As filed with the Securities and Exchange Commission on September
9, 1996.
Registration No. 2-36250
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No.
Transamerica Occidental's Separate Account Fund C
(Exact Name of Registrant as Specified in Charter)
(213) 742-3065
(Area Code and Telephone Number)
Transamerica Occidental Life Insurance Company
(Name of Insurance Company)
1150 South Olive
Los Angeles, CA 90015-2211
(Address of Principal Executive Offices: Number,
Street,
State, Zip Code)
Name and Address of Agent for Service: Copy to:
James W. Dederer, Esq. Frederick R.
Bellamy, Esq.
Executive Vice President, General Sutherland,
Asbill & Brennan
Counsel, and Corporate Secretary 1275
Pennsylvania Avenue, N.W.
Transamerica Occidental Life Washington, D.C.
20004-2404
Insurance Company
1150 South Olive
Los Angeles, CA 90015-2211
Approximate Date of Proposed Public Offering: As soon as
practicable
following the effective date of this Registration Statement.
It is proposed that this filing will become effective 30
(thirty) days
after filing pursuant to Rule 488 under the Securities Act of
1933.
DECLARATION PURSUANT TO RULE 24f-2
An indefinite amount of securities is being registered under the
Securities Act
of 1933 pursuant to Rule 24f-2 under the Investment Company
Act of 1940. A
filing fee of $500 is being paid with this filing.
<PAGE>
TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND C
Registration Statement on Form N-14
CROSS REFERENCE SHEET
Pursuant to Rule 481(a)
Part A Caption in Proxy
Statement/Prospectus
1. Beginning of Registration
Statement and Outside Front
Cover Page of Prospectus Facing Sheet; Cover Page;
Cross-
Reference Sheet
2. Beginning and Outside Back
Cover Page of Prospectus Table of Contents
3. Fee Table, Synopsis Information,
and Risk Factors General Voting
Information; Summary of
the Reorganization; Principal
Risk Factors;
Comparative Fees and
Expenses;
Comparative Fee Table;
Comparison of
Old Account C, the Growth
Portfolio, and
New Account C
4. Information About the Transaction Summary of the
Reorganization; The Pro-
posed Reorganization;
Existing and Pro
Forma Capitalization
Table; Exhibit A
5. Information About the Registrant Summary of the
Reorganization; The
Proposed Reorganization;
Information on
Transamerica, Old Account C,
and the
Fund; Exhibit B
6. Information About the Company
Being Acquired Summary of the Reorganization;
The
Proposed Reorganization;
Information on
Transamerica, Old Account C,
and the
Fund; Exhibit C
7. Voting Information General Voting
Information
8. Interest of Certain Persons
and Experts Board of Managers and
Officers of Fund A
and Fund B; Interests of
Named Experts
and Counsel
9. Additional Information Required
for Re-offering by Persons Deemed
to be Underwriters Not Applicable
Caption in Statement
Part B of Additional Information
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. Additional Information About
the Registrant Exhibit B
13. Additional Information About the
Company Being Acquired Exhibit C
14. Financial Statements Exhibits B and C
Part C
Information required to be included in Part C is set
forth under the
appropriate item, so numbered in Part C of this Registration
Statement.
<PAGE>
TRANSAMERICA LIFE COMPANIES
Transamerica Center
1150 South Olive
Los Angeles, CA 90015-2211
October 7, 1996
To Our Contract Owners:
We are sending you this letter with the enclosed proxy
card and proxy
statement with the recommendation that you vote to approve the
reorganization of
the Transamerica Occidental's Separate Account Fund C ("Old
Account C"), in
which you now participate as an owner of a variable annuity
contract issued by
Transamerica Occidental Life Insurance Company ("Transamerica").
The purpose of
this letter is to outline for you the advantages we see
resulting from approval
of the proposed reorganization. We urge you to read this
letter, and the
attached proxy statement, carefully, and retain them both for
future reference.
Under the proposed reorganization, Old Account C's
assets will be
transferred intact to a newly-created mutual fund, the
Growth Portfolio of
Transamerica Variable Insurance Fund, Inc. (the "Fund"), in
exchange for shares
of the Growth Portfolio of the Fund. The Fund is a Maryland
corporation and,
like your separate account, is a management investment company
registered under
the Investment Company Act of 1940. The investment objective
of the Growth
Portfolio of the Fund is identical to that of Old Account
C. After the
reorganization, Old Account C will continue as a
separate account of
Transamerica supporting your variable annuity contract, but will
be restructured
as a passive investment vehicle, a unit investment trust,
that will invest
exclusively in shares of the Growth Portfolio of the Fund.
Following the
reorganization, you will have an interest in the Growth
Portfolio that is
equivalent to your present interest in Old Account C.
The value under your Contract immediately after the
transaction will equal
the value of your Contract immediately before the transaction.
Your benefits under the Contract, such as variable annuity
options, rights
of termination, death benefits, and expenses and fees will not be
changed.
If the reorganization is approved, you will
continue to instruct
Transamerica how to vote with respect to the same kinds of
matters as you do at
present. Transamerica will vote your interests in the Growth
Portfolio of the
Fund. Please see the enclosed proxy statement for a description
of your voting
rights.
After the reorganization, your Contract value will be
allocated to the
Growth Portfolio which we expect will continue to grow and attain
a larger asset
base than your present Old Account C, in part because, after the
reorganization,
other separate accounts will also be able to invest in the
Growth Portfolio and
these additional investments are expected to result in
enhanced investment
flexibility and reduced costs through administrative
efficiencies and economies
of scale.
Transamerica will pay the entire cost of the
reorganization. The value of
your account will not change and the total charges under your
Contract will not
be increased as a result of the reorganization.
The Board of Managers of Old Account C has
determined that the
reorganization would be in the best interest of all Contract
Owners. Contract
Owners are being asked to consider the proposal and to vote this
proxy or attend
a Special Meeting of Contract Owners of Old Account C to be held
on October 30,
1996, at 9 a.m., Pacific Standard Time, at Transamerica's
home office, 1150
South Olive, Los Angeles, California 90015. All Contract
Owners who have an
interest in Old Account C are being asked to vote on
the proposed
reorganization. If approved by a majority of Contract Owners, the
reorganization
is expected to occur on or about November 1, 1996.
Detailed information about the reorganization and the
reasons therefore are
set forth in the enclosed materials. Please exercise your
right to vote by
completing, dating, and signing the enclosed proxy card. A
self-addressed,
postage-paid envelope has been enclosed for your
convenience. It is very
important that you vote and that your voting instructions be
received by us no
later than October 29, 1996. WE STRONGLY INVITE YOUR
PARTICIPATION BY ASKING YOU
TO REVIEW, COMPLETE AND RETURN YOUR PROXY AS SOON AS POSSIBLE.
Sincerely,
-----------------------------------
Thomas J. Cusack
President, Chief Executive Officer
Transamerica Occidental Life Insurance Company
IT IS IMPORTANT THAT YOU VOTE.
<PAGE>
TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND C
1150 South Olive
Los Angeles, CA 90015
NOTICE OF MEETING OF CONTRACT OWNERS
NOTICE IS HEREBY GIVEN that a special meeting (the
"Meeting") of
owners of Individual Equity Investment Fund Contracts ("Contract
owners") issued
by Transamerica Occidental Life Insurance Company
("Transamerica" or the
"Company") entitled to give voting instructions in connection
with Transamerica
Occidental's Separate Account Fund C ("Old Account C") will
be held at the
Company's home office at 1150 South Olive, Los Angeles,
California 90015, on
October 30, 1996, at 9 a.m., Pacific Standard Time, in the
conference room on
floor 27, for the purposes of considering and acting on the
following matters,
as set forth in the accompanying Proxy Statement/Prospectus:
1. To approve or to disapprove an Agreement and Plan of
Reorganization (the
"Agreement") and related transactions (together, the
Agreement and related
transactions are the "Reorganization") whereby Old Account
C, presently a
management investment company, would be converted into a
unit investment
trust, Transamerica Occidental Separate Account C, by
transferring all of Old
Account C's securities and other investments to the
Growth Portfolio of
Transamerica Variable Insurance Fund, Inc. (the "Fund") in
exchange for shares
of the Growth Portfolio of the Fund of equal value as
described in the
accompanying Prospectus/Proxy Statement;
2. If the Reorganization is approved, to instruct the
Company regarding the
election of directors of the Fund;
3. If the Reorganization is approved, to instruct the
Company as to the
approval or disapproval of an investment advisory agreement
between the Company
and the Fund;
4. If the Reorganization is approved, to instruct the Company as
to the approval
or disapproval of an investment sub-advisory agreement
between the Company
and Transamerica Investment Services, Inc.;
5. If the Reorganization is approved, to instruct the Company
as to the
ratification or the rejection of Ernst & Young LLP as the
independent
auditors of the Fund; and
6. To consider and act upon such other business as may
properly come
before the Meeting or any adjournment or postponement
thereof.
The Board of Managers of Old Account C has fixed the close
of business on
Setpember 25, 1996 as the record date for determination of
Contract owners
entitled to notice of, and to vote at, the Meeting or any
adjournment or
postponement thereof.
YOUR VOTE IS IMPORTANT. CONTRACT OWNERS WHO DO NOT EXPECT TO
ATTEND THE MEETING
ARE REQUESTED TO COMPLETE, SIGN AND DATE THE ACCOMPANYING
PROXY, AND TO RETURN
IT IMMEDIATELY IN THE ENCLOSED POSTAGE-PAID ENVELOPE SO
THAT THEY MAY BE
REPRESENTED AT THE MEETING. IF YOU LATER DECIDE TO ATTEND THE
MEETING IN PERSON,
YOU MAY VOTE AT THE MEETING EVEN THOUGH YOU PREVIOUSLY SUBMITTED
A PROXY.
For the Board of Managers of
Transamerica
Occidental's Separate Account Fund C
s/s Thomas M. Adams
Thomas M. Adams
Secretary of Transamerica Occidental's
Separate Account Fund C
Los Angeles, California
October 9, 1996
<PAGE>
PART A
<PAGE>
TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND C
1150 South Olive
Los Angeles, California 90015-2211
PROXY STATEMENT/PROSPECTUS
October 9, 1996
This Prospectus/Proxy Statement is furnished by the Board
of Managers of
Transamerica Occidental's Separate Account Fund C ("Old Account
C") to owners of
Individual Equity Investment Fund Contracts (the
"Contracts") issued by
Transamerica Occidental Life Insurance Company
("Transamerica" or the
"Company"). Contract owners are being asked:
(1) to approve an Agreement and Plan of Reorganization.
The purpose is to
convert Old Account C from a management investment
company into a unit
investment trust investing exclusively in shares
of the Growth
Portfolio of Transamerica Variable Insurance Fund, Inc.
(the "Fund").
If the Reorganization is approved, Contract owners
are also asked to
instruct the Company regarding:
(2) the election of directors of the Fund;
(3) the approval or disapproval of an investment advisory
agreement for
the Fund;
(4) the approval or disapproval of an investment
sub-advisory agreement
for the Fund;
(5) the ratification or the rejection of the selection of
independent
auditors for the Fund; and
(6) to consider and act upon any other matter that may
properly come
before the meeting.
Old Account C was established by Transamerica on February
26, 1969, as a
separate investment account to act as a funding
medium for three
non-tax-qualified variable annuity contracts, which are called
Individual Equity
Investment Fund Contracts -- Annual Deposit, Single Deposit
Deferred, and Single
Deposit Immediate. As part of the Reorganization, the assets
of Old Account C
will be transferred intact to the Growth Portfolio of the
Fund (the "Growth
Portfolio" or the "Portfolio") in exchange for shares of the
Growth Portfolio.
Old Account C would be redesignated as Transamerica Occidental
Separate Account
C ("New Account C"). The value of a Contract will not change as
a result of the
Reorganization, and Contract owners will have the same contract
rights after the
Reorganization as before. Transamerica will bear the
expenses of the
Reorganization, and fees and expenses charged to Contract
owners will not
increase.
The enclosed proxy will be voted pursuant to a Contract
owner's direction
at the meeting of Contract owners to be held at Transamerica's
office at 1150
South Olive, Los Angeles, California 90015, on October 30,
1996, at 9 a.m.,
Pacific Standard Time, in the conference room on floor
27, and at any
adjournment or postponement thereof (the "Meeting"). A Contract
owner may revoke
an executed and submitted proxy at any time before it is voted
by filing with
the Secretary to the Board of Managers, prior to the Meeting,
either a duly
executed instrument of revocation or a duly executed proxy
bearing a later date.
In addition, the proxy may be revoked by a Contract owner
personally attending
the Meeting and voting in person.
This Prospectus/Proxy Statement, which should be
retained for future
reference, sets forth concisely the information about the
Reorganization, Old
Account C, the Fund and New Account C that a Contract owner
should know before
approving or disapproving the Reorganization. A Statement
of Additional
Information, dated October 9, 1996, containing more
detailed information
relating to the matters covered in this Proxy
Statement/Prospectus has been
filed with the SEC and is incorporated herein by reference.
Copies of the
Statement of Additional Information may be obtained without
charge by writing or
telephoning Transamerica at ___________________ or (800)
XXX-XXXX.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
PROXY STATEMENT/PROSPECTUS
Table of Contents
Page
GENERAL VOTING INFORMATION . . . . . . . . . . . . . . . . . . .
. . . . 4
I. APPROVAL OR DISAPPROVAL OF THE REORGANIZATION. . . . . . . .
. . . . 5
Summary of the Reorganization . . . . . . . . . . . . . . .
. . . . 5
Reasons for the Reorganization. . . . . . . . . . . . . . .
. . . . 6
Principal Risk Factors. . . . . . . . . . . . . . . . . . .
. . . . 6
Comparative Fees and Expenses . . . . . . . . . . . . . . .
. . . . 6
Comparative Fee Table . . . . . . . . . . . . . . . . . . .
. . . . 7
Comparison of Old Account C and the Growth Portfolio. . . .
. . . . 9
The Agreement . . . . . . . . . . . . . . . . . . . . . . .
. . . . 14
Shares of the Growth Portfolio. . . . . . . . . . . . . . .
. . . . 14
Existing and Pro Forma Capitalization . . . . . . . . . . .
. . . . 17
Transamerica Occidental Life Insurance Company. . . . . . .
. . . . 17
Old Account C . . . . . . . . . . . . . . . . . . . . . . .
. . . . 17
The Contracts . . . . . . . . . . . . . . . . . . . . . . .
. . . . 18
The Fund. . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . 21
Recommendation of the Board of Managers . . . . . . . . . .
. . . . 21
II. ELECTION OF THE BOARD OF DIRECTORS. . . . . . . . . . . . .
. . . . 21
Board of Directors of the Fund. . . . . . . . . . . . . . .
. . . . 21
Compensation. . . . . . . . . . . . . . . . . . . . . . . .
. . . . 24
III. APPROVAL OR DISAPPROVAL OF INVESTMENT ADVISORY
AGREEMENT FOR THE GROWTH PORTFOLIO OF THE FUND. . . . . . .
. . . . 25
IV. APPROVAL OR DISAPPROVAL OF INVESTMENT SUB-ADVISORY
AGREEMENT FOR THE GROWTH PORTFOLIO OF THE FUND. . . . . . .
. . . . 28
V. RATIFICATION OR REJECTION OF THE SELECTION OF INDEPENDENT
AUDITORS. . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . 30
VI. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . .
. . . . 30
Principal Holders of Shares of the Fund . . . . . . . . . .
. . . . 30
Principal Holders of the Contracts. . . . . . . . . . . . .
. . . . 31
Legal Proceedings . . . . . . . . . . . . . . . . . . . . .
. . . . 31
Legal Opinions. . . . . . . . . . . . . . . . . . . . . . .
. . . . 31
Public Information. . . . . . . . . . . . . . . . . . . . .
. . . . 31
Interests of Named Experts and Counsel. . . . . . . . . . .
. . . . 31
Other Matters . . . . . . . . . . . . . . . . . . . . . . .
. . . . 31
<PAGE>
GENERAL VOTING INFORMATION
This Proxy Statement/Prospectus is furnished to
Contract owners by the
Board of Managers of Old Account C, in connection with the
solicitation of
voting instructions from such Contract owners for use at a
Meeting of Contract
owners to be held on October 30, 1996. The Board has called
the Meeting for
Contract owners to consider and to approve or disapprove a
Reorganization by
which Old Account C, currently a management investment
company, would be
restructured into New Account C, a unit investment trust
investing exclusively
in shares of the Growth Portfolio of Transamerica Variable
Insurance Fund, Inc.
(the "Fund"). If the Reorganization is approved, Contract owners
would also vote
on the following matters necessary for the organization of the
Fund: to elect
directors for the Fund; to approve or disapprove separate
investment advisory
and investment sub-advisory agreements for the Fund; to
ratify or reject the
selection of independent auditors for the Fund; and to consider
and act upon any
other matter that may properly come before the Meeting.
The Board of Managers has fixed the close of business on
September 25,
1996, as the record date for the determination of Contract
owners entitled to
notice of and to vote at the Meeting. As of that date, there
were _____ votes
entitled to be cast by Old Account C Contract owners. Except for
Transamerica,
no person owns beneficially more than 5 percent of Old Account
C's outstanding
units. No manager/nominee or executive officer of Old Account
C beneficially
owns any Old Account C units.
The rules and regulations of Old Account C provide that the
number of votes
that may be cast by a Contract owner before the Retirement
Date (the date the
first annuity payment is made under a Contract) is equal to the
Contract owner's
Accumulation Account Value divided by 100. The number of votes
that may be cast
by a Contract owner on or after the Retirement Date is equal
to the amount of
the reserve established to meet Variable Annuity obligations
related to the
Contract divided by 100.
To be given effect, the enclosed proxy must be properly
executed and
returned to Transamerica in the enclosed envelope or mailed to
and arrive by 5
p.m. Eastern Standard Time, October 29, 1996. A properly
executed and returned
proxy may be revoked at any time before it is voted by providing
either written
notice of revocation to Transamerica, a duly executed proxy
bearing a later
date, or a vote in person at the Meeting. If no choice as to the
Reorganization
or any other agenda item is specified on a proxy returned to
Transamerica,
Transamerica will consider its timely receipt of the proxy as an
instruction to
vote in favor of the Reorganization or such other agenda item.
Approval of the Reorganization requires the affirmative
vote of a majority
of the accumulation and annuity units represented in person or
by proxy at the
Meeting if a quorum is present. A quorum is comprised of
Contract owners
entitled to cast 33 percent of the accumulation and annuity
units that may be
cast at the Meeting. If a quorum is not present, Contract
owners entitled to
cast a majority of the accumulation and annuity units represented
at the Meeting
may adjourn the Meeting for the purpose of further proxy
solicitation, or for
any other purpose. Unless otherwise instructed, a proxy will be
voted in favor
of any adjournment. At any subsequent reconvening of the Meeting,
unless a proxy
is revoked it will be voted in the same manner as it would
have been voted at
the original Meeting.
Transamerica bears the entire cost of this proxy
solicitation, which is
made by mail and in some instances, also by telephone or other
means by officers
or employees of Transamerica and/or its affiliates. The
approximate date for
mailing of proxy materials to Contract owners is October 9, 1996.
I. APPROVAL OR DISAPPROVAL OF THE REORGANIZATION
Summary of the Reorganization
On June 26, 1995, the Board of Managers of Old
Account C approved
resolutions authorizing the reorganization of Old Account C
from a management
investment company into an unmanaged unit investment trust
that will be
comprised of one subaccount investing exclusively in shares
of the Growth
Portfolio of the Fund. The Fund is a newly created management
investment company
of which the Growth Portfolio is the only investment
portfolio. The Growth
Portfolio has the same investment objective as Old Account C,
which is long-term
capital growth. Just like Old Account C, the Growth Portfolio
generally will
invest primarily in stocks and other equity securities.
The Agreement, a copy of which is attached hereto as
Exhibit A, provides
that the assets and related liabilities of Old Account C will
be transferred
intact to the Growth Portfolio in exchange for shares of the
Growth Portfolio of
equal value. The Growth Portfolio shares issued in
connection with the
Reorganization will be recorded as assets of New Account
C. After the
Reorganization, Contract owners' indirect interests in the Growth
Portfolio will
be equal to their pre-Reorganization interests in Old Account
C. In addition,
the Growth Portfolio will mirror the investment policies of
Old Account C. If
approved by Contract owners following their approval of the
Reorganization, the
Growth Portfolio also will have the same investment adviser, the
same investment
sub-adviser, and the same Board of Directors (Managers) as
Old Account C.
Transamerica will assume all costs and expenses associated
with effecting the
Reorganization.
The Reorganization will not have any adverse economic
impact on Contract
owners. The total charges and fees assessed, directly or
indirectly, and the
annuity features under the Contracts will not be affected by the
Reorganization.
The new structure will allow other types of variable
insurance products to
invest in the Fund.
Reasons for the Reorganization
The purpose of the Reorganization is to enable the
Fund to act as the
underlying investment medium for New Account C, as well as
other separate
investment accounts of Transamerica and, in the future,
other insurance
companies and certain qualified pension and retirement
plans. Transamerica
believes that the utilization of a common underlying vehicle
will enhance the
investment flexibility of Contract owners. It is
expected that the
Reorganization will reduce costs through administrative
efficiencies and
economies of scale. Also, existing Contract owners may
benefit to the extent
that the common management of a larger asset base will
enhance investment
flexibility and return, and increase the potential for
additional investment
portfolios.
Principal Risk Factors
The principal risk factors involved in investing in New
Account C and the
Growth Portfolio will be substantially similar to the
principal risk factors
currently associated with investing in Old Account C. Those
risk factors are
that the investments made by the Growth Portfolio's investment
adviser may not
appreciate in value or will, in fact, lose value. Specifically,
the principal
investment risk applicable to both Old Account C and the
Growth Portfolio is
"market risk" which refers to the degree to which the price of a
security will
react to changes in conditions in the securities markets,
changes in the
company's situation, and changes in the overall level of
interest rates. There
is also "financial risk" which refers to the ability of the
issuer of a security
to pay principal and interest when due or to maintain or increase
dividends; and
"current income volatility" which refers to the degree to which
and the timing
by which changes in the overall level of interest rates or
other underlying
economic variables or indices affect the current income from an
investment.
Comparative Fees and Expenses
Currently, a maximum 6.50% sales expense charge and 2.50%
administration
expense charge (plus state premium taxes ranging from 0% to
3.5%) are deducted
from each amount paid to the Company under the Contracts. In
addition, two
charges are deducted from the average daily net assets of Old
Account C: a 1.10%
mortality and expense risk charge and a 0.30% management
fee. After the
Reorganization, the sales expense and administration expense (and
any applicable
premium tax) charges will continue to be deducted from
purchases under the
Contract; however, the 0.30% management fee will no longer be
deducted from the
net assets of New Account C. Instead, Transamerica, as
investment adviser for
the Growth Portfolio (if approved by Contract owners) will
charge a management
fee of 0.75% of the Growth Portfolio's average daily net assets
and the Growth
Portfolio will bear certain operating expenses that are not
anticipated to
exceed 0.10%. Although the management fee is higher after the
Reorganization, if
the sum of the annual expenses to be charged against the
Contracts by New
Account C plus the Growth Portfolio's expenses is greater in
amount than the
annual expenses that would have been charged by Old
Account C had the
Reorganization not occurred, then, as to the Contracts
outstanding as of the
closing date of the Reorganization, Transamerica will reduce
the mortality and
expense risk charge to fully offset the effect of any and all
expenses of a type
or in an amount that would not have been borne by Old
Account C had the
Reorganization not occurred. It is anticipated that the
mortality and expense
risk charge will be 0.55% after the Reorganization. Accordingly,
there will be
no increase in total fees and expenses for existing Contract
owners.
Comparative Fee Table
The following comparative fee table and examples illustrate
the charges and
deductions currently applicable to Old Account C, the fees and
expenses of the
Growth Portfolio, and the charges and deductions under the
Contract applicable
to New Account C (including the fees and expenses of the
Growth Portfolio)
restated as if the Reorganization has occurred. The tables and
examples assume
the highest deductions possible under the Contracts
whether or not such
deductions actually would be made from an individual Contract
owner's account.
<PAGE>
Old Account C
(actual)
Growth Portfolio
(actual)
New Account C
Plus Growth
Portfolio
(pro forma)
Contract Owner Transaction Expenses
Sales Load Imposed on Purchases:
6.50%
None
6.50%
Administration Expense Imposed on Purchases:
2.50%
None
2.50%
Maximum Total Contract Owner Transaction
Expenses:
9.00%
None
9.00%
Annual Expenses:
(as a percentage of average daily net assets)
Management Fee
0.30%
0.75%
0.75%
Mortality and Expense Risk Charge
1.10%
None
0.55%
Other Expenses
None
0.10%
0.10%
Total Annual Expenses
1.40%
0.85%
1.40%
<PAGE>
The following Examples should not be considered a
representation of past or
future expenses and charges. Actual expenses may be greater or
less than those
shown. Similarly, the assumed 5% annual rate of return is not
an estimate or a
guarantee of future investment performance.
A $1,000 investment would be subject to the total
expenses shown below,
assuming 5% annual return on assets.
1 Year 3 Years 5 Years 10 Years
Old Account C $103 $130 $160 $243
New Account C $103 $130 $160 $243
Comparison of Old Account C and the Growth Portfolio
Investment Objectives, Policies, and Restrictions. The
Growth Portfolio of
the Fund has been designed to duplicate the investment objective,
policies, and
restrictions of Old Account C as closely as possible. Old
Account C and the
Growth Portfolio of the Fund have an identical investment
objective: long-term
capital growth. Old Account C and the Growth Portfolio each
attempt to achieve
their investment objective primarily though investments in
common stock;
however, both may also invest in debt securities and preferred
stock having a
call on common stocks.
In the opinion of Transamerica and the Board of Managers of
Old Account C,
the investment policies and restrictions of Old Account C are
not materially
different in substance from the investment policies and
restrictions of the
Growth Portfolio; however, there are differences between Old
Account C and the
Growth Portfolio as to whether certain investment
restrictions are deemed
fundamental. The investment policies and restrictions of Old
Account C and the
Growth Portfolio of the Fund are compared below.
Old Account C
Growth Portfolio
Old Account C's investment objective is long-term capital growth,
although this
objective may not be achieved. Common stock, listed and
unlisted, is the basic
form of investment. Old Account C may also invest in debt
securities and
preferred stock having a call on common stock by means of a
conversion privilege
or attached warrants and warrants or other rights to purchase
common stock.
Unless market conditions would indicate otherwise, Old
Account C's portfolio
will be invested in such equity-type securities. However, when
market conditions
warrant it, a portion of Old Account C's assets may be held
in cash or debt
securities. The Growth Portfolio's investment objective is
long-term capital
growth. Common stock, listed and unlisted, is the basic form
of investment.
Although the Portfolio invests the majority of its assets in
common stocks, the
Portfolio may also invest in debt securities and preferred stocks
(both having a
call on common stocks by means of a conversion privilege or
attached warrants)
and warrants or other rights to purchase common stocks. Unless
market conditions
would indicate otherwise, the Growth Portfolio will be
invested primarily in
such equity-type securities. When in the judgment of Investment
Services market
conditions warrant, the Growth Portfolio may, for temporary
defensive purposes,
hold part or all of its assets in cash, debt or money market
instruments.
No stated Policy.
The Portfolio may invest up to 10% of the Portfolio's assets in
debt securities
having a call on common stocks that are rated below investment
grade. Those
securities are rated Ba1 or lower by Moody's Investors Service,
Inc. ("Moody's")
or BB+ or lower by Standard & Poor's Corporation ("S&P"), or, if
unrated, deemed
to be of comparable quality by Investment Services. If a
security that was
originally rated "investment grade" is downgraded by a ratings
service, it may
or may not be sold. This depends on Investment Services'
assessment of the
issuer's prospects. However, Investment Services will
not purchase
below-investment-grade securities if that purchase would
increase their
representation in the Portfolio to more than 10%.
No stated Policy.
The Portfolio may invest up to 10% of its net assets in the
securities of
foreign issuers that are in the form of American Depository
Receipts ("ADRs").
ADRs are registered stock of foreign companies that are
typically issued by an
American bank or trust company evidencing ownership of
the underlying
securities. ADRs are designed for use on the U.S. stock
exchanges.
As to 75% of the value of its total assets, Old Account C will
not invest more
than 5% of the value of its total assets in the securities of
any one issuer,
except obligations of the United States Government and
instru- mentalities
thereof. However, holdings may exceed the 5% limit if it results
from investment
performance, and is not the result, wholly or partially, of
purchase. With
respect to 75% of total assets, the Portfolio may not purchase
securities of any
issuer if, as a result of the purchase, more than 5% of the
Portfolio's total
assets would be invested in the securities of the issuer. This
limitation does
not apply to securities issued or guaranteed by the United
States government,
its agencies or instrumentalities.
Not more than 10% of the voting securities of any one issuer
will be acquired.
With respect to 75% of total assets, the Portfolio may not
purchase more than
10% of the voting securities of any one issuer
Investment will not be made in the securities of a company for
the purpose of
exercising management or control in that company. The Portfolio
may not invest
in companies for the purpose of exercising management or
control in that
company.
Old Account C does not currently intend to make investments in
the securities of
other investment companies. Old Account C does reserve the
right to purchase
such securities, subject to the following limitations: Old
Account C will not
purchase such securities if it would cause (1) more than 10% of
the value of the
total assets of Old Account C to be invested in securities
of registered
investment companies; or (2) Old Account C to own more than
3% of the total
outstanding voting stock of any one investment company; or (3)
Old Account C to
own securities of any one investment company that have a
total value greater
than 5% of the value of the total assets of Old Account C; or (4)
together with
other investment companies advised by Transamerica, Old
Account C to own more
than 10% of the outstanding voting stock of a closed-end
investment company. The
Growth Portfolio does not currently intend to make investments in
the securities
of other investment companies. The Growth Portfolio does
reserve the right to
purchase such securities, provided the purchase of such
securities does not
cause: (1) more than 10% of the value of the total assets of the
Portfolio to be
invested in securities of registered investment companies; or
(2) the Portfolio
to own more than 3% of the total outstanding voting stock of any
one investment
company; or (3) the Portfolio to own securities of any one
investment company
that have a total value greater than 5% of the value of the
total assets of the
Portfolio; or (4) together with other investment
companies advised by
Transamerica, the Growth Portfolio to own more than 10% of
the outstanding
voting stock of a closed-end investment company.
Purchases or acquisitions may be made of securities which
are not readily
marketable by reason of the fact that they are subject to
the registration
requirements of the Securities Act of 1933 or the salability
of which is
otherwise conditioned ("restricted securities"), as long as any
such purchase or
acquisition will not immediately result in the value of all
such restricted
securities exceeding 10% of the value of Old Account C's total
assets. It is the
policy of the Board not to invest more than 10% of Old Account
C's net assets in
restricted securities. Purchases or acquisitions may be made of
securities which
are not readily marketable by reason of the fact that they are
subject to the
registration requirements of the Securities Act of 1933 or
the salability of
which is otherwise conditioned, including real estate and
certain repurchase
agreements or time deposits maturing in more than seven
days ("restricted
securities"), as long as any such purchase or acquisition will
not immediately
result in the value of all such restricted securities exceeding
15% of the value
of the Portfolio's total assets.
Borrowings will not be made except as a temporary measure for
extraordinary or
emergency purposes provided that such borrowings shall not
exceed 5% of the
value of Old Account C's total assets. The Portfolio may borrow
from banks for
temporary or emergency (not leveraging) purposes, including
the meeting of
redemption requests and cash payments of dividends and
distributions, provided
such borrowings do not exceed 5% of the value of the Portfolio's
total assets.
Securities of other issuers will not be underwritten provided
that this shall
not prevent the purchase of securities the sale of which
may result in Old
Account C being deemed to be an "underwriter" for purposes of the
Securities Act
of 1933. The Portfolio may not underwrite any issue of
securities, except to the
extent that the sale of securities in accordance with the
Portfolio's investment
objective, policies and limitations may be deemed to be an
underwriting, and
except that the Portfolio may acquire securities under
circumstances in which,
if the securities were sold, the Portfolio might be deemed to be
an underwriter
for purposes of the Securities Act of 1933, as amended.
Investments will not be concentrated in any one industry nor
will more than 25%
of the value of Old Account C's assets be invested in
issuers all of which
conduct their principal business activities in the same general
industry. The
Portfolio may not invest more than 25% of the value of its
total assets in
securities issued by companies engaged in any one industry. This
limitation does
not apply to investments in Government Securities.
The purchase and sale of real estate or interests in real estate
is not intended
as a principal activity. However, the right is reserved to
invest up to 10% of
the value of the assets of Old Account C in real properties,
including property
acquired in satisfaction of obligations previously held or
received in part
payment on the sale of other real property owned. The
Portfolio reserves the
right to invest up to 10% of the value of its assets in
real properties,
including property acquired in satisfaction of obligations
previously held or
received in part payment on the sale of other real property
owned. The purchase
and sale of real estate or interests in real estate is not
intended to be a
principal activity of the Portfolio.
The purchase and sale of commodities or commodity contracts will
not be engaged
in. The Portfolio may not purchase or sell commodities or
commodities contracts.
Loans may be made by only through the acquisition of all or a
portion of an
issue of bonds, debentures or other evidences of
indebtedness of a type
customarily purchased for investment by institutional
investors, whether
publicly or privately distributed. (It is not presently intended
to invest more
than 10% of the value of Old Account C in privately
distributed loans.
Furthermore, it is possible that the acquisition of an entire
issue may cause
Old Account C to be deemed "underwriter" for purposes of the
Securities Act of
1933.) The securities of Old Account C may also be loaned
provided that any such
loan is collateralized with cash equal to or in excess of the
market value of
such securities. (It is not presently intended to engage in
the lending of
securities.) The Portfolio may not lend its assets or money to
other persons,
except through: (a) the acquisition of all or a portion of an
issue of bonds,
debentures or other evidence of indebtedness of a type
customarily purchased for
investment by institutional investors, whether publicly
or privately
distributed. (The Portfolio does not presently intend to invest
more than 10% of
the value of the Portfolio in privately distributed loans. It
is possible that
the acquisition of an entire issue may cause the Portfolio
to be deemed an
"underwriter" fur purposes of the Securities Act of
1933.); (b) lending
securities, provided that any such loan is collateralized with
cash equal to or
in excess of the market value of such securities. (The
Portfolio does not
presently intend to engage in the lending of securities.); and
(c) entering into
repurchase agreements.
Old Account C does not intend to issue senior securities. The
Portfolio may not
issue senior securities.
Old Account C does not intend to write put and call options.
The Portfolio may
not write put and call options.
Purchase of securities on margin may not be made, but such
short-term credits as
may be necessary for the clearance of purchases and sales of
securities are
permissible. The Portfolio may not purchase securities on
margin, except that
the Portfolio may obtain any short-term credits necessary for
the clearance of
purchases and sales of securities. For purposes of this
restriction, the deposit
or payment of initial or variation margin in connection
with options on
securities will not be deemed to be a purchase of securities
on margin by the
Portfolio.
Short sales may not be made and a short positions may not be
maintained unless
at all times when a short position is open Old Account C owns at
least an equal
amount of such securities or securities currently exchangeable,
without payment
of any further consideration, for securities of the same issue
as, and at least
equal in amount to, the securities sold short (generally
called a "short sale
against the box") and unless not more than 10% of the value of
Old Account C's
net assets is deposited or pledged as collateral for such sales
at any one time.
The Portfolio may not make short sales of securities or
maintain a short
position, unless at all times when the short position is open,
the Portfolio
owns an equal amount of such securities or securities currently
exchangeable,
without payment of any further consideration, for securities of
the same issue
as, and at least equal in amount to, the securities sold short
(generally called
a "short sale against the box") and unless not more than 10% of
the value of the
Portfolio's net assets is deposited or pledged as collateral
for such sales at
any one time.
Management. The Fund has the same management as Old Account
C, the same
investment adviser and sub-adviser, and the same independent
accountants.
Old Account C is managed by its Board of Managers. The
affairs of Old
Account C are conducted in accordance with Rules and Regulations
adopted by the
Board of Managers of Old Account C and the Board of Directors of
Transamerica.
Transamerica, 1150 South Olive, Los Angeles, California
90015, serves as
the investment adviser to Old Account C, and develops and
implements an
investment program subject to the supervision of the Board
of Managers.
Transamerica has contracted with Transamerica Investment
Services, Inc.
("Investment Services"), a wholly-owned subsidiary of
Transamerica Corporation,
to render investment services to Old Account C. Investment
Services has been in
existence since 1967 and has provided investment services to
Old Account C and
other Transamerica Life Companies since 1980. These services
include providing
recommendations on management of assets of the Fund,
providing investment
research reports and information, determining those securities
to be bought or
sold and placing orders for the purchase or sale of
securities. Investment
decisions regarding the composition of Old Account C's portfolio
and the nature
and timing of changes in the portfolio are subject to the
control of the Board
of Managers. Investment Services' business address is 1150
South Olive, Los
Angeles, California 90015-2211. Both Transamerica and
Investment Services are
registered with the SEC under the Investment Advisers Act of
1940.
The Growth Portfolio is managed by its Board of
Directors, which is
comprised of the same persons as the Old Account C Board
of Managers..
Transamerica also serves as investment adviser to the Growth
Portfolio and
conducts the Portfolio's business and affairs. Transamerica
also has engaged
Investment Services to act as the Growth Portfolio's investment
sub-adviser to
provide the day-to-day portfolio management for the Growth
Portfolio. The Board
of Directors is responsible for deciding matters of general
policy and reviewing
the actions Transamerica and Investment Services, the custodian,
the accounting
and administrative services providers and other service
providers to the Growth
Portfolio. The officers of the Fund supervise the Growth
Portfolio's daily
business operations.
Other Services. Transamerica Financial Resources, Inc.
serves as the
principal underwriter for the Contracts. As part of the
Reorganization,
Transamerica Securities Sales Corporation, the principal
underwriter for the
Growth Portfolio, will replace Transamerica Financial Resources,
Inc. as the
principal underwriter for the Contracts. Ernst & Young LLP is
the independent
accountant for Old Account C and, subject to selection by the
Board of
Directors and ratification by Contract owners, will also serve as
the
independent accountant for the Fund.
Taxes. Transamerica believes, based on its review of
existing federal
income tax laws and regulations, that the transfer of portfolio
assets from Old
Account C to the Growth Portfolio in exchange for the issuance
of shares of the
Growth Portfolio will be a tax-free event. Neither Old
Account C, the Growth
Portfolio, nor New Account C will realize any gain or
loss on the asset
transfers, and the Growth Portfolio will succeed to the same
adjusted basis of
the portfolio assets as such assets had prior to the transfer.
Transamerica has
received a private letter ruling from the Internal Revenue
Service to confirm
the tax-free nature of the Reorganization. However, to the
extent any tax
liability arises out of this transfer, such liability will
be borne by
Transamerica.
The Agreement
The Agreement provides that on the closing date of the
Reorganization (the
"Closing Date"), Transamerica will transfer all portfolio
assets and related
liabilities of Old Account C to the Growth Portfolio of the
Fund in return for
shares of the Growth Portfolio of equal value. Transamerica
will record shares
issued by the Fund with respect to the Growth Portfolio as assets
of New Account
C. The Old Account C assets include all cash (except for a
minimal amount to
keep bank accounts open), all securities and other
investments held or in
transit, all accounts receivable for sold investments, and
all dividends and
interest receivable. The number of shares of the Fund to be
issued in the
exchange shall be determined by dividing the value of the
net assets of Old
Account C to be transferred, as of the close of trading on the
first business
day preceding the Closing Date, by the per share value of the
Growth Portfolio
shares. The shares of the Growth Portfolio, when issued, will be
fully paid and
non-assessable and have no preemptive or conversion rights.
As of the Closing Date, Transamerica shall cause the
shares of the Growth
Portfolio it receives pursuant to the Reorganization to be
duly and validly
recorded and held on its records as assets of New Account
C, such that the
Contract owners' interests in New Account C after the Closing
Date will then be
exactly equal to their former interests in Old Account C.
Transamerica shall
take all action necessary to ensure that such interests in
New Account C,
immediately following the Closing Date are duly and validly
recorded on the
Contract owners' individual account records.
Shares of the Growth Portfolio
General. The Fund currently consists of one investment
portfolio, the
Growth Portfolio. The Board of Directors of the Fund may
establish additional
portfolios without the consent of shareholders or Contract
owners. The Board of
Directors also may decide at any time to discontinue any
portfolio, subject to
compliance with any requirements for governmental approvals
or exemptions or
approval by Contract owners.
The Fund will initially offer its shares solely to Old
Account C as a
funding vehicle for the Contracts. The Fund does not offer its
shares directly
to the general public. Transamerica owns more than 25% of the
outstanding shares
of the Growth Portfolio which may result in Transamerica
being deemed a
controlling person of the Growth Portfolio, as that term is
defined int he 1940
Act. The Fund may, in the future, offer its shares to other
registered and
unregistered insurance company separate accounts supporting
other variable
annuity or variable life insurance contracts and to certain
qualified pension
and retirement plans.
Voting. Each share of the Growth Portfolio outstanding is
entitled to one
vote on all matters submitted to a vote of shareholders.
The shares have
noncumulative voting rights. The voting procedures with respect
to Old Account C
are set forth under "General Voting Information" above.
If the Reorganization is approved by Contract owners,
Transamerica will
offer Contract owners the opportunity to instruct Transamerica
as to how the
Growth Portfolio's shares allocable to their Contracts will be
voted. The number
of shares of the Growth Portfolio held in New Account C deemed
attributable to
each Contract owner for this purpose will be determined by
dividing the total
value of the Contract's Accumulation Account Value (or, after
the Retirement
Date, the amount of the reserve established to meet Variable
Annuity obligations
related to the Contract) by the net asset value of one share
of the Growth
Portfolio as of the record date. The number of votes will be
rounded to the
nearest vote and each Contract owner will have at least one
vote. Transamerica
will vote the shares of the Growth Portfolio held by New
Account C that are
deemed attributable to the Contracts for which instructions are
not provided in
proportion to instructions received from the Contract owners.
Shares of the
Growth Portfolio held by New Account C that are not deemed
attributable to
Contract owners will also be voted in the same proportions on
each issue as the
votes received from Contract owners. Therefore, although
voting instructions
will be reflected somewhat differently after the
Reorganization than before,
Transamerica believes that this will not result in any
diminution of Contract
owners' voting privileges.
Dividends, Distributions, and Taxes. Each issued and
outstanding share of
the Growth Portfolio is entitled to participate equally in
dividends and
distributions declared for the Portfolio's stock and, upon
liquidation or
dissolution, in the Portfolio's net assets remaining after
satisfaction of
outstanding liabilities.
The Growth Portfolio intends to qualify and to continue
to qualify as a
regulated investment company under Subchapter M of the Internal
Revenue Code of
1986, as amended (the "Code"). In order to qualify for that
treatment, the
Growth Portfolio must distribute to its shareholders for each
taxable year at
least 90% of its investment company taxable income, consisting of
net investment
income and net short-term capital gain.
To qualify for treatment as a regulated investment
company, the Growth
Portfolio must also, among other things, derive its income from
certain sources.
Specifically, in each taxable year, the Growth Portfolio must
generally derive
at least 90% of its gross income from dividends, interest,
payments with respect
to securities loans, gains from the sale or other disposition
of securities or
foreign currencies, or other income (including, but not limited
to, gains from
options, futures or forward contracts) derived with respect to
its business of
investing in securities, or currencies. The Growth Portfolio must
also generally
derive less than 30% of its gross income from the sale or other
disposition of
any of the following which was held for less than three
months: (1) stock or
securities, (2) options, futures, or forward contracts
(other than options,
futures, or forward contracts on foreign currencies), or (3)
foreign currencies
(or options, futures, or forward contracts on foreign
currencies) but only if
such currencies (or options, futures, or forward contracts)
are not directly
related to the Growth Portfolio's principal business of
investing in stock or
securities (or options and futures with respect to stock or
securities). For
purposes of these tests, gross income generally is determined
without regard to
losses from the sale or other disposition of stock or securities
or other Growth
Portfolio assets.
To qualify for treatment as a regulated investment
company, the Growth
Portfolio must also satisfy certain requirements with
respect to the
diversification of its assets. The Growth Portfolio must have,
at the close of
each quarter of the taxable year, at least 50% of the value of
its total assets
represented by cash, cash items, United States Government
securities, securities
of other regulated investment companies, and other securities
which, in respect
of any one issuer, do not represent more than 5% of the value
of the Growth
Portfolio's assets nor more than 10% of the voting securities of
that issuer. In
addition, at those times not more than 25% of the value
of the Growth
Portfolio's assets may be invested in securities (other than
United States
Government securities or the securities of other regulated
investment companies)
of any one issuer, or of two or more issuers which the Growth
Portfolio controls
and which are engaged in the same or similar trades or
businesses or related
trades or businesses.
Because the Fund is established as an investment medium
for variable
annuity contracts, Section 817(h) of the Code imposes additional
diversification
requirements on the Growth Portfolio. These requirements
generally are that no
more than 55% of the value of the Growth Portfolio's assets may
be represented
by any one investment; no more than 70% by any two investments;
no more than 80%
by any three investments; and no more than 90% by any four
investments. For
these purposes, all securities of the same issuer are
treated as a single
investment and each United States government agency or
instrumentality is
treated as a separate issuer.
If the Growth Portfolio failed to qualify as a
regulated investment
company, the Growth Portfolio might incur additional taxes. In
addition, if the
Growth Portfolio failed to qualify as a regulated investment
company, or if the
Growth Portfolio failed to comply with the diversification
requirements of
Section 817(h) of the Code, Contract owners would be taxed on
the investment
earnings under their Contracts and thereby lose the benefit of
tax deferral.
Accordingly, compliance with the above rules is carefully
monitored by the
Fund's sub-adviser and it is intended that the Growth Portfolio
will comply with
these rules as they exist or as they may be modified from
time to time.
Compliance with the tax requirements described above may result
in a reduction
in the return under the Growth Portfolio, since, to comply with
the above rules,
the investments utilized (and the time at which such
investments are entered
into and closed out) may be different from that the sub-adviser
might otherwise
believe to be desirable.
Existing and Pro Forma Capitalization
The following table shows the actual capitalization of
Old Account C and
the Growth Portfolio as of December 31, 1995, as well as
the pro forma
capitalization of New Account C, as adjusted to give
effect to the
Reorganization:
<PAGE>
Capitalization
Old Account C
Growth Portfolio
New Account C
Net Assets
$25,738,045
0
$25,738,045
Net Asset Value Per Unit or
Share
$18.786
0
$18.786
Units or Shares Outstanding
1,341
0
1,341
Transamerica Occidental Life Insurance Company
Transamerica is a stock life insurance company incorporated
in the state of
California on June 30, 1906. Transamerica's home office is
located at 1150 South
Olive, Los Angeles, California 90015-2211. Transamerica has been
a wholly-owned
direct or indirect subsidiary of Transamerica Corporation,
600 Montgomery
Street, San Francisco, California 94111, since March 14,
1930. Transamerica
presently provides individual life insurance, especially
interest-sensitive
products, variable and term life insurance, fixed and flexible
premium annuity
contracts, and reinsurance. Subsidiaries of Transamerica
include Transamerica
Assurance Company, Transamerica Life Insurance and Annuity
Company, Transamerica
Life Insurance Company of Canada, Transamerica Occidental Life
Insurance Company
of Illinois and a New York company, First Transamerica Life
Insurance Company.
Old Account C
Old Account C was established under California law on
February 26, 1969 as
a separate account by the Board of Directors of Transamerica
to facilitate
investment of amounts paid to Transamerica under the Contracts.
Old Account C's
assets are held for individuals currently and contingently
entitled to benefits
under the Contracts. California law requires Old Account C's
assets to be held
in Transamerica's name and Transamerica is not a trustee with
respect thereto.
Income, gains and losses, whether or not realized, from assets
allocated to Old
Account C are, in accordance with the Contracts, credited to or
charged against
Old Account C without regard to other income, gains or losses of
Transamerica.
Old Account C is not affected by the investment or use of
other Transamerica
assets. Section 10506 of the California Insurance Law provides
that the assets
of a separate account are not chargeable with liabilities
incurred in any other
business operation of the insurance company (except to the
extent assets in the
separate account exceed the reserves and the liabilities
of the separate
account). Old Account C is registered as an open-end,
diversified, management
investment company under the 1940 Act and meets the definition
of a separate
account under the federal securities laws. Registration with
the SEC does not
involve supervision or management of investment practices or
policies of Old
Account C or Transamerica by the SEC. Old Account C has
no subaccounts.
Obligations under the Contract are obligations of
Transamerica. There are no
material legal proceeding pending to which Old Account C is a
party; nor are
there any material legal proceedings involving Old
Account C to which
Transamerica, Investment Services, or Transamerica Securities
Sales Corporation,
the principal underwriter for the Contracts, are parties.
The Contracts
The following presents a brief description of the
Contract's features.
Greater detail regarding the Contract is provided in the
prospectus for Old
Account C which is attached to this Proxy Statement/Prospectus
as Exhibit B and
is incorporated herein by reference.
General. The Contracts have been designed for retirement
programs. Payments
made under the Contracts are invested in a portfolio that
is comprised
principally of equity securities. Three types of Contracts
have been offered
through Old Account C -- Annual Deposit, Single Deposit
Deferred, and Single
Deposit Immediate. The Contracts are no longer being
offered for sale but
additional payments may be made on certain outstanding Contracts.
The Annual Deposit Contract is a deferred variable
annuity that provides
for payments to be made at least annually. The minimum payment
is $10 and the
aggregate minimum annual payment must be $120 in any Contract
year. Payments may
be increased on a Contract anniversary, but annual payments may
not be increased
to more than three times the first year's payments without
Transamerica's
consent.
The Single Deposit Deferred Contract provides a deferred
variable annuity.
A minimum single payment of $1,000 must be made when the
Contract is issued.
Additional payments of at least $20 may be made anytime within
the first five
Contract years. Thereafter, Transamerica must give its consent to
accept further
payments.
The Single Deposit Immediate Contract provides an
immediate variable
annuity. The minimum single payment accepted under the Contract
is $2,500. The
retirement date (the date the first annuity payment is made
under a Contract)
specified by the Contract owner may not be changed.
Accumulation Unit Value. The Accumulation Unit Value of
the Contract was
set at $1.00 on October 16, 1969. The Accumulation Unit Value
is determined at
the end of a valuation period by multiplying the
Accumulation Unit Value
determined at the end of the immediate preceding valuation
period by the
Investment Performance Factor for the current valuation period
and reducing the
result by the mortality and expense risk charges.
The market value of Old Account C's assets for each
valuation period is
determined as follows: (1) each security's market value is
determined by the
last closing price as reported on the Consolidated Tape (a daily
report listing
the closing price quotations of securities); (2)
securities that are not
reported on the Consolidated Tape but where market quotations
are available are
valued at the most recent bid price; (3) value of the
other assets and
securities where no quotations are readily available is
determined in the manner
directed in good faith by the Board of Managers.
Old Account C's net value is calculated by reducing the
market value of the
assets by liabilities at the end of a valuation period.
Annuity Payments. The Contracts provide for a series of
monthly annuity
payments to begin on the retirement date. The Contract owner
may select from
three variable payment options: a variable annuity with monthly
payments during
the lifetime of the Contract owner; a variable annuity paid
monthly to the
Contract owner or the person named to receive the annuity
payments (the
"Annuitant") as long as either shall live; or a variable
annuity paid monthly
during the lifetime of the Contract owner with a minimum
guaranteed period of
60, 120 or 180 months. The amount of the annuity payments depends
on the payment
option chosen, the age of the Annuitant, and the value of the
Contract on the
retirement date. The minimum amount of the first annuity
payments must be $20.
If the first monthly payment would be less than $20,
Transamerica may make a
single payment equal to the total value of the Contract
owner's account (the
"Accumulation Account Value").
Death Benefit. The Contracts provide a death benefit
payable if the
Contract owner (or Annuitant) dies before the selected
retirement date. For
Annual Deposit and Deferred Contracts, Transamerica will pay the
beneficiary the
Accumulation Account Value as of the date Transamerica receives
due proof of the
deceased's death and payment instructions. In lieu of the
payment of such value
in one sum, the beneficiary may elect to have all or part of
the Accumulation
Account Value applied under one of the forms of annuity
payments described
above, or elect an optional method of payment subject to
agreement by the
Company and compliance with applicable federal and state law.
For Immediate
Contracts, Transamerica will pay to the beneficiary the
Accumulation Account
Value based on the accumulation unit value determined on the
valuation date
coinciding with or next following the date the Company receives
proof of death.
If the death occurs on or after the retirement date, death
benefits, if
any, payable to the beneficiary shall be provided under the
annuity option or
elected optional payment method then in effect.
Surrender and Partial Withdrawals. Annual Deposit and
Single Deposit
Deferred Contracts may be surrendered or partially withdrawn
prior to a selected
retirement date for the Accumulated Account Value. That
value will be
established at the end of the day on which the written request
for withdrawal or
surrender is received, provided the New York Stock Exchange is
open for trading
on that day. There is no surrender or withdrawal charge. A
Contract must be
surrendered if a withdrawal reduces the Accumulated Account
Value below $10 for
an Annual Deposit Contract or $20 for a Single Deposit Deferred
Contract. There
are no surrender or withdrawal privileges for Single Immediate
Contracts.
Charges and Deductions -- Sales Charge. Transamerica deducts
a sales charge
from each payment made under the Contracts. The sales
charge, which will
continue to be deducted after the Reorganization, is 6.5% of
the first $15,000
of payments made under the Contract; 4.5% of the next $35,000
of payments made
under the Contract; 2.0% of the next $100,000 of payments
made; and 0.0% (no
charge) for payments exceeding $150,000 under the Contract.
Administrative Charge. Transamerica deducts an
administrative expense
charge from each payment made under the Contracts. This
charge, which will
continue to be deducted after the Reorganization, is 2.5% of
the first $15,000
of payments made under the Contract; 1.5% of the next $35,000
of payments made
under the Contract; 0.75% of the next $100,000 of payments
made under the
Contract; and 0.0% (no charge) for payments exceeding
$150,000 under the
Contract. This fee is guaranteed not to increase for the
duration of the
Contract.
Mortality and Expense Risk Charge. Transamerica deducts a
daily charge on
assets in Old Account C to compensate it for bearing certain
mortality and
expense risks in connection with the Contracts. This charge
is equal to an
effective annual rate of 1.10% of the value of the net assets in
Old Account C.
The 1.10% charge consists of approximately 0.77% attributable to
mortality risk,
and approximately 0.33% attributable to expense risk.
Transamerica guarantees
that this charge will never exceed 1.10%. After the
Reorganization, this charge
will be reduced to offset the amount by which the expenses
of the Growth
Portfolio are higher than the expenses of Old Account C.
Taxes. Certain states impose a premium tax on annuity
payments received by
insurance companies. Transamerica will deduct the aggregate
premium taxes paid
on behalf of a particular Contract either from: (a)
payments as they are
received; or (b) the Accumulated Account Value when a
conversion is made to
provide annuity benefits. Premium taxes currently range from
0% to 3.5%. No
charges are currently made for federal, state, or local taxes
other than premium
taxes.
Old Account C Expenses. A fee at an annual rate of 0.30%
of the average
daily net assets of Old Account C is charged for
Transamerica's investment
advisory services.
The Fund
The Fund is an open-end, diversified management
investment company
incorporated in the state of Maryland on June 23, 1995, as the
successor to Old
Account C. The Fund currently consists of one investment
portfolio, the Growth
Portfolio. Additional investment portfolios may be created from
time to time. An
investor in the Fund is entitled to a pro-rata share of all
dividends and
distributions arising from the net income and capital gains on
the investments
of the Growth Portfolio. Likewise, an investor shares pro-rata
in any losses of
the Growth Portfolio. Additional information about the Fund is
contained in the
Fund's prospectus which accompanies this Proxy
Statement/Prospectus as Exhibit C
and is incorporated herein by reference.
Recommendation of the Board of Managers
The Board of Managers believes that the Reorganization
is in the best
interests of Old Account C and that the interests of existing
Contract owners
will not be diluted as a result of the Reorganization. The
Board also believes
that the terms of the Agreement are reasonable and fair, and
do not involve
overreaching on the part of any person concerned. The Board
affirmatively
recommends that the Contract owners vote to approve and adopt
the Agreement and
the Reorganization.
THE BOARD OF MANAGERS RECOMMENDS APPROVAL
OF THE REORGANIZATION
II. ELECTION OF THE BOARD OF DIRECTORS
Board of Directors of the Fund
It is proposed that the Board of Managers of Old Account
C be elected as
the Board of Directors of the Fund. Accordingly, the following
persons have been
nominated for election to the Board as the entire Board of
Directors, to hold
office until his or her successor is duly elected and qualified,
or until his or
her death, or until he or she shall resign or shall have been
removed from the
Board: Donald E. Cantlay, Richard N. Latzer, DeWayne W. Moore,
Gary U. Roll, and
Peter J. Sodini. These nominees are the current members of the
Board of Managers
of Old Account C, and also the current members of the Board of
Directors of the
Fund. All nominees have consented to being named
in this Proxy
Statement/Prospectus and have agreed to serve if elected. If
any nominee is
unable to serve as a Director at the time of the Meeting,
or before any
adjournment thereof, another person or persons may be nominated
for election as
a Director. The proxy holder named in the enclosed proxy
intends to vote all
proxies (except those in which authority to vote on Directors
is withheld) in
favor of the nominees to the Board of Directors named in the
following table.
The Fund had not commenced operations as of the date
of this Proxy
Statement/Prospectus. The Board of Directors has not
established any audit,
nominating or compensation committees.
The members and nominees of the Board of Directors of
the Fund are as
follows:
<TABLE>
<CAPTION>
Position
Name, Age and Address** with the Fund Principal
Occupation During the Past Five Years
<S> <C> <C>
Donald E. Cantlay (73) Board of Directors Director,
Managing General Partner of Cee 'n' Tee
Company;
Director of California Trucking Association
and
Western Highway Institute; Director of FPA
Capital
Fund and FPA New Income Fund.
Richard N. Latzer (58)* Board of Directors President,
Chief Executive Officer and Director of
Transamerica Investment Services, Inc.; Senior Vice
President
and Chief Investment Officer of
Transamerica Corporation.
DeWayne W. Moore (81) Board of Directors Retired
Senior Vice President, Chief Financial Officer
and
Director of Guy F. Atkinson Company of
California; Director of FPA Capital Fund and FPA
New Income
Fund.
Gary U. Roll (53)* Chairman, Board of Director,
Transamerica Cash Reserves; Director,
Directors Executive Vice President and
Chief Investment
Officer of Transamerica Investment Services, Inc.;
Director and Chief Investment
Officer of
Transamerica Occidental Life Insurance Company.
Peter J. Sodini (54) Board of Directors Associate,
Freeman Spogli & Co. (a private Investor);
President
and Chief Executive Officer, Purity
Supreme,
Inc. (a supermarket). President and Chief
Executive
Officer, Quality Foods International
(supermarkets); Director Pamida Holdings Corp. (a
retail
merchandiser) and Buttrey Food and Drug Co.
(a supermarket).
* These members of the Board are interested persons as defined
by Section 2(a)
(19) of the 1940 Act. ** The mailing address of each Board
member is 1150 South
Olive, Los Angeles, California 90015.
The principal occupations listed above apply for the last
five years. In
some instances, occupation listed above is the current position.
Prior positions
with the same company or affiliate are not indicated.
The executive officers of the Fund are described in the
table below. They
are the same as the executive officers of Old Account C.
Position
Name, Age and Address** with the
FundPrincipal Occupation During the Past Five Years
Barbara A. Kelley (41) President President, Chief
Operating Officer and Director of
Transamerica
Financial Resources, Inc. and President
and Director of
Transamerica Securities Sales
Corporation,
Transamerica Advisors, Inc.,
Transamerica
Product, Inc., Transamerica Product,
Inc. I, Transamerica
Product, Inc. II, Transamerica
Product, Inc. IV,
and Transamerica Leasing Ventures,
Inc.
*Matt Coben (35) Vice President Broker/Dealer
Channel of Transamerica Life
Insurance and
Annuity Company and prior
to 1994, Vice
President and National Sales
Manager of the
Dreyfus Service Organization.
Sally S. Yamada (44) Treasurer and Vice President
and Treasurer of Transamerica
Assistant Secretary Occidental
Life Insurance Company and Treasurer of
Transamerica Life Insurance
and Annuity Company.
Thomas M. Adams (59) Secretary Partner in the law
firm of Lanning & Adams.
Regina M. Fink (40) Assistant Secretary Counsel
for Transamerica Occidental Life Insurance
Company and prior to 1994
Counsel and Vice
President for Colonial
Management Assoicates, Inc.
</TABLE>
* The mailing address of this officer is 101 North Tryon
Street, Suite 1070,
Charolotte, North Carolina 28246. ** The mailing address of each
officer is 1150
South Olive, Los Angeles, California 90015.
Compensation
The following table shows the compensation expected to be
paid by the Fund
during the current fiscal year to all Directors of the Fund.
Name of Person
Aggregate
Compensation
From Fund
Total Pension or
Retirement Benefits Accrued
As Part of Fund Expenses1/
Compensation
From Registrant
and Fund Complex
Paid to Directors2/
Donald E. Cantlay
$1,000
- - - -0-
$6,000
Richard N. Latzer
- - - -0-
- - - -0-
- - - -0-
DeWayne W. Moore
$1,000
- - - -0-
$6,250
Gary U. Roll
- - - -0-
- - - -0-
- - - -0-
Peter J. Sodini
$1,000
- - - -0-
$6,250
Members of the Board, Officers or other individuals affiliated
with the Fund,
who are also Officers, Directors or employees of Transamerica,
are not entitled
to any compensation from the Fund for their services to the
Fund. There is no
long-term compensation and no grants of stock options provided
to any executive
officer.
None of the directors, executive officers or nominees for
election as a
director, nor any of their immediate family has engaged in the
last fiscal year
of Old Account C in any transaction to which Old Account C was a
party in which
the amount involved exceeded $60,000. None of the
aforementioned persons is
indebted to Old Account C in any amount.
There are no material pending legal proceedings to which
any director,
nominee, or affiliated person (as defined in the 1940 Act) of
such director or
nominee is an adverse party to Old Account C or any of its
affiliated persons,
or has a material interest adverse to Old Account C or any of
its affiliated
persons.
1/ None of the members of the Board of Directors currently
receives any pension
or retirement benefits due to services rendered to the Fund
and thus will not
receive any benefits upon retirement from the Fund.
2/ During 1996, each of the Board members was also a member
of the Board of
Transamerica Occidental's Separate Account Fund B and of
Transamerica Income
Shares, Inc., a closed-end management company advised by
Transamerica Investment
Services, Inc. Mr. Roll is a director of Transamerica Investors,
Inc.
THE BOARD OF MANAGERS RECOMMENDS A "VOTE FOR" EACH NOMINEE TO
THE BOARD OF
DIRECTORS.
III. APPROVAL OR DISAPPROVAL OF INVESTMENT ADVISORY AGREEMENT
FOR
THE GROWTH PORTFOLIO OF THE FUND
If the Reorganization is approved, Contract owners will be
called upon to
instruct Transamerica as to the approval or the disapproval
of an investment
advisory agreement between Transamerica and the Fund.
Transamerica currently
serves as investment adviser to Old Account C. Transamerica,
an investment
adviser registered with the SEC under the Investment Advisers
Act of 1940, is
located at 1150 South Olive, Los Angeles, California 90015, is
a wholly-owned
subsidiary of Transamerica Insurance Corporation of
California, which is a
wholly-owned subsidiary of Transamerica Corporation, 600
Montgomery Street, San
Francisco, California 94111. The proposed Investment Advisory
Agreement was
approved by the Board of Directors of the Fund, including
approval by a majority
of the Directors who are not interested persons of the Fund, on
July 24, 1996.
The Investment Advisory Agreement will remain in effect
from year to year
provided such continuance is specifically approved as to the
Portfolio at least
annually by: (a) the Board of Directors or the vote of a
majority of the votes
attributable to shares of the Portfolio; and (b) the vote of a
majority of the
non-interested Directors, cast in person at a meeting called for
the purpose of
voting on such approval. The Investment Advisory Agreement
will terminate
automatically if assigned (as defined in the 1940 Act). The
Investment Advisory
Agreement is also terminable at any time by the Board of
Directors or by vote of
a majority of the votes attributable to outstanding voting
securities of the
Portfolio (a) without penalty and (b) on 60 days'
written notice to
Transamerica. The agreement is also terminable by
Transamerica on 90 days'
written notice to the Fund.
A copy of the Investment Advisory Agreement is appended
hereto as Exhibit D.
Under the terms of the Investment Advisory Agreement,
Transamerica assumes
overall responsibility, subject to the supervision of the
Fund's Board of
Directors, for administering all operations of the Fund and for
monitoring and
evaluating the management of the Growth Portfolio's assets
by Investment
Services on an ongoing basis. Transamerica provides or
arranges for the
provision of the overall business management and
administrative services
necessary for the Fund's operations and furnishes or procures any
other services
and information necessary for the proper conduct of the
Fund's business.
Transamerica also acts as liaison among, and supervisor of, the
various service
providers to the Fund.
For its services to the Growth Portfolio of the Fund,
Transamerica will
receive an advisory fee of 0.75% of the average daily net
assets of the Growth
Portfolio. The fee is deducted daily from the assets of the
Growth Portfolio.
Transamerica may waive some or all of its fee from time
to time at its
discretion.
The names of Directors and Executive Officers of Transamerica,
their positions
and offices with Transamerica, and their other affiliations are
as follows. The
address of Directors and Executive Officers is 1150 South
Olive, Los Angeles,
California 90015-2211, unless otherwise indicated.
<PAGE>
<TABLE>
<CAPTION>
Other business and business
address, profession, vocation or
employment of a substantial nature
engaged in for
Position and
his own account during last two
Name and Principal Position and Offices Offices with
fiscal years or as director, officer,
Business Address with Transamerica Old Account C
employee, partner or trustee
<S> <C>
<C> <C>
Robert Abeles Director, Executive Vice
None None
President & Chief Financial
Officer
Thomas J.Cusack Director, President &
None Senior Vice President of
Chief Executive Officer
Transamerica Corporation
James W.Dederer Director, Executive
None None
Vice President, General
Counsel and Corporate
Secretary
John A.Fibiger Director, Chairman
None None
Richard H.Finn* Director
None Executive Vice President of
Transamerica Corporation;
Director, President and Chief
Executive Officer of Transamerica
Finance Group, Inc.
David E.Gooding Director, Executive
None None
Vice President and
Chief Information Officer
Edgar H.Grubb* Director
None Executive Vice President, and
Chief Financial Officer and
Secretary of Transamerica
Corporation
Frank C.Herringer* Director
None Director, Chairman and Chief
Executive Officer of Transamerica
Corporation
Daniel E. Jund Director
None President and Chief Executive
Officer of Transamerica Assurance
Company
Richard N.Latzer* Director and Chief
Director Director, Senior Vice President
Investment Officer
Officer of Transamerica
Corporation; Director, President
and Chief Executive Officer of
Transamerica Investment Services,
Inc.
Charles E. LeDoyen** Director and President
None None
Structured Settlements
Division
Karen O. MacDonald Director, Senior Vice
None None
President & Corporate
Actuary
Gary U.Rolle Director and Chief
Chairman, Executive Vice President
Investment Officer
Board of and Chief Investment
Managers Officer of Transamerica
Investment Services, Inc.
James B.Roszak Director, President
None None
Life Insurance Division
and Chief Marketing Officer
William E. Simms** Director and President,
None None
Reinsurance Division
Nooruddin S. Veerjee Director and President,
None Director, President of
Group Pension Division
Transamerica Life Insurance and
Annuity Company
Robert A. Watson Director
None Executive Vice President,
Transamerica Corporation
</TABLE>
* 600 Montgomery Street, San Francisco, California 94111
** 100 N. Tryon Street, Suite 2500, Charlotte, N.C.
28202-4004
It is proposed that, following the Reorganization, the Contract
owners approve
the Investment Advisory Agreement by which Transamerica will
serve as investment
adviser to the Growth Portfolio.
Transamerica has been the investment advisor to Old
Account C since its
inception and has provided high quality administrative and
insurance services.
The investment performance of the Account under Transamerica's
management has
been outstanding. For the one year ended June 30, 1995, the
return was 55.22%;
for the three years then ended, the average annual return was
26.61%; for the
ten years then ended, the average annual return was 19.72%. The
cumulative total
return for the ten years then ended was over 500%. Of
course, these are
historical figures and past performance may not indicate future
performance.
THE BOARD OF MANAGERS RECOMMENDS A VOTE TO APPROVE THE INVESTMENT
ADVISORY AGREEMENT.
IV. APPROVAL OR DISAPPROVAL OF INVESTMENT SUB-ADVISORY
AGREEMENT
FOR THE GROWTH PORTFOLIO OF THE FUND
If the Reorganization is approved, Contract owners will be
called upon to
instruct Transamerica as to the approval or the disapproval
of an investment
sub-advisory agreement between Transamerica and
Transamerica Investment
Services, Inc. Investment Services is currently the sub-advisor
for Old Account
C. Investment Services is a wholly-owned subsidiary of
Transamerica Corporation,
and renders investment services to the Fund. Investment
Services has been in
existence since 1967 and has provided investment services
to investment
companies and the Transamerica Life Companies since 1980.
Investment Services is
located at 1150 South Olive, Los Angeles, California
90015-2211. Transamerica
has agreed to pay Investment Services a monthly fee at the
annual rate of 0.30%
of the first $50 million of the Fund's average daily net
assets, 0.25% of the
next $150 million, and 0.20% of assets in excess of $200
million. Investment
Services will provide recommendations on the management of Fund
assets, provide
investment research reports and information, supervise
and manage the
investments of the Growth Portfolio, and direct the
purchase and sale of
Portfolio investments. Investment decisions regarding the
composition of the
Growth Portfolio and the nature and timing of changes in the
Portfolio are
subject to the control of the Board of Directors of the Fund.
The Investment Sub-Advisory Agreement, a copy of which is
attached as Exhibit
E, was approved for the Growth Portfolio by the Board of
Directors, including a
majority of the Directors who are not parties to the
investment sub-advisory
agreement or "interested persons" (as such term is defined in
the 1940 Act) of
any party thereto (the "non-interested Directors"), on July
24, 1996. The
Investment Sub-Advisory Agreement will remain in effect
from year to year
provided such continuance is specifically approved as to the
Portfolio at least
annually by: (a) the Board of Directors or the vote of a
majority of the votes
attributable to shares of the Portfolio; and (b) the vote of a
majority of the
non-interested Directors, cast in person at a meeting called for
the purpose of
voting on such approval. The Investment Sub-Advisory Agreement
will terminate
automatically if assigned (as defined in the 1940 Act).
The Investment
Sub-Advisory Agreement is also terminable at any time by the
Board of Directors
or by vote of a majority of the votes attributable to
outstanding voting
securities of the Portfolio (a) without penalty and (b) on 60
days' written
notice to Investment Services. The agreement is also terminable
by Transamerica
or Investment Services on 90 days' written notice to the Fund.
The names and principal occupations of the executive officers
and directors of
Investment Services are provided below. The address of each
director and
executive officer is 1150 South Olive, Los Angeles,
California 90015-2211,
unless otherwise indicated.
Directors
Thomas J. Cusack Frank C. Herringer
Richard H. Finn Richard N. Latzer
Edgar H. Grubb Gary U. Rolle'
Officers
President and Chief Executive Officer Richard N.
Latzer*
Executive Vice President and Chief Investment Officer Gary U.
Rolle'
Senior Vice President Susan
A. Silbert
Vice President, Chief Financial Officer and Secretary J.
Richard Atwood
Vice Presidents Glen
E. Bickerstaff
John
M. Casparian
Heather E. Creeden
Sharon K. Kilmer
Michael F. Luongo
Thomas D. Lyon
Heidi
W. Robertson
Jeffrey Van Harte*
Assistant Vice Presidents
Stephen J. Ahearn
Bruce
C. Edwards
James
J. Flick
William L. Griffin
Kevin
J. Hickam
Matthew W. Kuhns
Timothy A. Monte
Thomas J. Ray
Philip W. Treick*
Reza
Vahabzadeh
*Located at:
600 Montgomery Street
San Francisco, CA 94111
(415) 983-4358
It is proposed that the Contract owners approve the
Investment Sub-Advisory
Agreement by which Investment Services will serve as investment
sub-adviser to
the Growth Portfolio. The Board of Managers makes its
recommendation that
Contract owners approve the Investment Sub- Advisory
Agreement because the
agreement is substantially identical to the current agreement
for the Growth
Portfolio and the investment objective and policies of the
Growth Portfolio are
substantially identical to investment objective and policies
of Old Account C
(and New Account C) following the Reorganization.
Investment services has been the sub-advisor for Old Account C
since 1981, and
in managing the portfolio it has provided Contract Owners
with excellent
investment performance. For the one year ended June 30, 1995,
the return was
55.22%; for the three years then ended, the average annual
return was 26.61%;
for the ten years then ended, the average annual return
was 19.72%. The
cumulative total return for the ten years then ended was over
500%. Of course,
these are historical figures and past performance may not
indicate future
performance.
THE BOARD OF MANAGERS RECOMMENDS A VOTE TO APPROVE THE INVESTMENT
SUB-ADVISORY AGREEMENT.
V. RATIFICATION OR REJECTION OF THE SELECTION OF INDEPENDENT
AUDITORS
If the Reorganization is approved, Contract owners will be
called upon to
instruct the Company as to the ratification or the rejection of
the selection of
Ernst & Young LLP as the independent auditors of the Fund.
Ernst & Young LLP
currently serves as independent auditors for Old Account C.
On July 24, 1996, the Board of Directors of the Fund
unanimously selected
Ernst & Young LLP as independent auditors for the Fund. The
services performed
by Ernst & Young LLP are all considered to be audit services
and include:
examination of annual financial statements; review and
consultation connected
with filings of annual reports to Contract owners and
with the SEC; and
consultation on financial accounting and reporting matters.
The selection of
Ernst & Young LLP as the independent auditors for the Fund
constituted approval
by the Board of Directors of each of the foregoing audit
services, and the Board
of Directors believes that the services have no effect on audit
independence.
Ernst & Young LLP also serves as the independent auditor for
Transamerica.
Ernst & Young LLP has no direct or indirect financial interests
in either Old
Account C, the Fund, or Transamerica, nor any connection with Old
Account C, the
Fund or Transamerica in the capacity of underwriter, voting
manager, director,
officer or employee. A representative of Ernst & Young LLP
will attend the
Meeting, will be given an opportunity to make a statement if he
or she desires
to do so, and will be available to answer appropriate questions.
THEBOARD OF MANAGERS RECOMMENDS A VOTE "FOR" RATIFICATION OF
THE SELECTION OF
ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR THE FUND.
VI. OTHER INFORMATION
Principal Holders of Shares of the Fund
The Board of Directors of the Fund, including nominees at the
Meeting, owns as
a group less than one percent of the outstanding shares of the
Fund.
As of December 31, 1995, approximately 74% of the assets in Old
Account C were
owned by Transamerica. It is anticipated that
Transamerica will own
approximately the same percentage of the Fund's shares.
Upon consummation of the Reorganization, no Contract
owner will own five
percent or more of the outstanding shares of the Fund.
Principal Holders of the Contracts
There are no Contract owners holding five percent or more of
the outstanding
units of Old Account C. The Board of Managers of Old Account
C, including
nominees at the Meeting, owns as a group less than one
percent of the
outstanding units of Old Account C.
Legal Proceedings
There are no material legal proceedings pending to which
Transamerica, Old
Account C, or the Fund are a party, or to which their property is
subject, which
depart from the ordinary routine litigation incident to the
kinds of business
conducted by them.
Legal Opinions
Legal matters relating to federal securities laws and federal
income tax laws
applicable to the Contracts have been passed upon by James W.
Dederer, Executive
Vice President, General Counsel and Corporate Secretary
to Transamerica
Occidental Life Insurance Company.
Public Information
Public information filed by Old Account C or the Fund can be
inspected and
copied at the public reference facilities maintained by the
SEC at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such
materials can be
obtained from the Public Reference Branch, Office of
Consumer Affairs and
Information Services, Securities and Exchange Commission,
Washington, D.C. 20549
at prescribed rates.
Interests of Named Experts and Counsel
No expert named herein or any counsel was employed on a
contingent basis, or
did or will receive in connection herewith any substantial
interest, direct or
indirect, in Old Account C or the Fund.
Other Matters
The Board of Managers of Old Account C and the Board of
Directors of the Fund
do not know of any other matter that may properly be
brought, and which is
likely to be brought, before the Meeting. However, should
other matters be
properly brought before the Meeting, the persons named on the
enclosed proxy or
their substitutes will vote in accordance with their best
judgment on such
matters.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE
SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY. YOUR VOTE IS
IMPORTANT.
IF YOU WISH TO ATTEND THE MEETING AND VOTE IN PERSON, YOU MAY
REVOKE
YOUR PROXY.
By Order of the Board of Managers
<PAGE>
Exhibit A
Agreement and Plan of Reorganization
This document is incorporated by reference to Exhibit 13
to the initial
Registration Statement on Form N-1A of Transamerica
Variable Insurance
Fund, Inc., File No. 33-99016 (November 3, 1995).
<PAGE>
Exhibit B
Transamerica Occidental's Separate Account Fund C
Prospectus
This document is incorporated by reference to the
prospectus filed
with Post-Effective Amendment No. 42 of Transamerica
Occidental's Separate Account Fund C, File No. 2-36250
(April 26,
1996).
<PAGE>
Exhibit C
Transamerica Variable Insurance Fund, Inc. Prospectus
This document is incorporated by reference to the
prospectus filed with
the initial Registration Statement on Form N-1A of
Transamerica Variable
Insurance Fund, Inc., File No. 33-99016 (November 3,
1995).
<PAGE>
Exhibit D
Investment Advisory Agreement
<PAGE>
INVESTMENT ADVISORY AGREEMENT
between
TRANSAMERICA VARIABLE INSURANCE FUND, IN
and
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
<PAGE>
INVESTMENT ADVISORY AGREEMENT
This INVESTMENT ADVISORY AGREEMENT is made this _____
day of ___1996,
between Transamerica Occidental Life Insurance Company, a
California corporation
( Adviser ), and Transamerica Variable Insurance Fund,
Inc., a Maryland
corporation (the Fund ), that is authorized to issue
shares of several
investment portfolios ( Portfolios ), each Portfolio
consisting of a separate
series of shares of beneficial interest in the Fund.
WHEREAS, Adviser is engaged in the business of
rendering investment
advisory services and is registered as an investment
adviser under the
Investment Advisers Act of 1940, as amended (the Advisers Act );
and
WHEREAS, the Fund has been organized for the purpose
of engaging in
business as an open-end investment company registered under
the Investment
Company Act of 1940, as amended (the 1940 Act ) and desires to
avail itself of
the investment experience, assistance and facilities available to
Adviser and to
have Adviser perform for it various management and clerical
services, and
Adviser is willing to furnish such advice, facilities and
services on the terms
and conditions hereinafter set forth and, in connection with
this Investment
Advisory Agreement, to enter into a sub-advisory agreement
with a sub-advisor
approved by the Fund;
NOW, THEREFORE, in consideration of the promises
and the mutual
covenants herein contained, the parties hereto agree as follows:
1. The Fund hereby employs Adviser to manage the
investment and
reinvestment of the assets of the Portfolios of the Fund in
accordance with the
limitations specified in the Fund s Articles of Incorporation
and By-Laws, as
amended from time to time (the
Articles ) and in the Fund s prospectus (the Prospectus ) and
the statement of
additional information ( SAI ) filed with the Securities and
Exchange Commission
( SEC ) as part of the Funds Registration Statement on Form
N-1A, as amended
from time to time, and to perform the other services herein set
forth subject to
the supervision of the Board of Directors of the Fund, for the
period and on the
terms herein set forth. Adviser hereby accepts such employment
and agrees during
such period, at its own expense, to render the services
and to assume the
obligations herein set forth for the compensation herein
provided.
2. In carrying out its obligations to manage the
investment and
reinvestment of the assets of the Portfolios of the Fund, Adviser
shall:
(a) obtain and evaluate pertinent economic,
statistical and
financial data and other information relevant to the investment
policies of
the Portfolios of the Fund, affecting the economy generally,
and
individual companies or industries the securities of which
are included in
each Portfolio s investment portfolio or are under consideration
for
inclusion therein and make such data
and information reasonably available to the Board of Directors
of the Fund at
its request;
(b) develop and implement an investment program for
each Portfolio of
the Fund consistent with each Portfolio s investment
objective, policies and
limitations as stated in the Prospectus, SAI and Articles of
the Fund, which
shall be subject to the overall review from time to time
of the Board of
Directors of the Fund;
(c) provide necessary personnel to assist the
Board of
Directors of the Fund in managing the affairs of the Fund;
(d) authorize and permit any of its directors,
officers and
employees, who may be elected as directors or officers of the
Fund, to serve in
the capacities in which they are elected;
(e) provide for all expenses and fees
incurred by the
sub-adviser as approved by the Board of Directors of the Fund.
3. Any investment program undertaken by Adviser
pursuant to this
Agreement and any other activities undertaken by Adviser on
behalf of the Fund
shall at all times be subject to any directives of the Board of
Directors of the
Fund or any duly constituted committee thereof acting
pursuant to like
authority.
4. Adviser understands that shares of the Portfolios
will be sold to
one or more separate accounts or sub-accounts of insurance
companies as the
funding medium for variable annuity contracts and variable
life insurance
policies ( variable products ); and that the variable
products will not be
treated as variable products for tax purposes if each Portfolio
does not:
(a) meet the diversification requirements
specified in Section
817(h) of the Internal Revenue Code of 1986, as amended (the
Code ) and the
regulations issued thereunder; and
(b) qualify as a regulated investment company
under Subchapter
M of the Code and any successor provision.
5. Adviser represents that it shall use its best
efforts to manage and
invest the Portfolios assets in such a manner, and to
coordinate with the
Portfolios accounting agent to ensure that:
(a) each Portfolio complies with Section
817(h) of the Code,
and the regulations issued thereunder, specifically Regulation
Section 1.817-5,
relating to the diversification requirements for variable
annuity and variable
life insurance contracts, and any amendments or other
modifications to such
Section or regulation;
(b) each Portfolio continuously qualifies
as a regulated
investment company under Subchapter M of the Code and any
successor provision;
and
(c) any and all applicable state insurance
law restrictions,
as amended from time to time, on investments that operate to
limit or restrict
the investments that a Portfolio may otherwise make are complied
with.
6. For the services rendered hereunder, Adviser
shall receive an
amount for each valuation period of each Portfolio of the
Fund, at the annual
rate specified on Exhibit A hereto, such amount to be paid to
Adviser monthly.
For the purpose of determining fees payable to Adviser,
the value of each
Portfolio s net assets shall be computed at the time and in the
manner specified
in the Prospectus and/or SAI. No Portfolio of the Fund shall be
liable for the
obligations of any other Portfolio of the Fund. Advisor shall
look only to the
assets of a particular Portfolio for payment of fees and
services rendered to
that Portfolio. Advisor may, in its discretion and from time to
time, waive all
or a potion of its fees.
7. With respect to the portfolio securities of each
Portfolio of the
Fund, Adviser shall purchase such securities from or
through and sell such
securities to or through such persons, brokers or dealers,
as it may deem
appropriate. Such persons, brokers or dealers may include those
affiliated with
Adviser. Securities orders will be placed with brokers or
dealers selected for
their ability to give the best execution at prices and
commissions rates (if
any) favorable to the Fund and, in some instances, for their
ability to provide
statistical, investment research and other services. As part of
the process of
brokerage allocation, Adviser is authorized to pay commissions
which may exceed
what another broker might have charged. To the extent that
preference is given
in the allocation of the Fund s portfolio business to those
brokers and dealers
which provide statistical, investment research, pricing
quotations, or other
services, the Fund will bear any cost of obtaining such
services, and Adviser
and other clients advised by Adviser may benefit from those
services. Under the
provisions of Section 28(e) of the Securities Exchange Act of
1934, Advisor must
determine in good faith that the amount of a commission paid was
reasonable in
relation to the value of the brokerage and research services
provided by the
executing broker or dealer viewed in terms of the particular
transaction or
Advisor s overall responsibilities with respect to accounts as
to which it is
exercising investment discretion.
8. The services of Adviser to the Fund hereunder are
not to be deemed
exclusive and Adviser shall be free to render similar services to
others so long
as its services hereunder are not impaired or interfered with
thereby.
9. Nothing in this Agreement shall limit or restrict
the right of any
director, officer or employee of Adviser who may also be a
director, officer or
employee of the Fund to engage in any other business or to
devote his time and
attention in part to the management or other aspects of any other
business or to
render services of any kind to any other corporation, firm,
individual or
association.
10. Adviser agrees that it will maintain, or
shall cause any
sub-adviser or other designee to maintain all required
records, memoranda,
instructions or authorizations relating to the activities
hereunder which are
required to be maintained by the Fund pursuant to the 1940 Act
and the rules and
regulations thereunder. In compliance with Rule 31a-3 of the
1940 Act Adviser
agrees to preserve for the periods described in Rule 31a-2
under the 1940 Act
any records that it maintains for the Fund and that are
required to be
maintained by Rule 31a-1 under the 1940 Act. All records
maintained by Adviser
with respect to these functions shall be open at all times to
inspection and
audit by authorized representatives of the Fund, and any or
all such records
shall be delivered to the Fund upon demand. Any records
maintained by Adviser
with respect to such investment functions are the property of the
Fund.
11. This Agreement shall be submitted for approval by
the shareholders
of the Portfolios and if then approved by a majority of
the Portfolios
outstanding voting securities, this Agreement:
(a) shall continue in effect with respect to each Portfolio
only so long as
its continuance is specifically approved for each Portfolio
annually by the
Board of Directors of Fund (including a majority of the
independent directors)
as required by the 1940 Act or by shareholders of each
Portfolio casting a
majority of the votes entitled to be cast by shareholders;
(b) may not be terminated by Adviser with respect to
each Portfolio
without the prior approval of a new investment advisory
agreement by the
Portfolio s shareholders casting a majority of the votes entitled
to be cast and
shall be subject to termination without the payment of any
penalty, on sixty
days written notice, by the Board of Directors of the Fund or
by vote of the
Portfolio s shareholders casting a majority of the votes entitled
to be cast;
(c) shall not be amended without prior
approval by the
Portfolios shareholders casting a majority of the votes entitled
to be cast;
and
(d) shall automatically terminate in the event of its
assignment by either
party.
12. The Fund shall pay:
(a) brokers commissions in connection with
portfolio asset
transactions to which the Fund is a party;
(b) all taxes, including issuance and transfer
taxes, which
may become payable to federal, state or other governmental
entities, with
respect to the operation of the Portfolios of the Fund;
(c) all legal and auditing fees;
(d) all extraordinary expenses which may
be incurred by
or on behalf of the Fund in connection with matters not in the
ordinary course
of business;
(e) provide for expenses (including all
fees) incurred
in connection with the registration and qualification of the
Portfolios of the
Fund under the 1940 Act, the Securities Act of 1933 and state
laws;
(f) provide for the charges and expenses
of any
custodian or depository appointed for the safekeeping of the
cash, securities
or other property of the Portfolios of the Fund; and
(g) bear the expenses of calling and
holding of meetings
of shareholders, the fees and expenses of members of the Board of
Directors of
the Fund, and all ordinary expenses incurred in the ordinary
course of business.
13. (a) In providing the Portfolios of the Fund with
investment advice
and other services as herein provided, neither Adviser
nor any officer,
director, employee or agent thereof shall be held liable by the
Portfolios or
any shareholder, director, or officer thereof or stockholders
for errors of
judgment or for anything except willful misfeasance, bad
faith, or gross
negligence in the performance of its duties, or reckless
disregard of its
obligations and duties under the terms of this agreement.
(b) The federal securities laws impose
liabilities under
certain circumstances on persons who act in good faith and
therefore
nothing herein shall in any way constitute a waiver or
limitation of any
rights which the Fund may have under any federal securities laws.
14. Adviser hereby agrees that while this agreement is
in effect, it
will not amend its articles of incorporation or by-laws in a
manner which would
impair the ability to provide business management services and
investment advice
to the Portfolios of the Fund.
15. Any notice under this agreement shall be given
in writing,
addressed and delivered, or mailed postpaid to:
Adviser: Transamerica Occidental Life Insurance
Company
Corporate Secretary
1150 South Olive Street
Los Angeles, California 90015
Fund: Transamerica Variable Insurance Fund,
Inc.
Corporate Secretary
1150 South Olive Street
Los Angeles, California 90015
16. This agreement shall be construed in accordance
with the laws of
the State of California, and is subject to the provisions of
the Advisers Act,
the 1940 Act and the rules and regulations of the Securities
and Exchange
Commission.
17. Waiver by either party of any obligations of the
other party does
not constitute a waiver of any other or other obligation of the
other party.
18. The singular of any word used in this agreement
includes the
plural. Unless otherwise indicated herein, terms and
phrases used in this
Agreement shall have the meaning ascribed to them in the 1940
Act, the Advisers
Act and the rules and regulations promulgated thereunder.
All rights, powers and privileges confer-red
hereunder upon the
parties shall be cumulative and shall not restrict those given by
law.
This agreement contains the entire agreement of the
parties hereto and
no prior representation inducements, promises or agreements,
oral or otherwise,
between the parties not embodied herein shall be of any force or
effect.
This agreement may be executed in any number of
counterparts, each of
which so executed shall be deemed to be an original and
such counterparts
together shall constitute but one and the same contract,
which shall be
sufficiently evidenced by any such original counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be
signed by their respective officials thereunto duly authorized as
of the day
and year first above written.
TRANSAMERICA VARIABLE TRANSAMERICA OCCIDENTAL LIFE
INSURANCE FUND, INC. INSURANCE COMPANY
By By
President President
By By
Secretary Secretary
<PAGE>
Exhibit A
to the
Investment Advisory Agreement
between
Transamerica Occidental life Insurance Company (the
Adviser )
and
Transamerica Variable Insurance Fund, Inc. (the Fund
)
Pursuant to Section 6 of this Agreement, the Fund shall pay
Adviser compensation
at an effective annual rate as follows:
Name of Portfolio Annual Rate of Compensation
Growth Portfolio 0.75 of 1% of the value of the
Portfolios
average daily net assets
<PAGE>
Exhibit E
Investment Sub-Advisory Agreement
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
between
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
and
TRANSAMERICA INVESTMENT SERVICES, INC.
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
TRANSAMERICA OCCIDENTAL LIFE INSURANCE
COMPANY, a California
corporation ( Adviser ), and TRANSAMERICA INVESTMENT SERVICES,
INC., a Delaware
corporation ( Sub-Adviser ), agree as follows:
WHEREAS, Sub-Adviser is engaged in business as
an investment
advisor and is so registered as an advisor under the federal
Investment Advisers
Act of 1940 (the
Advisers Act ), and Adviser desires to avail itself of
the investment
experience of Sub- Adviser and to have Sub-Adviser furnish
certain investment
advisory services to the Growth Portfolio (the Portfolio ) of
the Transamerica
Variable Insurance Fund, Inc. (the Fund ), and such other
portfolios of the Fund
as the Fund may establish in the future (the
Portfolios ), in connection with the Advisory Agreement, a
copy of which is
attached hereto as Exhibit A, and Sub-Adviser is willing to
furnish such advice
and services on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the
above-referenced facts
and their mutual promises, the parties agree as follows:
1. ADVICE AND OTHER SERVICES
(a) Sub-Adviser shall, to the extent required in
the conduct of
the investment activities of the Portfolios, place at the
disposal of the
Portfolios, its judgment and experience and develop and
implement an investment
program for each Portfolio consistent with each Portfolio
s investment
objective, policies and limitations as stated in the Fund
s Articles of
Incorporation and By-Laws, as amended from time to time (the
Articles ), and in
the Funds prospectus (the Prospectus ) and statement of
additional information (
SAI ) filed with the Securities and Exchange Commission ( SEC )
as part of the
Funds Registration Statement on Form N-1A, as amended from time
to time, subject
to the supervision of the Board of Directors of the Fund, for
the period and on
the terms herein set forth. Sub-Adviser shall also, from time to
time, furnish
to and place at the disposal of Adviser and the Fund
such reports and
information relating to industries, businesses, corporations,
or securities as
may be reasonably required by Adviser or the Fund or as
Sub-Adviser may deem to
be helpful to Adviser or the Fund in the administration of
the Portfolios
assets.
(b) Sub-Adviser agrees to use its best efforts in
providing such
advice and recommendations and in the preparation of
such reports and
information, and for this purpose Sub-Adviser shall at all
times maintain a
staff of officers and other trained personnel for the
performance of its
obligations under this agreement. Sub-Adviser may, at its
expense, employ other
persons to furnish to Sub-Adviser statistical and other
factual information,
advice regarding economic factors and trends, information
with respect to
technical and scientific developments, and such other
information, advice and
assistance.
(c) Adviser will, on a ongoing basis, notify
Sub-Adviser of every
change in the fundamental and non-fundamental investment
policies of the
Portfolios and will make available to Sub-Adviser as promptly
as practicable
copies of all amendments and supplements to the Prospectus,
SAI, and the
Articles and such other financial reports and proxy statements of
the Portfolios
as Sub-Adviser shall require.
(d) Sub-Adviser shall take, on behalf of the
Portfolios, all
actions which it deems necessary to implement each
Portfolio s investment
objective, policies and limitations as stated in the Funds
Prospectus, SAI and
the Articles and in compliance with the 1940 Act subject to the
supervision of
Adviser and the Board of Directors of the Fund. To that end
Sub-Adviser is
authorized as the agent and attorney-in-fact of Adviser and
the Fund to give
instructions as to deliveries of securities and to execute
account documentation
agreements, contracts and other documents as Sub-Adviser may be
required to sign
by brokers, dealers, counterparties, and other persons in
connection with the
management of the assets of the Portfolios. Selection of the
brokers or dealers
with whom transactions are executed and negotiation of
commission rates will be
made by Sub-Adviser, subject to the supervision of Adviser
and the Board of
Directors of the Fund.
(e) Securities orders will be placed with
brokers or dealers
selected for their ability to give the best execution at prices
and commissions
rates (if any) favorable to the Fund and, in some instances,
for their ability
to provide statistical, investment research and other services.
As part of the
process of brokerage allocation, Sub-Adviser is authorized to
pay commissions
which may exceed what another broker might have charged. To
the extent that
preference is given in the allocation of the Fund s portfolio
business to those
brokers and dealers which provide statistical, investment
research pricing
quotations, or other services, the Fund will bear any cost of
obtaining such
services, and Sub-Adviser and other clients advised by
Sub-Adviser may benefit
from those services. Under the provisions of Section 28(e) of
the Securities
Exchange Act of 1934, Sub-Adviser must determine in good faith
that the amount
of a commission paid was reasonable in relation to the value
of the brokerage
and research services provided by the executing broker or dealer
viewed in terms
of the particular transaction or Sub-Advises overall
responsibilities with
respect to accounts as to which it is exercising investment
discretion. All such
actions are subject to the limitations as set out in Section 6.
2. ALLOCATION OF CHARGES AND EXPENSES
Sub-Adviser shall furnish at its own expense
executive, supervisory
and other personnel and services, office space, equipment,
utilities and
telephone services in connection with supplying the
investment advisory,
statistical and research services contemplated by this agreement.
3. COMPENSATION TO SUB-ADVISER
Adviser agrees to pay to Sub-Adviser and Sub-Adviser
agrees to accept
as full compensation for all services rendered hereunder, a fee
paid quarterly
in arrears and to be calculated as a percentage of the average
daily net assets
of each Portfolio during the previous quarter at the annual
rate specified in
Exhibit B hereto. For the purpose of determining fees payable
to Sub-Adviser,
the value of each Portfolio s net assets shall be computed at
the time and in
the manner specified in the Prospectus and/or SAI. No Portfolio
shall be liable
for the obligations of any other Portfolio. Sub-Adviser shall
look only to the
assets of a particular Portfolio for payment of fees and
services rendered to
that Portfolio. Sub-Adviser may, in its discretion and from time
to time, waive
all or a portion of its fees.
4. DURATION AND TERMINATION
This Agreement shall be submitted for approval by the
shareholders of
the Portfolios and if then approved by a majority of the
Portfolio s outstanding
voting securities, this Agreement:
(a) shall continue in effect with respect to each
Portfolio only so
long as its continuance is specifically approved for each
Portfolio annually by
the Board of Directors of Fund as required by the 1940 Act or by
shareholders of
each Portfolio casting a majority of the votes entitled
to be cast by
shareholders;
(b) may not be terminated by Adviser with respect to
each Portfolio
without the prior approval of a new investment sub-advisory
agreement by the
Portfolio s shareholders casting a majority of the votes entitled
to be cast and
shall be subject to termination without the payment of any
penalty, on thirty
(30) days written notice, by the Board of Directors of the
Fund or by vote of
the Portfolio s shareholders casting a majority of the votes
entitled to be
cast, and will terminate upon two (2) days written notice to
Sub-Adviser of
termination of the Advisory Agreement between Adviser and the
Fund;
(c) shall not be amended without prior approval by the
Portfolio s
shareholders casting a majority of the votes entitled to be cast;
and
(d) shall automatically terminate in the event of its
assignment by
either party.
Notice of termination will be effective the day
after the notice is
deposited, postage prepaid, registered or certified mail.,
return receipt
requested, in the mail addressed to the other party s address
as set forth in
Section 14 or such other more recent address, or if the mail is
not used, the
day it is delivered to the other party s last known address or
to an officer of
Adviser or of Sub-Adviser, as the case may be.
5. COMPLIANCE WITH THE FUND S POLICIES
Sub-Adviser covenants and agrees that the
investment planning,
investment advice and services that it furnishes Adviser will
be in accordance
with the investment objective, policies, and limitations of
each Portfolio as
set forth in the Funds Prospectus, SAI and Articles and shall
be in compliance
with the 1940 Act.
6. TAX AND OTHER COMPLIANCE
(a) Sub-Adviser understands that shares of the
Portfolios will be sold
to one or more separate accounts or sub-accounts of insurance
companies as the
funding medium for variable annuity contracts and variable
life insurance
policies ( variable products ); and that the variable
products will not be
treated as variable products for tax purposes if each Portfolio
does not:
1. meet the diversification requirements
specified in
Section 817(h) of the Internal Revenue Code of 1986, as amended
(the Code )
and the regulations issued thereunder; and
2. qualify as a regulated investment
company under
Subchapter M of the Code and any successor provision.
(b) Sub-Adviser represents that it shall use its
best efforts to
manage and invest the Portfolios assets in such a manner and,
with regard to its
duties under this Agreement, ensure that:
1. each Portfolio complies with Section
817(h) of the Code,
and the regulations issued thereunder, specifically Regulation
Section 1.817-5,
relating to the diversification requirements for variable
annuity and variable
life insurance contracts, and any amendments or other
modifications to such
Section or regulation;
2. each Portfolio continuously qualifies as
a regulated
investment company under Subchapter M of the Code and any
successor provision;
and
3. any and all applicable state insurance law
restrictions,
as amended from time to time, on investments that operate to
limit or restrict
the investments that a Portfolio may otherwise make are complied
with.
7. RECORDS
(a) Sub-Adviser agrees that it will maintain all
required records,
memoranda, instructions or authorizations relating to the
acquisition or
disposition of assets of the Fund, including all books and
records required to
be maintained by the 1940 Act and the rules and regulations
thereunder. In
compliance with Rule 31a-3 of the 1940 Act, Sub- Adviser agrees
to preserve for
the periods described in Rule 31a-2 under the 1940 Act any
records that it
maintains for the Portfolios and that are required to be
maintained by Rule 31a-
1 under the 1940 Act. All records maintained by Sub-Adviser
with respect to
these functions shall be open at all times to inspection and
audit by Advises
and/or the Funds authorized representatives, and any or all
such records shall
be delivered to the Fund upon demand. Any records maintained by
Sub-Adviser with
respect to such investment functions are the property of the
Fund.
(b) Sub-Adviser shall assist and provide operational
support in the
audit of any records with respect to the services provided
hereunder by Advises
auditors, its firm of CPA s the Insurance Department of any
state, or upon the
request of any governmental agency (local, municipal, county,
state or federal).
Copies of any files will be provided at cost.
(c) Sub-Adviser shall provide, upon Advises request
any records which
are necessary to file any report required by any federal,
state or local
government or agency. If such records are not timely provided,
Sub-Adviser will
pay any costs incur-red by Adviser in compiling the necessary
documentation.
(d) The terms and conditions of any records
generated by this
agreement are confidential and shall be treated as such by
Sub-Adviser and its
employees.
8. INFORMATION
Adviser agrees that it will furnish to Sub-Adviser
any information
that Sub- Adviser may reasonably request with respect to the
services performed
or to be performed by Sub-Adviser under this agreement.
9. LIABILITY OF SUB-ADVISER
In providing the Portfolios with investment advice and
other services
as herein provided, neither Sub-Adviser nor any officer,
director, employee or
agent thereof shall be held liable by Adviser, the Fund, the
Portfolios or any
shareholder, director, or officer thereof or stockholders for
errors of judgment
or for anything except willful misfeasance, bad faith, or gross
negligence in
the performance of its duties, or reckless disregard of its
obligations and
duties under the terms of this agreement.
It is further understood and agreed that Sub-Adviser
may rely upon
information furnished to it reasonably believed to be accurate
and reliable.
The federal securities laws impose liabilities
under certain
circumstances on persons who act in good faith and therefore
nothing herein
shall in any way constitute a waiver or limitation of any
rights which Adviser
or the Fund may have under any federal securities laws.
10. STATUS OF SUB-ADVISER
Except as expressly provided or authorized in
this agreement,
Sub-Adviser shall have no authority to act for or represent
Adviser or the Fund.
11. CORPORATE AUTHORITY
Sub-Adviser hereby certifies that it has full corporate
power to enter
into this agreement and perform its obligations
thereunder, that such
performance would not give rise to any violation of any other
contract with
respect to it or any of its subsidiaries or affiliated
companies, and that the
officer executing such agreement has full authority and right to
do so.
Sub-Adviser agrees that while this agreement is in
effect, it will not
amend its articles of incorporation or by-laws in a manner
which would impair
the ability to provide business management services and
investment advice to the
Portfolios.
12. DEPARTMENT OF INSURANCE APPROVAL
This agreement is executed by the parties with the
understanding that
it may be subject to the approval of or non-disapproval of
the California
Department of Insurance. In the event said approval or
non-disapproval is not
obtained or the Insurance Department disapproves this agreement
Adviser shall
have the unqualified right to terminate this agreement without
any penalty.
13. NOTICE
Any notice under this agreement shall be given in
writing, addressed
and delivered, or mailed postpaid to:
Adviser: Transamerica Occidental Life
Insurance Company
Corporate Secretary
1150 South Olive Street
Los Angeles, California 90015
Sub-Adviser: Transamerica Investment
Services, Inc.
Corporate Secretary
1150 South Olive Street
Los Angeles, California 90015
14. APPLICABLE LAW
This agreement shall be construed in accordance with
the laws of the
State of California, and is subject to the provisions of the
Advisers Act, the
1940 Act and the rules and regulations of the Securities
and Exchange
Commission.
15. WAIVER
Waiver by either party of any obligations of the other
party does not
constitute a waiver of any further or other obligation of the
other party.
16. MISCELLANEOUS
The singular of any word used in this agreement
includes the plural.
Unless otherwise indicated herein, terms and
phrases used in this
Agreement shall have the meaning ascribed to them in the 1940
Act, the Advisers
Act and the rules and regulations promulgated thereunder.
All rights, powers and privileges conferred hereunder
upon the parties
shall be cumulative and shall not restrict those given by law.
This agreement contains the entire agreement of the
parties hereto and
no prior representation, inducements, bonuses or agreements,
oral or otherwise,
between the parties not embodied herein shall be of any force or
effect.
This agreement may be executed in any number of
counterparts, each of
which so executed shall be deemed to be an original and
such counterparts
together shall constitute but one and the same contract,
which shall be
sufficiently evidenced by any such original counterpart.
The captions used in this agreement are solely for the
convenience of
the parties hereto and such captions do not constitute a part of
this agreement.
IN WITNESS WHEREOF, the parties have caused the signatures
of their duly
authorized officers to be hereto affixed.
TRANSAMERICA OCCIDENTAL LIFE TRANSAMERICA INVESTMENT
INSURANCE COMPANY SERVICES, INC.
By: By:
Title: Title:
By: By:
Title: Title:
<PAGE>
Exhibit A
to the
Investment Sub-Advisory Agreement
between
Transamerica Occidental Life Insurance Company ( Adviser )
and
Transamerica Investment Services, Inc.. ( Sub-Adviser )
is
the Investment Advisory Agreement filed as Exhibit D to
Part A of this Form N-14
<PAGE>
Exhibit B
to the
Investment Sub-Advisory Agreement
between
Transamerica Occidental Life Insurance Company ( Adviser )
and
Transamerica Investment Services, Inc.. ( Sub-Adviser )
Pursuant to Section 3 of this Agreement, Adviser shall
pay Sub-Adviser
compensation at an effective annual rate as follows:
Name of Portfolio Annual Rate of Compensation
Growth Portfolio 0.30 of 1% of the Portfolio s
average daily net
assets up to $50 million; plus
0.25 of 1% of the Portfolio s
average daily net
assets from $50 million to $200
million; plus
0.20 of 1% of the Portfolio s
average daily net
assets of $200 million or more.
<PAGE>
Exhibit F
Form of Proxy
<PAGE>
NOTICE
IT IS ESSENTIAL THAT YOU COMPLETE THIS PROXY
FORM AND RETURN IT
IMMEDIATELY IN THE POSTPAID RETURN MAILER PROVIDED.
THANK YOU, TRANSAMERICA OCCIDENTAL LIFE INSURANCE
COMPANY
PROXY
SOLICITED BY ORDER OF THE BOARD
OF MANAGERS OF TRANSAMERICA
OCCIDENTAL'S SEPARATE ACCOUNT
FUND C
NOTICE OF SPECIAL MEETING OF CONTRACT OWNERS - OCTOBER 30, 1996
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
To Contract Owners:
A special meeting of owners of Individual Equity Investment
Fund Contracts
("Contract owners") issued by Transamerica Occidental Life
Insurance Company
("Transamerica") in connection with Transamerica Occidental's
Separate Account
Fund C ("Old Account C") will be held at Transamerica's home
office at 1150
South Olive, Los Angeles, California 90015, on October 30,
1996, at 9 a.m.,
Pacific Standard Time, for the following purposes:
1. TO APPROVE an Agreement and Plan of Reorganization (the
"Agreement") and
related transactions (together, the Agreement and related
transactions are
the "Reorganization") whereby Old Account C, presently a
management
investment company, would be converted into a unit
investment trust,
Transamerica Occidental Separate Account C, by transferring
all of Old
Account C's securities and other
investments to the Growth Portfolio of Transamerica Variable
Insurance
Fund, Inc.
(the "Fund") in exchange for shares of the Growth Portfolio
of the Fund
of equal value
as described in the accompanying Proxy Statement/Prospectus;
For Against Abstain
2. To instruct Transamerica regarding the following:
(a) TO ELECT to the Fund's Board of Directors the following
nominees:
Donald E. Cantlay
Richard N. Latzer
DeWayne W. Moore
Gary U. Roll
Peter J. Sodini
For all nominees listed
Withhold authority for all
Withhold authority only for those nominees
written below
(b) TO APPROVE a proposed Investment Advisory Agreement
between the Fund
and Transamerica; and
For Against Abstain
(c) TO APPROVE a proposed Investment Sub-Advisory Agreement
between
Transamerica and Transamerica Investment Services, Inc.
For Against Abstain
(d) TO RATIFY the selection of Ernst & Young as independent
auditors of
the Fund;
For Against Abstain
3. TO ACT upon any other business which may properly come
before the meeting
or any adjournment thereof.
This Proxy, when properly executed, will be voted in the manner
directed herein
by the undersigned.
IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED "FOR"
PROPOSALS
1 AND 2 (a), (b), (c) and (d).
Receipt of the Notice of Meeting and Proxy Statement
accompanying this Proxy is
acknowledged by the undersigned. These proposals are discussed
in detail in the
attached Proxy Statement/Prospectus.
Date: October ___, 1996
Contract Owner
Signature -- Please sign exactly as your name
appears below.
Date: October ___, 1996
Joint Owner, if any.
Sign, Date and Return this Proxy Card Promptly using the enclosed
envelope. If
signing is by attorney, executor, administration or guardian,
please give full
title.
Please vote, enter the date, sign and promptly return the
signed Proxy in the
enclosed envelope.
Be Certain to Sign Your Proxy
Only Contract Owners of record at the close of business on
September 25, 1996,
will be entitled to vote at the meeting.
<PAGE>
PART B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
Transamerica Occidental's Separate Account Fund C
STATEMENT OF ADDITIONAL INFORMATION
October 9, 1996
This Statement of Additional Information is not a
prospectus. The Statement
of Additional Information should be read in
conjunction with the
Prospectus/Proxy Statement of Transamerica Occidental's Separate
Account Fund C
dated October 7, 1996. That document may be obtained by
writing Transamerica
Occidental Life Insurance Company, ___________________ or
by telephoning
1-800-XXX-XXXX.
TABLE OF CONTENTS
Exhibit A -Transamerica Occidental's Separate Account Fund C
Statement of
Additional Information (April 26, 1996) . . . . . . . . . . . . .
. . . . . .
Exhibit B -Transamerica Occidental's Separate Account Fund C
Semi-Annual Report
(June 30, 1996). . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . .
Exhibit C - Growth Portfolio of Transamerica Variable Insurance
Fund, Inc.
Statement of Additional Information (November 3, 1995). . . . . .
. . . . . .
<PAGE>
Additional Information About Old Account C
Additional information regarding Transamerica
Occidental's Separate
Account Fund C ("Old Account C") is found in the
Statement of
Additional Information to Old Account C's
Registration Statement on
Form N-3 filed with the Securities and Exchange
Commission as
Post-Effective Amendment No. 42 on April 26, 1996
(File Nos. 2-36250;
811-2025). This Statement of Additional Information is
attached hereto
as Exhibit A.
Additional Information About the Fund
Additional information regarding the Growth Portfolio
of Transamerica
Variable Insurance Fund, Inc. (the "Fund") is found
in the Statement
of Additional Information to the Fund's initial
Registration Statement
on Form N- 1A filed with the Securities and Exchange
Commission on
November 3, 1995 (File No. 33-98984). That Statement
of Additional
Information is attached hereto as Exhibit C.
Financial Statements
Financial statements regarding Old Account C dated
December 31, 1995
are included in the Statement of Additional
Information provided in
Exhibit A. Unaudited financial statements regarding
Old Account C
dated June 31, 1996 are included in the Semi-Annual
Report of Old
Account C provided in Exhibit B.
<PAGE>
Exhibit A
Transamerica Occidental's Separate Account Fund C
Statement of Additional Information
This document is incorporated by reference to the
Statement of
Additional Information filed with Post-Effective
Amendment No.
42 of Transamerica Occidental's Separate Account Fund
C, File
No. 2-36250 (April 26, 1996).
<PAGE>
Exhibit B
Transamerica Occidental's Separate Account Fund C
Semi-Annual Report
This document is incorporated by reference to the
Semi-Annual Report
of Transamerica Occidental's Separate Account Fund C
dated June 30,
1996, File No. 2-36250 (August 29, 1996).
<PAGE>
Exhibit C
Transamerica Variable Insurance Fund, Inc.
Statement of Additional Information
This document is incorporated by reference to the
Statement of
Additional Information filed with the initial
Registration Statement
on Form N-1A of Transamerica Variable Insurance Fund,
Inc., File No.
33-99016 (November 3, 1995).
<PAGE>
PART C
OTHER INFORMATION
<PAGE>
TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND C
PART C -- OTHER INFORMATION
Item 15. Indemnification
Information regarding indemnification provisions
relating to
Transamerica Occidental's Separate Account Fund C ("Old
Account C") is
incorporated by reference herein to post-effective
amendment No. 42 to
Old Account C's Registration Statement on Form N-3
(File No.2-36250)
filed with the Securities and Exchange Commission on
April 26, 1996.
Item 16. Exhibits
(1) Resolution establishing Transamerica Occidental's
Separate Account
Fund C. 1/
(2) Rules and Regulations of Transamerica Occidental's
Separate Account
Fund C. 1/
(3) Not applicable.
(4) Agreement and Plan of Reorganization. 2/
(5) Not applicable.
(6) (a) Investment Advisory Agreement. 3/
(b) Investment Sub-Advisory Agreement. 4/
(7) Marketing Agreement. 5/
(8) Not applicable.
(9) Custodian Agreement between Registrant,
Transamerica Occidental
Life Insurance company and Boston Safe Deposit and
Trust Company
of California. 6/
(10) Not applicable.
(11) Opinion and consent of counsel as to the legality
of the
securities being registered.
(12) Private letter ruling from the Internal
Revenue Service
supporting tax matters.
(13) Not applicable.
(14) Opinion and consent of Ernst & Young LLP.
(15) Not applicable.
(16) Power of attorney pursuant to which the name of
any person has
been signed to the registration statement. 7/
(17) Not applicable.
- - - -----------------
1/ Incorporated by reference to the exhibits filed as part
of Old Account
C's registration statement on Form N-8B-1.
2/ Incorporated by reference to Exhibit 13 to the initial
Registration
Statement on Form N-1A of Transamerica Variable
Insurance Fund, Inc.,
File No. 33-99016 (November 3, 1995).
3/ Included as Exhibit D to Part A (Prospectus/Proxy
Statement) of this
Registration Statement on Form N-14.
4/ Included as Exhibit E to Part A (Prospectus/Proxy
Statement) of this
Registration Statement on Form N-14.
5/ Incorporated by reference to the exhibits filed as part
of Old Account
C's registration statement on Form N-1.
6/ Incorporated by reference to Exhibit 3 filed as part of
Old Account
C's Post-Effective Amendment No. 42 on Form N-3, File
No. 2-36250
(April 26, 1996).
7/ Incorporated by reference to Exhibit 15 filed as part
of Separate
Account C's Post-Effective Amendment No. 43 on Form
N-4, File No.
2-36250 (August 8, 1996) and to Exhibit 16 filed as
part of Old
Account C's Post-Effective Amendment No. 42 on Form
N-3, File No.
2-36250 (April 26, 1996).
Item 17. Undertakings
(1) The undersigned registrant agrees that prior
to any public
reoffering of the securities registered
through the use of a
prospectus which is part of this registration
statement by any
person or party who is deemed to be an
underwriter within the
meaning of rule 145(c) under the Securities
Act of 1933, the
reoffering prospectus will contain the
information called for by
the applicable registration form for reofferings
by persons who
may be deemed underwriters, in addition to the
information called
for by the other items of the applicable form.
(2) The undersigned registrant agrees that every
prospectus that is
filed under paragraph (1) above will be filed
as a part of an
amendment to the registration statement and
will not be used
until the amendment is effective, and that, in
determining any
liability under the Securities Act of 1933, each
post-effective
amendment shall be deemed to be a new registration
statement for
the securities offered therein, and the
offering of the
securities at that time shall be deemed to be the
initial bona
fide offering of them.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this registration
statement has
been signed on behalf of Transamerica Occidental's Separate
Account Fund C, in
the City of Los Angeles, State of California on the 6th day of
September, 1996.
TRANSAMERICA OCCIDENTAL'S
SEPARATE ACCOUNT FUND C
By: ________________________________
Barbara A. Kelley, President*
As required by the Securities Act of 1933, this registration
statement has
been signed on September 6, 1996 by the following persons in
the capacities
indicated.
Signature Title
_______________________*
Barbara A. Kelley President
_______________________*
Sally S. Yamada Treasurer and Assistant Secretary
_______________________*
Donald E. Cantlay Member of the Board of Managers
_______________________*
Richard N. Latzer Member of the Board of Managers
_______________________*
DeWayne W. Moore Member of the Board of Managers
_______________________*
Gary U. Rolle' Chairman of the Board of Managers
_______________________*
Peter J. Sodini Member of the Board of Managers
/s/
*By James W. Dederer, pursuant to Power of Attorney
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 this registration
statement has
been signed on behalf of the registrant, in the City of Los
Angeles and State of
California on September 5, 1996.
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
- - - -----------------------------------------------------
JAMES W. DEDERER, Executive Vice President,
General Counsel
and Corporate Secretary
*Attorney-in-Fact
As required by the Securities Act of 1933, this registration
statement has
been signed on September 5, 1996 by the following persons
or by their duly
appointed attorney-in-fact in the capacities sepcified:
Signature Signature
___________________________*
_____________________________*
Thomas J. Cusak Richard N. Latzer
Director, President and Director
Chief Executive Officer
___________________________*
_____________________________*
Robert Abeles Charles E. LeDoyen
Director, Executive Vice President & Director
Chief Financial Officer
___________________________*
_____________________________*
James W. Dederer Karen O. MacDonlad
Director Director
___________________________*
_____________________________*
John A Fibiger Gary U. Rolle'
Director Director
___________________________*
_____________________________*
Richard H. Finn James B. Roszak
Director Director
__________________________*
_____________________________*
David E. Gooding William E. Simms
Director Director
___________________________*
_____________________________*
Edgar H. Grubb Nooruddin S. Veerjee
Director Director
___________________________*
_____________________________*
Frank C. Herringer Robert A. Watson
Director Director
___________________________*
Daniel E. Jund
Director
- - - ------------------------------------------
*By James W. Dederer, pursuant to Power of Attorney
<PAGE>
Part C Exhibit Index
11. Opinion and consent of counsel as to the legality of the
securities being
registered
12. Private letter ruling from the Internal Revenue Service
supporting tax
matters.
14. Opinion and consent of Ernst & Young LLP
<PAGE>
Exhibit 11
Opinion and consent of counsel as to the legality of the
securities being
registered
<PAGE>
September 4, 1996
Transamerica Occidental Life
Insurance Company
1150 South Olive Street
Los Angeles, CA 90015
Gentlemen:
With reference to the Registration Statement on Form N-14 filed
by Transamerica
Occidental Life Insurance Company and its Separate Account
Fund C with the
Securities and Exchange Commission covering certain variable
annuity contracts
(File No. 2-36250), I have examined such documents and such law
as I considered
necessary and appropriate, and on the basis of such
examinations, it is my
opinion that:
1.) Transamerica Occidental Life Insurance Company is
duly organized and
validly existing under the laws of the State of
California.
2.) The variable annuity contracts, when issued as
contemplated by the
said Form N-14 Registration Statement, will constitute
legal, validly
issued and binding obligations of Transamerica
Occidental Life
Insurance Company.
I hereby consent to the filing of this opinion as an exhibit
to the said Form
N-14 Registration Statement and to the reference to my name
under the caption
"Legal Opinions" in the Prospectus contained in the said Form
N-14. In giving
this consent, I am not admitting that I am in the category of
persons whose
consent is required under Section 7 of the Securities Act of
1933.
Very truly yours,
James W. Dederer
Executive Vice President,
General Counsel and
Corporate Secretary
<PAGE>
Exhibit 12
Private letter ruling from the Internal Revenue Service
supporting tax matters.
<PAGE>
Internal Revenue Service Department of the Treasury
Index Numbers: 0351.00-00 Washington, DC 20224
Person to Contact:
Kent L. Killelea Vincent Daly
Scribner, Hall & Thompson Telephone Number:
Suite 1100 202) 622-7770
1850 K Street, N.W. Refer Reply to:
Washington, DC 20006-2201 CC:DOM:CORP:2-TR-31-
1649-95
Date: November 21,
1995
Company =
Transamerica Occidental Life
Insurance Company
EIN: 95-
1060502
RIC =
Transamerica Variable
Insurance Fund
EIN
applied for
State A = California
State B = Maryland
Dear Mr. Killelea:
This is in response to a ruling request dated July 26, 1995,
and subsequent
correspondence, which you submitted on behalf of Company. You
have asked for a
ruling that the transfer of assets described below is
nontaxable with the
attendant carryover basis and holding period consequences.
Company is a stock life insurance company organized under
the laws of State
A. Company is a life insurance company within the meaning of
section 816 of the
Internal Revenue Code, Company has established under the
laws of State A a
separate investment account (the Separate Account) through
which are invested
the assets underlying certain variable annuity contracts issued
by Company.
The Separate Account is registered under the Investment
Company Act of 1940
(15 U.S.C. 80a-1 to 80a-64) as an open-end, diversified,
management investment
company. Company serves as the investment adviser to the
Separate Account, The
Separate Account holds a diversified portfolio consisting
principally of equity
securities of a large number of different U.S., issuers, Company
has treated the
Separate Account as a "segregated asset account" for purposes of
section 817 of
the Code.
Company proposes to transfer the assets currently
in the Separate
Account to RIC, a new corporation incorporated in State B, RIC
will be operated
in a manner intended to qualify as a regulated investment company
under sections
851-55 of the Code. It will be available for investment only to
segregated asset
.accounts of Company and in the future to other insurance
companies and certain
qualified pension or retirement plans. RIC will be treated
as an open-end
management investment company under the Investment Company Act
of 1940 and will
be registered with the Securities and Exchange Commission
as such. RIC's
business will be the holding and management of a portfolio
of securities,
consisting initially of only the securities transferred from
the Separate
Account.
The proposed transaction will take place as follows:
Company will transfer
substantially all the assets of the Separate Account (other than
any required to
discharge its liabilities) to RIC as seed capital solely in
exchange for shares
of equal value of RIC, RIC will not assume any liabilities of
Company, Company
will cause the Separate Account to be converted to a unit
investment trust
separate account, After the Separate Account assets have been
transferred, RIC
will offer to sell additional RIC shares for cash on an ongoing
basis at a price
equal to the net asset value per share (the "offering"), In order
to satisfy the
"look through" rules of section 817, the only authorized
purchasers will be
segregated asset accounts of other life insurance
companies and certain
qualified pension or retirement plans.
The business reason for the proposed transaction is
that Company's
management has determined that, by transferring the assets
currently in the
Separate Account to RIC, investment flexibility and return
may be increased
through the common management of a larger investment pool, and
that there may
also be economies of scale in the costs of managing the
investments currently in
the Separate Account in combination with investments purchased
with the funds
received by RIC from the subsequent purchasers of RIC shares, if
any,
In connection with the proposed transaction, company
makes the following
representations:
(a) Company will transfer to RIC a diversified portfolio of
assets. For purposes
of this representation, a portfolio of assets is diversified
if it satisfies
Section 368(a)(F)(ii) applying the relevant provisions of Section
368(a)(2)(F) ,
except that in applying Section 368(a)(2)(F)(iv) , government
securities are
included in determining total assets unless the government
securities are
acquired to meet Section 368(a)(2)(F)(ii).
(b) The quality and level of the risks of the assets transferred
from Company to
RIC will be substantially identical to the quality and level of
risks of assets
that will be held by RIC after the transfer. For purposes of this
representation
the quality and level of risk is determined by taking into
account, among other
things, the assets' relative values, nature, and mix.
Further, if RIC promptly acquires assets with transferred
cash, .the acquired
assets will be deemed transferred and the transferred cash is
not taken into
account as a transferred asset.
(c) RIC has no plan or intention to depart in any way from
the investment
strategy or practice of the Separate Account. For
purposes of this
representation, Company's investment practice is determined
by taking into
account, among other things, the relative values, natures, and
mix of assets in
its asset portfolio historically and immediately before the
proposed transfer.
(d) No stock or securities will be issued for services
rendered to or for the
benefit of RIC in connection with the proposed transaction.
No stock or
securities will be issued for indebtedness of RIC that is not
evidenced by a
security or for interest on indebtedness of RIC which accrued
on or after the
beginning of the holding period of Company or the later
transferors, if any, for
the debt.
(e) None of the assets to be transferred were received by
Company as part of a
plan of liquidation of another corporation.
(f) No income items, such as accounts receivable or commissions
due, are being
transferred to RIC.
(g) No interest in a partnership or a partnership's assets will
be transferred
to RIC.
(h) No patents, patent applications, copyrights,
franchises, trademarks,
tradenames, or technical "know-how" is being transferred to RIC.
(i) Stock in other corporations is part of the property being
transferred to
RIC, In no case will the stock transferred constitute more than
10% of the total
outstanding securities of the relevant corporation. None of
the stock being
transferred to RIC is being transferred subject to any
liabilities, nor are any
liabilities being assumed in connection with the transfer of such
stock. Company
will own, actually and constructively, 100% of Rica s stock
immediately after
Company's transfer of assets to RIC, None of the stock to be
transferred to RIC
is "section 306 stock" within the meaning of section 306(c) of
the Code.
(j) The transfer by Company is not the result of the solicitation
by a promoter,
broker or investment house, and the Company will not retain
any rights in the
property transferred to RIC.
(k) No licenses or leases will be granted in exchange for stock
or securities
of RIC.
(1) No property transferred to RIC will be leased back to
Company or to a party
related to Company.
(m) No stock of RIC will be transferred in exchange for accounts
receivable.
(n) The transfer of assets in exchange for RIC stock is not
part of a larger
transaction that fits a pattern common to acquisitive
reorganizations.
(o) None of the stock being transferred to RIC will be
transferred subject to
any debt, nor will any debt be assumed in connection with the
transfer of such
stock.
(p) RIC will not be a bank holding company.
(q) The adjusted basis and the fair market value of the assets to
be transferred
to RIC will, in each instance, be equal to or exceed the sum of
any liabilities
to be assumed by RIC plus any liabilities to which the
transferred assets are
subject.
(r) Any liabilities to be assumed by RIC were incurred in the
ordinary course of
business and are associated with the assets to be transferred.
(s) All of the RIC stock that will be issued to Company is in
consideration for
transfer of the above-described assets, RIC stock that is
issued to later
transferors, if any, will be issued solely for cash.
(t) There is no indebtedness between RIC and Company, and
there will be no
indebtedness created in favor of Company as a result of
the proposed
transaction.
(u) RIC will issue no other property to Company in connection
with the proposed
transaction.
(v) The entirety of the stock of RIC will be issued in the
proposed transaction;
RIC had no stock outstanding prior to the proposed transaction.
(w) Immediately after the transfer of assets from the Separate
Account, 100% of
Rica s outstanding stock will be owned by Company. After the
Offering, 100% of
Rica s outstanding stock will be owned by Company and the later
transferors, if
any.
(x) The transfers and exchanges will occur under a plan agreed
upon by Company
and RIC prior to the proposed transaction, and the rights of the
parties will be
defined in this plan.
(y) All the exchanges involving Company will occur on
approximately the same
date, The exchanges involving other transferors are planned to
occur some months
thereafter.
(z) None of the RIC stock will be placed in escrow, nor will
any of the RIC
stock be issued later under a contingent stock agreement.
(aa) There is no plan to issue stock in addition to that
being issued to
Company, and, subsequent to the Offering, to the other
transferors.
(bb) Company does not have any plan to dispose of the RIC
stock received in
connection with the proposed transaction other than in the
ordinary course of
holding shares of RIC stock as investments of the unit trust
(the successor to
the Separate Account).
(cc) There is no plan or intention on the part of RIC to
redeem or otherwise
reacquire any stock or indebtedness to be issued in the proposed
transaction.
(dd) Taking into account any issuance of additional shares
of stock of RIC,
issuance, if any, of shares of stock for services, the exercise
of any RIC stock
rights, warrants, or subscriptions, the Offering of Rica s
stock and any sale,
exchange, transfer by gift, or other disposition of any of the
stock of RIC to
be received in the exchange, Company or Company along
with the other
transferors, will be in "control" of RIC within the meaning of
section 368(c) of
the Code.
(ee) Company will receive shares of stock of RIC,
approximately equal to the
fair market value of the property transferred to RIC.
(ff) RIC will remain in existence and retain and use the property
transferred to
it in trade or business.
(gg) There is no plan or intention by RIC to dispose of the
transferred property
other than in the normal course of business operations.
(hh) RIC will not engage in any loans, sales, exchanges, or
other transactions
other than recurring arm's length sales, purchases, etc., in
the normal course
of business.
(ii) Company will pay all expenses incurred in connection with
the transaction.
(jj) Company does not intend to make the election under section
1362 of the Code
to be taxed as a small business corporation.
(kk) Company is not under the jurisdiction of a court in a
Title 11 or similar
case (within the meaning of section 368(a)(3)(A) of the
Code)and the stock
received in the exchange will not be used to satisfy any
indebtedness of
Company.
(ll) RIC will not be a "personal service corporation" within
the meaning of
section 269A of the Code.
Based solely of the representations and the facts
submitted, we rule as
follows:
(1) The transfer of diversified assets by Company to
RIC will not be
treated as a transfer to an investment company within the
meaning of section
351(e) of the Code.
(2) No gain or loss will be recognized by Company upon the
transfer of its
assets to RIC in exchange for the stock of RIC and the
assumption of its
liabilities by RIC, if any, Sections 351(a) and 357(a) of the
Code.
(3) The basis of the shares of stock of RIC to be received
by Company will
be equal to the basis of the assets exchanged therefor
decreased by the amount
of liabilities assumed by RIC if any, Section 358(a)(1) of the
Code.
(4) The holding period of the shares of stock of RIC to
be received by
Company will include the period during which the assets of
Company exchanged
therefor were held.
Section 1223(1) of the Code.
(5) The basis of the assets of Company in the hands of RIC
will be the
same as the basis of those assets in the hands of Company
immediately prior to
the transfer. Section 362(a) of the Code.
(6) The holding period of the assets transferred to RIC by
Company will be
the same as the holding period of those assets in the
hands of Company
immediately before the exchange, Section 1223(2) of the Code.
(7) RIC will recognize no gain or loss on its receipt of
Company's assets
in exchange for shares of RIC stock, Section 1032(a) of the Code.
No opinion is expressed as to whether subsequent
transfers to RIC other
than the original transfer by Company will affect the tax
consequences of the
original transfer, Furthermore, no opinion is expressed as to
whether RIC will
qualify as a regulated investment company that is taxable under
sections 85155
of the Code. Finally, no opinion is expressed as to the tax
treatment of the
transaction under the provisions of any other sections of the
Code and Income
Tax Regulations which may be applicable thereto or the tax
treatment of any
conditions existing at the time of, or effects resulting from
the transaction,
which are not specifically set forth above.
This ruling is directed only to the taxpayer who
requested it, Section
6110(j)(3) of the Code provides that it may not be used or cited
as precedent.
Temporary or final regulations pertaining to one or more
of the issues
addressed in this ruling have not yet been adopted, Therefore,
this ruling may
be modified or revoked if the adopted temporary or final
regulations are
inconsistent with any conclusion in this ruling. See section
11.04 of Rev.Proc.
95-1, 1995-1 I.R.B., 91 41. However, when the criteria in
section 11.05 of
Rev.Proc. 95-1 are satisfied, a ruling is not revoked or modified
retroactively,
except in rare or unusual circumstances.
<PAGE>
A copy of this letter should be attached to the federal
income tax returns
of the taxpayers involved for the taxable year in which
the transaction
discussed in this letter is consummated.
Sincerely yours,
Acting Assistant Chief Counsel
(Corporate)
By:
Lewis K Brickates
Assistant to the Chief, Branch 2
<PAGE>
Exhibit 14
Opinion and consent of Ernst & Young LLP
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions
"Per Accumulation
Unit Income and Capital Changes" in the Prospectus and
"Investment Advisory and
Other Services" in the Statement of Additional Information both
included in the
Form N-3 for Transamerica Occidental's Separate Account Fund C
filed with the
Securities and Exchange Commission on April 25, 1996
incorporated by reference
in the Registration Statement (Form N-14) and related Prospectus
of Transamerica
Occidental's Separate Account Fund C. We also consent to the use
of our reports
dated February 8, 1996 and February 14, 1996 on
Transamerica Occidental's
Separate Account Fund C and Transamerica Occidental Life
Insurance Company and
Subsidiaries, respectively, contained in the Statement
of Additional
Information, included in the Form N-3 for Transamerica
Occidental's Separate
Account Fund C filed with the Securities and Exchange
Commission on April 25,
1996 incorporated by reference in the Registration Statement
(Form N-14) and
related Prospectus of Transamerica Occidental's Separate Account
Fund C.
Ernst & Young, LLP
Los Angeles, California
September 9, 1996
