SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
LIFE OF VIRGINIA SERIES FUND, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
( ) $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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LIFE OF VIRGINIA SERIES FUND, INC.
6610 West Broad Street
Richmond, Virginia 23230
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF THE
REAL ESTATE SECURITIES PORTFOLIO
August 20, 1996
To participants in the Aon Savings Plan (hereinafter, the "Plan") entitled to
give voting instructions to the Trustees of the Plan (hereinafter, the
"Trustees") with respect to the Real Estate Securities Portfolio (hereinafter,
the "Portfolio") of the Life of Virginia Series Fund, Inc. (hereinafter, the
"Fund")
Notice is hereby given that a Special Meeting of Shareholders (hereinafter, "the
Meeting") of the Portfolio of the Fund will be held on Tuesday, August 20, 1996
at 11:00 a.m., Richmond, Virginia time, in the 8th Floor Board Room of The Life
Insurance Company of Virginia Building, 6610 West Broad Street, Richmond,
Virginia.
The Fund has outstanding a separate series (or class) of stock for each of its
investment portfolios: Common Stock Index Portfolio, Government Securities
Portfolio, Money Market Portfolio, Total Return Portfolio, International Equity
Portfolio and the Portfolio. Only holders of shares of the Portfolio will meet
for the following purposes:
1. To approve or disapprove the New Investment Sub-Advisory
Agreement for the Portfolio between GMG/Seneca Capital
Management L.L.C. and Aon Advisors, Inc. in the form
appended as Exhibit A; and,
2. To consider and transact such other business as may
properly come before the Meeting or any adjournment
thereof.
The Trustees and The Life Insurance Company of Virginia (hereinafter, "LOV") on
behalf of itself and the separate accounts of LOV (hereinafter, the "Accounts"),
are currently the only shareholders of the Portfolio. The Trustees hereby
solicit and agree to vote the stock of the Portfolio held by the Trustees at the
Meeting in accordance with timely instructions received from Plan participants
(hereinafter, "Participants").
As a Participant at the close of business on July 17, 1996, you have the right
to instruct the Trustees as to the manner in which shares of the Portfolio held
by the Trustees on your behalf should be voted. To assist you in giving your
instructions, a voting instruction form is enclosed that indicates the number of
shares of the Portfolio for which you are entitled to give voting instructions.
In addition, a proxy statement attached to this notice describes the matters to
be voted upon at the Meeting or any adjournments thereof.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING,
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED VOTING INSTRUCTION FORM AND RETURN
IT PROMPTLY IN THE ENCLOSED POSTAGE PREPAID ENVELOPE.
By Order of the Board of Directors
Linda L. Lanam, Secretary
Richmond, Virginia August 1, 1996
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LIFE OF VIRGINIA SERIES FUND, INC.
6610 West Broad Street
Richmond, Virginia 23230
August 1, 1996
PROXY STATEMENT
This proxy statement is being furnished on behalf of the Board of Directors of
the Life of Virginia Series Fund, Inc. (hereinafter, the "Fund") by the Trustees
(hereinafter, the "Trustees") of the Aon Savings Plan (hereinafter, the "Plan")
to participants in the Plan (hereinafter, "Participants") on whose behalf the
Plan held shares of the Real Estate Securities Portfolio (hereinafter, the
"Portfolio") on the record date of July 17, 1996. This proxy statement is being
furnished in connection with the solicitation of voting instructions from
Participants for use at a Special Meeting of Shareholders (hereinafter, the
"Meeting") of the Portfolio.
The Fund has outstanding a separate series (or class) of stock for each of its
investment portfolios: Common Stock Index Portfolio, Government Securities
Portfolio, Money Market Portfolio, Total Return Portfolio, International Equity
Portfolio and the Portfolio. Only holders of shares of the Portfolio will vote
on the matters presented to this Meeting. The Meeting will be held on Tuesday,
August 20, 1996 at 11:00 a.m., Richmond, Virginia time, in the 8th Floor Board
Room of The Life Insurance Company of Virginia Building, 6610 West Broad Street,
Richmond, Virginia for the purposes set forth below and in the attached Notice
of Special Meeting. The approximate mailing date of this proxy statement is
August 1, 1996.
Shareholders of the Portfolio will meet for the following purposes:
1. To approve or disapprove the New Investment Sub-Advisory
Agreement of the Portfolio between GMG/Seneca Capital
Management L.L.C. and Aon Advisors, Inc. in the form
appended as Exhibit A; and,
2. To consider and transact such other business as may
properly come before the Meeting or any adjournment
thereof.
GENERAL VOTING INFORMATION
The Fund, a Virginia corporation organized on May 14, 1984, is registered with
the Securities and Exchange Commission (hereinafter, the "SEC") as a diversified
open-end management investment company under the Investment Company Act of 1940
(hereinafter, the "1940 Act"). The Plan is a qualified retirement plan open to
all eligible employees of Aon Corporation and its subsidiaries, including Aon
Advisors, Inc., which have adopted the Plan. From 1986 until April 1, 1996, The
Life Insurance Company of Virginia (hereinafter, "LOV") was a subsidiary of Aon
Corporation and had adopted the Plan. On April 1, 1996, Aon Corporation sold LOV
to General Electric Capital Corporation and it became an indirectly owned
subsidiary of GNA Corporation . However, many officers and employees of LOV are
still Participants and may be eligible to vote at the Meeting.
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The Plan is intended to qualify under section 401(a) and section 501(a) of the
Internal Revenue Code of 1986, as amended, (hereinafter, the "Code") and
includes a cash or deferred arrangement intended to qualify under section 401(k)
of the Code. Participants may indirectly purchase shares of the capital stock of
the Portfolio through the Trustees who purchase shares of the capital stock of
the Portfolio for the Plan.
In addition to selling shares of the Portfolio to the Plan, the Fund sells
shares to various separate accounts established by LOV. LOV established Life of
Virginia Separate Account I, Life of Virginia Separate Account II and Life of
Virginia Separate Account III to support variable life insurance policies and
Life of Virginia Separate Account 4 (hereinafter, the "Accounts") to support
variable annuity policies. These Accounts are each registered with the SEC under
the 1940 Act as a unit investment trust. Net premiums paid by a policyowner may
be allocated to one or more of the six investment subdivisions of each Account
that invest in stock of the Fund. Each such investment subdivision invests in a
series of capital stock corresponding to one of the Fund's portfolios and
represents an interest in that portfolio. Each portfolio is a separate
investment portfolio.
The Trustees and LOV on its own behalf and on behalf of the Accounts are
currently the only owners of the Portfolio's capital stock. Pursuant to
undertakings made by the Trustees in an application for an order that would
permit the Plan to purchase shares of the Fund, including the Portfolio, which
was filed with the SEC on March 17, 1994, the Trustees will vote shares of the
Portfolio held by the Plan at the Meeting in accordance with the timely
instructions received from Participants entitled to give voting instructions.
All properly executed voting instruction forms received by the Trustees by the
close of business on August 19, 1996 will be counted.
Participants may revoke voting instructions given to the Trustees at any time
prior to the Meeting by notifying the Trustees or the Secretary of the Fund in
writing.
The Trustees will vote stock attributable to Participants for which no voting
instructions are received in proportion to those for which instructions are
received. If a voting instruction form is received that does not specify a
choice, the Trustees will consider its timely receipt as an instruction to vote
in favor of the proposal(s) to which it relates.
The number of shares of stock of the Portfolio for which a Participant may give
voting instructions is equal to the number of shares, or fraction of shares,
which the Trustees hold on behalf of the Participant as of the record date. Each
share of stock receives one vote, and fractional shares are counted.
The vote required to approve each matter listed in the notice attached hereto is
set forth below where each such matter is discussed in detail.
The Board of Directors of the Fund has fixed July 17, 1996 as the record date
for the determination of shareholders entitled to notice of and to vote at the
Meeting. As of July 17, 1996, there were out
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standing the following shares of the capital stock of the Portfolio (Class F)
1,666,097.206
None of the Directors of the Fund own, directly or indirectly, any stock of the
Portfolio. To the best knowledge of the Boards of Directors of the Fund, of LOV
and the Trustees, the following Participants and owners of certain variable life
insurance policies and variable annuity policies issued by LOV (hereinafter,
"Policyowners") are the only Participants and Policyowners who, as of July 17,
1996, had the right to instruct LOV or the Trustees as to stock equal to 5% or
more of the value of the Portfolio's stock:
POLICYOWNER\PARTICIPANT
NONE
APPROVAL OR DISAPPROVAL
OF
THE NEW INVESTMENT SUB-ADVISORY AGREEMENT
At the inception of the Portfolio, Aon Advisors, Inc., the Fund's investment
advisor, recommended a sub-advisory relationship with Genesis Realty Capital
Management, L.P. (hereinafter, "Genesis"), a limited partnership established in
the state of New York. Genesis had three principal general partners. Zell
Capital Associates, L.P., an Illinois limited partnership indirectly controlled
by Samuel Zell, owned 50% of the stock of Genesis. Genesis Realty Investments,
L.P., a California limited partnership, owned 25% of Genesis. The general
partners of Genesis Realty Investments were Will K. Weinstein, Gail P. Seneca
and Philip C. Stapleton. BG Realty Capital Management, L.P. also owned 25% of
Genesis. Initially, Mr. Michael Berman was the Portfolio Manager of the
Portfolio, however, in 1995, Mr. Berman left Genesis and was replaced by the
current Portfolio Manager, Mr. David A. Shapiro.
At a regular meeting of the Board of Directors held on April 24, 1996,
representatives of Genesis presented a plan to the Directors which would
dissolve the partnership known as Genesis and transfer its business and
personnel to a new corporation owned by essentially the same individuals who
were the partners of Genesis. The new corporation, GMG/Seneca Capital
Management, L.L.C., (hereinafter, "GMG/Seneca") would become the investment
sub-advisor to the Portfolio. GMG/Seneca is a California limited liability
company, which is registered under the Investment Advisers Act of 1940 as an
investment advisor. GMG/Seneca has four principal stockholders; Will K.
Weinstein, Gail P. Seneca, Richard D. Little and Stellar Capital Management
Company, a personal holding company for Andrew Blank and Mark Blank. The
current Portfolio Manager, Mr. David Shapiro, is employed by GMG/Seneca. Mr.
Will K. Weinstein's address is 909 Montgomery Street, San Francisco, California
94133 and his principal occupation is Chief Executive Officer of Genesis
Merchant Group Securities. Ms. Seneca's address is also 909 Montgomery Street,
San Francisco, California 94133 and her principal occupation is Chief Investment
Officer of GMG/Seneca. Mr. Little's address is 909 Montgomery Street, San
Francisco, California 94133 and his occupation is Equity Portfolio Manager of
GMG/Seneca. Stellar Capital Management Company's address is 9350 S. Dixie
Highway Suite 900, Miami, Florida 33156.
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The Board of Directors approved a new Investment Sub-Advisory Agreement
between GMG/Seneca Capital Management and Aon Advisors, Inc. on April 24,
1996 (hereinafter, the "New Agreement") which is attached hereto as Exhibit
A. The Directors based this decision on three major factors: (1) that fact that
the principals of Genesis and GMG/Seneca were essentially the same individuals,
(2) the fact that GMG/Seneca was organizationally and financially more sound
than Genesis and (3) the success of the Portfolio under the management of David
A. Shapiro, who would remain the Portfolio Manager under the terms of the New
Agreement. By unanimous consent, the Directors of the Fund decided to propose
to the shareholders of the Portfolio that they approve the New Agreement at a
Special Meeting to be held on August 20, 1996.
The New Agreement replaces the Investment Sub-Advisory Agreement between Genesis
Realty Capital Management L.P. and Aon Advisors, Inc. (hereinafter, the "Current
Agreement") dated May 1, 1995, attached hereto as Exhibit B. The Current
Agreement was approved by LOV as the sole shareholder on May 17, 1995. Under
the terms of the Current Agreement, Aon Advisors, Inc. paid Genesis $33,023.00
for its services as investment sub-advisor in fiscal year 1995.
The terms of the two agreements are the same. The only provisions of the Current
Agreement which have been changed are references to the name of the investment
sub-advisor, which have been changed from Genesis to GMG/Seneca. In addition,
references to the form of the company have been changed from L.P., which
indicates a limited partnership to L.L.C. which indicates a limited liability
company. No other provisions, including the investment sub-advisory fees, have
been changed.
Under both the Current Agreement and the New Agreement, Aon Advisors, Inc. paid
Genesis and would pay GMG/Seneca, a monthly fee based upon the average daily net
assets of the Portfolio at the following annual rates: 0.425% of the first
$100,000,000; 0.40% of the next $100,000,000; and 0.375% of amounts in excess of
$200,000,000.
GMG/Seneca also is the investment manager of the Seneca Real Estate Securities
Fund; an investment portfolio of Seneca Funds, a Delaware Business Trust. Seneca
Real Estate Securities Fund pays GMG/Seneca a management fee at an annual rate
of 0.85% of the Seneca Real Estate Fund's average daily net assets.
Recommendation and Vote Required
The approval of the New Agreement requires the vote of a majority of the
outstanding shares of the Portfolio. In the event that the New Agreement is not
approved by the Portfolio's shareholders, the Board of Directors will take such
action as it deems to be in the best interest of the Portfolio and the Fund,
which may include calling a second meeting of Portfolio's shareholders to vote
on the New Agreement.
The Board of Directors of the Fund unanimously recommends that the Portfolio's
Aon Savings Plan Participants instruct the Aon Savings Plan Trustees to vote
"FOR" approval of the new Investment Sub-Advisory Agreement for the Portfolio.
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ADDITIONAL INFORMATION
Expenses
All expenses in connection with the solicitation of voting instructions from
Participants will be borne by LOV on behalf of the Trustees. The solicitation
will be conducted by employees of LOV. These employees spend full time or
substantially full time on LOV matters. The solicitation will be made by mail
and may be supplemented by telephone or personal contact. If necessary, LOV may
employ outside parties to aid in the solicitation.
Other Matters
The Trustees know of no matters other than those discussed herein that may come
before the Meeting. If any other matters should properly come before the
Meeting, the Trustees intend to vote the stock of the Portfolio held by the
Trustees upon such matters at the discretion of the Trustees.
Shareholder Proposals
Proposals for presentation at the next meeting of shareholders of any portfolio
of the Fund by, or on behalf of, persons entitled to give voting instructions in
connection with the Plan should be directed, in writing, to:
Linda L. Lanam
Secretary
Life of Virginia Series Fund, Inc.
6610 West Broad Street
Richmond, Virginia 23230
and received five months prior to the meeting, for inclusion in the proxy
statement and the voting instruction forms for that meeting. Because the Fund
does not intend to hold annual or other regularly scheduled meetings, anyone
wishing to present a proposal at the next shareholders meeting for any portfolio
should call (804) 281-6553 to determine whether a meeting has been scheduled
and, if so, the date of that meeting. The Fund reserves the right not to include
any proposal that does not meet all of the SEC requirements then in effect for
inclusion of shareholder proposals in proxy statements and proxies.
Investment Advisor
The Investment Advisor for the Fund is Aon Advisors, Inc., 123 North Wacker
Drive, Chicago, Illinois 60606.
Principal Underwriter
The Principal Underwriter for the Fund is Forth Financial Securities
Corporation, 6610 West Broad Street, Richmond, Virginia 23230.
Annual Report
Any shareholder who would like a free copy of the Fund's most recent annual
report or most recent semi-annual report may request a copy by calling
1-800-636-7203.
Linda L. Lanam
Secretary
Life of Virginia Series Fund, Inc.
Richmond, Virginia August 1, 1996
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EXHIBIT B
SUB-INVESTMENT ADVISORY AGREEMENT
THIS SUB-INVESTMENT ADVISORY AGREEMENT ("Agreement") made this ____ day of
______ 1995 by and Between Aon Advisors, Inc., a Virginia corporation, (the
"Adviser") and Genesis Realty Capital Management, a partnership organized under
the laws of Delaware (the "Sub-Adviser").
Adviser and Sub-Adviser agree as follows:
1. Adviser hereby engages the services of Sub-Adviser in connection with
Adviser's management of the Real Estate Securities Portfolio (the "Portfolio")
of Life of Virginia Series Fund, Inc. (the "Fund"). Pursuant to this Agreement
and subject to the oversight and supervision by Adviser and the officers and the
board of directors of the Fund, Sub-Adviser shall manage the investment and
reinvestment of the assets of the Portfolio.
2. Sub-Adviser hereby accepts employment by Adviser in the foregoing capacity
and agrees, at its own expense, to render the services set forth herein and to
provide the office space, furnishings, equipment and personnel required by it to
perform such services on the terms and for the compensation provided in this
Agreement.
3. In particular, Sub-Adviser shall furnish continuously an investment program
for the Portfolio and shall determine from time to time in its discretion the
securities and other investments to be purchased or sold or exchanged and what
portions of the Portfolio shall be held in various securities, cash or other
investments. In this connection, Sub-Adviser shall provide Adviser and the
officers and directors of the Fund with such reports and documentation as the
latter shall reasonably request regarding Sub-Adviser's management of the
Portfolio's assets.
4. Sub-Adviser shall carry out its responsibilities under this Agreement in
compliance with: (a) the Portfolio's investment objective, policies and
restrictions as set forth in the Fund's current registration statement, (b) such
policies or directives as the Fund's directors may from time to time establish
or issue, and (c) applicable law and related regulations. In particular,
Sub-Adviser shall make every effort to ensure that the Portfolio complies with
(1) Section 817(h) of the Internal Revenue Code of 1986 (the "Code") and
regulations issued thereunder relating to the diversification requirements for
variable annuity, endowment, and life insurance contracts and to ensure that the
Portfolio continuously qualifies as a regulated investment company under
sub-chapter M of the Code and (2) the California Insurance Department's
Borrowing Guideline Limits Applicable to a Portfolio of a Separate Account and
its Diversification Guidelines for Foreign Country Investments by a Portfolio of
a Separate Account.
5. Sub-Adviser shall take all actions which it considers necessary to implement
the investment policies of the Portfolio, and in particular, to place all orders
for the purchase or sale of securities or other investments for the Portfolio
with brokers or dealers selected by it, and to that end, Sub-Adviser is
authorized as the agent of the Fund to give instructions to the Fund's custodian
as to deliveries of securities or other investments and payments of cash for the
account of
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the Portfolio. In connection with the selection of brokers or dealers and the
placing of purchase and sale orders with respect to investments of the
Portfolio, Sub-Adviser is directed at all times to seek to obtain best execution
and price within the policy guidelines determined by the Fund's board of
directors and set forth in the Fund's current registration statement.
In addition to seeking the best price and execution, Sub- Adviser may also take
into consideration research and statistical information and wire and other
quotation services provided by brokers and dealers to Sub-Adviser. Sub-Adviser
is also authorized to effect individual securities transactions at commission
rates in excess of the minimum commission rates available, if it determines in
good faith that such amount of commission is reasonable in relation to the value
of the brokerage and research services provided by such broker or dealer, viewed
in terms of either that particular transaction or Sub-Adviser's overall
responsibilities with respect to the Portfolio. The policies with respect to
brokerage allocation, determined from time to time by the Fund's board of
directors are those disclosed in the Fund's currently effective registration
statement. Sub-Adviser will periodically evaluate the statistical data, research
and other investment services provided to it by brokers and dealers. Such
services may be used by Sub-Adviser in connection with the performance of its
obligations under this Agreement or in connection with other advisory or
investment operations including using such information in managing its own
accounts.
6. Sub-Adviser's services under this Agreement are not exclusive. Sub-Adviser
may provide the same or similar services to other clients provided that
Sub-Adviser's services to Adviser are not impaired thereby. Sub-Adviser shall
for all purposes herein be deemed to be an independent contractor and shall,
unless otherwise expressly provided or authorized, have no authority to act for
or represent the Adviser, the Fund or the Portfolio or otherwise be deemed
agents of the Adviser, the Fund or the Portfolio.
7. Sub-Adviser is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended, and shall remain so registered throughout the
term of this Agreement. Sub-Adviser shall notify Adviser immediately if
Sub-Adviser ceases to be so registered as an investment adviser.
8. Subject to: (a) the requirement that Sub-Adviser seek to obtain best
execution and price within the policy guidelines determined by the Fund's board
of directors and set forth in the Fund's current registration statement, (b) the
provisions of the Investment Advisers Act of 1940 (the "Act"), (c) the
provisions of the Securities Exchange Act of 1934, and (d) other applicable
provisions of law; Sub-Adviser or an affiliated person of Sub- Adviser may act
as broker for the Portfolio in connection with the purchase or sale of
securities or other investments for the Portfolio. Such brokerage services are
not within the scope of the duties of Sub-Adviser under this Agreement. Subject
to the requirements of applicable law and any procedures adopted by Fund's board
of directors, Sub-Adviser or its affiliated persons may receive brokerage
commissions, fees or other remuneration from the Portfolio or the Fund for such
services in addition to Sub-Adviser's fees for services under this Agreement.
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9. For the services rendered, the facilities furnished and the expenses assumed
by Sub-Adviser, Adviser shall pay Sub-Adviser at the end of each calendar month
a fee based on the average daily net assets of the Portfolio at the following
annual rates:
.425% of the first $100,000,000; .40% of the next
$100,000,000; and .375% of amounts in excess of $200,000,000
Sub-Adviser's fee shall be accrued daily at 1/365th of the applicable annual
rate set forth above. For the purpose of accruing compensation, the net assets
of the Portfolio shall be determined in the manner and on the dates set forth in
the current prospectus of the Fund, and on days on which the net assets are not
so determined, the net asset value computation to be used shall be as determined
on the next day on which the net assets shall have been determined. In the event
of termination of this Agreement, all compensation due through the date of
termination will be calculated on a pro-rated basis through the date of
termination and paid within thirty business days of the date of termination.
During any period when the determination of net value is suspended, the net
asset value of the Portfolio of the last business day prior to such suspension
shall for this purpose be deemed to be the net asset value at the close of each
succeeding business day until it is again determined.
10. Sub-Adviser hereby undertakes and agrees to maintain, in the form and for
the period required by Rule 31a-2 under the Investment Company Act of 1940, all
records relating to the Portfolio's investments that are required to be
maintained by the Fund pursuant to the requirements of Rule 31a-1 of that Act.
Sub-Adviser agrees that all books and records which it maintains for the
Portfolio or the Fund are the property of the Fund and further agrees to
surrender promptly to the Adviser or the Fund any such books, records or
information upon the Adviser's or the Fund's request. All such books and records
shall be made available, within five business days of a written request, to the
Fund's accountants or auditors during regular business hours at Sub-Adviser's
offices. Adviser and the Fund or their authorized representative shall have the
right to copy any records in the possession of Sub-Adviser which pertain to the
Portfolio or the Fund. Such books, records, information or reports shall be made
available to properly authorized government representatives consistent with
state and federal law and/or regulations. In the event of the termination of
this Agreement, all such books, records or other information shall be returned
to Adviser or the Fund free from any claim or assertion of rights by
Sub-Adviser.
11. Sub-Adviser agrees that it will not disclose or use any records or
information obtained pursuant to this Agreement in any manner whatsoever except
as authorized in this Agreement and that it will keep confidential any
information obtained pursuant to this Agreement and disclose such information
only if Adviser or the Fund has authorized such disclosure, or if such
disclosure is required by federal or state regulatory authorities.
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12. Sub-Adviser hereby indemnifies, defends and protects Adviser and holds
Adviser harmless, from and against any losses arising out of Sub-Adviser's
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of Sub-Adviser, its officers,
directors, agents, partners, employees, controlling persons, shareholders or
affiliated persons.
Adviser hereby indemnifies, defends and protects Sub-Adviser and holds
Sub-Adviser harmless, from and against any losses arising out of Adviser's
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of Adviser, its officers, directors,
agents, partners, employees, controlling persons, shareholders or affiliated
persons.
13. This Agreement shall not become effective unless and until it is approved by
the board of directors of the Fund, including a majority of directors who are
not parties to this Agreement or interested persons of any such party to this
Agreement. This Agreement shall come into full force and effect on the date
which it is so approved. This Agreement shall continue in effect for two years
and shall thereafter continue in effect from year to year so long as such
continuance is specifically approved at least annually by (i) the board of
directors of the Fund, or by the vote of a majority of the outstanding shares of
the class of stock representing an interest in the Portfolio; and (ii) a
majority of those directors who are not parties to this Agreement or interested
persons of any such party cast in person at a meeting called for the purpose of
voting on such approval.
14. This Agreement may be terminated at any time without the payment of any
penalty, by the Fund's board of directors, or by vote of a majority of the
outstanding shares of the class of stock representing an interest in the
Portfolio on sixty days written notice to the Adviser and Sub-Adviser, or by the
Adviser, or by the Sub-Adviser, on sixty days written notice to the other. This
Agreement shall automatically terminate in the event of its assignment or in the
event of the termination of the investment advisory agreement between the
Adviser and the Fund regarding the Adviser's management of the Portfolio.
15. This Agreement may be amended by either party only if such amendment is
specifically approved by (i) the vote of a majority of outstanding shares of the
class representing an interest in the Portfolio, and (ii) a majority of those
directors who are not parties to this Agreement or interested persons of any
such party cast in person at a meeting called for the purpose of voting on such
approval.
16. The terms "assignment", "affiliated person" and "interested person", when
used in this Agreement, shall have the respective meanings specified in the
Investment Company Act of 1940. The term "majority of the outstanding shares of
the class" means the lesser of (a) 67% or more of the shares of such class
present at a meeting if more than 50% of such shares are present or represented
by proxy or (b) more than 50% of the shares of such class.
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17. This Agreement shall be construed in accordance with laws of the
Commonwealth of Virginia, and applicable provisions of the Act and the
Investment Company Act of 1940.
18. If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
AON ADVISORS, INC. GENESIS REALTY CAPITAL MANAGEMENT
ATTEST: ATTEST:
By: By:
Its: Its:
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EXHIBIT A
SUB-INVESTMENT ADVISORY AGREEMENT
THIS SUB-INVESTMENT ADVISORY AGREEMENT ("Agreement") made this ________ day of
____________________ 1996 by and Between Aon Advisors, Inc., a Virginia
corporation, (the "Adviser") and GMG/Seneca Capital Management, L.L.C., a
limited liability company organized under the laws of California (the
"Sub-Adviser").
Adviser and Sub-Adviser agree as follows:
1. Adviser hereby engages the services of Sub-Adviser in connection with
Adviser's management of the Real Estate Securities Portfolio (the "Portfolio")
of Life of Virginia Series Fund, Inc. (the "Fund"). Pursuant to this Agreement
and subject to the oversight and supervision by Adviser and the officers and the
board of directors of the Fund, Sub-Adviser shall manage the investment and
reinvestment of the assets of the Portfolio.
2. Sub-Adviser hereby accepts employment by Adviser in the foregoing capacity
and agrees, at its own expense, to render the services set forth herein and to
provide the office space, furnishings, equipment and personnel required by it to
perform such services on the terms and for the compensation provided in this
Agreement.
3. In particular, Sub-Adviser shall furnish continuously an investment program
for the Portfolio and shall determine from time to time in its discretion the
securities and other investments to be purchased or sold or exchanged and what
portions of the Portfolio shall be held in various securities, cash or other
investments. In this connection, Sub-Adviser shall provide Adviser and the
officers and directors of the Fund with such reports and documentation as the
latter shall reasonably request regarding Sub-Adviser's management of the
Portfolio's assets.
4. Sub-Adviser shall carry out its responsibilities under this Agreement in
compliance with: (a) the Portfolio's investment objective, policies and
restrictions as set forth in the Fund's current registration statement, (b) such
policies or directives as the Fund's directors may from time to time establish
or issue, and (c) applicable law and related regulations. In particular,
Sub-Adviser shall make every effort to ensure that the Portfolio complies with
(1) Section 817(h) of the Internal Revenue Code of 1986 (the "Code") and
regulations issued thereunder relating to the diversification requirements for
variable annuity, endowment, and life insurance contracts and to ensure that the
Portfolio continuously qualifies as a regulated investment company under
sub-chapter M of the Code and (2) the California Insurance Department's
Borrowing Guideline Limits Applicable to a Portfolio of a Separate Account and
its Diversification Guidelines for Foreign Country Investments by a Portfolio of
a Separate Account.
5. Sub-Adviser shall take all actions which it considers necessary to implement
the investment policies of the Portfolio, and in particular, to place all orders
for the purchase or sale of
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securities or other investments for the Portfolio with brokers or dealers
selected by it, and to that end, Sub-Adviser is authorized as the agent of the
Fund to give instructions to the Fund's custodian as to deliveries of securities
or other investments and payments of cash for the account of the Portfolio. In
connection with the selection of brokers or dealers and the placing of purchase
and sale orders with respect to investments of the Portfolio, Sub-Adviser is
directed at all times to seek to obtain best execution and price within the
policy guidelines determined by the Fund's board of directors and set forth in
the Fund's current registration statement.
In addition to seeking the best price and execution, Sub- Adviser may also take
into consideration research and statistical information and wire and other
quotation services provided by brokers and dealers to Sub-Adviser. Sub-Adviser
is also authorized to effect individual securities transactions at commission
rates in excess of the minimum commission rates available, if it determines in
good faith that such amount of commission is reasonable in relation to the value
of the brokerage and research services provided by such broker or dealer, viewed
in terms of either that particular transaction or Sub-Adviser's overall
responsibilities with respect to the Portfolio. The policies with respect to
brokerage allocation, determined from time to time by the Fund's board of
directors are those disclosed in the Fund's currently effective registration
statement. Sub-Adviser will periodically evaluate the statistical data, research
and other investment services provided to it by brokers and dealers. Such
services may be used by Sub-Adviser in connection with the performance of its
obligations under this Agreement or in connection with other advisory or
investment operations including using such information in managing its own
accounts.
6. Sub-Adviser's services under this Agreement are not exclusive. Sub-Adviser
may provide the same or similar services to other clients provided that
Sub-Adviser's services to Adviser are not impaired thereby. Sub-Adviser shall
for all purposes herein be deemed to be an independent contractor and shall,
unless otherwise expressly provided or authorized, have no authority to act for
or represent the Adviser, the Fund or the Portfolio or otherwise be deemed
agents of the Adviser, the Fund or the Portfolio.
7. Sub-Adviser is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended, and shall remain so registered throughout the
term of this Agreement. Sub-Adviser shall notify Adviser immediately if
Sub-Adviser ceases to be so registered as an investment adviser.
8. Subject to: (a) the requirement that Sub-Adviser seek to obtain best
execution and price within the policy guidelines determined by the Fund's board
of directors and set forth in the Fund's current registration statement, (b) the
provisions of the Investment Advisers Act of 1940 (the "Act"), (c) the
provisions of the Securities Exchange Act of 1934, and (d) other applicable
provisions of law; Sub-Adviser or an affiliated person of Sub- Adviser may act
as broker for the Portfolio in connection with the purchase or sale of
securities or other investments for the
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Portfolio. Such brokerage services are not within the scope of the duties of
Sub-Adviser under this Agreement. Subject to the requirements of applicable law
and any procedures adopted by Fund's board of directors, Sub-Adviser or its
affiliated persons may receive brokerage commissions, fees or other remuneration
from the Portfolio or the Fund for such services in addition to Sub-Adviser's
fees for services under this Agreement.
9. For the services rendered, the facilities furnished and the expenses assumed
by Sub-Adviser, Adviser shall pay Sub-Adviser at the end of each calendar month
a fee based on the average daily net assets of the Portfolio at the following
annual rates:
.425% of the first $100,000,000; .40% of the next
$100,000,000; and .375% of amounts in excess of $200,000,000
Sub-Adviser's fee shall be accrued daily at 1/365th of the applicable annual
rate set forth above. For the purpose of accruing compensation, the net assets
of the Portfolio shall be determined in the manner and on the dates set forth in
the current prospectus of the Fund, and on days on which the net assets are not
so determined, the net asset value computation to be used shall be as determined
on the next day on which the net assets shall have been determined. In the event
of termination of this Agreement, all compensation due through the date of
termination will be calculated on a pro-rated basis through the date of
termination and paid within thirty business days of the date of termination.
During any period when the determination of net value is suspended, the net
asset value of the Portfolio of the last business day prior to such suspension
shall for this purpose be deemed to be the net asset value at the close of each
succeeding business day until it is again determined.
10. Sub-Adviser hereby undertakes and agrees to maintain, in the form and for
the period required by Rule 31a-2 under the Investment Company Act of 1940, all
records relating to the Portfolio's investments that are required to be
maintained by the Fund pursuant to the requirements of Rule 31a-1 of that Act.
Sub-Adviser agrees that all books and records which it maintains for the
Portfolio or the Fund are the property of the Fund and further agrees to
surrender promptly to the Adviser or the Fund any such books, records or
information upon the Adviser's or the Fund's request. All such books and records
shall be made available, within five business days of a written request, to the
Fund's accountants or auditors during regular business hours at Sub-Adviser's
offices. Adviser and the Fund or their authorized representative shall have the
right to copy any records in the possession of Sub-Adviser which pertain to the
Portfolio or the Fund. Such books, records, information or reports shall be made
available to properly authorized government representatives consistent with
state and federal law and/or regulations. In the event of the termination of
this Agreement, all such books, records or other information shall be returned
to Adviser or the Fund free from any claim or assertion of rights by
Sub-Adviser.
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11. Sub-Adviser agrees that it will not disclose or use any records or
information obtained pursuant to this Agreement in any manner whatsoever except
as authorized in this Agreement and that it will keep confidential any
information obtained pursuant to this Agreement and disclose such information
only if Adviser or the Fund has authorized such disclosure, or if such
disclosure is required by federal or state regulatory authorities.
12. Sub-Adviser hereby indemnifies, defends and protects Adviser and holds
Adviser harmless, from and against any losses arising out of Sub-Adviser's
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of Sub-Adviser, its officers,
directors, agents, partners, employees, controlling persons, shareholders or
affiliated persons.
Adviser hereby indemnifies, defends and protects Sub-Adviser and holds
Sub-Adviser harmless, from and against any losses arising out of Adviser's
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of Adviser, its officers, directors,
agents, partners, employees, controlling persons, shareholders or affiliated
persons.
13. This Agreement shall not become effective unless and until it is approved by
the board of directors of the Fund, including a majority of directors who are
not parties to this Agreement or interested persons of any such party to this
Agreement. This Agreement shall come into full force and effect on the date
which it is so approved. This Agreement shall continue in effect for two years
and shall thereafter continue in effect from year to year so long as such
continuance is specifically approved at least annually by (i) the board of
directors of the Fund, or by the vote of a majority of the outstanding shares of
the class of stock representing an interest in the Portfolio; and (ii) a
majority of those directors who are not parties to this Agreement or interested
persons of any such party cast in person at a meeting called for the purpose of
voting on such approval.
14. This Agreement may be terminated at any time without the payment of any
penalty, by the Fund's board of directors, or by vote of a majority of the
outstanding shares of the class of stock representing an interest in the
Portfolio on sixty days written notice to the Adviser and Sub-Adviser, or by the
Adviser, or by the Sub-Adviser, on sixty days written notice to the other. This
Agreement shall automatically terminate in the event of its assignment or in the
event of the termination of the investment advisory agreement between the
Adviser and the Fund regarding the Adviser's management of the Portfolio.
15. This Agreement may be amended by either party only if such amendment is
specifically approved by (i) the vote of a majority of outstanding shares of the
class representing an interest in the Portfolio, and (ii) a majority of those
directors who are not parties to this Agreement or interested persons of any
such party cast in person at a meeting called for the purpose of voting on such
approval.
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16. The terms "assignment", "affiliated person" and "interested person", when
used in this Agreement, shall have the respective meanings specified in the
Investment Company Act of 1940. The term "majority of the outstanding shares of
the class" means the lesser of (a) 67% or more of the shares of such class
present at a meeting if more than 50% of such shares are present or represented
by proxy or (b) more than 50% of the shares of such class.
17. This Agreement shall be construed in accordance with laws of the
Commonwealth of Virginia, and applicable provisions of the Act and the
Investment Company Act of 1940.
18. If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
AON ADVISORS, INC. GMG/SENECA CAPITAL
MANAGEMENT, L.L.C.
ATTEST: ATTEST:
By: By:
Its: Its:
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INSTRUCTIONS TO AON SAVINGS PLAN PARTICIPANTS
The undersigned participant (or beneficiary) in the Aon Saving Plan (the
"Plan"), revoking previous instructions, hereby instructs the trustees of the
Plan to vote all shares of the above referenced Portfolio of the Life of
Virginia Series Fund, Inc. held in the account of the undersigned with the Plan
(and held of record by the trustees of the Plan). The shares shall be voted on
the proposals described in the Proxy Statement as specified on the reverse side
of this card at the Special Meeting of the Shareholders to be held at 11:00
a.m., Thursday, December 15, 1994, or at any adjournment thereof. Receipt of the
Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
Under the terms of the Plan, and unless otherwise required by law, the
trustees will vote the shares in your account according to your instructions.
The voting instructions you give the trustees will also apply to your
proportionate share of unallocated shares held by the trustees and shares
allocated to the accounts of others from whom no proper voting instructions were
received. If dated and signed instructions are not received by 5 p.m. December
14, 1994 by the trustees, or if the instruction card is returned unsigned or
otherwise incorrectly marked, the trustees intend to vote the shares in your
account in the same proportion that the trustees are directed to vote the shares
in the accounts of participants who have timely given proper voting instructions
to the trustees.
Life of Virginia Series Fund, Inc. has retained Management Information
Services Corporation to tabulate the votes and report the results. Your voting
instructions will be kept confidential. No information regarding your
instructions will be released to Life of Virginia Series Fund, Inc. or any agent
thereof.
NOTE: Please sign exactly as your name appears on the instruction form.
DATE:____________, 1994
- ------------------------------------------------
- ------------------------------------------------
Signature(s)
Please sign, date and return promptly in enclosed envelope.
The Board of Directors of Life of Virginia Series Fund, Inc. recommend a vote
FOR the following:
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(1) FOR [ ] AGAINST [ ] ABSTAIN FROM [ ]
Approval of Amended and Restated Articles of Incorporation of the
Fund
(2) FOR ( ) AGAINST ( ) ABSTAIN FROM ( )
Ratification of the selection of Ernst & Young as independent
accountants to the Fund for the fiscal year 1994.
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LIFE OF VIRGINIA SERIES FUND, INC.
6610 West Broad Street
Richmond, Virginia 23230
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF THE
REAL ESTATE SECURITIES PORTFOLIO
August 20, 1996
To owners of variable life insurance and variable annuity policies
(hereinafter, "Variable Policies") issued by The Life Insurance Company of
Virginia (hereinafter, "LOV") entitled to give voting instructions in connection
with subdivisions of separate accounts of LOV (hereinafter, the "Accounts")
which are invested in the Real Estate Securities Portfolio (hereinafter, the
"Portfolio") of the Life of Virginia Series Fund, Inc.
(hereinafter, the "Fund").
Notice is hereby given that a Special Meeting of Shareholders
(hereinafter, the "Meeting") of the Portfolio will be held on Tuesday, August
20, 1996 at 11:00 a.m., Richmond, Virginia time, in the 8th Floor Board Room of
The Life Insurance Company of Virginia Building, 6610 West Broad Street,
Richmond, Virginia.
The Fund has outstanding a separate series (or class) of stock for each
of its investment portfolios: Common Stock Index Portfolio, Government
Securities Portfolio, Money Market Portfolio, Total Return Portfolio,
International Equity Portfolio and the Portfolio. Only holders of shares of the
Portfolio will meet for the following purposes:
1. To approve or disapprove the new Investment Sub-Advisory Agreement for
the Portfolio between GMG/Seneca Capital Management L.L.C. and Aon
Advisors, Inc. in the form appended as Exhibit A; and,
2. To consider and transact such other business as may properly come
before the Meeting or any adjournment thereof.
LOV, on behalf of itself and the Accounts of LOV and the Trustees of
the Aon Savings Plan (hereinafter, the "Trustees") are currently the only
shareholders of the Portfolio. However, LOV hereby solicits and agrees to vote
the stock of the Portfolio that it or the Accounts hold at the Meeting in
accordance with timely instructions received from owners of Variable Policies
having cash values or account values allocated to the Accounts of
LOV invested in the Portfolio. For variable life insurance policies these
Accounts are Life of Virginia Separate Account I, Life of Virginia Separate
Account II and Life of Virginia Separate Account III and for variable annuity
policies the Account is Life of Virginia Separate Account 4.
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As an owner of record of a Variable Policy at the close of business on
July 17, 1996, you have the right to instruct LOV as to the manner in which
shares of the Portfolio attributable to your Variable Policy should be voted. To
assist you in giving your instructions, a voting instruction form is enclosed
that indicates the number of shares of the Portfolio for which you are entitled
to give voting instructions. In addition, a proxy statement attached to this
notice describes the matters to be voted upon at the Meeting or any adjournments
thereof.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED VOTING INSTRUCTION FORM AND RETURN IT
PROMPTLY IN THE ENCLOSED POSTAGE PREPAID ENVELOPE.
By Order of the Board of Directors
Linda L. Lanam, Secretary
Richmond, Virginia August 1, 1996
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LIFE OF VIRGINIA SERIES FUND, INC.
6610 West Broad Street
Richmond, Virginia 23230
August 1, 1996
PROXY STATEMENT
This proxy statement is being furnished on behalf of the Board of
Directors of Life of Virginia Series Fund, Inc. (hereinafter, the "Fund") by The
Life Insurance Company of Virginia (hereinafter, "LOV") to owners of certain
variable life insurance policies and variable annuity policies (hereinafter, the
"Variable Policies") issued by LOV and having cash values or account values on
the record date of July 17, 1996, allocated to subdivisions of separate accounts
of LOV (hereinafter, the "Accounts") invested in the Real Estate Securities
Portfolio (hereinafter, the "Portfolio") of the Fund. This proxy statement is
being furnished in connection with the solicitation of voting instructions from
owners of Variable Policies (hereinafter, "Policyowners") for use at a Special
Meeting of Shareholders of the Portfolio (hereinafter, the "Meeting").
The Fund has outstanding a separate series (or class) of stock for each
of its investment portfolios: Common Stock Index Portfolio, Government
Securities Portfolio, Money Market Portfolio, Total Return Portfolio,
International Equity Portfolio, and the Portfolio. Only holders of shares of the
Portfolio will vote on the matters presented to this Meeting. The Meeting will
be held on Tuesday, August 20, 1996 at 11:00 a.m., Richmond, Virginia time, in
the 8th Floor Board Room of The Life Insurance Company of Virginia Building,
6610 West Broad Street, Richmond, Virginia for the purposes set forth below and
in the attached Notice of Special Meeting. The approximate mailing date of this
proxy statement is August 1, 1996.
Shareholders of the Portfolio will meet for the following purposes:
1. To approve or disapprove the new Investment Sub-Advisory Agreement of
the Portfolio between GMG/Seneca Capital Management L.L.C. and Aon
Advisors, Inc. in the form appended as Exhibit A; and,
2. To consider and transact such other business as may properly come
before the Meeting or any adjournment thereof.
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GENERAL VOTING INFORMATION
The Fund, a Virginia corporation organized on May 14, 1984,
is registered with the Securities and Exchange Commission (hereinafter, the
"SEC") as a diversified open-end management investment company under the
Investment Company Act of 1940 (the "1940 Act"). LOV is a stock life insurance
company operating under a charter granted by the Commonwealth of Virginia on
March 21, 1871. From 1986 until April 1, 1996, LOV was owned by Aon Corporation,
an insurance holding company. On April 1, 1996, Aon Corporation sold LOV to
General Electric Capital Corporation and it became an indirectly owned
subsidiary of GNA Corporation . LOV established Life of Virginia Separate
Account I, Life of Virginia Separate Account II and Life of Virginia Separate
Account III to support variable life insurance policies and Life of Virginia
Separate Account 4 to support variable annuity policies. These Accounts are each
registered with the SEC under the 1940 Act as unit investment trusts.
Net premiums paid by a Policyowner may be allocated to one or more of
the six investment subdivisions of each Account that invest in stock of the
Fund. Each such investment subdivision invests in a series of capital stock
corresponding to one of the Fund's portfolios and represents an interest in that
portfolio. Each portfolio is a separate investment portfolio.
In addition to selling shares to LOV and the Accounts, the Fund also
sells shares to the Aon Savings Plan (hereinafter, the "Plan"). The Plan is a
qualified retirement plan open to all eligible employees of Aon Corporation and
its subsidiaries which have adopted the Plan. The Plan is intended to qualify
under section 401(a) and section 501(a) of the Internal Revenue Code of 1986, as
amended, (hereinafter, the "Code") and includes a cash or deferred arrangement
intended to qualify under section 401(k) of the Code. Plan participants may
indirectly purchase shares of the capital stock of the Fund, including the
capital stock of the Portfolio, through the Plan. The Trustees of the Plan
(hereinafter, the "Trustees") purchase shares of the capital stock of the Fund,
including capital stock of the Portfolio, on behalf of the Plan.
LOV, the Accounts and the Trustees are currently the only owners of the
Fund's capital stock, including the capital stock of the Portfolio. Pursuant to
undertakings in prospectuses for the Variable Policies, LOV will vote the stock
it owned by itself and the Accounts at the Meeting in accordance with the timely
instructions received from Policyowners entitled to give voting instructions.
All properly executed voting instruction forms received by LOV by the close of
business on August 19, 1996 will be counted.
Policyowners may revoke voting instructions given to LOV at any time
prior to the Meeting by notifying the Secretary of the Fund or LOV in writing.
LOV will vote stock attributable to Variable Policies for
which no voting instructions are received in proportion to those for which
instructions are received. LOV also will vote stock which it owns that is not
attributable to Variable Policies (i.e., representing seed money investments in
the portfolios made by LOV) in proportion to stock for which instructions have
been received from Policyowners. If a voting instruction form is received that
does not specify a choice, LOV will consider its timely receipt as an
instruction to vote in favor of the proposal(s) to which it relates. In certain
circumstances, LOV has the right to disregard voting instructions from certain
Policyowners. LOV does not believe that these circumstances exist with respect
to matters currently before the shareholders.
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The number of shares of stock of the Portfolio for which a Policyowner
may give instructions is determined by dividing the Variable Policy's cash value
or account value in the investment subdivision investing in the Portfolio by the
net asset value per share of the Portfolio as of the record date. Each share of
stock receives one vote, and fractional shares are counted.
The vote required to approve each matter listed in the notice attached
hereto is set forth below where each such matter is discussed in detail.
The Board of Directors of the Fund has fixed July 17, 1996 as the
record date for the determination of shareholders entitled to notice of and to
vote at the Meeting. As of July 17, 1996, there were outstanding the following
shares of the Portfolio's capital stock: (Class F) 1,666,097.206.
None of the Directors of the Fund owns, directly or indirectly, any
stock of the Portfolio. To the best knowledge of LOV, the Board of Directors of
the Fund and the Trustees, the following Policyowners and Aon Savings Plan
Participants (hereinafter, "Participants") are the only Policyowners or
Participants who, as of July 17, 1996, had the right to instruct LOV or the
Trustees as to stock equal to 5% or more of the value of the Portfolio's stock:
POLICYOWNER\PARTICIPANT
NONE
APPROVAL OR DISAPPROVAL
OF
THE NEW INVESTMENT SUB-ADVISORY AGREEMENT
At the inception of the Portfolio, Aon Advisors, Inc., the Fund's
investment advisor, recommended a sub-advisory relationship with Genesis Realty
Capital Management, L.P. (hereinafter, "Genesis"), a limited partnership
established in the state of New York. Genesis had three principal general
partners. Zell Capital Associates, L.P., an Illinois limited partnership
indirectly controlled by Samuel Zell, owned 50% of the stock of Genesis. Genesis
Realty Investments, L.P., a California limited partnership, owned 25% of
Genesis. The general partners of Genesis Realty Investments were Will K.
Weinstein, Gail P. Seneca and Philip C. Stapleton. BG Realty Capital Management,
L.P. also owned 25% of Genesis. Initially, Mr. Michael Berman was the Portfolio
Manager of the Portfolio, however, in 1995, Mr. Berman left Genesis and was
replaced by the current Portfolio Manager, Mr. David A. Shapiro.
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At a regular meeting of the Board of Directors held on April 24, 1996,
representatives of Genesis presented a plan to the Directors which would
dissolve the partnership known as Genesis and transfer its business and
personnel to a new corporation owned by essentially the same individuals who
were the partners of Genesis. The new corporation, GMG/Seneca Capital
Management, L.L.C., (hereinafter, "GMG/Seneca") would become the investment
sub-advisor to the Portfolio. GMG/Seneca is a California limited liability
company, which is registered under the Investment Advisers Act of 1940 as an
investment advisor. GMG/Seneca has four principal stockholders; Will K.
Weinstein, Gail P. Seneca, Richard D. Little and Stellar Capital Management
Company, a personal holding company for Andrew Blank and Mark Blank. The current
Portfolio Manager, Mr. David Shapiro, is employed by GMG/Seneca. Mr. Will K.
Weinstein's address is 909 Montgomery Street, San Francisco, California 94133
and his principal occupation is Chief Executive Officer of Genesis Merchant
Group Securities. Ms. Seneca's address is also 909 Montgomery Street, San
Francisco, California 94133 and her principal occupation is Chief Investment
Officer of GMG/Seneca. Mr. Little's address is 909 Montgomery Street, San
Francisco, California 94133 and his occupation is Equity Portfolio Manager of
GMG/Seneca. Stellar Capital Management Company's address is 9350 S. Dixie
Highway Suite 900, Miami, Florida 33156.
The Board of Directors approved a new Investment Sub-Advisory
Agreement between GMG/Seneca Capital Management and Aon Advisors, Inc. on
April 24, 1996 (hereinafter, the "New Agreement") which is attached hereto as
Exhibit A. The Directors based this decision on three major factors: (1) that
fact that the principals of Genesis and GMG/Seneca were essentially the same
individuals, (2) the fact that GMG/Seneca was organizationally and financially
more sound than Genesis and (3) the success of the Portfolio under the
management of David A. Shapiro, who would remain the Portfolio Manager under the
terms of the New Agreement. By unanimous consent, the Directors of
the Fund decided to propose to the shareholders of the Portfolio that they
approve the New Agreement at a Special Meeting to be held on August 20, 1996.
The New Agreement replaces the Investment Sub-Advisory
Agreement between Genesis Realty Capital Management L.P. and Aon
Advisors, Inc. (hereinafter, the "Current Agreement") dated May
1, 1995, attached hereto as Exhibit B. The Current Agreement was
approved by LOV as the sole shareholder on May 17, 1995.
Under the terms of the Current Agreement, Aon Advisors, Inc. paid
Genesis $33,023.00 for its services as investment sub-advisor in
fiscal year 1995.
The terms of the two agreements are the same. The only provisions of
the Current Agreement which have been changed are references to the name of the
investment sub-advisor, which have been changed from Genesis to GMG/Seneca. In
addition, references to the form of the company have been changed from L.P.,
which indicates a limited partnership to L.L.C. which indicates a limited
liability company. No other provisions, including the investment sub-advisory
fees, have been changed.
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Under both the Current Agreement and the New Agreement, Aon Advisors,
Inc. paid Genesis and would pay GMG/Seneca, a monthly fee based upon the average
daily net assets of the Portfolio at the following annual rates: 0.425% of the
first $100,000,000; 0.40% of the next $100,000,000; and 0.375% of amounts in
excess of $200,000,000.
GMG/Seneca also is the investment manager of the Seneca Real Estate
Securities Fund; an investment portfolio of Seneca Funds, a Delaware Business
Trust. Seneca Real Estate Securities Fund pays GMG/Seneca a management fee at an
annual rate of 0.85% of the Seneca Real Estate Fund's average daily net assets.
Recommendation and Vote Required
The approval of the New Agreement requires the vote of a majority of
the outstanding shares of the Portfolio. In the event that the New Agreement is
not approved by the Portfolio's shareholders, the Board of Directors will take
such action as it deems to be in the best interest of the Portfolio and the
Fund, which may include calling a second meeting of Portfolio's shareholders to
vote on the New Agreement.
The Board of Directors of the Fund unanimously recommends that
Policyowners instruct LOV to vote "FOR" approval of the new Investment
Sub-Advisory Agreement of the Portfolio.
ADDITIONAL INFORMATION
Expenses
All expenses in connection with the solicitation of voting
instructions from Policyowners will be borne by LOV. The solicitation will be
conducted by employees of LOV. These employees spend full time or substantially
full time on LOV matters. The solicitation will be made by mail and may be
supplemented by telephone or personal contact. If necessary, LOV may employ
outside parties to aid in the solicitation.
Other Matters
LOV knows of no matters other than those discussed herein that may come
before the Meeting. If any other matters should properly come before the
Meeting, LOV intends to vote stock of the Fund in the Accounts upon such matters
at its discretion.
Shareholder Proposals
Proposals for presentation at the next meeting of shareholders of any
portfolio of the Fund by, or on behalf of, persons entitled to give voting
instructions in connection with the Variable Policies should be directed, in
writing, to:
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Linda L. Lanam
Secretary
Life of Virginia Series Fund, Inc.
6610 West Broad Street
Richmond, Virginia 23230
and received five months prior to the meeting, for inclusion in the proxy
statement and the voting instruction forms for that meeting. Because the Fund
does not intend to hold annual or other regularly scheduled meetings, anyone
wishing to present a proposal at the next shareholders meeting for any portfolio
should call (804) 281-6553 to determine whether a meeting has been scheduled
and, if so, the date of that meeting. The Fund reserves the right not to include
any proposal that does not meet all of the SEC requirements then in effect for
inclusion of shareholder proposals in proxy statements and proxies.
Investment Advisor
The Investment Advisor for the Fund is Aon Advisors, Inc., 123 North
Wacker Drive, Chicago, Illinois 60606.
Principal Underwriter
The Principal Underwriter for the Fund is Forth Financial
Securities Corporation, 6610 West Broad Street, Richmond,
Virginia 23230.
Annual Report
Any shareholder who would like a free copy of the Fund's most recent
annual report or most recent semi-annual report may request a copy by calling
1-800-636-7203.
Linda L. Lanam
Secretary
Life of Virginia Series Fund, Inc.
Richmond, Virginia August 1, 1996
10
<PAGE>
EXHIBIT B
SUB-INVESTMENT ADVISORY AGREEMENT
THIS SUB-INVESTMENT ADVISORY AGREEMENT ("Agreement") made this ____ day of
______ 1995 by and Between Aon Advisors, Inc., a Virginia corporation, (the
"Adviser") and Genesis Realty Capital Management, a partnership organized under
the laws of Delaware (the "Sub-Adviser").
Adviser and Sub-Adviser agree as follows:
1. Adviser hereby engages the services of Sub-Adviser in connection with
Adviser's management of the Real Estate Securities Portfolio (the "Portfolio")
of Life of Virginia Series Fund, Inc. (the "Fund"). Pursuant to this Agreement
and subject to the oversight and supervision by Adviser and the officers and the
board of directors of the Fund, Sub-Adviser shall manage the investment and
reinvestment of the assets of the Portfolio.
2. Sub-Adviser hereby accepts employment by Adviser in the foregoing capacity
and agrees, at its own expense, to render the services set forth herein and to
provide the office space, furnishings, equipment and personnel required by it to
perform such services on the terms and for the compensation provided in this
Agreement.
3. In particular, Sub-Adviser shall furnish continuously an investment program
for the Portfolio and shall determine from time to time in its discretion the
securities and other investments to be purchased or sold or exchanged and what
portions of the Portfolio shall be held in various securities, cash or other
investments. In this connection, Sub-Adviser shall provide Adviser and the
officers and directors of the Fund with such reports and documentation as the
latter shall reasonably request regarding Sub-Adviser's management of the
Portfolio's assets.
4. Sub-Adviser shall carry out its responsibilities under this Agreement in
compliance with: (a) the Portfolio's investment objective, policies and
restrictions as set forth in the Fund's current registration statement, (b) such
policies or directives as the Fund's directors may from time to time establish
or issue, and (c) applicable law and related regulations. In particular,
Sub-Adviser shall make every effort to ensure that the Portfolio complies with
(1) Section 817(h) of the Internal Revenue Code of 1986 (the "Code") and
regulations issued thereunder relating to the diversification requirements for
variable annuity, endowment, and life insurance contracts and to ensure that the
Portfolio continuously qualifies as a regulated investment company under
sub-chapter M of the Code and (2) the California Insurance Department's
Borrowing Guideline Limits Applicable to a Portfolio of a Separate Account and
its Diversification Guidelines for Foreign Country Investments by a Portfolio of
a Separate Account.
5. Sub-Adviser shall take all actions which it considers necessary to implement
the investment policies of the Portfolio, and in particular, to place all orders
for the purchase or sale of securities or other investments for the Portfolio
with brokers or dealers selected by it, and to that end, Sub-Adviser is
authorized as the agent of the Fund to give instructions to the Fund's custodian
as to deliveries of securities or other investments and payments of cash for the
account of
1
<PAGE>
the Portfolio. In connection with the selection of brokers or dealers and the
placing of purchase and sale orders with respect to investments of the
Portfolio, Sub-Adviser is directed at all times to seek to obtain best execution
and price within the policy guidelines determined by the Fund's board of
directors and set forth in the Fund's current registration statement.
In addition to seeking the best price and execution, Sub- Adviser may also take
into consideration research and statistical information and wire and other
quotation services provided by brokers and dealers to Sub-Adviser. Sub-Adviser
is also authorized to effect individual securities transactions at commission
rates in excess of the minimum commission rates available, if it determines in
good faith that such amount of commission is reasonable in relation to the value
of the brokerage and research services provided by such broker or dealer, viewed
in terms of either that particular transaction or Sub-Adviser's overall
responsibilities with respect to the Portfolio. The policies with respect to
brokerage allocation, determined from time to time by the Fund's board of
directors are those disclosed in the Fund's currently effective registration
statement. Sub-Adviser will periodically evaluate the statistical data, research
and other investment services provided to it by brokers and dealers. Such
services may be used by Sub-Adviser in connection with the performance of its
obligations under this Agreement or in connection with other advisory or
investment operations including using such information in managing its own
accounts.
6. Sub-Adviser's services under this Agreement are not exclusive. Sub-Adviser
may provide the same or similar services to other clients provided that
Sub-Adviser's services to Adviser are not impaired thereby. Sub-Adviser shall
for all purposes herein be deemed to be an independent contractor and shall,
unless otherwise expressly provided or authorized, have no authority to act for
or represent the Adviser, the Fund or the Portfolio or otherwise be deemed
agents of the Adviser, the Fund or the Portfolio.
7. Sub-Adviser is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended, and shall remain so registered throughout the
term of this Agreement. Sub-Adviser shall notify Adviser immediately if
Sub-Adviser ceases to be so registered as an investment adviser.
8. Subject to: (a) the requirement that Sub-Adviser seek to obtain best
execution and price within the policy guidelines determined by the Fund's board
of directors and set forth in the Fund's current registration statement, (b) the
provisions of the Investment Advisers Act of 1940 (the "Act"), (c) the
provisions of the Securities Exchange Act of 1934, and (d) other applicable
provisions of law; Sub-Adviser or an affiliated person of Sub- Adviser may act
as broker for the Portfolio in connection with the purchase or sale of
securities or other investments for the Portfolio. Such brokerage services are
not within the scope of the duties of Sub-Adviser under this Agreement. Subject
to the requirements of applicable law and any procedures adopted by Fund's board
of directors, Sub-Adviser or its affiliated persons may receive brokerage
commissions, fees or other remuneration from the Portfolio or the Fund for such
services in addition to Sub-Adviser's fees for services under this Agreement.
2
<PAGE>
9. For the services rendered, the facilities furnished and the expenses assumed
by Sub-Adviser, Adviser shall pay Sub-Adviser at the end of each calendar month
a fee based on the average daily net assets of the Portfolio at the following
annual rates:
.425% of the first $100,000,000; .40% of the next
$100,000,000; and .375% of amounts in excess of $200,000,000
Sub-Adviser's fee shall be accrued daily at 1/365th of the applicable annual
rate set forth above. For the purpose of accruing compensation, the net assets
of the Portfolio shall be determined in the manner and on the dates set forth in
the current prospectus of the Fund, and on days on which the net assets are not
so determined, the net asset value computation to be used shall be as determined
on the next day on which the net assets shall have been determined. In the event
of termination of this Agreement, all compensation due through the date of
termination will be calculated on a pro-rated basis through the date of
termination and paid within thirty business days of the date of termination.
During any period when the determination of net value is suspended, the net
asset value of the Portfolio of the last business day prior to such suspension
shall for this purpose be deemed to be the net asset value at the close of each
succeeding business day until it is again determined.
10. Sub-Adviser hereby undertakes and agrees to maintain, in the form and for
the period required by Rule 31a-2 under the Investment Company Act of 1940, all
records relating to the Portfolio's investments that are required to be
maintained by the Fund pursuant to the requirements of Rule 31a-1 of that Act.
Sub-Adviser agrees that all books and records which it maintains for the
Portfolio or the Fund are the property of the Fund and further agrees to
surrender promptly to the Adviser or the Fund any such books, records or
information upon the Adviser's or the Fund's request. All such books and records
shall be made available, within five business days of a written request, to the
Fund's accountants or auditors during regular business hours at Sub-Adviser's
offices. Adviser and the Fund or their authorized representative shall have the
right to copy any records in the possession of Sub-Adviser which pertain to the
Portfolio or the Fund. Such books, records, information or reports shall be made
available to properly authorized government representatives consistent with
state and federal law and/or regulations. In the event of the termination of
this Agreement, all such books, records or other information shall be returned
to Adviser or the Fund free from any claim or assertion of rights by
Sub-Adviser.
11. Sub-Adviser agrees that it will not disclose or use any records or
information obtained pursuant to this Agreement in any manner whatsoever except
as authorized in this Agreement and that it will keep confidential any
information obtained pursuant to this Agreement and disclose such information
only if Adviser or the Fund has authorized such disclosure, or if such
disclosure is required by federal or state regulatory authorities.
3
<PAGE>
12. Sub-Adviser hereby indemnifies, defends and protects Adviser and holds
Adviser harmless, from and against any losses arising out of Sub-Adviser's
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of Sub-Adviser, its officers,
directors, agents, partners, employees, controlling persons, shareholders or
affiliated persons.
Adviser hereby indemnifies, defends and protects Sub-Adviser and holds
Sub-Adviser harmless, from and against any losses arising out of Adviser's
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of Adviser, its officers, directors,
agents, partners, employees, controlling persons, shareholders or affiliated
persons.
13. This Agreement shall not become effective unless and until it is approved by
the board of directors of the Fund, including a majority of directors who are
not parties to this Agreement or interested persons of any such party to this
Agreement. This Agreement shall come into full force and effect on the date
which it is so approved. This Agreement shall continue in effect for two years
and shall thereafter continue in effect from year to year so long as such
continuance is specifically approved at least annually by (i) the board of
directors of the Fund, or by the vote of a majority of the outstanding shares of
the class of stock representing an interest in the Portfolio; and (ii) a
majority of those directors who are not parties to this Agreement or interested
persons of any such party cast in person at a meeting called for the purpose of
voting on such approval.
14. This Agreement may be terminated at any time without the payment of any
penalty, by the Fund's board of directors, or by vote of a majority of the
outstanding shares of the class of stock representing an interest in the
Portfolio on sixty days written notice to the Adviser and Sub-Adviser, or by the
Adviser, or by the Sub-Adviser, on sixty days written notice to the other. This
Agreement shall automatically terminate in the event of its assignment or in the
event of the termination of the investment advisory agreement between the
Adviser and the Fund regarding the Adviser's management of the Portfolio.
15. This Agreement may be amended by either party only if such amendment is
specifically approved by (i) the vote of a majority of outstanding shares of the
class representing an interest in the Portfolio, and (ii) a majority of those
directors who are not parties to this Agreement or interested persons of any
such party cast in person at a meeting called for the purpose of voting on such
approval.
16. The terms "assignment", "affiliated person" and "interested person", when
used in this Agreement, shall have the respective meanings specified in the
Investment Company Act of 1940. The term "majority of the outstanding shares of
the class" means the lesser of (a) 67% or more of the shares of such class
present at a meeting if more than 50% of such shares are present or represented
by proxy or (b) more than 50% of the shares of such class.
4
<PAGE>
17. This Agreement shall be construed in accordance with laws of the
Commonwealth of Virginia, and applicable provisions of the Act and the
Investment Company Act of 1940.
18. If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
AON ADVISORS, INC. GENESIS REALTY CAPITAL MANAGEMENT
ATTEST: ATTEST:
By: By:
Its: Its:
5
<PAGE>
EXHIBIT A
SUB-INVESTMENT ADVISORY AGREEMENT
THIS SUB-INVESTMENT ADVISORY AGREEMENT ("Agreement") made this ________ day of
____________________ 1996 by and Between Aon Advisors, Inc., a Virginia
corporation, (the "Adviser") and GMG/Seneca Capital Management, L.L.C., a
limited liability company organized under the laws of California (the
"Sub-Adviser").
Adviser and Sub-Adviser agree as follows:
1. Adviser hereby engages the services of Sub-Adviser in connection with
Adviser's management of the Real Estate Securities Portfolio (the "Portfolio")
of Life of Virginia Series Fund, Inc. (the "Fund"). Pursuant to this Agreement
and subject to the oversight and supervision by Adviser and the officers and the
board of directors of the Fund, Sub-Adviser shall manage the investment and
reinvestment of the assets of the Portfolio.
2. Sub-Adviser hereby accepts employment by Adviser in the foregoing capacity
and agrees, at its own expense, to render the services set forth herein and to
provide the office space, furnishings, equipment and personnel required by it to
perform such services on the terms and for the compensation provided in this
Agreement.
3. In particular, Sub-Adviser shall furnish continuously an investment program
for the Portfolio and shall determine from time to time in its discretion the
securities and other investments to be purchased or sold or exchanged and what
portions of the Portfolio shall be held in various securities, cash or other
investments. In this connection, Sub-Adviser shall provide Adviser and the
officers and directors of the Fund with such reports and documentation as the
latter shall reasonably request regarding Sub-Adviser's management of the
Portfolio's assets.
4. Sub-Adviser shall carry out its responsibilities under this Agreement in
compliance with: (a) the Portfolio's investment objective, policies and
restrictions as set forth in the Fund's current registration statement, (b) such
policies or directives as the Fund's directors may from time to time establish
or issue, and (c) applicable law and related regulations. In particular,
Sub-Adviser shall make every effort to ensure that the Portfolio complies with
(1) Section 817(h) of the Internal Revenue Code of 1986 (the "Code") and
regulations issued thereunder relating to the diversification requirements for
variable annuity, endowment, and life insurance contracts and to ensure that the
Portfolio continuously qualifies as a regulated investment company under
sub-chapter M of the Code and (2) the California Insurance Department's
Borrowing Guideline Limits Applicable to a Portfolio of a Separate Account and
its Diversification Guidelines for Foreign Country Investments by a Portfolio of
a Separate Account.
5. Sub-Adviser shall take all actions which it considers necessary to implement
the investment policies of the Portfolio, and in particular, to place all orders
for the purchase or sale of
1
<PAGE>
securities or other investments for the Portfolio with brokers or dealers
selected by it, and to that end, Sub-Adviser is authorized as the agent of the
Fund to give instructions to the Fund's custodian as to deliveries of securities
or other investments and payments of cash for the account of the Portfolio. In
connection with the selection of brokers or dealers and the placing of purchase
and sale orders with respect to investments of the Portfolio, Sub-Adviser is
directed at all times to seek to obtain best execution and price within the
policy guidelines determined by the Fund's board of directors and set forth in
the Fund's current registration statement.
In addition to seeking the best price and execution, Sub- Adviser may also take
into consideration research and statistical information and wire and other
quotation services provided by brokers and dealers to Sub-Adviser. Sub-Adviser
is also authorized to effect individual securities transactions at commission
rates in excess of the minimum commission rates available, if it determines in
good faith that such amount of commission is reasonable in relation to the value
of the brokerage and research services provided by such broker or dealer, viewed
in terms of either that particular transaction or Sub-Adviser's overall
responsibilities with respect to the Portfolio. The policies with respect to
brokerage allocation, determined from time to time by the Fund's board of
directors are those disclosed in the Fund's currently effective registration
statement. Sub-Adviser will periodically evaluate the statistical data, research
and other investment services provided to it by brokers and dealers. Such
services may be used by Sub-Adviser in connection with the performance of its
obligations under this Agreement or in connection with other advisory or
investment operations including using such information in managing its own
accounts.
6. Sub-Adviser's services under this Agreement are not exclusive. Sub-Adviser
may provide the same or similar services to other clients provided that
Sub-Adviser's services to Adviser are not impaired thereby. Sub-Adviser shall
for all purposes herein be deemed to be an independent contractor and shall,
unless otherwise expressly provided or authorized, have no authority to act for
or represent the Adviser, the Fund or the Portfolio or otherwise be deemed
agents of the Adviser, the Fund or the Portfolio.
7. Sub-Adviser is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended, and shall remain so registered throughout the
term of this Agreement. Sub-Adviser shall notify Adviser immediately if
Sub-Adviser ceases to be so registered as an investment adviser.
8. Subject to: (a) the requirement that Sub-Adviser seek to obtain best
execution and price within the policy guidelines determined by the Fund's board
of directors and set forth in the Fund's current registration statement, (b) the
provisions of the Investment Advisers Act of 1940 (the "Act"), (c) the
provisions of the Securities Exchange Act of 1934, and (d) other applicable
provisions of law; Sub-Adviser or an affiliated person of Sub- Adviser may act
as broker for the Portfolio in connection with the purchase or sale of
securities or other investments for the
2
<PAGE>
Portfolio. Such brokerage services are not within the scope of the duties of
Sub-Adviser under this Agreement. Subject to the requirements of applicable law
and any procedures adopted by Fund's board of directors, Sub-Adviser or its
affiliated persons may receive brokerage commissions, fees or other remuneration
from the Portfolio or the Fund for such services in addition to Sub-Adviser's
fees for services under this Agreement.
9. For the services rendered, the facilities furnished and the expenses assumed
by Sub-Adviser, Adviser shall pay Sub-Adviser at the end of each calendar month
a fee based on the average daily net assets of the Portfolio at the following
annual rates:
.425% of the first $100,000,000; .40% of the next
$100,000,000; and .375% of amounts in excess of $200,000,000
Sub-Adviser's fee shall be accrued daily at 1/365th of the applicable annual
rate set forth above. For the purpose of accruing compensation, the net assets
of the Portfolio shall be determined in the manner and on the dates set forth in
the current prospectus of the Fund, and on days on which the net assets are not
so determined, the net asset value computation to be used shall be as determined
on the next day on which the net assets shall have been determined. In the event
of termination of this Agreement, all compensation due through the date of
termination will be calculated on a pro-rated basis through the date of
termination and paid within thirty business days of the date of termination.
During any period when the determination of net value is suspended, the net
asset value of the Portfolio of the last business day prior to such suspension
shall for this purpose be deemed to be the net asset value at the close of each
succeeding business day until it is again determined.
10. Sub-Adviser hereby undertakes and agrees to maintain, in the form and for
the period required by Rule 31a-2 under the Investment Company Act of 1940, all
records relating to the Portfolio's investments that are required to be
maintained by the Fund pursuant to the requirements of Rule 31a-1 of that Act.
Sub-Adviser agrees that all books and records which it maintains for the
Portfolio or the Fund are the property of the Fund and further agrees to
surrender promptly to the Adviser or the Fund any such books, records or
information upon the Adviser's or the Fund's request. All such books and records
shall be made available, within five business days of a written request, to the
Fund's accountants or auditors during regular business hours at Sub-Adviser's
offices. Adviser and the Fund or their authorized representative shall have the
right to copy any records in the possession of Sub-Adviser which pertain to the
Portfolio or the Fund. Such books, records, information or reports shall be made
available to properly authorized government representatives consistent with
state and federal law and/or regulations. In the event of the termination of
this Agreement, all such books, records or other information shall be returned
to Adviser or the Fund free from any claim or assertion of rights by
Sub-Adviser.
3
<PAGE>
11. Sub-Adviser agrees that it will not disclose or use any records or
information obtained pursuant to this Agreement in any manner whatsoever except
as authorized in this Agreement and that it will keep confidential any
information obtained pursuant to this Agreement and disclose such information
only if Adviser or the Fund has authorized such disclosure, or if such
disclosure is required by federal or state regulatory authorities.
12. Sub-Adviser hereby indemnifies, defends and protects Adviser and holds
Adviser harmless, from and against any losses arising out of Sub-Adviser's
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of Sub-Adviser, its officers,
directors, agents, partners, employees, controlling persons, shareholders or
affiliated persons.
Adviser hereby indemnifies, defends and protects Sub-Adviser and holds
Sub-Adviser harmless, from and against any losses arising out of Adviser's
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of Adviser, its officers, directors,
agents, partners, employees, controlling persons, shareholders or affiliated
persons.
13. This Agreement shall not become effective unless and until it is approved by
the board of directors of the Fund, including a majority of directors who are
not parties to this Agreement or interested persons of any such party to this
Agreement. This Agreement shall come into full force and effect on the date
which it is so approved. This Agreement shall continue in effect for two years
and shall thereafter continue in effect from year to year so long as such
continuance is specifically approved at least annually by (i) the board of
directors of the Fund, or by the vote of a majority of the outstanding shares of
the class of stock representing an interest in the Portfolio; and (ii) a
majority of those directors who are not parties to this Agreement or interested
persons of any such party cast in person at a meeting called for the purpose of
voting on such approval.
14. This Agreement may be terminated at any time without the payment of any
penalty, by the Fund's board of directors, or by vote of a majority of the
outstanding shares of the class of stock representing an interest in the
Portfolio on sixty days written notice to the Adviser and Sub-Adviser, or by the
Adviser, or by the Sub-Adviser, on sixty days written notice to the other. This
Agreement shall automatically terminate in the event of its assignment or in the
event of the termination of the investment advisory agreement between the
Adviser and the Fund regarding the Adviser's management of the Portfolio.
15. This Agreement may be amended by either party only if such amendment is
specifically approved by (i) the vote of a majority of outstanding shares of the
class representing an interest in the Portfolio, and (ii) a majority of those
directors who are not parties to this Agreement or interested persons of any
such party cast in person at a meeting called for the purpose of voting on such
approval.
4
<PAGE>
16. The terms "assignment", "affiliated person" and "interested person", when
used in this Agreement, shall have the respective meanings specified in the
Investment Company Act of 1940. The term "majority of the outstanding shares of
the class" means the lesser of (a) 67% or more of the shares of such class
present at a meeting if more than 50% of such shares are present or represented
by proxy or (b) more than 50% of the shares of such class.
17. This Agreement shall be construed in accordance with laws of the
Commonwealth of Virginia, and applicable provisions of the Act and the
Investment Company Act of 1940.
18. If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
AON ADVISORS, INC. GMG/SENECA CAPITAL
MANAGEMENT, L.L.C.
ATTEST: ATTEST:
By: By:
Its: Its:
5
<PAGE>
INSTRUCTIONS TO THE VARIABLE INSURANCE PRODUCT POLICYHOLDER
Life of Virginia Series Fund, Inc.
Proxy solicitation by the Board of Directors
The undersigned, revoking previous instructions, hereby instructs The
Life Insurance Company of Virginia to vote all shares of the Real Estate
Securities Portfolio of the Life of Virginia Series Fund, Inc. held in the
account of the undersigned at the Special Meeting of the Shareholders to be held
at 11:00 a.m., Tuesday, August 20, 1996, or at any adjournment thereof and to
vote on the proposals received in the Proxy Statement as specified on the
reverse side. Receipt of the Notice of the Meeting and the accompanying Proxy
Statement is hereby acknowledged.
If this instruction form is signed and returned and no specification is
made The Life Insurance Company of Virginia shall vote FOR all proposals. If
this instruction card is not returned or is returned unsigned, The Life
Insurance Company of Virginia shall vote your shares in the same proportion as
it votes the shares for which it has received instructions.
As to any other matter, The Life Insurance Company of Virginia shall
vote in accordance with its best judgement.
NOTE: Please sign exactly as your name appears on the
instruction form.
DATE:____________, 1996
- ------------------------------------------------
- ------------------------------------------------
Signature(s) and title(s), if applicable
Please sign, date and return promptly in enclosed envelope.
The Board of Directors of the Fund recommend a vote FOR the following:
11
<PAGE>
(1) FOR [ ] AGAINST [ ] ABSTAIN FROM [ ]
Approval of the amended Investment Sub-Advisory
Agreement for the Real Estate Securities Portfolio
between GMG/Seneca Capital Management, L.L.C. and Aon
Advisors, Inc.
11
