<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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] 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:
<PAGE>
January 12, 2001
Dear Shareholder:
I am writing to inform you of the upcoming special meeting for shareholders
of the North American -- American Century International Growth Fund of North
American Funds Variable Product Series I.
The Variable Annuity Life Insurance Company (the "Advisor") has established
a team of experienced investment research professionals who continually monitor
the investment options in the North American Variable Funds Product Series I
("NAFV I"). Based on the Advisor's evaluation of investment options, it
recommended to the Board of Directors of NAFV I (the "Board") and the Board
approved the formation of the North American -- American Century International
Growth Fund (the "Fund"), and selected American Century Investment
Management, Inc., an asset management firm with superior long-term historical
track records, to serve as sub-advisor of the Fund. The purpose of the special
meeting is to request that you approve the investment advisory agreement for the
Fund, as well as an arrangement that allows the Advisor to change sub-advisors
with the approval of the Board, without a shareholder vote.
Please take a few minutes to read the enclosed material and vote on these
important issues. The Board, including myself, believes these proposals are in
your best interest and that of your Fund.
Regardless of the number of units you own, it is important that you take the
time to read the enclosed proxy materials, and VOTE ON THE ISSUES AS SOON AS YOU
CAN. You may vote by mail or in person. All shareholders benefit from the speedy
return of proxy votes.
I appreciate the time you will take to review these important matters. If we
may be of any assistance or if you have any questions about the proxy issues,
please call us at 1-800-44-VALIC.
Sincerely,
[SIGNATURE]
Alice T. Kane
Chairman of the Board and President
North American Funds Variable Product Series I
<PAGE>
NORTH AMERICAN FUNDS VARIABLE PRODUCT SERIES I
NORTH AMERICAN -- AMERICAN CENTURY INTERNATIONAL 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 -- American
Century International 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,
[SIGNATURE]
Nori L. Gabert, Esq.
Vice President and Secretary
<PAGE>
NORTH AMERICAN FUNDS VARIABLE PRODUCT SERIES I
NORTH AMERICAN -- AMERICAN CENTURY INTERNATIONAL GROWTH FUND
2929 ALLEN PARKWAY
HOUSTON, TEXAS 77019
PROXY STATEMENT
JANUARY 12, 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 -- American Century International 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,
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 12, 2001.
<PAGE>
INTRODUCTION
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, deviation from investment discipline, 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 American Century Investment Management, Inc. ("American
Century"), an asset management firm with superior long-term historical track
records, to serve as sub-advisor of the Fund.
On July 18, 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 Templeton International Fund (the
"Replaced Fund") held by the Separate Account based on a number of factors
including the superior long-term historical track record of American Century. 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
2
<PAGE>
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.
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.
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, American Century. American
Century 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 American Century an annual
fee, payable monthly, based on average daily net assets, of:
0.65% of the first $250 million;
0.55% on the next $250 million; and
0.50% on the assets over $50 million.
3
<PAGE>
The Advisory Agreement provides that absent willful misfeasance, bad faith,
negligence, or reckless disregard of its duties, VALIC 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 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"). 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 more than 60 days' nor
less than 30 days' written notice.
The Advisory Agreement was unanimously adopted by the Board, including a
majority of the Independent Directors, on July 18, 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."
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%. These charges are lower than the
maximum charges of 1.25% borne by the Replaced Fund. Total account expenses for
Contract owners, which includes total fund expenses as well as separate account
charges, for the Fund are expected not to exceed 2.06% before December 8, 2002,
and thus will be lower than the maximum charges of 2.13% that would have been
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 0.07% lower than that of the Replaced Fund.
ANNUAL FUND EXPENSES
The following table summarizes (1) annual total fund operating expenses of
the Replaced Fund for the fiscal year ending December 31, 1999, (2) maximum
annual total fund operating expenses of the Fund if Fund shareholders approve
the Advisory Agreement, and (3) maximum annual total fund operating expenses of
the Fund if Fund shareholders do not approve the Advisory
4
<PAGE>
Agreement. If Fund shareholders do not approve the Advisory Agreement, total
fund operating expenses, including management fees, will be capped at the level
shown below (although actual operating expenses may be lower) until Fund
shareholders approve a new investment advisory agreement with respect to the
Fund.
<TABLE>
<CAPTION>
MAXIMUM MAXIMUM
EXPENSES OF EXPENSES OF
FUND WITH FUND WITHOUT
EXPENSES OF SHAREHOLDER SHAREHOLDER
REPLACED FUND APPROVAL APPROVAL
------------- ----------- ------------
<S> <C> <C> <C>
Management Fees................. 0.69% 1.00% 0.69%
Other Expenses.................. 0.19% 0.06% 0.44%
----- ----- -----
Total Fund Operating Expenses... 0.88% 1.06% 1.13%
===== ===== =====
</TABLE>
Although the tables indicate that the management fee is higher for the Fund
than the Replaced Fund, other expenses of the Fund would be lower if the
shareholders approve the Advisory Agreement. Pursuant to the Substitution Order,
VALIC has agreed to limit total expenses of the Fund to the percentage levels
set forth (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. The tables
describing annual total fund operating expenses do not reflect separate account
expenses or any sales load.
EXAMPLE
This example is intended to help you compare the cost of investing in the
Fund if shareholders approve the Advisory Agreement and if shareholders do not
approve the Advisory Agreement. The example assumes that you invest $10,000 in
the 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.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- -------- -------- --------
<S> <C> <C> <C> <C>
With Shareholder Approval............. $108 $337 $586 $1,299
Without Shareholder Approval.......... $115 $359 $623 $1,379
</TABLE>
5
<PAGE>
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 NAFV I'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:
- Bruce R. Abrams, Director and Executive Vice President
- Kathleen Adamson, Director and Executive Vice President
- Kent E. Barrett, Director, Executive Vice President, and Chief Financial
Officer; Executive Vice President of the Fund
- Rebecca G. Campbell, Director and Senior Vice President
- Mary L. Cavanaugh, Director, Senior Vice President and Secretary
- Robert P. Condon, Director and President
- John A. Graf, Chairman and Chief Executive Officer
RECOMMENDATION
At a meeting of the Board held on July 18, 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 American Century as the
sub-advisor and the fee paid by VALIC to American Century, (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
6
<PAGE>
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 American Century 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 with that of 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 American Century as sub-advisor. The Board reviewed
information provided by VALIC regarding the investment processes of American
Century and considered the historical performance achieved by American Century
in connection with similar funds and funds advised by American Century with
investment objectives and policies similar to those of the Fund, noting that
such performance was superior to that of the Replaced Fund. The Board also
reviewed the qualifications of the portfolio managers of American Century 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 American Century'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 July 18,
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.
Additionally, VALIC agrees that it will limit its annualized management fee of
the Fund at the same level as the Replaced Fund and the total annualized
expenses to the same percentage level as the Replaced Fund, adjusted to reflect
any reductions in separate account charges that take effect in connection with
the substitution.
7
<PAGE>
-------------------------------------------------------------------
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 American Century) 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
8
<PAGE>
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 Order as discussed under "Introduction"
required the Board to call a 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.
9
<PAGE>
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 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, Chairman and President, Nori L. Gabert, Vice President and Secretary, and
Gregory R. Kingston, Treasurer, will vote on the matters in accordance with
their judgment.
10
<PAGE>
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:
- WRITE TO:
NORTH AMERICAN FUNDS VARIABLE PRODUCT SERIES I
2929 ALLEN PARKWAY
HOUSTON, TEXAS 77019
- 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, 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.
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 330,788,371 shares.
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<PAGE>
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.
12
<PAGE>
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 - American Century International 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
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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 [ ]
