<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:
[X] Preliminary Proxy Statement
[ ] 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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<PAGE>
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: October , 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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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)
- 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 shares of the Portfolio outstanding. See Page 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 5, 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 .
The net assets of the Portfolio as of September 30, 1996 were $ .
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. The only person known to First Variable Life or
Monarch Life to own, of record or beneficially, more than 20% of the
outstanding variable annuity accumulation units of Funds A, E or M or Separate
Accounts VA or VA-3 is the State of Arkansas which owned, on , 1996,
a total of accumulation units of Fund A, or % of the then
outstanding accumulation units. The State's ownership of variable annuity
contracts arises pursuant to non-qualified deferred compensation plans
sponsored by the State for the benefit of plan participants. By virtue of the
foregoing, both First Variable Life and the State of Arkansas may be deemed to
be controlling persons of the Portfolio.
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: October , 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>
EXPENSE
AGGREGATE LIMITATION,
AMOUNT IF ANY (AS A
NET ASSETS OF ADVISORY PERCENTAGE OF
FISCAL YEAR ON SEPT. 30, FEE FOR LAST AVERAGE NET
NAME OF FUND ENDED 1996 FISCAL YEAR ASSETS)
- ------------------------------ ------------------ ------------ -------------- ------------------
<S> <C> <C> <C>
B-1 .......................... 10/31/95 $1,876,672 N/A
B-2 .......................... 8/31/96 3,481,728 N/A
B-4 .......................... 7/31/96 3,788,171 N/A
K-1 .......................... 6/30/96 6,447,849 N/A
K-2 .......................... 10/31/95 2,779,544 N/A
S-1 .......................... 8/31/96 1,492,757 N/A
S-3 .......................... 8/31/96 1,908,509 N/A
S-4 .......................... 5/31/96 8,473,139 N/A
Adjustable Rate .............. 9/30/96 N/A
Institutional ................ 6/30/96 9,209 Limited to 1.00%
International ................ 10/31/95 985,652 N/A
Precious Metals .............. 2/28/96 1,354,605 N/A
Tax Free ..................... 12/31/95 5,327,202 N/A
Emerging Growth .............. 9/30/96 N/A
Balanced Fund ................ 6/30/97* Limited to 1.50%
for Class A and
2.25% for
Classes B & C
Capital Preservation
and Income ................. 9/30/96 Limited to 0.90%
for Class A and
1.65% for
Classes B & C
Emerging Markets ............. 10/31/96** Limited to 0.00%
for Classes
A, B, C
Total Return ................. 11/30/95 300,290 N/A
Fund of the Americas ......... 10/31/95 1,099,920 N/A
Global Opportunities ......... 9/30/96 N/A
Global Resources ............. 3/31/96 217,332 N/A
Government Securities ........ 7/31/96 365,012 N/A
Intermediate Term ............ 7/31/96 273,644 Limited to 1.10%
for Class A and
1.85% for
Classes B & C
Liquid Trust ................. 6/30/96 1,359,239 N/A
Omega ........................ 12/31/95 1,280,426 N/A
Small Company Growth ......... 5/31/96 21,221 Limited to 1.95%
for Class A and
2.70% for
Classes B & C
State Tax Free ............... 3/31/96 1,168,889 Limited to 0.75%
for Class A and
1.50% for
Classes B & C
State Tax Free II ............ 11/30/95 233,519 Limited to 0.75%
for Class A and
1.50% for
Classes B & C
Strategic Income ............. 7/31/96 1,663,669 N/A
Tax Free Income .............. 11/30/95 919,802 N/A
World Bond ................... 10/31/95 93,806 N/A
<FN>
* Balanced Fund began operations on August 16, 1996; these fees are for the period from August 16, 1996
to September 30, 1996.
** Emerging Markets began operations on May 31, 1996; these fees are for the period from May 31, 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.
- -------------------------------------------------------------
| |
| |
| |
- -------------------------------------------------------------
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 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
