SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE
REGISTRANT [ ]
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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 sec. 240.14a-11(c) or sec. 240.14a-12
Money Market Variable Account
(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)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was
determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 011(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>
SUN LIFE ASSURANCE COMPANY One Sun Life Executive Park
OF CANADA (U.S.) Wellesley Hills, Massachusetts 02481
Tel. (617) 237-6030
February 2, 2001
Dear Owners and Payees:
A meeting of owners of and payees under annuity contracts issued by Sun
Life Assurance Company of Canada (U.S.) in connection with Capital Appreciation
Variable Account, Global Governments Variable Account, Government Securities
Variable Account, High Yield Variable Account, Managed Sectors Variable
Account, Money Market Variable Account and Total Return Variable Account will
be held at the offices of Massachusetts Financial Services Company, 500
Boylston Street, 24th Floor, Boston, Massachusetts, on March 22, 2001, at 10:00
a.m. local time.
As a unitholder in one or more of the Accounts listed above, you will be
asked to vote on several proposals, including the election of Managers,
amending or removing certain investment restrictions and ratifying the
selection of accountants.
These proposals are detailed in the enclosed Notice of Special Meeting of
Unitholders and Proxy Statement dated February 2, 2001. Please vote by signing
and returning the enclosed proxy card or by following the enclosed instructions
to vote via telephone or over the internet.
The Accounts are using Shareholder Communications Corporation (SCC), a
professional proxy solicitation firm, to assist unitholders in the voting
process. As the date of the meeting approaches, if we have not already heard
from you, you may receive a telephone call from SCC reminding you to exercise
your right to vote.
YOUR VOTE ON THESE MATTERS IS IMPORTANT. PLEASE COMPLETE THE PROXY CARD
AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED OR VOTE VIA TELEPHONE OR OVER
THE INTERNET.
Sincerely,
C. James Prieur
President
<PAGE>
PRELIMINARY PROXY MATERIALS
NOT FOR DISTRIBUTION
CAPITAL APPRECIATION VARIABLE ACCOUNT
GLOBAL GOVERNMENTS VARIABLE ACCOUNT
GOVERNMENT SECURITIES VARIABLE ACCOUNT
HIGH YIELD VARIABLE ACCOUNT
MANAGED SECTORS VARIABLE ACCOUNT
MONEY MARKET VARIABLE ACCOUNT
TOTAL RETURN VARIABLE ACCOUNT
ONE SUN LIFE EXECUTIVE PARK
WELLESLEY HILLS, MASSACHUSETTS 02181
NOTICE OF SPECIAL MEETINGS OF UNITHOLDERS
TO BE HELD ON MARCH 22, 2001
Special Meetings of Owners of and Payees under annuity contracts issued by
Sun Life Assurance Company of Canada (U.S.) in connection with each Account
named above will be held at the offices of Massachusetts Financial Services
Company, 500 Boylston Street, 24th Floor, Boston, Massachusetts, at 10:00 a.m.
on Thursday, March 22, 2001, for the following purposes:
ITEM 1. To elect a Board of Managers of each Account.
ITEM 2. To amend, remove or add certain fundamental investment policies for
each Account.
ITEM 3. To change each Account's investment objective from fundamental to
non-fundamental.
ITEM 4. To ratify the selection of Deloitte & Touche LLP as the
independent public accountants of each Account for the fiscal year
ending December 31, 2001.
ITEM 5. To transact such other business as may properly come before the
Meetings and any adjournments thereof.
YOUR MANAGERS RECOMMEND THAT YOU VOTE FOR THE ELECTION OF THE MEMBERS OF THE
BOARDS OF MANAGERS AND IN FAVOR OF ALL ITEMS.
Unitholders of record on January 23, 2001 are entitled to vote at the Special
Meetings and at any adjournments thereof.
C. James Prieur, President
February 2, 2001
<PAGE>
YOUR VOTE IS IMPORTANT. We would appreciate your promptly voting, signing and
returning the enclosed proxy, which will help in avoiding the additional
expense of a second solicitation. The enclosed addressed envelope requires no
postage and is intended for your convenience. You may also vote your proxy by
telephone or internet. For instructions on how to vote via telephone or
internet, please refer to the outside cover of this proxy statement.
PLEASE NOTE:
IF YOU ARE A UNITHOLDER IN MORE THAN ONE ACCOUNT, YOU wILL RECEIVE A SEPARATE
PROXY STATEMENT AND PROXY CARD FOR EACH ACCOUNT. PLEASE BE SURE TO EXECUTE AND
RETuRN ALL PROXY CARDS WHICH YOU RECEIVE IN ORDER TO BE REPRESENTED AT THE
MEETINGS.
<PAGE>
PRELIMINARY PROXY MATERIALS
NOT FOR DISTRIBUTION
PROXY STATEMENT
CAPITAL APPRECIATION VARIABLE ACCOUNT
GLOBAL GOVERNMENTS VARIABLE ACCOUNT
GOVERNMENT SECURITIES VARIABLE ACCOUNT
HIGH YIELD VARIABLE ACCOUNT
MANAGED SECTORS VARIABLE ACCOUNT
MONEY MARKET VARIABLE ACCOUNT
TOTAL RETURN VARIABLE ACCOUNT
This Proxy Statement is furnished in connection with the solicitation of
proxies by and on behalf of the Boards of Managers of the Accounts named above
to be used at Special Meetings of Owners of and Payees under annuity contracts
participating in the investment experience of the Accounts ("Unitholders") to
be held at 10:00 a.m. on Thursday, March 22, 2001, at the offices of
Massachusetts Financial Services Company, 500 Boylston Street, 24th Floor,
Boston, Massachusetts, and at any adjournments thereof. The Meetings will be
held for the purposes set forth in the accompanying Notice. A separate Meeting
will be held for each Account. Only Unitholders in a particular Account will be
entitled to vote at the Meeting for that Account. If the enclosed form of proxy
is executed and returned, it may nevertheless be revoked prior to its exercise
by a signed writing filed with the Secretary of the Accounts or delivered at
the Meetings. Solicitation of proxies is being made by the mailing of this
Notice and Proxy Statement with its enclosures on or about February 2, 2001.
Unitholders of record at the close of business on January 23, 2001 will be
entitled to notice of and to vote at the Meetings. As of January 23, 2001, the
following units of each Account were outstanding:
NUMBER OF UNITS
ACCOUNT: OUTSTANDING:
Capital Appreciation Variable
Account ________
Global Governments Variable
Account ________
Government Securities Variable
Account ________
High Yield Variable Account ________
Managed Sectors Variable Account
________
<PAGE>
Money Market Variable Account
________
Total Return Variable Account
________
On that date, all units of each Account were owned of record by Owners of and
Payees under Compass 2 and Compass 3 combination fixed/variable annuity
contracts issued by Sun Life Assurance Company of Canada (U.S.) ("Sun Life of
Canada (U.S.)") and participating in the investment experience of one or more
of the Accounts.
VOTE REQUIRED: Unitholders of each Account will vote separately on each Item.
For each Account, each nominee named in Item 1 must be elected by a plurality
of the votes cast at the Meeting by Unitholders of that Account.
Approval of Items 2 and 3 for an Account requires the affirmative vote of a
"majority of the outstanding voting securities" of that Account. Under the
Investment Company Act of 1940, as amended (the "1940 Act"), the vote of "a
majority of the outstanding voting securities" means the affirmative vote of
the lesser of (a) 67% or more of the voting securities present at the meeting
or represented by proxy if holders of more than 50% of the outstanding voting
securities are present or represented by proxy or (b) more than 50% of the
outstanding voting securities.
Approval of Item 4 for an Account requires the affirmative vote of a majority
of the votes cast at the Meeting by Unitholders of that Account.
The mailing address of the Accounts is Sun Life of Canada (U.S.), One Sun Life
Executive Park, Wellesley Hills, Massachusetts 02181. A copy of the Annual
Report for the Accounts may be obtained without charge by contacting Sun Life
Assurance Company of Canada (U.S.), Retirement Products and Services Division,
P.O. Box 1024, Boston, Massachusetts 02103, or call by telephone toll-free at
1-800-752-7215.
ITEM 1 -- TO ELECT A BOARD OF MANAGERS OF EACH ACCOUNT.
At the Meetings, Unitholders of each Account will be asked to elect a Board of
Managers for that Account. The existing Boards of Managers have determined that
the number of Managers for each Account shall be fixed at ten. Proxies not
containing specific instructions to the contrary will be voted for election as
Members of the Boards of Managers of the ten nominees listed below.
Except for Messrs. Bishop, Dulles, Steinhart, Prieur and Wright, all nominees
currently serve as Managers of each Account and have served in that capacity
continuously since originally elected or appointed. Messrs. Bishop, Dulles,
<PAGE>
Steinhart, Prieur and Wright were elected by each Account's Board of Managers
on January 24, 2001, subject to approval by that Account's Unitholders. They do
not currently serve as Managers, but have agreed to do so if elected by
Unitholders. If, before the election, any nominee refuses or is unable to
serve, proxies will be voted for a replacement nominee designated by the
current Boards of Managers. Messrs. Adams, Birchfield, Gutow, Horn and Phillips
will continue to serve as Managers for each Account whether or not Unitholders
of that Account approve Item 1.
The Accounts do not hold annual meetings of Unitholders for the purpose of
electing Managers, and Managers are not elected for fixed terms. This means
that each Manager will be elected to hold office until his successor is chosen
and qualified.
The following table presents certain information regarding the Managers,
nominees for Manager and executive officers of the Accounts, including their
principal occupations, which, unless specific dates are shown, are of more than
five years duration, although the titles may not have been the same throughout.
NAME, POSITION WITH ACCOUNTS, AGE
PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS(1):
SAMUEL ADAMS Manager (since 7/21/82) (born 10/19/25) Warner & Stackpole
(Attorneys), Partner (until 1999); Kirkpatrick & Lockhart LLP, Of Counsel.
J.KERMIT BIRCHFIELD Manager (since 5/12/97) (born 1/8/40) Consultant;
Displaytech, Inc. (manufacturer of liquid crystal display technology),
Chairman; Century Partners, Inc. (investments), Managing Director; HPSC,
Inc. (medical financing), Director; Dairy Mart Convenience Stores, Inc.
(convenience stores), Director; Intermountain Gas Company, Inc. (public
utility gas distribution), Director.
WILLIAM R. GUTOW Manager (since 5/12/97) (born 9/27/41) Private investor and
real estate consultant; Capitol Entertainment Management Company (video
franchise), Vice Chairman.
DAVID D. HORN* Manager (since 4/24/86) (born 6/7/41) Retired; Sun Life
Assurance Company of Canada, Former Senior Vice President and General
Manager for the United States.
DERWYN F. PHILLIPS Manager (since 4/24/86) (born 8/31/30) Retired; The Gillette
Company, Former Vice Chairman.
<PAGE>
NAME, POSITION WITH ACCOUNTS, AGE
PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS(1):
ROBERT C. BISHOP Nominee for Manager (born 1/13/43) Autoimmune Inc.
(pharmaceutical product development), Chairman, Director, President and
Chief Executive Officer; Millipore Corporation (purification/filtration
products), Director; Quintiles Transnational Corp. (contract services to the
medical industry), Director; Bancone Equity Capital, Life Sciences Advisory
Board Member.
FREDERICK H. DULLES Nominee for Manager (born 3/12/42) McFadden, Pilkington &
Ward (law firm), Partner (April 1997 to December 1999 and since January
2001), Of Counsel (January 2000 to November 2000); Jackson & Nash, LLP (law
firm), Of Counsel (January 2000 to November 2000); McDermott, Will & Emery
(law firm), Partner (April 1994 to December 1996), Of Counsel (January 1997
to April 1997).
C.JAMES PRIEUR* Nominee for Manager, President (since 7/29/99) (born 4/21/51)
Sun Life Assurance Company of Canada, President and Chief Operating Officer
(since April 1999), General Manager, U.S. (since November 1997); Vice
President of Investments, Sun Life Assurance Company of Canada (1992 to
November 1997).
RONALD G. STEINHART Nominee for Manager (born 6/15/40) Private Investor; Bank
One Corporation, Officer (until January 2000); Bank One, Texas, N.A., Vice
Chairman and Director; Prentiss Properties Trust (real estate investment
trust), Director; NCH Corporation (manufacturer and distributor), Director.
HAVILAND WRIGHT Nominee for Manager (born 7/21/48) Displaytech, Inc.
(manufacturer of liquid crystal display technology), Chief Executive Officer
and Director.
JAMES R. BORDEWICK, JR.** Assistant Secretary and Assistant Clerk (born 3/6/59)
Massachusetts Financial Services Company, Senior Vice President and
Associate General Counsel.
STEPHEN E. CAVAN** Secretary and Clerk (born 11/6/53) Massachusetts Financial
Services Company, Senior Vice President, General Counsel and Secretary.
JAMES O. YOST** Treasurer (born 6/12/60) Massachusetts Financial Services
Company, Senior Vice President.
-----------------------
(1) Directorships of companies required to report to the Securities and
Exchange Commission (the "SEC") (i.e., "public companies").
<PAGE>
* "Interested person" (as defined in the 1940 Act) of Sun Life of Canada
(U.S.), the address of which is One Sun Life Executive Park, Wellesley
Hills, Massachusetts.
** "Interested person" (as defined in the 1940 Act) of Massachusetts
Financial Services Company, the address of which is 500 Boylston
Street, Boston, Massachusetts.
All of the Managers are also Trustees of MFS/Sun Life Series Trust, a
Massachusetts business trust and registered investment company. The executive
officers of the Accounts hold similar offices for MFS/Sun Life Series Trust.
The following table shows the cash compensation paid to the Managers for the
Accounts' most recent fiscal year.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
MANAGER COMPENSATION TABLE
MANAGER FEES (1)
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CAPITAL GLOBAL GOVERNMENT HIGH MANAGED
APPRECIATION GOVERNMENTS SECURITIES YIELD SECTORS
MANAGER VARIABLE VARIABLE VARIABLE VARIABLE VARIABLE
ACCOUNT ACCOUNT ACCOUNT ACCOUNT ACCOUNT
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Samuel Adams $3,183 $56 $584 $483 $854
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J. Kermit Birchfield 3,874 68 710 588 1,040
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William Gutow 3,598 63 660 546 965
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David D. Horn 3,183 56 584 483 854
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Garth Marston(3) 2,463 43 452 374 661
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Derwyn F. Phillips 3,598 63 660 546 965
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</TABLE>
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MONEY MARKET VARIABLE TOTAL RETURN TOTAL FEES
ACCOUNT VARIABLE FROM THE
ACCOUNT ACCOUNTS AND
FUND COMPLEX
(2)
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$497 $1,040 $ 57,500
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606 1,267 70,000
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563 1,176 135,308
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497 1,040 57,500
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385 805 44,500
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563 1,176 65,000
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(1) For the year ended December 31, 2000
(2) Information provided for calendar year 2000. All Managers receiving
compensation from the Accounts served as Managers or Trustees of 36 funds
and registered accounts within the MFS fund complex, having aggregate net
assets at December 31, 2000 of $15.9 billion, except Mr. Gutow, who
served as Manager or Trustee of 64 funds and registered accounts within
<PAGE>
the MFS complex (having aggregate net assets at December 31, 2000 of
approximately $22.3 billion.
(3) Mr. Marston retired as a Manager in May, 2000. He currently serves as
Manager Emeritus of each Account.
Each Board of Managers has established a retirement policy providing for the
retirement of all current Managers and Managers elected by Unitholders after
September, 2000 at age 78 and 73, respectively, with an opportunity to serve in
a non-Manager "Manager Emeritus" position for up to five years following the
date of retirement. Each Board has currently fixed the compensation for the
Manager Emeritus position at one-half of the annual retainer and per meeting
fee paid to the Managers. Mr. Garth Marston, who retired from each Board in
May, 2000, currently serves as a Manager Emeritus.
Each Board of Managers met five times during its last fiscal year. Each Board
has a standing Audit Committee, currently composed of Messrs. Birchfield, Gutow
and Phillips, which met two times during the Accounts' last fiscal year, to
recommend auditors for the Accounts to the full Boards, to direct and approve
the overall scope of the audit of the books and records of the Accounts, to
review the results of that audit, to review internal control mechanisms and to
receive all recommendations and explanations which the auditors of the Accounts
wish to make to the Boards of Managers. Each Board has created a Nominating
Committee, composed of Messrs. Birchfield, Gutow and Phillips, that is
responsible for recommending qualified candidates to the Board in the event
that a position is vacated or created. The Nominating Committees consist only
of Managers who are not "interested persons" of the Accounts as defined in the
1940 Act. The Nominating Committees would consider recommendations by
Unitholders if a vacancy were to exist. Unitholders wishing to recommend
Manager candidates for consideration by the Nominating Committee may do so by
writing the Secretary of the applicable Account. Members of each Nominating
Committee confer periodically and hold meetings as required. Each Nominating
Committee met once during 2000 and selected the nominees for Manager listed
above. Each Manager attended at least 75% of all Board and applicable committee
meetings.
REQUIRED VOTE
Election of each nominee with respect to an Account will require a plurality of
the votes cast at the Meeting by Unitholders of that Account.
THE BOARDS OF MANAGERS UNANIMOUSLY RECOMMEND THAT UNITHOLDERS OF EACH ACCOUNT
VOTE FOR THE ELECTION OF EACH NOMINEE AS A MANAGeR OF THE ACCOUNT.
ITEM 2 -- TO AMEND, REMOVE OR ADD CERTAIN FUNDAMENTAL INVESTMENT POLICIES
FOR EACH ACCOUNT.
Each Account has adopted certain investment restrictions or policies that are
"fundamental," meaning that as a matter of law they cannot be changed without
Unitholder approval. Over time, some Accounts have adopted fundamental policies
to reflect certain regulatory, business or industry conditions. Changes in
<PAGE>
applicable law now permit investment companies like the Accounts to eliminate
certain of these policies.
The Boards of Managers, together with each Account's officers and MFS, have
reviewed the Accounts' current fundamental policies, and have concluded that
certain policies should be eliminated or revised based on the development of
new practices and changes in applicable law. In certain cases, an additional
fundamental policy is required. The proposed revised policies for each Account
are listed in Appendix A. At the Meetings, Unitholders of each Account will be
asked to approve the revised policies for that Account and to eliminate all
other fundamental policies.
The revised policies maintain important investor protections while providing
flexibility to respond to changing markets, new investment opportunities and
future changes in applicable law. The Managers believe that implementing the
revised policies will facilitate MFS' management of the Accounts' assets and
simplify the process of monitoring compliance with investment policies.
THE PROPOSED AMENDMENTS DO NOT AFFECT THE INVESTMENT OBJECTIVES OF THE
ACCOUNTS, WHICH REMAIN UNCHANGED. THE ACCOUNTS WILL CONTINUE TO BE MANAGED IN
ACCORDANCE WITh THE INVESTMENT POLICIES DESCRIBED IN THE PROSPECTUS. MOREOVER,
THE BOARDS DO NOT ANTICIPATE THAT THE CHANGES, INDIVIDUALLY OR IN THE
AGGREGATE, WILL CHANGE TO A MATERIAL DEGREE THE LEVEL OF INVESTMENT RISK
ASSOCIATED WITH THE INVESTMENT IN ANY ACCOUNT.
Each investment policy proposed to be revised, eliminated or added is discussed
below. The Accounts affected by the proposed changes are listed in italics at
the beginning of each section. Appendix A lists the fundamental policies that
will apply to each Account if Unitholders of that Account approve this
proposal. Appendix B lists each Account's current fundamental investment
policies and the proposed action to be taken with respect to each policy.
A. Borrowing
Changes proposed for all Accounts
It is proposed that the policy concerning borrowing be changed so that each
Account may borrow money only to the extent such borrowing is not prohibited by
the 1940 Act and exemptive orders granted under such Act.
Currently, each Account may borrow in an amount up to one-third of the value of
its total assets to meet redemption requests. Borrowings must be unsecured, and
the Accounts may not purchase any investments when borrowings are outstanding.
The 1940 Act does not require that borrowings be made solely to meet redemption
requests or that borrowings be unsecured. It is possible that the Accounts'
existing policies could prevent them from borrowing when it is in the best
<PAGE>
interests of Unitholders to do so. The revised policy will give the Accounts
the maximum amount of flexibility to borrow permitted by applicable law.
Currently, the 1940 Act permits investment companies like the Accounts to
borrow money so long as there is 300% asset coverage of the borrowings. This
means that borrowings cannot exceed one-third of an investment company's total
assets after subtracting liabilities other than the borrowings. Of course, this
law could change in the future. If the Accounts intend to borrow to any
material extent, this intention will be disclosed in the Accounts' prospectus
or statement of additional information.
B. Underwriting Securities
Changes proposed for all Accounts
It is proposed that the policy concerning underwriting securities be changed so
that each Account may not underwrite securities issued by other persons, except
that all or any portion of the assets of the Account may be invested in one or
more investment companies, to the extent not prohibited by the 1940 Act and
exemptive orders granted under such Act, and except insofar as the Account may
technically be deemed an underwriter under the Securities Act of 1933, as
amended, in selling a portfolio security.
Currently, each Account is prohibited from underwriting securities issued by
others except to the extent the Account may be deemed to be an underwriter,
under the federal securities laws, in connection with the disposition of
portfolio securities. The revised policy also provides that an Account shall
not be deemed to underwrite securities by virtue of employing a master/feeder
or fund-of-funds investment structure as permitted by applicable law. Utilizing
these investment structures is also discussed in section K below.
C. Real Estate, Oil and Gas, Mineral Interests, and Commodities
Changes proposed for all Accounts
It is proposed that the policies concerning real estate, oil, gas and mineral
interests, and commodities be changed so that each Account may not purchase or
sell real estate (excluding securities secured by real estate and securities of
companies that deal in real estate), interests in oil, gas or mineral leases,
commodities or commodity contracts (excluding currencies, options, futures and
forwards) in the ordinary course of its business. Each Account will retain the
right to hold and sell real estate, mineral leases, commodities or commodity
contracts acquired as a result of the ownership of securities.
As noted in Appendix B, each Account currently has separate policies regarding
investment in real estate and commodities, and in oil, gas or other mineral
exploration or development programs. The revised policy combines these separate
policies into one.
The revised policy also clarifies that the restrictions relating to investments
in real estate and commodities do not apply to investments in currencies, any
<PAGE>
type of option contract, futures contract, forward contract, securities secured
by real estate or interests therein and securities of companies, such as real
estate investment trusts, which deal in real estate or interests therein. If
the Accounts intend to make these types of investments to any material extent,
this intention will be disclosed in the Accounts' prospectus or statement of
additional information.
D Issuance of Senior Securities
Changes proposed for all Accounts
It is proposed that the policy concerning the issuance of senior securities be
changed so that each Account may issue senior securities only to the extent not
prohibited by the 1940 Act and exemptive orders granted under such Act. For
purposes of this restriction, collateral arrangements with respect to swaps,
options, futures, forwards and initial and variation margin are not deemed to
be the issuance of a senior security.
Currently, each Account is subject to a fundamental investment policy that
provides that it may not issue any senior securities except in connection with
permitted borrowings. Certain technical changes are being made to this policy
to clarify the circumstances in which an Account may issue senior securities,
including when that issuance is permitted by the 1940 Act or any exemptive
relief under the 1940 Act.
Each Account also has a fundamental policy that prevents the Account from
purchasing any security on margin. Margin transactions generally involve the
purchase of securities with money borrowed from a broker, with cash or
securities being used as collateral against the loan. The staff of the SEC
currently takes the position that margin transactions are prohibited by the
1940 Act because they involve borrowing from a broker (which is not permitted)
as opposed to borrowing from a bank (which is permitted in certain
circumstances). MFS has recommended the elimination of this policy on margin
transactions to provide the Accounts with the maximum amount of flexibility
permitted by applicable law, and any future changes in law, on this topic.
Accordingly, it is proposed that this policy be deleted in its entirety and
replaced with the policy described above relating to the issuance of senior
securities.
E. Lending of Money or Securities
Changes proposed for all Accounts
It is proposed that the policy concerning lending money and securities be
changed so that each Account may make loans only to the extent not prohibited
by the 1940 Act and exemptive orders granted under such Act.
Currently, each Account is prohibited from lending money or securities.
Investments in commercial paper, debt securities and repurchase agreements are
not treated as loans for purposes of these policies. The revised policy will
permit each Account to make loans, whether of money or securities, so long as
<PAGE>
the transactions are permitted by applicable law. Lending securities may be a
source of income to the Accounts and is permitted under the 1940 Act, subject
to certain limitations. As with other extensions of credit there are risks of
delay in recovery or even loss of rights in the underlying securities should
the borrower of the securities fail financially. However, in accordance with
procedures approved by the Managers of each Account, loans would be made only
to firms deemed by MFS to be of good standing, and when, in the judgment of
MFS, the consideration which can be earned currently from securities loans
justifies the attendant risk.
It is unlikely that the Accounts would lend money, except to the extent that
the purchase of debt securities can be considered a loan; however, the Accounts
could lend money to other Accounts or to funds advised by MFS or one of its
affiliates. Loans to other Accounts or MFS-advised funds would require
exemptive relief from the SEC.
F. Industry Concentration
Changes proposed for all Accounts
Currently, the Money Market Variable Account, the High Yield Variable Account,
the Capital Appreciation Variable Account and the Total Return Variable Account
have concentration policies that prohibit them from investing more than 25% of
their assets in any particular industry. It is proposed that the policy
concerning concentration in a particular industry be changed so that each
Account may not purchase any securities of an issuer of a particular industry
if as a result 25% or more of that Account's total assets (taken at market
value at the time of purchase) would be invested in securities of issuers whose
principal business activities are in the same industry. The revised policy
clarifies that this calculation is made with respect to an Account's total
assets taken at market value at the time of purchase of the security in
question.
The revised concentration policy for the Money Market Variable Account would
not apply to securities or obligations issued or guaranteed by banks or bank
holding companies, finance companies or utility companies. The current
concentration policy for the Money Market Variable Account states that the
policy does not apply to certificates of deposit or securities issued or
guaranteed by domestic banks. Thus, the Money Market Variable Account would be
able to invest a greater percentage of its assets in non-domestic banks, bank
holding companies, finance companies and utility companies than it would be
able to under the current concentration policy.
The Government Securities Variable Account, the Global Governments Variable
Account and the Managed Sectors Variable Account currently do not have
concentration policies. It is proposed that these Accounts adopt the revised
policy described in this section.
<PAGE>
G. Short Sales - Removal of Policy
Removal of policy proposed for all Accounts
Currently, each Account is prohibited from making short sales of securities,
except that certain Accounts may make short sales "against the box" (short
sales where the Account owns or has the right to acquire at no added cost
securities identical to those sold short). The 1940 Act prohibits investment
companies from making short sales of securities except in accordance with SEC
rules and regulations. The SEC has not adopted any rules or regulations
relating to short sales, except that the staff of the SEC regards a short sale
as a form of leverage and has taken positions with respect to the use of
leveraging transactions. Accordingly, the Accounts' investment policy is more
restrictive than applicable law. Each Account is proposing to delete this
policy in its entirety in order to have the maximum amount of flexibility
permitted by applicable law, and any future changes in law, on this topic.
In a typical short sale an Account borrows securities from a broker that it
anticipates will decline in value in order to sell to a third party. The
Account becomes obligated to return securities of the same issue and quantity
at some future date, and it realizes a profit or loss depending upon whether
the market price of the security decreases or increases between the date of the
short sale and the date on which the Account must replace the borrowed
security. Since the value of a particular security can increase without limit,
an Account could potentially realize losses with respect to short sales that
are not "against the box" that could be significantly greater than the value of
the securities at the time they are sold short. If an Account intends to engage
in short sales to any material extent, the prospectus and statement of
additional information will disclose that intention.
H. Illiquid Investments - Removal of Policy
Removal of policy proposed for the Money Market Variable Account, the
Government Securities Variable Account, the High Yield Variable Account
and the Capital Appreciation Variable Account
Currently, these accounts are either prohibited from investing in securities of
issuers which are not readily marketable (except for certain repurchase
agreements), or may invest not more than 10% of their total assets in these
securities.
These investment policies are more restrictive than the current policies of the
SEC. The staff of the SEC has taken the position that if an investment company
like the Accounts holds a material percentage (i.e., 10% of the net assets of a
money market fund and 15% of the net assets of other types of funds) of its
assets in illiquid investments, or securities that may not be sold or disposed
of in the ordinary course of business at the price at which the fund values the
investments, there may be a question as to the fund's ability to pay redemption
proceeds on shares or units redeemed within seven days of the redemption
request. The Accounts wish to remove the current investment policies in order
<PAGE>
to have the full flexibility permitted by applicable law and policy positions,
and any future changes in law and policy, on this topic.
Of course, each Account will continue to adhere to applicable rules and
policies relating to investments in illiquid securities. Current SEC policies
require that a fund's ability to invest in these types of securities should be
disclosed in its prospectus. The Accounts' prospectus or statement of
additional information complies with this policy.
I. Repurchase Agreements - Removal of Policy
Removal of policy proposed for all Accounts
Currently, each Account is prohibited from entering into repurchase agreements
if, as a result, more than 10% of the Account's total assets would be subject
to repurchase agreements maturing in more than seven days. As described under
section H. above, this policy is more restrictive than the current policy of
the SEC with respect to securities that may be considered illiquid, such as
repurchase agreements maturing in more than seven days. The Accounts are
proposing to delete this investment policy in order to permit the Accounts the
maximum flexibility with respect to their investments in repurchase agreements.
Of course, each Account will continue to adhere to applicable rules and
policies relating to investments in illiquid securities.
J. Transactions with Affiliates - Removal of Policy
Removal of policy proposed for all Accounts
Currently, each Account is prohibited from investing in securities of issuers
in which any Member of the Board of Managers of the Account or the directors
and officers of Sun Life of Canada (U.S.) or MFS own a certain percentage of
securities This policy was required by certain state laws which no longer apply
to the Accounts. It is proposed that this policy be eliminated in order to
provide each Account with the maximum amount of flexibility.
If this policy is eliminated, an Account would be able to invest in the
securities of any issuer without regard to ownership in that issuer by
management of the Account, MFS, or Sun Life of Canada (U.S.), except to the
extent prohibited by the Account's investment objective and policies and the
1940 Act. Transactions with affiliates are permitted under the 1940 Act only in
limited circumstances, and MFS maintains a code of ethics to monitor affiliated
transactions affecting the Account. Therefore, the Managers believe this policy
is no longer necessary.
K. Securities of other Investment Companies - Removal of Policy
Removal of policy proposed for all Accounts
<PAGE>
Currently, each Account is prohibited from investing in securities of other
investment companies, with certain limited exceptions for certain Accounts.
Also, the Accounts may not purchase securities issued by any openend investment
company. This policy deals with certain anti-pyramiding concerns addressed by
the 1940 Act. However, the 1940 Act permits investment companies like the
Accounts to invest their assets in one or more investment companies so long as
certain conditions are met. In order to take advantage of the flexibility of
current and future applicable law and regulation, it is proposed that the
Accounts eliminate this policy. The Accounts have no current intention to
invest all or substantially all of their assets in other investment companies
at this time. However, the Accounts may invest a more limited amount of their
assets in other investment companies in accordance with the requirements of the
1940 Act and the regulations thereunder. If the Accounts intend to invest in
other investment companies to any material extent, this intention will be
disclosed in the Accounts' prospectus or statement of additional information.
L. Options - Removal of Policy
Removal of policy proposed for all Accounts
Currently, each Account is prohibited from purchasing certain types of options.
This policy was required by certain state laws which no longer apply to the
Accounts. The Managers have recommended the elimination of this policy in order
to provide the Accounts with the maximum amount of flexibility.
If the proposal is approved, each Account would no longer be prohibited under
its fundamental policies from engaging in a variety of options transactions for
hedging purposes and to increase investment return. The Managers believe that
this enhanced flexibility could assist an Account in achieving its investment
objective under certain market conditions. A call option gives the holder the
right to purchase, and obligates the writer to sell, an asset such as a
security, a currency or a unit of an index, at the exercise price prior to or
on the expiration date. A put option gives the holder the right to sell, and
obligates the writer to buy, an asset at the exercise price prior to or on the
expiration date. In order for a put option purchased by an Account to be
profitable, the market price of the underlying asset must decline sufficiently
below the exercise price to cover the premium and transaction costs paid by the
Account. In order for a call option purchased by the Account to be profitable,
the market price of the underlying asset must rise sufficiently above the
exercise price to cover the premium and transaction costs paid by the Account.
If an option expires unexercised, the Account will receive nothing for its
premium payment.
When an Account writes a call option, it gives up the opportunity to profit
from any increase in the price of an asset above the exercise price of the
option; when it writes a put option, the Account takes the risk that it will be
required to purchase an asset from the option holder at a price above the
current market price of that asset. An Account receives a premium for writing a
call or a put option (representing the cost of the option), which increases the
return if the option expires unexercised or is closed out at a net profit.
<PAGE>
The successful use of options depends on the ability of MFS to forecast
correctly interest rate and market movements. The effective use of options also
depends on an Account's ability to terminate option positions at times when MFS
deems it desirable to do so. There is no assurance that the Accounts will be
able to effect closing transactions at any particular time or at an acceptable
price. Disruptions such as trading interruptions or restrictions on option
exercise in the markets for securities and other assets underlying options
purchased or sold by an Account could result in losses on an option, including
the entire investment by the Account in the option.
If the Accounts intend to invest in options to any material extent, this
intention will be disclosed in the Accounts' prospectus or statement of
additional information.
M. Investment for the Purpose of Exercising Control of Management -
Removal of Policy
Removal of policy proposed for all Accounts
Currently, each Account is prohibited from investing for the purpose of
exercising control or management of another issuer. This policy is not required
by applicable laws and regulations, and in certain circumstances may unduly
restrict MFS from exerting influence with the management of issuers in which a
Account invests when to do so would be in the best interests of the Account and
its Unitholders. For these reasons, it is proposed that this investment policy
be removed for each Account.
N. Investments in a Single Issuer - Removal of Policy
Removal of policy proposed for all Accounts
Currently, certain Accounts are prohibited from purchasing securities of any
issuer (other than U.S. Government obligations) if, as a result of such
purchase, more than a particular percentage (ranging from 5% to 10% depending
upon the Account) of the value of its assets would be invested in the
securities of that issuer. Certain other Accounts are also prohibited from
purchasing more than 10% of any class of securities of any issuer and/or from
purchasing the securities of any issuer if such purchase at the time thereof
would cause more than 10% of the voting securities of such issuer to be held by
the Account.
Under the 1940 Act, an investment company that is "diversified" may not, as to
75% of its total assets, hold more than 10% of an issuer's outstanding voting
securities or invest more than 5% of its assets in any one issuer. Each
Account, other than the High Yield Variable Account, the Global Governments
Variable Account and the Managed Sectors Variable Account, is "diversified,"
and cannot elect to be treated as non-diversified without Unitholder approval.
There is no intention to seek to change these Accounts from "diversified" to
non-diversified status. In addition, each Account must meet certain
diversification requirements under the Internal Revenue Code in order to
qualify for beneficial tax treatment as a regulated investment company. Each
Account, including the High Yield Variable Account, the Global Governments
<PAGE>
Variable Account and the Managed Sectors Variable Account, intends to meet the
applicable diversification requirements to qualify as a regulated investment
company for tax purposes. The investment policies that limit a diversified
Account's investments in a single issuer to 5% or 10% of its assets (depending
upon the Account) and that prohibit a diversified Account from purchasing more
than 10% of the securities of an issuer are more restrictive than the 1940 Act
requires for a diversified investment company. The Managers also believe that
it is unnecessary to have fundamental policies that repeat or are more
restrictive than what the 1940 Act or the Internal Revenue Code requires.
Accordingly, the Accounts propose to delete these investment policies.
O. Investments in a Particular Type of Security - Removal of Policy
Removal of policy proposed for the Money Market Variable Account
and the Government Securities Variable Account
Currently, these Accounts are prohibited from purchasing equity securities or
voting securities. In addition, the Government Securities Account may not
purchase certain mortgage interests if, as a result of such purchase, more than
90% of its assets would be evidenced by direct pass through mortgage
certificates. The Money Market Account may not purchase local or state
government securities.
The Government Securities Account is not expected to invest in equity
securities or voting securities and is not expected to have more than 90% of
the value of its assets evidenced by direct pass through mortgage certificates.
Nevertheless, the Managers believe that having these restrictions as
fundamental policies is unnecessary and may be unduly burdensome.
The Money Market Account complies with industry regulations that apply to money
market funds. These regulations require that the Account's investments mature
or be deemed to mature within 397 days from the date purchased and that the
average maturity of the Account's investments (on a dollar-weighted basis) be
90 days. In addition, all of the Account's investments must be in U.S.
dollar-denominated high quality securities which have been determined by MFS to
present minimal credit risks. Because these regulations typically would prevent
the Account from investing in equity securities and voting securities, the
Managers believe that it is unnecessary to have additional fundamental policies
with respect to equity securities and voting securities. In addition, the
Managers believe that the Account should not be restricted from purchasing
local or state government securities, although this is not expected to be the
focus of the Account's investments, provided that these securities meet the
high credit quality standards of the regulations applying to money market
funds.
Accordingly, it is proposed that these investment policies be deleted.
<PAGE>
REQUIRED VOTE
Approval of this Item with respect to an Account will require the affirmative
vote of a "majority of the outstanding voting securities" of that Account.
THE BOARDS OF MANAGERS HAVE CONCLUDED THAT THE PROPOSAl TO AMEND THE
FUNDAMENTAL INVESTMENT POLICIES OF EACH ACCOUNT WILL BENEFIT THAT ACCOUNT AND
ITS UNITHOLDERS. THE MANAGERS UNANIMOUSLY RECOMMEND VOTING FOR THE PROPOSAL.
ITEM 3 -- TO CHANGE EACH ACCOUNT'S INVESTMENT OBJECTIVE FROM FUNDAMENTAL
TO NON-FUNDAMENTAL.
Currently, the investment objective for each Account is fundamental and may not
be changed without Unitholder approval. It is proposed that the investment
objective be changed to a non-fundamental policy that may be amended without
Unitholder approval. The Managers have no current intention to change the
Accounts' investment objective.
Permitting an Account's investment objective to be changed without Unitholder
approval is consistent with current industry practice for other insurance
company separate accounts. Of course, Unitholders would be notified of any
future change.
REQUIRED VOTE
Approval of this Item with respect to an Account will require the affirmative
vote of the holders of a "majority of the outstanding voting securities" of
that Account.
THE BOARDS OF MANAGERS HAVE CONCLUDED THAT THIS PROPOSaL WILL BENEFIT EACH
ACCOUNT AND ITS UNITHOLDERS. THE MANAGERS UNANIMOUSLY RECOMMEND VOTING FOR THE
PROPOSAL.
ITEM 4 -- TO RATIFY THE SELECTION OF ACCOUNTANTS OF EACH ACCOUNT.
At the Meetings, Unitholders of each Account will be asked to ratify the
selection of accountants for that Account. The Managers, including a majority
of the Managers who are not "interested persons" (as that term is defined in
the 1940 Act) of the Accounts, have selected Deloitte & Touche LLP as
independent public accountants to certify every financial statement of each
Account required by any law or regulation to be certified by independent public
accountants and filed with the SEC in respect of all or any part of the fiscal
year ending December 31, 2001. It is intended that proxies not limited to the
contrary will be voted in favor of ratifying that selection. Deloitte & Touche
LLP currently serves as the independent public accountant for each Account.
Deloitte & Touche LLP has no direct or material indirect interest in any
Account. Representatives of Deloitte & Touche LLP are not expected to be
present at the Meetings.
<PAGE>
REQUIRED VOTE
Approval of this proposal with respect to an Account will require the
affirmative vote of a majority of the votes cast at the Meeting by Unitholders
of that Account.
INVESTMENT ADVISER AND ADMINISTRATOR
Massachusetts Financial Services Company ("MFS") is the investment adviser and
administrator of each Account. MFS, a Delaware corporation with offices at 500
Boylston Street, Boston, Massachusetts 02116, is a subsidiary of Sun Life of
Canada (U.S.) Financial Services Holdings, Inc., One Sun Life Executive Park,
Wellesley Hills, Massachusetts 02181, which is in turn an indirect wholly owned
subsidiary of Sun Life Assurance Company of Canada, 150 King Street West,
Toronto, Canada M5H1J9.
DISTRIBUTOR
Clarendon Insurance Agency, Inc., One Sun Life Executive Park, Wellesley Hills,
Massachusetts 02481, a wholly-owned subsidiary of Sun Life of Canada (U.S.), is
the general distributor of the contracts participating in the investment
experience of the Accounts.
MANNER OF VOTING PROXIES
[Each Unitholder of an Account is entitled to one vote for each full unit and a
fractional vote for each fractional unit for the election of Members of the
Board of Managers of that Account and on each other matter with respect to that
Account submitted to a vote at the Meetings.]
All proxies received by management will be voted on all matters presented at
the Meetings, and if not limited to the contrary, will be voted "for" the
matters listed in the accompanying Notice of Special Meetings of Unitholders
and "for" any other matters deemed appropriate. With respect to each Account,
the presence in person or by proxy of the holders of twenty-five percent (25%)
of the total number of votes entitled to be cast at the Meeting for that
Account is required to constitute a quorum at the Meeting for purposes of
voting on Items 1 and 4. For Items 2 and 3, the presence in person or by proxy
<PAGE>
of the holders of more than fifty percent (50%) of the total number of votes
entitled to be cast at the Meeting is required to constitute a quorum.
If a proxy is properly executed and returned and is marked with an abstention
(collectively, "abstentions"), the units represented thereby will be considered
to be present at the applicable Meeting for purpose of determining the
existence of a quorum for the transaction of business. Abstentions will not
constitute a vote "for" or "against" a matter and will be disregarded in
determining the "votes cast" on an issue. Therefore, abstentions will have the
same effect as a vote "against" Items 2 and 3 and will have no effect on Items
1 and 4.
The costs of the proxy solicitation and expenses incurred in connection with
the preparation, printing and mailing of this proxy statement and its
enclosures are estimated to be $__________ and will be borne by the Accounts.
In addition to the solicitation of proxies by mail, management may utilize the
services of the Accounts' officers and employees of Sun Life of Canada (U.S.)
and its subsidiaries and affiliates (who will receive no compensation therefor
in addition to their regular remuneration) to solicit proxies personally and by
telephone. The Accounts have retained Shareholder Communications Corp. to
assist in soliciting proxies. The fees of such firm will be approximately
$________, plus certain out-of-pocket expenses, and will be borne by the
Accounts.
The Managers know of no other matters to be brought before the Meetings. If,
however, because of any unexpected occurrence, any other matters properly come
before the Meetings, it is the Managers' intention that proxies not limited to
the contrary will be voted in accordance with the judgment of the persons named
in the enclosed form of proxy.
You may vote your proxy by telephone or internet. For instructions on how to
vote via telephone or internet, please refer to the outside cover of this proxy
statement.
INTERESTS OF CERTAIN PERSONS
As of December 31, 2000, no Manager or officer owned units of the
Accounts.
<PAGE>
As of December 31, 2000, to the best knowledge of the Accounts, no person or
entity beneficially owned 5% or more of the outstanding units of the Accounts.
SUBMISSION OF PROPOSALS
The Accounts are not required to hold annual meetings of Unitholders. However,
meetings of Unitholders may be held from time to time to consider such matters
as the approval of investment advisory agreements or changes in certain
investment restrictions. Proposals of Unitholders which are intended to be
presented at future Unitholders' meetings must be received by the Accounts a
reasonable time prior to the Accounts' solicitation of proxies relating to such
future meeting.
ADDITIONAL INFORMATION
In the event that sufficient votes in favor of the proposals set forth in the
Notice of Special Meetings are not received by March 22, 2001, the persons
named as appointed proxies on the enclosed proxy card may propose one or more
adjournments of the Meetings to permit further solicitation of proxies. Any
such adjournment will require the affirmative vote of the holders of a majority
of the units present in person or by proxy at the session of the Meetings to be
adjourned. The persons named as appointed proxies on the enclosed proxy card
will vote in favor of any such adjournment those proxies required to be voted
in favor of the proposal for which further solicitation of proxies is made.
They will vote against any such adjournment those proxies required to be voted
against such proposal. The costs of any such additional solicitation and of any
adjournment session will be borne by the Accounts.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
February 2, 2001
<PAGE>
APPENDIX A
FUNDAMENTAL POLICIES TO APPLY TO
EACH ACCOUNT UPON UNITHOLDER APPROVAL
An Account may not:
(1) Borrow Money: borrow money except to the extent such borrowing is not
prohibited by the 1940 Act and exemptive orders granted under such Act.
(2) Underwrite Securities: underwrite securities issued by other persons,
except that all or any portion of the assets of the Account may be
invested in one or more investment companies, to the extent not
prohibited by the 1940 Act and exemptive orders granted under such Act,
and except insofar as the Account may technically be deemed an
underwriter under the Securities Act of 1933, as amended, in selling a
portfolio security.
(3) Real Estate, Oil and Gas, Mineral Interests, Commodities: purchase or
sell real estate (excluding securities secured by real estate or
interests therein and securities of companies, such as real estate
investment trusts, which deal in real estate or interests therein),
interests in oil, gas or mineral leases, commodities or commodity
contracts (excluding currencies and any type of option, Futures
Contracts and Forward Contracts) in the ordinary course of its business.
The Account reserves the freedom of action to hold and to sell real
estate, mineral leases, commodities or commodity contracts (including
currencies and any type of option, Futures Contracts and Forward
Contracts) acquired as a result of the ownership of securities.
(4) Senior Securities: issue any senior securities except to the extent not
prohibited by the 1940 Act and exemptive orders granted under such Act.
For purposes of this restriction, collateral arrangements with respect
to any type of swap, option, Forward Contracts and Futures Contracts and
collateral arrangements with respect to initial and variation margin are
not deemed to be the issuance of a senior security.
(5) Make Loans: make loans except to the extent not prohibited by the 1940
Act and exemptive orders granted under such Act.
(6) Industry Concentration: purchase any securities of an issuer in a
particular industry if as a result 25% or more of its total assets
(taken at market value at the time of purchase) would be invested in
securities of issuers whose principal business activities are in the
same industry. For the Money Market Variable Account, this restriction
shall not apply to securities or obligations issued or guaranteed by
banks or bank holding companies, finance companies or utility companies.
<PAGE>
APPENDIX B
CURRENT FUNDAMENTAL INVESTMENT POLICIES AND
PROPOSED ACTION TO BE TAKEN
CAPITAL APPRECIATION VARIABLE ACCOUNT ("CAVA")
GLOBAL GOVERNMENTS VARIABLE ACCOUNT ("GGVA")
GOVERNMENT SECURITIES VARIABLE ACCOUNT ("GSVA")
HIGH YIELD VARIABLE ACCOUNT ("HYVA")
MANAGED SECTORS VARIABLE ACCOUNT ("MSVA")
MONEY MARKET VARIABLE ACCOUNT ("MMVA")
TOTAL RETURN VARIABLE ACCOUNT ("TRVA")
1. INVESTMENT POLICIES THAT APPLY TO ALL ACCOUNTS
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CURRENT FUNDAMENTAL POLICY REVISED FUNDAMENTAL POLICY OR
PROPOSED REMOVAL OF POLICY
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The Accounts may not:
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(1) Enter into repurchase agreements if, It is proposed that this
as a result of such agreement, more than fundamental policy be removed.
10% of the Account's total assets valued at
the time of the transaction would be subject
to repurchase agreements maturing in more
than seven days.
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(2) Lend money or securities, provided that Make Loans: An Account may not
the making of time or demand deposits with make loans except to the extent
banks and the purchase of debt securities not prohibited by the 1940 Act
such as bonds, debentures, commercial paper, and exemptive orders granted
repurchase agreements and shortterm under such Act.
obligations in accordance with its
objectives and policies are not prohibited;
and provided that this shall not prohibit
GGVA and TRVA from lending securities in
accordance with their objectives and
policies; and provided that this shall not
prevent MSVA from purchasing convertible
debt instruments consistent with its
investment objectives. As regards HYVA,
TRVA, GGVA and MSVA, the purchase of a
portion or all of an issue of debt
securities shall not be considered the
making of a loan.
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<PAGE>
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(3) Borrow money except as a temporary Borrow Money: An Account may
measure for extraordinary or emergency not borrow money except to the
purposes and then only in an amount up extent such borrowing is not
to onethird of the value of its total prohibited by the 1940 Act and
assets, in order to meet redemption exemptive orders granted under
requests without immediately selling such Act.
any portfolio securities (any such
borrowings under this section will not
be collateralized). If, for any reason,
the current value of any Account's total
assets falls below an amount equal to
three times the amount of its
indebtedness from money borrowed, the
Account will, within three business days,
reduce its indebtedness to the extent
necessary. The Accounts will not borrow
for leverage purposes. The Accounts
will not purchase any investments while
borrowings are outstanding.
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(4) Make short sales of securities or It is proposed that this
purchase any securities on margin fundamental policy be removed.
except to obtain such short term
credits as may be necessary for the
clearance of transactions; provided
that this shall not prevent CAVA,
GSVA, GGVA, or MSVA from making
margin deposits in connection with
options, Futures Contracts, Options
on Futures Contracts, Forward
Contracts or options on foreign
currencies; and provided that this
shall not prevent TRVA or MSVA from
selling a security which it does not
own if, by virtue of its ownership
of other securities, the Account
has, at the time of sale, a right
to obtain securities without payment
of further consideration equivalent
in kind and amount to the securities
sold and provided that if such right
is conditional, the sale is made
upon the same conditions.
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<PAGE>
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(5) Write, purchase or sell puts, calls or It is proposed that this
combinations thereof; provided that this fundamental policy be removed.
shall not prevent CAVA, GSVA, GGVA or MSVA
from writing, purchasing and selling puts,
calls or combinations thereof in accordance
with their objectives and policies; and
further provided that this shall not prevent
CAVA, GSVA, GGVA and MSVA from purchasing,
owning, holding or selling contracts for
the future delivery of securities or
currencies. Warrants and convertible
securities may be purchased and sold by
the Account; however, except as to TRVA
where the grantor of warrants is the issuer
of the underlying securities, no more than
5% of the Account's total assets may consist
of warrants and no more than 5% of the
Account's total assets may consist of
convertible securities. A warrant is a
certificate entitling the Account to
purchase a specified amount of securities
at a specified time at a specified price.
A convertible security is a bond, debenture
or preferred security which may be exchanged
by the Account for common stock or another
security. With respect to warrants, the risk
exists that the market value of the underlying
security will not exceed or equal the exercise
price at some time during the exercise period.
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(6) Purchase or retain the securities of any It is proposed that this
issuer if any of the members of the Board of fundamental policy be removed.
policy Managers of the Account or the
directors and officers of Sun Life Assurance
Company of Canada (U.S.) or MFS own
beneficially more than onehalf of one percent
(.50%) of the securities of such issuer
and together own more than 5% of the
securities of such issuer.
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(7) Invest for the purpose of exercising It is proposed that this
control or management of another issuer. fundamental policy be removed.
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<PAGE>
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(8) Invest in commodities or commodity Real Estate, Oil and Gas, Mineral
futures contracts or in real estate; except Interests, Commodities:
that this shall not prevent CAVA, GSVA, GGVA An Account may not purchase or
or MSVA from writing, selling or purchasing sell real estate (excluding
Futures Contracts, Options on Futures securities secured by real estate
Contracts, Forward Contracts or options on or interest therein and
foreign currencies, or from holding or securities of companies, such as
selling real estate or mineral leases, real estate investment trusts,
commodities or commodity contracts acquired which deal inreal estate or
as a result of the ownership of securities interests therein), interests
in accordance with their investment in oil, gas or mineral leases,
objectives and policies. commodities or commodity
contracts (excluding currencies
and any type ofoption, Futures
Contracts and Forward Contracts)
in the ordinary course of its
business. The Account reserves
the freedom of action to hold
and to sell real estate, mineral
leases, commodities or commodity
contracts (including currencies
and any type of option, Futures
Contracts and Forward Contracts)
acquired as a result of the
ownership of securities.
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(9) Invest in oil, gas or other mineral It is proposed that this
exploration or development programs. fundamental policy be removed.
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<PAGE>
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(10) Purchase securities of other investment It is proposed that this
companies; except that GSVA may purchase fundamental policy be removed.
Governmentrelated Securities in accordance
with its investment objectives and policies;
and except, as regards TRVA, GGVA and MSVA,
by purchase in the open market where no
commission or profit to a sponsor or dealer
results from such purchase other than the
customary broker's commission, or except
when such purchase, though not made in the
open market, is part of a plan of merger
or consolidation; provided, however, that
MSVA shall not purchase the securities
of any investment company if such purchase
at the time thereof would cause more than
10% of the Account's total assets (taken
at market value) to be invested in the
securities of such issuers; and provided,
further, that the Accounts shall not
purchase securities issued by
any openend investment company.
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(11) Underwrite securities issued by others Underwrite Securities: An Account
except to the extent the Account may be may not underwrite securities
other deemed to be an underwriter, under the issued by other persons except
Federal securities laws, in connection with that all or any portion of the
the disposition of portfolio securities. assets of the Account may be
invested in one or more
investment companies, to the
extent not prohibited by the
1940 Act and exemptive orders
granted under such Act, and
except insofar as the Account
may technically be deemed an
underwriter under the Securities
Act of 1933, as amended, in
selling a portfolio security.
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<PAGE>
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(12) Issue senior securities as defined in Senior Securities: An Account
the Investment Company Act of 1940 except as may not issue any senior
permitted in restriction (3) above. For the securities except to the
purpose of this restriction as it applies to extent not prohibited by the 1940
CAVA, GSVA, GGVA and MSVA, collateral Act and exemptive orders granted
arrangements with respect to options, under such Act. For purposes of
Futures Contracts, Options on Futures this restriction, collateral
Contracts, Forward Contracts and options on arrangements with respect to any
foreign currencies, and collateral type of swap, option, Forward
arrangements with respect to initial and Contracts and Futures Contracts
variation margins are not deemed to be the and collateral arrangements
issuance of a senior security. with respect to initial and
variation margin are not deemed
to be the issuance of a senior
security.
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
2. INVESTMENT POLICIES THAT APPLY ONLY TO MMVA:
-----------------------------------------------------------------------------
CURRENT FUNDAMENTAL POLICY REVISED FUNDAMENTAL POLICY OR
PROPOSED REMOVAL OF POLICY
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
MMVA will operate under the general
Investment Policies described in Section 1.
In addition, MMVA will not:
-----------------------------------------------------------------------------
(1) Purchase securities of any issuer It is proposed that this
(other than obligations of, or guaranteed fundamental policy be removed.
by, the United States Government, its
agencies or instrumentalities) if, as a
result of such purchase, more than 5% of
the value of its assets would be invested
in securities of that issuer.
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(2) Purchase more than 10% of any class of It is proposed that this
securities of any issuer (for this purpose fundamental policy be removed.
all indebtedness of an issuer shall be
deemed a single class).
-----------------------------------------------------------------------------
<PAGE>
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(3) Concentrate more than 25% of the value Industry Concentration: The
of its assets in any one industry, provided Account may not purchase any
that the restriction shall not apply to securities of an issuer in a
obligations issued or guaranteed by the particular industry if as a
United States Government, its agencies or result 25% or more of its total
instrumentalities, or certificates of assets (taken at market value at
deposit or securities issued or guaranteed the time of purchase) would be
by domestic banks. invested in securities of
issuers whose principal business
activities are in the same
industry. This restriction shall
not apply to securities or
obligations issued or guaranteed
by banks or bank holding
companies, finance companies or
utility companies.
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(4) Purchase equity securities, voting It is proposed that this
securities or local or state government fundamental policy be removed.
securities.
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(5) Invest in securities of issuers which It is proposed that this
are not readily marketable (except for fundamental policy be removed.
repurchase agreements).
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
3. INVESTMENT POLICIES THAT APPLY ONLY TO HYVA:
-----------------------------------------------------------------------------
CURRENT FUNDAMENTAL POLICY REVISED FUNDAMENTAL POLICY OR
PROPOSED REMOVAL OF POLICY
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
HYVA will operate under the general
Investment Policies described in Section 1.
In addition, HYVA will not:
-----------------------------------------------------------------------------
(1) Purchase securities of any issuer (other It is proposed that this
than obligations of, or guaranteed by the fundamental policy be removed.
United States government, its agencies or
instrumentalities) if, as a result of such
purchase, more than 10% of the value of its
assets would be invested in securities of
that issuer.
-----------------------------------------------------------------------------
<PAGE>
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(2) Concentrate more than 25% of the value Industry Concentration: The
of its assets in any one industry. Water, Account may not purchase any
communications, electric and gas utilities securities of an issuer in a
shall each be considered a seperate particular industry if as a
industry. result 25% or more of its total
assets (taken at market value
at the time of purchase) would
be invested in securities of
issuers whose principal business
activities are in the same
industry.
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(3) Invest more than 10% of its total It is proposed that this
assets in securities of issuers which fundamental policy be removed.
are not readily marketable.
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
4. INVESTMENT POLICIES THAT APPLY ONLY TO CAVA:
-----------------------------------------------------------------------------
CURRENT FUNDAMENTAL POLICY REVISED FUNDAMENTAL POLICY
OR PROPOSED REMOVAL OF POLICY
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
CAVA will operate under the general
Investment Policies described in Section 1.
In addition, CAVA will not:
-----------------------------------------------------------------------------
(1) Purchase securities of any issuer (other It is proposed that this
than obligations of, or guaranteed by the fundamental policy be removed.
United States government, its agencies or
instrumentalities) if, as a result of such
purchase, more than 5% of the value of its
assets would be invested in the securities
of that issuer.
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(2) Purchase more than 10% of any class of It is proposed that this
securities of any issuer. All debt fundamental policy be removed.
securities and all preferred stocks are
each considered as one class.
-----------------------------------------------------------------------------
<PAGE>
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(3) Concentrate more than 25% of the value Industry Concentration: The
of its assets in any one industry. Account may not purchase any
Water, communications, electric and gas securities of an issuer in a
utilities shall each be considered particular industry if as a
a separate industry. result 25% or more of its total
assets (taken at market value
at the time of purchase) would
be invested in securities of
issuers whose principal business
activities are in the same
industry.
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(4) Invest more than 10% of its total assets It is proposed that this
in securities of issuers which are not fundamental policy be removed.
readily marketable.
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
5. INVESTMENT POLICIES THAT APPLY ONLY TO GSVA:
-----------------------------------------------------------------------------
CURRENT FUNDAMENTAL POLICY REVISED OR ADDED FUNDAMENTAL
POLICY OR PROPOSED REMOVAL OF
POLICY
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
GSVA will operate under the general
Investment Policies described in Section 1.
In addition, GSVA will not:
-----------------------------------------------------------------------------
(1) Purchase the securities of any issuer It is proposed that this
(other than obligations of, or guaranteed by fundamental policy be removed.
the United States Government, its agencies
or instrumentalities) if, as a result of
such purchase, more than 5% of the value of
its assets would be invested in securities
of that issuer.
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(2) Purchase more than 10% of any class of It is proposed that this
securities of any issuer (for this purpose fundamental policy be removed.
all indebtedness of an issuer shall be
deemed a single class).
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(3) Purchase equity securities or voting It is proposed that this
securities. fundamental policy be removed.
-----------------------------------------------------------------------------
<PAGE>
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(4) Purchase interests in pools of mortgages It is proposed that this
fundamental evidenced by direct pass through mortgage policy be removed.
certificates if, as a result of such
purchase, more than 90% of the value of its
assets would be evidenced by direct pass
through mortgage certificates.
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(5) Invest in securities of issuers which It is proposed that this
are not readily marketable (except for fundamental policy be removed.
repurchase agreements maturing in more than
seven days).
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
It is proposed that the
following fundamental policy be
added: Industry Concentration:
The Account may not purchase any
securities of an issuer in a
particular industry if as a
result 25% or more of its total
assets (taken at market value at
the time of purchase) would be
invested in securities of
issuers whose principal business
activities are in the same
industry.
-----------------------------------------------------------------------------
6. INVESTMENT POLICIES THAT APPLY ONLY TO TRVA:
-----------------------------------------------------------------------------
CURRENT FUNDAMENTAL POLICY REVISED FUNDAMENTAL POLICY OR
PROPOSED REMOVAL OF POLICY
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
TRVA will operate under the general
Investment Policies described in Section 1.
In addition, TRVA will not:
-----------------------------------------------------------------------------
(1) Concentrate its investments in any Industry Concentration: The
particular industry, but if it is deemed Account may not purchase any
appropriate for the attainment of its securities of an issuer in a
investment objectives, up to 25% of its particular industry if as a
assets, taken at market value at the result 25% or more of its total
time of each investment, may be invested assets (taken at market value
in any one industry. at the time of the purchase)
would be invested in securities
of issuers whose principal
business activities are in the
same industry.
-----------------------------------------------------------------------------
<PAGE>
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(2) Purchase the securities of any issuer It is proposed that this
(other than obligations of, or guaranteed by fundamental policy be removed.
the United States government, its agencies
or instrumentalities) if such purchase, at
the time thereof, would cause more than 5%
of its total assets, taken at market value,
to be invested in the securities of such
issuer.
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(3) Purchase voting securities of any issuer It is proposed that this
if such purchase, at the time thereof, would fundamental policy be removed.
cause more than 10% of the outstanding
voting securities of such issuer to be held
by the Account, or purchase securities of
any issuer if such purchase, at the time
thereof, would cause the Account to hold
more than 10% of any class of securities of
such issuer. For this purpose, all
indebtedness of an issuer shall be deemed
a single class and all preferred stock of
an issuer shall be deemed a single class.
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
7. INVESTMENT POLICIES THAT APPLY ONLY TO GGVA:
-----------------------------------------------------------------------------
CURRENT FUNDAMENTAL POLICY REVISED OR ADDED FUNDAMENTAL
POLICY OR PROPOSED REMOVAL OF
POLICY
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
GGVA will operate under the general
Investment Policies described in Section 1.
In addition, GGVA will not:
-----------------------------------------------------------------------------
(1) Purchase the securities of any issuer It is proposed that this
(other than obligations of, or guaranteed by fundamental policy be removed.
the United States government, its agencies
or instrumentalities) if such purchase, at
the time thereof, would cause more than 10%
of the voting securities of such issuer to
be held by the Account.
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
<PAGE>
-----------------------------------------------------------------------------
It is proposed that the
following fundamental policy be
added: Industry Concentration:
The Account may not purchase any
securities of an issuer in a
particular industry if as a
result 25% or more of its total
assets (taken at market value at
the time of purchase) would be
invested in securities of
issuers whose principal business
activities are in the same
industry.
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
8. INVESTMENT POLICIES THAT APPLY ONLY TO MSVA:
-----------------------------------------------------------------------------
CURRENT FUNDAMENTAL POLICY REVISED OR ADDED FUNDAMENTAL
POLICY OR PROPOSED REMOVAL OF
POLICY
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
MSVA will operate under the general
Investment Policies described in Section 1.
In addition, MSVA will not:
-----------------------------------------------------------------------------
(1) Purchase the securities of any issuer It is proposed that this
(other than obligations of, or guaranteed by fundamental policy be removed.
the United States government, its agencies
or instrumentalities) if, as to 50% of the
Account's total assets, such purchase, at
the time thereof, would cause more than 5%
of its total assets, taken at market value,
to be invested in the securities of such
issuer.
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(2) Purchase voting securities of any issuer It is proposed that this
if, as to 50% of the value of the Account's fundamental policy be removed.
assets, such purchase, at the time thereof,
would cause more than 10% of the outstanding
voting securities of such issuer to be held
by the Account.
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
<PAGE>
-----------------------------------------------------------------------------
It is proposed that the
following fundamental policy be
added: Industry Concentration:
The Account may not purchase any
securities of an issuer in a
particular industry if as a
result 25% or more of its total
assets (taken at market value at
the time of purchase) would be
invested in securities of
issuers whose principal business
activities are in the same
industry.
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
<PAGE>
PROXY SOLICITED BY THE BOARD OF MANAGERS OF
[**NAME OF VARIABLE ACCOUNT**]
FOR MEETING OF UNITHOLDERS
The undersigned, revoking prior proxies, hereby appoints James R. Bordewick,
Jr., Stephen E. Cavan, C. James Prieur and James O. Yost, and each of them,
proxies with several powers of substitution, to vote for the undersigned at the
Special Meetings of Unitholders of [**Name of Variable Account**] to be held at
Massachusetts Financial Services Company, 500 Boylston Street, 24th Floor,
Boston, Massachusetts, on Thursday, March 22, 2001, notice of which meetings
and the Proxy Statement accompanying the same have been received by the
undersigned, or at any adjournment thereof, upon the following matters as
described in the Notice of Meetings and accompanying Proxy Statement.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED UNITHOLDER. ALL PROPOSALS (SET FORTH ON THE REVERSE OF THIS
PROXY CARD) HAVE BEEN PROPOSED BY THE BOARD OF MANAGERS. IF NO DIRECTION IS
GIVEN ON THESE PROPOSALS, THIS PROXY CARD WILL BE VOTED "FOR" THE NOMINEES AND
"FOR" ITEMS 2, 3 AND 4. THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE HOLDER'S
BEST JUDGMENT AS TO ANY OTHER MATTERS.
PLEASE VOTE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
Please sign this proxy exactly as your name or names appear on reverse side of
this card. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more
than one name appears, a majority must sign. If a corporation, this signature
should be that of an authorized officer who should state his or her title.
<PAGE>
[X] PLEASE MARK VOTES AS
IN THIS EXAMPLE
1. TO ELECT A BOARD OF FOR ALL FOR ALL
MANAGERS. NOMINEES WITHHOLD EXCEPT
[ ] [ ] [ ]
NOMINEES:
SAMUEL ADAMS
J. KERMIT BIRCHFIELD
ROBERT C. BISHOP
FREDERICK H. DULLES
WILLIAM R. GUTOW
DAVID D. HORN
DERWYN F. PHILLIPS
C. JAMES PRIEUR
RONALD G. STEINHART
HAVILAND WRIGHT
IF YOU DO NOT WISH YOUR UNITS VOTED "FOR"
A PARTICULAR NOMINEE, MARK THE "FOR ALL EXCEPT"
BOX AND STRIKE A LINE THROUGH THE NAME(S) OF
THE NOMINEE(S). YOUR UNITS WILL BE VOTED FOR
THE REMAINING NOMINEE(S).
2. TO AMEND, REMOVE OR ADD
CERTAIN FUNDAMENTAL
POLICIES OF THE ACCOUNT.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. TO CHANGE THE ACCOUNT'S
INVESTMENT OBJECTIVE
FROM FUNDAMENTAL TO
NON-FUNDAMENTAL.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
<PAGE>
4. TO RATIFY THE SELECTION
OF ACCOUNTANTS.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
PLEASE BE SURE TO SIGN AND DATE THIS PROXY. DATE
________________________ _________________________
________________________ _________________________
UNITHOLDER SIGN HERE CO-OWNER SIGN HERE
RECORD DATE UNITS:
___________________________________________________
<PAGE>
Compass Variable Accounts
Proxy Information
o Capital Appreciation Variable Account
o Global Governments Variable Account
o Government Securities Variable Account
o High Yield Variable Account
o Managed Sectors Variable Account
o Money Market Variable Account
o Total Return Variable Account
The enclosed proxy statement discusses important issues affecting your annuity
contract issued by Sun Life Assurance Company of Canada (U.S.) in connection
with the Compass Variable Accounts. To make voting faster and more convenient
for you, we're offering the options of voting on the internet or by telephone
instead of completing and mailing the enclosed proxy card. Either method is
generally available 24 hours a day, and your vote will be confirmed and posted
promptly. If you choose to vote via the internet or by phone, do not mail the
proxy card. However you choose to vote, it is important that you vote to save
the expense of additional solicitations.
Ways to vote:
To vote on the internet
1. Read the proxy statement.
2. Go to www.proxyweb.com.
3. Enter the 14 digit control number located
on the top left corner of your proxy card.
4. Follow the instructions on the site.
To vote by telephone
1. Read the proxy statement.
2. Call toll-free 1-888-221-0697.
3. Enter the 14 digit control number located
on the top left corner of your proxy card.
4 Follow the recorded instructions.
Your vote is important to us, please vote now.
Questions:
Shareholder Communications Corporation (SCC), a professional proxy solicitation
firm, has been selected to assist unitholders in the voting process.
If we have not received your proxy card as the date of the meeting approaches,
SCC may call you to remind you to exercise your right to vote. If you have any
questions, please call SCC toll-free at 1-877-504-5022 any business day between
9 a.m. and 11 p.m. Eastern time.
<PAGE>
MFS Logo
500 Boylston Street
Boston, MA 02116-3741
(C)2001 MFS Investment Management(R).
MFS(R) investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116.
COMPASS-14-1/01 xM
