<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
CANADA LIFE OF AMERICA SERIES FUND, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[CANADA LIFE LETTERHEAD]
July 4, 1997
Dear Contract Owner:
As Owner of a variable annuity contract ("Contract") issued by the Canada Life
Insurance Company of New York ("Canada Life"), you have the right to instruct
Canada Life how to vote certain shares of the International Equity Portfolio of
the Canada Life of America Series Fund, Inc. (the "Fund") at the July 16, 1997
special meeting of shareholders of the Fund (the "Meeting"). To assist you in
giving this instruction, we have enclosed the following:
(1) A Notice of the Special Meeting;
(2) Voting Instruction Form; and
(3) A Proxy Statement to Shareholders.
Please read the enclosed Notice of the Special Meeting and the Proxy Statement
for details regarding the purposes of the Meeting.
The purposes of the Meeting are to vote on the approval of an Sub-Advisory
Agreement between CL Capital Management, Inc. ("CLCM") and Canada Life
Investment Management Limited ("CLIM") with respect to the International Equity
Portfolio of the Fund, the material terms of which are substantially the same
as those of the prior Sub-Advisory Agreement between CLCM and CLIM and to
transact such other business as may properly come before the meeting or any
adjournment thereof. See the Proxy Statement for Details.
Canada Life is one of two shareholders of the Fund. Although you are not
directly a shareholder of the Fund, some or all of your Contract Value is
invested, as provided by your Contract, into the International Equity Portfolio.
Accordingly, you have the right to instruct Canada Life how to vote the
International Equity Portfolio shares which are attributable to your Contract.
To be given effect at the Meeting, properly executed Voting Instruction Forms
must be received by us at P.O. Box 105087, Atlanta, Georgia 30348, no later than
July 14, 1997.
<PAGE> 3
IF WE SO RECEIVE YOUR FORM AND A CHOICE AS TO THIS PROPOSAL IS NOT SPECIFIED IN
IT, WE WILL VOTE SUCH SHARES "FOR" SUCH PROPOSAL.
We will vote the shares of the International Equity Portfolio for which timely
voting instructions are not received in the same proportion as to those shares
attributable to the International Equity Portfolio for which timely instructions
are received. We will vote shares held in our general account in accordance with
instructions received from Contract Owners. We will also vote International
Equity Portfolio shares in our best judgment on any other matters which come
before the Meeting.
The number of International Equity Portfolio shares for which a Contract Owner
may give instructions is determined as follows. For each Contract the number of
votes in the International Equity Portfolio will be determined by dividing the
amount of the Contract's value attributable to the International Equity
Portfolio as of the record date by the value of one share of such Portfolio.
Fractional shares will be counted.
Please complete the Voting Instruction Form and promptly return the Form
pursuant to the instructions provided on the Form. Your instructions are very
important, and we would appreciate your return of the Form as soon as possible.
Thank you for your prompt cooperation.
Very truly yours,
/s/ Allen Loney
D. Allen Loney
President
Canada Life Insurance Company of New York
P.S. If you own more than one Contract, you will receive a separate mailing for
each Contract. It is important you return signed Voting Instruction Form for
each Contract.
<PAGE> 4
[CANADA LIFE LETTERHEAD]
July 4, 1997
Dear Contract Owner:
As Owner of a variable annuity contract ("Contract") issued by the Canada Life
Insurance Company of America ("Canada Life"), you have the right to instruct
Canada Life how to vote certain shares of the International Equity Portfolio of
the Canada Life of America Series Fund, Inc. (the "Fund") at the July 16, 1997
special meeting of shareholders of the Fund (the "Meeting"). To assist you in
giving this instruction, we have enclosed the following:
(1) An Notice of the Special Meeting:
(2) Voting Instruction Form; and
(3) A Proxy Statement to Shareholders.
Please read the enclosed Notice of the Special Meeting and the Proxy Statement
for details regarding the purposes of the Meeting.
The purposes of the Meeting are to vote on the approval of an Sub-Advisory
Agreement between CL Capital Management, Inc. ("CLCM") and Canada Life
Investment Management Limited ("CLIM") with respect to the International Equity
Portfolio of the Fund, the material terms of which are substantially the same
as those of the prior Sub-Advisory Agreement between CLCM and CLIM and to
transact such other business as may properly come before the meeting or any
adjournment thereof. See the Proxy Statement for Details.
Canada Life is one of two shareholders of the Fund. Although you are not
directly a shareholder of the Fund, some or all of your Contract Value is
invested, as provided by your Contract, into the International Equity Portfolio.
Accordingly, you have the right to instruct Canada Life how to vote the
International Equity Portfolio shares which are attributable to your Contract.
To be given effect at the Meeting, properly executed Voting Instruction Forms
must be received by us at P.O. Box 105087, Atlanta, Georgia 30348, no later than
July 14, 1997.
<PAGE> 5
IF WE SO RECEIVE YOUR FORM AND A CHOICE AS TO THIS PROPOSAL IS NOT SPECIFIED IN
IT, WE WILL VOTE SUCH SHARES "FOR" SUCH PROPOSAL.
We will vote the shares of the International Equity Portfolio for which timely
voting instructions are not received in the same proportion as to those shares
attributable to the International Equity Portfolio for which timely instructions
are received. We will vote shares held in our general account in accordance with
instructions received from Contract Owners. We will also vote International
Equity Portfolio shares in our best judgment on any other matters which come
before the Meeting.
The number of International Equity Portfolio shares for which a Contract Owner
may give instructions is determined as follows. For each Contract the number of
votes in the International Equity Portfolio will be determined by dividing the
amount of the Contract's value attributable to the International Equity
Portfolio as of the record date by the value of one share of such Portfolio.
Fractional shares will be counted.
Please complete the Voting Instruction Form and promptly return the Form
pursuant to the instructions provided on the Form. Your instructions are very
important, and we would appreciate your return of the Form as soon as possible.
Thank you for your prompt cooperation.
Very truly yours,
/s/ D. Allen Loney
D. Allen Loney
President
Canada Life Insurance Company of America
P.S. If you own more than one Contract, you will receive a separate mailing for
each Contract. It is important you return signed Voting Instruction Form for
each Contract.
<PAGE> 6
CANADA LIFE OF AMERICA SERIES FUND, INC.
INTERNATIONAL EQUITY PORTFOLIO
330 University Avenue
Toronto, Canada M5G IR8
NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS
July 16, 1997
TO THE SHAREHOLDERS:
A special meeting of the shareholders of the Canada Life of America
Series Fund, Inc. (the "Fund"), will be held on Wednesday, July 16, 1997, at
6201 Powers Ferry Road, N.W., Suite 600, Atlanta, Georgia 30339, or any
adjournment thereof, for the following purposes:
(1) To approve a Sub-Advisory Agreement between CL Capital Management,
Inc. ("CLCM") and Canada Life Investment Management Limited ("CLIM")
with respect to the International Equity Portfolio of the Fund, the
material terms of which are substantially the same as those of the
prior Sub-Advisory Agreement between CLCM and CLIM; and
(2) To transact such other business as may properly come before the meeting
or any adjournment thereof.
Canada Life Insurance Company of America ("Canada Life") and Canada Life
Insurance Company of New York ("Canada Life of New York") are shareholders of
the Fund. However, Canada Life and Canada Life of New York hereby solicit and
agree to vote the shares of the International Equity Portfolio of the Fund at
this meeting in accordance with the timely instructions received from owners of
variable annuity contracts ("Contracts") funded through Canada Life of America
Variable Annuity Account I and Canada Life of New York Variable Annuity Account
1, both of which invest in shares of the International Equity Portfolio of the
Fund.
As a Contract Owner of record at the close of business on May 31, 1997, you have
the right to instruct Canada Life or Canada Life of New York as to the manner in
which the International Equity Portfolio shares attributable to your Contract
should be voted. To assist you in giving Canada Life or Canada Life of New York
your instructions, a Voting Instruction Form is enclosed which reflects the
number of shares of the International Equity Portfolio for which you are
entitled to give voting instructions. In addition, a Proxy Statement is attached
to this notice and describes the matters to be acted upon at this meeting.
YOUR INSTRUCTIONS ARE IMPORTANT. Please read the attached Proxy Statement and
complete the enclosed Voting Instruction Form and return it promptly in the
enclosed postpaid return envelope.
By Order of the Board of Directors
/s/ Roy W. Linden
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Atlanta, Georgia Roy W. Linden, Assistant Secretary
July 4, 1997 Canada Life of America Series Fund, Inc.
<PAGE> 7
CANADA LIFE OF AMERICA SERIES FUND, INC.
INTERNATIONAL EQUITY PORTFOLIO
PRINCIPAL EXECUTIVE OFFICE MAILING ADDRESS
330 University Avenue P.O. Box 105087
Toronto, Canada M5G IR8 Atlanta, Georgia 30348
July 4, 1997
STATEMENT TO PERSONS ENTITLED
TO GIVE VOTING INSTRUCTIONS IN CONNECTION
WITH CANADA LIFE OF AMERICA
VARIABLE ANNUITY ACCOUNT 1 AND
CANADA LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT 1
VARIABLE ANNUITY CONTRACTS
Soliciting Instructions for the Voting of
Shares of the International Equity
Portfolio of Canada Life of America Series
Fund, Inc.
at the Special Meeting of Shareholders to be held on
July 16, 1997
This Statement is first being furnished on July 4, 1997 in connection with a
solicitation by Canada Life Insurance Company of America ("CLICA"), Canada Life
Insurance Company of New York ("Canada Life of New York") and by Canada Life of
America Series Fund, Inc. (the "Fund") of voting instructions from owners of
variable annuity contracts (the "Contracts") entitled to give such instructions
for use at the Special Meeting of Shareholders of the Fund, to be held on
Wednesday, July 16, 1997, for the purposes set forth below and in the
accompanying Notice of Special Meeting of Shareholders. At this meeting,
Shareholders will be asked:
(1) To approve a Sub-Advisory Agreement between CL Capital
Management, Inc. ("CLCM") and Canada Life Investment
Management Limited ("CLIM") with respect to the International
Equity Portfolio of the Fund, the material terms of which are
substantially the same as those of the prior Sub-Advisory
Agreement between CLCM and CLIM; and
(2) To transact such other business as may properly come before
the meeting or any adjournment thereof.
CLICA is a stock life insurance company with assets as of December 31, 1996 of
approximately $2.7 billion. It was incorporated under Michigan law on April 12,
1988 and is principally engaged in issuing and reinsuring annuity policies.
CLICA is admitted in 47 states and the District of Columbia. CLICA is a wholly
owned subsidiary of The Canada Life Assurance Company, a Canadian life
insurance company headquartered in Toronto, Ontario, Canada, with a U.S. home
office in Atlanta, Georgia. The Canada Life Assurance Company commenced
<PAGE> 8
insurance operations in 1847, and has been actively operating in the United
States since 1889 with consolidated assets as of December 31, 1996 of
approximately $23.3 billion.
Canada Life of New York is a stock life insurance company with assets as of
December 31, 1996 of approximately $261 million. It was incorporated under New
York law on June 7, 1971 and is principally engaged in issuing annuity and life
insurance policies in the State of New York. Canada Life of New York is a
wholly owned subsidiary of The Canada Life Assurance Company.
CLCM, which is located at 6151 Powers Ferry Road, N.W., Atlanta, Georgia 30339,
has served as investment adviser to the Fund since May 1, 1995.
The Canada Life of America Variable Annuity Account 1 (the "Variable Account")
was established as a separate investment account of CLICA on July 22, 1988 by
Canada Life's Board of Directors. The Canada Life of New York Variable Annuity
Account 1 (the "New York Variable Account") was established as a separate
investment account of Canada Life of New York on September 13, 1989 by Canada
Life of New York's Board of Directors. Both the Variable Account and the New
York Variable Account (together, the "Variable Accounts") are registered with
the Securities and Exchange Commission (the "Securities and Exchange
Commission") under the Investment Company Act of 1940 (the "Investment Company
Act") as unit investment trusts.
Contract owners may allocate net premiums and policy value among the
sub-accounts of the Variable Account and the New York Variable Account, one of
which is the International Sub- Account (the "Sub-Account"). The assets of the
Sub-Account are in turn invested in shares of the International Equity
Portfolio of the Fund. This portfolio represents a separate investment
portfolio of the Fund. The Fund, a Maryland corporation organized on February
23, 1989, is registered with the Securities and Exchange Commission as an
open-end management investment company under the Investment Company Act. For
purposes of this Proxy Statement, a Contract owner who allocates premiums or
policy value to the Sub-Account will be considered a shareholder of the
International Equity Portfolio of the Fund and will be eligible to vote his
interests in such portfolio.
The proposal will be voted upon at the Special Meeting of Shareholders to be
held on July 16, 1997. The expense of the solicitation of voting instructions
for such Special Meeting of Shareholders, including the cost of preparing,
printing and mailing this Statement and the accompanying Notice of Special
Meeting of Shareholders and Voting Instruction Form, will be borne by CLICA.
RECORD DATE; VOTING RIGHTS; OUTSTANDING SHARES
Contract owners of record at the close of business on May 31, 1997 will be
entitled to be present and give voting instructions at the meeting. On that
date, there were 334,719.325 International Equity Portfolio shares outstanding.
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<PAGE> 9
Pursuant to an undertaking made in the Variable Account and the New York
Variable Account prospectuses, CLICA and Canada Life of New York will vote
shares in accordance with timely voting instructions received from Contract
owners. To be given effect, properly executed Voting Instruction Forms must be
forwarded to CLICA and Canada Life of New York at P.O. Box 105087, Atlanta,
Georgia 30348, Attn. David A. Hopkins, Secretary, not later than 5:00 p.m.,
Eastern Daylight Time, July 14, 1997. If no choice is specified for the
proposal to be voted upon at this meeting, the timely return of the Voting
Instruction Forms shall be deemed to be an instruction to vote such shares in
favor of such proposal. Accordingly, such shares will be voted by CLICA and
Canada Life of New York, in favor of the Sub-Advisory Agreement between CLCM
and CLIM.
The Voting Instruction Form is revocable, at any time prior to being voted, by
notifying the Secretary of the Fund, at its Executive Offices, in writing.
CLICA and Canada Life of New York will vote the shares of the International
Equity Portfolio of the Fund for which timely voting instructions are not
received in the same proportion as those shares attributable to that portfolio
for which timely instructions are received. CLICA and Canada Life of New York
will vote the shares held in their general accounts in accordance with
instructions received from Contract owners. CLICA, The Canada Life Assurance
Company or its affiliates will vote International Equity Portfolio shares held
in their unregistered separate accounts in their discretion. International
Equity Portfolio shares will also be voted in the best judgment of CLICA and
Canada Life of New York on any other matters which come before the meeting.
The number of International Equity Portfolio shares in the Sub-Account for
which a Contract owner may give instruction is determined by dividing any
portion of that Contract's policy value derived from participation in that
Sub-Account by the value of one share in the International Equity Portfolio
determined as of the record date. Each share of the International Equity
Portfolio is entitled to one vote. Fractional votes will be counted.
The vote required to approve the matter scheduled to come before this meeting
is set forth below.
BACKGROUND
Until recently, CLIM was a wholly-owned subsidiary of The Canada Life Assurance
Company. On or about July 2, 1997, however, pursuant to an agreement entered
into between The Canada Life Assurance Company, CLIM and certain executive
employees of CLIM ("CLIM Employees"), the CLIM Employees acquired, through an
employee owned holding company, 50 percent of the issued and outstanding shares
of CLIM common stock from The Canada Life Assurance Company for $500,000.00
(CDN) (the "Transaction"). (1) From the date of the
- --------------------
(1) The CLIM Employees include the following: John Knox Sandford
Fleming, President; Gary Victor Kondrat, Chief Investment Officer; Gary Michael
Morris, Vice President; Helen
(continued...)
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<PAGE> 10
Transaction, CLIM, as jointly owned by The Canada Life Assurance Company and
the holding company owned by the CLIM Employees, continued to provide
investment advisory services to CLICA and The Canada Life Assurance Company in
connection with the insurers' institutional and qualified retirement plan
business. CLIM retained all of its current investment advisory personnel after
the Transaction. The composition of CLIM's Board of Directors changed after the
Transaction, however, to reflect the interests of the CLIM Employees. Three of
the six directors on the CLIM Board of Directors were appointed by the CLIM
Employees.
Consummation of the Transaction resulted in the termination of the Sub-Advisory
Agreement entered into between CLCM and CLIM.2 Upon consummation of the
Transaction and International Equity Portfolio shareholder approval, CLIM will
provide investment advisory services to the International Equity Portfolio of
the Fund pursuant to a written agreement approved at the May 21, 1997 meeting
of the Fund's Board of Directors. The Sub-Advisory Agreement was voted upon and
approved by the Fund's directors including a majority of the directors who are
not interested persons of either CLCM or CLIM (as defined under the Investment
Company Act). Because Section 15(a) of the Investment Company Act prohibits any
person from serving as an investment adviser or sub-adviser to a registered
investment company except pursuant to a written contract that has been approved
by the shareholders of the registered investment company, in order for CLIM to
provide investment advisory services to the
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(1)(... continued)
Jean Chisholm-Owen, Vice President; Russel John Robertson, Vice President;
John Manville Vipond, Vice President; Diane Lynn Haflidson, Vice President;
Thomas Ralph Henry Tibbles, Vice President; Susan Elizabeth Henderson,
Director, Finance and Administration; Laurie Margaret McPhail, Investment
Consultant; Philip Humphrey Wootteen, Portfolio Manager PIM; Barry Addison
Lockhart, Senior Investment Analyst, Foreign Equities; Andrew Grant Osterback,
Senior Investment Analyst, Fixed Income; Richard Luc Henri Joseph Ruel,
Trader, Canadian & Foreign Equities; Gilbert Sherman Lamothe, Portfolio System
Administrator; and Michael Martin Globe, Manager, Marketing and Client
Services.
(2) The Investment Company Act requires each investment advisory and
sub-advisory contract providing for the performance of investment advisory
services on behalf of a registered investment company, such as the Fund, to
terminate automatically upon its assignment. An "assignment" is broadly defined
under the Investment Company Act to include, among other things, any transfer
of a controlling block of an adviser's stock. Under the Investment Company Act,
any person who owns beneficially, either directly or indirectly, more than 25
percent of the voting securities of a company is presumed to control it. In
this regard, the sale of 50 percent of CLIM's outstanding stock to the holding
company owned by the CLIM Employees together with the reconstitution of CLIM's
Board of Directors to represent the interests of those employees may reflect an
actual change in the control or management of CLIM and, therefore, an
assignment and termination of the current Sub-Advisory Agreement within the
meaning of the Investment Company Act.
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<PAGE> 11
International Equity Portfolio of the Fund, Contract owners must approve the
Sub-Advisory Agreement between CLCM and CLIM. The Form of the Sub-Advisory
Agreement is attached as Exhibit A.
From the date of the Transaction until the date the International Equity
Portfolio shareholders approve the Sub-Advisory Agreement, CLIM will provide
investment advisory services to the International Equity Portfolio at cost.
During this time period, the total investment advisory fee paid by the
International Equity Portfolio has been reduced to reflect that CLIM's services
are provided on an at cost basis.
Contract owners should read the Sub-Advisory Agreement carefully. There are no
fees payable to CLIM, CLCM or CLICA from the Fund's assets other than the
advisory fees.
Retaining CLIM as the sub-adviser for the International Equity Portfolio will
benefit the Fund and Contract owners. As discussed below, CLIM has substantial
experience advising international equity portfolios, a successful track record
for the portfolios it advised and highly educated and experienced personnel.
PROPOSAL
APPROVAL OF NEW INVESTMENT
SUB-ADVISORY AGREEMENT
Contract owners are being asked to approve a Sub-Advisory Agreement between
CLCM and CLIM to permit CLIM to serve as the investment sub-adviser for the
International Equity Portfolio of the Fund. CLIM, which is located at 130
Adelaide Street West, Suite 3000, Toronto, Ontario, Canada, M5H 3P5, served as
investment sub-adviser to the International Equity Portfolio from May 1, 1995
pursuant to an Investment Sub-Advisory Agreement dated May 1, 1995 between CLCM
and CLIM (the "Old Sub-Advisory Agreement"). The Old Sub- Advisory Agreement
was last approved by the Fund's Board of Directors, including a majority of the
directors who were not parties to the Old Sub-Advisory Agreement or interested
persons of such parties, at a meeting held on February 23, 1995.
The consummation of the Transaction resulted in the termination of the Old
Sub-Advisory Agreement between CLCM and CLIM. In order for CLIM to serve as the
investment Sub- Adviser for the International Equity Portfolio, CLCM and CLIM
will enter into a new Sub-Advisory Agreement that is substantially identical
to the Old Sub-Advisory Agreement.
The Sub-Advisory Agreement was approved by the Fund's Board of Directors,
including a majority of the directors who were not interested persons of the
parties to the Sub-Advisory Agreement, at a meeting held on May 21, 1997. The
fees payable under the Sub-Advisory Agreement will be the same as the fees
payable under the Old Sub-Advisory Agreement.
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<PAGE> 12
If the Sub-Advisory Agreement is approved by the International Equity Portfolio
shareholders, it will remain in effect, unless earlier terminated, for an
initial term expiring two years from the date of effectiveness and will
continue in effect thereafter for successive twelve-month periods, provided
that each such continuance is specifically approved at least annually (i) by
the Fund's Board of Directors or by the vote of a majority of the outstanding
voting securities of the International Equity Portfolio, and, in either case,
(ii) by a majority of the Fund's directors who are not parties to the
Sub-Advisory Agreement or interested persons of any such party (other than as
directors of the Fund).
CLIM has advised the Fund that there has been no change in CLIM's investment
management and other personnel in connection with the Transaction and that the
same persons responsible for management of the International Equity Portfolio
under the Old Sub-Advisory Agreement will continue to be responsible under the
Sub-Advisory Agreement.
If the shareholders of the International Equity Portfolio do not approve the
Sub-Advisory Agreement, CLCM and the directors of the Fund would obtain interim
sub-advisory services for the International Equity Portfolio, either from CLIM
or from another advisory organization. Thereafter, the directors would either
negotiate a new investment sub-advisory agreement for the International Equity
Portfolio with an investment advisory organization selected by the directors or
make other appropriate arrangements, in either event subject to approval by the
shareholders of the International Equity Portfolio.
COMPARISON OF THE SUB-ADVISORY AGREEMENT AND THE OLD SUB-ADVISORY AGREEMENT
The Sub-Advisory Agreement is identical in all material respects to the Old
Sub-Advisory Agreement except as to the dates of effectiveness. Under the terms
of the Sub-Advisory Agreement and the Old Sub-Advisory Agreement, CLIM manages
the investment and reinvestment of the assets of the International Equity
Portfolio and continuously reviews, supervises and administers the
International Equity Portfolio's investments. CLIM manages the International
Equity Portfolio and has done so since the inception of the International
Equity Portfolio. CLIM is responsible for placing orders for the purchase and
sale of the investments directly with brokers and dealers selected by it in its
discretion. CLIM also furnishes to CLCM and the Board of Directors, which has
overall responsibility for the business and affairs of the Fund, periodic
reports on the investment performance of the International Equity Portfolio.
The Sub-Advisory Agreement provides that CLIM shall not be liable under the
Agreement for any mistake of judgment or in any event whatsoever, except for
lack of good faith, provided that nothing in the Agreement shall be deemed to
protect, or purport to protect, CLIM against any liability to the International
Equity Portfolio or to the shareholders of the International Equity Portfolio
to which CLIM would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of CLIM's duties under the
Agreement or by reason of CLIM's reckless disregard of its obligations and
duties under the Agreement.
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<PAGE> 13
The Sub-Advisory Agreement may be terminated at any time (i) by the Fund's
Board of Directors or by a vote of a majority of the outstanding voting
securities of the International Equity Portfolio on 60 days' written notice to
CLIM or (ii) by CLIM on 60 days' written notice to the Fund.
The terms of the Sub-Advisory Agreement obligate CLIM to manage the
International Equity Portfolio in accordance with applicable laws and
regulations. The provision of investment advisory services by CLIM to the
International Equity Portfolio is not exclusive under the terms of the
Sub-Advisory Agreement. CLIM is free to and does render investment advisory
services to others. See "Information About CLIM" below.
PORTFOLIO TRANSACTIONS AND BROKERAGE
CLIM will be responsible for the investment decisions of the International
Equity Portfolio of the Fund, including decisions to buy and sell securities,
the selection of brokers and dealers to effect the transactions, the placing of
investment transactions, and the negotiation of brokerage commissions, if any.
The International Equity Portfolio has no obligation to deal with any dealer or
groups of dealers in the execution of transactions in portfolio securities. In
placing orders, it is the policy of the International Equity Portfolio to
obtain the most favorable net results, taking into account various factors,
including price, dealer spread or commission, if any, size of the transaction,
and difficulty of execution. While CLIM generally seeks reasonably competitive
spreads or commissions, the International Equity Portfolio will not necessarily
be paying the lowest spread or commission available.
If the securities in which the International Equity Portfolio invest are traded
primarily in the over-the-counter market, where possible, the International
Equity Portfolio will deal directly with the dealers who make a market in the
securities involved unless better prices and execution are available elsewhere.
Such dealers usually act as principals for their own account. On occasion,
securities may be purchased directly from the issuer. The cost of securities
transactions for the International Equity Portfolio will consist primarily of
brokerage commissions or dealer or underwriter spreads.
While CLIM seeks to obtain the most favorable net results in effecting
transactions for the International Equity Portfolio, dealers who provide
supplemental investment research to CLIM may receive orders for transactions by
the Portfolio. Such supplemental research service ordinarily consists of
assessments and analyses of the business or prospects of a company, industry,
or economic sector. If in the judgment of CLIM the Portfolio will be benefited
by such supplemental research services, CLIM is authorized to pay spreads or
commissions to brokers or dealers furnishing such services which are in excess
of spreads or commissions which another broker or dealer may charge for the
same transaction. Information so received will be in addition to and not in
lieu of the services required to be performed by CLIM under the Sub-Advisory
Agreement. The expenses of CLIM will not necessarily be reduced as a result of
the receipt of such supplemental information. In some cases, CLIM may use such
supplemental research in
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<PAGE> 14
providing investment advice to its other advisory accounts. CLIM will not use
affiliated brokers to execute portfolio transactions on behalf of the
International Equity Portfolio.
EVALUATION BY THE BOARD OF DIRECTORS
At the meeting of the Board of Directors of the Fund on May 21, 1997, the Board
of Directors including those directors that are not interested persons to the
Sub-Advisory Agreement reviewed and discussed information regarding the
Sub-Advisory Agreement. In evaluating the continuation of CLIM as Sub-Adviser
to the International Equity Portfolio the Board of Directors reviewed materials
furnished by CLICA, CLCM and CLIM relevant to their decision. Those materials
included information regarding CLIM, its personnel, operations and financial
condition, the terms of the Sub-Advisory Agreement, the investment performance
of the International Equity Portfolio and the possible effects on the
International Equity Portfolio of replacing CLIM as Sub-Adviser.
The directors evaluated CLIM's experience and expertise by considering such
factors as: the clients for which CLIM performed investment advisory services;
the fees CLIM charges its other clients for investment advisory services; the
size of the asset pools managed by CLIM; and the length of CLIM's service to
such other clients. The directors noted that CLIM has rendered investment
advisory services on behalf of separate accounts sponsored by The Canada Life
Assurance Company since CLIM's incorporation in 1977 and that certain of those
separate accounts invest in portfolios with investment objectives similar to
the International Equity Portfolio of the Fund. As of December 31, 1996, The
Canada Life Assurance Company separate accounts managed by CLIM held $5.16
billion (CDN) in assets.
CLICA, CLCM and CLIM presented the directors with information comparing the
performance of the International Equity Portfolio with the performance of ten
other international equity funds supporting separate accounts sponsored by life
insurance companies. In all cases, the International Equity Portfolio compared
favorably and for the year ended December 31, 1996, exceeded the average return
for those other funds by 3.9 percent.
The directors considered the educational background, professional background
and investment management experience of CLIM's sixteen investment advisory
personnel. The directors were presented with the biographies which reflected,
among other things, that the majority of CLIM's investment advisory personnel
held a Chartered Financial Analyst designation and that several held a Masters
in Business Administration. The biographies also reflected that CLIM's
investment advisory personnel combined for more than two hundred sixty years of
experience in rendering investment advisory services.
The directors compared the investment advisory fees to be charged the
International Equity Portfolio of the Fund with advisory fees charged by other
advisors and sub-advisors to other funds with similar investment objectives.
The directors were presented with comparative information that set forth the
investment advisory fees assessed by other advisers to international
- 8 -
<PAGE> 15
equity funds supporting variable annuity contracts issued by life insurance
companies. The directors noted that the advisory fee paid by the International
Equity Portfolio compared favorably in all cases with the advisory fees paid by
such other funds. Advisory fees for comparable funds ranged from .65 to 1.00
percent of assets under management. In comparison, the International Equity
Fund pays an advisory fee at an annual rate of 0.80% of average daily net
assets from which a sub-advisory fee of 0.30% of the net assets of the
International Equity Portfolio will be paid CLIM.
The directors also compared the sub-advisory fees charged the International
Equity Portfolio by CLIM to the advisory fees charged other CLIM clients for
similar services rendered. Advisory fees charged by CLIM range from .10 to .45
percent of fund net assets compared with a sub- advisory fee of .30 percent of
the International Equity Portfolio net assets.
The directors noted that the sub-advisory fees under the Sub-Advisory Agreement
are identical to the fees payable under the Old Sub-Advisory Agreement between
CLCM and CLIM. The directors also considered the sub-advisory fees in light of
the services to be rendered under the Sub-Advisory Agreement.
The directors reviewed the financial statements for CLIM for the years ended
December 31, 1996 and December 31, 1995. CLIM's financial statements revealed
substantial asset and revenue growth as well as decreased operating expenses.
Based on its review, the Board of Directors approved the Sub-Advisory Agreement
and determined to recommend that Contract owners approve the Sub-Advisory
Agreement. In this regard, it was noted that the investment performance of the
International Equity Portfolio was comparable to funds and portfolios with
similar investment objectives and policies. It was also noted that CLIM had
substantial experience advising international equity portfolios, a successful
track record for the portfolios it advised, highly educated and experienced
personnel and that the fees payable under the Sub-Advisory Agreement were
identical to the fees paid under the Old Sub-Advisory Agreement between CLCM
and CLIM and that such fees were reasonable and fair for the investment
advisory services rendered. Accordingly, after consideration of the above, and
such other factors and information it deemed relevant, the Board of Directors,
including each member of the Board who is not an interested person of either
CLCM or CLIM, unanimously approved the Sub-Advisory Agreement and voted to
recommend its approval by International Equity Portfolio shareholders.
SUB-ADVISORY FEES
CLCM received an advisory fee at an annual rate of 0.80% of the average daily
net assets of the International Equity Portfolio. For its services under the
Old Sub-Advisory Agreement, CLCM paid CLIM, as full compensation for investment
advisory services to the International Equity Portfolio, a monthly fee computed
on a daily basis, at annual effective rate of 0.30% of the net assets of the
International Equity Portfolio. For the fiscal year ended December 31, 1996,
CLCM paid CLIM an aggregate advisory fee of $8,084. The advisory fee payable to
CLIM under the Sub-Advisory Agreement is identical to the fee under the Old
Sub-Advisory Agreement.
- 9 -
<PAGE> 16
INFORMATION ABOUT CLIM
CLIM, a registered investment adviser, has conducted investment management
services since its organization in 1977. CLIM has entered into advisory
agreements which provides investment advisory services to The Canada Life
Assurance Company and CLICA for individual and institutional accounts and
manages approximately $6.65 billion (CDN) in assets. CLIM's principal executive
offices and directors and their principal occupations are listed below.
<TABLE>
<CAPTION>
NAME AND POSITION WITH CLIM PRINCIPAL OCCUPATION
- --------------------------- --------------------
<C> <C>
James Henry Ruess Financial Vice President,
Chairman and Director The Canada Life Assurance Company**
John Knox Sandford Fleming President,
President and Director CLIM*
Gary Victor Kondrat Chief Investment Officer,
Chief Investment Officer CLIM*
Gary Michael Morris Portfolio Manager, Fixed Income,
Vice President CLIM*
Helen Jean Chisholm-Owen Portfolio Manager, Canadian Equities,
Vice President CLIM*
Russel John Robertson Portfolio Manager, Canadian Equities,
Vice President CLIM*
John Manville Vipond Portfolio Manager, Foreign Equities,
Vice President CLIM*
Thomas Ralph Henry Tibbles Portfolio Manager, Foreign Equities
Vice President CLIM*
Robert Michael Smithen Executive Vice President & CFO,
Director The Canada Life Assurance Company**
Alexander Patrick Symons Executive Vice President,
Director The Canada Life Assurance Company**
Roy William Linden Vice President & General Counsel,
Director The Canada Life Assurance Company**
</TABLE>
* The principal business address is 130 Adelaide Street West, Suite 3000,
Toronto, Ontario, Canada, M5H 3P5.
**The principal business address is 330 University Avenue, Toronto, Ontario,
Canada M5G 1R8.
- 10 -
<PAGE> 17
At the present time, CLIM is a jointly owned subsidiary of The Canada Life
Assurance Company and the CLIM Employees. CLIM does not have any additional
shareholders, nor are there any other persons with a material direct interest
in CLIM.
From February 1977 to the present CLIM served as investment adviser to
individuals, pension, profit sharing and other employee benefit plans, trusts,
endowments, foundations and corporations. CLIM served as investment adviser for
certain unregistered segregated accounts consisting of U.S. and foreign stocks,
bonds and money market securities sponsored by The Canada Life Assurance
Company. Such segregated accounts had approximate net assets as of December 31,
1996 of $6.72 billion (CDN), of which CLIM managed approximately $5.16 billion
(CDN). For the fiscal year ended December 31, 1996, CLIM received an aggregate
advisory fee of $5,180,735.
CLIM currently advises the CLICA International Equity Portfolio, an
unregistered pooled fund with investment objectives and policies substantially
similar to those of the International Equity Portfolio of the Fund. The CLICA
International Equity Portfolio is sold exclusively to pension and profit
sharing plans. As of December 31, 1996, the CLICA International Equity
Portfolio had net assets of approximately $9.4 million. CLIM receives an annual
sub-advisory fee equal to .20 percent of the average daily net assets of the
CLICA International Equity Portfolio for investment advisory services rendered
to that portfolio.
VOTE REQUIRED
Approval of the Proposal requires the affirmative vote of "a majority of the
outstanding voting securities" of the International Equity Portfolio as that
term is defined under the Investment Company Act. Under the Investment Company
Act, "a majority of the outstanding voting securities" of the International
Equity Portfolio means the affirmative vote of the lesser of (a) 67% or more of
the shares of the International Equity Portfolio present at the meeting or
represented by proxy if the holders of more than 50% of the outstanding shares
are present or represented by proxy at the meeting or (b) more than 50% of the
outstanding shares of the International Equity Portfolio.
SUBMISSION OF SHAREHOLDER PROPOSALS
It is anticipated that, following the Special Meeting of Shareholders to be
held on July 16, 1997, the Fund will not hold any meetings of shareholders
except as required by Federal or Maryland state law. Shareholders wishing to
submit proposals for inclusion in a proxy statement for a subsequent
shareholder meeting should send proposals to David A. Hopkins, Secretary of the
Fund, P.O. Box 105087, Atlanta, Georgia, 30348.
- 11 -
<PAGE> 18
THE FUND'S ANNUAL REPORT IS AVAILABLE UPON REQUEST FREE OF CHARGE. FOR A COPY
OF THE ANNUAL REPORT PLEASE SEND YOUR REQUEST TO VARIABLE ANNUITY
ADMINISTRATION AT P.O. BOX 105087, ATLANTA, GEORGIA, 30348 OR CALL
1-800-333-2542. UPON RECEIPT OF YOUR REQUEST AND VERIFICATION OF OWNERSHIP OF A
VARIABLE ANNUITY CONTRACT ISSUED THROUGH EITHER THE VARIABLE ACCOUNT OR THE NEW
YORK VARIABLE ACCOUNT A COPY OF THE ANNUAL REPORT WILL BE IMMEDIATELY FORWARDED
TO YOUR ADDRESS VIA FIRST CLASS MAIL.
YOU ARE URGED TO FILL IN, DATE AND SIGN AND RETURN THE ENCLOSED VOTING
INSTRUCTION FORM.
- 12 -
<PAGE> 19
Exhibit A
SUB-INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 1st day of May, 1995 between CL Capital Management,
Inc. (the "Investment Advisor"), a Georgia corporation, and Canada Life
Investment Management Limited (the "Sub-Investment Adviser"), a Canadian
corporation:
WITNESSETH:
WHEREAS, Canada Life of America Series Fund, Inc., a Maryland
Corporation (the "Fund") is engaged in business as a diversified open-end
management investment company and is registered as such under the Investment
Company Act of 1940 (the "Investment Company Act"); and
WHEREAS, the Fund, a series type of investment company, issues separate
classes (or series) of stock, each of which represents a separate portfolio of
investments; and
WHEREAS, the Fund is currently comprised of six classes of stock
(together with any classes subsequently added, the "Series"), each of which
pursues its investment objectives through separate investment policies; and
WHEREAS, the Sub-Investment Adviser is engaged principally in the
business of rendering advisory services and is registered as an investment
adviser under the Investment Advisers Act of 1940; and
WHEREAS, the Fund has employed the Investment Adviser to act as
investment manager of the Fund as set forth in the Investment Advisory
Agreement between the Fund and the Investment Adviser dated May 1, 1995 (the
"Investment Advisory Agreement"); and
WHEREAS, the Fund and the Investment Adviser desire to retain the
Sub-Investment Adviser to render certain investment advisory services to the
International Equity Series in the manner and on the terms hereinafter set
forth;
NOW THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Investment Adviser and the Sub-Investment Adviser
hereby agree as follows:
ARTICLE I
DUTIES OF THE SUB-INVESTMENT ADVISER
The Investment Adviser hereby employs the Sub-Investment Adviser to act
as the investment adviser of the International Equity Series of the Fund, and
to furnish the investment advisory services described below, subject to the
supervision of the Board of Directors of the Fund and the Investment Adviser,
for the period and on the terms and conditions set forth in this Agreement.
The Sub-Investment Adviser hereby accepts such employment and agrees during
such period, at its own expense, to render, or arrange for the rendering of,
such services and to assume the obligations herein set forth for the
compensation provided for herein. The Sub-Investment Adviser shall for all
purposes herein be deemed to be an independent contractor and shall, unless
otherwise expressly provided or authorized, have no authority to act for or
represent the Fund in any way or shall in no way be deemed an agent of the Fund.
<PAGE> 20
2
The Sub-Investment Adviser, shall provide the International Equity
Series with such investment research, advice and supervision as the latter may
from time to time consider necessary for the proper supervision of the assets
of such Series, shall furnish continuously an investment program for such
Series, exchanged, determine how voting and other rights with respect to the
securities of the International Equity Series shall be exercised, and what
portions of such Series shall be held in the various securities in which the
Series invests or cash, and shall take such steps as are necessary to implement
any overall investment plan for such Series, including providing or obtaining
such services as may be necessary in managing, acquiring or disposing of
investments. The Sub-Investment Adviser's services shall be subject always to
the control and restrictions of the Articles of Incorporation and By-Laws of
the Fund, as amended from time to time, the provisions of the Investment
Company Act, the statements relating to the investment objectives of the
International Equity Series, investment policies and investment restrictions as
the same are set forth in the currently effective registration statement
relating to the shares of the Fund under the Securities Act of 1933, as amended
and the Investment Company Act of 1940, as amended (the "Registration
Statement"), appropriate state insurance laws, and any applicable provisions of
the Internal Revenue Code of 1986. Should the Board of Directors of the Fund
at any time make any definite determination as to investment policy and notify
the Sub-Investment Adviser thereof in writing, the Sub-Investment Adviser shall
be bound by such determination for the period, if any, specified in such notice
or until similarly notified that such determination has been revoked.
Investment Adviser acknowledges and agrees that it has sole
responsiblity to ensure that Sub-Investment Adviser is properly informed of
such policies and restrictions applicable to the International Equity Series
including without limitation as are, (i) contained in the Fund's Prospectus,
(ii) set forth in the Internal Revenue Code of 1986, as amended, (iii) set
forth pursuant to state insurance laws.
Investment Adviser also acknowledges and agrees that it will be
responsible to provide Sub-Investment Adviser with all necessary compliance
reports to enable Sub-Investment Adviser to make purchases and sales for the
International Equity Series in accordance with the policies and restrictions to
which such Series is subject. Investment Adviser also agrees that it or the
Fund is responsible to provide or contract to provide accounting, custodial and
any other administrative services necessary to administer the business and
other affairs of the Fund.
The Sub-Investment Adviser shall take, on behalf of the International
Equity Series, all actions which it deems necessary to implement the investment
policies determined as provided above, and in particular to place all orders
for the purchase or sale of portfolio securities for the Series' account with
brokers or dealers selected by it, and to that end, the Sub-Investment Adviser
is authorized as the agent of the Fund to give instructions to the Custodian of
the Fund as to deliveries of securities and payments of cash for the account of
the International Equity Series. In connection with the selection of such
brokers or dealers and the placing of such orders with respect to assets of the
International Equity Series, the Sub-Investment Adviser is directed at all
times
<PAGE> 21
3
to seek to obtain best execution and price within the policy guidelines
determined by the Board of Directors of the Fund and set forth in the
Registration Statement. Subject to this requirement and the provisions of the
Investment Company Act, the Securities Exchange Act of 1934, as amended, and
other applicable provisions of law, the Sub-Investment Adviser may select
brokers or dealers with which it or the Fund is affiliated.
In addition to seeking the best price and execution, the Sub-Investment
Adviser may also take into consideration research and statistical information
and wire and other quotation services provided to the Sub-Investment Adviser
which may justify brokerage commissions at a higher cost to the Series
then may result when allocating brokerages to other brokers on the basis of
seeking best price and execution. However, the Sub-Investment Adviser shall
select only brokers whose commissions it believes are reasonable. The
Sub-Investment Adviser will periodically evaluate the statistical data,
research and other investment services provided to it by brokers and dealers.
Such services may be used by the Sub-Investment Adviser in connection with the
performance of its obligations under this Agreement or in connection with other
advisory or investment operations.
ARTICLE II
SUB-INVESTMENT ADVISORY FEE
The payment of investment advisory fees and the allocation of charges
and expenses between the Fund and the Investment Adviser are set forth in the
Investment Advisory Agreement, and nothing in this Sub-Investment Advisory
Agreement shall change or affect that arrangement. The payment of investment
advisory fees and the apportionment of any expenses related to the services of
the Sub-Investment Adviser shall be the sole concern of the Investment Adviser
and the Sub-Investment Adviser and shall not be the responsibility of the
Fund.
For the services rendered pursuant to this Agreement, Investment
Adviser will pay the Sub-Investment Adviser at the end of each calendar month,
a fee, calculated daily based upon the average daily value of the net assets of
the International Equity Series of the Fund, as determined and computed in
accordance with the description of the determination of the net asset value
contained in the Registration Statement for the Fund, at the annual rate of
0.30%.
ARTICLE III
LIMITATION OF LIABILITY
Subject to Section 36 of the Investment Company Act of 1940, as
amended, the Sub-Investment Adviser shall not be liable for any error of
judgment or mistake of law or for any loss arising out of any investment or for
any act or omission in the management of Fund, and the performance of its
duties hereunder except for wilful misfeasance, bad faith or gross negligence
in the
<PAGE> 22
4
performance of its duties or by reason of reckless disregard of its obligations
and duties hereunder.
ARTICLE IV
Activities of the Sub-Investment Adviser
The services of the Sub-Investment Adviser to the International Equity
Series are not deemed to be exclusive, and the Sub-Investment Adviser is free
to render services to others.
It is agreed that the Sub-Investment Adviser may use any supplemental
investment research obtained for the benefit of the International Equity Series
in providing investment advice to its other investment advisory accounts. The
Sub-Investment Adviser or its affiliates may use such information in managing
their own accounts. Conversely, such supplemental information obtained by the
placement of business for the Sub-Investment Adviser or other entities advised
by the Sub-Investment Adviser will be considered by and may be useful to the
Sub-Investment Adviser in carrying out its obligations to the International
Equity Series.
Securities held by the International Equity Series may also be held by
separate investment accounts or other mutual funds for which the Sub-Investment
Adviser may act as an adviser or by the Sub-Investment Adviser or its
affiliates. Because of different investment objectives or other factors, a
particular security may be bought by the Sub-Investment Adviser or its
affiliates or for one or more clients when one or more clients are selling the
same security. If purchases or sales of securities for the International Equity
Series or other entities for which the Sub-Investment Adviser or its affiliates
act as investment adviser or for their advisory clients arise for consideration
at or about the same time, the Sub-Investment Adviser may make transactions in
such securities, insofar as feasible, for the respective entities and clients
in a manner deemed equitable to all. To the extent that transactions on behalf
of more than one client of the Sub-Investment Adviser during the same period
may increase the demand for securities being purchased or the supply of
securities being sold, it is recognized that there may be an adverse effect on
price.
It is agreed that, on occasions when the Sub-Investment Adviser deems
the purchase or sale of a security to be in the best interest of the
International Equity Series as well as other accounts or companies, it may, to
the extent permitted by applicable laws or regulations, but will not be
obligated to, aggregate the securities to be sold or purchased for other
accounts or companies in order to obtain favourable execution and lower
brokerage commissions. In that event, allocation of the securities purchased
or sold, as well as the expenses incurred in the transaction, will be made by
the Sub-Investment Adviser in the manner it considers to be most equitable and
consistent with its fiduciary obligations to the International Equity Series and
to such other accounts or companies. It is recognized that in some cases this
procedure may adversely affect the size of the position obtainable for the
International Equity Series.
<PAGE> 23
5
ARTICLE V
Books and Records
The Sub-Investment Adviser agrees that all books and records which it
maintains for the International Equity Series shall be made available, within
five business days of a written request, to the Fund's accountants or auditors
during regular business hours at the Sub-Investment Adviser's offices. The
Fund or its authorized representative shall have the right to copy any records
in the possession of the Sub-Investment Adviser which pertain to the Fund and
as the Fund shall require in accordance with applicable law. Such books,
records, information or reports shall be available to properly constitute
governmental authorities consistent with state and federal law and/or
regulations. The Sub-Investment Adviser shall keep confidential and shall not
disclose or use any records of information obtained pursuant to this Agreement
except as expressly required by state or federal law/or regulations.
In the event of the termination of this Agreement, all such books, records, or
other information shall be returned to the Fund free from any claim or
assertion of rights by the Sub-Investment Adviser. The Fund shall make
available to the Sub-Investment Adviser on a reasonable basis all books and
records which it maintains for the International Equity Series.
ARTICLE VI
Duration and Termination of this Agreement
This Agreement shall become effective as of the date first above
written, and shall continue in effect until the date of the first annual or
special meeting of shareholders of the International Equity Series, but not
later than sixteen months after the effective date of the Securities Act of
1933 Registration Statement for the International Equity Series. Thereafter,
this Agreement shall continue in effect from year to year with respect to the
International Equity Series so long as such continuance is specifically
approved at least annually by (i) the Board of Directors of the Fund, or by the
vote of a majority of the outstanding voting securities of the International
Equity Series, and (ii) a majority of those Directors of the Fund who are not
parties to this Agreement or interested persons of any such party cast in
person at a meeting called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of
any penalty, by the Board of Directors of the Fund, or by vote or a majority of
the outstanding voting securities of the International Equity Series, or by the
Investment Adviser, on sixty day written notice to the other party. This
agreement may be terminated for "cause" at any time by the Board of Directors
of the Fund. "Cause" is defined and limited for this purpose to mean wilful
misfeasance, bad faith, or gross negligence by the Sub-Investment Adviser in
the performance of its duties or reckless disregard by it of its obligations
and
<PAGE> 24
6
duties under this Agreement. This Agreement shall automatically terminate in
the event of its assignment or in the event of the termination of the
Investment Advisory Agreement between the Fund and the Investment Adviser.
This Agreement may be terminated without penalty, by Sub-Investment Adviser on
sixty days notice.
ARTICLE VII
DEFINITIONS
The terms "assignment," "interested person," and "majority of the
outstanding voting securities," when used in this Agreement, shall have the
respective meanings specified under the Investment Company Act.
ARTICLE VIII
Amendments of this Agreement
When required by applicable law, this Agreement may be amended by the
parties only if such amendment is specifically approved by (i) the vote of
a majority of the outstanding voting securities shares of the International
Equity Series, and (ii) a majority of those Directors of the Fund who are
not parties to this Agreement or interested persons of any such party cast
in person at a meeting called for the purpose of voting on such approval.
The Investment Adviser agrees to advise the Sub-Investment Adviser
immediately:
(a) of any request by the SEC for amendments to the Prospectus or for
additional information.
(b) of the issuance by the SEC of any stop order suspending the
effectiveness of the Fund's Prospectus or the initiation of any proceedings for
that purpose.
(c) of the happening of any material event which makes untrue any
statement made in the Fund's Prospectus or which requires the making of a
change in either of them in order to make the statements there in not
misleading.
(d) of all actions of the SEC with respect to any amendments to the
Fund's Prospectus.
(e) of the happening of any event relating to the Investment Adviser
which would have a material effect on its business.
The Sub-Investment Adviser agrees to advise the Investment Adviser
immediately:
(a) of the happening of any material event which makes untrue any
statement made in the Fund's Prospectus or which requires the making of a
change in either of them in order to make the statements therein not
misleading, and
<PAGE> 25
7
(b) of the happening of any event relating to the Sub-Investment
Adviser which would have a material effect on its business.
ARTICLE IX
Governing Law
This Agreement shall be construed and interpreted in accordance with
the laws of the State of Georgia, and the applicable provisions of the
Investment Company Act.
IN WISTNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
CL CAPITAL MANAGEMENT, INC.
By:
-------------------------
-------------------------
CANADA LIFE INVESTMENT MANAGEMENT LIMITED
By:
-------------------------
-------------------------
<PAGE> 26
APPENDIX
VOTING INSTRUCTION FORM
CANADA LIFE OF AMERICA SERIES FUND, INC.
INTERNATIONAL EQUITY PORTFOLIO
Voting Instructions Solicited on Behalf of the Board of Directors
for a Special Meeting of Shareholders of the Canada Life of America Series
Fund, Inc. July 16, 1997.
I hereby instruct Canada Life Insurance Company of America ("Canada Life") or
Canada Life Insurance Company of New York ("Canada Life of New York") to vote
the shares of the International Equity Portfolio of the Canada Life of America
Series Fund, Inc. (the "Fund") as to which I am entitled to give instructions,
as shown above at a Special Meeting of the Shareholders of the Fund (the
"Meeting") to be held at 10:00 a.m. on July 16, 1997, Eastern Time, and any
adjournments thereof at 6201 Powers Ferry Road, N.W., Suite 600, Atlanta,
Georgia 30339, as follows:
(1) To approve a Sub-Advisory Agreement between CL Captial Management, Inc.
("CLCM") and Canada Life Investment Management Limited ("CLIM") with respect to
the International Equity Portfolio of the Fund, the material terms of which are
substantially the same as those of the prior Sub-Advisory Agreement between CLCM
and CLIM:
International Equity Portfolio ____For ____Against ____Abstain
THE BOARD OF DIRECTORS OF THE FUND
RECOMMENDS A VOTE FOR THIS PROPOSAL
PLEASE SIGN AND DATE THIS FORM AND RETURN PROMPTLY
I hereby revoke any and all voting instructions with respect to such shares
previously given by me. I acknowledge receipt of the Proxy Statement dated July
4, 1997. THIS INSTRUCTION WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS
MADE, THIS INSTRUCTION WILL BE VOTED "FOR" THIS PROPOSAL.
This instruction may be revoked at any time prior to the Meeting by notifying
the Secretary of the Fund in writing.
- ------------------------------ ---------------------
Contract Owner Signature Date
PLEASE SIGN, DATE AND RETURN THIS FORM PROMPTLY. Signature should be exactly as
name or names appear on this Voting Instruction Form. If the individual is a
fiduciary (e.g. attorney, executor, trustee, guardian, etc.) the individual's
signature must be followed by his full title.
