SCHEDULE 14A INFORMATION
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
Mutual of America Investment Corporation
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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pursuant to Exchange Act Rule 0-11 (set forth amount on which filing
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<PAGE>
MUTUAL OF AMERICA
INVESTMENT CORPORATION
Special Meeting of Shareholders
to be held on February 28, 2000
PROXY STATEMENT
--Please Review the Important Information Inside--
<PAGE>
Table of Contents
Notice of Special Meeting of Shareholders ................................... i
Proxy Statement ............................................................. 1
Proposal 1: Elect a Board of Directors ................................... 4
Proposal 2: Approve Amendments to All Fundamental Investment
Restrictions ................................................. 6
2a. Eliminate the fundamental restriction on options and futures ........ 7
2b. Eliminate the fundamental restriction on foreign securities ......... 8
2c. Eliminate the fundamental restriction on investing to
exercise control .................................................. 9
2d. Amend the fundamental restriction on underwriting securities ........ 9
2e. Eliminate the fundamental restriction on short sales ................ 10
2f. Amend the fundamental restriction on commodities .................... 11
2g. Amend the fundamental restriction on diversification
among issuers ..................................................... 11
2h. Amend the fundamental restriction on amount of voting securities .... 12
2i. Amend the fundamental restriction on issuing senior securities ...... 12
2j. Amend the fundamental restriction on industry concentration ......... 13
2k. Amend the fundamental restriction on real estate and mortgages ...... 13
2l. Eliminate the fundamental restriction on registered investment
company securities ................................................ 14
2m. Eliminate the fundamental restriction on purchasing on margin ....... 15
2n. Amend the fundamental restriction on borrowing and
pledging assets ................................................... 16
2o. Amend the fundamental restriction on making loans ................... 17
2p. Eliminate the fundamental restriction on illiquid securities ........ 18
2q. Eliminate the fundamental restriction on purchase of oil and
gas interests ..................................................... 19
2r. Eliminate the unnumbered sentence regarding the
Money Market Fund ................................................. 19
Proposal 3: Ratify Selection of Arthur Andersen LLP as Independent
Accountants .................................................. 20
Proposal 4: Amend the Investment Objective of the Aggressive Equity
Fund ......................................................... 21
Additional Information ................................................... 21
Exhibit A: Proposed Fundamental Investment Restrictions .................A-1
Exhibit B: Current Fundamental Investment Restrictions ..................B-1
Exhibit C: Proposed Non-Fundamental Investment Policies .................C-1
<PAGE>
MUTUAL OF AMERICA INVESTMENT CORPORATION
320 Park Avenue, New York, New York 10022
1-212-224-1600
o Equity Index Fund
o All America Fund
o Mid-Cap Equity Index Fund
o Aggressive Equity Fund
o Composite Fund
o Bond Fund
o Mid-Term Bond Fund
o Short-Term Bond Fund
o Money Market Fund
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
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Notice is hereby given that a Special Meeting of Shareholders of the Mutual of
America Investment Corporation will be held at the offices of Mutual of America
Life Insurance Company, 320 Park Avenue, New York, New York 10022, on February
28, 2000, at 2:30 p.m., Eastern time, for the following purposes:
1. To elect a Board of Directors;
2. To approve amendments to all of the fundamental investment restrictions of
the Funds;
3. To ratify the selection of Arthur Andersen LLP as independent accountants
for the Funds;
4. To amend the investment objective of the Aggressive Equity Fund; and
5. To transact such other business as may properly come before the Meeting.
The Board of Directors has fixed the close of business on December 21, 1999 as
the record date for the determination of shareholders entitled to notice of, and
to vote at, the Special Meeting or any adjournment thereof.
Dolores J. Morrissey
President, Chief Executive Officer
and Chairman of the Board
January , 2000
i
<PAGE>
MUTUAL OF AMERICA INVESTMENT CORPORATION
SPECIAL MEETING OF SHAREHOLDERS
To be held on February 28, 2000
PROXY STATEMENT
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Mutual of America Investment Corporation, a Maryland corporation (the
"Investment Company") is furnishing this Proxy Statement in connection with the
solicitation of proxies by its Board of Directors. The proxies will be voted at
a Special Meeting of Shareholders of the Investment Company (the "Meeting") to
be held at the offices of Mutual of America Life Insurance Company (the
"Insurance Company"), 320 Park Avenue, 6th Floor, New York, New York 10022, on
February 28, 2000 at 2:30 p.m. Eastern time, and at all adjournments thereof.
The record date for determining shareholders entitled to vote at the Meeting is
the close of business on December 21, 1999.
We are mailing or delivering this Proxy Statement, the Notice of Special Meeting
and the proxy card to shareholders on or about January 17, 2000. Any shareholder
who has given a proxy may revoke it prior to the Meeting by delivering written
notice to the Secretary of the Investment Company, by attending the Meeting in
person, or by executing a superseding proxy. All properly executed proxies we
receive in time for the Special Meeting will be voted as specified in the proxy
or, if there is no specification, for each proposal in the Proxy Statement.
Shares of the Investment Company Funds currently are available for purchase only
by Separate Accounts No. 1 and No. 2 of the Insurance Company and by Separate
Accounts No. 1, No. 2 and No. 3 of The American Life Insurance Company of New
York ("American Life"), which is a wholly-owned subsidiary of the Insurance
Company. These Separate Accounts of the Insurance Company and American Life are
referred to individually as a "Separate Account" and collectively as the
"Separate Accounts". Each Separate Account has nine subaccounts (called Funds),
and each subaccount invests in shares of a corresponding Investment Company
Fund.
The Investment Company has these Funds (or series): the Equity Index Fund, All
America Fund, Mid-Cap Equity Index Fund, Aggressive Equity Fund, Composite Fund,
Bond Fund, Mid-Term Bond Fund, Short-Term Bond Fund and Money Market Fund (each
a "Fund" and collectively, the "Funds"). The following table summarizes the
Proposals in this Proxy Statement applicable to each Fund.
1
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<TABLE>
<CAPTION>
Proposal Fund(s) Manner in Which the
Number Description of Proposal To Vote Funds Will Vote
<S> <C> <C> <C>
1 Elect a Board of Directors All Shareholders of all Funds will
(six persons named as nominees) vote together as a single class
regarding each nominee
2a - 2q Approve amendments to all of All Shareholders of each Fund will
the fundamental investment vote separately
restrictions of the Funds, with
some restrictions eliminated if
not required to be fundamental
and others amended
2r Eliminate a sentence about the Money Shareholders of the Money
Money Market Fund that might Market Market Fund will vote separately
be considered to be a
fundamental restriction
3 Ratify selection of Arthur All Shareholders of all Funds will
Andersen LLP as Independent vote together as a single class
Accountants for the Funds
4 Amend the investment objective Aggressive Shareholders of the Aggressive
of the Aggressive Equity Fund Equity Equity Fund will vote separately
</TABLE>
The Insurance Company and American Life are the only shareholders of the
Investment Company. The table below sets forth their share ownership of each of
the Funds as of the record date for the Meeting.
<TABLE>
<CAPTION>
Shares Outstanding Shares (and %) Held Shares (and %) Held
Name of Fund at 12/21/99 by Insurance Company by American Life
<S> <C> <C> <C>
Equity Index 197,962,496 186,054,309(94.0%) 11,908,187(6.0%)
All America 244,508,695 237,794,111(97.3%) 6,714,584(2.7%)
Mid-Cap Equity Index 29,991,517 29,524,356(98.4%) 467,161(1.6%)
Aggressive Equity 127,637,036 120,066,664(94.1%) 7,570,372(5.9%)
Composite 177,901,935 172,600,239(97.0%) 5,301,696(3.0%)
Bond 334,789,412 331,858,010(99.1%) 2,931,402(0.9%)
Mid-Term Bond 14,631,115 13,869,180(94.8%) 761,935(5.2%)
Short-Term Bond 10,504,002 10,019,300(95.4%) 484,702(4.6%)
Money Market 63,371,123 61,222,924(96.6%) 2,148,199(3.4%)
</TABLE>
The Insurance Company and American Life "pass through" to their contractholders,
participants and policyowners (together, "participants") the right to vote
shares of the Investment Company Funds. The Investment Company expects that the
Insurance Company and American Life will solicit voting instructions from their
participants and vote 100% of the shares of the Investment Company Funds held by
their respective Separate Accounts, in the proportions indicated in the voting
instructions they receive from participants. In determining whether a quorum
exists, the Investment Company will count shareholder abstentions as shares
present and voting. Any shareholder abstentions for a Proposal will have the
effect of a "no" vote.
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Investment Adviser for the Funds and Subadvisers for the All America Fund.
Mutual of America Capital Management Corporation (the "Adviser"), serves as the
investment adviser for each of the Funds. The Adviser is an indirect,
wholly-owned subsidiary of the Insurance Company, and its business address is
320 Park Avenue, New York, New York 10022. Three subadvisers for the All America
Fund manage approximately 30% of the Fund's assets. The names and addresses of
these subadvisers are: Fred Alger Management, Inc., 30 Montgomery Street, Jersey
City, New Jersey 07302; Oak Associates, Ltd., 3875 Embassy Parkway, Suite 250,
Akron, Ohio 44333; and Palley-Needelman Asset Management, Inc., 800 Newport
Center Drive, Newport Beach, California 92660.
Officers of the Investment Company. The Investment Company has the following
officers, who serve without compensation from the Investment Company. The
business address of each officer is 320 Park Avenue, New York, New York 10022.
Principal Occupations
Name and Age Position Held During Past Five Years
Dolores J. Morrissey President and President, Mutual of America Securities
(age 71) Chief Executive Corporation, since August 1996; Execu-
Officer tive Vice President and Assistant to
President of Adviser, March 1996 to
December 1996; prior thereto, President
and Chief Executive Officer of Adviser
Manfred Altstadt Senior Executive Senior Executive Vice President and
(age 50) Vice President, Chief Financial Officer of Adviser, the
Chief Financial Insurance Company and American Life;
Officer and Director of the Insurance Company since
Treasurer October 1998 and Director of American
Life
Patrick A. Burns Senior Executive Senior Executive Vice President and
(age 53) Vice President General Counsel of Adviser, the
and General Insurance Company and American Life;
Counsel Director of the Insurance Company since
October 1998 and Director of American
Life
Stanley M. Lenkowicz Senior Vice Senior Vice President and Deputy
(age 57) President, General Counsel of the Insurance Company
Deputy General and American Life since March 1995;
Counsel and prior thereto, Senior Vice President and
Secretary Associate General Counsel; Secretary of
the Adviser since September 1998
Distributor: The Insurance Company is the principal underwriter of the Funds'
shares.
Annual Report: The Investment Company will furnish, without charge, a copy of
its most recent annual report and semi-annual report, containing the Funds'
financial statements. To request these reports, please call the Investment
Company at 1-800-468-3785 or write to Mutual of America Investment Corporation,
320 Park Avenue, New York, New York 10022, Attn: Stanley M. Lenkowicz.
3
<PAGE>
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Proposal 1. Elect a Board of Directors
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Six Directors will be elected at the Meeting, each to serve until his or her
successor is elected and qualified. Each proxy card will be voted for the
election of the nominees listed below, unless a contrary specification is made
on the card.
The nominees for Director, other than Robert J. McGuire, currently are Directors
of the Investment Company and have served in that capacity continuously since
originally elected or appointed. Each nominee has consented to serve as a
Director if elected. Mr. McGuire will serve in place of James J. Needham, age
73, a director since 1992 who has not been renominated. The business address of
each nominee is 320 Park Avenue, New York, New York 10022, unless otherwise
indicated in the table below:
<TABLE>
<CAPTION>
Name and Age of Director
Each Nominee Principal Occupation During Past Five Years Since
<S> <C> <C>
Manfred Altstadt* (50) Senior Executive Vice President and Chief Financial 1992
Officer of Adviser, Insurance Company and American
Life; Director, the Insurance Company, since
October 1998; Director, American Life
Peter J. Flanagan (69) President Emeritus and Consultant, The Life 1992
Insurance Council of New York (LICONY), since
November 1999; prior thereto, President of LICONY
Robert J. McGuire (63) Counsel, Morvillo, Abramowitz, Grand, Iason & --
565 Fifth Avenue Silverberg (law firm), since January 1998; prior
New York, NY 10017 thereto, President, Kroll Associates (corporate
investigations and consulting firm)
George Mertz (71) Retired; formerly President and CEO of National 1989
Industries for the Blind
Dolores J. Morrissey* (71) President, Mutual of America Securities Corporation
1989 since August 1996; Executive Vice President and
Assistant to President of Adviser from March 1996
to December 1996; prior thereto, President and
Chief Executive Officer of Adviser
Howard J. Nolan (62) President and Chief Professional Officer, United
P.O. Box 898 Way of San Antonio and Bexar County 1989
San Antonio, TX 78293
</TABLE>
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* Mr. Altstadt and Ms. Morrissey are "interested persons" (as defined in the
Investment Company Act of 1940) of the Investment Company based on their
affiliation with the Adviser or its affiliate.
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<PAGE>
Mr. McGuire currently serves as a director of the GAM Funds, Inc. (a registered
investment company), the Brazilian Equity Fund (a closed-end registered
investment company) and the Emigrant Savings Bank (a New York savings bank).
The nominees for Director do not own any of the outstanding shares of the
Investment Company. Directors who are participants under group or individual
variable accumulation annuity contracts issued by the Insurance Company or
American Life or who are policyowners of variable universal life insurance
policies issued by American Life may allocate portions of their account balances
to Separate Account Funds that invest in Funds of the Investment Company.
The Investment Company does not have an Audit Committee; the entire Board of
Directors fulfills the obligations that an Audit Committee would have. The
Investment Company also has no standing nomination, compensation or executive
committees.
During 1999, the Board of Directors held five meetings. Ms. Morrissey and
Messrs. Flanagan and Nolan attended all five meetings, and Messrs. Altstadt,
Mertz and Needham attended four meetings. Directors who are not interested
persons of the Investment Company do not serve on the Board of any other
investment company in the same complex as the Investment Company. The directors
received the following compensation for serving as directors of the Investment
Company in 1999:
<TABLE>
<CAPTION>
Pension or Total Compensation
Aggregate Retirement Benefits Estimated from Investment
Compensation Accrued as Part Annual Company and Fund
from Investment of Investment Benefits Upon Complex Paid to
Name of Director Company Company Expenses Retirement Directors
<S> <C> <C> <C> <C>
Manfred Altstadt None (1) None None None (1)
Dolores J. Morrissey None (1) None None None (1)
Peter J. Flanagan $18,375 (2) None None $18,375 (2)
George J. Mertz $18,149 (2) None None $18,149 (2)
James J. Needham $19,013 (2) None None $19,013 (2)
Howard J. Nolan $16,854 (2) None None $16,854 (2)
</TABLE>
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(1) As an employee of the Adviser or its affiliate and as "interested persons"
of the Investment Company, Ms. Morrissey and Mr. Altstadt serve as directors
of the Investment Company without compensation.
(2) Directors who are not "interested persons" of the Investment Company receive
an annual retainer of $10,000 and a fee of $1,000 for each Board or
Committee meeting they attend. In addition, they receive business travel and
accident insurance and life insurance coverage of $75,000.
Required Vote. Each nominee who receives the affirmative vote of a majority of
the Investment Company Fund shares cast at the Meeting will be elected as a
Director. The Directors of the Investment Company recommend that the
shareholders of the Investment Company vote FOR each of the nominees for
Director listed in this Proposal 1.
5
<PAGE>
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Proposal 2: Approve Amendments to All Fundamental Investment Restrictions
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The Investment Company Act of 1940 (the "1940 Act") requires investment
companies to adopt fundamental policies for investing in certain types of
securities or using certain investment techniques. The Investment Company
adopted its current fundamental investment restrictions in 1985, at a time when
investment companies typically adopted a lengthy list of restrictions, in part
because of state securities department requirements for investment companies
that are no longer applicable.
Changes to the Investment Company's fundamental investment restrictions require
a vote of shareholders, and the Investment Company holds meetings of
shareholders only from time to time. The Investment Company is using the
opportunity of this Meeting to request that shareholders substantially revise
and update the Funds' fundamental investment restrictions.
The Investment Company is asking that Fund shareholders eliminate a number of
fundamental restrictions that the 1940 Act does not require to be fundamental.
In several instances, 1940 Act provisions, and rules or interpretations adopted
by the Securities and Exchange Commission ("SEC") thereunder, will limit
investments by the Funds, whether or not they have a fundamental policy. The
Board of Directors intends to adopt non-fundamental investment policies covering
certain securities or investment techniques when shareholders approve
elimination of fundamental policies.
The Investment Company currently has 16 fundamental investment restrictions -- 9
are proposed to be amended and retained as fundamental, 6 are proposed to be
eliminated (and replaced with 7 non-fundamental investment policies that will be
adopted by the Board of Directors), and 1 is proposed to be eliminated as
redundant. For 3 of the 9 amended fundamental investment restrictions, the Board
of Directors also intends to adopt new corresponding non-fundamental investment
policies.
The Board of Directors has determined that approval by shareholders of the
proposed amendments to the fundamental investment restrictions is in the best
interests of the shareholders of each of the Funds. The Investment Company does
not anticipate that approval of the Proposal 2 amendments will materially affect
the operations of any Fund or its investment performance.
The purposes of the amendments under Proposal 2 are:
o To clarify or simplify the fundamental investment restrictions;
o To conform the fundamental restrictions to current provisions of the 1940
Act and related rules and regulations, as they may be amended from time to
time; and
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<PAGE>
o To provide the Investment Company Funds with more investment flexibility,
consistent with practices that have been adopted by other registered
investment companies, by eliminating certain fundamental investment
restrictions that are not required under the 1940 Act.
Non-fundamental investment policies will allow the Funds flexibility to respond
to changed market conditions. They can be changed upon approval by the Board of
Directors, subject to any limits imposed under the 1940 Act and related rules
and interpretations, or other regulatory authorities.
Exhibit A to this Proxy Statement shows the Investment Company's proposed
fundamental investment restrictions, discussed in this Proposal 2. Exhibit B to
this Proxy Statement sets forth the Investment Company's current fundamental
investment restrictions.
For your information, Exhibit C sets forth the non-fundamental investment
policies the Board intends to adopt upon approval by a Fund's shareholders of
the proposed changes to the Fund's current fundamental investment restrictions.
Shareholders are not being asked to vote on the non-fundamental policies in
Exhibit C.
Proposal 2a. Eliminate the fundamental restriction on options and futures
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The Funds' current fundamental investment restriction concerning options and
futures contracts states:
None of the Funds will purchase or sell options or futures except those
listed on a domestic exchange.
The proposed change would eliminate the restriction as a fundamental policy.
If a Fund's shareholders approve the change, the Directors intend to adopt the
following non-fundamental investment policy for the Fund:
No Fund will purchase or sell options or futures contracts or options on
futures contracts unless the options or contracts relate to U.S. issuers
or U.S. stock indexes and are not for speculation, and in addition (i) a
Fund may write only covered call options and may buy put options only if
it holds the related securities, (ii) a Fund may invest in futures
contracts to hedge not more than 20% of its total assets, and (iii)
premiums paid on outstanding options contracts may not exceed 5% of a
Fund's total assets.
7
<PAGE>
Reason for change: The 1940 Act does not require the Investment Company to have
a fundamental policy on options and futures contracts. The non-fundamental
policy recognizes that not all options contracts are listed on exchanges, sets
forth certain restrictions on options and hedging transactions that currently
are set forth elsewhere in the Investment Company's Prospectus or Statement of
Additional Information ("SAI") and imposes additional limitations on the amount
of a Fund's options and futures contracts. A non-fundamental policy will allow
the Directors to update the restriction in response to changes in applicable
law, investment experiences by the Funds and current market conditions.
Proposal 2b. Eliminate the fundamental restriction on foreign securities
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The Funds' current fundamental investment restriction concerning foreign
exchange and foreign securities states:
None of the Funds will trade in foreign exchange, or invest in securities
of foreign issuers if at the time of acquisition more than 20% of its
total assets, taken at market value at the time of the investment, would
be invested in such securities.
The proposed change would eliminate the restriction as a fundamental policy.
If a Fund's shareholders approve the change, the Directors intend to adopt the
following non-fundamental investment policy for the Fund:
No Fund will invest in foreign exchange nor invest more than 25% of its
total assets in securities of foreign issuers and American Depository
Receipts (ADRs).
Reason for change: The 1940 Act does not require the Investment Company to have
a fundamental policy on foreign securities. The proposed non-fundamental policy
clarifies that the Funds may not trade in foreign exchange and includes ADRs in
the restriction on foreign securities. ADRs are securities of foreign issuers
that are deposited with a U.S. financial institution, which issues receipts for
the securities. ADRs are subject to the same issuer risks as foreign securities,
although they are not subject to foreign custodian risks. The Investment Company
considers it appropriate that there be an aggregate limit on a Fund's holdings
of foreign securities and ADRs. A non-fundamental policy will allow the
Directors to update the restriction in response to investment experiences by the
Funds and current market conditions.
8
<PAGE>
Proposal 2c. Eliminate the fundamental restriction on investing to exercise
control
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The Funds' current fundamental investment restriction concerning investing to
exercise control over management of a company states:
None of the Funds will make an investment in order to exercise control of
management over a company (either singly or together with other Funds).
The proposed change would eliminate the restriction as a fundamental policy.
If a Fund's shareholders approve the change, the Directors intend to adopt the
following non-fundamental investment policy for the Fund:
No Fund will invest for the purpose of exercising control over management
of an issuer (either separately or together with any other Funds).
Reason for change: The 1940 Act does not require the Investment Company to have
a fundamental policy on exercise of control. The Investment Company Funds have
no current intention of investing for the purpose of exercising control over
management, and 1940 Act diversification requirements limit the ability of a
Fund to invest to gain control of an issuer.
Proposal 2d. Amend the fundamental restriction on underwriting securities
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The Funds' current fundamental investment restriction concerning underwriting
securities states:
None of the Funds will underwrite the securities of other companies,
including purchasing securities that are restricted under the Securities
Act of 1933 ("1933 Act") or rules or regulations issued under the 1933 Act
(restricted securities cannot be sold publicly until they are registered
under the 1933 Act).
The proposed change would amend the restriction and retain it as fundamental:
No Fund will underwrite the securities issued by other companies, except
to the extent that the Fund's purchase and sale of portfolio securities
may be deemed to be an underwriting.
Reason for change: The proposed restriction simplifies the language and
clarifies its meaning.
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<PAGE>
Proposal 2e. Eliminate the fundamental restriction on short sales
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The Funds' current fundamental investment restriction concerning the making of
short sales states:
None of the Funds will make short sales, except when the Fund has, by
reason of ownership of other securities, the right to obtain securities of
equivalent kind and amount that will be held so long as they are in a
short position.
The proposed change would eliminate the restriction as a fundamental policy.
If a Fund's shareholders approve the change, the Directors intend to adopt the
following non-fundamental investment policy for the Fund:
No Fund will make short sales, except when the Fund owns or has the right
to obtain securities of equivalent kind and amount that will be held for
as long as the Fund is in a short position.
Reason for change. The 1940 Act does not require the Investment Company to have
a fundamental policy on short sales. The Funds presently have no intention of
engaging in "short sales", which are a form of borrowing. If a Fund were to sell
short, it would sell borrowed securities with the hope of purchasing securities
of the same type at a lower price, or furnishing securities of the same type
that it already owns, to replace the borrowed securities. The Investment Company
initially adopted the short sale restriction based on requirements of certain
state securities departments, which are no longer applicable to investment
companies. Under both the Investment Company's existing fundamental investment
restriction and the proposed non-fundamental investment policy, a Fund may
engage in a short sale only when it owns or has the right to obtain the same
securities it is selling short, which is called a "short sale against the box".
Short sales by the Funds are limited under 1940 Act provisions and SEC
interpretations of those provisions that restrict borrowing by an investment
company.
Proposal 2f. Amend the fundamental restriction on commodities
- --------------------------------------------------------------------------------
The Funds' current fundamental investment restriction concerning the purchase of
commodities or commodities contracts states:
None of the Funds will purchase commodities or commodities contracts.
The proposed change would reword the restriction and retain it as fundamental:
No Fund will purchase physical commodities or contracts involving physical
commodities.
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<PAGE>
Reason for change: Financial futures contracts are traded on commodities
exchanges, and the Funds may invest in financial futures contracts. The change
clarifies that the restriction applies only to the Funds' purchase of physical
(or tangible) commodities products.
Proposal 2g. Amend the fundamental restriction on diversification among issuers
- --------------------------------------------------------------------------------
The Funds' current fundamental investment restriction concerning diversification
of investments among issuers states:
None of the Funds will with respect to at least 75% of the value of its
total assets, invest more than 5% of its total assets in the securities of
any one issuer (including repurchase agreements with any one bank), other
than securities issued or guaranteed by the United States Government or
its agencies or instrumentalities (see the caption entitled "The Money
Market Fund" in the Prospectus for more restrictive policies relating to
that fund).
The proposed change would amend the restriction and retain it as fundamental:
No Fund will, based on its investments in individual issuers, be
non-diversified as defined under the 1940 Act, which currently restricts a
Fund, with respect to 75% of the value of its total assets, from investing
more than 5% of its total assets in the securities of any one issuer,
other than (i) securities issued or guaranteed by the United States
Government or its agencies or instrumentalities ("U.S. Government
Securities"), and (ii) securities of other registered investment
companies; in addition the Money Market Fund will not invest in any
securities that would cause it to fail to comply with applicable
diversification requirements for money market funds under the 1940 Act and
rules thereunder, as amended from time to time.
Reason for change: The proposed restriction refers to the 1940 Act
diversification requirement, allowing automatic updating if the requirement
changes. It also sets forth the restrictions under current law and adds the
permitted exclusion of the securities of other investment companies. The Funds
will be able to invest in investment company securities to the extent permitted
under the 1940 Act (currently limited to 10% of total assets) and any exemptive
relief granted by the SEC. The Funds have no current intention of purchasing the
securities of other investment companies.
11
<PAGE>
Proposal 2h. Amend the fundamental restriction on amount of voting securities
- --------------------------------------------------------------------------------
The Funds' current fundamental investment restriction concerning the purchase of
an issuer's voting securities states:
None of the Funds will with respect to at least 75% of the value of its
total assets, purchase more than 10% of the outstanding voting securities
of an issuer, except that such restriction shall not apply to securities
issued or guaranteed by the United States Government or its agencies or
instrumentalities.
The proposed change would reword the restriction and retain it as fundamental:
No Fund will, based on its investment in an issuer's voting securities, be
non-diversified as defined under the 1940 Act, which currently restricts a
Fund, with respect to 75% of the value of its total assets, from
purchasing more than 10% of the outstanding voting securities of any one
issuer other than (i) U.S. Government Securities, and (ii) securities of
other registered investment companies, and imposes additional restrictions
on the Money Market Fund.
Reason for change: The proposed restriction refers to the 1940 Act
diversification requirement regarding the purchase of voting securities,
allowing automatic updating if the requirement changes. It also sets forth the
restriction under current law and adds the permitted exclusion of the securities
of other investment companies. The Funds will be able to invest in such
securities to the extent permitted under the 1940 Act (currently limited to 10%
of total assets) and any applicable exemptive relief. The Funds have no current
intention of purchasing the securities of other investment companies.
Proposal 2i. Amend the fundamental restriction on issuing senior securities
- --------------------------------------------------------------------------------
The Funds' current fundamental investment restriction concerning the issuance of
senior securities states:
None of the Funds will issue senior securities except that each Fund may
borrow as described in restriction 13 below (the issuance and sale of
options and futures not being considered the issuance of senior
securities).
The proposed change would reword the restriction and retain it as fundamental:
No Fund will issue senior securities, except as permitted under the 1940
Act and the rules thereunder as amended from time to time.
12
<PAGE>
Reason for change: The proposed restriction simplifies the wording and refers to
1940 Act provisions. Under the 1940 Act, borrowing and certain other
transactions by an investment company are viewed as creating "senior
securities". Senior securities, as debt, would be entitled to payment prior to
the claims of the investment company's shareholders. The 1940 Act and related
rules and interpretations permit an investment company to issue senior
securities, including through borrowing, in certain circumstances. The reference
to these provisions will in effect incorporate them into the fundamental
restriction.
Proposal 2j. Amend the fundamental restriction on industry concentration
- --------------------------------------------------------------------------------
The Funds' current fundamental investment restriction concerning the
concentration of investments in any industry states:
None of the Funds will make an investment in an industry if that
investment would make the Fund's holding in that industry exceed 25% of
the Fund's total assets, except for the Bond Fund, the Short-Term Bond
Fund and the Mid-Term Bond Fund, each of which may invest up to 75% of its
total assets in the electric, gas and/or telephone utilities industries,
as described under the caption "Investment Objectives and Policies of the
Funds--The Bond Fund, the Short-Term Bond Fund and the Mid-Term Bond Fund"
in the Prospectus.
The proposed change would amend the restriction and retain it as fundamental:
No Fund will invest more than 25% of its assets in the securities of
issuers in one industry, other than U.S. Government Securities, except
that the Money Market Fund may invest more than 25% of its total assets in
the financial services industry.
Reason for change: The proposed restriction would eliminate the ability of the
Bond Fund, the Mid-Term Bond Fund and the Short-Term Bond Fund to concentrate in
utility industry securities, which was adopted as a fundamental policy several
years ago. These Bond Funds do not foresee circumstances when they would
consider it advisable to concentrate their investments in the utilities
industry. The proposed restriction also would allow the Money Market Fund to
concentrate in the financial services industry. Credit companies and banks tend
to be active issuers of the types of securities in which the Money Market Fund
may invest. At times, the Money Market Fund may need to concentrate its
investments in the financial services industry in order to maximize its
investment performance.
Proposal 2k. Amend the fundamental restriction on real estate and mortgages
- --------------------------------------------------------------------------------
The Funds' current fundamental investment restriction concerning the purchase of
real estate or mortgages states:
13
<PAGE>
None of the Funds will purchase real estate or mortgages directly. The All
America and Aggressive Equity Funds may, however, buy shares of real
estate investment trusts listed on stock exchanges or reported on the
National Association of Securities Dealers Automated Quotations ("NASDAQ")
system, and the Bond Fund, the Short-Term Bond Fund and the Mid-Term Bond
Fund may each buy mortgage-backed debt issues.
The proposed change would amend the restriction and retain it as fundamental:
No Fund will purchase real estate or mortgages directly, but a Fund may
invest in mortgage-backed securities and may purchase the securities of
companies whose businesses deal in real estate or mortgages, including
real estate investment trusts.
If a Fund's shareholders approve the proposed change, the Directors intend to
adopt the following additional non-fundamental investment policy:
No Fund will, if its investment policy is to invest primarily in equity
securities, purchase mortgage-backed securities unless they are also U.S.
Government Securities, or if its investment policy is to invest primarily
in fixed income securities, invest more than 10% of its total assets in
mortgage-backed securities that are not also U.S. Government Securities.
Reason for change: The revised fundamental policy allows all of the Funds to
purchase mortgage-backed securities. The non-fundamental policy will limit
purchases of these securities by the Investment Company's equity Funds to U.S.
Government Securities, which are liquid and may be appropriate for investment by
the equity Funds in certain market conditions. The policy's limit for fixed
income Funds currently is included in the Investment Company's SAI. A
non-fundamental policy will allow the Directors to update the restriction in
response to investment experiences by the Funds and current market conditions.
Proposal 2l. Eliminate the fundamental restriction on registered investment
company securities
- --------------------------------------------------------------------------------
The Funds' current fundamental investment restriction concerning investment in
the securities of other registered investment companies states:
None of the Funds will invest more than 5% of its total assets in the
securities of any one registered investment company. A Fund may not own
more than 3% of an investment company's outstanding voting securities, and
total holdings of investment company securities may not exceed 10% of the
value of a Fund's total assets.
The proposed change would eliminate the restriction as a fundamental policy.
14
<PAGE>
If a Fund's shareholders approve the change, the Directors intend to adopt the
following non-fundamental investment policy for the Fund:
No Fund will invest in the securities of any registered investment
company, except as permitted under the Investment Company Act of 1940 and
the rules thereunder, as amended from time to time, or by any exemptive
relief granted by the SEC.
Reason for change: The 1940 Act does not require the Investment Company to have
a fundamental policy for the purchase of investment company securities. Under
current 1940 Act provisions, a Fund may invest up to 10% of its total assets in
the securities of other registered investment companies, may invest not more
than 5% of its total assets in the securities of any one registered investment
company and may not own more than 3% of an investment company's outstanding
voting securities. The Funds do not have any current intention of investing in
registered investment company securities.
Proposal 2m. Eliminate the fundamental restriction on purchasing on margin
- --------------------------------------------------------------------------------
The Funds' current fundamental investment restriction concerning purchasing
securities on margin, borrowing money and pledging assets states:
None of the Funds will purchase any security on margin or borrow money,
except from banks for temporary purposes, or pledge its assets unless to
secure such borrowing. The Funds may borrow money from or pledge their
assets to banks in order to transfer funds for various purposes, as
required, without interfering with the orderly liquidation of securities
in their portfolios, but not for leveraging purposes. Such borrowings may
not exceed 5% of the value of a Fund's total assets at market value.
The proposed change for purchasing on margin would eliminate the restriction as
a fundamental policy.
If a Fund's shareholders approve the change, the Directors intend to adopt the
following non-fundamental investment policy for the Fund:
No Fund will purchase securities on margin, with credits for the clearance
of portfolio transactions and the making of margin payments for futures
contracts and options on futures contracts not constituting purchasing
securities on margin.
Reason for change: The Funds presently have no intention of "purchasing
securities on margin", which is a form of borrowing. If a Fund were to purchase
securities on margin, it would pay only a portion of the purchase price (the
margin)
15
<PAGE>
and borrow the remainder of the purchase price from a broker. The Investment
Company initially adopted the margin restriction based on requirements of
certain state securities departments, which are no longer applicable to
investment companies. The Funds are prohibited from making margin purchases
under the 1940 Act, which restricts the creation of senior securities through
borrowing.
Proposal 2n. Amend the fundamental restriction on borrowing and pledging assets
- --------------------------------------------------------------------------------
The Funds' current fundamental investment restriction concerning borrowing money
and pledging assets, which also covers purchasing on margin, is set forth above
under Proposal 2m. The proposed change for borrowing money and pledging assets
would amend the restriction and retain it as fundamental:
No Fund will borrow money, except to the extent permitted by the 1940 Act
and rules thereunder, as amended from time to time, which currently limit
a Fund's borrowing to 331/3% of total assets (including the amount
borrowed) minus liabilities (other than borrowings) and require the
reduction of any excess borrowing within three business days.
If a Fund's shareholders approve the proposed change, the Directors intend to
adopt an additional, non-fundamental investment policy regarding borrowing:
No Fund will borrow money except for temporary or emergency purposes (not
for investment or leveraging) or under any reverse repurchase agreement,
provided that a Fund's aggregate borrowings may not exceed 10% of the
value of the Fund's total assets and it may not purchase additional
securities if its borrowings exceed that limit.
Reason for change: The proposed fundamental restriction refers to the 1940 Act
restriction on borrowing, allowing automatic updating if the requirement
changes, and sets forth the restriction under current law. The existing
restriction on pledging assets, which is proposed to be eliminated, was based on
state securities law requirements that are no longer applicable to investment
companies, and the Investment Company considers that the 1940 Act provisions on
borrowing are appropriate to address the pledge of assets. The non-fundamental
policy will establish limits on a Fund's borrowing that are consistent with the
limits currently applicable to the Funds and allow the Directors to update the
restriction in response to investment experiences by the Funds and current
market conditions.
The Investment Company contemplates that Funds in some circumstances may borrow
to meet liquidity needs. The Funds maintain a certain amount of cash in their
portfolios in order to meet redemption requests from shareholders. At times,
16
<PAGE>
the amount of cash may be inadequate to meet all redemption requests. If a Fund
must sell securities to raise cash to pay the redeeming shareholder, there will
be a timing difference between when the Fund pays the shareholder and when it
receives the proceeds from sale of the securities. This difference occurs
because when a shareholder redeems from a Fund, the shareholder normally
receives the redemption proceeds on the next business day. When a Fund sells
securities, however, the settlement date, meaning the date it receives the sale
proceeds, occurs up to three business days after the sale of securities. If a
Fund must sell securities to pay redemption proceeds to a shareholder, it may
need to borrow money on a temporary basis until it receives sale proceeds on the
settlement date.
Under current law, the Funds may borrow only from banks. If the proposed
amendments to the Funds' fundamental investment restrictions on borrowing are
approved by Fund shareholders, the Investment Company, on behalf of the
approving Funds, may apply to the SEC for an exemption from the prohibition on
borrowing from another Fund or a fund of an affiliated investment company (an
"Affiliated Fund"). There is no assurance that the SEC will grant the exemption.
If the SEC does grant the exemption, each Fund covered by the application would
be allowed to borrow from Affiliated Funds in accordance with the conditions in
the SEC exemptive order. The Investment Company would borrow from an Affiliated
Fund rather than a bank only when the borrowing Fund would pay a lower rate of
interest than available through bank loans for comparable short-term
investments. Before the Investment Company could file an exemptive application
with the SEC, the Board of Directors would have to review the proposed borrowing
program and determine that it would provide potential benefits to the Funds,
including more flexibility in engaging in borrowing transactions and the
possibility of borrowing in a more cost-effective manner.
Proposal 2o. Amend the fundamental restriction on making loans
- --------------------------------------------------------------------------------
The Funds' current fundamental investment restriction concerning making loans
states:
None of the Funds will make loans, except loans of portfolio securities
(not exceeding 30% of the value of its total assets at market value), or
loans through entry into repurchase agreements (the purchase of publicly
traded debt obligations not being considered the making of a loan).
The proposed change would amend the restriction and retain it as fundamental:
No Fund will lend assets to other persons (with a Fund's entry into
repurchase agreements or the purchase of debt securities not being
considered the making of a loan), except to the extent permitted by the
1940 Act, the rules thereunder
17
<PAGE>
and applicable SEC guidelines, as amended from time to time, which
currently limit a Fund's lending to 331/3% of its total assets, or
pursuant to any exemptive relief granted by the SEC.
If a Fund's shareholders approve the proposed change, the Directors intend to
adopt an additional, non-fundamental investment policy regarding lending assets:
No Fund will lend more than 10% of its assets.
Reason for change: The proposed fundamental restriction refers to the 1940 Act
restriction on lending, allowing automatic updating if the requirement changes,
and sets forth the restriction under current law. The non-fundamental policy
will limit a Fund's borrowing and allow the Directors to update the lending
restriction in response to investment experiences by the Funds and current
market conditions.
Under current law, the Funds may not lend to other Funds. If the proposed
amendments to the Funds' fundamental investment restrictions on making loans are
approved by Fund shareholders, the Investment Company, on behalf of the
approving Funds, may apply to the SEC for an exemption from the prohibition on
lending to Affiliated Funds ("interfund lending"). There is no assurance that
the SEC will grant the exemption. If the SEC does grant the exemption, each Fund
covered by the application would be allowed to lend to Affiliated Funds to the
extent set forth in the non-fundamental policy and in accordance with the
conditions in the SEC exemptive order. Each Fund maintains a certain amount of
cash in its portfolio in order to meet redemption requests as they occur, and
the Funds invest this cash on a short-term basis. A Fund would lend assets to an
affiliate only if it would receive a greater return than available under other
short-term investments. Before the Investment Company could file an exemptive
application with the SEC, the Board of Directors would have to review the
proposed interfund lending program and master loan agreement, including risks to
the Funds, and determine that interfund lending would provide potential benefits
to the Funds, including more flexibility in engaging in lending transactions and
the possibility of earning higher returns on short-term investments.
Proposal 2p. Eliminate the fundamental restriction on illiquid securities
- --------------------------------------------------------------------------------
The Funds' current fundamental investment restriction concerning illiquid
securities states:
None of the Funds will invest more than 10% of its total assets in
repurchase agreements or time deposits maturing in more than seven days or
in portfolio securities not readily marketable.
18
<PAGE>
The proposed change would eliminate the restriction as a fundamental policy.
If a Fund's shareholders approve the change, the Directors intend to adopt the
following non-fundamental investment policy for the Fund:
No Fund will invest more than 10% of its total assets in securities that
are considered to be illiquid because they are subject to legal or
contractual restrictions on resale or are otherwise not readily
marketable, including repurchase agreements and time deposits that do not
mature within seven days but excluding Rule 144A securities and other
restricted securities that are determined to be liquid pursuant to
procedures adopted by the Board of Directors.
Reason for change: The 1940 Act does not require the Investment Company to adopt
a fundamental policy on the purchase of illiquid securities. The Investment
Company initially adopted the 10% restriction based on the requirements of
certain state securities departments, which are no longer applicable to
investment companies. Under the 1940 Act, a Fund's investment in illiquid
securities is limited to 15% of total assets. The non-fundamental policy will
allow the Directors to update the restriction in response to changes in
applicable law, investment experiences by the Funds and current market
conditions.
Proposal 2q. Eliminate the fundamental restriction on purchase of oil and gas
interests
- --------------------------------------------------------------------------------
The Funds' current fundamental investment restriction concerning the purchase of
oil and gas interests states:
None of the Funds will purchase oil and gas interests, except that the
Funds may purchase securities of issuers that invest in oil or gas
interests.
The proposed change would eliminate the restriction.
Reason for change: The Funds do not have the authority to purchase oil and gas
interests, so the restriction is unnecessary.
Proposal 2r. Eliminate the unnumbered sentence regarding the Money Market Fund
- --------------------------------------------------------------------------------
Immediately following the list of current fundamental investment restrictions, a
sentence sets forth certain securities that the Money Market Fund may not
purchase. This sentence, although not numbered, might be considered a
fundamental restriction, and the Investment Company is requesting shareholder
approval of its deletion. The sentence states:
19
<PAGE>
The Money Market Fund will not purchase equity securities, voting
securities, local or state government securities, or corporate debt or
other than those types of securities specifically mentioned in its
investment objectives.
The proposed change would eliminate the restriction.
Reason for change: The 1940 Act and Rule 2a-7 thereunder restrict the
investments that the Money Market Fund may make, and the current discussion is
confusing and unnecessary.
Required Vote for Proposal 2, paragraphs 2a through 2r. The shares of each Fund
will vote separately on the changes to the Fund's fundamental investment
restrictions proposed in paragraphs a through q of Proposal 2. Only the shares
of the Money Market Fund will vote on paragraph r of Proposal 2. Approval of a
proposed revision for a Fund requires the affirmative vote of a majority of the
outstanding shares of that Fund. The approval of any one proposed change for a
Fund is not conditioned on any other proposed change being approved by the
Fund's shareholders or shareholders of other Funds. The Directors of the
Investment Company recommend that the shareholders of each Fund vote FOR this
Proposal 2, paragraphs 2a through 2q and that the shareholders of the Money
Market Fund vote FOR Proposal 2r.
- --------------------------------------------------------------------------------
Proposal 3. Ratify Selection of Arthur Andersen LLP as Independent Accountants
- --------------------------------------------------------------------------------
The Board of Directors, including a majority of the Directors who are not
interested persons of the Investment Company, has selected the firm of Arthur
Andersen LLP, independent certified public accountants ("Arthur Andersen"), to
audit the financial statements of the Investment Company Funds for the year
ending December 31, 2000. Arthur Andersen also acts as independent certified
public accountants for the Insurance Company and its subsidiaries, including the
Adviser.
The Investment Company's independent accountants audit the Investment Company's
annual financial statements and provide tax services. Arthur Andersen does not
provide consulting services for the Investment Company, the Insurance Company or
any of its subsidiaries. Representatives of Arthur Andersen are not expected to
be present at the Meeting, but they will have the opportunity to make a
statement if they so desire and will be available if any matter requiring their
presence arises at the Meeting.
Required Vote. Ratification of the selection of Arthur Andersen LLP as
independent accountants requires the approval of a majority of the Investment
Company Fund shares voting at the Meeting. The Directors of the Investment
Company recommend that the shareholders of each Fund vote FOR this Proposal 3.
20
<PAGE>
- --------------------------------------------------------------------------------
Proposal 4. Amend the Investment Objective of the Aggressive Equity Fund
- --------------------------------------------------------------------------------
The investment objective for the Aggressive Equity Fund reads:
The investment objective of the Aggressive Equity Fund is capital
appreciation, by investing approximately 50% of its assets in growth
stocks and approximately 50% of its assets in value stocks.
The Directors recommend that the shareholders of the Aggressive Equity Fund
amend the Fund's investment objective to read as follows:
The investment objective of the Aggressive Equity Fund is capital
appreciation.
Currently, the percentage of the Fund's assets invested in growth stocks or
value stocks ranges between 40% and 60% of the Fund's assets invested in equity
securities. Upon approval of this Proposal, the Adviser will determine the
percentage of the Fund's equity securities invested at any time in growth stocks
or value stocks based on current market conditions and the securities that meet
the Adviser's criteria for investment by the Fund.
The Investment Company considers that flexibility in the composition of the
Aggressive Equity Fund's portfolio will be in the best interests of the
shareholders. The performance of growth stocks at times exceeds that of value
stocks, and at other times value stocks may outperform growth stocks. The
revised investment objective will permit the Adviser to seek to maximize the
Fund's capital appreciation.
Required Vote. Approval of the amendment to the Aggressive Equity Fund's
investment objective requires the affirmative vote of a majority of the
outstanding shares of the Fund. The Directors of the Investment Company
recommend that the shareholders of the Aggressive Equity Fund vote FOR this
Proposal 4.
- --------------------------------------------------------------------------------
Additional Information
- --------------------------------------------------------------------------------
Other Business to Come Before the Meeting. The Board does not know of any other
business to be brought before the Meeting. If any other matters properly come
before the Meeting, however, proxy cards that do not contain specific
instructions to the contrary will be voted on the additional matters in
accordance with the judgment of the persons designated in the proxy cards to
serve as proxies.
21
<PAGE>
Proposals of Shareholders. Any shareholders who wish to submit any proposal for
inclusion in a proxy statement for a shareholder meeting that takes place after
the Meeting should send their written proposals to the Secretary of the
Investment Company, 320 Park Avenue, New York, New York 10022 within a
reasonable time before the solicitation of proxies for the next shareholders
meeting. Even if a shareholder submits a proposal on a timely basis, the
inclusion of the proposal in the Investment Company's proxy statement is not
guaranteed.
Payment of Costs Related to the Meeting. The costs of preparing, printing and
delivering the Notice of Special Meeting, Proxy Statement and proxy cards to the
shareholders, namely the Insurance Company and American Life, are chargeable to
the Investment Company. Mutual of America Capital Management Corporation, the
Adviser for the Investment Company, however, voluntarily reimburses the expenses
of the Funds of the Investment Company other than the Funds' investment advisory
fees and portfolio transactions costs.
The Insurance Company and American Life will bear the costs of forwarding to
their participants the Notice of Special Meeting and Proxy Statement of the
Investment Company, along with their voting instructions cards, and of
tabulating the votes they will cast at the Meeting based on voting instructions
they have received from their participants.
January , 2000
22
<PAGE>
EXHIBIT A
PROPOSED FUNDAMENTAL INVESTMENT RESTRICTIONS
The following investment restrictions are fundamental policies. A Fund may not
change these policies unless a majority of the outstanding voting shares of the
Fund approves the change. No Fund will:
1. underwrite the securities issued by other companies, except to the extent
that the Fund's purchase and sale of portfolio securities may be deemed to
be an underwriting;
2. purchase physical commodities or contracts involving physical commodities;
3. based on its investments in individual issuers, be non-diversified as
defined under the 1940 Act, which currently restricts a Fund, with respect
to 75% of the value of its total assets, from investing more than 5% of its
total assets in the securities of any one issuer, other than (i) securities
issued or guaranteed by the United States Government or its agencies or
instrumentalities ("U.S. Government Securities"), and (ii) securities of
other registered investment companies; in addition the Money Market Fund
will not invest in any securities that would cause it to fail to comply with
applicable diversification requirements for money market funds under the
1940 Act and rules thereunder, as amended from time to time;
4. based on its investment in an issuer's voting securities, be non-diversified
as defined under the 1940 Act, which currently restricts a Fund, with
respect to 75% of the value of its total assets, from purchasing more than
10% of the outstanding voting securities of any one issuer other than (i)
U.S. Government Securities, and (ii) securities of other registered
investment companies, and imposes additional restrictions on the Money
Market Fund;
5. issue senior securities, except as permitted under the 1940 Act and the
rules thereunder as amended from time to time;
6. invest more than 25% of its assets in the securities of issuers in one
industry, other than U.S. Government Securities, except that the Money
Market Fund may invest more than 25% of its total assets in the financial
services industry;
7. purchase real estate or mortgages directly, but a Fund may invest in
mortgage-backed securities and may purchase the securities of companies
whose businesses deal in real estate or mortgages, including real estate
investment trusts;
A-1
<PAGE>
8. borrow money, except to the extent permitted by the 1940 Act and rules
thereunder, as amended from time to time, which currently limit a Fund's
borrowing to 331/3% of total assets (including the amount borrowed) minus
liabilities (other than borrowings) and require the reduction of any excess
borrowing within three business days; or
9. lend assets to other persons (with a Fund's entry into repurchase agreements
or the purchase of debt securities not being considered the making of a
loan), except to the extent permitted by the 1940 Act, the rules thereunder
and applicable SEC guidelines, as amended from time to time, which currently
limit a Fund's lending to 331/3% of its total assets, or pursuant to any
exemptive relief granted by the SEC.
A-2
<PAGE>
EXHIBIT B
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS
The following investment restrictions are fundamental policies. The Funds may
not change these policies unless a majority of the outstanding voting shares of
the affected Fund(s) approves the change. None of the Funds will:
1. purchase or sell options or futures except those listed on a domestic
exchange;
2. trade in foreign exchange, or invest in securities of foreign issuers if at
the time of acquisition more than 20% of its total assets, taken at market
value at the time of the investment, would be invested in such securities;
3. make an investment in order to exercise control of management over a company
(either singly or together with other Funds);
4. underwrite the securities of other companies, including purchasing
securities that are restricted under the Securities Act of 1933 ("1933 Act")
or rules or regulations issued under the 1933 Act (restricted securities
cannot be sold publicly until they are registered under the 1933 Act);
5. make short sales, except when the Fund has, by reason of ownership of other
securities, the right to obtain securities of equivalent kind and amount
that will be held so long as they are in a short position;
6. purchase commodities or commodities contracts;
7. with respect to at least 75% of the value of its total assets, invest more
than 5% of its total assets in the securities of any one issuer (including
repurchase agreements with any one bank), other than securities issued or
guaranteed by the United States Government or its agencies or
instrumentalities (see the caption entitled "The Money Market Fund" in the
Prospectus for more restrictive policies relating to that fund);
8. with respect to at least 75% of the value of its total assets, purchase more
than 10% of the outstanding voting securities of an issuer, except that such
restriction shall not apply to securities issued or guaranteed by the United
States Government or its agencies or instrumentalities;
9. issue senior securities except that each Fund may borrow as described in
restriction 13 below (the issuance and sale of options and futures not being
considered the issuance of senior securities);
B-1
<PAGE>
10. make an investment in an industry if that investment would make the Fund's
holding in that industry exceed 25% of the Fund's total assets, except for
the Bond Fund, the Short-Term Bond Fund and the Mid-Term Bond Fund, each of
which may invest up to 75% of its total assets in the electric, gas and/or
telephone utilities industries, as described under the caption "Investment
Objectives and Policies of the Funds--The Bond Fund, the Short-Term Bond
Fund and the Mid-Term Bond Fund" in the Prospectus;
11. purchase real estate or mortgages directly. The All America and Aggressive
Equity Funds may, however, buy shares of real estate investment trusts
listed on stock exchanges or reported on the National Association of
Securities Dealers Automated Quotations ("NASDAQ") system, and the Bond
Fund, the Short-Term Bond Fund and the Mid-Term Bond Fund may each buy
mortgage-backed debt issues;
12. invest more than 5% of its total assets in the securities of any one
registered investment company. A Fund may not own more than 3% of an
investment company's outstanding voting securities, and total holdings of
investment company securities may not exceed 10% of the value of a Fund's
total assets;
13. purchase any security on margin or borrow money, except from banks for
temporary purposes, or pledge its assets unless to secure such borrowing.
The Funds may borrow money from or pledge their assets to banks in order to
transfer funds for various purposes, as required, without interfering with
the orderly liquidation of securities in their portfolios, but not for
leveraging purposes. Such borrowings may not exceed 5% of the value of a
fund's total assets at market value;
14. make loans, except loans of portfolio securities (not exceeding 30% of the
value of its total assets at market value), or loans through entry into
repurchase agreements (the purchase of publicly traded debt obligations not
being considered the making of a loan);
15. invest more than 10% of its total assets in repurchase agreements or time
deposits maturing in more than seven days or in portfolio securities not
readily marketable; or
16. purchase oil and gas interests, except that the Funds may purchase
securities of issuers that invest in oil or gas interests.
The Money Market Fund will not purchase equity securities, voting securities,
local or state government securities, or corporate debt or other than those
types of securities specifically mentioned in its investment objectives.
B-2
<PAGE>
EXHIBIT C
PROPOSED NON-FUNDAMENTAL INVESTMENT POLICIES
Below are the non-fundamental investment policies that the Board of Directors of
the Investment Company intends to adopt for the Funds whose shareholders approve
the proposed amendments to the Funds' fundamental investment restrictions.
The following investment restrictions are not fundamental policies. They may be
changed without shareholder approval by a vote of the Board of Directors of the
Investment Company, subject to any limits imposed under the 1940 Act and related
rules and interpretations or other regulatory authorities. No Fund will:
1. purchase or sell options or futures contracts or options on futures
contracts unless the options or contracts relate to U.S. issuers or U.S.
stock indexes and are not for speculation, and in addition (i) a Fund may
write only covered call options and may buy put options only if it holds the
related securities, (ii) a Fund may invest in futures contracts to hedge not
more than 20% of its total assets, and (iii) premiums paid on outstanding
options contracts may not exceed 5% of the Fund's total assets;
2. invest in foreign exchange nor invest more than 25% of its total assets in
securities of foreign issuers and American Depository Receipts (ADRs);
3. invest for the purpose of exercising control over management of an issuer
(either separately or together with any other Funds);
4. make short sales, except when the Fund owns or has the right to obtain
securities of equivalent kind and amount that will be held for as long as
the Fund is in a short position;
5. if its investment policy is to invest primarily in equity securities,
purchase mortgage-backed securities unless they are also U.S. Government
Securities, or if its investment policy is to invest primarily in fixed
income securities, invest more than 10% of its total assets in
mortgage-backed securities that are not also U.S. Government Securities;
6. invest in the securities of any registered investment company except as
permitted under the Investment Company Act of 1940 and the rules thereunder,
as amended from time to time, or by any exemptive relief granted by the SEC;
C-1
<PAGE>
7. purchase securities on margin, with credits for the clearance of portfolio
transactions and the making of margin payments for futures contracts and
options on futures contracts not constituting purchasing securities on
margin;
8. borrow money except for temporary or emergency purposes (not for investment
or leveraging) or under any reverse repurchase agreement, provided that a
Fund's aggregate borrowings may not exceed 10% of the value of the Fund's
total assets and it may not purchase additional securities if its borrowings
exceed that limit;
9. lend more than 10% of its assets;
10. invest more than 10% of its total assets in securities that are considered
to be illiquid because they are subject to legal or contractual restrictions
on resale or are otherwise not readily marketable, including repurchase
agreements and time deposits that do not mature within seven days but
excluding Rule 144A securities and other restricted securities that are
determined to be liquid pursuant to procedures adopted by the Board of
Directors;
11. invest more than 5% of its total assets in equipment trust certificates;*
12. invest more than 10% of its total assets in asset-backed securities or
purchase the most speculative series or class of asset-backed securities
issues;*
13. purchase the most speculative series or class of collateralized mortgage
obligation issues or other mortgage-backed securities issues;*
14. invest in interest-only strips or principal only strips of asset-backed
securities, mortgage-backed securities or other debt securities;*
15. invest more than 5% of its assets in warrants*; or
16. invest more than 10% of its assets in preferred stock.*
- ----------
* The Investment Company's Statement of Additional Information, dated May 1,
1999, describes these policies as current intentions of the Funds, and the
Board intends to adopt them as non-fundamental investment policies.
C-2
<PAGE>
MUTUAL OF AMERICA INVESTMENT CORPORATION
320 Park Avenue, New York, New York 10022
Special Meeting of Shareholders--February 28, 2000, 2:30 p.m.
This proxy is solicited on behalf of the Board of Directors of Mutual
of America Investment Corporation ("Investment Company"). The
undersigned hereby appoints Patrick A. Burns and Stanley M. Lenkowicz
and each of them (with power of substitution) to attend the Special
Meeting of Shareholders, and all adjournments thereof, and to vote all
shares of common stock of the Investment Company held of record. The
Proposals to be voted on are discussed in the Notice of Special Meeting
and Proxy Statement, each dated January , 2000. The Board of Directors
recommends a vote "FOR" each Proposal and for each nominee for
director.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
- --------------------------------------------------------------------------------
MUTUAL OF AMERICA INVESTMENT CORPORATION
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
THE MUTUAL OF AMERICA INVESTMENT CORPORATION BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR THE FOLLOWING:
Vote On Proposals
1. To Elect a Board of Directors:
For Withhold For All
All All Except
1. Manfred Altstadt [ ] [ ] [ ]
2. Peter J. Flanagan
3. Robert J. McGuire
4. George Mertz
5. Dolores J. Morrissey
6. Howard J. Nolan
----------------------------------------------------------
To withhold authority to vote for a nominee, mark "For All
Except" and write the nominee's number on the line above.
2. To approve amended fundamental investment restrictions to: (a) delete
restrictions that are no longer required to be fundamental due to changes in
state laws or which otherwise need not be fundamental; and (b) revise the
language of those restrictions that are still required to be fundamental:
For All
Except as Against Abstain
Noted Below All All
[ ] [ ] [ ]
a. Options and futures
b. Foreign securities
c. Exercise of control
d. Underwriting securities
e. Making short sales
f. Commodities
g. Issuer diversification
h. Voting securities
i. Senior securities
j. Industry concentration
k. Real estate and mortgages
l. Investment company securities
m. Purchasing on margin
n. Borrowing money
o. Lending Fund assets
p. Illiquid securities
q. Oil and gas interests
r. Money Market Fund
[Money Market Fund only]
---------------------------------------------------------
To vote against a change, mark "For All Except as Noted
Below" and write the Proposal's letter on the line above.
For Against Abstain
3. To ratify the Board's selection of Arthur
Andersen LLP as independent accountants [ ] [ ] [ ]
4. To approve a revised investment objective
for the Aggressive Equity Fund [ ] [ ] [ ]
[Aggressive Equity Fund only]
5. To transact any other business before Meeting
- --------------------------------------------
Signature [PLEASE SIGN WITHIN BOX] Date
<PAGE>
[Letterhead of Mutual of America Life Insurance Company
Diane M. Aramony, Senior Vice President, Corporate Secretary and
Assistant to the Chairman]
January , 2000
To: Participants and Contractholders (Participants) who have allocated any
portion of their Account Balance to one or more of the Mutual of America
Investment Corporation Funds in our Separate Accounts No. 1 or No. 2
Mutual of America Investment Corporation (the "Investment Company") has
scheduled a meeting of shareholders for February 28, 2000 (the "Meeting"). The
Investment Company is a mutual fund, and its Board of Directors has determined
the matters to be voted on at the Meeting.
Mutual of America Life Insurance Company is the record owner of Investment
Company Fund shares and will vote at the Meeting. You have allocated your
Account Balance to one or more of the Investment Company Funds of Mutual of
America's Separate Account No. 1 or Separate Account No. 2. As a result, you
have the right to instruct us on how we should vote the Investment Company Fund
shares we own which are attributable to your Account Balance.
We will vote 100% of the Investment Company Fund shares held by our Separate
Accounts. Our vote will be based proportionately on voting instructions we have
received from participants in the Separate Account Investment Company Funds. If
you do not give us voting instructions, we will vote the Investment Company Fund
shares attributable to your Account Balance in accordance with the voting
instructions we have received from other participants.
Your vote is important to us. We have enclosed for your review a Notice of
Special Meeting of Shareholders and a Proxy Statement from the Investment
Company, along with a Voting Instruction Card for each Fund where you have any
Account Balance, and a pre-addressed, postage paid envelope for returning the
Card(s). If you have more than one contract with us, you will receive separate
Cards for each contract. Please give us your voting instructions in any of these
ways:
o completing, signing and returning the Voting Instruction Card(s) in the
envelope provided,
o calling 1-800-690-6903 on a touch-tone phone, or
o using the proxy service organization's Internet web site, at
www.proxyvote.com.
We must receive your voting instructions no later than February 25, 2000 in
order to have time to include them in the tabulation of our votes. If you have
questions about the matters to be voted on at the Meeting, please refer to the
Proxy Statement or call your Mutual of America representative, at
1-800-468-3785.
Sincerely,
<PAGE>
[Letterhead of The American Life Insurance Company of New York]
January , 2000
To: Participants, Contractholders and Policyowners ("Participants") who have
allocated any portion of their Account Balance to one or more of the Mutual
of America Investment Corporation Funds in our Separate Accounts No. 1, No.
2 or No. 3
Mutual of America Investment Corporation (the "Investment Company") has
scheduled a meeting of shareholders for February 28, 2000 (the "Meeting"). The
Investment Company is a mutual fund, and its Board of Directors has determined
the matters to be voted on at the Meeting.
The American Life Insurance Company of New York is the record owner of
Investment Company Fund shares and will vote at the Meeting. At December 21,
1999 (the record date for the Meeting), you had allocated your Account Balance
to one or more of the Investment Company Funds of American Life's Separate
Account No. 1, Separate Account No. 2 or Separate Account No. 3. As a result,
you have the right to instruct us on how we should vote the Investment Company
Fund shares we own which are attributable to your Account Balance.
We will vote 100% of the Investment Company Fund shares held by our Separate
Accounts. Our vote will be based proportionately on voting instructions we have
received from participants in the Separate Account Investment Company Funds. If
you do not give us voting instructions, we will vote the Investment Company Fund
shares attributable to your Account Balance in accordance with the voting
instructions we have received from other participants.
Your vote is important to us. We have enclosed for your review a Notice of
Special Meeting of Shareholders and a Proxy Statement from the Investment
Company, along with a Voting Instruction Card for each Fund where you have any
Account Balance, and a pre-addressed, postage paid envelope for returning the
Card(s). If you have more than one contract with us, you will receive separate
Cards for each contract. Please give us your voting instructions in any of these
ways:
o completing, signing and returning the Voting Instruction Card(s) in the
envelope provided,
o calling 1-800-690-6903 on a touch-tone phone, or
o using the proxy service organization's Internet web site, at
www.proxyvote.com.
We must receive your voting instructions no later than February 25, 2000 in
order to have time to include them in the tabulation of our votes. If you have
questions about the matters to be voted on at the Meeting, please refer to the
Proxy Statement or call your American Life representative, at 1-800-872-5963.
Sincerely,
Diane M. Aramony
Senior Vice President
and Corporate Secretary
<PAGE>
MUTUAL OF AMERICA
LIFE INSURANCE COMPANY
320 Park Avenue
New York, NY 10022-6839
(FUND NAME WILL PRINT HERE)
MUTUAL OF AMERICA INVESTMENT CORPORATION
Voting Instruction Card Solicited By Mutual of America
As a contractholder or participant who holds accumulation unit values
in a Separate Account Fund of Mutual of America that invests in the
Fund named above and who is entitled to give instructions on how to
vote shares of the Fund held by the Separate Account, I instruct Mutual
of America to vote, at the Special Meeting of Shareholders of the Fund
scheduled for February 28, 2000 and at any adjournment thereof, all
shares of the named Fund attributable to my contract or interest
therein ("attributed Shares") as I direct below or by telephone or
Internet. I acknowledge receipt of the Investment Corporation's Notice
of Special Meeting and Proxy Statement, dated January , 2000.
If you sign below but leave the Card blank, Mutual of America will vote
the attributed Shares FOR all matters. If you do not give voting
instructions, we will vote the attributed Shares in proportion to the
voting instructions we receive from others in your Separate Account.
-To vote by mail, sign below exactly as your name appears above
and return the Card in the envelope provided
-To vote by touch-tone phone, call 1-800-690-6903
-To vote by Internet, use web site www.proxyvote.com
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
MUTAME
- --------------------------------------------------------------------------------
MUTUAL OF AMERICA INVESTMENT CORPORATION
(FUND NAME WILL PRINT HERE)
THIS VOTING INSTRUCTION CARD IS VALID ONLY WHEN SIGNED AND DATED.
THE MUTUAL OF AMERICA INVESTMENT CORPORATION BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR THE FOLLOWING:
Vote On Proposals
1. To Elect a Board of Directors:
For Withhold For All
All All Except
1. Manfred Altstadt [ ] [ ] [ ]
2. Peter J. Flanagan
3. Robert J. McGuire
4. George Mertz
5. Dolores J. Morrissey
6. Howard J. Nolan
----------------------------------------------------------
To withhold authority to vote for a nominee, mark "For All
Except" and write the nominee's number on the line above.
2. To approve amended fundamental investment restrictions to: (a) delete
restrictions that are no longer required to be fundamental due to changes in
state laws or which otherwise need not be fundamental; and (b) revise the
language of those restrictions that are still required to be fundamental:
For All
Except as Against Abstain
Noted Below All All
[ ] [ ] [ ]
a. Options and futures
b. Foreign securities
c. Exercise of control
d. Underwriting securities
e. Making short sales
f. Commodities
g. Issuer diversification
h. Voting securities
i. Senior securities
j. Industry concentration
k. Real estate and mortgages
l. Investment company securities
m. Purchasing on margin
n. Borrowing money
o. Lending Fund assets
p. Illiquid securities
q. Oil and gas interests
r. Money Market Fund
[Money Market Fund only]
---------------------------------------------------------
To vote against a change, mark "For All Except as Noted
Below" and write the Proposal's letter on the line above.
For Against Abstain
3. To ratify the Board's selection of Arthur
Andersen LLP as independent accountants [ ] [ ] [ ]
4. To approve a revised investment objective
for the Aggressive Equity Fund [ ] [ ] [ ]
[Aggressive Equity Fund only]
5. To transact any other business before Meeting
- --------------------------------------------
Signature [PLEASE SIGN WITHIN BOX] Date
- ---------------------------------------------
Signature (Joint Owners) Date
<PAGE>
THE AMERICAN LIFE
INSURANCE COMPANY
OF NEW YORK
320 Park Avenue
New York, NY 10022-6839
(FUND NAME WILL PRINT HERE)
MUTUAL OF AMERICA INVESTMENT CORPORATION
Voting Instruction Card Solicited By American Life
As a contractholder, participant or policyowner who holds accumulation
unit values in a Separate Account Fund of American Life that invests in
the Fund named above and who is entitled to give instructions on how to
vote shares of the Fund held by the Separate Account, I instruct
American Life to vote, at the Special Meeting of Shareholders of the
Fund scheduled for February 28, 2000 and at any adjournment thereof,
all shares of the named Fund attributable to my contract or interest
therein ("attributed Shares") as I direct below or by telephone or
Internet. I acknowledge receipt of the Investment Corporation's Notice
of Special Meeting and Proxy Statement, dated January , 2000.
If you sign below but leave the Card blank, American Life will vote the
attributed Shares FOR all matters. If you do not give voting
instructions, we will vote the attributed Shares in proportion to the
voting instructions we receive from others in your Separate Account.
-To vote by mail, sign below exactly as your name appears above
and return the Card in the envelope provided
-To vote by touch-tone phone, call 1-800-690-6903
-To vote by Internet, use web site www.proxyvote.com
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
MUTALE
- --------------------------------------------------------------------------------
MUTUAL OF AMERICA INVESTMENT CORPORATION
(FUND NAME WILL PRINT HERE)
THIS VOTING INSTRUCTION CARD IS VALID ONLY WHEN SIGNED AND DATED.
THE MUTUAL OF AMERICA INVESTMENT CORPORATION BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR THE FOLLOWING:
Vote On Proposals
1. To Elect a Board of Directors:
For Withhold For All
All All Except
1. Manfred Altstadt [ ] [ ] [ ]
2. Peter J. Flanagan
3. Robert J. McGuire
4. George Mertz
5. Dolores J. Morrissey
6. Howard J. Nolan
----------------------------------------------------------
To withhold authority to vote for a nominee, mark "For All
Except" and write the nominee's number on the line above.
2. To approve amended fundamental investment restrictions to: (a) delete
restrictions that are no longer required to be fundamental due to changes in
state laws or which otherwise need not be fundamental; and (b) revise the
language of those restrictions that are still required to be fundamental:
For All
Except as Against Abstain
Noted Below All All
[ ] [ ] [ ]
a. Options and futures
b. Foreign securities
c. Exercise of control
d. Underwriting securities
e. Making short sales
f. Commodities
g. Issuer diversification
h. Voting securities
i. Senior securities
j. Industry concentration
k. Real estate and mortgages
l. Investment company securities
m. Purchasing on margin
n. Borrowing money
o. Lending Fund assets
p. Illiquid securities
q. Oil and gas interests
r. Money Market Fund
[Money Market Fund only]
---------------------------------------------------------
To vote against a change, mark "For All Except as Noted
Below" and write the Proposal's letter on the line above.
For Against Abstain
3. To ratify the Board's selection of Arthur
Andersen LLP as independent accountants [ ] [ ] [ ]
4. To approve a revised investment objective
for the Aggressive Equity Fund [ ] [ ] [ ]
[Aggressive Equity Fund only]
5. To transact any other business before Meeting
- --------------------------------------------
Signature [PLEASE SIGN WITHIN BOX] Date
- ---------------------------------------------
Signature (Joint Owners) Date
