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:
[ ] 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 240.14a-11(c) or 240.14a-12
AAL VARIABLE PRODUCT SERIES FUND, INC.
(Name of Registrant as Specified in Its Charter)
Not Applicable
(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)(4) 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 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>
[AAL LOGO]
AAL VARIABLE PRODUCT SERIES FUND, INC.
4321 North Ballard Road
Appleton, Wisconsin 54919-0001
800-225-5225
September 17, 1998
Dear Certificate Owner:
Enclosed is a notice of a Special Meeting of Shareholders of each series of the
AAL Variable Product Series Fund, Inc. (together the "Portfolios"), to be held
on Friday, October 30, 1998, together with a Proxy Statement and Form of Proxy
relating to the business to be transacted at the meeting.
This Special Meeting of Shareholders is being called to vote on the election of
seven nominees to the Board of Directors, and to ratify the selection of Ernst &
Young LLP as independent auditors for the fiscal year ending December 31, 1998.
The shareholders of all of the Portfolios will vote together on the election of
Directors and the ratification of the selection of auditors.
Mr. D. W. Russler, who has served as a Director since the organization of AAL
Variable Product Series Fund, Inc. in 1994, has announced his retirement
effective December 31, 1998. I am sure all of our shareholders join me and the
other Directors and management of AAL Variable Product Series Fund, Inc. as we
extend our gratitude to Mr. Russler for his dedicated service and wise guidance
over the years.
The Board of Directors has nominated Mr. Edward W. Smeds to fill the vacancy
that will be created with the retirement of Mr. Russler on December 31, 1998. In
order to serve in this capacity, Mr. Smeds must be elected by the shareholders
of AAL Variable Product Series Fund, Inc. At the same time the present
Directors, other than Mr. Russler, will stand for election. Accordingly,
shareholders will be asked to vote for a total of seven nominees, including six
of the seven presently serving Directors, and Mr. Smeds as a new nominee.
If you have any questions or concerns that you would like to discuss about the
meeting and the matter to be acted upon, please call us at 800-225-5225.
Thank you for your continued confidence in AAL. Your cooperation and
participation in completing and returning the enclosed proxy will ensure that
your vote is counted.
Very truly yours,
AAL VARIABLE PRODUCT SERIES FUND, INC.
/s/ Steven A. Weber
Steven A. Weber, President
<PAGE>
AAL VARIABLE PRODUCT SERIES FUND, INC.
4321 North Ballard Road
Appleton, Wisconsin 54919-0001
800-225-5225
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on October 30, 1998
A Special Meeting of the Shareholders ("Special Meeting") of the AAL Variable
Product Series Fund, Inc. (the "Fund"), including AAL Variable Product Money
Market, Bond, Balanced, Large Company Stock, Small Company Stock, International
Stock and High Yield Bond Portfolios (together the "Portfolios"), will be held
at 222 West College Avenue, Appleton, Wisconsin, on Friday, October 30, 1998,
beginning at 9:30 a.m. local time for the following purposes:
1. To vote on the election of seven nominees for the Board of Directors;
2. To ratify the Board of Directors' selection of Ernst & Young LLP as
independent auditors for all of the Portfolios for the fiscal year
ending December 31, 1998; and
3. To transact any other business as properly may come before the
meeting, or any adjournment thereof.
The Board of Directors has fixed the close of business on Monday, August 31,
1998, as the record date ("Record Date") for determining shareholders entitled
to notice of, and shares having voting rights in connection with, the Special
Meeting and any adjournment thereof. Your attention is invited to the Proxy
Statement accompanying this Notice for a more complete statement regarding the
matters to be acted upon at the Special Meeting.
Each Portfolio issues and sells its shares to AAL Variable Annuity
Account I and AAL Variable Life Account I (together the "Variable Accounts"),
where the shares are held to fund benefits under individual flexible premium
deferred variable annuity certificates and flexible premium variable life
insurance certificates (together the "Certificates") issued by the Variable
Accounts. As the owner of all of the assets held in the Variable Accounts, Aid
Association for Lutherans ("AAL") is the sole shareholder of each Portfolio and
is entitled to vote all of the shares of each Portfolio held in the Variable
Accounts. However, pursuant to applicable laws, the Fund's current prospectus
dated September 1, 1998, and the Fund's Articles of Incorporation and Bylaws,
AAL votes outstanding shares of the Portfolios in accordance with instructions
received from the owners of the Certificates ("Certificate Owners") issued in
the Variable Accounts. This Notice is being delivered to Certificate Owners who,
by virtue of their ownership of Certificate(s), owned beneficially shares of one
or more of the Portfolios as of the Record Date, so that they may instruct AAL
on how the Portfolio shares underlying their Certificates should be voted on
matters to be acted upon at the Special Meeting.
By Order of the Board of Directors of
AAL Variable Product Series Fund, Inc.
/s/ Kathleen A. Brost
Kathleen A. Brost, Secretary
Appleton, Wisconsin
September 17, 1998
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND
RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE PAID ENVELOPE PROVIDED FOR THAT
PURPOSE.
<PAGE>
AAL VARIABLE PRODUCT SERIES FUND, INC.
AAL Variable Product Money Market Portfolio
AAL Variable Product Bond Portfolio
AAL Variable Product Balanced Portfolio
AAL Variable Product Large Company Stock Portfolio
AAL Variable Product Small Company Stock Portfolio
AAL Variable Product International Stock Portfolio
AAL Variable Product High Yield Bond Portfolio
4321 North Ballard Road
Appleton, Wisconsin 54919-0001
800-225-5225
PROXY STATEMENT
The Proxy Statement was first mailed to
Shareholders on or about September 18, 1998
SOLICITATION, PURPOSE AND VOTING
Solicitation
The enclosed proxy is being solicited by the Board of Directors of AAL
Variable Product Series Fund, Inc. (the "Fund") in connection with a Joint
Special Meeting of Shareholders (the "Special Meeting") of each of the
Portfolios listed above to be held on Friday, October 30, 1998. Each Portfolio
issues and sells its shares to AAL Variable Annuity Account I and AAL Variable
Life Account I (together the "Variable Accounts"), where the shares are held to
fund benefits under individual flexible premium deferred variable annuity
certificates and flexible premium variable life insurance certificates (the
"Certificates") issued by Aid Association for Lutherans ("AAL") in the Variable
Accounts.
AAL is a non-profit, non-stock membership organization, licensed to do
business as a fraternal benefit society. AAL has a mission of bringing Lutherans
and their families together to pursue quality living through financial security,
volunteer action and help for others. AAL has about 1.7 million members and is
one of the world's largest fraternal benefit societies in terms of assets and
life insurance in force. AAL ranks in the top two percent of all life insurers
in the United States in terms of ordinary life insurance (nearly $82 billion in
force). AAL offers life, health and disability income insurance and fixed and
variable annuities to its members. Members belong to one of over 9,800 local AAL
branches throughout the United States.
As the owner of all of the assets held in the Variable Accounts, AAL is
the sole shareholder of each Portfolio and is entitled to vote all of the shares
of each Portfolio held in the Variable Accounts. However, pursuant to applicable
laws, the Fund's current prospectus dated September 1, 1998, and the Fund's
Articles of Incorporation and Bylaws, AAL votes outstanding shares of the
Portfolio in accordance with instructions received from the owners of the
Certificates ("Certificate Owners") issued in the Variable Accounts. This Proxy
Statement and the accompanying Notice of Special Meeting of Shareholders and
Form of Proxy are being delivered to Certificate Owners who, by virtue of their
ownership of Certificate(s), beneficially owned shares of the Portfolio as of
Monday, August 31, 1998 (the "Record Date"), so that they may instruct AAL on
how the Portfolio shares underlying their Certificates should be voted on
matters to be acted upon at the Special Meeting.
You are encouraged to read carefully this Proxy Statement and mark and
return the Form of Proxy accompanying it.
Purpose
The purpose of the Special Meeting is to vote on the election of seven
nominees for the Board of Directors, and to ratify the Board of Directors'
selection of Ernst & Young LLP as independent auditors for the Fund for the
fiscal year ending December 31, 1998. No other business is scheduled to be
transacted.
Quorum and Voting
The representation at the Special Meeting, in person or by proxy, of
shares constituting one-third of all shares outstanding and entitled to vote on
a matter constitutes a quorum for the transaction of business. Abstentions will
be treated as present for purposes of determining the presence or absence of a
quorum.
The election of Directors pursuant to Proposal 1 requires a plurality
of the votes cast by the holders of the Fund's outstanding shares, with all
Portfolios voting together. "Plurality" means that the individuals who receive
the largest number of votes cast are elected as Directors up to the maximum
number of Directors to be chosen at the Special Meeting. Consequently, any
shares not voted (for example, abstentions) have no impact on the election of
Directors, except to the extent that the failure to vote for an individual
results in another individual receiving a larger number of votes.
Ratification of Ernst & Young LLP to serve as independent auditors to
the Fund pursuant to Proposal 2 requires that the number of votes cast in favor
of ratification must exceed the number of votes cast in opposition to
ratification. Accordingly, shares represented in person or by proxy at the
Special Meeting which are not voted (for example, abstentions) will not affect
the outcome of this proposal. All shares of all of the Portfolios will vote
together on the ratification of the selection of auditors.
AAL, as the sole shareholder of each Portfolio, will submit a proxy for
all shares of each Portfolio owned of record by it as of the Record Date. Shares
underlying Certificates with respect to which AAL has received voting
instructions from the Certificate Owner will be voted by AAL in accordance with
such instructions. Shares with respect to which an executed proxy is received,
but provides no voting instructions, will be voted by AAL in favor of the
proposal. Shares with respect to which no proxy is received and any shares held
by AAL, its subsidiaries or affiliates for its own account will be voted by AAL
in proportion to the shares with respect to which AAL has received instructions
from Certificate Owners. For purposes of calculating AAL's proportionate voting
described below, such uninstructed shares will be counted the same as shares
with respect to which AAL has received instructions to vote in favor of the
proposal.
By way of example, suppose there were outstanding a total of 1,000
shares of a Portfolio. Suppose further that Certificate Owners owning
Certificates representing 680 of those shares returned proxies instructing AAL
as follows: (a) to vote 340 shares "FOR" approval of the proposal; (b) to vote
170 shares "AGAINST" approval; (c) to abstain from voting 85 shares; and (d)
providing no voting instruction with respect to the remaining 85 shares. Then
AAL would vote the 595 shares referred to in clauses (a), (b) and (c) as
instructed, and would vote the remaining 85 shares referred to in clause (d)
"FOR" approval of the proposal. In addition, of the 320 shares with respect to
which no proxies were received, AAL would vote 200 shares "FOR" approval (which
is proportionate to the sum of the shares referred to in clauses (a) and (d)
above, divided by the total number of shares with respect to which executed
proxies were received), would vote 80 shares "AGAINST" approval, and would
abstain from voting the remaining 40 shares.
The number of votes with respect to which a Certificate Owner has the
right to instruct AAL on voting is calculated separately for each subaccount.
The number of votes that each Certificate Owner may instruct is determined by
dividing a Certificate's accumulated value in a subaccount as of the Record Date
by the net asset value per share of the corresponding Portfolio in which the
subaccount invests as of the Record Date. Fractional shares are counted.
Shares represented by properly executed proxies received by the Fund
will be voted by AAL at the Special Meeting and any adjournment thereof in
accordance with the terms of such proxies, as described above. A Certificate
Owner may revoke his or her proxy at any time prior to the voting thereof by
filing a written notice of revocation with the Secretary of the Fund prior to
the Special Meeting or by delivering a duly executed proxy bearing a later date.
Certificate Owners owning Certificates representing shares at the close
of business on August 31, 1998, will be entitled to one vote on each matter
presented for each share so represented. At that date, there were
102,110,064.375 shares of the Fund outstanding.
UPON REQUEST AND AT NO COST TO A REQUESTING CERTIFICATE OWNER, THE FUND
WILL MAIL, BY FIRST CLASS MAIL, COPIES OF ITS ANNUAL REPORT DATED DECEMBER 31,
1997, AND ITS SEMI-ANNUAL REPORT DATED JUNE 30, 1998. REQUESTS SHOULD BE
DIRECTED TO THE ATTENTION OF THE AAL VARIABLE PRODUCTS SERVICE CENTER AT 4321
NORTH BALLARD ROAD, APPLETON, WISCONSIN 54919-0001, TELEPHONE 800-225-5225.
<PAGE>
PROPOSAL 1- ELECTION OF DIRECTORS
Background
Six of the seven presently serving members of the Board of Directors are
standing for election as Directors at the Special Meeting. The seventh presently
serving Director, Mr. D. W. Russler, is retiring from his Board position
effective December 31, 1998, and accordingly will not stand for election. The
Board has nominated Mr. Edward W. Smeds to fill the vacancy that will be created
with the retirement of Mr. Russler. If elected, Mr. Smeds' term of office as a
Director would begin on January 1, 1999.
It is the intention of the persons named in the enclosed proxy to vote the
shares represented thereby for the election of these seven individuals unless
otherwise specified by a shareholder on the proxy. Should any of them become
unable or unwilling to accept nomination or election, the persons named in the
proxy will exercise their voting power in favor of such other person or persons
as the Board of Directors may recommend. The following table sets forth
information concerning the nominee Director and the six Directors standing for
election.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- - ---------------------------------- ----------- ------------------------------------------------------ --------------
Principal Occupation Director
Name of Director Age and Business Experience Since
- - ---------------------------------- ----------- ------------------------------------------------------ --------------
- - --------------------------------------------------------------------------------------------------------------------
Nominee Director:
- - --------------------------------------------------------------------------------------------------------------------
- - ---------------------------------- ----------- ------------------------------------------------------ --------------
Edward W. Smeds 62 Retired; President, Customer Service and Operations, N/A
10 Regent Wood Road Kraft Foods from 1991 to 1994; President, Kraft
Northfield, IL 60093 Foods Canada from 1989 to 1990; Chairman, Board of
Trustees, Carthage College
- - ---------------------------------- ----------- ------------------------------------------------------ --------------
- - --------------------------------------------------------------------------------------------------------------------
Directors Standing for Election:
- - --------------------------------------------------------------------------------------------------------------------
- - ---------------------------------- ----------- ------------------------------------------------------ --------------
F. Gregory Campbell 58 President, Carthage College, Kenosha, Wisconsin; 1994
2001 Alford Parks Dr. Vice Chairman, Kenosha Hospital and Medical Center;
Kenosha, WI 53140 Director, Evangelical Lutheran Church in America
Risk Management/University and College Health;
Director, Johnson Mutual Funds; Director, Kenosha
Area Development Association
- - ---------------------------------- ----------- ------------------------------------------------------ --------------
- - ---------------------------------- ----------- ------------------------------------------------------ --------------
Richard L. Gady 55 Vice President, Public Affairs and Chief Economist, 1994
One Central Park Plaza ConAgra, Inc. (agribusiness)
Omaha, NE 68102
- - ---------------------------------- ----------- ------------------------------------------------------ --------------
- - ---------------------------------- ----------- ------------------------------------------------------ --------------
Lawrence M. Woods 66 Former Executive Vice President and Director, Mobil 1994
P.O. Box 1860 Oil Corp.; Director, Mobil Corp. (international oil
Worland, WY 82401 company and holding company) from 1976 through 1985
- - ---------------------------------- ----------- ------------------------------------------------------ --------------
- - ---------------------------------- ----------- ------------------------------------------------------ --------------
John O. Gilbert* 56 President and Chief Executive Officer, Aid 1997
4321 North Ballard Road Association for Lutherans; Regent, Luther College;
Appleton, WI 54919 Director, Life Office Management Association, Inc.
(trade association)
- - ---------------------------------- ----------- ------------------------------------------------------ --------------
- - ---------------------------------- ----------- ------------------------------------------------------ --------------
Ronald G. Anderson* 47 Director, AAL Trust; Senior Vice President and CFO, 1996
4321 North Ballard Road Aid Association for Lutherans; Chairman of the
Appleton, WI 54919 Board, President and CEO, AAL Capital Management
Corporation; Director, General Re-CKAG Reinsurance
and Investment S.ar.L. (Luxembourg Reinsurance
Corporation); from 1991 through 1996, Chairman,
General Re Financial Products; and from 1995 through
1996, Vice President Corporate Development, General
Re (both reinsurance)
- - ---------------------------------- ----------- ------------------------------------------------------ --------------
- - ---------------------------------- ----------- ------------------------------------------------------ --------------
Steve A. Weber * 45 Senior Vice President, Aid Association for Lutherans 1996
4321 North Ballard Road
Appleton, WI 54919
- - ---------------------------------- ----------- ------------------------------------------------------ --------------
</TABLE>
* Messrs. Anderson, Gilbert and Weber are "interested persons" of the Fund as
defined in the Investment Company Act of 1940.
The Board of Directors held four regular meetings and no special meetings during
the fiscal year ended December 31, 1997. All of the directors attended 100% of
the total number of meetings of the Board of Directors, and of each committee
thereof of which he is a member. The Board of Directors has a standing Audit
Committee comprised of Richard L. Gady, F. Gregory Campbell, Lawrence M. Woods
and D.W. Russler, none of whom is an "interested person" of the Fund as defined
in the 1940 Act. The Audit Committee reviews the internal and external
accounting procedures of the Fund and, among other things, considers the
selection of independent certified public accountants for each Portfolio of the
Fund, approves all significant services proposed to be performed by the
independent certified public accountants and considers the possible effect of
such services on the accountant's independence. The Audit Committee met once
during the fiscal year ended December 31, 1997. All members of the committee
attended the meetings. The Board of Directors has established no other standing
committees nor any policy or procedure regarding the recommendation of Director
nominees by shareholders.
The Fund makes no payments to any of its officers for services. However, any of
the Directors who are not officers or employees of Aid Association for Lutherans
(AAL) or of any of its affiliates are paid, by the Fund, an annual fee of
$5,000. These fees are assessed ratably to each of the Portfolios. Directors are
reimbursed by the Fund for any expenses they may incur by reason of attending
such meetings or in connection with services they may perform for the Fund. The
table below shows compensation paid to any Director or officer of the Fund for
the fiscal year ended December 31, 1997.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
- - --------------------------- ----------------- ---------------- ---------------- ----------------- -------------------
Pension or
Retirement Total
Benefits Estimated Compensation from
Capacities in Accrued During Annual Benefits the Fund and Fund
Which the Fund's Upon Retirement Complex Paid
Remuneration Aggregate Last Fiscal to Director(1)
Name Received Remuneration Year
- - --------------------------- ----------------- ---------------- ---------------- ----------------- -------------------
- - --------------------------- ----------------- ---------------- ---------------- ----------------- -------------------
Richard L. Gady Director $5,750 -0- -0- $22,500
- - --------------------------- ----------------- ---------------- ---------------- ----------------- -------------------
- - --------------------------- ----------------- ---------------- ---------------- ----------------- -------------------
F. Gregory Campbell Director $5,750 -0- -0- $22,500
- - --------------------------- ----------------- ---------------- ---------------- ----------------- -------------------
- - --------------------------- ----------------- ---------------- ---------------- ----------------- -------------------
Lawrence M. Woods Director $5,750 -0- -0- $22,500
- - --------------------------- ----------------- ---------------- ---------------- ----------------- -------------------
- - --------------------------- ----------------- ---------------- ---------------- ----------------- -------------------
D.W. Russler Director $5,750 -0- -0- $22,500
- - --------------------------- ----------------- ---------------- ---------------- ----------------- -------------------
</TABLE>
(1) The Fund Complex includes, in addition to the Fund, The AAL Mutual Funds.
Information regarding each Director's beneficial ownership of shares of
each series of the Fund is provided in the table attached as Appendix A to this
Proxy Statement.
The Board of Directors of the Fund unanimously recommends a vote "FOR"
the election of the seven nominee Directors named above.
PROPOSAL 2 - RATIFICATION OF INDEPENDENT AUDITORS
The Fund's Board of Directors unanimously selected Ernst & Young LLP,
auditors, to audit the books and records of the Fund, including the books and
records for each of the Portfolios, for the fiscal year ending December 31,
1998. This firm has served the Fund as independent auditors since its inception
in 1994, and has served as auditors for each Portfolio since their respective
dates of commencement of operations. Ernst & Young LLP has no direct or indirect
financial interest in the Fund, except as independent auditors. No
representative of Ernst & Young LLP is expected to be present at the special
meeting.
The Board of Directors unanimously recommends that shareholders ratify
the selection of Ernst & Young LLP as independent auditors of the Fund.
PROPOSAL 3 - OTHER BUSINESS
Management of the Fund is not aware of any other matters that will come
before the Special Meeting. However, if any other business should come before
the Special Meeting, your proxy, if signed and returned, will give discretionary
authority to the persons designated in it to vote according to their best
judgment on such matters.
<PAGE>
ADDITIONAL INFORMATION
Officers of The Fund
The following table sets forth information with respect to each officer
of the Fund who is not a Director. Officers are appointed annually by the Board
of Directors, and serve one-year terms.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- - ------------------------------------ ------ --------------------------------------- ---------------------------------
Position and
Name Age Offices with the Fund Principal Occupation
- - ------------------------------------ ------ --------------------------------------- ---------------------------------
- - ------------------------------------ ------ --------------------------------------- ---------------------------------
Daniel L Shinnick 41 Vice President Vice President, Annuity
4321 North Ballard Road Solutions, Aid Association for
Appleton, WI 54919-0001 Lutherans
- - ------------------------------------ ------ --------------------------------------- ---------------------------------
- - ------------------------------------ ------ --------------------------------------- ---------------------------------
Kathleen A. Brost 37 Secretary Staff Attorney, Insurance
4321 North Ballard Road Products and Securities, Aid
Appleton, WI 54919-0001 Association for Lutherans
- - ------------------------------------ ------ --------------------------------------- ---------------------------------
- - ------------------------------------ ------ --------------------------------------- ---------------------------------
Carl J. Rudolph 53 Treasurer Vice President, Controller and
4321 North Ballard Road Treasurer, Aid Association for
Appleton, WI 54919-0001 Lutherans
- - ------------------------------------ ------ --------------------------------------- ---------------------------------
</TABLE>
Adviser and Administrator
Aid Association for Lutherans is the Adviser to each of the Portfolios.
AAL Capital Management Corporation, a wholly owned subsidiary of AAL, performs
certain administrative services including accounting, expense accrual, valuation
and financial reporting, and tax accounting services for each Portfolio. AAL
pays AAL Capital Management Corporation's fees for these services. The Fund
bears no portion of those fees.
Principal Shareholders and Certain Beneficial Owners
Other than AAL, no person was known to own of record or beneficially
five percent (5%) or more of the outstanding shares of any Portfolio.
The table included in Appendix A to this Proxy Statement shows shares
of each Portfolio of the Fund as to which each Director, the nominee Director
and the group consisting of all Directors, the nominee Director and executive
officers of the Fund, had or shared power over voting or disposition as of
August 31, 1998.
Cost of Solicitation
In addition to this solicitation of proxies by use of the mails,
proxies may be solicited by officers of the Fund and by officers and employees
of AAL, personally or by telephone or telegraph, without special compensation.
Proxies may also be solicited by a professional proxy solicitation service
should management of the Fund determine that solicitation by such means is
advisable. The cost of preparing and mailing proxy materials, of the Special
Meeting (including any adjourned sessions thereof), and of soliciting proxies
will be borne by the Fund.
<PAGE>
Adjournment
In the event that sufficient votes in favor of the proposal set forth
in the Notice of Special Meeting which accompanies this Proxy Statement are not
received by the time scheduled for the Special Meeting, the persons named as
proxies may propose one or more adjournments of the Special Meeting to permit
further solicitation of proxies with respect to the proposal. Any such
adjournment will require the affirmative vote of a majority of the votes cast on
the question in person or by proxy at the session of the Special Meeting to be
adjourned. The persons named as proxy will vote in favor of such adjournment
those proxies which they are entitled to vote in favor of the proposal. They
will vote against any such adjournment those proxies required to be voted
against any the proposal.
Shareholder Meetings
The Fund is organized as a Maryland corporation, and as such is subject
to Maryland law. Pursuant to Maryland law and the Articles of Incorporation of
the Fund, the Fund is not required to hold a shareholder meeting in any year in
which the election of directors, approval of the Investment Advisory Agreement
or ratification of the selection of independent public accountants is not
required to be acted upon by shareholders of the Fund under the 1940 Act.
Meetings of the shareholders of the Fund (or of any Portfolio) will be held when
and as determined necessary by the Board of Directors of the Fund and in
accordance with the 1940 Act. Other than the Special Meeting to which this Proxy
Statement relates and the Special Meeting of the shareholders of the AAL
Variable Product International Stock Portfolio held on August 14, 1998, the Fund
currently does not anticipate that it will hold a meeting of shareholders of any
Portfolio in 1998. Shareholders who wish to present a proposal for action at the
next meeting or suggestions as to nominees for the Board of Directors should
submit the proposal or suggestions to the following address: AAL Variable
Product Series Fund, Inc., 4321 North Ballard Road, Appleton, Wisconsin
54919-0001, Attention: Kathleen A. Brost, Secretary.
<PAGE>
APPENDIX A
The following table shows shares of each Portfolio of the Fund as to
which each Director, the nominee Director and the group consisting of all
Directors, the nominee Director and executive officers of the Fund, had or
shared power over voting or disposition as of August 31, 1998.
- - ------------------------------------------------ -------------------------------
Name and Series Number of Shares of the Fund(1)
- - ------------------------------------------------ -------------------------------
- - ------------------------------------------------ -------------------------------
Ronald G. Anderson:
Money Market Portfolio -0-
Bond Portfolio -0-
Balanced Portfolio -0-
Large Company Stock Portfolio -0-
Small Company Stock Portfolio -0-
International Stock Portfolio -0-
High Yield Bond Portfolio -0-
- - ------------------------------------------------ -------------------------------
- - ------------------------------------------------ -------------------------------
F. Gregory Campbell:
Money Market Portfolio -0-
Bond Portfolio -0-
Balanced Portfolio -0-
Large Company Stock Portfolio -0-
Small Company Stock Portfolio -0-
International Stock Portfolio -0-
High Yield Bond Portfolio -0-
- - ------------------------------------------------ -------------------------------
- - ------------------------------------------------ -------------------------------
Richard L. Gady:
Money Market Portfolio -0-
Bond Portfolio -0-
Balanced Portfolio -0-
Large Company Stock Portfolio -0-
Small Company Stock Portfolio -0-
International Stock Portfolio -0-
High Yield Bond Portfolio -0-
- - ------------------------------------------------ -------------------------------
- - ------------------------------------------------ -------------------------------
Lawrence M. Woods:
Money Market Portfolio -0-
Bond Portfolio -0-
Balanced Portfolio -0-
Large Company Stock Portfolio -0-
Small Company Stock Portfolio -0-
International Stock Portfolio -0-
High Yield Bond Portfolio -0-
- - ------------------------------------------------ -------------------------------
- - ------------------------------------------------ -------------------------------
John O. Gilbert:
Money Market Portfolio -0-
Bond Portfolio -0-
Balanced Portfolio -0-
Large Company Stock Portfolio -0-
Small Company Stock Portfolio 3,299.921
International Stock Portfolio -0-
High Yield Bond Portfolio -0-
- - ------------------------------------------------ -------------------------------
- - ------------------------------------------------ -------------------------------
Steven A. Weber:
Money Market Portfolio -0-
Bond Portfolio -0-
Balanced Portfolio -0-
Large Company Stock Portfolio -0-
Small Company Stock Portfolio -0-
International Stock Portfolio -0-
High Yield Bond Portfolio -0-
- - ------------------------------------------------ -------------------------------
- - ------------------------------------------------ -------------------------------
Edward W. Smeds:
Money Market Portfolio -0-
Bond Portfolio -0-
Balanced Portfolio -0-
Large Company Stock Portfolio -0-
Small Company Stock Portfolio -0-
International Stock Portfolio -0-
High Yield Bond Portfolio -0-
- - ------------------------------------------------ -------------------------------
- - ------------------------------------------------ -------------------------------
All Directors and as a Group
(a total of 10 persons)
Money Market Portfolio -0-
Bond Portfolio 128.986
Balanced Portfolio 48.228
Large Company Stock Portfolio 396.892
Small Company Stock Portfolio 4,157.069
International Stock Portfolio 566.640
High Yield Bond Portfolio 51.915
- - ------------------------------------------------ -------------------------------
(1) These figures are based on information furnished by the respective
individuals and by AAL, the Fund's Transfer Agent, as of August 31,
1998. Certain of the individuals listed share voting and investment
power with his spouse with respect to some or all of the shares listed
opposite his name. Each individual Director or executive officer
beneficially owns less than 1% of the shares of the Fund.
<PAGE>
AAL VARAIBLE PRODUCT SERIES FUND, INC.
Please fold and detach
card at perforation before mailing.
AAL VARIABLE PRODUCT SERIES FUND, INC.,
Special Meeting of Shareholders
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Ronald G. Anderson, Kathleen A. Brost, Robert G.
Same and Joseph F. Wreschnig, or any of them, proxy, with full power of
substitution, to represent and vote, as designated below, all shares the
undersigned is entitled to vote at the Special Meeting of Shareholders of the
above referenced fund of the Relevant Portfolio(s) to be held at 222 West
College Avenue, Appleton, Wisconsin 54919 beginning at 9:30 a.m., local time, on
October 30, 1998, or at any adjournment thereof, with respect to the matters set
forth below and described in the accompanying Notice of Special Meeting and
Proxy Statement, receipt of which is hereby acknowledged.
DATED:______________, 1998
(If stock is owned by more than one person, all owners should sign. Persons
signing as executors, administrators, trustees or in similar capacities should
so indicate.)
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(Please sign exactly as name appears at left.)
Please place an "X" on the desired blank for each Item.
Shares represented by this proxy will be voted as directed by the
shareholder.
IF NO DIRECTION IS SUPPLIED, THE PROXY WILL BE VOTED FOR ALL NOMINEES IN
PROPOSAL 1 AND FOR PROPOSAL 2.
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Please vote by filling in the appropriate boxes below. FOR WITHHOLD
all nominees listed (except authority to
as noted in space provided) vote for all
1. Proposal to elect seven candidates to serve on the Board of Directors of [ ] nominees lised
AAL Variable Product Series Fund, Inc., six of whom presently are serving [ ]
as Directors, Ronald G. Anderson, Richard L. Gady, Lawrence M. Woods, F.
Gregory Campbell, John O. Gilbert and Steven A. Weber, and the seventh of
whom is a new nominee, Edward W. Smeds.
INSTRUCTION: To withhold authority to vote for any individual nominee, write
the nominee's name in the space provided below.
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2. Proposal to ratify the Board of Directors' selection of Ernst & Young FOR AGAINST ABSTAIN
LLP as independent auditors for all of the Portfolios for the fiscal year
ending December 31, 1998. [ ] [ ] [ ]
3. In their discretion on such other matters as may properly come before the
meeting or any adjournment thereof.
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