<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 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 the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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:
- --------------------------------------------------------------------------------
<PAGE> 2
LIFE OF VIRGINIA SERIES FUND, INC.
6610 WEST BROAD STREET
RICHMOND, VIRGINIA 23230
------------------
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
APRIL 16, 1997
To owners of variable life insurance contracts and variable annuity
contracts (collectively, the "variable contracts") issued by The Life Insurance
Company of Virginia ("LOV") entitled to give voting instructions in connection
with certain separate accounts established by LOV.
Notice is hereby given that a special meeting of the shareholders of Life
of Virginia Series Fund, Inc. (the "Fund"), including special meetings of
shareholders (the "Meetings") of each of the Fund's six investment portfolios
(each, a "Portfolio" and collectively, the "Portfolios"), will be held on April
16, 1997 in the 8th Floor Board Room of The Life Insurance Company of Virginia
Building, 6610 West Broad Street, Richmond, Virginia 23230, at 10:00 a.m.,
Eastern Standard Time.
The Meetings will be held for the following purposes:
1. To approve or disapprove an amendment to the Articles of
Incorporation of the Fund to authorize a change in the name of the Fund and
to authorize four new classes of capital stock. SHAREHOLDERS OF ALL OF THE
PORTFOLIOS VOTING TOGETHER.
2a. To approve or disapprove investment advisory and administration
agreements (one agreement on behalf of each Portfolio) between the Fund and
GE Investment Management Incorporated ("GEIM"), pursuant to which GEIM will
serve as investment adviser and administrator with respect to each
Portfolio. SHAREHOLDERS OF EACH PORTFOLIO VOTING SEPARATELY.
2b. To approve or disapprove an investment sub-advisory agreement
between GEIM and GMG/Seneca Capital Management, LLC ("GMG/Seneca"),
pursuant to which GMG/Seneca will continue to serve as investment
sub-adviser to the Real Estate Securities Portfolio. SHAREHOLDERS OF THE
REAL ESTATE SECURITIES PORTFOLIO VOTING SEPARATELY.
3. To elect nine directors of the Fund. SHAREHOLDERS OF ALL OF THE
PORTFOLIOS VOTING TOGETHER.
4. To ratify or reject the selection of KPMG Peat Marwick LLP as the
Fund's independent public accountant. SHAREHOLDERS OF ALL OF THE PORTFOLIOS
VOTING TOGETHER.
5. To transact such other business as may properly come before the
Meetings or any adjournment(s) thereof.
LOV and certain separate accounts of LOV are the only shareholders of the
Fund. However, LOV hereby solicits and agrees to vote the shares of the Fund
attributable to LOV and such separate accounts at the Meetings in accordance
with timely instructions received from owners of the variable contracts having
contract values allocated to such separate accounts invested in such shares.
As a variable contract owner of record at the close of business on February
28, 1997, you have the right to instruct LOV as to the manner in which shares of
a Portfolio attributable to your variable contract should be voted. To assist
you in giving your instructions, a Voting Instruction Form is enclosed that
reflects the number of shares of each Portfolio of the Fund for which you are
entitled to give voting instructions. In addition, a Proxy Statement is attached
to this Notice and describes the matters to be voted upon at the Meetings or any
adjournment(s) thereof.
<PAGE> 3
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETINGS, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED VOTING INSTRUCTION FORM(S) AND RETURN IT
PROMPTLY IN THE ENCLOSED POSTAGE PREPAID ENVELOPE.
By Order of the Board of Directors
Linda L. Lanam
Secretary
Richmond, Virginia
March 7, 1997
<PAGE> 4
LIFE OF VIRGINIA SERIES FUND, INC.
6610 WEST BROAD STREET
RICHMOND, VIRGINIA 23230
------------------
PROXY STATEMENT
MARCH 7, 1997
------------------
This Proxy Statement is being furnished on behalf of the Board of Directors
of Life of Virginia Series Fund, Inc. (the "Fund") by The Life Insurance Company
of Virginia ("LOV") to owners of variable annuity contracts and variable life
insurance contracts (collectively, the "variable contracts") issued by LOV and
having contract values on the record date allocated to certain separate accounts
of LOV invested in shares of the Fund.
This Proxy Statement is being furnished in connection with the solicitation
of voting instructions from owners of such variable contracts for use at special
meetings (the "Meetings") of shareholders of the Common Stock Index Portfolio,
Government Securities Portfolio, Money Market Portfolio, Total Return Portfolio,
International Equity Portfolio, and Real Estate Securities Portfolio. The
Meetings are to be held on April 16, 1997, at 10:00 a.m., Eastern Standard Time,
in the 8th Floor Board Room of The Life Insurance Company of Virginia Building,
6610 West Broad Street, Richmond, Virginia 23230, for the purposes set forth
below and in the accompanying Notice of the Special Meetings. The approximate
mailing date of this Proxy Statement and Voting Instruction Form(s) is March 7,
1997.
The costs of the Meetings including the solicitation of voting instructions
will be paid by LOV. In addition to the use of the mail, voting instructions may
be solicited, in person or by telephone, by officers of the Fund and regular
employees and representatives of LOV or its affiliates, who will not be
separately compensated for such activities. If necessary, LOV may employ outside
contractors to assist in the solicitation.
At the Meetings, the shareholders of the Common Stock Index Portfolio,
Government Securities Portfolio, Money Market Portfolio, Total Return Portfolio,
International Equity Portfolio, and Real Estate Securities Portfolio, each
voting separately, will be asked:
1. To approve or disapprove investment advisory and administration
agreements (one agreement on behalf of each Portfolio) between the Fund and
GE Investment Management Incorporated ("GEIM"), pursuant to which GEIM will
serve as investment adviser and administrator with respect to their
Portfolio.
At the Meetings, the shareholders of the Real Estate Securities Portfolio,
voting separately, will be asked:
1. To approve or disapprove an investment sub-advisory agreement
between GEIM and GMG/Seneca Capital Management, LLC ("GMG/Seneca"),
pursuant to which GMG/Seneca will continue to serve as investment
sub-adviser to the Real Estate Securities Portfolio.
At the Meetings, the shareholders of each of the Portfolios, voting
together, will be asked:
1. To approve or disapprove an amendment to the Articles of
Incorporation of the Fund to authorize a change in the name of the Fund and
to authorize four new classes of capital stock;
2. To elect nine directors of the Fund;
3. To ratify or reject the selection of KPMG Peat Marwick LLP as the
Fund's independent public accountant; and
4. To transact such other business as may properly come before the
Meetings or any adjournment(s) thereof.
<PAGE> 5
The following chart indicates which shareholders are entitled to vote on
each proposal:
<TABLE>
<CAPTION>
VOTING GROUPS BY PORTFOLIO
MONEY GOVERNMENT COMMON TOTAL INTERNATIONAL REAL ESTATE
MARKET SECURITIES STOCK INDEX RETURN EQUITY SECURITIES
PROPOSAL PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Approval of amendment to X X X X X X
Articles of
Incorporation
2a. Approval of investment X X X X X X
advisory and
administration agreement
with GEIM
2b. Approval of investment X
sub-advisory agreement
with GMG/Seneca
3. Election of nine X X X X X X
directors of the Fund
4. Ratification of X X X X X X
selection of the
independent public
accountant
</TABLE>
GENERAL VOTING INFORMATION
LOV itself and certain separate accounts of LOV (the "Accounts") are the
only shareholders of the Fund. LOV will vote the shares of the Fund held by it
and the Accounts at the Meetings in accordance with timely instructions received
from persons entitled to give voting instructions under the variable contracts
funded through the Accounts. All properly executed Voting Instruction Forms
received by LOV by the close of business on April 15, 1997 will be counted.
LOV will vote shares attributable to variable contracts as to which no
voting instructions are received in proportion (for, against or abstain) to
those for which instructions are received. LOV also will vote shares not
attributable to variable contracts (i.e., representing seed money investments in
the Portfolios made by LOV) in proportion to those for which instructions are
received from owners of variable contracts. 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 variable contract owners. LOV does not believe that these circumstances
exist with respect to matters currently before shareholders. Variable contract
owners may revoke voting instructions given to LOV at any time prior to the
Meetings by notifying the Secretary of the Fund in writing.
The Fund, a Virginia corporation organized on May 14, 1984, is registered
with the U.S. Securities and Exchange Commission (the "SEC") as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Fund sells shares to the following Accounts: Life
of Virginia Separate Account I, Life of Virginia Separate Account II, and Life
of Virginia Separate Account III (which support variable life insurance
contracts); and Life of Virginia Separate Account 4 and Life of Virginia
Separate Account 5 (which support variable annuity contracts). Each of the
Accounts is a segregated asset account established by LOV and each Account,
other than Life of Virginia Separate Account 5, is registered with the SEC under
the 1940 Act as a unit investment trust. Net premiums paid by a variable
contract owner may be allocated to one or more of the six investment
subdivisions of each Account that invest in shares of the Fund. Each 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 number of shares of stock in each Portfolio for which a variable
contract owner (or annuitants or beneficiaries thereunder) may give voting
instructions is equal to the number of shares, or fraction of shares,
2
<PAGE> 6
held in the Account attributable to such variable contract owner as of the
record date. Each share of the Fund's outstanding capital stock is entitled to
one vote and fractional votes are counted. The vote required to approve each
matter is set forth below.
The Board of Directors of the Fund has fixed February 28, 1997 as the
record date for the determination of shareholders entitled to notice of and to
vote at the Meetings. As of February 28, 1997, there were outstanding the
following numbers of shares of capital stock in each Portfolio:
<TABLE>
<CAPTION>
NUMBER OF
SHARES OUTSTANDING
------------------
<S> <C>
Money Market Portfolio......................................................
Government Securities Portfolio.............................................
Common Stock Index Portfolio................................................
Total Return Portfolio......................................................
International Equity Portfolio..............................................
Real Estate Securities Portfolio............................................
</TABLE>
The following table sets forth, as of February 28, 1997, the beneficial
ownership of the Fund's capital stock by each person known by the Fund or LOV to
beneficially own more than 5% of the shares of any class of such stock. For this
purpose, persons who have the right to instruct LOV as to shares of stock
attributable to a variable contract are considered beneficial owners of such
shares of stock. The directors and officers of the Fund, either individually or
as a group, do not own any shares of any class of the Fund's capital stock.
<TABLE>
<CAPTION>
NUMBER OF SHARES (AND PERCENT OF CLASS) BENEFICIALLY OWNED
-------------------------------------------------------------------------------------------------
GOVERNMENT REAL ESTATE
NAME OF BENEFICIAL MONEY MARKET SECURITIES COMMON STOCK TOTAL RETURN INTERNATIONAL SECURITIES
OWNER PORTFOLIO PORTFOLIO INDEX PORTFOLIO PORTFOLIO EQUITY PORTFOLIO PORTFOLIO
- -------------------- ------------- ----------- ---------------- ------------- ----------------- ------------
<S> <C> <C> <C> <C> <C> <C>
LOV.................
</TABLE>
All shares for which LOV timely receives properly executed voting
instructions, which are not subsequently revoked prior to the Meetings, will be
voted at the Meetings in accordance with such instructions. To the knowledge of
the Fund and LOV, no person has the right to instruct LOV with respect to more
than 5% of the shares of any Portfolio.
Prior to December 31, 1996, Aon Savings Plan, an employee benefit plan for
employees of Aon Corporation, held a substantial number of shares of each class
of the Fund's capital stock. (See item 2a below for a brief explanation.) As a
result, the trustees of Aon Savings Plan likely were controlling persons of the
Fund and each of the Portfolios during the period in which the Plan held the
Fund's stock.
Approval of the amendments to the Articles of Incorporation requires the
affirmative vote of a majority of the shares present (in person or by proxy) at
the Meetings, provided that at least one-third of the shares entitled to be cast
are present at the Meetings.
Approval of the agreements in proposals 2a and 2b above requires, as to
each Portfolio voting, either (1) the affirmative vote of a majority of the
shares entitled to be cast for that Portfolio, or (2) 67% or more of the shares
present (in person or by proxy) at the Meeting for that Portfolio, if the
holders of more than 50% of the shares entitled to be cast for that Portfolio
are present, whichever is less.
Election of each nominee as a director requires, as to the entire Fund, the
affirmative vote of a plurality of the shares present (in person or by proxy) at
the Meetings, provided that at least one-third of the shares entitled to be cast
are present at the Meetings.
Ratification of the selection of KPMG Peat Marwick LLP as independent
public accountants requires, as to the entire Fund, the affirmative vote of a
majority of the shares present (in person or by proxy) at the Meetings, provided
that at least one-third of the shares entitled to be cast are present at the
Meetings.
3
<PAGE> 7
ITEM 1: APPROVAL OR DISAPPROVAL OF AMENDMENTS TO THE ARTICLES OF
INCORPORATION OF THE FUND
At a meeting held on January 29, 1997, the Board of Directors of the Fund
approved two amendments to the Fund's Articles of Incorporation and recommended
that the amendments be submitted to the shareholders of the Fund for their
approval or disapproval. The proposed amendments to the Articles of
Incorporation would change the name of the Fund and authorize four new classes
of capital stock.
The first proposed amendment to the Articles of Incorporation would change
the name of the Fund to GE Investments Funds, Inc. On April 1, 1996, LOV was
acquired by a wholly owned subsidiary of General Electric Capital Corporation
("GE Capital"). Currently, 80% of LOV's stock is held by General Electric
Capital Assurance Corporation and 20% is held by GE Life Insurance Group, Inc.,
both wholly owned subsidiaries of GE Capital. GE Capital is a wholly owned
subsidiary of General Electric Company and is a diversified financial services
company. As described below in connection with Item 2a, the change in LOV's
ownership created the opportunity for the Fund to offer its capital stock to
separate accounts of insurance companies that are affiliated with GE Capital or
General Electric Company as well as to LOV and the Accounts. Therefore, LOV
determined that it would be appropriate for the name of the Fund to reflect its
affiliation with the General Electric organization as well as its new investment
adviser, assuming that the new investment advisory agreements for the Portfolios
are approved (see Item 2a below), by changing the Fund's name to GE Investments
Funds, Inc. To change the Fund's name, it is necessary to amend the FIRST
Article of the Articles of Incorporation to reflect the new name.
The second proposed amendment to the Articles of Incorporation would
authorize four new classes of capital stock for the Fund. Currently, the Fund
has been authorized to issue a total of 2,750,000,000 shares of capital stock.
The capital stock is divided into 11 classes, designated by consecutive
alphabetic letters as Class A through Class K. Each class has 250,000,000 shares
of capital stock allocated to it. The Board of Directors has assigned one class
to each of the six investment portfolios of the Fund (Class A through Class F).
The remaining five classes (Class G through Class K) are available to be
assigned to any additional portfolios established by the Board of Directors. The
Board of Directors has decided that in the future they may need the flexibility
to establish more than five new portfolios for the Fund, therefore, they are
requesting that shareholders amend the Articles of Incorporation to provide such
flexibility.
The proposed amendment would amend the THIRD Article of the Articles of
Incorporation to authorize the Fund to issue an additional 1,000,000,000 shares
of capital stock (par value $0.01 per share) for a total of 3,750,000,000 shares
of capital stock. The four new classes of capital stock would be designated
respectively as Class L, Class M, Class N, and Class O. As with each existing
class, each new class would have 250,000,000 shares of capital stock allocated
to it, and would have all rights, qualifications, restrictions and limitations
of the existing classes. The Board of Directors may assign Class L through Class
O to new investment portfolios in the future without shareholder approval.
In the event that the amendments to the Articles of Incorporation are not
approved by the shareholders of the Fund, the Board of Directors will take such
action as it deems to be in the best interest of the Fund, which may include
calling a second meeting of shareholders to vote on the amendments to the
Articles of Incorporation.
THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE PROPOSED AMENDMENTS TO THE ARTICLES OF INCORPORATION.
ITEM 2A: APPROVAL OR DISAPPROVAL OF INVESTMENT ADVISORY AND
ADMINISTRATION AGREEMENTS BETWEEN GEIM AND THE FUND
Prior to its being sold, LOV was owned by Aon Corporation, an insurance
holding company organization. Aon Advisors, Inc. ("AAI"), a wholly owned
subsidiary of Aon Corporation, currently serves as investment adviser to the
Fund. AAI also served as investment manager to Aon Savings Plan, an employee
benefit plan for Aon Corporation employees. Until recently, Aon Savings Plan
held substantial amounts of each class of the Fund's capital stock. Shortly
after Aon Corporation sold LOV, AAI indicated its desire to resign as the
4
<PAGE> 8
Fund's investment adviser and to have Aon Savings Plan redeem the shares of the
Fund held by the Plan. During the last two months of 1996, Aon Savings Plan
redeemed all of its holdings of Fund shares. In response to these developments,
LOV proposed that GEIM assume the investment advisory and certain administrative
duties for the Portfolios of the Fund. The Board of Directors therefore
determined not to renew the Fund's current investment advisory agreements with
AAI.
In order to change investment advisers, new investment advisory and
administration agreements (one agreement on behalf of each Portfolio) (the
"Agreements") must be approved by a vote of the shareholders of each Portfolio.
The shareholders of each Portfolio will be asked at the Meetings to approve or
disapprove the Agreement between GEIM and the Fund with respect to their
Portfolio. The Agreements were approved for each Portfolio by the Board of
Directors, including a majority of the directors who are not parties to the
Agreements or interested persons of such parties ("independent directors"), at a
meeting held on January 29, 1997. A copy of the Agreement for the International
Equity Portfolio is attached as Exhibit A. Except for the fees that would be
payable to GEIM, the terms of the Agreements for each of the other Portfolios
are identical to the terms of the Agreement for the International Equity
Portfolio shown in Exhibit A.
THE CURRENT INVESTMENT ADVISER AND THE CURRENT ADVISORY AGREEMENTS
AAI, which is located at 123 N. Wacker Drive, Chicago, Illinois 60606,
currently serves as the investment adviser to each Portfolio of the Fund
pursuant to the Fund's existing investment advisory agreements (the "Current
Advisory Agreements"). The Current Advisory Agreements were first approved for
each Portfolio (other than International Equity Portfolio and Real Estate
Securities Portfolio) by the Board of Directors at a meeting held on January 27,
1993. On April 20, 1993, the Current Advisory Agreements were approved by the
shareholders of each Portfolio (other than International Equity Portfolio and
Real Estate Securities Portfolio). The Current Advisory Agreements regarding the
International Equity Portfolio and Real Estate Securities Portfolio were
approved by the Board of Directors on January 25, 1995, and by the shareholders
of those Portfolios on May 24, 1995. The Current Advisory Agreement for the
International Equity Portfolio is attached as Exhibit B. Except for the fees
that are payable, the terms of the Current Advisory Agreements for each of the
other Portfolios are identical to the terms of the Current Advisory Agreement
for the International Equity Portfolio.
Under the Current Advisory Agreements, AAI, with the supervision of the
Board of Directors, continuously furnishes an investment program for the
Portfolios, is responsible for the actual management of the investments of the
Portfolios, and has responsibility for making decisions governing whether to
buy, sell or hold any particular security. AAI maintains all required accounts,
records, memoranda, instructions or authorizations relating to a Portfolio's
investments, and regularly reports to the Board of Directors with respect to the
implementation of any overall investment strategy. AAI also performs research
and obtains and evaluates pertinent economic, statistical, and financial data
relevant to the investment policies of the Portfolios.
The Current Advisory Agreements also authorize AAI, subject to Board
approval, to enter into sub-advisory agreements whereby another entity would
perform some of AAI's services. AAI has entered into separate sub-advisory
agreements with GMG/Seneca regarding the Real Estate Securities Portfolio, and
with Perpetual Portfolio Management, Limited regarding the International Equity
Portfolio.
The Current Advisory Agreements also require that, in addition to providing
investment advisory services, AAI perform or supervise the performance of
certain administrative services for the Portfolios and the Fund, including
financial reporting by the Fund.
AAI is responsible for paying all expenses it incurs in providing its
services to the Portfolios including compensating its officers and employees
connected with investment and economic research, trading and investment
management of the Fund and paying any fees to interested directors of the Fund.
AAI also provides all executive, administrative, clerical and other personnel
necessary to operate the Fund, and furnishes office space, facilities, and
equipment and will pay the day-to-day expenses related to the operation and
maintenance of such office space, facilities, and equipment. AAI also pays
legal, accounting and all other
5
<PAGE> 9
expenses incurred in the organization of the Fund or of new portfolios of the
Fund, including costs of registering under federal and state securities laws.
The Fund is responsible for paying all other expenses it may incur in its
operation, including general administrative expenses, share redemption expenses,
expenses of portfolio transactions, shareholder servicing costs, pricing costs
(including the daily calculation of net asset value), interest on borrowings by
the Fund, charges of the custodian and transfer agent, cost of auditing
services, independent directors' fees, legal expenses, state franchise taxes,
certain insurance premiums, cost of maintaining corporate existence, investor
services, costs of printing and mailing updated Fund prospectuses to
shareholders, proxy statements and shareholder reports, costs of paying dividend
and capital gains distributions, capital stock certificates, costs of director
and shareholder meetings, and any extraordinary expenses (litigation costs or
costs related to indemnification of directors, officers and employees of the
Fund).
The Current Advisory Agreements provide that AAI shall not be liable for
any error of judgment or mistake of law or for any loss arising out of the
Portfolios in connection with AAI's services pursuant to the Current Advisory
Agreements, except for (i) willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of reckless disregard of its duties
or obligations under the Agreements, and (ii) to the extent specified in Section
36(b) of the Act concerning loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation.
As compensation for its services to the Portfolios under the Current
Advisory Agreements, AAI receives monthly fees payable at the following annual
rates based on the average daily net assets of each Portfolio.
International Equity Portfolio: 1.00% of the first $100,000,000; .95% of
the next $100,000,000; and .90% of the amounts in excess of
$200,000,000.
Real Estate Securities Portfolio: .85% of the first $100,000,000; .80%
of the next $100,000,000; and .75% of the amounts in excess of
$200,000,000.
Common Stock Index Portfolio: .35%.
Government Securities Portfolio, Money Market Portfolio and Total Return
Portfolio: .50% of the first $100,000,000; .45% of the next
$100,000,000; .40% of the next $100,000,000; .35% of the next
$100,000,000; and .30% of the amounts in excess of $400,000,000.
Under the terms of the Current Advisory Agreements, AAI reimburses each
Portfolio for ordinary operating expenses (not including attorney's fees, court
judgments or other litigation expenses or certain costs relating to
indemnification) in any fiscal year in excess of the following amounts:
International Equity Portfolio: 1.75% of the first $30 million of the
average daily net assets of the Portfolio and 1.00% of the amount by
which the average daily net assets of the Portfolio exceeds $30 million;
Government Securities Portfolio, Total Return Portfolio and Real Estate
Securities Portfolio: 1.50% of the first $30 million of the average
daily net assets of these portfolios and 1.00% of the amount by which
the average daily net assets of each of these portfolios exceed $30
million; and
Money Market Portfolio and Common Stock Index Portfolio: .75% of the
average daily net assets of each of these Portfolios.
6
<PAGE> 10
During the Fund's fiscal year ended December 31, 1996, AAI received
advisory fees for services to each Portfolio in the following amounts:
<TABLE>
<CAPTION>
ADVISORY
PORTFOLIO FEE
------------------------------------------------------------------ --------
<S> <C>
International Equity Portfolio.................................... $237,088
Real Estate Securities Portfolio.................................. $161,881
Common Stock Index Portfolio...................................... $336,589
Government Securities Portfolio................................... $129,116
Money Market Portfolio............................................ $111,778
Total Return Portfolio....................................... $405,779
</TABLE>
During the fiscal year ended December 31, 1996, the Board of Directors
approved the continuance of each of the Current Advisory Agreements.
GEIM AND THE AGREEMENTS
GEIM, which is located at 3003 Summer Street, Stamford, Connecticut 06905,
is being proposed as the investment adviser and administrator for each Portfolio
of the Fund. GEIM, which was formed under the laws of Delaware in 1988, is a
wholly owned subsidiary of General Electric Company ("GE"). A list of the
directors and principal executive officers of GEIM is provided in Appendix A.
GEIM currently provides investment advisory or sub-advisory services with
respect to 19 other mutual funds and a number of other private institutional
accounts. The professionals responsible for the investment operations of GEIM
serve in similar capacities with respect to General Electric Investment
Corporation "GEIC"), a sister company of GEIM wholly owned by GE, which provides
investment advisory services with respect to GE's pension and benefit plans and
a number of funds offered exclusively to GE employees, retirees and certain
related persons. These funds include the ELFun family of Funds (the first of
which, ELFun Trusts, was established in 1935) and the funds offered as part of
GE's 401(k) program (also known as the GE Savings and Security Program), which
are referred to as the GE S&S Program Mutual Fund and the GE S&S Long Term
Interest Fund. The investment professionals at GEIM and GEIC and their
predecessors have managed GE's pension assets since 1927. As of December 31,
1996, GEIM and GEIC managed assets in excess of $58 billion, including roughly
$11 billion in mutual funds.
The Agreements are substantially similar in all material respects to each
of the Current Advisory Agreements. In particular, the fees payable to GEIM for
services to each Portfolio under the Agreements are identical to the fees
payable to AAI under the Current Advisory Agreements. The Agreements differ from
the Current Advisory Agreements in that the Agreements: (1) provide general
descriptions and less detail about the investment advisory services to be
provided; (2) provide a greater level of detail regarding administrative
services; (3) do not contain any provisions for reimbursement of Portfolio
operating expenses by the adviser; (4) specify that the Fund will pay the
registration costs of each Portfolio and its shares under the federal and state
securities laws; (5) contain the name of a different investment adviser; and (6)
include different dates of execution and termination.
Under the Agreements, GEIM would provide a continuous investment program
for each Portfolio's assets, including investment research and management. GEIM
would determine what investments will be purchased, retained or sold by the
Portfolios and will place purchase and sale orders for the Portfolios'
investments. GEIM would provide the Fund with all executive, administrative,
clerical and other personnel necessary to operate each Portfolio, and will pay
salaries and other employment-related costs of employing these persons. GEIM
would furnish the Fund and each Portfolio with office space, facilities, and
equipment and would pay the day-to-day expenses related to the operation of such
space, facilities and equipment. GEIM, as administrator, also would: (1)
maintain the books and records of each Portfolio; (2) prepare reports to
shareholders of each Portfolio; (3) prepare and file tax returns for each
Portfolio; (4) assist with the preparation and filing of reports and the Fund's
registration statement with the Securities and Exchange Commission; (5) provide
appropriate officers for the Fund; (6) provide administrative support necessary
for
7
<PAGE> 11
the Board of Directors of the Fund to conduct meetings; and (7) supervise and
coordinate the activities of other service providers, including independent
auditors, legal counsel, custodians, accounting service agents, and transfer
agents.
GEIM would be responsible for employing sufficient staff and consulting
with other persons that it determines may be necessary or useful to the
performance of its obligations; providing services in accordance with each
Portfolios' investment objectives, policies and restrictions as stated in the
Fund's current registration statement, as amended from time to time; and keeping
the Fund informed of developments materially affecting a Portfolio, including
furnishing the Fund with whatever information and reports that the Board
reasonably requests.
The Agreements permit GEIM, subject to Board approval and other applicable
legal requirements, to enter into any advisory or sub-advisory agreement with
affiliated or unaffiliated entities whereby such entity will perform some or all
of GEIM's responsibilities under the Agreements. In this event, GEIM would
remain responsible for ensuring that these entities performed the services that
each would undertake pursuant to the sub-advisory agreements.
For its services to each Portfolio of the Fund, GEIM would receive a
monthly advisory and administrative fee. The fee would be deducted daily from
the assets of each of the Portfolios and paid to GEIM monthly. The fees that
would be payable to GEIM, which are identical to the fees under the Current
Advisory Agreements, are based on the average daily net assets of the Portfolio
at the following annual rates:
Government Securities Portfolio, Money Market Portfolio and Total Return
Portfolio: .50% of the first $100,000,000; .45% of the next
$100,000,000; .40% of the next $100,000,000; .35% of the next
$100,000,000; and .30% of the amounts in excess of $400,000,000;
International Equity Portfolio: 1.00% of the first $100,000,000; .95% of
the next $100,000,000; and .90% of the amounts in excess of
$200,000,000;
Real Estate Securities Portfolio: .85% of the first $100,000,000; .80%
of the next $100,000,000; and .75% of the amounts in excess of
$200,000,000; and
Common Stock Index Portfolio: .35%.
The Agreements do not contain any provisions prescribing limits on the
operating expenses of the Fund or of any Portfolio.
The Agreements provide that GEIM may render similar advisory and
administrative services to other clients so long as the services that it
provides under the Agreements are not impaired thereby. The Agreements also
provide that GEIM shall not be liable for any error of judgment or mistake of
law or for any loss arising out of the Portfolios in connection with GEIM's
services pursuant to the Agreements, except for (1) willful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of
reckless disregard of its duties or obligations under the Agreements, and (2) to
the extent specified in Section 36(b) of the Act concerning loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation.
GEIM serves as investment adviser or sub-adviser to other investment
companies or portfolios having a similar investment objective to one or more of
the Portfolios. The table provided in Appendix B lists such other companies or
portfolios, states the size of such companies or portfolios, and describes the
rate of GEIM's compensation (including whether such compensation includes
compensation for any administrative services). Any company or portfolio for
which GEIM has agreed to a voluntary expense limitation is noted.
Each Agreement, as approved by the Board of Directors, is now being
submitted for approval by the shareholders of the appropriate Portfolio. If
approved by the shareholders of a Portfolio, it will take effect on May 1, 1997
and continue in effect for that Portfolio for a term ending April 30, 1999, and
will continue from year to year thereafter, subject to approval annually by (a)
the Board of Directors or a vote of a majority of the outstanding shares of the
Portfolio, and (b) the vote of a majority of the independent directors, cast in
person at a meeting called for the purpose of voting on such approval. If the
shareholders of a Portfolio fail to approve
8
<PAGE> 12
the Agreement for that Portfolio, the Board of Directors shall consider
appropriate alternative arrangements with respect to management of that
Portfolio.
DIRECTOR'S RECOMMENDATION
In determining whether it was appropriate to approve the Agreements for
each Portfolio and to recommend its approval to each Portfolio's shareholders,
the Board of Directors, including the independent directors, considered various
matters and materials provided by GEIM. The Directors considered information
about, among other things, the following: (1) the compensation to be received by
GEIM from each Portfolio and the compensation that other similar portfolios pay
to their investment advisers and administrators; (2) the nature and quality of
the services required to be performed by GEIM to the Portfolios; (3) the
projected expense ratios of each Portfolio under the Agreements; (4) the
projected profitability of GEIM in managing each Portfolio; (5) the
qualifications of the personnel of GEIM; (6) the past performance of GEIM with
regard to other clients that are similar to each Portfolio; (7) the policies and
practices of GEIM in assigning personnel resources to provide the services; and
(8) any significant regulatory compliance issues that might have affected GEIM.
In their deliberations regarding approval of the Agreements, the Board of
Directors focused most of their attention on the information in items (1), (2),
(3) and (6). The Directors evaluated the potential value of GEIM's services to
the Fund overall and to each Portfolio. The Board of Directors also considered
the fees that each Portfolio would pay to GEIM under the Agreements including
the fact that such fees were the same as those under the Current Advisory
Agreements, and the fact that the shareholders of each Portfolio would receive
good value in the form of investment advisory and administrative services in
return for such fees. With regard to the value that GEIM would provide to each
Portfolio and the shareholders invested therein, the Board of Directors
carefully considered GEIM's past performance for similar clients.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE APPROVAL
OF THE AGREEMENTS WITH GEIM.
ITEM 2B: APPROVAL OR DISAPPROVAL OF INVESTMENT SUB-ADVISORY AGREEMENT BETWEEN
GEIM AND GMG/SENECA
GMG/Seneca, the current investment sub-adviser for the Real Estate
Securities Portfolio, entered into an investment sub-advisory agreement dated
May 1, 1996 (the "Current Real Estate Sub-Advisory Agreement") with AAI in
connection with that Portfolio. A copy of the Current Real Estate Sub-Advisory
Agreement is provided in Exhibit C. The terms of the Current Real Estate
Sub-Advisory Agreement provide that it will terminate automatically in the event
of the termination of the Current Advisory Agreement. It is anticipated that if
the Agreements with GEIM are approved, then the Current Advisory Agreements will
terminate as of May 1, 1997. Therefore, the shareholders of the Real Estate
Securities Portfolio will be asked at the Meetings to approve or disapprove a
proposed new investment sub-advisory agreement (the "New Real Estate
Sub-Advisory Agreement") for their Portfolio between GEIM and GMG/Seneca to take
effect on May 1, 1997. The New Real Estate Sub-Advisory Agreement was approved
by the Board of Directors, including a majority of the independent directors, at
a meeting held on January 29, 1997. A copy of the New Real Estate Sub-Advisory
Agreement is provided in Exhibit D.
If approved by the shareholders of the Real Estate Securities Portfolio,
the New Real Estate Sub-Advisory Agreement will continue in effect for an
initial term ending April 30, 1999, and will continue from year to year
thereafter, subject to approval annually by (a) the shareholders of the Real
Estate Securities Portfolio or a majority of the Directors of the Fund, and (b)
the vote of a majority of the independent directors, cast in person at a meeting
called for the purpose of voting on such approval. If the shareholders of the
Real Estate Securities Portfolio fail to approve the New Real Estate
Sub-Advisory Agreement for that Portfolio, the Directors shall consider
appropriate alternative action.
9
<PAGE> 13
INFORMATION ABOUT GMG/SENECA
GMG/Seneca is a California limited liability company located at 909
Montgomery Street, San Francisco, California 94133. GMG/Seneca has three
principal stockholders: Gail P. Seneca; Will K. Weinstein; and Richard D.
Little. Ms. Seneca's principal occupation is Chief Investment Officer of
GMG/Seneca. Mr. Weinstein's principal occupation is Chief Executive Officer of
Genesis Merchant Group Securities. Mr. Little's principal occupation is Equity
Portfolio Manager of GMG/Seneca. Ms. Seneca, Mr. Weinstein, and Mr. Little use
909 Montgomery Street, San Francisco, California 94133 as their business
address. Appendix C lists information about certain management personnel of
GMG/Seneca. Appendix D lists information about other investment companies or
portfolios for which GMG/Seneca serves as investment adviser that have a similar
investment objective to the Real Estate Securities Portfolio.
Currently, only Ms. Seneca owns a "controlling" block of GMG/Seneca's
stock. It is possible that several of the stockholders (other than Ms. Seneca)
may sell a "controlling" block of stock. Should such a sale occur, it may result
in the assignment, and thus the termination, of the New Real Estate Sub-Advisory
Agreement. In this event, shareholders of the Real Estate Securities Portfolio
would likely be asked to reapprove the New Real Estate Sub-Advisory Agreement.
GMG/Seneca would bear the expenses of holding a shareholders' meeting for this
purpose.
CURRENT REAL ESTATE SUB-ADVISORY AGREEMENT
The Current Real Estate Sub-Advisory Agreement was approved by the Board of
Directors on April 24, 1996, and by the shareholders of the Real Estate
Securities Portfolio on August 20, 1996. Under the Current Real Estate
Sub-Advisory Agreement, GMG/Seneca, subject to the general supervision of the
Fund's Board of Directors, manages the investment portfolio of the Real Estate
Securities Portfolio. GMG/Seneca is responsible for making investment decisions
for the Real Estate Securities Portfolio and for placing the purchase and sale
orders for the portfolio transactions of the Portfolio. In this capacity,
GMG/Seneca obtains and evaluates appropriate economic, statistical, timing, and
financial information and formulates and implements investment programs in
furtherance of the Real Estate Securities Portfolio's investment objective.
As compensation for its services to the Real Estate Securities Portfolio on
behalf of AAI, GMG/Seneca receives a monthly fee from AAI on the average daily
net assets of the Real Estate Securities 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. During the Fund's fiscal year ended
December 31, 1996, GMG/Seneca received a sub-advisory fee for the Real Estate
Securities Portfolio of approximately $81,000.
The Current Real Estate Sub-Advisory Agreement provides that GMG/Seneca may
render similar services to others so long as the services that it provides
thereunder are not impaired thereby. The Current Real Estate Sub-Advisory
Agreement will terminate automatically if assigned or in the event of
termination of the Current Advisory Agreements, and is terminable at any time
without penalty by the Directors of the Fund or by vote of a majority of the
outstanding shares of the Real Estate Securities Portfolio on 60 days' written
notice to AAI or GMG/Seneca, and by either AAI or GMG/Seneca on 60 days' written
notice to the other.
NEW REAL ESTATE SUB-ADVISORY AGREEMENT
The terms describing GMG/Seneca's proposed duties as a sub-adviser under
the New Real Estate Sub-Advisory Agreement are substantially identical to those
contained in the Current Real Estate Sub-Advisory Agreement. In addition, the
monthly fee schedule in the New Real Estate Sub-Advisory Agreement is identical
to the monthly fee schedule in the Current Real Estate Sub-Advisory Agreement.
The principal differences between the New Real Estate Sub-Advisory
Agreement and the Current Real Estate Sub-Advisory Agreement are that the New
Real Estate Sub-Advisory Agreement: (1) includes different dates of execution
and termination; (2) contains the name of a different investment adviser; (3)
authorizes GMG/Seneca to fill orders for simultaneously placed purchases and
sales of the same security among the Real Estate Securities Portfolio and one or
more accounts advised by GMG/Seneca on an
10
<PAGE> 14
equitable basis; (4) includes a more detailed list of representations from
GMG/Seneca; and (5) provides that it will be construed in accordance with the
Act and the laws of New York instead of the laws of Virginia.
DIRECTOR'S RECOMMENDATION
In determining whether it was appropriate to approve the New Real Estate
Sub-Advisory Agreement and to recommend approval to shareholders, the Board of
Directors, including the independent directors, considered among other things
information about the following: (1) the sub-advisory fee to be received by
GMG/Seneca from GEIM for services to the Real Estate Securities Portfolio; (2)
the fact that this fee is identical to the sub-advisory fee received by
GMG/Seneca from AAI under the Current Real Estate Sub-Advisory Agreement; (3)
the nature and quality of the services required to be performed by GMG/Seneca;
(4) the results achieved by GMG/Seneca for the Real Estate Securities Portfolio;
(5) the personnel and research capabilities of GMG/Seneca; (6) the profitability
to GMG/Seneca in advising the Real Estate Securities Portfolio; and (7) any
significant regulatory or compliance issues that might have affected GMG/Seneca.
In their deliberations regarding approval of the New Real Estate
Sub-Advisory Agreement, the Directors addressed most of their analysis to items
(1), (2) and (4) above. The Directors evaluated the value of the services that
GMG/Seneca provides to the Real Estate Securities Portfolio and determined that
these were comparable to such services provided by other investment advisers or
sub-advisers in the mutual fund industry. In this regard the Directors carefully
considered: (1) GMG/Seneca's past performance for the Real Estate Securities
Portfolio as compared with that of similar mutual funds and appropriate indices;
(2) the fact that the persons making the investment decisions on behalf of the
Real Estate Securities Portfolio under the Current Real Estate Sub-Advisory
Agreement would likely continue to do so under the New Real Estate Sub-Advisory
Agreement; and (3) the fact that the fees proposed to be paid by GEIM to
GMG/Seneca under the New Real Estate Sub-Advisory Agreement were identical to
those under the Current Real Estate Sub-Advisory Agreement. The Directors
determined that the proposed new arrangements between GEIM and GMG/Seneca were
reasonable.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS OF THE REAL ESTATE
SECURITIES PORTFOLIO VOTE "FOR" THE APPROVAL OF THE INVESTMENT SUB-ADVISORY
AGREEMENT WITH GMG/SENECA.
ITEM 3. ELECTION OF DIRECTORS
The Fund's current Board of Directors consists of seven directors. At a
meeting of the Board of Directors held on February 21, 1997, the Board of
Directors: nominated for re-election as directors all of the current directors
of the Fund except two directors, Mr. Chandler and Mr. Leard (who did not desire
to continue as directors after April 16, 1997), and nominated four additional
persons for election as directors. The names of the nominees are listed below
along with their current addresses and principal occupation for the past five
years. All of the nominees have consented to being named as nominees in this
Proxy Statement. Should any nominee become unable or unwilling to serve, the
persons appointed as proxies shall vote for the selection of such other person
as the Board of Directors shall recommend. If elected, all nominees will serve
until their successors are duly elected and qualified.
During the fiscal year ended December 31, 1996, the Fund's Board of
Directors held six meetings. The Board's audit committee, consisting in 1996 of
Messrs. Martin, Miller, Putney, Chandler and Leard, held [2] meetings during the
1996 fiscal year. The committee reviews audits, audit procedures, financial
statements and other financial and operational matters of the Fund. Each of the
current directors attended at least 75% of the meetings of the Board of
Directors and the audit committee during the 1996 fiscal year.
11
<PAGE> 15
DIRECTORS AND OFFICERS
<TABLE>
<S> <C>
Michael J. Cosgrove* Executive Vice President -- Mutual Funds, GEIM and GEIC, since 1993.
3003 Summer Street Executive Vice President and Director of GEIM and Director of GEIC,
Stamford, CT 06905 since 1988. Executive Vice President -- Finance and Administration,
Age 47 GEIM and GEIC, 1988-1993. Trustee, GE Funds (registered investment
company), since 1992. Trustee, Variable Investment Trust (registered
investment company), since 1994. Trustee, GE LifeStyle Funds
(registered investment company), since 1996.
John R. Costantino Managing Director, Walden Partners, Ltd., since 1992. President, CMG
150 East 58th Street Acquisition Corp., Inc., since 1988. Vice Chairman, Acoustiguide
New York, NY 10055 Holdings, Inc., since 1989. President CMG/IKH, Inc., since 1991.
Age 50 Director since 1991: Crossland Federal Savings Bank; Brooklyn
Bankcorp, Inc.; IK Holdings, Inc.; I. Kleinfeld & Son, Inc.; High
Performance Appliances, Inc. ("HPA"); and HPA Hong Kong, Ltd.
Director, Lancit Media Productions, Ltd., since 1995. Partner,
Costantino Melamede-Greenberg Investment Partners, 1987-1992. Trustee,
GE Funds (registered investment company), since 1992. Trustee,
Variable Investment Trust (registered investment company), since 1994.
Trustee, GE LifeStyle Funds (registered investment company), since
1996.
William J. Lucas Vice President and Treasurer, Fairfield University, since 1983.
Fairfield University Trustee, GE Funds (registered investment company), since 1992.
North Benson Road Trustee, Variable Investment Trust (registered investment company),
Fairfield, CT 06480 since 1994. Trustee, GE LifeStyle Funds (registered investment
Age 49 company), since 1996.
Robert P. Martin, Jr. Director since 1985. Self-employed investment consultant, since 1985.
115 Granite Avenue
Richmond, VA 23226
Age 63
J. Clifford Miller, Director since 1985. Account Executive, Davenport & Co. of Virginia,
III Inc., since 1992. Self-employed consultant, 1988 to 1992. General
7103 Glen Parkway Partner, Miller Land Company, since 1987.
Richmond, VA 23229
Age 54
J. Garnett Nelson* Director since 1985. President, Mid-Atlantic Holdings, L.L.C., since
Route 1, Box 195 1995. Senior Vice President 1988-1995 and Director 1989-1995, LOV.
Montpelier, VA 23192 Director, Combined Insurance Company of America, 1990-1995. Director,
Age 57 RAC Income Fund, Inc., since 1991. Director, Lawyers Title
Corporation, 1991-1996.
John J. Palmer* President and Director since 1986. Director, LOV, since 1986.
Age 56 Director, Forth Financial Securities Corporation, since 1986.
President, Forth Financial Securities Corporation, since 1992.
Lee A. Putney Director since 1985. Director, Regency Financial Shares, Inc., since
4208 Sulgrave Road 1989. Chairman of the Board of Directors, Regency Bank, since 1987.
Richmond, VA
Age 64
Robert P. Quinn Retired, Saloman Brothers, Inc., since 1983. Director, GP Financial
45 Shinnecock Road Corp., since 1994. Director, The Greenpoint Savings Bank, since 1987.
Quogue, NY 11959 Trustee, GE Funds (registered investment company), since 1992.
Age 61 Trustee, Variable Investment Trust (registered investment company),
since 1994. Trustee, GE LifeStyle Funds (registered investment
company), since 1996.
Linda L. Lanam* Secretary since 1992. Corporate Secretary for LOV, since 1992. Vice
Age 47 President and Senior Counsel of LOV, since 1989.
</TABLE>
12
<PAGE> 16
<TABLE>
<S> <C>
Scott R. Reeks* Treasurer since 1985. Director -- Marketing Administration and Equity
Age 38 Operations, LOV, since 1991. Manager -- Equity Operations, LOV,
1986-1991. Treasurer, Vice President and Manager of Operations, Forth
Financial Securities Corporation, since 1985.
</TABLE>
- ---------------
Each person other than Ms. Lanam and Mr. Reeks are nominees to the Board of
Directors.
* "Interested Person" of the Fund for purposes of the Investment Company Act of
1940, as amended. The address of Interested Persons of the Fund, except as
otherwise noted, is 6610 W. Broad Street, Richmond, VA 23230.
During the fiscal year ended December 31, 1996, the directors and officers
of the Fund received compensation from the Fund as indicated below.
<TABLE>
<CAPTION>
AGGREGATE COMPENSATION
NAME FROM THE FUND
-------------------------------------------------------- ----------------------
<S> <C>
Wallace L. Chandler..................................... $3,500
John E. Leard........................................... $3,500
Robert P. Martin, Jr.................................... $3,500
J. Clifford Miller, III................................. $3,500
J. Garnett Nelson....................................... 0
John J. Palmer.......................................... 0
Lee A. Putney........................................... $3,500
Linda L. Lanam.......................................... 0
Scott R. Reeks.......................................... 0
</TABLE>
The directors and officers of the Fund do not receive any benefits from the
Fund upon retirement nor does the Fund accrue any expenses for pension or
retirement benefits.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" ALL THE
NOMINEES FOR ELECTION AS DIRECTORS.
ITEM 4. RATIFICATION OR REJECTION OF THE SELECTION OF KPMG PEAT MARWICK LLP AS
THE FUND'S INDEPENDENT PUBLIC ACCOUNTANT
At a meeting held January 29, 1997, the audit committee of the Fund's Board
of Directors recommended to the full Board of Directors that KPMG Peat Marwick
LLP ("Peat Marwick") be selected as the Fund's accountant for the 1997 fiscal
year. At a meeting held January 29, 1997, the Board of Directors of the Fund
selected Peat Marwick as the independent public accountant for the Fund for the
1997 fiscal year. During the 1996 and 1995 fiscal years, Peat Marwick had not
been engaged in any capacity with respect to the Fund. Peat Marwick was
recommended to the Board of Directors by GEIM. Peat Marwick serves as accountant
for the majority of mutual fund assets for which GEIM or GEIC currently serves
as investment adviser. The Board of Directors believes that selecting Peat
Marwick would promote consistency in auditing and possibly economies of scale
among mutual funds advised by GEIM. Neither Peat Marwick nor any of its members
has a direct or indirect financial interest in the Fund. Representatives of Peat
Marwick are not expected to be present at the Meetings.
Ernst & Young LLP ("Ernst & Young") served as the Fund's independent public
accountant for the 1996 fiscal year. Appointment of Peat Marwick effectively
terminates Ernst & Young as the Fund's accountant. Representatives of Ernst &
Young are not expected to be present at the Meetings. Ernst & Young's report on
the financial statements of the Fund did not contain for either of the past two
years any adverse opinion or disclaimer of opinion, and the report was not
qualified or modified as to uncertainty, audit scope, or accounting principles.
During the fiscal years 1996 and 1995, there were no disagreements with
Ernst & Young on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which, if not
13
<PAGE> 17
resolved to Ernst & Young's satisfaction, would have caused Ernst & Young to
make reference to the subject matter of the disagreement in connection with its
report.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE TO RATIFY THE
SELECTION OF KPMG PEAT MARWICK LLP AS THE FUND'S INDEPENDENT PUBLIC ACCOUNTANT
FOR THE 1997 FISCAL YEAR.
REPORTS AVAILABLE
Copies of the Fund's most recent annual report or most recent semi-annual
report will be furnished without charge upon request by writing to the Fund at
6610 W. Broad Street, Richmond, VA 23230 or by calling 1-800-636-7203.
SHAREHOLDER PROPOSALS
As a general matter, the Fund does not hold annual meetings of
shareholders. Shareholders wishing to submit proposals for inclusion in a proxy
statement for a subsequent shareholders' meeting should send their written
proposals to the Secretary of the Fund, 6610 W. Broad Street, Richmond, VA
23230.
OTHER INFORMATION
Pursuant to a distribution agreement, Forth Financial Securities
Corporation ("FFSC") acts without remuneration as the Fund's distributor in the
distribution of the shares of each Portfolio. FFSC is a wholly owned subsidiary
of Forth Financial Resources, Ltd., which is a wholly owned subsidiary of GNA
Corporation, a subsidiary of GE Capital. FFSC is located at 6610 W. Broad
Street, Richmond, VA 23230. Mr. John J. Palmer, President and Director of the
Fund and a nominee for director named in this Proxy Statement, and Mr. Scott
Reeks, Treasurer of the Fund, are both affiliated with FFSC. FFSC has no
obligation to sell any stated number of shares.
OTHER BUSINESS
Management knows of no business to be presented to the Meetings other than
the matters set forth in this Proxy Statement, but should any other matter
requiring the vote of shareholders arise, the proxies will vote thereon
according to their best judgment in the interest of the Fund.
14
<PAGE> 18
APPENDIX A
Directors and Executive Officers of GEIM
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
- ------------------------------------------------- ----------------------------------------------
<S> <C>
John H. Myers -- Chairman of the Board of
Directors, CEO................................. Chairman and President, GEIM
Eugene K. Bolton -- Director..................... Executive Vice President, GEIM
Michael J. Cosgrove -- Director.................. Executive Vice President, GEIM
Ralph R. Layman -- Director...................... Executive Vice President, GEIM
Executive Vice President, General Counsel and
Alan M. Lewis -- Director........................ Secretary, GEIM
Robert A. MacDougall -- Director................. Executive Vice President, GEIM
Geoffrey R. Norman -- Director................... Executive Vice President, GEIM
Donald W. Torey -- Director...................... Executive Vice President, GEIM
</TABLE>
The address for each person listed above is 3003 Summer St., Stamford, CT
06905
<PAGE> 19
APPENDIX B
The table below provides information about other companies or portfolios
advised by GEIM that have a similar investment objective to one or more of the
Portfolios.
<TABLE>
<CAPTION>
RATE OF SUBJECT TO VOLUNTARY
NAME OF COMPANY OR PORTFOLIO SIZE(1) COMPENSATION(2) EXPENSE LIMITATION
- ----------------------------------------------------- ------- --------------- --------------------
<S> <C> <C> <C>
GE Money Market Fund................................. $93.9 0.25% Yes
GE Strategic Investment Fund......................... $99.9 0.35% Yes
GE International Equity Fund......................... $81.3 0.80% Yes
Variable Investment Trust GE International
Equity Portfolio................................... $ 8.2 0.80% Yes
Variable Investment Trust GE Money Market
Portfolio.......................................... $ 4.3 0.25% Yes
WRL International Equity Portfolio................... $ 1.1 0.25%(3) Yes
IDEX Series Fund(4).................................. $ 0.5 0.225%(3) Yes
</TABLE>
- ---------------
(1) In millions, as of January 31, 1997.
(2) As a percentage of average daily net assets of each portfolio. Except as
otherwise noted, fees include compensation for administrative services.
(3) Fee reflects 1/2 of total sub-advisory fee charged to portfolio because GEIM
is a co-sub-adviser with another independent entity. Fee does not include
the provision of administrative services or the portion of the investment
management fee retained by the investment manager of the portfolio.
(4) Commenced operations on February 1, 1997.
<PAGE> 20
APPENDIX C
GMG/Seneca
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
-------------------------------- ---------------------------------------------------------
<S> <C>
Gail P. Seneca.................. Chief Investment Officer, Managing Partner, GMG/Seneca
Sandra Westhoff................. Chief Administrative Officer, GMG/Seneca
Charles Dicke................... Fixed Income Portfolio Manager, GMG/Seneca
Belinda Melton.................. Marketing Director, GMG/Seneca
Ron Jacks....................... Equity Portfolio Manager, GMG/Seneca
David Shapiro................... Portfolio Manager for Seneca Real Estate Securities Fund
</TABLE>
Except for Mr. Shapiro, each person listed above is a member of the
Operating Committee for GMG/Seneca. The address for each person listed above is
909 Montgomery Street, San Francisco, CA 94133.
<PAGE> 21
APPENDIX D
The table below provides information about other companies or portfolios
advised by GMG/Seneca that have a similar investment objective to the Real
Estate Securities Portfolio.
<TABLE>
<CAPTION>
RATE OF SUBJECT TO VOLUNTARY
NAME OF COMPANY OR PORTFOLIO SIZE(1) COMPENSATION(1) EXPENSE LIMITATION
- ----------------------------------------------------- ------- --------------- --------------------
<S> <C> <C> <C>
Seneca Real Estate Securities Fund................... $26.8 0.85% Yes
</TABLE>
- ---------------
(1) In millions, as of January 31, 1997.
(2) As a percentage of average daily net assets.
<PAGE> 22
EXHIBIT A
Proposed Investment Advisory Agreement for the International Equity Portfolio
<PAGE> 23
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT
GE INVESTMENTS SERIES FUNDS, INC.
INTERNATIONAL EQUITY PORTFOLIO
GE INVESTMENT MANAGEMENT INCORPORATED
Agreement made as of May 1, 1997 between GE INVESTMENT MANAGEMENT
INCORPORATED ("GEIM") and GE INVESTMENTS SERIES FUND, INC. (the "Fund") on
behalf of its International Equity Portfolio (the "Portfolio").
RECITALS
The Fund is an open-end management investment company incorporated under
the laws of the Commonwealth of Virginia on May 14, 1984 and registered under
the Investment Company Act of 1940, as amended (the "1940 Act"). The Fund,
organized as a series company as defined in Rule 18f-2 under the 1940 Act,
currently has [eight] classes of Capital Stock outstanding, each representing an
interest in a different investment portfolio of the Fund. The Portfolio is one
such portfolio.
GEIM is a Delaware corporation registered as an investment adviser under
the Investment Advisers Act of 1940 (the "Advisers Act").
The Fund wishes to retain GEIM to serve as investment adviser and
administrator to the Portfolio and GEIM wishes to serve in this capacity.
SECTION 1. APPOINTMENT.
The Fund hereby appoints GEIM as investment adviser and administrator with
respect to the Portfolio's assets for the period and on the terms set forth in
this Agreement. GEIM accepts this appointment and hereby agrees to render the
services herein set forth for the compensation herein provided.
Subject to the approval of the Board and to other applicable legal
requirements, GEIM may enter into any advisory or sub-advisory agreement or
contract with another affiliated or unaffiliated entity pursuant to which such
entity will carry out some or all of GEIM's responsibilities listed herein.
SECTION 2. SERVICES AS INVESTMENT ADVISER AND ADMINISTRATOR.
(a) Subject to the oversight and supervision of the Fund's board of
directors (the "Board"), GEIM agrees to provide a continuous investment program
for the Portfolio's assets, including investment research and management. GEIM
will determine from time to time what investments will be purchased, retained or
sold by the Portfolio. GEIM will place purchase and sale orders for the
Portfolio's investments. GEIM will provide services under this Agreement in
accordance with the Portfolio's investment objectives, policies and restrictions
as stated in the Fund's current Registration Statement on Form N-1A, as amended
from time to time (the "Registration Statement").
(b) The Fund has furnished or will furnish GEIM with copies of the
Registration Statement, its articles of incorporation and by-laws as currently
in effect and agrees during the continuance of this agreement to furnish GEIM
with copies of any amendment or supplements thereto before or at the time such
amendments or supplements become effective. GEIM may rely on all documents
furnished to it by the Fund.
(c) Subject to the oversight and supervision of the Board, GEIM agrees to
serve as administrator to the Fund and the Portfolio and, in this capacity,
will: (i) insure the maintenance of the books and records of the Portfolio
(including those required to be maintained or preserved by Rules 31a-1 and 31a-2
under the 1940 Act); (ii) prepare reports to shareholders of the Portfolio,
(iii) prepare and file tax returns for the Portfolio; (iv) assist with the
preparation and filing of reports and the Registration Statement with the
Securities and Exchange Commission (the "Commission"), (v) provide appropriate
officers for the Fund, including a Secretary or Assistant Secretary, (vi)
provide administrative support necessary for the Board to conduct
A-1
<PAGE> 24
meetings; and (vii) supervise and coordinate the activities of other service
providers, including independent auditors, legal counsel, custodians, accounting
service agents, and transfer agents.
(d) GEIM will, at its own expense, maintain sufficient staff, and employ or
retain sufficient personnel and consult with any other persons that it
determines may be necessary or useful to the performance of its obligations
under this agreement.
(e) GEIM will keep the Fund informed of developments materially affecting
the Portfolio, and will, on its own initiative, furnish the Fund from time to
time with whatever information and reports that the Board reasonably requests as
appropriate for this purpose.
SECTION 3. SELECTION OF INVESTMENTS ON BEHALF OF THE PORTFOLIO.
Unless otherwise set forth in the Registration Statement or directed by the
Fund, GEIM will, in selecting brokers or dealers to effect transactions on
behalf of the Portfolio select the best overall terms available. In so doing,
GEIM may consider the breadth of the market on the investment, the price of the
security, the size and difficulty of the order, the willingness of the broker or
dealer to position, the reliability, financial condition and execution and
operational capabilities of the broker or dealer, and the reasonableness of the
commission or size of the dealer's "spread", if any, for the specific
transaction and on a continuing basis. GEIM may also consider brokerage and
research services provided to the Portfolio and/or other accounts over which
GEIM or its affiliates exercise investment discretion. The Fund recognizes the
desirability of GEIM's having access to supplemental investment and market
research and security and economic analyses provided by brokers and that those
brokers may execute brokerage transactions at a higher cost to the Fund than
would be the case if the transactions were executed on the basis of the most
favorable price and efficient execution. The Fund, thus, authorizes GEIM, to the
extent permitted by applicable law and regulations, to pay higher brokerage
commissions or dealer spreads for the purchase and sale of securities for the
Portfolio to brokers who provide supplemental investment and market research and
security and economic analyses, subject to GEIM's determining in good faith that
such commissions are reasonable in terms either of the particular transaction or
of the overall responsibility of GEIM to the Portfolio and its other clients and
that the total commissions paid by the Portfolio will be reasonable in relation
to the benefits to the Portfolio over the long term. In no instance will
portfolio securities be purchased from or sold to GEIM, or any affiliated person
thereof or any investment advisory client thereof, except in accordance with the
federal securities laws and the rules and regulations thereunder.
SECTION 4. COSTS AND EXPENSES.
GEIM will bear the cost of rendering the services it is obligated to
provide under this Agreement and will provide the Fund with all executive,
administrative, clerical and other personnel necessary for the investment and
administrative operations of the Portfolio and will pay salaries and other
employment-related costs of employing these persons. GEIM will furnish the Fund
and the Portfolio with office space, facilities, and equipment and will pay the
day-to-day expenses related to the operation of such space, facilities and
equipment.
The Fund or the Portfolio shall be responsible for paying all expenses that
each may incur in its operation and all of the general administrative expenses
allocable to each except those expressly assumed by GEIM above. These include,
by way of description and not of limitation, any share redemption expenses,
shareholder servicing costs (including allocable personnel and telephone
expenses), the expenses of any shareholder servicing plan and/or distribution
plan adopted by the Board pursuant to Rule 12b-1 under the 1940 Act, the costs
of custody, transfer agency and recordkeeping services in connection with the
Portfolio; brokerage fees and commissions; taxes; registration costs of the
Portfolio and its shares under Federal and state securities laws; the cost and
expense of printing, including typesetting and distributing of a prospectus
describing the Portfolio and supplements to that prospectus to regulatory
authorities and the Portfolio's shareholders; all expenses incurred in
conducting meetings of the Portfolio's shareholders and meetings of the Board
relating to the Portfolio, including fees paid to members of the Board who are
not interested persons of the Fund; all expenses incurred in preparing, printing
and mailing proxy statements and reports to shareholders of the
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<PAGE> 25
Portfolio; fees and travel expenses of members of the Board or members of any
advisory board or committee who are not interested persons of the Fund; all
expenses incident to any dividend, withdrawal or redemption options provided to
Portfolio shareholders; charges and expenses of any outside service used for
pricing the Portfolio's portfolio securities and calculating the net asset value
of the Portfolio's shares; fees and expenses of legal counsel, including counsel
to the members of the Board who are not interested persons of the Fund and
independent auditors; membership dues of industry associations; interest on
Portfolio borrowings; postage; insurance premiums for coverage of property or
personnel (including officers and Directors) of the Fund; extraordinary expenses
(including, but not limited to, legal claims and liabilities and litigation
costs and any indemnification relating thereto); and all other costs of the
Portfolio's operations.
SECTION 5. COMPENSATION.
In consideration of services rendered and the expenses paid by GEIM
pursuant to this Agreement, the Fund will pay GEIM at the beginning of each
calendar month a fee that is accrued daily at the annual rates set forth below,
which annual rates shall be based on the value of the Portfolio's average daily
net assets for the previous month:
1.00% of the first $100,000,000; .95% of the next $100,000,000; and
.90% of amounts in excess of $200,000,000.
For the purpose of determining fees payable to GEIM under this Agreement, the
value of the Portfolio's net assets will be computed in the manner described in
the Registration Statement.
SECTION 6. SERVICES TO OTHER COMPANIES OR ACCOUNTS.
(a) The Fund understands and acknowledges that GEIM now acts and will
continue to act as investment manager or adviser to various fiduciary or other
managed accounts ("Other Accounts") and the Fund has no objection to GEIM's so
acting, so long as that when the Portfolio and any Other Account served by GEIM
are prepared to invest in, or desire to dispose of the same security, available
investments or opportunities for sales will be allocated in a manner believed by
GEIM to be equitable to the Portfolio and the Other Account. In addition, the
Trust understands and acknowledges that GEIM may, to the extent permitted by
applicable laws and regulations, aggregate securities to be sold or purchased
for the Fund with those to be sold or purchased for Other Accounts so long as
the securities purchased or sold, as well as the expenses incurred in the
transaction, are allocated in a manner believed by GEIM to be equitable to the
Fund and the Other Accounts. The Fund recognizes that, in some cases, the above
procedures may adversely affected the price paid or received by the Portfolio or
the size of the position obtained or disposed of by the Portfolio.
(b) It is agreed that GEIM may use any supplemental investment research and
other services provided by brokers or dealer obtained for the benefit of the
Portfolio or the Fund in providing investment advice to Other Accounts.
(c) The Fund understands and acknowledges that the persons employed by GEIM
to assist in the performance of its duties under this Agreement will not devote
their full time to that service and agrees that nothing contained in this
Agreement will be deemed to limit or restrict the right of GEIM or any affiliate
of GEIM to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature.
SECTION 7. CONTINUANCE AND TERMINATION OF THE AGREEMENT.
(a) This Agreement will become effective as of May 1, 1997 and will
continue for an initial two-year term and will continue thereafter so long as
the continuance is specifically approved at least annually (a) by the Board or
(b) by a vote of a majority of the Portfolio's outstanding voting securities, as
defined in the 1940 Act, provided that in either event the continuance is also
approved by a majority of the Directors who are not "interested persons" (as
defined in the 1940 Act) of any party to this Agreement, by vote cast in person
at a meeting called for the purpose of voting on the approval.
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<PAGE> 26
(b) This Agreement is terminable without penalty, by the Fund on not more
than 60 nor less than 30 days' written notice to GEIM, by vote of holders of a
majority of the Portfolio's outstanding voting securities, as defined in the
1940 Act, or by GEIM on not more than 60 nor less than 30 days' notice to the
Fund.
(c) This Agreement will terminate automatically in the event of its
assignment (as defined in the 1940 Act or in rules adopted under the 1940 Act).
SECTION 8. LIMITATION OF LIABILITY.
GEIM will exercise its best judgment in rendering the services described in
this Agreement, except that GEIM will not be liable for any error of judgment or
mistake of law or for any loss suffered by the Portfolio in connection with the
matters to which this Agreement relates, other than a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of GEIM in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement or to the extent specified in Section 36(b) of
the 1940 Act concerning loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services.
SECTION 9. MISCELLANEOUS.
The Fund recognizes that directors, officers and employees of GEIM and its
affiliates may from time to time serve as directors, trustees, officers and
employees of corporations, partnerships, group trusts and business trusts
(including other investment companies) and that such other entities may include
the initials "GE" or the words "General Electric" as part of their name, and
that GEIM or its affiliates may enter into distribution, investment advisory or
other agreements with such other corporations and trusts. If GEIM ceases to act
as the investment adviser to the Fund, the Fund agrees that, at GEIM's request,
any license granted to the Fund for the use of the initials "GE" will terminate
and that the Fund will cease and discontinue completely further use of such
initials.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized signatories as of the date and year first
above written.
GE INVESTMENTS SERIES FUNDS, INC.
By:
-----------------------------------
Name:
Title:
GE INVESTMENT MANAGEMENT
INCORPORATED
By:
-----------------------------------
Name: Michael J. Cosgrove
Title: Executive Vice President
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<PAGE> 27
EXHIBIT B
Current Investment Advisory Agreement for the International Equity Portfolio
<PAGE> 28
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT made this 27th day of April, 1995, by and
between LIFE OF VIRGINIA SERIES FUND, INC ., (the "Fund") a Virginia corporation
and AON ADVISORS, INC., (the "Adviser") a corporation, which is registered as an
investment adviser under the Investment Advisers Act of 1940, whereby the
Adviser will act as investment adviser to the Fund as follows:
ARTICLE I
Duties of the Adviser
The Fund is an open-end, diversified management investment company,
incorporated under the laws of the Commonwealth of Virginia on May 14, 1984. The
Fund, organized as a series company as defined in Rule 18f-2 under the
Investment Company Act of 1940, as amended (the "Act") has six classes of
Capital Stock currently outstanding (designated classes A, B, C, D, E and F).
The Fund also currently has or will have six investment portfolios: the Common
Stock Index Portfolio, the Government Securities Portfolio, the Money Market
Portfolio, the Total Return Portfolio, the International Equity Portfolio and
the Real Estate Securities Portfolio. Additional portfolios may be created in
the future. Each current or future portfolio will have different investment
objectives.
The Fund hereby employs the Adviser to act as the investment adviser to and
manager of the Fund, and, subject to the supervision of the Board of Directors
of the Fund (the "Board"), to manage the investment and reinvestment of the
assets of the Fund's International Equity Portfolio (the "Portfolio") for the
period and on the terms and conditions set forth in this Agreement. The Adviser
hereby accepts such employment and agrees during such period, at its own
expense, to render the services and to assume the obligations herein set forth
for the compensation provided for herein. The Adviser shall for all purposes
herein be deemed to be an independent contractor and shall, unless otherwise
expressly provided or authorized herein, have no authority to act for or
represent the Fund in any way or otherwise be deemed an agent of the Fund. The
Adviser shall, for purposes of this agreement, have and exercise full investment
discretion and authority to act as agent for the Fund in buying, selling or
otherwise disposing of or managing the Fund's investments, subject to the
supervision of the Board.
A. Investment Advisory Services. In carrying out its obligations to manage
the investment and reinvestment of the assets of the Fund, the Adviser shall, as
appropriate and consistent with the limitations set forth in Section C hereof:
(a) perform research and obtain and evaluate pertinent economic,
statistical, and financial data relevant to the investment policies of the
Portfolio or the Fund as set forth in the Prospectus for the Fund, as
amended from time to time;
(b) consult with the Board and furnish to the Board recommendations
with respect to an overall investment strategy of the Portfolio for
approval, modification, or rejection the Board;
(c) seek out and implement specific investment opportunities,
consistent with any investment strategies approved by the Board;
(d) take such steps as are necessary to implement any overall
investment strategies approved by the Board, including making and carrying
out day-to-day decisions to acquire or dispose of permissible investments,
management of investments and any other property of the Portfolio, and
providing or obtaining such services as may be necessary in managing,
acquiring or disposing of investments;
(e) regularly report to the Board with respect to the implementation
of any approved overall investment strategy and any other activities in
connection with management of the assets of the Portfolio, including
furnishing, within 30 days after the end of each calendar quarter, a
statement of all purchases and sales during the quarter and a schedule of
investments and other assets of the Portfolio as of the end of the quarter;
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<PAGE> 29
(f) maintain all required accounts, records, memoranda, instructions
or authorizations relating to the acquisition or disposition of investments
for the Portfolio;
(g) assist the Fund officers in determining each business day the net
asset value of the shares of the Portfolio in accordance with applicable
law; and,
(h) Subject to the approval of the Board and to other applicable legal
requirements, the Adviser may enter into any advisory or sub-advisory
agreement or contract with another affiliated or unaffiliated entity
pursuant to which such entity will carry out some or all of the Adviser's
responsibilities listed above.
B. Administrative Services. In addition to the performance of investment
advisory services, the Adviser shall perform, or supervise the performance of,
administrative services in connection with the management of the Fund and the
portfolios, including financial reporting by the Fund. In this connection, the
Adviser agrees to supervise the coordination of all matters relating to the
functions of the custodian or other shareholder service agents, if any, and
accountants, attorneys and other parties performing services for the Fund.
Nothing contained herein will be construed to restrict the Fund's right to
hire its own employees or to contract for services to be performed by third
parties.
C. Limitations on Services. The Adviser shall perform all services under
this Agreement subject to the supervision and review of the Board and in a
manner consistent with the investment objectives, policies, and restrictions of
the Portfolio as stated in the Fund's Registration Statement, as amended from
time to time, filed with the Securities and Exchange Commission, with its
Articles of Incorporation and By-laws, as amended from time to time, and with
the provisions of the Act.
The Fund has furnished or will furnish the Adviser with copies of the
Fund's Registration Statement, Articles of Incorporation, and By-laws as
currently in effect and agrees during the continuance of this agreement to
furnish the Adviser with copies of any amendment or supplements thereto before
or at the time the amendments or supplements become effective. The Adviser will
be entitled to rely on all documents furnished by the Fund.
ARTICLE II
Compensation of the Adviser
A. Investment Advisory Fee. For the services rendered, the facilities
furnished and the expenses assumed by the Adviser, the Fund shall pay to the
Adviser at the end of each calendar month, a fee for the Portfolio based upon
the average daily net assets of the Portfolio (as computed in accordance with
the description of the determination of the net asset value in the currently
effective prospectus for the Fund at the time of the computation) at the
following annual rates:
International Equity Portfolio: 1.00% of the first $100,000,000; .95%
of the next $100,000,000; and .80% of the amounts in excess of
$200,000,000.
B. Allocation of Expenses. The Adviser shall be responsible for payment of
all expenses it may incur in performing the services set forth in Article I
hereunder. These expenses include costs incurred in providing investment
advisory services, compensating and furnishing office space for officers and
employees of the Adviser connected with investment and economic research,
trading and investment management of the Fund and the payment of any fees to
interested directors of the Fund. The Adviser will provide all executive,
administrative, clerical and other personnel necessary to operate the Fund and
will pay the salaries and other employment-related costs of employing these
persons. The Adviser will furnish the Fund with office space, facilities and
equipment and will pay the day-to-day expenses related to the operation and
maintenance of such office space facilities and equipment. Legal, accounting and
all other expenses incurred in the organization of the Fund or of new Portfolios
of the Fund, including costs of registering under Federal and State securities
laws, will also be paid by the Adviser.
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<PAGE> 30
The Fund shall be responsible for payments of all expenses it may incur in
its operation and all of its general administrative expenses except those
expressly assumed by the Adviser in the foregoing paragraph. These include, by
way of description and not of limitation, any share redemption expenses,
expenses of portfolio transactions, shareholder servicing costs, pricing costs
(including the daily calculation of net asset value), interest on borrowing by
the Fund, charges of the custodian and transfer agent, if any, cost of auditing
services, non-interested directors' fees, legal expenses, state franchise taxes,
certain other taxes, investment advisory fees, certain insurance premiums, costs
of maintenance of corporate existence, investor services (including allocable
personnel and telephone expenses), costs of printing and mailing updated Fund
prospectuses to shareholders, proxy statements and shareholder reports, the cost
of paying dividends and capital gains distribution, capital stock certificates,
costs of Board and shareholder meetings, and any extraordinary expenses,
including litigation costs in legal actions involving the Fund, or costs
relating to indemnification of directors, officers and employees of the Fund.
The Board shall determine the manner in which expenses are allocated to the
Portfolio and among the Portfolios of the Fund, and the determination of the
Board shall be final and binding.
C. Reimbursement of Excess Operating Expenses. If the operating expenses
allocable to the Portfolio for any fiscal year should exceed the amounts
indicated below the Adviser shall reimburse the Fund for the excess:
1.75% of the first $30,000,000 of the average daily net assets of the
Portfolio and 1% of the amount by which the average daily net assets of the
Portfolio exceeds $30,000,000.
For purposes of this Section, "operating expenses" do not include
attorneys' fees, court judgments, decrees or awards, or any other litigation
costs in legal actions involving the Fund, or costs relating to indemnification
of directors, officers or employees of the Fund where such costs are not covered
by director and officer liability insurance.
Expenses that are reimbursable pursuant to this Section, if any, shall be
calculated daily and credited to the Fund on a monthly basis.
ARTICLE III
Portfolio Transactions and Brokerage
The Adviser agrees to determine, or if applicable have a SubAdviser
determine, the securities to be purchased or sold by the Portfolio, subject to
the provisions of Article I, and to place orders pursuant to such
determinations, either directly with the issuer, with any broker-dealer or
underwriter that specializes in the securities for which the order is made, or
with any other broker or dealer selected by the Adviser or the Sub-Adviser
subject to the following limitations:
The Adviser or Sub-Adviser is authorized to select the brokers or dealers
that will execute the purchases and sales of the Portfolio and will use best
efforts to obtain the most favorable net results and execution of the Fund's
orders, taking into account all appropriate factors, including price, dealer
spread or commission, if any, size of the transaction and difficulty of the
transaction.
If, in the judgment of the Adviser or Sub-Adviser, the Fund would benefit
from supplemental investment research, the Adviser or Sub-Adviser is authorized
to pay spreads or commissions to brokers or dealers furnishing such services in
excess of spreads or commissions which another broker or dealer may charge for
the same transaction. The expenses of the Adviser may not necessarily be reduced
as a result of receipt of such supplemental information.
Subject to the above requirements, nothing shall prohibit the Adviser or
Sub-Adviser from selecting brokers or dealers with which it or the Fund are
affiliated and from selecting brokers or dealers by virtue of sales of insurance
policies of The Life Insurance Company of Virginia or of its life insurance
company affiliates by such broker-dealers or their affiliates.
B-3
<PAGE> 31
ARTICLE IV
Activities of the Adviser
The services of the Adviser to the Fund under this Investment Advisory
Agreement are not to be deemed exclusive and the Adviser will be free to render
similar services to others as long as its services under this Investment
Advisory Agreement are not impaired. Directors, officers, employees and
shareholders of the Fund are or may become interested persons of the Adviser, as
directors, officers, employees or shareholders or otherwise, and directors,
officers, employees or shareholders of the Adviser are or may become interested
persons of the Fund.
It is agreed that the Adviser or any Sub-Adviser may use any supplemental
investment research obtained for the benefit of the Portfolio or the Fund in
providing investment advice to its other investment advisory accounts. The
Adviser or its subsidiaries or Sub-Adviser may use such information in managing
their own accounts. Conversely, such supplemental information obtained by the
placement of business for the Adviser or other entities advised by the Adviser
will be considered by and may be useful to the Adviser or any Sub-Adviser in
carrying out its obligations to the Fund.
Securities held by the Portfolio may also be held by separate investment
accounts or other mutual funds for which the Adviser or Sub-Adviser may act as
an adviser or sub-adviser or by the Adviser, Sub-Adviser or their affiliates.
Because of different investment objectives or other factors, a particular
security may be bought by the Adviser, Sub-Adviser or their affiliates or for
one or more clients when one or more clients are selling the same security. If
purchases or sales of securities for the Portfolio or other entities for which
the Adviser, Sub-Adviser or their affiliates act as investment adviser or
sub-adviser or for their advisory clients arise for consideration at about the
same time, the Fund agrees that the Adviser or Sub-Adviser may make transactions
in such securities, insofar as feasible, for the respective entities and clients
in a manner deemed equitable to all. To the extent that transactions on behalf
of more than one client of the Adviser or Sub-Adviser during the same period may
increase the demand for securities being purchased or the supply of securities
being sold, the Fund recognizes that there may be an adverse effect on the price
of that security.
It is agreed that, on occasions when the Adviser or Sub-Adviser deems the
purchase or sale of a security to be in the best interests of the Fund as well
as other accounts or companies, it may, to the extent permitted by applicable
laws or regulations, but will not be obligated to, aggregate the securities to
be so sold or purchased for the Portfolio with those to be sold or purchased for
other accounts or companies in order to obtain favorable execution and lower
brokerage commissions. In that event, allocation of the securities purchased or
sold, as well as the expenses incurred in the transaction, will be made by the
Adviser or Sub-Adviser in the manner it considers to be most equitable and
consistent with its fiduciary obligations to the Fund and to such other accounts
or companies. The Fund recognizes that in some cases this procedure may
adversely affect the size of the position obtainable for the Portfolio.
ARTICLE V
Effectiveness of the Agreement
This Investment Advisory Agreement shall become effective on the date that
it is approved for by the Fund's Board of Directors, including a majority of
directors who are not parties to this Agreement or interested persons of any
such party, or on the date this Agreement is approved by a majority of the
Portfolio's shareholders acting in accordance with the requirements of the Act
and the rules and regulations promulgated thereunder, whichever is later.
ARTICLE VI
Term of the Agreement
This Investment Advisory Agreement shall remain in effect from year-to-year
after its initial effective date so long as such continuance is specifically
approved at least annually (a) by the vote of the majority of
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<PAGE> 32
the Board, or by vote of a majority of the outstanding voting shares of the
class representing interests in the Portfolio, and (b) by the vote of a majority
of the members of the Board 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.
In connection with all such approvals, the Board shall request and
evaluate, and the Adviser shall furnish, such information as may reasonably
necessary to evaluate the terms of this Agreement. This Agreement:
(a) shall be subject to termination by the Adviser, without the
payment of any penalty, on sixty days' written notice to the Fund;
(b) shall be subject to termination, without the payment of any
penalty, by the Board or by vote of a majority of the outstanding voting
securities of the class representing interests in the Portfolio, on sixty
days' written notice to the Adviser;
(c) shall not be amended without specific approval of such amendment
by (i) the vote of a majority of the class representing interests in the
Portfolio, and (ii) a majority of those directors who are not parties to
this Agreement or interested persons of such a party, cast in person at a
meeting called for the purpose of voting on such approval; and
(d) shall automatically terminate upon assignment by either party.
ARTICLE VII
Recordkeeping
The Adviser agrees to preserve for the period prescribed by the rules and
regulations of the Securities and Exchange Commission all records the Adviser
maintains for the Fund as are required to be maintained pursuant to such rules.
The Adviser agrees that all such records shall be the property of the Fund and
shall be made available, within five (5) business days of the request, to the
Fund's accountants or auditors during regular business hours at the Adviser's
offices upon such prior written notice. In the event of termination for any
reason, all such records shall be returned promptly to the Fund, free from any
claim or retention of rights by the Adviser. In addition, the Adviser will
provide any materials, reasonably related to the investment advisory services
provided hereunder, as may be reasonably requested in writing by the directors
or officers of the Fund or as may be required by any governmental agency having
jurisdiction.
The Adviser further 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 The Life Insurance Company of Virginia or the Fund has authorized such
disclosure, or if such disclosure is required by Federal or state regulatory
authorities.
ARTICLE VIII
Liability of the Adviser
In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties on the part of the Adviser (or its
officers, directors, agents, employees, controlling persons, shareholders, and
any other person or entity affiliated with the Adviser or retained by it to
perform or assist in the performance of its obligations under this Agreement),
neither the Adviser nor any of its officers, directors, employees or agents
shall be subject to liability of the Fund or to any shareholder or to any other
person with a beneficial interest in the Fund for any act or omission in the
course of, or connected with, rendering services hereunder, including without
limitation any error of judgment or mistake of law or for any loss suffered by
the Fund or any shareholder or other person in connection with the matters to
which this Agreement relates, except to the extent specified in Section 36(b) of
the Investment Company Act concerning loss resulting from a breach of fiduciary
duty with respect to the receipt of compensation for services.
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<PAGE> 33
ARTICLE IX
Governing Law
While this Agreement is intended by the parties to be governed by Virginia
law as to matters of State law, this Investment Advisory Agreement is also
subject to the provisions of the Act and the rules and regulations of the
Securities and Exchange Commission thereunder, including such exemptions
therefrom as the Securities and Exchange Commission may grant. Words and-phrases
used herein shall be interpreted in accordance with the Act and those rules and
regulations. As used with respect to the Fund and the holders of voting shares
of any class of the Fund's Capital Stock, the term "majority of the outstanding
voting shares" means the lesser of (i) 67% or more of the voting shares
represented at a meeting at which the holders of more than 50% of the
outstanding voting shares are represented or (ii) more than 50% of the
outstanding voting shares.
IN WITNESS WHEREOF, the parties have caused this Investment Advisory
Agreement to be signed by their respective officials duly authorized, as of the
day and year first above written.
AON ADVISORS, INC.
BY: Michael A. Conway
--------------------------------
TITLE: President
-----------------------------
DATE: April 12, 1995
------------------------------
LIFE OF VIRGINIA SERIES FUND, INC.
BY: John J. Palmer
--------------------------------
TITLE: President
-----------------------------
DATE: April 27, 1995
------------------------------
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<PAGE> 34
EXHIBIT C
Current Sub-Advisory Agreement for Real Estate Securities Portfolio
<PAGE> 35
INVESTMENT SUB-ADVISORY AGREEMENT
THIS INVESTMENT SUB-ADVISORY AGREEMENT ("Agreement") made this day of
1996 by and Between Aon Advisors, Inc., a Virginia corporation, (the
"Adviser") and GMG/Seneca Capital Management LLC, 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 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
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<PAGE> 36
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.
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
3la-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
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<PAGE> 37
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.
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
it's 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.
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.
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<PAGE> 38
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
<TABLE>
<S> <C>
AON ADVISORS, INC. GMG/SENECA CAPITAL
MANAGEMENT LLC
ATTEST: ATTEST:
By: By:
Its: Its:
</TABLE>
C-4
<PAGE> 39
EXHIBIT D
Proposed Sub-Advisory Agreement for Real Estate Securities Portfolio
<PAGE> 40
GE INVESTMENTS SERIES FUNDS, INC.
REAL ESTATE SECURITIES PORTFOLIO
SUB-ADVISORY AGREEMENT
Agreement made as of May 1, 1997, between GE INVESTMENT MANAGEMENT
INCORPORATED ("GEIM"), a Delaware corporation, and GMG/Seneca Capital Management
LLC ("Sub-Adviser"), a California corporation (the "Agreement").
RECITALS
GEIM has entered into an Investment Advisory and Administration Agreement
dated May 1, 1997, ("Management Agreement") with GE Investments Series Funds,
Inc. ("Fund"), an open-end management investment company registered under the
Investment Company Act of 1940, as amended ("1940 Act") with respect to the Real
Estate Securities Portfolio ("Portfolio") series of the Fund; and
GEIM wishes to retain the Sub-Adviser to furnish certain investment
advisory services to GEIM and the Portfolio, and the Sub-Adviser is willing to
furnish those services;
GEIM intends that this Agreement will be submitted to the Board of
Directors (the "Board") and shareholders for approval hereafter;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
1. Appointment. GEIM hereby appoints the Sub-Adviser as an investment
sub-adviser with respect to the Portfolio's assets for the period and on
the terms set forth in this Agreement. The Sub-Adviser accepts that
appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. Duties as Sub-Adviser.
(a) Subject to the oversight and supervision of GEIM and the
officers and the Board, the Sub-Adviser will provide a continuous
investment program for the Portfolio's assets, including investment
research and management. The Sub-Adviser will determine from time to
time what investments will be purchased, retained or sold by the
Portfolio. The Sub-Adviser will be responsible for placing purchase and
sell orders for Portfolio investments. The Sub-Adviser will provide
services under this Agreement in accordance with the Portfolio's
investment objective, policies and restrictions as stated in the Fund's
current Registration Statement on Form N-1A and any amendments or
supplements thereto (the "Registration Statement"). In this connection
and in connection with the further duties set forth in paragraphs 2(b) -
(g) below, the Sub-Adviser shall provide GEIM and the officers and
directors of the Fund with such periodic reports and documentation as
GEIM or the officers and directors of the Fund shall request regarding
the Sub-Adviser's management of the Portfolio's assets and compliance
with the Prospectus and all requirements hereunder.
(b) The Sub-Adviser shall carry out its responsibilities under this
Agreement in compliance with: (1) the Portfolio's investment objective,
policies and restrictions as set forth in the Registration Statement,
(2) such policies or directives as the Board may from time to time
establish or issue, and (3) applicable law and related regulations. In
particular, the Sub-Adviser shall make every effort to ensure that the
Portfolio complies with (i) 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 (ii) 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. GEIM shall promptly notify the
Sub-Adviser of changes to (1) or
D-1
<PAGE> 41
(2) above and shall notify the Sub-Adviser of changes to (3) above
promptly after it becomes aware of such changes.
(c) The 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, the 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, the Sub-Adviser is directed at all times to seek to
obtain best execution and price within the policy guidelines determined
by the Board and set forth in the Registration Statement.
In addition to seeking the best price and execution, the
Sub-Adviser may also take into consideration research and statistical
information and wire and other quotation services provided by brokers
and dealers to the SubAdviser. The 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 the
Sub-Adviser's overall responsibilities with respect to the Portfolio.
The policies with respect to brokerage allocation, determined from time
to time by the Board are those disclosed in the Registration Statement.
The 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 the 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. Whenever the Sub-Adviser
simultaneously places orders to purchase or sell the same security on
behalf of the Portfolio and one or more other accounts advised by the
Sub-Adviser, the orders will be allocated as to price and amount among
all such accounts in a manner believed to be equitable by the
Sub-Adviser to each account.
(d) Subject to: (1) the requirement that the Sub-Adviser seek to
obtain best execution and price within the policy guidelines determined
by the Board and set forth in the Registration Statement, (2) the
provisions of the 1940 Act and the Investment Advisers Act of 1940, as
amended (the "Advisers Act"), (3) the provisions of the Securities
Exchange Act of 1934, and (4) other applicable provisions of law; the
Sub-Adviser or an affiliated person of the Sub-Adviser or of GEIM 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 the Sub-Adviser under
this Agreement. Subject to the requirements of applicable law and any
procedures adopted by the Board, the 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 the
Sub-Adviser's fees for services under this Agreement.
(e) The Sub-Adviser will maintain all books and records required to
be maintained by the Fund pursuant to the 1940 Act and the rules and
regulations promulgated thereunder with respect to transactions on
behalf of the Portfolio, and will furnish the Board and GEIM with such
periodic and special reports as the Board or GEIM reasonably may
request. In compliance with the requirements of Rule 31a-3 under the
1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Portfolio are the property of the Fund, agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any
records which it maintains for the Fund and which are required to be
maintained by Rule 31a-1 under the 1940 Act, and further agrees to
surrender promptly to the Fund any records which it maintains for the
Fund upon request by the Fund.
(f) At such times as shall reasonably be requested by the Board or
GEIM, the Sub-Adviser will provide the Board and GEIM with economic and
investment analyses and reports as well as quarterly reports setting
forth the Portfolio's performance and make available to the Board and
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<PAGE> 42
GEIM any economic, statistical and investment services normally
available to institutional or other customers of the Sub-Adviser.
(g) In accordance with procedures adopted by the Board, as amended
from time to time, the Sub-Adviser is responsible for determining the
fair valuation of any illiquid portfolio securities and will assist the
Fund's accounting services agent or GEIM to obtain independent sources
of market value for all other portfolio securities.
3. Further Duties. In all matters relating to the performance of this
Agreement, the Sub-Adviser will act in conformity with the Fund's Articles
of Incorporation, By-Laws and Registration Statement and with the written
instructions and directions of the Board and GEIM and will comply with the
requirements of the 1940 Act, the Advisers Act, the rules under each, and
Subchapter M of the Code as applicable to regulated investment companies.
In addition, the Sub-Adviser will act in conformity with all other
applicable federal and state laws and regulations. GEIM agrees to provide
to the SubAdviser copies of the Fund's Articles of Incorporation, By-Laws,
Registration Statement and any amendments or supplements to any of these
materials as soon as practicable after such materials become available.
4. Expenses. During the term of this Agreement, the Sub-Adviser will
bear all expenses incurred by it in connection with its investment
sub-advisory services under this Agreement.
5. Compensation. For the services rendered, the facilities furnished
and the expenses assumed by the Sub-Adviser, the Adviser shall pay the
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.
The 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 dates 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 asset value is
suspended, the net asset value of the Portfolio as 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.
6. Limitation Of Liability. The Sub-Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the
Portfolio, the Fund or its shareholders or by GEIM in connection with the
matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
7. Indemnification.
(a) GEIM agrees to indemnify the Sub-Adviser, its officers and
directors, and any person who controls the Sub-Adviser within the
meaning of Section 15 of the Securities Act of 1933 ("1933 Act") for any
loss or expense (including attorneys' fees) arising out of any claim,
demand, action or suit in the event that the Sub-Adviser has been found
to be without fault and GEIM has been found at fault (i) by the final
judgment of a court of competent jurisdiction or (ii) in any order of
settlement of any claim, demand, action or suit that has been approved
by the Board of Directors of GEIM.
(b) The Sub-Adviser agrees to indemnify GEIM, its officers and
directors, and any person who controls GEIM within the meaning of
Section 15 of the 1933 Act for any loss or expense (including attorneys'
fees) arising out of any claim, demand, action or suit in the event that
GEIM has been
D-3
<PAGE> 43
found to be without fault and the Sub-Adviser has been found at fault
(i) by the final judgment of a court of competent jurisdiction or (ii)
in any order of settlement of any claim, demand, action or suit that has
been approved by the Board of Directors of the Sub-Adviser.
8. Representations of Sub-Adviser. The Sub-Adviser represents,
warrants and agrees as follows:
(a) The Sub-Adviser (i) is registered as an investment adviser
under the Advisers Act and will continue to be so registered for so long
as this Agreement remains in effect; (ii) is not prohibited by the 1940
Act or the Advisers Act from performing the services contemplated by
this Agreement; (iii) has met, and will seek to continue to meet for so
long as this Agreement remains in effect, any other applicable federal
or state requirements, or the applicable requirements of any regulatory
or industry self-regulatory agency, necessary to be met in order to
perform the services contemplated by this Agreement; (iv) has the
authority to enter into and perform the services contemplated by this
Agreement; and (v) will promptly notify GEIM of the occurrence of any
event that would disqualify the Sub-Adviser from serving as an
investment adviser of an investment company pursuant to Section 9(a) of
the 1940 Act or otherwise.
(b) The Sub-Adviser has adopted a written code of ethics complying
with the requirements of Rule 17j-1 under the 1940 Act and will provide
GEIM and the Board with a copy of that code of ethics, together with
evidence of its adoption. Within fifteen days of the end of the last
calendar quarter of each year that this Agreement is in effect, the
president or a vice-president of the Sub-Adviser shall certify to GEIM
that the Sub-Adviser has complied with the requirements of Rule 17j-1
during the previous year and that there has been no violation of the
Sub-Adviser's code of ethics or, if such a violation has occurred, that
appropriate action was taken in response to such violation. Upon the
written request of GEIM, the Sub-Adviser shall permit GEIM, its
employees or its agents to examine the reports required to be made to
the Sub-Adviser by Rule 17j-1(c)(1) and all other records relevant to
the Sub-Adviser's code of ethics.
(c) The Sub-Adviser has provided GEIM with a copy of its Form ADV
as most recently filed with the Securities and Exchange Commission
("SEC") and promptly will furnish a copy of all amendments to GEIM at
least annually.
(d) The Sub-Adviser will notify GEIM of any change of control of
the Sub-Adviser, including any change of its general partners or 25%
shareholders, as applicable, and any changes in the key personnel of the
Sub-Adviser, in each case prior to or promptly after such change.
9. Representations and Warranties of GEIM. GEIM represents, warrants
and agrees that GEIM (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by the 1940 Act from
performing the services contemplated by this Agreement; (iii) has met, and
will seek to continue to meet for so long as this Agreement remains in
effect, any other applicable federal or state requirements, or the
applicable requirements of any regulatory or industry self-regulatory
agency, necessary to be met in order to perform the services contemplated
by this agreement; (iv) has the authority to enter into and perform the
services contemplated by this Agreement; and (v) will promptly notify the
Sub-Adviser of the occurrence of any event that would disqualify GEIM from
serving as an investment adviser of an investment company pursuant to
Section 9(a) of the 1940 Act or otherwise.
10. Duration and Termination.
(a) This Agreement shall become effective upon the date first above
written and will continue for an initial two-year term and will continue
thereafter so long as the continuance is specifically approved at least
annually (a) by the Board or (b) by a vote of a majority of the
Portfolio's outstanding voting securities, as defined in the 1940 Act,
provided that in either event the continuance is also approved by a
majority of the Board who are not "interested persons" (as defined in
the 1940 Act) of any party to this Agreement, by vote cast in person at
a meeting called for the purpose of voting on the approval.
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<PAGE> 44
(b) This Agreement may be terminated at any time without the
payment of any penalty, by the Board, or by vote of a majority of the
Portfolio's outstanding voting securities, on 60 days' written notice to
the Sub-Adviser. This Agreement may also be terminated, without the
payment of any penalty, by GEIM: (i) upon 60 days' written notice to the
Sub-Adviser; (ii) upon material breach by the Sub-Adviser of any of the
representations and warranties set forth in Paragraph 8 of this
Agreement; or (iii) if the Sub-Adviser becomes unable to discharge its
duties and obligations under this Agreement, including circumstances
such as financial insolvency of the Sub-Adviser or other circumstances
that could adversely affect the Portfolio. The Sub-Adviser may terminate
this Agreement at any time, without the payment of a penalty, on 60
days' written notice to GEIM. This Agreement will terminate
automatically in the event of its assignment or upon termination of the
Advisory Agreement.
11. Amendment of this Agreement. No provision of this Agreement may
be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, and no material
amendment to the terms of this Agreement shall be effective until approved
by a vote of a majority of the Portfolio's outstanding voting securities
(unless the Fund receives an SEC order or opinion of counsel permitting it
to modify the Agreement without such vote).
12. Governing Law. This Agreement shall be construed in accordance
with the 1940 Act and the laws of the State of New York, without giving
effect to the conflicts of laws principles thereof. To the extent that the
applicable laws of the State of New York conflict with the applicable
provisions of the 1940 Act, the latter shall control.
13. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. 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. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto. As used in this Agreement, the
terms "majority of the outstanding voting securities," "affiliated person,"
"interested person," "assignment," "broker," "investment adviser," "net
assets," "sale," "sell" and "security" shall have the same meaning as such
terms have in the 1940 Act, subject to such exemption as may be granted by
the SEC by any rule, regulation or order. Where the effect of a requirement
of the federal securities laws reflected in any provision of this Agreement
is made less restrictive by rule, regulation or order of the SEC, whether
of special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order. This Agreement
may be signed in counterpart.
D-5
<PAGE> 45
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized signatories as of the date and year first
above written.
Attest: GE INVESTMENT MANAGEMENT
INCORPORATED
BY:
-----------------------------------
Name:
Title:
Attest: GMG/SENECA CAPITAL MANAGEMENT LLC
BY:
-----------------------------------
Name:
Title:
D-6
<PAGE> 46
VOTING INSTRUCTION FORM
LIFE OF VIRGINIA SERIES FUND, INC.
REAL ESTATE SECURITIES PORTFOLIO
VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR A SPECIAL MEETING OF SHAREHOLDERS OF THE LIFE OF VIRGINIA
SERIES FUND, INC. TO BE HELD ON APRIL 16, 1997
The undersigned hereby instructs The Life Insurance Company of Virginia to vote
all shares of the above-referenced portfolio of the Life of Virginia Series
Fund, Inc. (the "Fund") held in the account of the undersigned at the Special
Meeting of Shareholders of the Fund to be held on April 16, 1997 in the 8th
Floor Board Room of The Life Insurance Company of Virginia Building, 6610 West
Broad Street, Richmond, Virginia 23230, at 10:00 a.m., Eastern Standard Time,
and at any adjournments thereof. The Life Insurance Company of Virginia shall
have all the powers the undersigned would have if personally present to vote
and to act upon each of the proposals below and, using its best judgment, on
any other matter that may properly come before the Special Meeting. All
previous instructions given with respect to the Special Meeting are hereby
revoked. By signing below, the undersigned acknowledges receipt of the Notice
of Special Meeting of Shareholders and the Proxy Statement relating to the
Special Meeting.
THE LIFE INSURANCE COMPANY OF VIRGINIA WILL VOTE IN THE MANNER INDICATED, OR IF
NO DIRECTION HAS BEEN INDICATED, "FOR" EACH PROPOSAL.
The Board of Directors recommends voting "FOR" each proposal, including all of
the nominees named in proposal 3.
Please sign exactly as your name appears on the Voting Instruction Form. If
shares are held by joint tenants, both persons should sign. If the individual
signing the form is a fiduciary (e.g., attorney, executor, trustee, guardian)
the individual must provide his full title following the signature. Corporate
instructions should be signed by an authorized officer.
Please mark, sign, date, and return all Voting Instruction Forms promptly in
the enclosed envelope. To vote on each of the proposals, using blue or black
ink, indicate your choice by marking an "X" in the appropriate box as follows:
[X]
- --------------------------------------------------------------------------------
THE VOTING INSTRUCTION FORM MUST BE SIGNED AND DATED ON THE NEXT PAGE FOR YOUR
INSTRUCTIONS TO BE COUNTED.
1 of 2
<PAGE> 47
Vote on Proposals:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
For Against Abstain
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Proposal to amend the Articles of Incorporation of the Fund [ ] [ ] [ ]
- --------------------------------------------------------------------------------------------------------------
2a. Proposal to approve investment advisory and administration
agreement (on behalf of the Real Estate Securities Portfolio) [ ] [ ] [ ]
between the Fund and GE Investment Management
Incorporated ("GEIM")
- --------------------------------------------------------------------------------------------------------------
2b. Proposal to approve an investment sub-advisory agreement
between GEIM and GMG/Seneca Capital Management, LLC [ ] [ ] [ ]
for the Real Estate Securities Portfolio
- --------------------------------------------------------------------------------------------------------------
3. Election of Directors (Mark one of the two boxes [ ] [ ]
on the immediate right to vote on the nominees as a
group.)
[ ]
Michael J. Cosgrove [ ]
John R. Costantino [ ]
William J. Lucas [ ]
Robert P. Martin, Jr. [ ]
J. Clifford Miller, III [ ]
J. Garnett Nelson [ ]
John J. Palmer [ ]
Lee A. Putney [ ]
Robert P. Quinn
YOU MAY WITHHOLD YOUR VOTE FOR ANY NOMINEE BY VOTING "AGAINST" THE NOMINEE.
- --------------------------------------------------------------------------------------------------------------
4. Proposal to ratify KPMG Peat Marwick LLP as the Fund's [ ] [ ] [ ]
independent accountant
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Signature: Policy XXXXXXXXXX
-------------------------------- Units XXXX.XXXXX
Signature:
--------------------------------
Dated: , 1997
----------------
VOTING INSTRUCTION FORMS MUST BE RECEIVED BY APRIL 15, 1997 TO BE COUNTED.
2 of 2
<PAGE> 48
VOTING INSTRUCTION FORM
LIFE OF VIRGINIA SERIES FUND, INC.
GOVERNMENT SECURITIES PORTFOLIO
VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR A SPECIAL MEETING OF SHAREHOLDERS OF THE LIFE OF VIRGINIA
SERIES FUND, INC. TO BE HELD ON APRIL 16, 1997
The undersigned hereby instructs The Life Insurance Company of Virginia to vote
all shares of the above-referenced portfolio of the Life of Virginia Series
Fund, Inc. (the "Fund") held in the account of the undersigned at the Special
Meeting of Shareholders of the Fund to be held on April 16, 1997 in the 8th
Floor Board Room of The Life Insurance Company of Virginia Building, 6610 West
Broad Street, Richmond, Virginia 23230, at 10:00 a.m., Eastern Standard Time,
and at any adjournments thereof. The Life Insurance Company of Virginia shall
have all the powers the undersigned would have if personally present to vote
and to act upon each of the proposals below and, using its best judgment, on
any other matter that may properly come before the Special Meeting. All
previous instructions given with respect to the Special Meeting are hereby
revoked. By signing below, the undersigned acknowledges receipt of the Notice
of Special Meeting of Shareholders and the Proxy Statement relating to the
Special Meeting.
THE LIFE INSURANCE COMPANY OF VIRGINIA WILL VOTE IN THE MANNER INDICATED, OR IF
NO DIRECTION HAS BEEN INDICATED, "FOR" EACH PROPOSAL.
The Board of Directors recommends voting "FOR" each proposal, including all of
the nominees named in proposal 3.
Please sign exactly as your name appears on the Voting Instruction Form. If
shares are held by joint tenants, both persons should sign. If the individual
signing the form is a fiduciary (e.g., attorney, executor, trustee, guardian)
the individual must provide his full title following the signature. Corporate
instructions should be signed by an authorized officer.
Please mark, sign, date, and return all Voting Instruction Forms promptly in
the enclosed envelope. To vote on each of the proposals, using blue or black
ink, indicate your choice by marking an "X" in the appropriate box as follows:
[X]
- --------------------------------------------------------------------------------
THE VOTING INSTRUCTION FORM MUST BE SIGNED AND DATED ON THE NEXT PAGE FOR YOUR
INSTRUCTIONS TO BE COUNTED.
1 of 2
<PAGE> 49
Vote on Proposals:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
For Against Abstain
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Proposal to amend the Articles of Incorporation of the Fund [ ] [ ] [ ]
- ---------------------------------------------------------------------------------------------------------------
2. Proposal to approve investment advisory and administration
agreement (on behalf of the Government Securities Portfolio) [ ] [ ] [ ]
between the Fund and GE Investment Management
Incorporated ("GEIM")
- ---------------------------------------------------------------------------------------------------------------
3. Election of Directors (Mark one of the two boxes [ ] [ ]
on the immediate right to vote on the nominees as a
group.)
[ ]
Michael J. Cosgrove [ ]
John R. Costantino [ ]
William J. Lucas [ ]
Robert P. Martin, Jr. [ ]
J. Clifford Miller, III [ ]
J. Garnett Nelson [ ]
John J. Palmer [ ]
Lee A. Putney [ ]
Robert P. Quinn
YOU MAY WITHHOLD YOUR VOTE FOR ANY NOMINEE BY VOTING "AGAINST" THE NOMINEE.
- ---------------------------------------------------------------------------------------------------------------
4. Proposal to ratify KPMG Peat Marwick LLP as the Fund's [ ] [ ] [ ]
independent accountant
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
Signature: Policy XXXXXXXXXX
-------------------------------- Units XXXX.XXXXX
Signature:
--------------------------------
Dated: , 1997
----------------
VOTING INSTRUCTION FORMS MUST BE RECEIVED BY APRIL 15, 1997 TO BE COUNTED.
2 of 2
<PAGE> 50
VOTING INSTRUCTION FORM
LIFE OF VIRGINIA SERIES FUND, INC.
COMMON STOCK INDEX PORTFOLIO
VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR A SPECIAL MEETING OF SHAREHOLDERS OF THE LIFE OF VIRGINIA
SERIES FUND, INC. TO BE HELD ON APRIL 16, 1997
The undersigned hereby instructs The Life Insurance Company of Virginia to vote
all shares of the above-referenced portfolio of the Life of Virginia Series
Fund, Inc. (the "Fund") held in the account of the undersigned at the Special
Meeting of Shareholders of the Fund to be held on April 16, 1997 in the 8th
Floor Board Room of The Life Insurance Company of Virginia Building, 6610 West
Broad Street, Richmond, Virginia 23230, at 10:00 a.m., Eastern Standard Time,
and at any adjournments thereof. The Life Insurance Company of Virginia shall
have all the powers the undersigned would have if personally present to vote
and to act upon each of the proposals below and, using its best judgment, on
any other matter that may properly come before the Special Meeting. All
previous instructions given with respect to the Special Meeting are hereby
revoked. By signing below, the undersigned acknowledges receipt of the Notice
of Special Meeting of Shareholders and the Proxy Statement relating to the
Special Meeting.
THE LIFE INSURANCE COMPANY OF VIRGINIA WILL VOTE IN THE MANNER INDICATED, OR IF
NO DIRECTION HAS BEEN INDICATED, "FOR" EACH PROPOSAL.
The Board of Directors recommends voting "FOR" each proposal, including all of
the nominees named in proposal 3.
Please sign exactly as your name appears on the Voting Instruction Form. If
shares are held by joint tenants, both persons should sign. If the individual
signing the form is a fiduciary (e.g., attorney, executor, trustee, guardian)
the individual must provide his full title following the signature. Corporate
instructions should be signed by an authorized officer.
Please mark, sign, date, and return all Voting Instruction Forms promptly in
the enclosed envelope. To vote on each of the proposals, using blue or black
ink, indicate your choice by marking an "X" in the appropriate box as follows:
[X]
- --------------------------------------------------------------------------------
THE VOTING INSTRUCTION FORM MUST BE SIGNED AND DATED ON THE NEXT PAGE FOR YOUR
INSTRUCTIONS TO BE COUNTED.
1 of 2
<PAGE> 51
Vote on Proposals:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
For Against Abstain
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Proposal to amend the Articles of Incorporation of the Fund [ ] [ ] [ ]
- ----------------------------------------------------------------------------------------------------------------
2. Proposal to approve investment advisory and administration
agreement (on behalf of the Common Stock Index Portfolio) [ ] [ ] [ ]
between the Fund and GE Investment Management
Incorporated ("GEIM")
- ----------------------------------------------------------------------------------------------------------------
3. Election of Directors (Mark one of the two boxes [ ] [ ]
on the immediate right to vote on the nominees as a
group.)
[ ]
Michael J. Cosgrove [ ]
John R. Costantino [ ]
William J. Lucas [ ]
Robert P. Martin, Jr. [ ]
J. Clifford Miller, III [ ]
J. Garnett Nelson [ ]
John J. Palmer [ ]
Lee A. Putney [ ]
Robert P. Quinn
YOU MAY WITHHOLD YOUR VOTE FOR ANY NOMINEE BY VOTING "AGAINST" THE NOMINEE.
- ----------------------------------------------------------------------------------------------------------------
4. Proposal to ratify KPMG Peat Marwick LLP as the Fund's [ ] [ ] [ ]
independent accountant
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Signature: Policy XXXXXXXXXX
-------------------------------- Units XXXX.XXXXX
Signature:
--------------------------------
Dated: , 1997
----------------
VOTING INSTRUCTION FORMS MUST BE RECEIVED BY APRIL 15, 1997 TO BE COUNTED.
2 of 2
<PAGE> 52
VOTING INSTRUCTION FORM
LIFE OF VIRGINIA SERIES FUND, INC.
TOTAL RETURN PORTFOLIO
VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR A SPECIAL MEETING OF SHAREHOLDERS OF THE LIFE OF VIRGINIA
SERIES FUND, INC. TO BE HELD ON APRIL 16, 1997
The undersigned hereby instructs The Life Insurance Company of Virginia to vote
all shares of the above-referenced portfolio of the Life of Virginia Series
Fund, Inc. (the "Fund") held in the account of the undersigned at the Special
Meeting of Shareholders of the Fund to be held on April 16, 1997 in the 8th
Floor Board Room of The Life Insurance Company of Virginia Building, 6610 West
Broad Street, Richmond, Virginia 23230, at 10:00 a.m., Eastern Standard Time,
and at any adjournments thereof. The Life Insurance Company of Virginia shall
have all the powers the undersigned would have if personally present to vote
and to act upon each of the proposals below and, using its best judgment, on
any other matter that may properly come before the Special Meeting. All
previous instructions given with respect to the Special Meeting are hereby
revoked. By signing below, the undersigned acknowledges receipt of the Notice
of Special Meeting of Shareholders and the Proxy Statement relating to the
Special Meeting.
THE LIFE INSURANCE COMPANY OF VIRGINIA WILL VOTE IN THE MANNER INDICATED, OR IF
NO DIRECTION HAS BEEN INDICATED, "FOR" EACH PROPOSAL.
The Board of Directors recommends voting "FOR" each proposal, including all of
the nominees named in proposal 3.
Please sign exactly as your name appears on the Voting Instruction Form. If
shares are held by joint tenants, both persons should sign. If the individual
signing the form is a fiduciary (e.g., attorney, executor, trustee, guardian)
the individual must provide his full title following the signature. Corporate
instructions should be signed by an authorized officer.
Please mark, sign, date, and return all Voting Instruction Forms promptly in
the enclosed envelope. To vote on each of the proposals, using blue or black
ink, indicate your choice by marking an "X" in the appropriate box as follows:
[X]
- --------------------------------------------------------------------------------
THE VOTING INSTRUCTION FORM MUST BE SIGNED AND DATED ON THE NEXT PAGE FOR YOUR
INSTRUCTIONS TO BE COUNTED.
1 of 2
<PAGE> 53
Vote on Proposals:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
For Against Abstain
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Proposal to amend the Articles of Incorporation of the Fund [ ] [ ] [ ]
- ----------------------------------------------------------------------------------------------------------------
2. Proposal to approve investment advisory and administration
agreement (on behalf of the Total Return Portfolio) between [ ] [ ] [ ]
the Fund and GE Investment Management Incorporated
("GEIM")
- ----------------------------------------------------------------------------------------------------------------
3. Election of Directors (Mark one of the two boxes [ ] [ ]
on the immediate right to vote on the nominees as a
group.)
[ ]
Michael J. Cosgrove [ ]
John R. Costantino [ ]
William J. Lucas [ ]
Robert P. Martin, Jr. [ ]
J. Clifford Miller, III [ ]
J. Garnett Nelson [ ]
John J. Palmer [ ]
Lee A. Putney [ ]
Robert P. Quinn
YOU MAY WITHHOLD YOUR VOTE FOR ANY NOMINEE BY VOTING "AGAINST" THE NOMINEE.
- ----------------------------------------------------------------------------------------------------------------
4. Proposal to ratify KPMG Peat Marwick LLP as the Fund's [ ] [ ] [ ]
independent accountant
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Signature: Policy XXXXXXXXXX
-------------------------------- Units XXXX.XXXXX
Signature:
--------------------------------
Dated: , 1997
----------------
VOTING INSTRUCTION FORMS MUST BE RECEIVED BY APRIL 15, 1997 TO BE COUNTED.
2 of 2
<PAGE> 54
VOTING INSTRUCTION FORM
LIFE OF VIRGINIA SERIES FUND, INC.
INTERNATIONAL EQUITY PORTFOLIO
VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR A SPECIAL MEETING OF SHAREHOLDERS OF THE LIFE OF VIRGINIA
SERIES FUND, INC. TO BE HELD ON APRIL 16, 1997
The undersigned hereby instructs The Life Insurance Company of Virginia to vote
all shares of the above-referenced portfolio of the Life of Virginia Series
Fund, Inc. (the "Fund") held in the account of the undersigned at the Special
Meeting of Shareholders of the Fund to be held on April 16, 1997 in the 8th
Floor Board Room of The Life Insurance Company of Virginia Building, 6610 West
Broad Street, Richmond, Virginia 23230, at 10:00 a.m., Eastern Standard Time,
and at any adjournments thereof. The Life Insurance Company of Virginia shall
have all the powers the undersigned would have if personally present to vote
and to act upon each of the proposals below and, using its best judgment, on
any other matter that may properly come before the Special Meeting. All
previous instructions given with respect to the Special Meeting are hereby
revoked. By signing below, the undersigned acknowledges receipt of the Notice
of Special Meeting of Shareholders and the Proxy Statement relating to the
Special Meeting.
THE LIFE INSURANCE COMPANY OF VIRGINIA WILL VOTE IN THE MANNER INDICATED, OR IF
NO DIRECTION HAS BEEN INDICATED, "FOR" EACH PROPOSAL.
The Board of Directors recommends voting "FOR" each proposal, including all of
the nominees named in proposal 3.
Please sign exactly as your name appears on the Voting Instruction Form. If
shares are held by joint tenants, both persons should sign. If the individual
signing the form is a fiduciary (e.g., attorney, executor, trustee, guardian)
the individual must provide his full title following the signature. Corporate
instructions should be signed by an authorized officer.
Please mark, sign, date, and return all Voting Instruction Forms promptly in
the enclosed envelope. To vote on each of the proposals, using blue or black
ink, indicate your choice by marking an "X" in the appropriate box as follows:
[X]
- --------------------------------------------------------------------------------
THE VOTING INSTRUCTION FORM MUST BE SIGNED AND DATED ON THE NEXT PAGE FOR YOUR
INSTRUCTIONS TO BE COUNTED.
1 of 2
<PAGE> 55
Vote on Proposals:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
For Against Abstain
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Proposal to amend the Articles of Incorporation of the Fund [ ] [ ] [ ]
- ---------------------------------------------------------------------------------------------------------------
2. Proposal to approve investment advisory and administration
agreement (on behalf of the International Equity Portfolio) [ ] [ ] [ ]
between the Fund and GE Investment Management
Incorporated ("GEIM")
- ---------------------------------------------------------------------------------------------------------------
3. Election of Directors (Mark one of the two boxes [ ] [ ]
on the immediate right to vote on the nominees as a
group.)
[ ]
Michael J. Cosgrove [ ]
John R. Costantino [ ]
William J. Lucas [ ]
Robert P. Martin, Jr. [ ]
J. Clifford Miller, III [ ]
J. Garnett Nelson [ ]
John J. Palmer [ ]
Lee A. Putney [ ]
Robert P. Quinn
YOU MAY WITHHOLD YOUR VOTE FOR ANY NOMINEE BY VOTING "AGAINST" THE NOMINEE.
- ---------------------------------------------------------------------------------------------------------------
4. Proposal to ratify KPMG Peat Marwick LLP as the Fund's [ ] [ ] [ ]
independent accountant
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
Signature: Policy XXXXXXXXXX
-------------------------------- Units XXXX.XXXXX
Signature:
--------------------------------
Dated: , 1997
----------------
VOTING INSTRUCTION FORMS MUST BE RECEIVED BY APRIL 15, 1997 TO BE COUNTED.
2 of 2
<PAGE> 56
VOTING INSTRUCTION FORM
LIFE OF VIRGINIA SERIES FUND, INC.
MONEY MARKET PORTFOLIO
VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR A SPECIAL MEETING OF SHAREHOLDERS OF THE LIFE OF VIRGINIA
SERIES FUND, INC. TO BE HELD ON APRIL 16, 1997
The undersigned hereby instructs The Life Insurance Company of Virginia to vote
all shares of the above-referenced portfolio of the Life of Virginia Series
Fund, Inc. (the "Fund") held in the account of the undersigned at the Special
Meeting of Shareholders of the Fund to be held on April 16, 1997 in the 8th
Floor Board Room of The Life Insurance Company of Virginia Building, 6610 West
Broad Street, Richmond, Virginia 23230, at 10:00 a.m., Eastern Standard Time,
and at any adjournments thereof. The Life Insurance Company of Virginia shall
have all the powers the undersigned would have if personally present to vote
and to act upon each of the proposals below and, using its best judgment, on
any other matter that may properly come before the Special Meeting. All
previous instructions given with respect to the Special Meeting are hereby
revoked. By signing below, the undersigned acknowledges receipt of the Notice
of Special Meeting of Shareholders and the Proxy Statement relating to the
Special Meeting.
THE LIFE INSURANCE COMPANY OF VIRGINIA WILL VOTE IN THE MANNER INDICATED, OR IF
NO DIRECTION HAS BEEN INDICATED, "FOR" EACH PROPOSAL.
The Board of Directors recommends voting "FOR" each proposal, including all of
the nominees named in proposal 3.
Please sign exactly as your name appears on the Voting Instruction Form. If
shares are held by joint tenants, both persons should sign. If the individual
signing the form is a fiduciary (e.g., attorney, executor, trustee, guardian)
the individual must provide his full title following the signature. Corporate
instructions should be signed by an authorized officer.
Please mark, sign, date, and return all Voting Instruction Forms promptly in
the enclosed envelope. To vote on each of the proposals, using blue or black
ink, indicate your choice by marking an "X" in the appropriate box as follows:
[X]
- --------------------------------------------------------------------------------
THE VOTING INSTRUCTION FORM MUST BE SIGNED AND DATED ON THE NEXT PAGE FOR YOUR
INSTRUCTIONS TO BE COUNTED.
1 of 2
<PAGE> 57
Vote on Proposals:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
For Against Abstain
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Proposal to amend the Articles of Incorporation of the Fund [ ] [ ] [ ]
- ----------------------------------------------------------------------------------------------------------------
2. Proposal to approve investment advisory and administration
agreement (on behalf of the Money Market Portfolio) [ ] [ ] [ ]
between the Fund and GE Investment Management
Incorporated ("GEIM")
- ----------------------------------------------------------------------------------------------------------------
3. Election of Directors (Mark one of the two boxes [ ] [ ]
on the immediate right to vote on the nominees as a
group.)
[ ]
Michael J. Cosgrove [ ]
John R. Costantino [ ]
William J. Lucas [ ]
Robert P. Martin, Jr. [ ]
J. Clifford Miller, III [ ]
J. Garnett Nelson [ ]
John J. Palmer [ ]
Lee A. Putney [ ]
Robert P. Quinn
YOU MAY WITHHOLD YOUR VOTE FOR ANY NOMINEE BY VOTING "AGAINST" THE NOMINEE.
- ----------------------------------------------------------------------------------------------------------------
4. Proposal to ratify KPMG Peat Marwick LLP as the Fund's [ ] [ ] [ ]
independent accountant
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Signature: Policy XXXXXXXXXX
-------------------------------- Units XXXX.XXXXX
Signature:
--------------------------------
Dated: , 1997
----------------
VOTING INSTRUCTION FORMS MUST BE RECEIVED BY APRIL 15, 1997 TO BE COUNTED.
2 of 2
