<PAGE> 1
As filed with the Securities and Exchange Commission on October 7, 1996.
Registration No. 333-11599
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. 1 / /
----
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)
<TABLE>
<CAPTION>
Name and Address of Agent for Service: Copy to:
<S> <C>
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
</TABLE>
Approximate Date of Proposed Public Offering: As soon as practicable
following the effective date of this Registration Statement.
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 was paid with the initial filing.
It is proposed that this filing will become effective:
/ / immediately upon filing pursuant to paragraph (b)
/ / on _______________ pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph (a)(i)
/ / on _________________ pursuant to paragraph (a)(i)
/ / 75 days after filing pursuant to paragraph (a)(ii)
/ / on _________________ pursuant to paragraph (a)(ii)
of Rule 485
<PAGE> 2
TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND C
Registration Statement on Form N-14
CROSS REFERENCE SHEET
Pursuant to Rule 481(a)
<TABLE>
<CAPTION>
Part A Caption in Prospectus/Proxy Statement
- ------ -------------------------------------
<S> <C> <C>
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
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
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>
Caption in Statement
Part B of Additional Information
- ------ -------------------------
<S> <C> <C>
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
</TABLE>
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> 4
October 9, 1996
To Our Contract Owners:
We are sending you this letter with the enclosed proxy card and proxy
statement , AND RECOMMEND that you vote to approve the reorganization of
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.
<PAGE> 5
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,
/S/ THOMAS J. CUSACK
Thomas J. Cusack
President, Chief Executive Officer
Transamerica Occidental Life Insurance Company
IT IS IMPORTANT THAT YOU VOTE.
<PAGE> 6
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 SEPTEMBER 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.
<PAGE> 7
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/ Thomas M. Adams
-------------------
Thomas M. Adams
Secretary of Transamerica Occidental's
Separate Account Fund C
Los Angeles, California
October 9, 1996
<PAGE> 8
PART A
<PAGE> 9
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.
<PAGE> 10
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
TRANSAMERICA AT THE TRANSAMERICA ANNUITY SERVICE CENTER, 101 NORTH TRYON
STREET, SUITE 1720, CHARLOTTE, NC 28246 OR CALLING 1-800-258-4260, EXT. 5560.
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.
- 2 -
<PAGE> 11
PROXY STATEMENT/PROSPECTUS
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C>
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
</TABLE>
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<PAGE> 12
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 72,334 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: 1) properly executed ;
2) returned to Transamerica BY USING THE ENCLOSED ADDRESSED, POSTAGE PAID
ENVELOPE OR BY MAILING TO TRANSAMERICA OCCIDENTAL SEPARATE ACCOUNT FUND C PROXY
TABULATOR, MANAGEMENT INFORMATION SERVICES CORP., P.O. BOX 9122, HINGHAM,
MASSACHUSETTS 02043 OR IF BY MEANS OTHER THAN U.S. MAILS TO TRANSAMERICA PROXY
TABULATORS, MANAGEMENT INFORMATION SERVICE CORP., 61 ACCORD PARK DRIVE,
NORWELL, MASSACHUSETTS 02061; AND 3) RECEIVED BY MANAGEMENT INFORMATION
SERVICES 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.
- 4 -
<PAGE> 13
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.(1/) 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.
ALTHOUGH TRANSAMERICA HAS A MAJORITY INTEREST IN OLD ACCOUNT C (SEE
"PRINCIPAL HOLDERS OF SHARES OF THE FUND," BELOW), TRANSAMERICA WILL NOT VOTE
ON ANY MATTER PRESENTED AT THE MEETING, EXCEPT THAT TRANSAMERICA WILL VOTE
THOSE ACCUMULATION AND ANNUITY UNITS ATTRIBUTABLE TO THE CONTRACTS AS TO WHICH
NO TIMELY INSTRUCTIONS ARE RECEIVED IN PROPORTION TO THE VOTING INSTRUCTIONS
THAT ARE RECEIVED.
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
- ------------------------
1/ A "majority" for this purpose means the lesser of (a) 67% of the voting
securities present, if the holders of 50% of the voting securities are present
or represented by proxy, or (b) 50% of the outstanding voting securities.
- 5 -
<PAGE> 14
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
- 6 -
<PAGE> 15
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.
- 7 -
<PAGE> 16
<TABLE>
<CAPTION>
Old Account C Growth Portfolio New Account C
------------- ---------------- Plus Growth
(actual) (actual) Portfolio
-------------
(pro forma)
<S> <C> <C> <C>
CONTRACT OWNER TRANSACTION EXPENSES
Sales Load Imposed on Purchases: 1/ 6.50% None 6.50%
Administration Expense Imposed on 2.50% None 2.50%
Purchases: 2/
Maximum Total Contract Owner Transaction 9.00% None 9.00%
Expenses: 3/
Annual Expenses:
(as a percentage of average daily net
assets)
Management Fee 0.30% 0.75% 0.75%
Mortality and Expense Risk
Charge 4/ 1.10% None 0.55%
Other Expenses 5/ None 0.10% 0.10%
------ ----- -----
</TABLE>
- ------------------------
1/ The sales charge 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.
2/ The administrative expense charge 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.
3/ Premium taxes are not shown. Premium taxes, if any, are deducted when paid
which may be upon annuitization. If a state so requires, a tax will be deducted
from each purchase payment.
4/ If the sum of the annual expenses to be charged against the Contracts by New
Account C plus the Fund's expenses is greater 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.
5/ After expense reimbursement by Transamerica. WITHOUT SUCH REIMBURSEMENT,
OTHER EXPENSES DURING 1996 ARE ESTIMATED TO BE 0.35%. IN THE FUTURE,
TRANSAMERICA WILL EITHER MAINTAIN THIS LEVEL OF EXPENSE REIMBURSEMENT OR ITWILL
OFFSET ANY INCREASE IN EXPENSES BY A REDUCTION OF THE MORTALITY AND EXPENSE RISK
CHARGE, SO THAT TOTAL ANNUAL EXPENSES ON CONTRACTS OUTSTANDING AS OF THE DATE OF
THE REORGANIZATION WILL NOT EXCEED 1.40% FOR ANY YEAR DURING WHICH SUCH
CONTRACTS ARE IN EFFECT.
- 8 -
<PAGE> 17
<TABLE>
<S> <C> <C> <C>
Total Annual Expenses 1.40% 0.85% 1.40%
</TABLE>
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.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Old Account C $103 $130 $160 $243
New Account C $103 $130 $160 $243
</TABLE>
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.(1/) FOR A MORE COMPLETE DESCRIPTION OF THE INVESTMENT
OBJECTIVE, POLICIES AND RESTRICTIONS OF THE GROWTH PORTFOLIO AND OF WHICH
INVESTMENT POLICIES ARE DEEMED FUNDAMENTAL, SEE THE PROSPECTUS FOR THE GROWTH
PORTFOLIO WHICH IS ATTACHED AS EXHIBIT C.
- ------------------------
1/ A fundamental restriction is one that cannot be changed without the
affirmative vote of the holders of a majority of the outstanding voting shares
of Old Account C or the Fund. For this purpose, a "majority" of shares means
the lesser of: (a) 67% or more of the voting shares present at a meeting, if the
holders of more than 50% of such votes are present or represented by proxy; or
(b) more than 50% of the voting shares.
- 9 -
<PAGE> 18
The investment policies and restrictions of Old Account C and the
Growth Portfolio of the Fund are compared below.
<TABLE>
<CAPTION>
===============================================================================================================
Old Account C Growth Portfolio
------------- ----------------
- ---------------------------------------------------------------------------------------------------------------
<S> <C>
Old Account C's investment objective is long-term The Growth Portfolio's investment objective
capital growth, although this objective may not be is long-term capital growth. Common stock,
achieved. Common stock, listed and unlisted, is the listed and unlisted, is the basic form of
basic form of investment. Old Account C may also invest investment. Although the Portfolio invests
in debt securities and preferred stock having a call on the majority of its assets in common
common stock by means of a conversion privilege or stocks, the Portfolio may also invest in
attached warrants and warrants or other rights to debt securities and preferred stocks (both
purchase common stock. Unless market conditions would having a call on common stocks by means of
indicate otherwise, Old Account C's portfolio will be a conversion privilege or attached
invested in such equity-type securities. However, when warrants) and warrants or other rights to
market conditions warrant it, a portion of Old Account purchase common stocks. Unless market
C's assets may be held in cash or debt securities. 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 With respect to 75% of total assets, the
C will not invest more than 5% of the value of its total Portfolio may not purchase securities of
assets in the securities of any one issuer, except any issuer if, as a result of the purchase,
obligations of the United States Government and more than 5% of the Portfolio's total
instrumentalities thereof. However, holdings may exceed assets would be invested in the securities
the 5% limit if it results from investment performance, of the issuer. This limitation does not
and is not the result, wholly or partially, of purchase. 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 With respect to 75% of total assets, the
issuer will be acquired. 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 The Portfolio may not invest in companies
company for the purpose of exercising management or for the purpose of exercising management or
control in that company. control in that company.
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
- 10 -
<PAGE> 19
<TABLE>
<CAPTION>
===============================================================================================================
Old Account C Growth Portfolio
------------- ----------------
- ---------------------------------------------------------------------------------------------------------------
<S> <C>
Old Account C does not currently intend to make The Growth Portfolio does not currently
investments in the securities of other investment intend to make investments in the
companies. Old Account C does reserve the right to securities of other investment companies.
purchase such securities, subject to the following The Growth Portfolio does reserve the right
limitations: Old Account C will not purchase such to purchase such securities, provided the
securities if it would cause (1) more than 10% of the purchase of such securities does not cause:
value of the total assets of Old Account C to be (1) more than 10% of the value of the total
invested in securities of registered investment assets of the Portfolio to be invested in
companies; or (2) Old Account C to own more than 3% of securities of registered investment
the total outstanding voting stock of any one investment companies; or (2) the Portfolio to own more
company; or (3) Old Account C to own securities of any than 3% of the total outstanding voting
one investment company that have a total value greater stock of any one investment company; or (3)
than 5% of the value of the total assets of Old Account the Portfolio to own securities of any one
C; or (4) together with other investment companies investment company that have a total value
advised by Transamerica, Old Account C to own more than greater than 5% of the value of the total
10% of the outstanding voting stock of a closed-end assets of the Portfolio; or (4) together
investment company. 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 Purchases or acquisitions may be made of
which are not readily marketable by reason of the fact securities which are not readily marketable
that they are subject to the registration requirements by reason of the fact that they are subject
of the Securities Act of 1933 or the salability of which to the registration requirements of the
is otherwise conditioned ("restricted securities"), as Securities Act of 1933 or the salability of
long as any such purchase or acquisition will not which is otherwise conditioned, including
immediately result in the value of all such restricted real estate and certain repurchase
securities exceeding 10% of the value of Old Account C's agreements or time deposits maturing in
total assets. It is the policy of the Board not to more than seven days ("restricted
invest more than 10% of Old Account C's net assets in securities"), as long as any such purchase
restricted securities. or acquisition will not immediately result
in the value of all such restricted
securities exceeding 15% of the value of
the Portfolio's NET assets.
- ---------------------------------------------------------------------------------------------------------------
Borrowings will not be made except as a temporary The Portfolio may borrow from banks for
measure for extraordinary or emergency purposes provided temporary or emergency (not leveraging)
that such borrowings shall not exceed 5% of the value of purposes, including the meeting of
Old Account C's total assets. 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 The Portfolio may not underwrite any issue
provided that this shall not prevent the purchase of of securities, except to the extent that
securities the sale of which may result in Old Account C the sale of securities in accordance with
being deemed to be an "underwriter" for purposes of the the Portfolio's investment objective,
Securities Act of 1933. 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 The Portfolio may not invest more than 25%
nor will more than 25% of the value of Old Account C's of the value of its total assets in
assets be invested in issuers all of which conduct their securities issued by companies engaged in
principal business activities in the same general any one industry. This limitation does not
industry. apply to investments in Government
Securities.
- ---------------------------------------------------------------------------------------------------------------
The purchase and sale of real estate or interests in The Portfolio reserves the right to invest
real estate is not intended as a principal activity. up to 10% of the value of its assets in
However, the right is reserved to invest up to 10% of real properties, including property
the value of the assets of Old Account C in real acquired in satisfaction of obligations
properties, including property acquired in satisfaction previously held or received in part payment
of obligations previously held or received in part on the sale of other real property owned.
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.
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
- 11 -
<PAGE> 20
<TABLE>
<CAPTION>
===============================================================================================================
Old Account C Growth Portfolio
------------- ----------------
- ---------------------------------------------------------------------------------------------------------------
<S> <C>
The purchase and sale of commodities or commodity The Portfolio may not purchase or sell
contracts will not be engaged in. commodities or commodities contracts.
- ---------------------------------------------------------------------------------------------------------------
Loans may be made by only through the acquisition of all The Portfolio may not lend its assets or
or a portion of an issue of bonds, debentures or other money to other persons, except through:
evidences of indebtedness of a type customarily (a) the acquisition of all or a portion of
purchased for investment by institutional investors, an issue of bonds, debentures or other
whether publicly or privately distributed. (It is not evidence of indebtedness of a type
presently intended to invest more than 10% of the value customarily purchased for investment by
of Old Account C in privately distributed loans. institutional investors, whether publicly
Furthermore, it is possible that the acquisition of an or privately distributed. (The Portfolio
entire issue may cause Old Account C to be deemed does not presently intend to invest more
"underwriter" for purposes of the Securities Act of than 10% of the value of the Portfolio in
1933.) The securities of Old Account C may also be privately distributed loans. It is
loaned provided that any such loan is collateralized possible that the acquisition of an entire
with cash equal to or in excess of the market value of issue may cause the Portfolio to be deemed
such securities. (It is not presently intended to an "underwriter" fur purposes of the
engage in the lending of securities.) 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 The Portfolio may not issue senior
securities. securities.
- ---------------------------------------------------------------------------------------------------------------
Old Account C does not intend to write put and call The Portfolio may not write put and call
options. options.
- ---------------------------------------------------------------------------------------------------------------
Purchase of securities on margin may not be made, but The Portfolio may not purchase securities
such short-term credits as may be necessary for the on margin, except that the Portfolio may
clearance of purchases and sales of securities are obtain any short-term credits necessary for
permissible. 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 The Portfolio may not make short sales of
not be maintained unless at all times when a short securities or maintain a short position,
position is open Old Account C owns at least an equal unless at all times when the short position
amount of such securities or securities currently is open, the Portfolio owns an equal amount
exchangeable, without payment of any further of such securities or securities currently
consideration, for securities of the same issue as, and exchangeable, without payment of any
at least equal in amount to, the securities sold short further consideration, for securities of
(generally called a "short sale against the box") and the same issue as, and at least equal in
unless not more than 10% of the value of Old Account C's amount to, the securities sold short
net assets is deposited or pledged as collateral for (generally called a "short sale against the
such sales at any one time. 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.
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
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
- 12 -
<PAGE> 21
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.
- 13 -
<PAGE> 22
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.
- 14 -
<PAGE> 23
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 con tracts) 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.
- 15 -
<PAGE> 24
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:
- 16 -
<PAGE> 25
<TABLE>
<CAPTION>
=============================================================================================================
CAPITALIZATION Old Account C Growth Portfolio New Account C
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <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
=============================================================================================================
</TABLE>
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
- 17 -
<PAGE> 26
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.(1/)
- ------------------------
1/ The Investment Performance Factor is determined at the end of each valuation
period and is the ratio of A/B where "A" is the value of Old Account C as of the
end of such valuation period immediately prior to making any deposits into and
any withdrawals from Old Account C, reduced by the investment management charge
assessed against such value at an annual
(continued...)
- 18 -
<PAGE> 27
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.
- ---------------------------
1/ (...continued)
rate of 0.30%; and "B" is the value of Old Account C as of the end of the
preceding valuation period immediately after making any deposits into and any
withdrawals from Old Account C, including any charges for expense and mortality
risks assessed against the Fund on that date, from Old Account C.
- 19 -
<PAGE> 28
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.
- 20 -
<PAGE> 29
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.
Rolle, 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
- 21 -
<PAGE> 30
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 (74) 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 (59)* 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 (82) 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. Rolle (55)* Chairman, Board of Director, Transamerica INVESTORS, INC.; Director, Executive Vice
Directors President and Chief Investment Officer of Transamerica Investment
Services, Inc.; Director and Chief Investment Officer of Transamerica
Occidental Life Insurance Company.
Peter J. Sodini (55) 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).
</TABLE>
* 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.
- 22 -
<PAGE> 31
The executive officers of the Fund are described in the table below.
They are the same as the executive officers of Old Account C.
<TABLE>
<CAPTION>
Position
Name, Age and Address** with the Fund Principal Occupation During the Past Five Years
- ----------------------- ------------- -----------------------------------------------
<S> <C> <C>
Barbara A. Kelley (43) 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 VICE PRESIDENT, Broker/Dealer Channel OF THE INSTITUTIONAL MARKETING
SERVICES DIVISION 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 (61) Secretary Partner in the law firm of Lanning, Adams & PETERSON.
Regina M. Fink (40) Assistant Secretary Counsel for Transamerica Occidental Life Insurance Company and prior to
1994 Counsel and Vice President for Colonial Management ASSOCIATES ,
Inc.
</TABLE>
* The mailing address of this officer is 101 North Tryon Street, Suite 1070,
CHARLOTTE, 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 AND THE FUND COMPLEX during the current fiscal year ENDING DECEMBER 31,
1996, to all Directors of the Fund.
<TABLE>
<CAPTION>
Name of Person
-------------- Aggregate Total Pension or Compensation
Compensation Retirement Benefits From Registrant
From Fund 1/ Accrued As Part of Fund and Fund Complex
Expenses 1/ 2/ Paid to Directors 2/ 3/
<S> <C> <C> <C>
Donald E. Cantlay -0- -0- $6,000
Richard N. Latzer -0- -0- -0-
</TABLE>
- 23 -
<PAGE> 32
<TABLE>
<S> <C> <C> <C>
DeWayne W. Moore -0- -0- $6,250
Gary U. Rolle -0- -0- -0-
Peter J. Sodini -0- -0- $4,750
</TABLE>
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/ ONCE THE FUND COMMENCES OPERATION, EACH DIRECTOR OF THE FUND WILL BE
COMPENSATED $250 FOR EACH MEETING THEY ATTEND. (THE BOARD OF THE FUND PLANS TO
HOLD FOUR REGULARLY SCHEDULED BOARD MEETINGS EACH YEAR; OTHER MEETINGS MAY BE
SCHEDULED.) THIS IS THE SAME COMPENSATION THE DIRECTORS RECEIVED WHILE MEMBERS
OF THE BOARD OF MANAGERS OF OLD ACCOUNT C.
2/ 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.
3/ During FISCAL YEAR 1996, each Board MEMBER 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. Rolle is a director of Transamerica Investors,
Inc. THESE REGISTERED INVESTMENT COMPANIES COMPRISE THE "FUND COMPLEX."
THE BOARD OF MANAGERS RECOMMENDS A "VOTE FOR" EACH NOMINEE TO THE
BOARD OF DIRECTORS.
- 24 -
<PAGE> 33
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. THIS ADVISORY FEE WILL BE HIGHER THAN THE ADVISORY FEE OF
0.30% OF AVERAGE DAILY NET ASSETS THAT HAS BEEN CHARGED AGAINST THE ASSETS OF
OLD ACCOUNT C. FOR THE YEAR ENDED DECEMBER 31, 1995, THE ACTUAL ADVISORY FEE
PAID TO TRANSAMERICA BY OLD ACCOUNT C WAS $67,198. ASSUMING THE PROPOSED
INVESTMENT ADVISORY AGREEMENT HAD BEEN IN PLACE DURING THE YEAR ENDED DECEMBER
31, 1995, THE ADVISORY FEE FOR OLD ACCOUNT C WOULD HAVE BEEN APPROXIMATELY
$176,987. THE DIFFERENCE BETWEEN THE ACTUAL AND THE PROPOSED FEE FOR
- 25 -
<PAGE> 34
THE YEAR ENDED DECEMBER 31, 1995 IS APPROXIMATELY 250%. HOWEVER, ANY INCREASE
IN THE ADVISORY FEE AFTER THE REORGANIZATION WILL BE FULLY OFFSET BY A
REDUCTION IN THE MORTALITY AND EXPENSE RISK CHARGE SO THAT THE TOTAL ANNUAL
EXPENSES OF CONTRACT OWNERS WILL NOT CHANGE. THIS OFFSET WILL REMAIN IN EFFECT
FOR THE DURATION OF THE CONTRACTS.
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.
<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
</TABLE>
- 26 -
<PAGE> 35
<TABLE>
<S> <C> <C> <C>
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
THE BOARD OF MANAGERS OF OLD ACCOUNT C RECOMMENDS that, following the
Reorganization, the Contract owners approve the Investment Advisory Agreement
by which Transamerica will serve as investment adviser to the Growth Portfolio.
THE PRINCIPAL FACTORS CONSIDERED BY THE BOARD OF MANAGERS IN MAKING
THIS RECOMMENDATION WERE AS FOLLOWS. Transamerica has been the investment
advisor to Old Account C since its inception and has provided high quality
administrative and insurance services. MOREOVER, THE investment performance
of the Account under Transamerica's management has
- 27 -
<PAGE> 36
been outstanding.
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 SINCE 1968 and the Transamerica Life Companies since
1981. Investment Services SERVES AS THE SUB-ADVISOR TO TRANSAMERICA
OCCIDENTAL'S SEPARATE ACCOUNT FUND B, A MANAGEMENT SEPARATE ACCOUNT WITH $40.6
MILLION IN NET ASSETS AS OF DECEMBER 31, 1995, THAT HAS AN INVESTMENT OBJECTIVE
AND ADVISORY FEE IDENTICAL TO OLD ACCOUNT C. SINCE OCTOBER 1995, INVESTMENT
SERVICES HAS SERVED AS INVESTMENT ADVISOR TO TRANSAMERICA PREMIER EQUITY FUND
("EQUITY FUND"), A MUTUAL FUND WITH $11.0 MILLION IN NET ASSETS AS OF DECEMBER
31, 1995, THAT SEEKS TO MAXIMIZE LONG-TERM GROWTH. FOR ITS SERVICES TO THE
EQUITY FUND, INVESTMENT SERVICES RECEIVES AN ANNUAL FEE OF .85% ON THE FIRST $1
BILLION OF ASSETS. THIS REDUCES TO .82% ON THE NEXT $1 BILLION, AND FINALLY
.80% ON ASSETS OVER $2 BILLION.
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. THIS FEE IS PAID BY TRANSAMERICA OUT OF ITS
ADVISORY FEE (DISCUSSED ABOVE), NOT BY THE FUND. PRIOR TO THE REORGANIZATION,
THE ASSETS HELD IN OLD ACCOUNT C WERE MANAGED BY INVESTMENT SERVICES PURSUANT
TO AN AGREEMENT WHEREBY INVESTMENT SERVICES MANAGED ALL THE ASSETS OF
TRANSAMERICA IN EXCHANGE FOR A FLAT FEE. INVESTMENT SERVICES WAS NOT PAID A
PERCENTAGE OF THE NET ASSETS IT MANAGED IN OLD ACCOUNT C. THEREFORE, IT IS NOT
POSSIBLE TO ACCURATELY PROVIDE THE DOLLAR AMOUNT PAID WITH RESPECT TO OLD
ACCOUNT C OR THE PERCENTAGE DIFFERENCE BETWEEN THE CURRENT AND THE PROPOSED
SUBADVISORY FEE. 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
- 28 -
<PAGE> 37
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
<TABLE>
<S> <C>
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
</TABLE>
- 29 -
<PAGE> 38
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
THE BOARD OF MANAGERS OF OLD ACCOUNT C RECOMMENDS 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 (EXCEPT FOR THE FEE STRUCTURE) for OLD
ACCOUNT C 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.
IN ADDITION, THE BOARD OF MANAGERS CONSIDERED THAT 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.
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.
- 30 -
<PAGE> 39
On July 24, 1996, the Board of Directors of the Fund, INCLUDING A
MAJORITY OF DIRECTORS WHO ARE NOT "INTERESTED PERSONS" 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.
THE BOARD 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
- 31 -
<PAGE> 40
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
- 32 -
<PAGE> 41
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> 42
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 TO THE
REGISTRATION STATEMENT ON FORM N-3 of Transamerica
Occidental's Separate Account Fund C, File No. 2-36250 (April
26, 1996).
<PAGE> 43
Exhibit C
Transamerica Variable Insurance Fund, Inc. Prospectus
This document is incorporated by reference to the prospectus
filed with PRE-EFFECTIVE AMENDMENT NO. 1 TO THE Registration
Statement on Form N-1A of Transamerica Variable Insurance
Fund, Inc., File No. 33-99016 (SEPTEMBER 12, 1996).
<PAGE> 44
Exhibit D
Investment Advisory Agreement
THIS DOCUMENT IS INCORPORATED BY REFERENCE TO THE
LIKE-NUMBERED EXHIBIT TO THE PROSPECTUS FILED WITH THE
INITIAL REGISTRATION STATEMENT ON FORM N-14 OF TRANSAMERICA
OCCIDENTAL'S SEPARATE ACCOUNT FUND C, FILE NO. 333-11599
(SEPTEMBER 9, 1996).
<PAGE> 45
Exhibit E
Investment Sub-Advisory Agreement
THIS DOCUMENT IS INCORPORATED BY REFERENCE TO THE
LIKE-NUMBERED EXHIBIT TO THE PROSPECTUS FILED WITH THE
INITIAL REGISTRATION STATEMENT ON FORM N-14 OF TRANSAMERICA
OCCIDENTAL'S SEPARATE ACCOUNT FUND C, FILE NO. 333-11599
(SEPTEMBER 9, 1996).
<PAGE> 46
Exhibit F
Form of Proxy
THIS DOCUMENT IS INCORPORATED BY REFERENCE TO THE
LIKE-NUMBERED EXHIBIT TO THE PROSPECTUS FILED WITH THE
INITIAL REGISTRATION STATEMENT ON FORM N-14 OF TRANSAMERICA
OCCIDENTAL'S SEPARATE ACCOUNT FUND C, FILE NO. 333-11599
(SEPTEMBER 9, 1996).
<PAGE> 47
PART B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE> 48
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 9, 1996. That document may be obtained by writing Transamerica
Occidental Life Insurance Company, AT THE TRANSAMERICA ANNUITY SERVICE CENTER,
101 NORTH TRYON STREET, SUITE 1720, CHARLOTTE, NC 28246 or by telephoning
1-800- 258-4260, EXT. 5560.
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 (OCTOBER 7, 1996) . . . . . . . . . . . . .
<PAGE> 49
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 PRE-EFFECTIVE AMENDMENT TO ITS Registration Statement
on Form N-1A filed with the Securities and Exchange
Commission on SEPTEMBER 12, 1996 (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.
-2-
<PAGE> 50
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> 51
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> 52
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 PRE-EFFECTIVE AMENDMENT
NO. 1 TO the initial Registration Statement on Form N-1A of
Transamerica Variable Insurance Fund, Inc., File No. 33-99016
(SEPTEMBER 12, 1996).
<PAGE> 53
PART C
OTHER INFORMATION
<PAGE> 54
TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND C
PART C -- OTHER INFORMATION
Item 15. Indemnification
In general, pursuant to the Rules and Regulations of the
Registrant, each member of the Board and each Officer and
agent of the Separate Account shall be indemnified by the
Separate Account for expenses incurred in connection with the
defense of any proceeding in which he is made a party by
reason of the fact that he holds or held such position with
the Separate Account. However, there shall be no
indemnification in relation to matters as to which such
person shall be finally adjudged in such proceeding to be
liable for negligence or misconduct in the performance of
duties. No person shall be protected against liability to
the Separate Account or to Contract Owners to which he would
otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties.
Pursuant to the Distribution Agreement with the Underwriter,
Transamerica will indemnify and hold harmless the Underwriter
and each person who controls it against any liabilities to
the extent that they arise from inaccurate or misleading
statements in material provided by Transamerica.
The directors and officers of Transamerica Occidental Life
Insurance Company are covered under a Directors and Officers
liability program which includes direct coverage to directors
and officers (Coverage A) and corporate reimbursement
(Coverage B) to reimburse the Company for indemnification of
its directors and officers. Such directors and officers are
indemnified for loss arising from any covered claim by reason
of any Wrongful Act in their capacities as directors or
officers. In general, the term "loss" means any amount which
the insureds are legally obligated to pay for a claim for
Wrongful Acts. In general, the term "Wrongful Acts" means
any breach of duty, neglect, error, misstatement, misleading
statement or omission caused, committed or attempted by a
director or officer while acting individually or collectively
in their capacity as such, claimed against them solely by
reason of their being directors and officers. The limit of
liability under the program is $65,000,000 for Coverage A and
$55,000,000 for Coverage B for the period 11/25/95 to
11/25/96. Coverage B is subject to a self insured retention
of $5,000,000. The primary policy under the program is with
Corporate Officers and Directors Assurance Holding Limited
(CODA).
1
<PAGE> 55
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant
to the foregoing provisions, or otherwise, the registrant has
been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of
such issue.
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.
2
<PAGE> 56
(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. 8/
(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 by reference to Exhibit D to Part A
(Prospectus/Proxy Statement) of the initial filing of this
Registration Statement on Form N-14, File No. 333-11599
(September 9, 1996).
4/ Included by reference to Exhibit E to Part A
(Prospectus/Proxy Statement) of the initial filing of this
Registration Statement on Form N-14, File No. 333-11599
(September 9, 1996).
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).
3
<PAGE> 57
8/ Incorporated by reference to the like-numbered exhibit to the
initial filing of this Registration Statement on Form N-14,
File No. 333-11599 (September 9, 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.
4
<PAGE> 58
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 4th day of October,
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 October 4, 1996 by the following persons in the capacities
indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
*
-----------------------
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
</TABLE>
/s/ James W. Dederer
- -----------------------------------------------------------------------
*By James W. Dederer, pursuant to Power of Attorney
<PAGE> 59
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 October 4, 1996.
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
/s/ James W. Dederer
-------------------------------------
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 October 4, 1996 by the following persons or by their duly
appointed attorney-in-fact in the capacities specified:
<TABLE>
<CAPTION>
SIGNATURE SIGNATURE
- --------- ---------
<S> <C>
* *
- --------------------------- -----------------------------
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
</TABLE>
<PAGE> 60
<TABLE>
<S> * <C> *
- --------------------------- -----------------------------
Edgar H. Grubb Nooruddin S. Veerjee
Director Director
* *
- --------------------------- -----------------------------
Frank C. Herringer Robert A. Watson
Director Director
*
- ---------------------------
Daniel E. Jund
Director
/s/ James W. Dederer
- ---------------------------------------------------
*By James W. Dederer, pursuant to Power of Attorney
</TABLE>
<PAGE> 61
PART C EXHIBIT INDEX
11. Opinion and consent of counsel as to the legality of the securities
being registered
14. Opinion and consent of Ernst & Young LLP
<PAGE> 1
EXHIBIT 11
Opinion and consent of counsel as to the legality
of the securities being registered
<PAGE> 2
October 3, 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. 333-11599), 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,
/s/ James W. Dederer
- --------------------
JAMES W. DEDERER
General Counsel
<PAGE> 1
Exhibit 14
Opinion and consent of Ernst & Young LLP
<PAGE> 2
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 26, 1996 incorporated by reference
in the Registration Statement (Form N-14 No. 333-11599) and related Prospectus
of Transamerica Occidental's Separate Account Fund C expected to be filed
Octobert 4, 1996. We also consent to the use of our reports dated February 8,
1996 and February 14, 1996 on Transamerica Occidental 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 26, 1996 and incorporated by
reference in the Registration Statement (Form N-14 No. 333-11599) and related
Prospectus of Transamerica Occidental's Separate Account Fund C expected to be
filed October 4, 1996.
/s/ Ernst & Young LLP
- ---------------------
Los Angeles, California
October 2, 1996
