<PAGE>
SCHEDULE 14A
(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 [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)2))
Variable Investors Series Trust
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(Name of Registrant as Specified In Its Charter)
Blazzard, Grodd & Hasenauer, P.C.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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VARIABLE INVESTORS SERIES TRUST
10 POST OFFICE SQUARE
BOSTON, MASSACHUSETTS 02109
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 9, 1996
To the Shareholders of the World Equity Portfolio of VARIABLE INVESTORS SERIES
TRUST:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of the World
Equity Portfolio ("Shareholders") of the Variable Investors Series Trust, an
unincorporated business trust organized under the laws of the Commonwealth of
Massachusetts (the "Trust"), will be held at the offices of First Variable
Advisory Services Corp., 10 Post Office Square, Boston, Massachusetts, on
December 9, 1996, at 10:00 a.m., Eastern time, for the following purposes:
1. To approve or disapprove a new sub-advisory agreement (with respect to
the World Equity Portfolio) between First Variable Advisory Services
Corp. and Keystone Investment Management Company, such new sub-advisory
agreement to contain the same terms and conditions as the current
sub-advisory agreement, except for the dates of execution, effectiveness
and termination.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record as of the close of business on October 22, 1996, are
entitled to notice of and to vote at the meeting and at any and all adjournments
thereof.
By order of the Board of Trustees
Arnold R. Bergman, Secretary
Dated: November 8, 1996
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YOUR VOTE IS IMPORTANT! PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED
PROXY, DATE AND SIGN IT, AND RETURN IT IN THE ACCOMPANYING POSTAGE PREPAID
ENVELOPE. IF YOU SIGN, DATE AND RETURN THE PROXY BUT GIVE NO VOTING
INSTRUCTIONS, YOUR SHARES WILL BE VOTED IN FAVOR OF ALL PROPOSALS NOTICED ABOVE.
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<PAGE>
THE TRUST'S ANNUAL REPORT TO SHAREHOLDERS, WHICH INCLUDES AUDITED FINANCIAL
STATEMENTS OF THE TRUST AS OF DECEMBER 31, 1995, AND THE TRUST'S SEMI-ANNUAL
REPORT TO SHAREHOLDERS, WHICH INCLUDES UNAUDITED FINANCIAL STATEMENTS OF THE
TRUST AS OF JUNE 30, 1996, MAY BE OBTAINED WITHOUT CHARGE BY CALLING (800)
228-1035 OR WRITING TO THE TRUST AT 10 POST OFFICE SQUARE, BOSTON, MASSACHUSETTS
02109.
IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION, WE ASK THAT
YOU MAIL YOUR PROXY PROMPTLY.
THE TRUSTEES OF THE TRUST RECOMMEND THAT YOU CAST YOUR VOTE FOR APPROVAL OF THE
NEW SUB-ADVISORY AGREEMENT.
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY CARD(S) PROMPTLY.
<PAGE>
VARIABLE INVESTORS SERIES TRUST
10 POST OFFICE SQUARE
BOSTON, MA 02109
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PROXY STATEMENT
FOR THE SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 9, 1996
This Proxy Statement is furnished in connection with the solicitation of
proxies for use at the Special Meeting of Shareholders ("Shareholders") of the
World Equity Portfolio (the "Portfolio") of the Variable Investors Series Trust,
a Massachusetts business trust (the "Trust"), to be held at the offices of First
Variable Advisory Services Corp., 10 Post Office Square, Boston, Massachusetts
02109, on December 9, 1996 at 10:00 a.m., Eastern time, and at any and all
adjournments thereof.
The Trust was established to be used exclusively as the underlying
investment for certain variable life insurance and variable annuity contracts
("Variable Contracts") offered by certain participating life insurance companies
through their separate accounts. Monarch Life Insurance Company ("Monarch Life")
and First Variable Life Insurance Company ("First Variable Life") (collectively,
"Life Companies") are the only participating life insurance companies in the
Trust and its sole shareholders. Pursuant to current interpretations of the
Investment Company Act of 1940, as amended (the "1940 Act"), the Life Companies
will solicit voting instructions from owners of Variable Contracts with respect
to matters to be acted upon at the meeting. All shares in the Trust held by the
Life Companies will be voted by the Life Companies in accordance with voting
instructions received from such contract owners. The Life Companies will vote
all of the shares which they are entitled to vote in the same proportion as the
votes cast by contract owners, on the issues presented, including shares which
are attributable to the Life Companies' interests in the Trust. The Life
Companies have fixed the close of business on December 4, 1996 as the last day
for which voting instructions will be accepted.
Each of the Life Companies will designate individuals who will serve as
proxies at the meeting. If the accompanying form of proxy is properly executed
and returned in time to be voted at the meeting, the shares covered thereby will
be voted by the Life Company shareholders in accordance with the instructions
marked thereon. Executed proxies that are unmarked will be voted for the
proposal to approve the proposed New Sub-Advisory Agreement (defined below) for
the Portfolio of the Trust. Any proxy may be revoked at any time prior to its
exercise by a written notice of revocation addressed to and received by the
Secretary of the Trust, by delivering a duly executed proxy bearing a later
date, or by attending the meeting and voting in person. Each proposal being
considered at the meeting will be approved only if a sufficient number of votes
are cast in favor of that proposal. Accordingly, votes to abstain and votes
against will have the same effect in determining whether a proposal is approved.
The Board of Trustees has fixed the close of business on October 22, 1996 as
the record date ("Record Date") for the determination of shareholders entitled
to notice of and to a vote at the meeting. As of the Record Date, there were
1,618,289.431 shares of the Portfolio outstanding. See Page 12 for information
concerning the substantial shareholders of voting securities of the Portfolio.
The proxy, Notice of Special Meeting and this Proxy Statement are first
being made available to Shareholders on or about November 12, 1996.
The primary purpose of the Special Meeting is to permit the Portfolio's
Shareholders to consider a New Sub-Advisory Agreement (defined below) to take
effect following the consummation of the transactions contemplated by an
Agreement and Plan of Acquisition and Merger, dated as of September 6, 1996, as
may be amended from time to time (the "Merger Agreement") among Keystone
Investments, Inc., the parent of Keystone Investment Management Company, the
Portfolio's sub-adviser ("Sub-Adviser"), First Union Corporation ("First
Union"), its wholly-owned subsidiary (except for directors' qualifying shares),
First Union National Bank of North Carolina ("FUNB-NC"), and FKI, Inc., a newly
organized wholly-owned subsidiary of FUNB-NC. Pursuant to the Merger Agreement,
the Sub-Adviser will become an indirect subsidiary of First Union. The
shareholder vote on the New Sub-Advisory Agreement (defined below) is required
under the 1940 Act, as a result of First Union's contemplated acquisition of the
Sub-Adviser.
The costs of the meeting, including the solicitation of proxies and voting
instructions from contract owners, will be paid by Keystone Investments, Inc.
If, by the time scheduled for the meeting, a quorum is not present or if a
quorum is present but sufficient votes in favor of any of the proposals
described in this Proxy Statement are not received, the persons named as proxies
may propose one or more adjournments of the meeting to permit further
solicitation of proxies. Any such adjournment will require the affirmative vote
of a majority of the shares present in person or represented by proxy at the
session of the meeting to be adjourned. The persons named as proxies will vote
in favor of any such adjournment those proxies which instruct them to vote in
favor of any of the proposals to be considered at the adjourned meeting, and
will vote against any such adjournment those proxies which instruct them to vote
against or to abstain from voting on all of the proposals to be considered at
the adjourned meeting.
PROPOSAL (1):
APPROVAL OF NEW SUB-ADVISORY AGREEMENT,
WITH RESPECT TO THE WORLD EQUITY PORTFOLIO,
BETWEEN FIRST VARIABLE ADVISORY SERVICES CORP.
("ADVISER") AND KEYSTONE INVESTMENT MANAGEMENT
COMPANY ("SUB-ADVISER")
DESCRIPTION OF ADVISER
Under the Investment Advisory Agreement dated September 22, 1994
("Investment Advisory Agreement"), Adviser manages the business and affairs of
the portfolios (including the Portfolio) and the Trust, subject to the control
of the Board of Trustees of the Trust.
Adviser is a Massachusetts corporation which was incorporated on October 8,
1993 and which is registered with the Securities and Exchange Commission as an
investment adviser under the Investment Advisers Act of 1940, as amended.
Adviser is a wholly-owned subsidiary of First Variable Life, which is a
wholly-owned subsidiary of Irish Life of North America, Inc. which in turn is
beneficially owned by Irish Life plc. ("Irish Life"). Irish Life of North
America, Inc. is a Delaware corporation, incorporated as Carrig International in
1986. Irish Life was formed in 1939 through a consolidation of a number of Irish
and British Life offices transacting business in Ireland. As of the end of 1995,
the Irish Life consolidated group had in excess of $11 billion in assets. The
address of the Adviser is 10 Post Office Square, Boston, Massachusetts 02109.
Under the Investment Advisory Agreement, the Adviser is obligated to
formulate a continuing program for the investment of the assets of each
portfolio of the Trust (including the Portfolio) in a manner consistent with
each portfolio's investment objectives, policies and restrictions and to
determine from time to time securities to be purchased, sold, retained or lent
by the Trust and implement those decisions. The Investment Advisory Agreement
also provides that Adviser shall manage the Trust's business and affairs and
shall provide such services required for effective administration of the Trust
as are not provided by employees or other agents engaged by the Trust. The
Investment Advisory Agreement further provides that Adviser shall furnish the
Trust with office space and necessary personnel, pay ordinary office expenses,
pay all executive salaries of the Trust and furnish, without expense to the
Trust, the services of such members of its organization as may be duly elected
officers or Trustees of the Trust. The Investment Advisory Agreement provides
that Adviser may retain sub-advisers, at Adviser's own cost and expense, for the
purpose of making investment recommendations and research information available
to the Trust. The Adviser has retained the Sub-Adviser to act as sub-adviser for
the Portfolio.
The Adviser's activities are subject to the review and supervision of the
Board of Trustees to whom the Adviser renders periodic reports of the Trust's
investment activities.
SUMMARY OF CURRENT SUB-ADVISORY AGREEMENT
The Sub-Advisory Agreement dated September 22, 1994 between the Adviser and
the Sub-Adviser (formerly known as Keystone Custodian Funds, Inc.), ("Current
Sub-Advisory Agreement") provides that the Sub-Adviser shall manage the
investment and reinvestment of the assets of the Portfolio. The Sub-Adviser
shall determine, in its discretion, subject to the oversight and review of
Adviser, the investments to be purchased or sold and will render regular reports
to Adviser and to officers and Trustees of the Trust concerning its discharge of
the foregoing responsibilities. The Sub-Adviser shall place all orders for the
purchase and sale of portfolio securities for the account of the Portfolio with
brokers or dealers selected by the Sub-Adviser.
For the services provided by Sub-Adviser, Adviser pays Sub-Adviser monthly
an annual fee as follows:
.45 of 1% on an annualized basis of the first $200 million of net assets
under management.
.375 of 1% on an annualized basis of any net assets under management over
and above $200 million but not exceeding $500 million.
.25 of 1% on an annualized basis of any net assets under management over
and above $500 million.
During the fiscal year ended December 31, 1995, the Adviser paid investment
advisory fees to the Sub-Adviser of $67,212.08.
The net assets of the Portfolio as of September 30, 1996 were
$23,591,408.19.
SUMMARY OF NEW KEYSTONE SUB-ADVISORY AGREEMENT
The New Sub-Advisory Agreement is substantially identical to the Current
Sub-Advisory Agreement, except for the proposed dates of execution,
effectiveness and termination.
The form of the proposed New Sub-Advisory Agreement, attached as Exhibit A
to this Proxy Statement, is marked to indicate the changes from the Current
Sub-Advisory Agreement.
INFORMATION CONCERNING THE PROPOSED MERGER
The Proposed Merger. Keystone Investments, Inc. ("Keystone Investments") is
the corporate parent of wholly-owned operating subsidiaries (which together with
Keystone Investments are sometimes referred to herein as "Keystone"), which
include the Sub-Adviser. Keystone has provided investment advisory and
management, underwriting, distribution, administrative, transfer agency and
trustee services to mutual funds and private accounts since the Sub-Adviser was
organized in 1932. Keystone Management, Inc. ("Keystone Management") serves as
investment manager of certain of the Keystone Family of Mutual Funds (the
"Funds"). In connection with the Merger Agreement, it is proposed that all of
the functions currently performed by Keystone Management for such Funds be
assumed by the Sub-Adviser. Keystone currently manages and advises 32 mutual
funds and other clients with assets which in the aggregate total over $11
billion. The Merger Agreement provides for the merger (the "Merger") of Keystone
Investments with and into FKI, Inc., which will then adopt the name "Keystone
Investments, Inc." ("New Keystone Investments").
First Union is a publicly owned multibank holding company registered under
the federal Bank Holding Company Act of 1956, as amended. First Union and its
subsidiaries provide a broad range of financial services to individuals and
businesses through offices in 38 states and four foreign countries. The
principal offices of First Union, FUNB-NC and FKI, Inc. are at One First Union
Center, Charlotte, North Carolina 28288. The Capital Management Group ("CMG") of
FUNB-NC manages, advises or otherwise oversees the investment of over $34
billion in assets belonging to a wide range of institutional, trust and
individual clients, including registered investment companies, or series
thereof, with assets of approximately $8.1 billion. Evergreen Asset Management
Corp. and Lieber & Company, wholly-owned subsidiaries of FUNB-NC, serve as
investment adviser, manager, and/or sub-adviser to institutional, trust and
individual clients, including registered investment companies, or series
thereof, with assets totaling approximately $8 billion.
In the Merger, First Union will issue shares of its voting common stock
("First Union Common Stock") and options on such First Union Common Stock to the
beneficial owners of Keystone Investments' voting common stock ("Keystone
Stock") and options thereon. Substantially all of the outstanding Keystone Stock
and options thereon are beneficially owned by certain of Keystone's present and
former officers and employees and members of their families and trusts
established by them. Except for 140,042 shares held by the Keystone Investments,
Inc. Savings and Investment Plan and certain unaffiliated shareholders, all of
the Keystone Stock outstanding as of the date hereof is held pursuant to eight
voting trust agreements ("voting trusts") for which certain of Keystone's senior
officers and directors are the voting trustees. A majority of the outstanding
Keystone Stock, totaling 52%, is held by seven senior officers or directors and
a spouse of one such individual, and is subject to two of such voting trusts.
These officers and directors, who may be deemed to control Keystone, are Messrs.
George S. Bissell, Albert H. Elfner, III, Ralph J. Spuehler, Jr., Stephen J.
Arpante, Philip M. Byrne, Edward F. Godfrey and Roger T. Wickers and, together
with such spouse, are referred to herein as the "Controlling Stockholders".
Their address is 200 Berkeley Street, Boston, Massachusetts 02116. Each of
Messrs. Bissell, Elfner, Spuehler, Godfrey and Byrne is also an "affiliated
person" of Keystone Investments (as defined under the 1940 Act). The Controlling
Stockholders have agreed to have their Keystone Stock voted in favor of the
Merger at a Special Meeting of Stockholders of Keystone Investments to be held
on December 2, 1996 and, accordingly, it is expected that the Merger Agreement
will be approved at such Special Meeting.
The Merger Agreement provides that First Union will issue in the Merger
2,912,000 shares of First Union Common Stock which, at September 6, 1996, had an
aggregate value of $186,004,000. The number of shares that will ultimately be
issued upon the Merger is subject to certain adjustments, including an
adjustment downwards of 13.5% in the event that net redemptions of shares of the
Funds and certain other Keystone funds prior to the effective date of the Merger
equal or exceed in the aggregate 15% of the outstanding shares of such Funds on
September 6, 1996. In addition, in the event that the average per share market
price of First Union Common Stock over a period of ten trading days ending on
the day five business days prior to the Effective Date (as defined herein)
declines by a certain amount determined with reference to the market prices of
shares of a certain peer group of bank holding companies, Keystone Investments
will have the option to terminate the Merger Agreement, subject to the right of
First Union to increase the aggregate number of shares of First Union Common
Stock to be issued in the Merger to compensate for such a decline in accordance
with the Merger Agreement. Assuming the consummation of the Merger during the
month of December 1996, an estimated 2,523,089 shares of First Union Common
Stock, having an aggregate market value as of October 16, 1996 of $171,570,052,
were issuable in exchange for all of the shares of Keystone Stock. The balance
of the First Union Common Stock issuable in the Merger will be paid to assignees
of Keystone TA Limited Partnership ("KTLP"), a former shareholder of Keystone
Investments, which assisted current management in a leveraged buyout of Keystone
Investments in 1989 pursuant to an agreement with Keystone Investments.
The Merger is expected to become effective on December 11, 1996, or a later
agreed date (the "Effective Date"), upon the satisfaction of specified terms and
conditions including, among other things, receipt of all necessary regulatory
approvals. Consummation of the Merger is conditioned on First Union and Keystone
Investments receiving, or a waiver of the requirement to receive, all necessary
approvals by governmental regulatory authorities, including approvals of the
Office of the Comptroller of the Currency and the Federal Reserve Board and the
expiration or termination of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976. Consummation of the Merger
is subject to a number of additional conditions, including the approvals
proposed hereby of new investment advisory and management agreements. To satisfy
this condition, shareholders of Keystone funds which, in the aggregate provided
at least 90% of the management and advisory fees paid to Keystone by all of the
Keystone funds for the twelve months ended August 31, 1996, must approve such
proposed agreements.
If the Merger is consummated, First Union, indirectly, and FUNB-NC,
directly, will own all of the outstanding voting securities of New Keystone
Investments, which in turn will own directly or indirectly all of the
outstanding voting securities of the Keystone operating (and any other)
subsidiaries, including the Sub-Adviser. Such new ownership will constitute a
change in the identity and control ("Change in Control") of Keystone Investments
and its direct and indirect subsidiaries, which will cause the Current
Sub-Advisory Agreement to terminate automatically in accordance with its terms,
as required by the 1940 Act. Such termination will necessitate adoption of a new
agreement for provision of such services. Shareholder approval of the New
Sub-Advisory Agreement is proposed. The consolidation of all investment advisory
services for the Funds under the Sub-Adviser will not involve any material
changes in the services provided to the Portfolio. THE PORTFOLIO'S SUB-ADVISORY
FEE RATE WILL REMAIN UNCHANGED.
Following the consummation of the Merger, First Union does not have any
current intention to make any immediate significant changes in the way that New
Keystone Investments provides sub-advisory services to the Portfolio. To
facilitate this continuity, Keystone Investments (the obligations of which will
be assumed by New Keystone Investments) has entered into employment contracts,
effective as of the Effective Date, with each of three directors and executive
officers of Keystone Investments (Albert H. Elfner, III, Edward F. Godfrey and
Ralph J. Spuehler, Jr.). Among other things, each such employment contract
provides for a payment to be made at the end of the one-, two- and/or three-year
periods following the Effective Date during which Messrs. Elfner, Godfrey and
Spuehler, as the case may be, remains an employee of Keystone in his present or
substantially equivalent position. Each annual payment would equal $440,000 for
Mr. Elfner, $345,000 for Mr. Godfrey and $220,000 for Mr. Spuehler. Such
payments would also be made under certain circumstances following termination of
the employment of Messrs. Elfner, Godfrey and Spuehler, respectively, and the
expiration of a one-year non-compete period following such termination. Messrs.
Elfner and Godfrey are expected to continue to be actively involved in providing
services to the Funds to substantially the same extent to which each has
historically been involved.
If the Merger is not consummated, the New Sub-Advisory Agreement would not
be entered into and the Current Sub-Advisory Agreement would remain in place.
The Trustees would, under these circumstances, take such actions, if any, as
they deemed necessary. If the Shareholders of the Portfolio do not approve the
proposed New Sub-Advisory Agreement, but the requisite shareholder approvals of
other Funds sufficient to satisfy the conditions to the Merger are obtained, the
Sub-Adviser will be unable to continue serving as sub-adviser to the Portfolio
pursuant to the Current Sub-Advisory Agreement. In that event, the Board of
Trustees, with the assistance of Keystone, will consider alternative
sub-advisory arrangements for the Portfolio.
Exhibit B shows the amounts of compensation received by the Sub-Adviser and
other affiliates of the Sub-Adviser for the most recent fiscal year pursuant to
its investment advisory and management agreements.
CONSIDERATIONS OF THE TRUSTEES
The Board of Trustees of the Trust held a meeting on October 17, 1996, at
which meeting the Trustees, including the Independent Trustees (Trustees who are
independent, i.e., not "interested persons", as defined in the 1940 Act, and who
have no direct or indirect financial interest in the New Sub-Advisory
Agreement), concluded that if the Merger occurs, entry by the Trust into the New
Sub-Advisory Agreement would be in the best interests of the Trust and the
Shareholders of the Portfolio. The Board of Trustees, including the Independent
Trustees, unanimously approved the New Sub-Advisory Agreement for the Portfolio
and recommended such agreement be submitted for approval by the Shareholders of
the Portfolio at the Special Meeting. The New Sub-Advisory Agreement would take
effect upon the later to occur of (i) the obtaining of Shareholder approval or
(ii) the closing of the Merger. The New Sub-Advisory Agreement will continue in
effect until April 30, 1998 and thereafter for successive annual periods as long
as such continuance is approved in accordance with the 1940 Act.
In evaluating the New Sub-Advisory Agreement, the Board of Trustees of the
Trust took into account that the Current Sub-Advisory Agreement and the New
Sub-Advisory Agreement, including the terms relating to the services to be
provided thereunder by the Sub-Adviser and the fees and expenses payable by the
Adviser to the Sub-Adviser, are substantially identical, except for the dates of
execution, effectiveness and termination.
The Trustees, after examining relevant materials furnished to them by First
Union and Keystone and attending the October 17, 1996 Board Meeting where
certain executives of First Union and Keystone addressed the Trustees,
determined that the expected benefits to the Portfolio would be largely due to
First Union's financial strength, investment advisory asset base, mutual funds
under management and personnel base.
The Trustees expect that the increased financial strength and stability of
the Sub-Adviser after the Merger would be likely to (a) enhance the
Sub-Adviser's ability to attract and retain desirable advisory and other
management personnel, (b) create opportunities for augmenting the technological
and other support infrastructure available for portfolio management and (c)
provide the Sub-Adviser with access to research and other resources of the
investment management personnel of First Union and its affiliates. The Trustees
concluded that the foregoing potential benefits, considered together with the
fact that no increase in the rate of sub-advisory fees to be charged to the
Portfolio was planned or contemplated, would be in the best interests of the
Portfolio and its Shareholders.
The parties to the Merger Agreement have each agreed for a period of three
years following the Effective Date to use their reasonable best efforts to
assure compliance with the safe harbor provisions of Section 15(f) of the 1940
Act. Section 15(f) provides that an investment adviser (under this proposed
Merger, the Sub-Adviser) to a registered investment company may receive a
benefit in connection with a sale of any interest in such adviser which results
in an assignment of an investment advisory contract so long as the following two
conditions are satisfied: (i) for a period of three years after such assignment,
at least 75% of the board of trustees of the investment company cannot be
"interested persons," as defined in the 1940 Act, of the new sub-adviser or its
predecessor, and (ii) no "unfair burden" (as defined in the 1940 Act) is imposed
on the investment company as a result of the assignment or any express or
implied terms, conditions or understandings applicable thereto. In this regard,
the current composition of the Board of Trustees of the Trust would be in
compliance with the first condition. In addition, the management of the Trust is
aware of no circumstances arising from the Merger, preparatory transactions to
the Merger or any potential financing that might result in the imposition of an
"unfair burden" on the Trust.
REQUIRED VOTE - SUB-ADVISORY AGREEMENT. The New Sub-Advisory Agreement must be
approved as to the Portfolio by the holders of a "majority of the outstanding
voting securities" of the Portfolio, which for this purpose means the
affirmative vote of the lesser of (1) more than 50% of the outstanding shares of
the Portfolio and (2) 67% or more of the shares of the Portfolio present at the
Special Meeting if more than 50% of the outstanding shares are present at the
Special Meeting in person or by proxy.
RECOMMENDATION OF TRUSTEES
The Board of Trustees of the Trust, including its Independent Trustees,
recommends that the Shareholders vote FOR approval of the proposed New
Sub-Advisory Agreement.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE
FOR APPROVAL OF PROPOSAL 1.
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ADDITIONAL INFORMATION
DIRECTORS AND OFFICERS OF THE SUB-ADVISER
The following table sets forth certain information concerning the executive
officers and directors of the Sub-Adviser.
The executive officers and directors of the Sub-Adviser, who are expected to
continue to be such, or who are expected to be elected if the Merger is
consummated, are:
Albert H. Elfner, III Chairman and Chief Executive Officer
James R. McCall President
Edward F. Godfrey Senior Vice President, Chief
Financial Officer and Treasurer
Philip M. Byrne Senior Vice President
Rosemary D. Van Antwerp Senior Vice President,
General Counsel and Secretary
Donald McMullen Director
William M. Ennis II Director
Barbara J. Colvin Director
The address of each of the persons referred to above, except Messrs.
McMullen and Ennis and Ms. Colvin, is 200 Berkeley Street, Boston,
Massachusetts 02116-5034. The address of Messrs. McMullen and Ennis and Ms.
Colvin is 301 South College Street, Charlotte, North Carolina 23288-0630.
SUBSTANTIAL SHAREHOLDERS
All of the shares of the Portfolio are currently owned by First Variable
Life and Monarch Life pursuant to variable annuity contracts issued to contract
owners of First Variable Life Annuity Funds A, E, and M and Monarch Life
Separate Accounts VA and VA-3. First Variable Life and Monarch Life have,
however, agreed to vote their shares in proportion to and in the manner
instructed by contract owners.
FUTURE MEETINGS OF SHAREHOLDERS
The Trust is not required to hold Annual Meetings of Shareholders and does
not plan to do so. The Trustees may call Special Meetings of Shareholders for
action by shareholder vote as may be required by the 1940 Act or the Declaration
of Trust. The Declaration of Trust provides that shareholders can remove
Trustees by a vote of two-thirds of the vote of the outstanding shares and the
Declaration sets out the procedures to be followed.
OTHER MATTERS
The Board of Trustees knows of no matters to be presented at the Special
Meeting other than those specified in the attached Notice of Special Meeting.
However, if any other matters come before the Special Meeting, it is intended
that the proxies will vote thereon in their discretion.
By order of the Board of Trustees,
ARNOLD R. BERGMAN
Secretary
Dated: November 8, 1996
<PAGE>
EXHIBIT A
VARIABLE INVESTORS SERIES TRUST
SUB-ADVISORY AGREEMENT
This Agreement is made between FIRST VARIABLE ADVISORY SERVICES CORP., a
Massachusetts corporation and a wholly-owned subsidiary of First Variable Life
Insurance Company ("Life Company"), having its principal place of business in
Boston, Massachusetts (hereinafter referred to as "Adviser"), and KEYSTONE
--------
INVESTMENT MANAGEMENT COMPANY, FORMERLY KEYSTONE CUSTODIAN FUNDS, INC., a
- ---------------------------------------
Delaware corporation, having its principal place of business in Boston,
Massachusetts (hereinafter referred to as "Sub-Adviser").
WHEREAS, Variable Investors Series Trust (the "Trust"), an open-end
diversified management investment company, as that term is defined in the
Investment Company Act of 1940, as amended ("Act"), that is registered as such
with the Securities and Exchange Commission has appointed Adviser as investment
adviser for all its portfolios including the World Equity Portfolio; and
WHEREAS, Sub-Adviser is engaged in the business of rendering investment
management services; and
WHEREAS, Adviser desires to retain Sub-Adviser to provide certain investment
management services for the World Equity Portfolio (the "Portfolio") of the
Trust as more fully described below;
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Adviser hereby retains Sub-Adviser to assist Adviser in its capacity as
investment adviser for the Portfolio. Subject to the oversight and review of
Adviser and the Board of Trustees of the Trust, Sub-Adviser shall manage the
investment and reinvestment of the assets of the Portfolio. Sub-Adviser will
determine in its discretion, subject to the oversight and review of Adviser, the
investments to be purchased or sold, will provide Adviser with records
concerning its activities which Adviser or the Trust is required to maintain,
and will render regular reports to Adviser and to officers and Trustees of the
Trust concerning its discharge of the foregoing responsibilities. The services
of Sub-Adviser hereunder are not to be deemed exclusive, and the Sub-Adviser
shall be free to render similar services to others.
2. Sub-Adviser, in its supervision of the investments of the Portfolio, will
be guided by the Portfolio's investment objectives and policies and the
provisions and restrictions contained in the Declaration of Trust and By-Laws of
the Trust and as set forth in the Registration Statement and exhibits as may be
on file with the Securities and Exchange Commission, all as communicated by
Adviser to Sub-Adviser.
3. Adviser shall pay to Sub-Adviser, for all services rendered to the
Portfolio by Sub-Adviser hereunder, the fees set forth in Exhibit A attached
hereto. During the term of this Agreement, Sub-Adviser will bear all expenses
incurred by it in the performance of its duties hereunder.
4. The term of this Agreement shall begin on the date of its execution and
shall remain in effect for two years from that date and from year to year
thereafter, subject to the provisions for termination and all of the other terms
and conditions hereof if: (a) such continuation shall be specifically approved
at least annually by the vote of a majority of the Trustees of the Trust,
including a majority of the Trustees who are not "interested persons", as
defined in Section 2(a)(19) of the Act, of any party (other than as Trustees of
the Trust) cast in person at a meeting called for that purpose; and (b) Adviser
shall not have notified the Trust in writing at least sixty (60) days prior to
the anniversary date of this Agreement in any year thereafter that it does not
desire such continuation with respect to the Portfolio.
5. Notwithstanding any provision in this Agreement, it may be terminated at
any time without the payment of any penalty, by the Trustees of the Trust or by
a vote of a majority of the outstanding voting securities of the Portfolio, as
defined in Section 2(a)(42) of the Act, on sixty (60) days' written notice to
Sub-Adviser, or by Adviser or Sub-Adviser upon not less than sixty (60) days'
written notice to the other party.
6. This Agreement may not be assigned by Adviser or Sub-Adviser and shall
automatically terminate in the event of any assignment. Sub-Adviser may employ
or contract with such other person, persons, corporation, or corporations at its
own cost and expense as it shall determine in order to assist it in carrying out
this Agreement.
7. Sub-Adviser represents and warrants that the Portfolio will at all times
be invested in such a manner as to ensure compliance with Section 817(h) of the
Internal Revenue Code of 1986, as amended and Treasury Regulations Section
1.817-5, relating to the diversification requirements for variable annuity,
endowment, or life insurance contracts and any amendments or other modifications
to such Section or Regulations; provided, however, that Adviser shall promptly
provide Sub-Adviser with copies of such Section 817(h) and Regulation Section
1.817-5 as currently in effect and as modified or amended from time to time.
Sub-Adviser will be relieved of this obligation and shall be held harmless when
(i) the Portfolio is invested in compliance with the requirements of Section
817(h) and/or Regulation Section 1.817-5 as most recently provided to
Sub-Adviser by Adviser or (ii) when direction from the Adviser or Trustees
causes non-compliance with Section 817(h) and/or Regulation Section 1.817-5.
Sub-Adviser agrees to provide quarterly reports to Adviser, executed by a duly
authorized officer of Sub-Adviser, within seven (7) days of the close of each
calendar quarter certifying as to compliance with said Section or Regulations.
In addition to the quarterly reports, Adviser may request and Sub-Adviser agrees
to provide Section 817 diversification compliance reports at more frequent
intervals, as reasonably requested by Adviser.
8. In the absence of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the obligations or duties under this Agreement on the part
of Sub-Adviser, Sub-Adviser shall not be liable to Adviser, the Trust, the
Portfolio or to any shareholder for any act or omission in the course of or
connected in any way with rendering services or for any losses that may be
sustained in the purchase, holding, or sale of any security.
9. The Sub-Adviser shall place all orders for the purchase and sale of
portfolio securities for the account of the Portfolio with broker-dealers
selected by the Sub-Adviser. In executing portfolio transactions and selecting
broker-dealers, the Sub-Adviser will use its best efforts to seek best execution
on behalf of the Portfolio. In assessing the best execution available for any
transaction, the Sub-Adviser shall consider all factors it deems relevant,
including the breadth of the market in the security, the price of the security,
the financial condition and execution capability of the broker-dealer, and the
reasonableness of the commission, if any (all for the specific transaction and
on a continuing basis). In evaluating the best execution available, and in
selecting the broker-dealer to execute a particular transaction, the Sub-Adviser
may also consider the brokerage and research services (as those terms are used
in Section 28(e) of the Securities Exchange Act of 1934 ("1934 Act")) provided
to the Portfolio and/or other accounts over which the Sub-Adviser, an affiliate
of the Sub-Adviser (to the extent permitted by law) or another investment
adviser of the Portfolio exercises investment discretion. The Sub-Adviser is
authorized to cause the Portfolio to pay a broker-dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of commission
another broker-dealer would have charged for effecting that transaction if, but
only if, the Sub-Adviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker-dealer viewed in terms of that particular transaction or
in terms of all of the accounts over which investment discretion is so
exercised.
10. This Agreement may be amended at any time by agreement of the parties,
provided that the amendment shall be approved both by the vote of a majority of
the Trustees of the Trust, including a majority of the Trustees who are not
"interested persons," as defined in Section 2(a)(19) of the Act, of any party to
this Agreement (other than as Trustees of the Trust) cast in person at a meeting
called for that purpose, and on behalf of the Portfolio by the holders of a
majority of the outstanding voting securities of the Portfolio, as defined in
Section 2(a)(42) of the Act.
11. This Agreement shall be construed in accordance with and governed by
the laws of the Commonwealth of Massachusetts.
12. This Agreement will become binding on the parties hereto upon their
execution of the attached Exhibit A to this Agreement.
13. It is understood that any information or recommendation supplied by the
Sub-Adviser in connection with the performance of its obligations hereunder is
to be regarded as confidential and for use only by the Adviser, the Trust or
such persons as the Adviser may designate in connection with the Portfolio. It
is also understood that any information supplied to Sub-Adviser in connection
with the performance of its obligations hereunder, particularly, but not
necessarily limited to, any list of securities which, on a temporary basis, may
not be bought or sold for the Portfolio, is to be regarded as confidential and
for use only by the Sub-Adviser in connection with its obligation to provide
investment advice and other services to the Portfolio.
14. Each party to this Agreement hereby acknowledges that it is registered
as an investment adviser under the Investment Advisers Act of 1940, it will use
its reasonable best efforts to maintain such registration, and it will promptly
notify the other if it ceases to be so registered, if its registration is
suspended for any reason, or if it is notified by any regulatory organization or
court of competent jurisdiction that it should show cause why its registration
should not be suspended or terminated.
<PAGE>
EXHIBIT A
VARIABLE INVESTORS SERIES TRUST
SUB-ADVISORY COMPENSATION
For all services rendered by Sub-Adviser hereunder, Adviser shall pay to
Sub-Adviser and Sub-Adviser agrees to accept as full compensation for all
services rendered hereunder, an annual fee as follows:
WORLD EQUITY PORTFOLIO
.45 of 1% on an annualized basis of the first $200 million of net assets
under management.
.375 of 1% on an annualized basis of any net assets under management over
and above $200 million but not exceeding $500 million.
.25 of 1% on an annualized basis of any net assets under management over and
above $500 million.
Such fees shall accrue daily and be paid monthly.
Witness the due execution hereof this ____ day of December, 1996.
---------------------------
FIRST VARIABLE ADVISORY
SERVICES CORP.
Attest:
- ----------------------------------- By: ------------------------------------
KEYSTONE INVESTMENT
----------
MANAGEMENT COMPANY
------------------
Attest:
- ----------------------------------- By: ------------------------------------
<PAGE>
EXHIBIT B
INVESTMENT ADVISORY FEES --
KEYSTONE INVESTMENT MANAGEMENT COMPANY
AND AFFILIATES
<TABLE>
<CAPTION>
ANNUAL
EXPENSE
AMOUNT OF NET LIMITATION,
ADVISORY AMOUNT IF ANY (AS A
NET ASSETS FEE WITHOUT OF ADVISORY PERCENTAGE OF
FISCAL YEAR ON SEPT. 30, EXPENSE FEE FOR LAST AVERAGE NET
NAME OF FUND ENDED 1996 LIMITATION* FISCAL YEAR ASSETS)
- ------------------------------------- -------------- ------------------ -------------- -------------- --------------------
<S> <C> <C> <C> <C> <C>
Keystone Quality Bond
Fund (B-1) ........................ 10/31/95 $ 230,715,654 $1,876,672 $1,876,672 N/A
Keystone Diversified Bond Fund (B-2) 8/31/96 559,514,552 3,481,728 3,481,728 N/A
Keystone High Income
Bond Fund (B-4) ................... 7/31/96 608,072,883 3,788,171 3,788,171 N/A
Keystone Balanced Fund (K-1) ........ 6/30/96 1,507,263,796 6,447,849 6,447,849 N/A
Keystone Strategic Growth Fund (K-2) 10/31/95 495,847,080 2,779,544 2,779,544 N/A
Keystone Growth and
Income Fund (S-1) ................. 8/31/96 238,062,693 1,492,757 1,492,757 N/A
Keystone Mid-Cap Growth Fund (S-3) .. 8/31/96 296,988,272 1,908,509 1,908,509 N/A
Keystone Small Company
Growth Fund (S-4) ................. 5/31/96 1,887,126,535 8,473,139 8,473,139 N/A
Keystone Institutional
Adjustable Rate Fund .............. 9/30/96 80,334,379 121,105 121,105 Limited to 0.55%
for Class Y and
0.30% for
Class Z
Keystone Institutional
Trust ............................. 6/30/96 2,424,779 9,209 0 Limited to 1.00%
Keystone International
Fund Inc. ......................... 10/31/95 146,207,691 985,652 985,652 N/A
Keystone Precious Metals
Holdings, Inc. .................... 2/28/96 183,434,527 1,354,605 1,354,605 N/A
Keystone Tax Free Fund .............. 12/31/95 1,614,941,007 5,327,202 5,327,202 N/A
Keystone America
Hartwell Emerging
Growth Fund, Inc. ................. 9/30/96 99,047,880 655,127 655,127 N/A
Keystone Balanced Fund II ........... 6/30/97** 5,918,452 2,000 0 Limited to 1.50%
for Class A and
2.25% for
Classes B & C
Keystone Capital
Preservation and
Income Fund ....................... 9/30/96 70,932,291 493,147 152,131 Limited to 0.90%
for Class A and
1.65% for
Classes B & C
Keystone Emerging
Markets Fund ...................... 10/31/96*** 1,410,832 4,999 0 Limited to 0.00%
for Classes
A, B, C
Keystone Fund for Total
Return ............................ 11/30/95 76,411,739 300,290 300,290 Limited to 1.50%
for Class A
Keystone Fund of the
Americas .......................... 10/31/95 101,796,477 1,099,920 1,099,920 N/A
Keystone Global
Opportunities Fund ................ 9/30/96 760,814,697 2,198,709 2,198,709 N/A
Keystone Global
Resources and
Development Fund .................. 3/31/96 23,675,381 217,332 217,332 N/A
Keystone Government
Securities Fund ................... 7/31/96 49,686,570 365,012 212,093 Limited to 1.15%
for Class A and
1.90% for
Classes B & C
Keystone Intermediate
Term Bond Fund .................... 7/31/96 36,360,905 273,644 82,548 Limited to 1.10%
for Class A and
1.85% for
Classes B & C
Keystone Liquid Trust ............... 6/30/96 329,102,669 1,359,239 1,359,239 N/A
Keystone Omega Fund ................. 12/31/95 258,883,032 1,280,436 1,280,436 N/A
Keystone Small Company
Growth Fund II .................... 5/31/96 49,961,602 21,221 0 Limited to 1.95%
for Class A and
2.70% for
Classes B & C
Keystone State Tax Free Fund......... 3/31/96 208,500,751 1,168,889 449,481 Limited to 0.75%
for Class A and
1.50% for
Classes B & C
Keystone State Tax Free
Fund II ........................... 11/30/95 55,214,423 233,519 21,379 Limited to 0.75%
for Class A and
1.50% for
Classes B & C
Keystone Strategic Income
Fund .............................. 7/31/96 220,559,401 1,663,669 1,663,669 N/A
Keystone Tax Free Income Fund ....... 11/30/95 130,422,171 919,802 919,802 N/A
Keystone World Bond
Fund .............................. 10/31/95 14,626,084 93,806 93,806 N/A
<FN>
* The expense limitations referred to herein are voluntary and temporary.
** Balanced Fund began operations on September 3, 1996; these fees are for the period from September 3, 1996 to September 30, 1996.
*** Emerging Markets began operations on February 20, 1996; these fees are for the period from February 20, 1996 to
September 30, 1996.
</TABLE>
<PAGE>
PROXY
WORLD EQUITY PORTFOLIO
OF
VARIABLE INVESTORS SERIES TRUST
SPECIAL MEETING OF SHAREHOLDERS
December 9, 1996
KNOW ALL MEN BY THESE PRESENTS that the undersigned shareholder(s) of the
World Equity Portfolio of Variable Investors Series Trust ("Trust") hereby
appoints ______________________________________________, or any one of them true
and lawful attorneys with power of substitution of each, to vote all shares
which the undersigned is entitled to vote, at the Special Meeting of
Shareholders of the Trust to be held on December 9, 1996 at the offices of First
Variable Advisory Services Corp., 10 Post Office Square, Boston, Massachusetts
at 10:00 a.m., Eastern time, and at any adjournment thereof ("Meeting"), as
follows:
1. To approve a new sub-advisory agreement (with respect to the World Equity
Portfolio) between First Variable Advisory Services Corp. and Keystone
Investment Management Company, such new sub-advisory agreement to contain the
same terms and conditions as the current sub-advisory agreement, except for the
dates of execution, effectiveness and termination.
FOR ( ) AGAINST ( ) ABSTAIN ( )
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Meeting.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR THE PROPOSAL IF
NO CHOICE IS INDICATED.
Dated: ____________________, 1996
Monarch Life Insurance Company
---------------------------------------------------
Name of Insurance Company
---------------------------------------------------
Name and Title of Authorized Officer
---------------------------------------------------
Signature of Authorized Officer
WORLD EQUITY PORTFOLIO
Name(s) of Separate Account(s)
of the Insurance Company
Owning Shares in this Portfolio:
MONARCH LIFE SEPARATE ACCOUNT VA
- ----------------------------------
<PAGE>
PROXY
WORLD EQUITY PORTFOLIO
OF
VARIABLE INVESTORS SERIES TRUST
SPECIAL MEETING OF SHAREHOLDERS
December 9, 1996
KNOW ALL MEN BY THESE PRESENTS that the undersigned shareholder(s) of the
World Equity Portfolio of Variable Investors Series Trust ("Trust") hereby
appoints ______________________________________________, or any one of them true
and lawful attorneys with power of substitution of each, to vote all shares
which the undersigned is entitled to vote, at the Special Meeting of
Shareholders of the Trust to be held on December 9, 1996 at the offices of First
Variable Advisory Services Corp., 10 Post Office Square, Boston, Massachusetts
at 10:00 a.m., Eastern time, and at any adjournment thereof ("Meeting"), as
follows:
1. To approve a new sub-advisory agreement (with respect to the World Equity
Portfolio) between First Variable Advisory Services Corp. and Keystone
Investment Management Company, such new sub-advisory agreement to contain the
same terms and conditions as the current sub-advisory agreement, except for the
dates of execution, effectiveness and termination.
FOR ( ) AGAINST ( ) ABSTAIN ( )
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Meeting.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR THE PROPOSAL IF
NO CHOICE IS INDICATED.
Dated: ____________________, 1996
Monarch Life Insurance Company
---------------------------------------------------
Name of Insurance Company
---------------------------------------------------
Name and Title of Authorized Officer
---------------------------------------------------
Signature of Authorized Officer
WORLD EQUITY PORTFOLIO
Name(s) of Separate Account(s)
of the Insurance Company
Owning Shares in this Portfolio:
MONARCH LIFE SEPARATE ACCOUNT VA-3
- ----------------------------------
- ----------------------------------
- ----------------------------------
TOTAL SHARES OF THIS PORTFOLIO
OWNED AND BEING VOTED BY THE
INSURANCE COMPANY:
- ----------------------------------
<PAGE>
PROXY
WORLD EQUITY PORTFOLIO
OF
VARIABLE INVESTORS SERIES TRUST
SPECIAL MEETING OF SHAREHOLDERS
December 9, 1996
KNOW ALL MEN BY THESE PRESENTS that the undersigned shareholder(s) of the
World Equity Portfolio of Variable Investors Series Trust ("Trust") hereby
appoints ______________________________________________, or any one of them true
and lawful attorneys with power of substitution of each, to vote all shares
which the undersigned is entitled to vote, at the Special Meeting of
Shareholders of the Trust to be held on December 9, 1996 at the offices of First
Variable Advisory Services Corp., 10 Post Office Square, Boston, Massachusetts
at 10:00 a.m., Eastern time, and at any adjournment thereof ("Meeting"), as
follows:
1. To approve a new sub-advisory agreement (with respect to the World Equity
Portfolio) between First Variable Advisory Services Corp. and Keystone
Investment Management Company, such new sub-advisory agreement to contain the
same terms and conditions as the current sub-advisory agreement, except for the
dates of execution, effectiveness and termination.
FOR ( ) AGAINST ( ) ABSTAIN ( )
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Meeting.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR THE PROPOSAL IF
NO CHOICE IS INDICATED.
Dated: ____________________, 1996
First Variable Life Insurance Company
---------------------------------------------------
Name of Insurance Company
---------------------------------------------------
Name and Title of Authorized Officer
---------------------------------------------------
Signature of Authorized Officer
WORLD EQUITY PORTFOLIO
Name(s) of Separate Account(s)
of the Insurance Company
Owning Shares in this Portfolio:
FIRST VARIABLE LIFE ANNUITY FUND A
- ----------------------------------
- ----------------------------------
- ----------------------------------
TOTAL SHARES OF THIS PORTFOLIO
OWNED AND BEING VOTED BY THE
INSURANCE COMPANY:
- ----------------------------------
<PAGE>
PROXY
WORLD EQUITY PORTFOLIO
OF
VARIABLE INVESTORS SERIES TRUST
SPECIAL MEETING OF SHAREHOLDERS
December 9, 1996
KNOW ALL MEN BY THESE PRESENTS that the undersigned shareholder(s) of the
World Equity Portfolio of Variable Investors Series Trust ("Trust") hereby
appoints ______________________________________________, or any one of them true
and lawful attorneys with power of substitution of each, to vote all shares
which the undersigned is entitled to vote, at the Special Meeting of
Shareholders of the Trust to be held on December 9, 1996 at the offices of First
Variable Advisory Services Corp., 10 Post Office Square, Boston, Massachusetts
at 10:00 a.m., Eastern time, and at any adjournment thereof ("Meeting"), as
follows:
1. To approve a new sub-advisory agreement (with respect to the World Equity
Portfolio) between First Variable Advisory Services Corp. and Keystone
Investment Management Company, such new sub-advisory agreement to contain the
same terms and conditions as the current sub-advisory agreement, except for the
dates of execution, effectiveness and termination.
FOR ( ) AGAINST ( ) ABSTAIN ( )
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Meeting.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR THE PROPOSAL IF
NO CHOICE IS INDICATED.
Dated: ____________________, 1996
First Variable Life Insurance Company
---------------------------------------------------
Name of Insurance Company
---------------------------------------------------
Name and Title of Authorized Officer
---------------------------------------------------
Signature of Authorized Officer
WORLD EQUITY PORTFOLIO
Name(s) of Separate Account(s)
of the Insurance Company
Owning Shares in this Portfolio:
FIRST VARIABLE LIFE ANNUITY FUND E
- ----------------------------------
- ----------------------------------
- ----------------------------------
TOTAL SHARES OF THIS PORTFOLIO
OWNED AND BEING VOTED BY THE
INSURANCE COMPANY:
- ----------------------------------
<PAGE>
PROXY
WORLD EQUITY PORTFOLIO
OF
VARIABLE INVESTORS SERIES TRUST
SPECIAL MEETING OF SHAREHOLDERS
December 9, 1996
KNOW ALL MEN BY THESE PRESENTS that the undersigned shareholder(s) of the
World Equity Portfolio of Variable Investors Series Trust ("Trust") hereby
appoints ______________________________________________, or any one of them true
and lawful attorneys with power of substitution of each, to vote all shares
which the undersigned is entitled to vote, at the Special Meeting of
Shareholders of the Trust to be held on December 9, 1996 at the offices of First
Variable Advisory Services Corp., 10 Post Office Square, Boston, Massachusetts
at 10:00 a.m., Eastern time, and at any adjournment thereof ("Meeting"), as
follows:
1. To approve a new sub-advisory agreement (with respect to the World Equity
Portfolio) between First Variable Advisory Services Corp. and Keystone
Investment Management Company, such new sub-advisory agreement to contain the
same terms and conditions as the current sub-advisory agreement, except for the
dates of execution, effectiveness and termination.
FOR ( ) AGAINST ( ) ABSTAIN ( )
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Meeting.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR THE PROPOSAL IF
NO CHOICE IS INDICATED.
Dated: ____________________, 1996
First Variable Life Insurance Company
---------------------------------------------------
Name of Insurance Company
---------------------------------------------------
Name and Title of Authorized Officer
---------------------------------------------------
Signature of Authorized Officer
WORLD EQUITY PORTFOLIO
Name(s) of Separate Account(s)
of the Insurance Company
Owning Shares in this Portfolio:
FIRST VARIABLE LIFE ANNUITY FUND M
- ----------------------------------
- ----------------------------------
- ----------------------------------
TOTAL SHARES OF THIS PORTFOLIO
OWNED AND BEING VOTED BY THE
INSURANCE COMPANY:
- ----------------------------------
<PAGE>
FIRST VARIABLE VOTING INSTRUCTIONS SOLICITED ON BEHALF
LIFE INSURANCE COMPANY OF THE BOARD OF DIRECTORS FOR A SPECIAL
MEETING OF SHAREHOLDERS OF THE VARIABLE
INVESTORS SERIES TRUST.
DECEMBER 9, 1996
\/ Please fold and detach card at perforation before mailing \/
WORLD EQUITY PORTFOLIO ("PORTFOLIO")
INSTRUCTIONS TO FIRST VARIABLE LIFE INSURANCE COMPANY
FOR THE SPECIAL MEETING OF SHAREHOLDERS OF
VARIABLE INVESTORS SERIES TRUST TO BE HELD ON DECEMBER 9, 1996
INSTRUCTIONS SOLICITED ON BEHALF OF
FIRST VARIABLE LIFE INSURANCE COMPANY
The undersigned hereby instructs First Variable Life Insurance Company (the
"Company") to vote all shares of the above-referenced Portfolio of VARIABLE
INVESTORS SERIES TRUST (the "Trust") represented by shares held by the
undersigned at a special meeting of shareholders of the Trust to be held at
10:00 a.m., Eastern Time, on December 9, 1996, at the offices of First Variable
Advisory Services Corp., 10 Post Office Square, Boston, Massachusetts and at any
adjournment thereof, as indicated on the reverse side.
Dated: ________________________, 1996
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S)
APPEAR ON THIS CARD. When signing as attorney,
executor, administrator, trustee, guardian, or as custodian
for a minor, please sign your name and give full title as
such. If signing on behalf of a corporation, please sign full
corporate name and your name and indicate your title. If
you are a partner signing for a partnership, please sign the
partnership name and your name. Joint owners should
each sign this proxy. Please sign, date and return.
- -------------------------------------------------------------
| |
| |
| |
- -------------------------------------------------------------
Signature(s) xxx
<PAGE>
PLEASE SIGN AND DATE THIS FORM ON THE REVERSE SIDE
AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
\/ Please fold and detach card at perforation before mailing \/
INSTRUCTIONS SOLICITED ON BEHALF OF FIRST VARIABLE LIFE INSURANCE COMPANY
FIRST VARIABLE LIFE INSURANCE COMPANY WILL VOTE SHARES HELD ON BEHALF OF THE
CONTRACT OWNER AS INDICATED BELOW OR FOR THE PROPOSAL IF NO CHOICE IS INDICATED.
RECEIPT OF THE NOTICE OF THE SPECIAL MEETING AND THE ACCOMPANYING PROXY
STATEMENT IS HEREBY ACKNOWLEDGED.
IF THIS INSTRUCTION FORM IS SIGNED AND RETURNED AND NO SPECIFICATION IS MADE,
THE COMPANY SHALL VOTE FOR ALL THE PROPOSALS. IF THIS INSTRUCTION CARD IS NOT
RETURNED OR IS RETURNED UNSIGNED, THE COMPANY SHALL VOTE YOUR SHARES IN THE
SAME PROPORTION AS IT VOTES THE SHARES FOR WHICH IT HAS RECEIVED INSTRUCTIONS.
Please vote by filling in the appropriate box below, as shown, using blue or
black ink or dark pencil. Do not use red ink. |_|
ABSTAIN
1. To approve a new sub-advisory agreement FOR AGAINST FROM
(with respect to the World Equity Portfolio)
between First Variable Advisory Services Corp. |_| |_| |_|
and Keystone Investment Management Company,
such new sub-advisory agreement to contain the |_ |_ |_
same terms and conditions as the current
sub-advisory agreement, except for the dates
of execution, effectiveness and termination.
IMPORTANT: Please sign on the reverse side. xxx
<PAGE>
MONARCH VOTING INSTRUCTIONS SOLICITED ON BEHALF
LIFE INSURANCE COMPANY OF THE BOARD OF DIRECTORS FOR A SPECIAL
MEETING OF SHAREHOLDERS OF THE VARIABLE
INVESTORS SERIES TRUST.
DECEMBER 9, 1996
\/ Please fold and detach card at perforation before mailing \/
WORLD EQUITY PORTFOLIO ("PORTFOLIO")
INSTRUCTIONS TO MONARCH LIFE INSURANCE COMPANY
FOR THE SPECIAL MEETING OF SHAREHOLDERS OF
VARIABLE INVESTORS SERIES TRUST TO BE HELD ON DECEMBER 9, 1996
INSTRUCTIONS SOLICITED ON BEHALF OF
MONARCH LIFE INSURANCE COMPANY
The undersigned hereby instructs Monarch Life Insurance Company (the
"Company") to vote all shares of the above-referenced Portfolio of VARIABLE
INVESTORS SERIES TRUST (the "Trust") represented by shares held by the
undersigned at a special meeting of shareholders of the Trust to be held at
10:00 a.m., Eastern Time, on December 9, 1996, at the offices of First Variable
Advisory Services Corp., 10 Post Office Square, Boston, Massachusetts and at any
adjournment thereof, as indicated on the reverse side.
Dated: ________________________, 1996
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S)
APPEAR ON THIS CARD. When signing as attorney,
executor, administrator, trustee, guardian, or as custodian
for a minor, please sign your name and give full title as
such. If signing on behalf of a corporation, please sign full
corporate name and your name and indicate your title. If
you are a partner signing for a partnership, please sign the
partnership name and your name. Joint owners should
each sign this proxy. Please sign, date and return.
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Signature(s) xxx
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PLEASE SIGN AND DATE THIS FORM ON THE REVERSE SIDE
AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
\/ Please fold and detach card at perforation before mailing \/
INSTRUCTIONS SOLICITED ON BEHALF OF MONARCH LIFE INSURANCE COMPANY
MONARCH LIFE INSURANCE COMPANY WILL VOTE SHARES HELD ON BEHALF OF THE
CONTRACT OWNER AS INDICATED BELOW OR FOR THE PROPOSAL IF NO CHOICE IS INDICATED.
RECEIPT OF THE NOTICE OF THE SPECIAL MEETING AND THE ACCOMPANYING PROXY
STATEMENT IS HEREBY ACKNOWLEDGED.
IF THIS INSTRUCTION FORM IS SIGNED AND RETURNED AND NO SPECIFICATION IS MADE,
THE COMPANY SHALL VOTE FOR ALL THE PROPOSALS. IF THIS INSTRUCTION CARD IS NOT
RETURNED OR IS RETURNED UNSIGNED, THE COMPANY SHALL VOTE YOUR SHARES IN THE
SAME PROPORTION AS IT VOTES THE SHARES FOR WHICH IT HAS RECEIVED INSTRUCTIONS.
Please vote by filling in the appropriate box below, as shown, using blue or
black ink or dark pencil. Do not use red ink. |_|
ABSTAIN
1. To approve a new sub-advisory agreement FOR AGAINST FROM
(with respect to the World Equity Portfolio)
between First Variable Advisory Services Corp. |_| |_| |_|
and Keystone Investment Management Company,
such new sub-advisory agreement to contain the |_ |_ |_
same terms and conditions as the current
sub-advisory agreement, except for the dates
of execution, effectiveness and termination.
IMPORTANT: Please sign on the reverse side. xxx
