solicitation will be paid by the Fund for Life Series
Fund and by IDS Life for Annuity Funds A&B.
SHAREHOLDER PROPOSALS. No proposals were received from shareholders. The Fund
does not hold regular meetings of shareholders on an annual basis. Therefore, no
anticipated date of the next regular meeting can be provided. If you have a
proposal you believe should be presented to all shareholders, send the proposal
to the President. The proposal will be considered at a meeting of the Board as
soon as practicable.
OTHER BUSINESS. The Board does not know at this time of any other business to
come before the meetings. If something does come up, the proxies will use their
best judgment to vote for you on the matter.
ADJOURNMENT. In the event that not enough votes in favor of any of the
proposals are received by the time scheduled for the meeting, the persons named
as proxies may move for one or more adjournments of the meeting for a period of
not more than 60 days in the aggregate to allow further solicitation of
shareholders on the proposals. Any adjournment requires the affirmative vote of
a majority of the shares present at the meeting. The persons named as proxies
will vote in favor of adjournment those shares they are entitled to vote that
have voted in favor of the proposals. They will vote against any adjournment
those shares that have voted against any of the proposals. The Fund will pay the
costs of any additional solicitation and of any adjourned meeting for Life
Series Fund. IDS Life will pay the costs of any additional solicitation and of
any adjourned meeting for Annuity Funds A&B.
ANNUAL REPORT. The latest annual report was previously mailed to you. If you
would like another copy of the annual report and any subsequent semi-annual
report, without charge, please write Bob Severson at American Express
Shareholder Service, P.O. Box 534, Minneapolis, MN 55440-0534 or call
1-800-862-7919.
11
<PAGE>
SECTION D - FUND INFORMATION
This section contains background information about your Fund.
THE FUND'S ADVISER AND DISTRIBUTOR. IDS Life, IDS Tower 10, Minneapolis, MN
55440-0010, is the manager and distributor for each of the Funds listed below.
AEFC is the investment adviser for each of the Funds. IDS Life is a wholly-owned
subsidiary of AEFC. AEFC is a wholly-owned subsidiary of American Express, World
Financial Center, New York, NY 10285.
TABLE D-1. FUND SIZE AND 5% OWNERS
as of Jan. 31, 1999
<TABLE>
<CAPTION>
OUTSTANDING
FUND NET ASSETS UNITS/SHARES 5% OWNERS
- --------------------------- --------------- ----------------------- ----------
<S> <C> <C> <C>
Annuity Fund A $ 442,536,847 16,169,906 None
Annuity Fund B 865,299,921 26,404,882 None
Equity 1,008,854,878 76,589 (1)
Government Securities 18,119,142 162,768 (2)
Income 95,580,222 34,813 (3)
International Equity 267,493,121 100,000 (4)
Managed 668,994,971 147,785 (5)
Money Market 40,530,870 95,203 (6)
</TABLE>
(1)IDS Life owns 935,309,357 shares (92.71%) of the Fund.
IDS Life of New York, 20 Madison Ave. Extension, Albany, NY 12203
owns 73,545,521 shares (7.29%) of the Fund.
(2)IDS Life owns 16,069,867 shares (88.69%) of the Fund.
IDS Life of New York owns 2,049,275 shares (11.31%) of the Fund.
(3)IDS Life owns 88,010,268 shares (92.08%) of the Fund.
IDS Life of New York owns 7,569,954 shares (7.92%) of the Fund.
(4)IDS Life owns 253,900,341 shares (94.92%) of the Fund.
IDS Life of New York owns 13,592,780 shares (5.08%) of the Fund.
(5)IDS Life owns 620,425,936 shares (92.74%) of the Fund.
IDS Life of New York owns 48,569,035 shares (7.26%) of the Fund.
(6)IDS Life owns 37,746,399 shares (93.13%) of the Fund.
IDS Life of New York owns 2,784,471 shares (6.87%) of the Fund.
12
<PAGE>
IDS LIFE FUNDS
PROXY STATEMENT SUMMARY
April 18, 1999
Here's a brief overview of some of the changes being recommended for your fund.
We encourage you to read the full text of the enclosed proxy statement.
WHY AM I BEING ASKED TO VOTE?
Funds are required to get shareholders' votes for certain
[GRAPHIC]
kinds of changes, like the ones included in this proxy statement.
You have a right to vote on these changes either by mailing your
proxy card, calling a toll-free number, or responding by internet.
WHAT IS BEING VOTED ON?
At all regular meetings, shareholders elect Board members and ratify the
selection of independent auditors. In addition, shareholders at this meeting
will vote on proposals to change some of the investment policies.
WHAT DO BOARD MEMBERS AND INDEPENDENT AUDITORS DO?
Board members represent the interests of the shareholders and oversee the
management of the Fund. Independent auditors review the financial statements
prepared for the Fund and give an opinion on whether they present fairly the
financial position of the Fund.
WHAT CHANGES ARE PROPOSED TO FUND POLICIES?
Some policies no longer apply because of changes in the law. Others are being
standardized to match the policies of other funds advised by AEFC. One policy is
being added to permit borrowing and lending between Funds. You are being asked
to eliminate, modify or add these policies. This will not change the way the
Fund is managed.
HOW DOES THE BOARD RECOMMEND THAT I VOTE?
After careful consideration, the Board recommends that you vote FOR each
proposal.
HOW DO I VOTE?
You can vote in one of four ways:
- By mail with the enclosed proxy card
[GRAPHIC]
- By telephone
- Through the internet
- In person at the meeting
Please refer to the enclosed voting instruction card for the telephone number
and internet address. If you own more than one Fund, it is important that you
vote for each Fund.
<PAGE>
--------------------------------------------------------------------------
VOTE TODAY BY MAIL, TOUCH-TONE PHONE, OR THE INTERNET
------------------------------------------------------
CALL TOLL-FREE: 1-888-221-0697 OR BY ACCESSING WWW.PROXYWEB.COM
--------------------------------------------------------------------------
SEE THE ENCLOSED INSERT FOR FURTHER INSTRUCTIONS ON VOTING BY PHONE OR INTERNET.
*** CONTROL NUMBER: 999 999 999 999 99 ***
V Please fold and detach card at perforation before mailing V
FUND NAME
PRINTS HERE PROXY/VOTING INSTRUCTION CARD
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS/MANAGERS.
The undersigned hereby appoints Richard W. Kling, Timothy S. Meehan and William
A. Stoltzmann, or any one of them, as proxies, with full power of substitution,
to represent and to vote all of the shares of the undersigned at the regular
meeting to be held on June 16, 1999, and any adjournment thereof.
TO HAVE YOUR VOTE COUNTED, YOU MUST SIGN, DATE AND RETURN THIS PROXY. IT WILL
BE VOTED AS MARKED, OR IF NOT MARKED, WILL BE VOTED "FOR" EACH PROPOSAL.
--------------------------------
THE BOARD RECOMMENDS A VOTE
"FOR" ALL PROPOSALS.
--------------------------------
------------------------------------
------------------------------------
Signature(s)
Date __________________,1999
Owners please sign as names appear
at left. Executors, administrators,
trustees, etc., should indicate
position when signing.
<PAGE>
---------------------------------------------------------------------------
PLEASE REFER TO SECTION A - OVERVIEW (PAGE 3) OF THE PROXY STATEMENT
TO DETERMINE WHICH PROPOSALS ARE APPLICABLE TO YOUR FUND.
---------------------------------------------------------------------------
Please vote by filling in the appropriate boxes below.
V Please fold and detach card at perforation before mailing V
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. Election of Board members. (ALL FUNDS) FOR WITHHOLD EXCEPTION
ALL ALL
(01) Gumer C. Alvero (02) Rodney P. Burwell (03) James M. Jensen / / / / / / 1.
(04) Jean B. Keffeler (05) Richard W. Kling (06) Thomas R. McBurney
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, MARK THE "EXCEPTION" BOX AND PRINT THE NOMINEE'S
NAME ON THIS LINE. ______________________________________
FOR AGAINST ABSTAIN
2. Ratify the selection of independent auditors (ALL FUNDS) / / / / / / 2.
3. Changes to investment policies (SEE OVERVIEW-PAGE 3) FOR AGAINST ABSTAIN
3.1 Borrow or lend to other funds 3.6 Pledging or mortgaging ALL ALL ALL
3.2 Prohibited conflict of interest 3.7 Exploration programs / / / / / / 3.
3.3 Senior securities 3.8 Control or manage
3.4 Transactions with affiliates 3.9 Concentration
3.5 Other investment companies
</TABLE>
IF YOU DO NOT WISH TO APPROVE A PARTICULAR INVESTMENT POLICY CHANGE,
APPLICABLE TO YOUR FUND, WRITE THE NUMBER OF THE SUB-PROPOSAL ON THE
LINE BELOW.
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<PAGE>
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