PRELIMINARY COPY
AMERICAN VARIABLE INSURANCE SERIES
333 SOUTH HOPE STREET, LOS ANGELES, CALIFORNIA 90071
GLOBAL GROWTH FUND
GLOBAL SMALL CAPITALIZATION FUND
GROWTH FUND
INTERNATIONAL FUND
NEW WORLD FUND
GROWTH-INCOME FUND
ASSET ALLOCATION FUND
BOND FUND
HIGH-YIELD BOND FUND
U.S. GOVERNMENT/AAA-RATED SECURITIES FUND
CASH MANAGEMENT FUND
Important Information for Contract Owners:
A meeting of shareholders of the 11 funds listed above (each a "Fund" and
collectively, the "Funds") comprising American Variable Insurance Series (the
"Series") will be held at the offices of the Series, 333 South Hope Street,
55th Floor, Los Angeles, California, on Tuesday, June 20, 2000 at 1:00 P.M.,
local time. These materials discuss the proposals to be voted on at the
meeting, and contain a Proxy Statement and Proxy Instruction Card.
All of the Funds' outstanding shares are owned of record by the separate
accounts of insurance companies. These companies use the Funds as the
underlying investment for variable annuity and variable life insurance
contracts issued by them. A Proxy Instruction Card is, in essence, a ballot.
When you complete your Proxy Instruction Card, it tells your insurance company
how to vote its proxy on important issues relating to the Fund(s) underlying
your insurance contract. If you complete and sign the Proxy Instruction Card,
the shares of the Funds related to your insurance contract will be voted
exactly as you instruct. If you simply sign the Proxy Instruction Card without
otherwise completing it, your insurance company will vote these shares for the
proposals. If you do not return a Proxy Instruction Card at all, your insurance
company will vote these shares in the same proportion as shares for which
instructions have been received from other owners of insurance contracts.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR ALL PROPOSALS.
We are sure that you, like most people, lead a busy life and are tempted to
put these materials aside for another day. Please don't delay. We urge you to
review the Proxy Statement and mark, sign and return the enclosed Proxy
Instruction Card today. If Contract owners do not return their signed Proxy
Instruction Cards, additional expenses may be incurred to pay for follow-up
mailings and telephone calls. PLEASE BE SURE TO SIGN AND RETURN EACH PROXY
INSTRUCTION CARD REGARDLESS OF HOW MANY YOU RECEIVE.
If you have any questions regarding the issues to be voted on or need
assistance in completing your Proxy Instruction Card, please contact us at
(800) XXX-XXXX. Thank you for investing with us and for your continuing
support.
Sincerely,
James F. Rothenberg James K. Dunton
CHAIRMAN OF THE BOARD PRESIDENT
<PAGE>
PRELIMINARY COPY
AMERICAN VARIABLE INSURANCE SERIES
________
GLOBAL GROWTH FUND
GLOBAL SMALL CAPITALIZATION FUND
GROWTH FUND
INTERNATIONAL FUND
NEW WORLD FUND
GROWTH-INCOME FUND
ASSET ALLOCATION FUND
BOND FUND
HIGH-YIELD BOND FUND
U.S. GOVERNMENT/AAA-RATED SECURITIES FUND
CASH MANAGEMENT FUND
________
NOTICE OF MEETING OF SHAREHOLDERS
JUNE 20, 2000
________
TO THE SHAREHOLDERS OF
AMERICAN VARIABLE INSURANCE SERIES:
A meeting of shareholders of the funds listed above (each a "Fund" and
collectively, the "Funds") comprising American Variable Insurance Series (the
"Series") will be held at the offices of the Series, 333 South Hope Street,
55th Floor, Los Angeles, California, on Tuesday, June 20, 2000 at 1:00 P.M.,
local time. Each of the Funds represents a separate, fully managed portfolio of
securities with its own investment objective(s) and policies and two classes of
shares -- Class 1 and Class 2. The meeting is being held to consider and vote
on the following matters for each Fund as indicated below and described under
the corresponding numbers in the accompanying Proxy Statement:
1. The election of a Board of 10 Trustees (Proposal 1 -- ALL FUNDS).
2. A proposal to eliminate or revise certain of the funds's investment
restrictions
(Proposal 2 - ALL FUNDS except, for Items 2A and 2B, Cash Management Fund).
3. Approval of an amendment to the Declaration of Trust to change the name of
the Series
(Proposal 3 - ALL FUNDS).
4. The ratification of the selection of PricewaterhouseCoopers LLP
as independent accountants for the Series for the fiscal year 2000 (Proposal
4 - ALL FUNDS).
The Board of Trustees has fixed the close of business on April 14, 2000 as
the record date for the determination of shareholders entitled to notice of and
to vote at the meeting.
THE PROPOSED BUSINESS CANNOT BE CONDUCTED AT THE MEETING UNLESS THE HOLDERS OF
A MAJORITY OF THE SHARES OF EACH FUND OUTSTANDING ON THE RECORD DATE ARE
PRESENT IN PERSON OR BY PROXY. THEREFORE, PLEASE MARK, DATE, SIGN AND RETURN
THE ENCLOSED PROXY INSTRUCTION CARD, WHICH IS SOLICITED BY THE BOARD OF
TRUSTEES. YOU MAY REVOKE IT AT ANY TIME PRIOR TO ITS USE. YOUR SIGNING IT
WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
By order of the Board of Trustees,
CHAD L. NORTON
SECRETARY
May XX, 2000
IMPORTANT
YOU CAN HELP THE SERIES AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP
LETTERS TO ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY INSTRUCTION
CARD. PLEASE MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY INSTRUCTION CARD
SO THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE MEETING. THE ENCLOSED
ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
PRELIMINARY COPY
AMERICAN VARIABLE INSURANCE SERIES
333 SOUTH HOPE STREET, LOS ANGELES, CALIFORNIA 90071
________
PROXY STATEMENT
MEETING OF SHAREHOLDERS
JUNE 20, 2000
________
The enclosed proxy is solicited by the Board of Trustees of the Series in
connection with the meeting of shareholders of the Global Growth, Global Small
Capitalization, Growth, International, New World, Growth-Income, Asset
Allocation, Bond, High-Yield Bond, U.S. Government/AAA-Rated Securities and
Cash Management Funds to be held at the offices of the Series, 333 South Hope
Street, 55th Floor, Los Angeles, California, on Tuesday, June 20, 2000 at 1:00
P.M., local time.
All of the Funds' outstanding shares are owned of record by the separate
accounts of insurance companies (the "Participating Insurance Companies") that
use the Funds as the underlying investment for variable annuity and variable
life insurance contracts. Under current law, the Participating Insurance
Companies are required to solicit voting instructions from contract owners who
beneficially own shares in the Funds as of the record date noted below. If you
complete and sign the enclosed Proxy Instruction Card, the Participating
Insurance Company that issued your insurance contract will vote the shares of
the Fund(s) related to your contract exactly as you instruct. If you simply
sign the Proxy Instruction Card without otherwise completing it, your
Participating Insurance Company will vote these shares for the proposals. If
you do not return a Proxy Instruction Card at all, your Participating Insurance
Company will vote these shares in the same proportion as shares for which
instructions have been received from other owners of contracts.
You can revoke a Proxy Instruction Card prior to its exercise, either by
filing with the Participating Insurance Company a written notice of revocation,
or by delivering a duly executed Proxy Instruction Card bearing a later date.
Because contract owners are indirectly invested in the Funds through their
contracts and have the right to instruct the Participating Insurance Companies
how to vote shares of the Funds on all matters requiring a shareholder vote,
contract owners should consider themselves shareholders of the Funds for
purposes of this Proxy Statement. This Proxy Statement and Proxy Instruction
Card were first mailed to shareholders on or about May XX, 2000.
The Series is a fully managed, diversified, open-end investment company
consisting of 11 funds, each of which represents a separate fully managed
portfolio of securities with its own investment objective(s) and policies, and
two classes of shares -- Class 1 and Class 2. At the close of business on
April 14, 2000, the record date fixed by the Board of Trustees for the
determination of shareholders entitled to notice of and to vote at the meeting,
the following were the outstanding share balances for the Funds:
<TABLE>
<CAPTION>
Fund Class 1 Class 2
<S> <C> <C>
Global Growth
Global Small Capitalization
Growth
International
New World
Growth-Income
Asset Allocation
Bond
High-Yield Bond
U.S. Government/
AAA-Rated Securities
Cash Management
</TABLE>
Each share of the Series (whether Class 1 or Class 2) is entitled to one vote.
There is no provision for cumulative voting. No contract owner is known by the
Series to own beneficially 5% or more of the outstanding shares of any Fund.
Shareholders of each Fund will vote separately with respect to Proposal 2 (if
applicable); shareholders of each Fund will vote together on Proposals 1, 3 and
4. Class 1 and Class 2 shareholders of each Fund will vote together on all
Proposals.
With respect to the election of trustees (Proposal 1), the 10 nominees
receiving the highest number of votes will be elected. The vote required to
approve Proposal 2 is the affirmative vote of the lesser of (a) 67% or more of
all shares present in person or by proxy, provided the holders of more than 50%
of all outstanding voting shares are present or represented by proxy, or (b)
more than 50% of all outstanding voting shares on the record date. The vote to
approve Proposal 3 is the affirmative vote of more than 50% of all outstanding
voting shares on the record date. The vote required to approve Proposal 4 is
the affirmative vote of a majority of all shares present in person or
represented by proxy.
If sufficient votes are not received by the meeting date, a person named as
proxy may propose one or more adjournments of the meeting for up to 120 days in
the aggregate to permit further solicitation of proxies. The persons named as
proxies may vote all proxies in favor of such adjournment.
PROPOSAL 1: ELECTION OF TRUSTEES
Ten trustees are to be elected at the meeting, each to hold office until the
next meeting and until a successor is elected and qualified. Because meetings
of shareholders will not be held each year, the trustees' terms will be
indefinite in length. All of the nominees for trustee except Lee A. Ault III,
James K. Dunton, Leonard R. Fuller, Donald D. O'Neal, and Kirk P. Pendleton
were elected by shareholders at their last Meeting on March 14, 1995. Mr.
Pendleton was elected by the Board of Trustees in 1996, Mr. Ault and Mr.
Fuller were elected by the Board of Trustees in 1999, and Mr. Dunton and Mr.
O'Neal were nominated by the Board of Trustees in 2000.
Each of the nominees has agreed to serve as trustee if elected. If, due to
presently unforeseen circumstances, any nominee is not available for election,
the persons named as proxies will vote the signed but unmarked proxies and
those marked for the nominated trustees for such other nominee as the present
directors may recommend. The table below sets forth certain information
regarding the nominees.
<TABLE>
<CAPTION>
NAME OF NOMINEE CURRENT PRINCIPAL OCCUPATION AND YEAR FIRST ELECTED A MEMBERSHIPS ON
(POSITION WITH PRINCIPAL EMPLOYMENT DURING PAST FIVE DIRECTOR BOARDS OF OTHER
FUND)AND AGE YEARS # REGISTERED
INVESTMENT
COMPANIES AND
PUBLICLY
HELD COMPANIES
<S> <C> <C> <C>
LEE A. AULT III CHAIRMAN, IN-Q-IT, INC.; FORMER CHIEF 1999 EQUIFAX, INC.
(TRUSTEE) EXECUTIVE OFFICER, TELECREDIT, INC. OFFICE DEPOT, INC.
63 SUNRISE MEDICAL,
INC.
H. FREDERICK PRIVATE INVESTOR; FORMER PRESIDENT 1994 THE AMERICAN FUNDS
CHRISTIE AND CHIEF EXECUTIVE OFFICER, THE GROUP
(TRUSTEE) MISSION GROUP (NON-UTILITY HOLDING (DIRECTOR/TRUSTEE
66 COMPANY, SUBSIDIARY OF SOUTHERN - 18 FUNDS)
CALIFORNIA EDISON COMPANY)
JOE E. DAVIS PRIVATE INVESTOR: FORMER CHAIRMAN OF 1991 BMC INDUSTRIES,
(TRUSTEE) THE BOARD, LINEAR CORPORATION; FORMER INC.
65 PRESIDENT, AND CHIEF EXECUTIVE FREYMILLER
OFFICER, NATIONAL HEALTH ENTERPRISES, TRUCKING, INC.
INC. WILSHIRE
TECHNOLOGIES, INC.
JAMES K. DUNTON* SENIOR VICE PRESIDENT AND DIRECTOR, NOMINEE THE AMERICAN FUNDS
(PRESIDENT AND CAPITAL RESEARCH AND MANAGEMENT GROUP
NOMINEE) COMPANY (DIRECTOR - 1
62 FUND)
MARTIN FENTON CHAIRMAN, SENIOR RESOURCE GROUP, LLC 1995 THE AMERICAN FUNDS
(TRUSTEE) (DEVELOPMENT AND MANAGEMENT OF SENIOR GROUP
64 LIVING COMMUNITIES) (DIRECTOR/TRUSTEE
- 14 FUNDS)
RAINTREE
HEALTHCARE
CORPORATION
LEONARD R. FULLER PRESIDENT, FULLER CONSULTING 1999 THE AMERICAN FUNDS
(TRUSTEE) (FINANCIAL MANAGEMENT CONSULTING GROUP
53 FIRM) (DIRECTOR/TRUSTEE
- 12 FUNDS)
MARY MYERS PRIVATE INVESTOR, FORMER OWNER AND 1994 THE AMERICAN FUNDS
KAUPPILA PRESIDENT, ENERGY INVESTMENT, INC. GROUP
(TRUSTEE) (DIRECTOR/TRUSTEE
46 - 4 FUNDS)
DONALD D. O'NEAL* SENIOR VICE PRESIDENT, CAPITAL NOMINEE
(NOMINEE) RESEARCH AND MANAGEMENT COMPANY
39
KIRK P. PENDLETON CHAIRMAN AND CHIEF EXECUTIVE OFFICER, 1996 THE AMERICAN FUNDS
(TRUSTEE) CAIRNWOOD, INC. (VENTURE CAPITAL GROUP
60 INVESTMENT) (DIRECTOR/TRUSTEE
- 5 FUNDS)
YORK GROUP, INC.
JAMES F. PRESIDENT AND DIRECTOR, CAPITAL 1995 THE AMERICAN FUNDS
ROTHENBERG* RESEARCH AND MANAGEMENT COMPANY GROUP
(CHAIRMAN OF (DIRECTOR/TRUSTEE
THE BOARD) - 2 FUNDS)
53 __________________
</TABLE>
# CORPORATE POSITIONS, IN SOME INSTANCES, MAY HAVE CHANGED DURING THIS PERIOD.
* IS CONSIDERED AN "INTERESTED PERSON" OF THE SERIES WITHIN THE MEANING OF THE
INVESTMENT COMPANY ACT OF 1940 (THE "1940 ACT"), ON THE BASIS OF AFFILIATION
WITH CAPITAL RESEARCH AND MANAGEMENT COMPANY (THE "INVESTMENT ADVISER"). THE
INVESTMENT ADVISER IS A WHOLLY OWNED SUBSIDIARY OF THE CAPITAL GROUP COMPANIES,
INC.
CAPITAL RESEARCH AND MANAGEMENT COMPANY MANAGES THE AMERICAN FUNDS GROUP
CONSISTING OF 29 FUNDS: AMCAP FUND, AMERICAN BALANCED FUND, INC., AMERICAN
HIGH-INCOME MUNICIPAL BOND FUND, INC., AMERICAN HIGH-INCOME TRUST, AMERICAN
MUTUAL FUND, INC., THE BOND FUND OF AMERICA, INC., THE CASH MANAGEMENT TRUST OF
AMERICA, CAPITAL INCOME BUILDER, INC., CAPITAL WORLD GROWTH AND INCOME FUND,
INC., CAPITAL WORLD BOND FUND, INC., EUROPACIFIC GROWTH FUND, FUNDAMENTAL
INVESTORS, INC., THE GROWTH FUND OF AMERICA, INC., THE INCOME FUND OF AMERICA,
INC., INTERMEDIATE BOND FUND OF AMERICA, THE INVESTMENT COMPANY OF AMERICA,
LIMITED TERM TAX-EXEMPT BOND FUND OF AMERICA, THE NEW ECONOMY FUND, NEW
PERSPECTIVE FUND, INC., NEW WORLD FUND, INC., SMALLCAP WORLD FUND, INC., THE
TAX-EXEMPT BOND FUND OF AMERICA, INC., THE TAX-EXEMPT FUND OF CALIFORNIA, THE
TAX-EXEMPT FUND OF MARYLAND, THE TAX-EXEMPT FUND OF VIRGINIA, THE TAX-EXEMPT
MONEY FUND OF AMERICA, THE U.S. TREASURY MONEY FUND OF AMERICA, U.S. GOVERNMENT
SECURITIES FUND AND WASHINGTON MUTUAL INVESTORS FUND, INC. CAPITAL RESEARCH
AND MANAGEMENT COMPANY ALSO MANAGES AMERICAN VARIABLE INSURANCE SERIES AND
ANCHOR PATHWAY FUND WHICH SERVE AS THE UNDERLYING INVESTMENT VEHICLES FOR
CERTAIN VARIABLE INSURANCE CONTRACTS; AND ENDOWMENTS, WHOSE SHAREHOLDERS ARE
LIMITED TO (I) ANY ENTITY EXEMPT FROM TAXATION UNDER SECTION 501(C)(3) OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED ("501(C)(3) ORGANIZATION"); (II) ANY
TRUST, THE PRESENT OR FUTURE BENEFICIARY OF WHICH IS A 501(C)(3) ORGANIZATION;
AND (III) ANY OTHER ENTITY FORMED FOR THE PRIMARY PURPOSE OF BENEFITING A
501(C)(3) ORGANIZATION. AN AFFILIATE OF CAPITAL RESEARCH AND MANAGEMENT
COMPANY, CAPITAL INTERNATIONAL, INC., MANAGES EMERGING MARKETS GROWTH FUND,
INC.
____________
THE SERIES HAS AN AUDIT COMMITTEE COMPOSED OF LEE A. AULT III, H. FREDERICK
CHRISTIE, JOE E. DAVIS, AND MARTIN FENTON. THE FUNCTION OF THE COMMITTEE
INCLUDES SUCH SPECIFIC MATTERS AS RECOMMENDING THE INDEPENDENT ACCOUNTANT TO
THE BOARD OF TRUSTEES, REVIEWING THE AUDIT PLAN AND RESULTS OF THE AUDITS AND
CONSIDERING OTHER MATTERS DEEMED APPROPRIATE FOR CONSIDERATION BY THE BOARD OF
TRUSTEES AND/OR THE COMMITTEE.
THE SERIES HAS A NOMINATING COMMITTEE COMPOSED OF LEE A. AULT III, JOE E.
DAVIS AND MARY MYERS KAUPPILA. THE COMMITTEE'S FUNCTIONS INCLUDE SELECTING AND
RECOMMENDING TO THE BOARD OF TRUSTEES NOMINEES FOR ELECTION AS TRUSTEES OF THE
SERIES. WHILE THE COMMITTEE NORMALLY IS ABLE TO IDENTIFY FROM ITS OWN
RESOURCES AN AMPLE NUMBER OF QUALIFIED CANDIDATES, IT WILL CONSIDER SHAREHOLDER
SUGGESTIONS OF PERSONS TO BE CONSIDERED AS NOMINEES TO FILL FUTURE VACANCIES ON
THE BOARD. SUCH SUGGESTIONS MUST BE SENT IN WRITING TO THE NOMINATING
COMMITTEE OF THE SERIES, C/O THE SERIES' SECRETARY, AND MUST BE ACCOMPANIED BY
COMPLETE BIOGRAPHICAL AND OCCUPATIONAL DATA ON THE PROSPECTIVE NOMINEE, ALONG
WITH A WRITTEN CONSENT OF THE PROSPECTIVE NOMINEE TO CONSIDERATION OF HIS OR
HER NAME BY THE COMMITTEE. SEE ALSO "SHAREHOLDER PROPOSALS."
THE SERIES HAS A CONTRACTS COMMITTEE COMPOSED OF ALL TRUSTEES WHO ARE NOT
CONSIDERED TO BE "INTERESTED PERSONS" OF THE SERIES WITHIN THE MEANING OF THE
1940 ACT. THE CONTRACTS COMMITTEE'S FUNCTION IS TO REQUEST, REVIEW AND
CONSIDER THE INFORMATION DEEMED NECESSARY TO EVALUATE THE TERMS OF THE
INVESTMENT ADVISORY AND SERVICE AGREEMENT AND THE PLAN OF DISTRIBUTION UNDER
RULE 12B-1 THAT THE SERIES PROPOSES TO ENTER INTO, RENEW OR CONTINUE, AND TO
MAKE ITS RECOMMENDATIONS TO THE FULL BOARD OF TRUSTEES ON THESE MATTERS.
THERE WERE FOUR BOARD OF TRUSTEES, TWO AUDIT COMMITTEE, ONE NOMINATING
COMMITTEE AND ONE CONTRACTS COMMITTEE MEETINGS DURING THE YEAR ENDED DECEMBER
31, 1999. ALL INCUMBENT TRUSTEES ATTENDED 100% OF ALL BOARD MEETINGS AND
MEETINGS OF THE COMMITTEES OF WHICH THEY WERE MEMBERS.
THE SERIES PAYS NO SALARIES OR OTHER COMPENSATION TO ITS TRUSTEES OTHER THAN
TRUSTEES' FEES, WHICH ARE PAID TO THOSE TRUSTEES WHO ARE UNAFFILIATED WITH THE
INVESTMENT ADVISER AS DESCRIBED BELOW.
<TABLE>
<CAPTION>
DIRECTOR COMPENSATION AGGREGATE COMPENSATION TOTAL COMPENSATION TOTAL
(INCLUDING VOLUNTARILY (INCLUDING NUMBER
DEFERRED COMPENSATION /1/) VOLUNTARILY DEFERRED OF FUND
FROM THE SERIES DURING THE COMPENSATION /1/) BOARDS
TRUSTEE FISCAL YEAR ENDED 11/30/99 FROM ALL FUNDS ON
AND ONE-MONTH ENDED MANAGED BY CAPITAL WHICH
12/31/99 RESEARCH AND TRUSTEE
MANAGEMENT COMPANY OR SERVES
ITS AFFILIATES /2/ /2/
FOR THE YEAR ENDED
11/30/99 AND ONE-MONTH
ENDED 12/31/99
<S> <C> <C> <C> <C> <C>
Lee A. Ault III $ 11,667 $ 13,500 $ 11,667 $ 13,500 1
H. Frederick Christie 33,500/3/ 13,500/3/ 204,200 33,150 18
Joe E. Davis 36,500 13,500 36,500 13,500 1
James K. Dunton none/4/ none/4/ 1
(nominee)
Martin Fenton 34,500/3/ 13,500/3/ 124,700 15,900 16
Leonard R. Fuller 11,667 13,500 60,867 20,200 13
Mary Myers Kauppila 32,500/3/ 13,500/3/ 115,500 23,250 5
Donald D. O'Neal none/4/ none/4/
(nominee)
Kirk P. Pendleton 30,500/3/ 13,500/3/ 135,000 19,5007
James F. Rothenberg none/4/ none/4/ 1
</TABLE>
/1/ Amounts may be deferred by eligible trustees under a non-qualified deferred
compensation plan adopted by the Series in 1993. Deferred amounts accumulate at
an earnings rate determined by the total return of one or more funds in The
American Funds Group as designated by the trustee.
/2/ Includes funds managed by Capital Research and Management Company and
affiliates.
/3/ Since the deferred compensation plan's adoption in 1993, the total amount
of deferred compensation accrued by the Series (plus earnings thereon) as of
the fiscal year ended December 31, 1999 for participating directors is as
follows: H. Frederick Christie ($155,207), Martin Fenton ($49,789), Mary Myers
Kauppila ($223,397), and Kirk P. Pendleton ($164,951). Amounts deferred and
accumulated earnings thereon are not funded and are general unsecured
liabilities of the Fund until paid to the director.
/4/ James K. Dunton, Donald D. O'Neal and James F. Rothenberg are affiliated
with the Series' Investment Adviser and, therefore, receive no remuneration
from the Series.
OTHER EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION /1/ OFFICER
(POSITION WITH SERIES) CONTINUOUSLY
AND AGE SINCE/2/
<S> <C> <C>
ABNER D. GOLDSTINE SENIOR VICE PRESIDENT AND DIRECTOR, 1993
(SENIOR VICE CAPITAL RESEARCH AND MANAGEMENT COMPANY
PRESIDENT)
70
MICHAEL J. DOWNER SENIOR VICE PRESIDENT -- FUND BUSINESS 1991
(SENIOR VICE MANAGEMENT GROUP, CAPITAL RESEARCH AND
PRESIDENT) MANAGEMENT COMPANY
45
ALAN N. BERRO SENIOR VICE PRESIDENT, CAPITAL RESEARCH 1999
(VICE PRESIDENT) COMPANY
40
CLAUDIA P. HUNTINGTON SENIOR VICE PRESIDENT, CAPITAL RESEARCH 1994
(VICE PRESIDENT) COMPANY
38
ROBERT W. LOVELACE VICE PRESIDENT, CAPITAL RESEARCH AND 1997
(VICE PRESIDENT) MANAGEMENT COMPANY
38
JOHN H. SMET VICE PRESIDENT, CAPITAL RESEARCH AND 1994
(VICE PRESIDENT) MANAGEMENT COMPANY
43
SUSAN M. TOLSON VICE PRESIDENT, CAPITAL RESEARCH AND 1999
(VICE PRESIDENT) MANAGEMENT
36 COMPANY
CHAD L. NORTON VICE PRESIDENT -- FUND BUSINESS MANAGEMENT 1994
(SECRETARY) GROUP, CAPITAL RESEARCH AND MANAGEMENT
39 COMPANY
ROBERT P. SIMMER VICE PRESIDENT -- FUND BUSINESS MANAGEMENT 1994
(TREASURER) GROUP, CAPITAL RESEARCH AND MANAGEMENT
39 COMPANY
SHERYL F. JOHNSON ASSISTANT VICE PRESIDENT -- FUND BUSINESS 1997
(ASSISTANT TREASURER) MANAGEMENT GROUP, CAPITAL RESEARCH AND
31 MANAGEMENT COMPANY
DAVID A. PRITCHETT ASSISTANT VICE PRESIDENT -- FUND BUSINESS 1998
(ASSISTANT TREASURER) MANAGEMENT GROUP, CAPITAL RESEARCH AND
33 MANAGEMENT COMPANY
</TABLE>
_____________
/1/ THE OCCUPATIONS SHOWN REFLECT THE PRINCIPAL EMPLOYMENT OF EACH INDIVIDUAL
DURING THE PAST FIVE YEARS. CORPORATE POSITIONS, IN SOME INSTANCES, MAY HAVE
CHANGED DURING THIS PERIOD.
/2/ OFFICERS HOLD OFFICE UNTIL THEIR RESPECTIVE SUCCESSORS ARE ELECTED, OR
UNTIL THEY RESIGN OR ARE REMOVED.
PROPOSAL 2: APPROVAL OF THE ELIMINATION OR REVISION
OF CERTAIN OF THE SERIES' FUNDAMENTAL INVESTMENT POLICIES
INTRODUCTION AND SUMMARY
Each of the Funds is subject to investment restrictions which establish
percentage and other limits that govern its investment activities. Under the
Investment Company Act of 1940 (the "1940 Act"), investment restrictions
relating to certain activities are required to be "fundamental," which means
that any changes require shareholder approval. Investment companies, including
the Series on behalf of the Funds, are permitted to designate additional
restrictions as fundamental. They may also adopt "non-fundamental" investment
restrictions, which may be changed by the Series' Board of Trustees without
shareholder approval.
Some of its existing fundamental investment restrictions reflect regulatory,
business or industry conditions, practices or requirements that have changed or
no longer exist. With the passage of time, the development of new practices,
and changes in regulatory standards, the Investment Adviser believes certain
fundamental restrictions should be revised, eliminated or reclassified as
non-fundamental.
The Board of Trustees, together with the Series' senior officers, have
analyzed the current fundamental investment restrictions for each of the Funds,
and have concluded that certain restrictions should be revised and reclassified
as non-fundamental, and certain restrictions should be eliminated. The
specific proposals are discussed below.
The proposed investment restrictions have been drafted to maintain important
investor protections while providing flexibility to respond to future legal,
regulatory and market changes. By reducing the number of policies that can be
changed only by shareholder vote, the Board of Trustees will have greater
flexibility to modify Fund policies, as appropriate, in response to changing
markets and in light of new investment opportunities and instruments. The
Series will then be able to avoid the costs and delays associated with a
shareholder meeting when making changes to the non-fundamental investment
policies that the Board may consider desirable.
IMPORTANTLY, THE PROPOSED AMENDMENTS DO NOT AFFECT THE INVESTMENT OBJECTIVES
OF THE FUNDS, WHICH REMAIN UNCHANGED. MOREOVER, THE BOARD DOES NOT ANTICIPATE
THAT THE CHANGES, INDIVIDUALLY OR IN THE AGGREGATE, WILL CHANGE TO A MATERIAL
DEGREE THE LEVEL OF INVESTMENT RISK ASSOCIATED WITH AN INVESTMENT IN ANY FUND.
The text of the proposed changes to the Funds' fundamental restrictions is
set forth below. Shareholders owning either Class 1 or Class 2 shares of a Fund
(other than the Cash Management Fund) may vote for or against any or all of the
changes that are the subject of Proposal 2. Because Proposals 2A and 2B do not
apply to the Cash Management Fund, its shareholders may vote for or against
Proposal 2C only. If the proposed changes are approved by the Funds'
shareholders, the Series' prospectus and statement of additional information
will be revised accordingly.
RESTRICTIONS PROPOSED TO BE REVISED AND RECLASSIFIED AS NON-FUNDAMENTAL (AND
RELATED RESTRICTIONS PROPOSED TO BE ELIMINATED)
2A. PURCHASING SECURITIES OF OTHER INVESTMENT COMPANIES
These restrictions deal with certain anti-pyramiding concerns addressed by
the 1940 Act. The proposed revisions would allow the Funds (other than the Cash
Management Fund) to invest to a limited degree in entities falling within the
technical definition of an investment company. On occasion, certain issuers in
various lines of business, primarily financial, fall within this definition but
otherwise represent attractive investment opportunities, consistent with the
Funds' investment objectives. Current industry practice is to rely on the 1940
Act for investor protection.
CURRENT TEXT (ALL FUNDS EXCEPT U.S. GOVERNMENT/AAA-RATED SECURITIES FUND AND
CASH MANAGEMENT FUND)
[The Fund may not...] purchase securities of other investment companies,
(except in connection with a merger, consolidation, acquisition, or
reorganization); except that the Global Small Capitalization Fund may invest up
to 5% of its total assets in the securities of other managed investment
companies. Any such investments by the Global Small Capitalization Fund shall
be limited to 3% of the voting stock of any investment company, provided,
however, that the investment in the open market of a closed-end investment
company where no more than customary broker's commissions are involved shall
not be prohibited by this restriction.
CURRENT TEXT (U.S. GOVERNMENT/AAA-RATED SECURITIES FUND)
[The Fund may not...] knowingly purchase securities of other investment
companies, except in connection with a merger, consolidation, acquisition, or
reorganization.
PROPOSED TEXT (ALL FUNDS EXCEPT CASH MANAGEMENT FUND)
[The Fund may not...] invest in securities of other investment companies,
except as permitted by the Investment Company Act of 1940, as amended.
2B. ILLIQUID/RESTRICTED SECURITIES
Each of the Funds have fundamental policies limiting the acquisition of
"illiquid securities" (including repurchase agreements maturing in more than
seven days). In addition, the U.S. Government/AAA-Rated Securities Fund has a
fundamental policy prohibiting the acquisition of "restricted securities"
(I.E., securities with legal or contractual limitations on transfer). These
policies are not required to be fundamental by the 1940 Act. Historically,
there has been a concern that restricted securities, which typically cannot be
resold to the public, may be difficult for a mutual fund to sell at
approximately the value at which the fund is carrying the investment.
Restricted securities may or may not be illiquid, however. Some restricted
securities are actively traded among institutional investors and thus highly
liquid in the marketplace.
For all funds other than the Cash Management Fund (which would retain its
current restriction), investors would be protected by the proposed,
non-fundamental investment restriction covering illiquid securities. The
proposed increase in the limit on these investments, from 10% of total assets
to 15% of net assets, is consistent with current regulatory standards
applicable to all non-money market mutual funds. As part of this proposal, the
fundamental restriction covering restricted securities for the U.S.
Government/AAA-Rated Securities Fund would be eliminated. In addition, in
connection with their review of these proposals, the Board of Trustees approved
the elimination of the NON-FUNDAMENTAL restrictions set forth below.
CURRENT TEXT (ALL FUNDS)
[The Fund may not...] enter into any repurchase agreement maturing in more than
seven days or invest in any other illiquid security if, as a result, more than
10% of the Fund's total assets would be so invested.
CURRENT TEXT (U.S. GOVERNMENT/AAA-RATED SECURITIES FUND)
[The Fund may not...] acquire securities subject to restrictions on disposition
imposed by the 1933 Act, if immediately after and as a result of such
acquisition, the value of all such restricted securities and all other illiquid
securities held by the Fund would exceed 10% of the value of the Fund's total
assets.
CURRENT TEXT (NON-FUNDAMENTAL POLICY FOR ALL FUNDS EXCEPT U.S.
GOVERNMENT/AAA-RATED SECURITIES FUND AND CASH MANAGEMENT FUND)
The Global Growth Fund, Global Small Capitalization Fund, International Fund
and High-Yield Bond Fund may not invest more than 10% of the value of their
total assets in securities which are restricted as to resale; the Growth Fund,
Growth-Income Fund and Asset Allocation Fund may not invest more than 5% of the
value of their respective total assets in securities which are restricted as to
resale. (Rule 144A securities and Section 4(2) commercial paper, as defined in
the Securities Act of 1933, are excluded from these investment limits.) As a
condition to the acquisition of the type of securities mentioned herein, the
funds will ordinarily require that the issuer of such securities agree to bear
the expenses of registration under the Securities Act of 1933, if and when the
Funds desire to sell such securities. The need to effect such registration
could result in a delay in disposing of such securities.
PROPOSED TEXT (NON-FUNDAMENTAL POLICY FOR ALL FUNDS EXCEPT CASH MANAGEMENT
FUND)
[The Fund may not...] invest knowingly more than 15% of its net assets in
illiquid securities.
RESTRICTIONS PROPOSED TO BE ELIMINATED
The following investment restrictions are not required under the 1940 Act.
They were originally adopted in response to state law restrictions or
interpretations that no longer apply to the Funds. Therefore, in order to
increase the ability of the Investment Adviser to manage the Funds' assets
effectively and efficiently in response to market and regulatory change, it is
proposed that these investment restrictions, which are currently listed as
fundamental, be eliminated.
2C. PLEDGING ASSETS
In certain circumstances these restrictions could interfere with the Funds'
ability to borrow temporarily for extraordinary or emergency purposes. The
Funds' current borrowing limits would remain unchanged.
CURRENT TEXT (ALL FUNDS EXCEPT U.S. GOVERNMENT/AAA-RATED SECURITIES FUND)
[The Fund may not...] pledge, or hypothecate the Fund's assets.
CURRENT TEXT (U.S. GOVERNMENT/AAA-RATED SECURITIES FUND
[The Fund may not...] mortgage, pledge or hypothecate any of its assets,
provided that this restriction shall not apply to the sale of securities
pursuant to a reverse repurchase agreement.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THESE PROPOSED
CHANGES TO THE FUNDS' FUNDAMENTAL INVESTMENT RESTRICTIONS.
3. APPROVAL OF AMENDMENT TO THE DECLARATION OF TRUST TO CHANGE THE NAME OF THE
SERIES TO AMERICAN FUNDS INSURANCE SERIES.
The Series began selling shares to separate accounts of The Lincoln National
Life Insurance Company in 1987 under the name American Variable Insurance
Series. The Series subsequently entered into participation agreements with
other insurance companies to sell shares to separate accounts. These include:
Hartford Life Insurance Company, Travelers Life and Annuity Company, Prudential
Life Insurance Company, Prudential Life Insurance Company, Transamerica Life
Insurance Company and Paragon Life Insurance Company.
In light of these new relationships and related marketing efforts, the Board
of Trustees believes it is important that there be broad recognition of the
Series' existing relationship with The American Funds Group.R Both the Series
and each of the mutual funds in The American Funds Group are managed by Capital
Research and Management Company. Accordingly, the Board of Trustees has
proposed that the name of the Series be changed to "American Funds Insurance
Series." The name change requires an amendment to the Declaration of Trust and
therefore must also be approved by a vote of a majority of the shares
outstanding and entitled to vote.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL.
4. RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
PUBLIC ACCOUNTANT FOR THE YEAR 2000
Shareholders are requested to ratify the selection by the Board of Trustees
(including a majority of trustees who are not "interested persons" of the
Series as that term is defined in the 1940 Act) of PricewaterhouseCoopers LLP
to act as independent public accountants for the Series for the year 2000.
PricewaterhouseCoopers LLP has served as the Series' independent public
accountant since March 18, 1991. No representative of PricewaterhouseCoopers
LLP is expected to attend the shareholder meeting.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF
ITS SELECTION OF PRICEWATERHOUSECOOPERS LLP.
OTHER MATTERS
Neither the persons named in the enclosed proxy nor the Board of Directors
are aware of any matters that will be presented for action at the meeting other
than matters described above. If any other matters properly requiring a vote
of shareholders arise, the proxies will confer upon the person or persons
entitled to vote the shares they represent a discretionary authority to vote
the shares in respect of any such matters in accordance with their best
judgment in the interests of the Funds and their shareholders.
SHAREHOLDER PROPOSALS
Any shareholder proposals for inclusion in proxy solicitation material for a
shareholders meeting should be submitted to the Secretary of the Series, at the
Series' principal executive offices, 333 South Hope Street, Los Angeles, CA
90071. Any such proposals must comply with the requirements of rule 14a-8 under
the Securities Exchange Act of 1934.
Under the laws of Massachusetts, where the Series is organized, and the
Series' Declaration of Trust and By-Laws, the Series is not required to hold
regular meetings of Fund shareholders. Under the 1940 Act, a vote of
shareholders is required from time to time for particular matters but not
necessarily on an annual basis. As a result, the Series does not expect to
hold shareholders meetings on a regular basis, and any shareholder proposal
received may not be considered until such a meeting is held.
GENERAL INFORMATION
Capital Research and Management Company is the investment adviser to the
Series and is located at 333 South Hope Street, Los Angeles, CA 90071 and 135
South State College Boulevard, Brea, CA 92821.
The enclosed proxy is solicited by and on behalf of the Board of Trustees of
the Series. The Series will pay the cost of soliciting proxies, consisting of
printing, handling and mailing of the proxies and related materials. In
addition to solicitation by mail, certain officers and trustees of the Series,
who will receive no extra compensation for their services, may solicit by
telephone, telegram or personally. WE URGE ALL SHAREHOLDERS TO MARK, DATE,
SIGN, AND RETURN THE PROXY INSTRUCTION CARD IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
You may obtain a copy of the Series' most recent annual report, without
charge, by writing to the Secretary of the Series at 333 South Hope Street,
55th Floor, Los Angeles, CA 90071, or by telephoning 800/421-0180. These
requests will be honored within three business days of receipt.
By Order of the Board of Trustees,
CHAD L. NORTON
Secretary
May __, 2000
<PAGE>
PROXY INSTRUCTION CARD
AMERICAN VARIABLE INSURANCE SERIES
PROXY INSTRUCTION CARD
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE SERIES
FOR THE MEETING OF SHAREHOLDERS TO BE HELD JUNE 20, 2000
The undersigned hereby appoints James K. Dunton, Chad L. Norton and James F.
Rothenberg, and each of them, his/her true and lawful agents and proxies with
full power of substitution to represent the undersigned at the Meeting of
Shareholders to be held at the Office of Capital Research and Management
Company, 333 South Hope Street, 55th Floor, Los Angeles, California, on
Tuesday, June 20, 2000 at 1:00 p.m., on all matters coming before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER YOU DIRECTED. IF
NO DIRECTION IS GIVEN, WITH RESPECT TO ANY PARTICULAR ITEM, THIS PROXY WILL BE
VOTED FOR THE NOMINEES IN ITEM 1 AND FOR ITEMS 2, 3, AND 4.
CONTROL NUMBER: 999 9999 9999 999
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. JOINT OWNERS
SHOULD EACH SIGN INDIVIDUALLY. CORPORATE PROXIES SHOULD BE SIGNED IN FULL
CORPORATE NAME BY AN AUTHORIZED OFFICER. FIDUCIARIES SHOULD GIVE FULL TITLES.
Signature
Signature of joint owner, if any
Date
AMERICAN VARIABLE INSURANCE SERIES
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: []
<TABLE>
<CAPTION>
1. Election of Directors: FOR ALL WITHHOLD ALL FOR ALL EXCEPT
<S> <C> <C> <C> <C>
01 Lee A. Ault III 06 Leonard R. Fuller
02 H. Frederick 07 Mary Myers [] [] []
Christie Kauppila
03 Joe E. Davis 08 Donald D. O'Neal
04 James K. Dunton 09 Kirk P. Pendleton
05 Martin Fenton 10 James F.
Rothenberg
</TABLE>
To withhold your vote for any individual nominee, mark the "For All Except" box
and write the nominee's number on the line provided below.
_____________________________________________________________________
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
2. Approval of the proposed changes to the Series' investment restrictions:
2A. Reclassify restriction regarding purchasing [] [] []
securities of other investment companies as a non-
fundamental restriction
2B. Reclassify restriction regarding [] [] []
illiquid/restricted securities as a non-fundamental
restriction
2C. Eliminate restriction regarding pledging [] [] []
assets
3. Approval of an amendment to the Declaration of [] [] []
Trust to change the name of the Series
4. Ratification of selection of [] [] []
PricewaterhouseCoopers LLP as independent
accountant:
</TABLE>
In their discretion, upon other matters as may properly come before the
meeting.
IMPORTANT
SHAREHOLDERS CAN HELP THE SERIES AVOID THE NECESSITY AND EXPENSE OF SENDING
FOLLOW-UP LETTERS BY PROMPTLY RETURNING THIS PROXY INSTRUCTION CARD.
