<PAGE>
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 |_|
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
North American Funds Variable Product Series I
(Name of Registrant as Specified in Its Charter)
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:
(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 previous filing by 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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NORTH AMERICAN FUNDS VARIABLE PRODUCT SERIES I
North American - Founders Large Cap Growth Fund
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
to Be Held on March 6, 2001
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of the North
American Funds Variable Product Series I ("NAFV I") North American - Founders
Large Cap Growth Fund (the "Fund") will be held in Meeting Room 1, at the Plaza
Level of The Woodson Tower Building, 2919 Allen Parkway, Houston, Texas, at 2:00
p.m. on Tuesday, March 6, 2001, for the following purposes:
I. To approve the investment advisory agreement between The Variable
Annuity Life Insurance Company (the "Advisor") and NAFV I with
respect to the Fund;
II. To approve an arrangement to permit the Advisor to terminate,
replace or add sub-advisors or modify sub-advisory agreements
without shareholder approval; and
III. To transact any other business that may properly come before the
Special Meeting or any adjournment or adjournments thereof.
Only shareholders of record at the close of business on December 15, 2000, are
entitled to vote at this meeting and any adjournment thereof.
You are urged to exercise your right to give voting instructions for the meeting
by filling in, dating and signing the enclosed voting instruction form(s).
Please return your voting instructions promptly.
By Order of the Board of Directors,
Nori L. Gabert, Esq.
Vice President and Secretary
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NORTH AMERICAN FUNDS VARIABLE PRODUCT SERIES I
North American - Founders Large Cap Growth Fund
2929 Allen Parkway
Houston, Texas 77019
PROXY STATEMENT
January 8, 2001
We are sending this proxy statement to ask you to approve the investment
advisory agreement between The Variable Annuity Life Insurance Company ("VALIC"
or the "Advisor") and North American Funds Variable Product Series I ("NAFV I")
with respect to the North American - Founders Large Cap Growth Fund (the
"Fund"). We are also asking you to approve an arrangement to permit VALIC to
terminate, replace or add sub-advisors or modify sub-advisory agreements without
shareholder approval. You may vote by mail or in person. Your vote is important.
Please call 1-800-44-VALIC if you have questions about this proxy.
This statement is furnished in connection with the solicitation of proxies by
the Board of Directors of NAFV I (the "Board") to be used at the Special Meeting
of Shareholders. The Special Meeting will be held in Meeting Room 1, at the
Plaza Level of The Woodson Tower Building, 2919 Allen Parkway, Houston, Texas at
2:00 p.m. on Tuesday, March 6, 2001, or at such other date or time made
necessary by adjournment for the purpose set forth in the Notice of Meeting.
The Fund is a portfolio of North American Funds Variable Product Series I ("NAFV
I"), an open-end management investment company incorporated in Maryland on
December 7, 1984. NAFV I is authorized to issue shares of common stock. Issued
shares are fully paid and non-assessable and have no preemptive or conversion
rights. Shareholder voting rights are not cumulative.
VALIC Separate Account A (the "Separate Account") is the record owner of all of
the shares of the Fund, and VALIC will vote the shares of the Fund at the
Special Meeting.
Although you are not directly a shareholder of the Fund, as an owner of a
variable annuity contract (a "Contract") issued by the Separate Account, you
have the right to instruct VALIC how to vote the shares of the Fund that are
attributable to your Contract. VALIC will vote shares of the Fund in accordance
with instructions received from Contract owners. Interests in Contracts for
which no timely instructions are received will be voted in proportion to the
instructions which are received from other Contract owners.
The approximate date on which this proxy statement and form of proxy are first
being mailed to shareholders, Contract owners and participants is January 8,
2001.
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INTRODUCTION
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VALIC has established a team of experienced investment research professionals
who continually monitor the investment options offered to Contract owners
through the Contracts issued by the Separate Account. These investment research
professionals monitor quantitative factors for the Fund, such as performance
returns relative to comparable benchmarks, as well as qualitative factors.
Qualitative factors with respect to a sub-advisor include: a change in the
ownership of the sub-advisor, a change in the portfolio management team,
regulatory/compliance problems, non-adherence to investment process, capacity
issues, and other factors.
VALIC continues to monitor a sub-advisor after its selection based on these
quantitative and qualitative factors, and will recommend changes to the Board as
deemed appropriate. Based on its evaluations, VALIC recommended the formation of
the Fund, and selected Founders Asset Management LLC ("Founders"), an asset
management firm with superior long-term historical track records, to serve as
sub-advisor of the Fund. The formation of a new fund with Founders as the
sub-advisor is expected to result in lower fund expenses, thus potentially
increasing the Fund's return (performance).
On March 2, 2000, the Board approved the formation of the Fund and adopted the
investment advisory agreement between VALIC and NAFV I with respect to the Fund
(the "Advisory Agreement") as described below. As permitted by the Contracts,
VALIC determined that it was in the best interests of Contract owners to
substitute Fund shares for the shares of Dreyfus Founders Large Cap Growth Fund
(the "Replaced Fund") held by the Separate Account. Founders, a highly regarded
asset management firm with superior long-term historical track records,
currently serves as advisor to both the Fund and the Replaced Fund. As required
by the Investment Company Act of 1940 (the "1940 Act"), VALIC and NAFV I sought
and obtained from the Securities and Exchange Commission ("SEC") approval for
this substitution. On November 17, 2000, the SEC issued an order approving the
substitution of shares of the Fund for shares of the Replaced Fund (the
"Substitution Order"). On December 8, 2000, the substitution took place, and the
Fund commenced operations.
One condition of the Substitution Order requires that the Fund hold a
shareholder meeting to approve the Advisory Agreement within 120 days after the
substitution. Pending shareholder approval of the Advisory Agreement, the
difference between the management fee paid by the Replaced Fund and the
management fee being paid under the Advisory Agreement will be held in an
interest-bearing escrow account.
In addition, the Substitution Order requires that, before the Fund may rely on
the exemptive relief described in Proposal 2, which permits VALIC to terminate,
replace or add sub-advisors without shareholder approval, a majority of the
shareholders of the Fund must approve this arrangement. The Board believes that
this arrangement will benefit the Contract owners because VALIC will maintain
greater control over the ongoing management of the Fund, with a greater ability
to respond to performance and investment style issues of sub-advisors.
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The Board of Directors recommends that you vote FOR Proposal 1 and FOR Proposal
2.
PROPOSALS
--------------------------------------------------------------------------------
Proposal 1: To approve the investment advisory agreement
between VALIC and NAFV I with respect to the Fund.
--------------------------------------------------------------------------------
The Advisory Agreement
VALIC is an investment advisor registered with the SEC. It is engaged in the
business of rendering investment advisory, administrative and management
services to various investment companies. The Fund has contracted with VALIC to
furnish these services to the Fund. Accordingly, VALIC provides ongoing
management supervision, policy direction, and administrative and legal services
to the Fund. Administrative and legal services include managing the day-to-day
operations of the Fund, including the calculation of the daily net asset value,
reconciliation of fund assets, and other fund accounting services, as well as
the preparation of registration statements, prospectuses, reports to
shareholders, proxy solicitation materials, and fund compliance services and
recordkeeping.
As compensation for VALIC's services under the Advisory Agreement, the Fund pays
VALIC an annual management fee of 1.00%, based on the Fund's average daily net
assets. VALIC pays out the majority of the management fee VALIC receives from
the Fund to the sub-advisor, as discussed below, and retains 0.50% (of the first
$50 million) for services provided to the Fund.
Pursuant to the Advisory Agreement, VALIC has the authority to manage the Fund
in accordance with its investment objective, strategies, policies, and
restrictions, subject to the control of the Board. VALIC has chosen to delegate
its portfolio manager authority to a sub-advisor, Founders. Founders makes the
daily investment decisions for the Fund, places purchase and sales orders for
portfolio transactions, and provides portfolio management services, such as
trade recordkeeping. VALIC pays Founders an annual fee, payable monthly, based
on average daily net assets, of:
0.50% of the first $50 million;
0.45% on the next $150 million;
0.425% on the next $300 million;
0.40% on the next $350 million; and
0.35 on the assets over $850 million.
The Advisory Agreement provides that absent willful misfeasance, bad faith,
negligence, or reckless disregard of its duties, the Advisor shall not be
subject to liability to the Fund or to any shareholder of the Fund for any act
or omission in the course of performing its duties. The Advisory Agreement
provides for automatic termination unless at least annually, its continuance is
approved by (i) the Board or the affirmative vote of the holders of a majority
of the outstanding shares of the Fund, and (ii) the affirmative vote of a
majority of those
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Directors who are not "interested persons" of the Fund as such term is defined
in Section 2(a)(19) of the 1940 Act ("Independent Directors"), as defined by the
1940 Act. The Advisory Agreement terminates automatically upon its assignment
and is terminable at any time, without penalty, by the Board, VALIC, or the
holders of a majority of the outstanding shares of the Fund upon not less than
60 days' written notice. The Advisory Agreement may also be terminated without
penalty upon 30 to 60 days' written notice by VALIC.
The Advisory Agreement was unanimously adopted by the Board, including a
majority of the Independent Directors, on March 2, 2000, and was approved by
VALIC as the sole shareholder of the Fund on December 8, 2000. The reasons for
the Board's determination are discussed below under "Recommendation."
Annual Fund Expenses
The tables summarize expenses that the Replaced Fund incurred in its fiscal year
ended December 31, 1999 and sets forth pro forma expenses of the Fund based on
projections for the fiscal year ended May 31, 2001 assuming the Advisory
Agreement is approved by shareholders. The tables describing annual total fund
operating expenses do not reflect separate account expenses or any sales load.
Although the tables indicate that the management fee is higher for the Fund than
the Replaced Fund, other expenses of the Fund are lower. Additionally, total
fund expenses of the Fund are 0.02% lower than that of the Replaced Fund.
Pursuant to the Substitution Order, VALIC has agreed to limit total expenses of
the Fund to the percentage levels set forth below (1.06%) through December 8,
2002.
Total Annual Fund Operating Expenses are paid out of Fund assets and include
fees for portfolio management, maintenance of shareholder accounts, shareholder
servicing, accounting and other services. You do not pay these fees directly,
but these costs are borne indirectly by all Contract owners.
Replaced
Fund(1) Fund(2)
----- --------
Management Fees 1.00% 0.67%
Other Expenses 0.06% 0.41%
---- ----
Total Annual Fund Operating Expenses 1.06% 1.08%
==== ====
----------
(1) Anticipated expenses for the fiscal year ended May 31, 2001. Pursuant to the
Substitution Order, VALIC has agreed to waive any expenses incurred by the Fund
in excess of 1.06% through December 8, 2002.
(2) Other Expenses included a Rule 12b-1 fee of 0.25%.
Example
This example is intended to help you compare the cost of investing in the Fund
and in the Replaced Fund on a pro forma basis. The example assumes that you
invest $10,000 in the Fund and in the Replaced Fund for the time periods
indicated then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
Fund's and the Replaced Fund's operating expenses remain the same.
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Although you probably would not make such redemptions since the Fund is part of
the Contract, based on these stated assumptions, your costs would be:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Fund $108 $337 $586 $1,299
Replaced Fund $110 $344 $596 $1,322
Insurance Charges
Separate account charges, which include a mortality and expense risk fee and an
administration and distribution fee, are imposed on you as a Contract owner of
one of the investment options available in the Contract offered by VALIC. The
total separate account charges for Contract owners with account balances
invested in the Fund will not exceed 1.00%. With respect to the Replaced Fund,
total separate account charges will not exceed 1.25% minus a separate account
reimbursement of 0.25% for a net maximum total of 1.00%. Total account expenses
for Contract owners, which includes total fund expenses as well as separate
account charges, for the Fund are not expected to exceed 2.06% and thus will be
lower than the maximum charges of 2.08% borne by Contract owners with balances
in the Replaced Fund. Accordingly, Contract owners invested in the Fund are
expected to have an expense ratio that is 0.02% lower than that of the Replaced
Fund. On an unreimbursed basis (that is, if VALIC were not reimbursing the
Separate Account) the expense ratio is expected to be 0.27% lower.
Accounting Services Fees
In addition to advisory fees as noted above, VALIC also provides accounting
services to the Fund in return for an annual fee of 0.03%, based on the Fund's
average daily net assets. These fees are shown as part of the "Other Expenses"
line above. The Accounting Services Agreement is not affected by the Advisory
Agreement.
Information about VALIC
VALIC is a stock life insurance company and serves as the investment advisor for
all series of NAFV I, including the Fund. VALIC is a wholly-owned subsidiary of
American General Life Insurance Company, which is itself a wholly-owned
subsidiary of AGC Life Insurance Company, a wholly-owned subsidiary of American
General Corporation, one of the nation's largest financial services companies.
American General Distributors, Inc. serves as the Company's principal
underwriter. VALIC, American General Distributors, Inc., AGC Life Insurance
Company, American General Life Insurance Company and American General
Corporation are located at 2929 Allen Parkway, Houston, Texas, 77019.
The address of the directors and officers of VALIC is 2929 Allen Parkway,
Houston, Texas 77019. The directors and executive officers are listed below:
o Bruce R. Abrams, Director and Executive Vice President
o Kathleen Adamson, Executive Vice President
o Kent E. Barrett, Director, Executive Vice President, and Chief
Financial Officer; Executive Vice President of the Fund
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o Rebecca G. Campbell, Director and Senior Vice President
o Mary L. Cavanaugh, Director, Senior Vice President and Secretary
o Robert P. Condon, Director and President
o John A. Graf, Chairman and Chief Executive Officer
Recommendation
At a meeting of the Board held on March 1 and 2, 2000, VALIC made a presentation
regarding (i) the formation of the Fund, (ii) the proposed management fee to be
paid by the Fund to VALIC, (iii) the selection of Founders as the sub-advisor
and the fee paid by VALIC to Founders, (iv) the total fund expenses and separate
account charges, and (v) the substitution of shares of the Fund for shares of
the Replaced Fund. After careful consideration of the material presented, the
Board determined that the formation of the Fund, the management fee to be paid
by the Fund to VALIC, the selection of Founders as sub-advisor and the
substitution of shares of the Fund for shares of the Replaced Fund were in the
best interest of shareholders.
The Board based this determination on a number of factors. The Board considered
the nature and quality of the services provided by VALIC, information regarding
the Fund and its fees, investment advisory fees paid by funds similar in size
and investment style, and the overall terms of the Advisory Agreement, as well
as the fact that the management fee of the Fund is higher than that of the
Replaced Fund. Additionally, the Board reviewed the total fund expenses and
separate account charges of the Fund and the Replaced Fund, noting that Contract
owners invested in the Fund are expected to have a lower expense ratio than if
invested in the Replaced Fund.
Furthermore, the Board focused on the potential benefits to shareholders of
obtaining the services of Founders as sub-advisor including the fact that
Founders currently serves as advisor to the Replaced Fund. The Board reviewed
information provided by VALIC regarding the investment processes of Founders and
considered the historical performance achieved by Founders in connection with
similar funds and funds advised by Founders with investment objectives and
policies similar to those of the Fund. The Board also reviewed the
qualifications of the portfolio managers of Founders who would be managing the
Fund on a day-to-day basis. The Board further considered (as discussed in
Proposal 2 herein) that VALIC has ultimate responsibility for monitoring
Founders's compliance with the Fund's investment objective, policies and
restrictions, as well as VALIC's established quantitative and qualitative
criteria.
After careful consideration, the Board, including a majority of the Independent
Directors, unanimously approved the Advisory Agreement on March 2, 2000.
Pursuant to the Substitution Order, the Board authorized submission of the
Advisory Agreement to shareholders for approval. Accordingly, the Board
recommends that shareholders vote FOR the Advisory Agreement. If the Advisory
Agreement is not approved, the fees held in escrow will be paid to the Fund, and
the Board will determine what steps to take in the interests of shareholders.
8
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--------------------------------------------------------------------------------
Proposal 2: To approve an arrangement to permit the Advisor to terminate,
replace or add sub-advisors or modify sub-advisory agreements without
shareholder approval.
--------------------------------------------------------------------------------
Discussion
VALIC, as investment advisor to the Fund, has overall responsibility for the
general management and day-to-day operations of the Fund, but may employ one or
more investment sub-advisors to make the investment decisions for the Fund.
Management proposes that VALIC, with the approval of the Board, be permitted to
enter into, terminate, replace (including Founders) or modify sub-advisory
agreements on behalf of the Fund with such sub-advisors without obtaining the
prior approval of a majority of the outstanding voting securities of the Fund,
as is otherwise required by Section 15 of the 1940 Act.
As discussed below, the foregoing arrangement may enable the Fund to operate
more efficiently because VALIC would be able to modify sub-advisory arrangements
from time to time without the expenses and delays associated with obtaining
shareholder approval of the changes. If shareholders approve the arrangement,
the Board will consider and approve any sub-advisory changes that VALIC proposes
under the arrangement to ensure that the changes are in the best interests of
the Fund and its shareholders. For these and other reasons discussed below, the
Board recommends that shareholders of the Fund vote FOR the proposal.
VALIC and NAFV I were issued an exemptive order by the SEC on September 9, 1998,
(the "Multi Manager Order") exempting them from certain provisions of the 1940
Act which would otherwise require VALIC to obtain formal shareholder approval
prior to engaging and entering into sub-advisory agreements with sub-advisors.
The relief is based on the conditions set forth in the Multi Manager Order that,
among other things: (i) VALIC will select, monitor, evaluate and allocate assets
to the sub-advisors and oversee the sub-advisors' compliance with the relevant
fund's investment objective, policies and restrictions; (ii) before a fund
advised by VALIC may rely on the Multi Manager Order, the Multi Manager Order
must be approved by the shareholders of the funds operating under the Multi
Manager Order; (iii) NAFV I will provide to shareholders certain information
about a new sub-advisor; (iv) NAFV I will disclose in its prospectus the
existence, substance and effect of the Multi Manager Order; and (v) the
Directors, including a majority of the Independent Directors, must approve each
sub-advisory agreement in the manner required under the 1940 Act. In addition,
the Multi Manager Order does not permit NAFV I to enter into an agreement with a
sub-advisor that is an affiliate of VALIC, NAFV I, or a fund (other than by
reason as serving as sub-advisor to the Fund) or to change the sub-advisory fee
to be paid to an affiliated sub-advisor, without shareholder approval. Any
changes to the Advisory Agreement between NAFV I and VALIC would still require
shareholder approval.
One of the SEC's conditions to implementing such relief requires that the
proposed arrangement be approved by a majority of the Fund's outstanding voting
securities. Because the Substitution Exemption as discussed under "Introduction"
required the Board to call a
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special meeting of shareholders to seek approval of the Advisory Agreement, the
Board is taking this opportunity to seek shareholder approval of the proposed
arrangement, as well.
Under the Advisory Agreement, VALIC supervises the purchase and sale of Fund
investments and oversees the Fund's day-to-day operations. The Advisory
Agreement expressly permits VALIC to appoint sub-advisors for the purpose of
providing investment management services as set forth in the sub-advisory
agreement. VALIC is responsible for recommending to the Board the hiring,
termination and replacement of sub-advisors; supervising and evaluating the
performance of sub-advisors; and negotiating and, as circumstances warrant,
renegotiating the terms and conditions of any sub-advisory agreement (including
the fees payable thereunder). Although VALIC and the Board currently may not
appoint a new sub-advisor for the Fund without shareholder approval, they may
terminate a sub-advisory agreement or begin the process of selecting a new
sub-advisor for the Fund at any time, including prior to the Meeting.
Recommendation
The Board believes that allowing VALIC to negotiate sub-advisory arrangements
for the Fund without incurring the expenses or delays of obtaining shareholder
approval is in the best interests of the Fund's shareholders and will allow the
Fund to operate more efficiently. In order for VALIC to appoint a sub-advisor or
materially modify a sub-advisory agreement with respect to the Fund, NAFV I must
hold a special shareholder meeting and solicit votes from the Fund's
shareholders. Without having to hold shareholder meetings, the Board would be
able to act more quickly and with less expense to appoint a sub-advisor when the
Board and VALIC believe that the appointment would benefit the Fund and its
shareholders. Furthermore, the Board believes that it is appropriate to allow
VALIC to negotiate and renegotiate sub-advisory arrangements for the Fund in
light of VALIC's significant experience and expertise.
Moreover, the Board will provide oversight of the sub-advisor selection process
to help ensure that shareholders' interests are protected if VALIC selects a new
sub-advisor or modifies a sub-advisory agreement. The Board, including a
majority of the Independent Directors, will evaluate and approve all new
sub-advisory agreements, as well as any modifications to all sub-advisory
agreements. In its review, the Board will analyze all factors that it considers
to be relevant to the determination, including the nature, quality and scope of
services provided by the sub-advisors. The Board believes that its review will
ensure that VALIC continues to act in the best interest of the Fund and its
shareholders. Finally, shareholders will receive notification of any change in
sub-advisors, as well as all the information about a new sub-advisor, which
shareholders would receive if they were being asked to approve a sub-advisory
agreement.
The Board received materials relating to the proposed arrangement in advance of
the meeting at which the arrangement was considered, and had the opportunity to
ask questions and request further information in connection with such
consideration. Based on their consideration of the above factors and other
information that they deemed relevant, the Board, including a majority of the
Independent Directors, voted to approve the submission of the proposed
arrangement to
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shareholders of the Fund for their approval. Accordingly, the Board recommends
that shareholders vote FOR the arrangement to permit the Advisor to terminate,
replace or add sub-advisors or modify sub-advisory agreements without
shareholder approval.
--------------------------------------------------------------------------------
OTHER BUSINESS
--------------------------------------------------------------------------------
The Board does not intend to present any other business at the meeting. If,
however, any other matters are properly brought before the meeting, Alice T.
Kane, Nori L. Gabert, Esq., and Gregory R. Kingston will vote on the matters in
accordance with their judgment.
--------------------------------------------------------------------------------
ANNUAL REPORTS
--------------------------------------------------------------------------------
The audited Annual Report to Shareholders of NAFV I is incorporated by reference
into this proxy statement. Copies of the most recent Annual Report may be
obtained without charge if you:
o write to:
NAFV I
2929 Allen Parkway
Houston, Texas 77019
o call (800) 813-5065 or (800) 633-8960
--------------------------------------------------------------------------------
SHAREHOLDER PROPOSALS
--------------------------------------------------------------------------------
NAFV I is not required to hold annual shareholder meetings. Shareholders who
would like to submit proposals for consideration at future shareholder meetings
should send written proposals to Nori L. Gabert, Esq., Vice President and
Secretary of NAFV I, American General, 2929 Allen Parkway, Houston, Texas,
77019.
--------------------------------------------------------------------------------
VOTING INFORMATION
--------------------------------------------------------------------------------
Proxies are solicited by mail. The Fund will bear the costs for this proxy. By
voting as soon as possible, you can save the Fund the expense of follow-up
mailings and calls.
A proxy may be revoked at any time before the meeting or during the meeting by
oral or written notice to Nori L. Gabert, Esq., 2929 Allen Parkway, Houston,
Texas, 77019. Unless revoked, all valid proxies will be voted in accordance with
the specification thereon or, in the absence of specification, for approval of
the proposal.
Each proposal must be approved by a majority of the outstanding shares, which is
defined as the lesser of: (1) the vote of 67% or more of the shares of the Fund
at the Special Meeting if the holders of more than 50% of the outstanding shares
of the Fund are present in person or by proxy, or (2) the vote of more than 50%
of the outstanding shares of the Fund.
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Shareholders of the Fund of record at the close of business on Friday, December
15, 2000 ("Record Date"), are entitled to notice of and to vote at the Special
Meeting or any adjournment thereof. Shareholders are entitled to one vote for
each share held on that date. As of December 15, 2000, as shown on the books of
the Fund, there were issued and outstanding __________ shares.
To the Fund's knowledge, no person owns a Contract or interests therein
entitling them to give voting instructions regarding as much as five percent of
the outstanding shares of any Fund.
--------------------------------------------------------------------------------
ADJOURNMENT
--------------------------------------------------------------------------------
In the event that sufficient votes in favor of the proposal set forth in the
Notice of Meeting and Proxy Statement are not received by the time scheduled for
the meeting, Alice T. Kane, Nori L. Gabert, Esq., and Gregory R. Kingston may
move for one or more adjournments of the meeting to permit further solicitation
of proxies with respect to any such proposal. Any such adjournment will require
the affirmative vote of a majority of the shares present at the meeting.
Ms. Kane, Ms. Gabert and Mr. Kingston will vote in favor of such adjournment
those shares that they are entitled to vote which have voted in favor of such
proposal. They will vote against any such adjournment on behalf of those proxies
that have voted against any such proposal.
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PROXY CARD
The undersigned, revoking previous proxies, hereby appoint(s) Alice T. Kane,
Nori L. Gabert, Esq. and Gregory R. Kingston, attorneys, with full power of
substitution, to vote all shares that the undersigned is entitled to vote at the
Special Meeting of Shareholders of the North American Funds Variable Product
Series I ("NAFV I") North American - Founders Large Cap Growth Fund (the "Fund")
to be held in the Meeting Room 1 of The Woodson Tower Building, 2919 Allen
Parkway, Houston Texas, on Tuesday, March 6, 2001, at 2:00 p.m. and at any
adjournment thereof. All powers may be exercised by a majority of the proxy
holders or substitutes voting or acting or, if only one votes and acts, then by
that one. This Proxy shall be voted on the proposal described in the Proxy
Statement. Receipt of the Notice of the Meeting and the accompanying Proxy
Statement is hereby acknowledged.
You may cast your vote using one of the following methods:
1. By mail: postage-paid envelope enclosed; or
2. In person: Tuesday, March 6, 2001
NOTE: If you plan to vote by mail, please sign the proxy card exactly as your
name appears on the card. When signing in a fiduciary capacity, such as
executor, administrator, Director, guardian, etc., please sign your name and
indicate your title. Corporate and partnership proxies should be signed by an
authorized person, indicating the person's title.
Date: ______________________________, 2001
__________________________________________
__________________________________________
Signature(s) (and Title(s), if applicable)
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSAL. As to
any other matter, the attorneys shall vote in accordance with their best
judgment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING:
1. To approve the investment advisory agreement between The Variable
Annuity Life Insurance Company (the "Advisor") and NAFV I with
respect to the Fund.
For |_| Against |_| Abstain |_|
2. To approve an arrangement to permit the Advisor to terminate,
replace or add sub-advisors or modify sub-advisory agreements
without shareholder approval.
For |_| Against |_| Abstain |_|
3. To transact any other business properly brought before the meeting.
For |_| Against |_| Abstain |_|
13
