LIFE & ANNUITY TRUST
SUPPLEMENT DATED APRIL 23, 1999 TO THE
PROSPECTUS DATED MAY 1, 1998
This supplement contains important information for shareholders about matters
recently approved by the Board of Trustees of Life & Annuity Trust (the
"Trust"). These matters are listed below and described in greater detail later
in this supplement.
o The reorganization of Life & Annuity Trust Funds into new funds of
Wells Fargo Variable Trust, as part of the consolidation of the
Stagecoach and Norwest Advantage fund families.
o The appointment of a new transfer agent, BFDS, beginning July 17, 1999.
o Changes to the Funds' Administration arrangements.
Approval of the Reorganization
On March 25, 1999, the Board of Trustees of Life & Annuity Trust (the "Trust")
approved the reorganization of the Trust's Funds into new portfolios of Wells
Fargo Variable Trust ("Variable Trust"). The reorganization is part of a plan to
consolidate the Wells Fargo Bank-advised fund family with the Norwest Advantage
fund family, following last November's merger of Wells Fargo & Company and
Norwest Corporation. The variable annuity ("VA")and variable life insurance
("VLI") providers through which the Trust's Funds are sold, will present the
reorganization to contractholders for their approval and will vote all shares in
accordance with procedures described in the VA and VLI product prospectuses at a
special meeting that is planned for August 1999.
If the reorganization is approved by contractholders, the following Funds will
be reorganized into the following portfolios of Variable Trust:
<TABLE>
<S> <C> <C>
Life & Annuity Trust Wells Fargo Variable Trust
Strategic Growth Fund Small Cap Fund
U.S. Government Allocation Fund Corporate Bond Fund
</TABLE>
Although the investment objective of the Small Cap Fund of Variable Trust is
substantially similar to the investment objective of the Strategic Growth Fund,
the principal investment strategies differ somewhat. The investment objective
and principal investment strategies of the Corporate Bond Fund of Variable Trust
differ from the objective and strategies of the U.S. Government Allocation Fund.
In addition, these Variable Trust portfolios are expected to absorb other
Norwest Select funds. All of the other Funds of the Trust will, if approved by
contractholders, be reorganized into new portfolios of Variable Trust that have
investment objectives and strategies that are substantially identical to the
corresponding Funds. These substantially identical Variable Trust portfolios
will not absorb other funds.
No contractholder action is necessary at this time. The Trust's proxy materials,
which are expected to be mailed in June to all persons who are contractholders
on May 6, 1999, will describe the reorganization in detail, including any effect
on expense ratios. If you buy your shares after that date, you will not be
entitled to vote on the reorganization, but you may request a copy of the proxy
materials.
Investors in the Strategic Growth Fund should be aware that an expense ratio
increase of 0.10% is contemplated. U.S. Government Allocation Fund expense
ratios are expected to decline.
For all of the Trust's Funds, the reorganization will not trigger any tax
consequences for contractholders. The reorganization will not trigger any sales
charges.
If you have any questions or, after early June, if you would like to request a
copy of the proxy materials, you should call 1-800-680-8920.
Appointment of New Transfer Agent-BFDS
The Board of Trustees of the Trust approved Boston Financial Data Services,
known as BFDS, to replace Wells Fargo Bank as the transfer agent for all of the
Trust's Funds. The Norwest Advantage fund family also has approved BFDS as a
sub-transfer agent for all of its funds. The Trust anticipates that BFDS will
begin to act as transfer agent on July 17, 1999.
The section of your prospectus entitled "Transfer and Dividend Disbursing Agent"
on page 8 should be updated to reflect BFDS as the transfer agent for all of the
Trust's Funds.
Wells Fargo is Primary Administrator for each Fund
Currently, Wells Fargo and Stephens Inc. serve as Co-Administrators for each of
the Trust's Funds for annual fees of 0.03% and 0.04%, respectively. On March 25,
1999, the Trust's Board of Trustees approved Wells Fargo to act as the sole
Administrator at an annual contract rate of 0.15%. Wells Fargo has agreed to
charge only 0.07% of this annual fee and waive the additional 0.08% of the
contract rate until after the completion of the Reorganization in September
1999. As a result of the waiver, this change will not increase fees for your
Fund at this time.
<PAGE>
[MORRISON & FOERSTER LLP LETTERHEAD]
April 23, 1999
Writer's Direct Dial Number
(202) 463-1018
Via EDGAR
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Re: Life & Annuity Trust
Registration Nos. 33-70988; 811-8118
Ladies and Gentlemen:
In connection with the registration of Life & Annuity Trust under the
Investment Company Act of 1940, and the issuance of securities by it under the
Securities Act of 1933, and pursuant to 17 C.F.R. 230.497(e), we are
transmitting herewith for filing a supplement dated April 23, 1999 to the
prospectus dated May 1, 1998 of the Trust's Funds.
This supplement is being filed to inform shareholders of the recently
approved reorganization of the Funds of the Trust into portfolios of Wells Fargo
Variable Trust, the appointment of a new transfer agent, and changes to the
Funds' Administration arrangements.
If you have any questions, please contact the undersigned at the number
indicated above.
Very truly yours,
/s/ Eileen M. Smiley
Eileen M. Smiley
