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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
WNL Series Trust
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(Name of Registrant as Specified in its Charter)
Blazzard, Grodd & Hasenauer, P.C.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/X/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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WNL SERIES TRUST
5555 SAN FELIPE -- SUITE 900
HOUSTON, TEXAS 77056
TELEPHONE (713) 888-7811
NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 16, 1996
Notice is hereby given to the holders ("Shareholders") of the Van Kampen
American Capital Emerging Growth Portfolio (the "Portfolio") of the WNL Series
Trust, a Massachusetts business trust (the "Trust"), that a Special Meeting of
the Shareholders of the Portfolio (the "Meeting") will be held at the offices of
Western National Life Insurance Company, 5555 San Felipe, Suite 900, Houston,
Texas 77056, on Wednesday, October 16, 1996, at 9:30 a.m., local time, for the
following purpose:
1. To approve or disapprove a new Sub-Advisory Agreement among Van Kampen
American Capital Asset Management, Inc., WNL Investment Advisory Services,
Inc. and WNL Series Trust;
2. To transact such other business as may properly come before the Meeting.
Holders of record of the Shares of the Portfolio at the close of business on
September 4, 1996 are entitled to notice of, and to vote at, the Meeting and any
adjournment thereof.
By order of the Board of Trustees
Dwight L. Cramer,
Vice President and Secretary
September 23, 1996
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THE TRUST WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL REPORT
(AND THE MOST RECENT SEMI-ANNUAL REPORT SUCCEEDING THE ANNUAL REPORT) TO A
SHAREHOLDER UPON REQUEST. ANY SUCH REQUEST SHOULD BE DIRECTED TO THE TRUST BY
CALLING (713) 888-7811 OR BY WRITING TO THE TRUST AT 5555 SAN FELIPE, SUITE 900,
HOUSTON, TEXAS 77056.
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND
SIGN SUCH PROXY CARD(S), AND RETURN IT (THEM) IN THE ENVELOPE PROVIDED, WHICH IS
ADDRESSED FOR YOUR CONVENIENCE AND NEEDS NO POSTAGE IF MAILED IN THE UNITED
STATES.
IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION, WE ASK THAT
YOU MAIL YOUR PROXY PROMPTLY.
THE TRUSTEES OF THE TRUST RECOMMEND THAT YOU CAST YOUR VOTE:
FOR APPROVAL OF THE NEW SUB-ADVISORY AGREEMENT.
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY CARD(S) PROMPTLY.
<PAGE> 4
PROXY STATEMENT
WNL SERIES TRUST
5555 SAN FELIPE -- SUITE 900
HOUSTON, TEXAS 77056
TELEPHONE (713) 888-7811
SPECIAL MEETING OF SHAREHOLDERS
OCTOBER 16, 1996
This Proxy Statement is furnished in connection with the solicitation by the
Board of Trustees (the "Trustees" or "Board") of the WNL Series Trust (the
"Trust") of which the Van Kampen American Capital Emerging Growth Portfolio (the
"Portfolio") is a separate series, of proxies to be voted at a Special Meeting
of Shareholders, and at all adjournments thereof (the "Meeting"), to be held at
the offices of Western National Life Insurance Company, 5555 San Felipe, Suite
900, Houston, Texas 77056, on Wednesday, October 16, 1996, at 9:30 a.m., local
time. The approximate mailing date of this Proxy Statement and accompanying form
of proxy is September 25, 1996.
The Trustees have fixed the close of business on September 4, 1996 as the
record date (the "Record Date") for the determination of holders of shares of
beneficial interest ("Shares") of the Portfolio ("Shareholders") entitled to
vote at the Meeting. Shareholders on the Record Date will be entitled to one
vote for each full Share held and a fractional vote for each fractional Share.
As of the Record Date, there were 145,560.299 Shares of the Portfolio
outstanding. See page 17 for information concerning the substantial Shareholders
of the Shares of the Trust.
The primary purpose of the Meeting is to permit the Portfolio's Shareholders
to consider a New Sub-Advisory Agreement (defined below) to take effect
following the consummation of the transactions contemplated by an Agreement and
Plan of Merger, dated as of June 21, 1996 (the "Merger Agreement"), among Morgan
Stanley Group Inc. ("Morgan Stanley"), MSAM Holdings II, Inc., MSAM Acquisition
Inc. and VK/AC Holding, Inc. ("VKAC Holding"), the indirect parent corporation
of the Portfolio's sub-adviser, Van Kampen American Capital Asset Management,
Inc. (the "Sub-Adviser"). Pursuant to the Merger Agreement, the Portfolio's
Sub-Adviser will become an indirect subsidiary of Morgan Stanley. The
shareholder vote on the New Sub-Advisory Agreement is required under the
Investment Company Act of 1940, as amended (the "1940 Act"), as a result of
Morgan Stanley's contemplated acquisition of the Sub-Adviser.
THE PORTFOLIO'S NEW SUB-ADVISORY AGREEMENT IS SUBSTANTIALLY IDENTICAL TO THE
PORTFOLIO'S CURRENT SUB-ADVISORY AGREEMENT (DEFINED BELOW), EXCEPT FOR THE DATES
OF EXECUTION, EFFECTIVENESS AND TERMINATION.
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THE TRUST WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL
REPORT (AND THE MOST RECENT SEMI-ANNUAL REPORT SUCCEEDING THE ANNUAL REPORT) TO
A SHAREHOLDER UPON REQUEST. ANY SUCH REQUEST SHOULD BE DIRECTED TO THE TRUST BY
CALLING (713) 888-7811 OR BY WRITING TO THE TRUST AT 5555 SAN FELIPE, SUITE 900,
HOUSTON, TEXAS 77056.
VOTING
The Declaration of Trust provides that a majority of the Shares of the Trust
entitled to vote at such meeting, represented in person or by proxy, must be
present to constitute a quorum at any meeting of Shareholders.
At any meeting of Shareholders, any holder of Shares entitled to vote thereat
may vote by proxy, provided that no proxy shall be voted at any meeting unless
it shall have been placed on file with the Secretary, or with such other officer
or agent of the Trust as the Secretary may direct, for the verification prior to
the time at which such vote shall be taken. Pursuant to a resolution of a
majority of the Trustees, proxies may be solicited in the name of one or more
Trustees or one or more of the officers of the Trust. Only Shareholders of
record shall be entitled to vote and each full Share shall be entitled to one
vote and fractional Shares shall be entitled to fractional votes. When any Share
is held jointly by several persons, any one of them may vote at any meeting in
person or by proxy in respect of such Share, but if more than one of them shall
be present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Share. A proxy purporting to be executed by or on
behalf of a Shareholder shall be deemed valid unless challenged at or prior to
its exercise, and the burden of proving invalidity shall rest on the challenger.
If the holder of any such Share is a minor or a person of unsound mind, and
subject to guardianship or to the legal control of any other person as regards
the charge or management of such Share, he may vote by his guardian or such
other person appointed or having such control, and such vote may be given in
person or by proxy.
With respect to Proposal 1, a "vote of the majority of the outstanding voting
securities" of the Portfolio, which shall mean the lesser of (i) 67% or more of
the Shares of the Portfolio entitled to vote thereon present in person or by
proxy at the Meeting, if holders of more than 50% of the outstanding Shares of
the Portfolio are present in person or represented by proxy, or (ii) more than
50% of the outstanding Shares of the Portfolio, is necessary to approve the New
Sub-Advisory Agreement among the Sub-Adviser, the Adviser (defined below) and
the Trust.
The Trust was established to be used exclusively as the underlying investment
for certain variable annuity contracts ("Variable Contracts") to be issued by
Western
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National Life Insurance Company ("Western National Life"). All Shares of the
Portfolio are owned by Western National Life. Pursuant to current
interpretations of the 1940 Act, Western National Life will solicit voting
instructions from the owners of Variable Contracts invested in the Portfolio
with respect to matters to be acted upon at the Meeting. All Shares of the
Portfolio will be voted by Western National Life in accordance with voting
instructions received from such Variable Contract owners. Western National Life
will vote all of the Shares of the Portfolio in the same proportion as the
voting instructions given by Variable Contract owners, on the issues presented,
including Shares which are attributable to Western National Life's interest in
the Portfolio.
Western National Life has fixed the close of business on October 14, 1996, as
the last day on which voting instructions will be accepted.
This Proxy is solicited by the Trustees.
THE TRUSTEES RECOMMEND THAT YOU CAST YOUR VOTE FOR THE APPROVAL OF THE NEW
SUB-ADVISORY AGREEMENT.
The Trust knows of no business other than that described in Proposal 1 of the
Notice which will be presented for consideration at the Meeting. If any other
matters are properly presented, it is the intention of the persons named as
proxies to vote proxies in accordance with their best judgment. In the event a
quorum is present at the Meeting but sufficient votes to approve the Proposal
are not received, the persons named as proxies may propose one or more
adjournments of such Meeting to permit further solicitation of proxies provided
they determine that such an adjournment and additional solicitation is
reasonable and in the interest of Shareholders based on a consideration of all
relevant factors, including the nature of the relevant proposal, the percentage
of votes then cast, the percentage of negative votes then cast, the nature of
the proposed solicitation activities and the nature of the reasons for such
further solicitation.
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PROPOSAL NO. 1: APPROVAL OF NEW SUB-ADVISORY AGREEMENT
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THE SUB-ADVISER
WNL Investment Advisory Services, Inc., (the "Adviser") serves as investment
adviser to the each of portfolios of the Trust (including the Portfolio)
pursuant to an Investment Advisory Agreement, dated August 23, 1995, which was
approved by the Board of Trustees, including a majority of the non-interested
Trustees, on April 18, 1995 (the "Investment Advisory Agreement") and approved
by the Shareholders of the Trust on May 17, 1996. The Adviser's address is 5555
San Felipe, Suite 900, Houston, Texas 77056. The Adviser also serves as the
Trust's administrator. Under the Investment Advisory Agreement, the Adviser is
obligated to formulate a continuing program for the investment of the assets of
each portfolio
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of the Trust in a manner consistent with each portfolio's investment objectives,
policies and restrictions and to determine from time to time securities to be
purchased, sold, retained or lent by the Trust and to implement those decisions.
The Investment Advisory Agreement also provides that the Adviser shall manage
the Trust's business and affairs and shall provide such services required for
effective administration of the Trust as are not provided by employees or other
agents engaged by the Trust. The Investment Advisory Agreement further provides
that the Adviser shall furnish the Trust with office space and necessary
personnel, pay ordinary office expenses, pay all executive salaries of the Trust
and furnish, without expense to the Trust, the services of such members of its
organization as may be duly elected officers or Trustees of the Trust. The
Investment Advisory Agreement provides that the Adviser may retain sub-advisers,
at the Adviser's own cost and expense, for the purpose of managing the
investment of the assets of one or more portfolios of the Trust. The Investment
Advisory Agreement states that the Adviser is not obligated to provide services
that are the subject of any separate agreement or arrangement between the
parties.
The Adviser retains Van Kampen American Capital Asset Management, Inc. (the
"Sub-Adviser") to act as sub-adviser for the Portfolio pursuant to the Current
Sub-Advisory Agreement. The Sub-Adviser has acted as sub-adviser for the
Portfolio since the Portfolio commenced its investment operations. The name of
the Portfolio was changed from the "American Capital Emerging Growth Portfolio"
to its current name on May 1, 1996.
The Sub-Adviser currently is a wholly-owned subsidiary of Van Kampen American
Capital, Inc. ("VKAC"), which is a wholly-owned subsidiary of VKAC Holding,
which in turn is controlled, through the ownership of a substantial majority of
its common stock, by The Clayton & Dubilier Private Equity Fund IV Limited
Partnership ("C&D L.P."), a Connecticut limited partnership. C&D L.P. is managed
by Clayton, Dubilier & Rice, Inc., a New York based private investment firm. The
General Partner of C&D L.P. is Clayton & Dubilier Associates IV Limited
Partnership ("C&D Associates L.P."). The general partners of C&D Associates L.P.
are Joseph L. Rice, III, B. Charles Ames, William A. Barbe, Alberto Cribiore,
Donald J. Gogel, Leon J. Hendrix, Jr., Hubbard C. Howe and Andrall E. Pearson,
each of whom is a principal of Clayton, Dubilier & Rice, Inc. In addition,
certain officers, directors and employees of VKAC own, in the aggregate,
approximately 6% of the common stock of VKAC Holding and have the right to
acquire, upon the exercise of options (whether or not vested), approximately an
additional 12% of the common stock of VKAC Holding. Currently, and after giving
effect to the exercise of such options, no officer or trustee of the Trust owns
or would own 5% or more of the common stock of VKAC Holding. The addresses of
VKAC Holding, VKAC and the Sub-Adviser are One Parkview Plaza, Oakbrook Terrace,
Illinois 60181 and 2800 Post Oak Blvd., Houston, Texas 77056.
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Gary M. Lewis is primarily responsible for the day-to-day management of the
Portfolio's investment portfolio. Mr. Lewis has been Vice President -- Portfolio
Manager of the Sub-Adviser since December 1987.
INFORMATION CONCERNING MORGAN STANLEY
Morgan Stanley and various of its directly or indirectly owned subsidiaries,
including Morgan Stanley & Co. Incorporated ("Morgan Stanley & Co."), a
registered broker-dealer and investment adviser, and Morgan Stanley
International, are engaged in a wide range of financial services. Their
principal businesses include securities underwriting, distribution and trading;
merger, acquisition, restructuring and other corporate finance advisory
activities; merchant banking; stock brokerage and research services; asset
management; trading of futures, options, foreign exchange, commodities and swaps
(involving foreign exchange, commodities, indices and interest rates); real
estate advice, financing and investing; and global custody, securities clearance
services and securities lending. Morgan Stanley Asset Management Inc. also is a
wholly-owned subsidiary of Morgan Stanley. As of June 30, 1996, Morgan Stanley
Asset Management Inc., together with its affiliated investment advisory
companies, had approximately $103.5 billion of assets under management and
fiduciary advice.
THE ACQUISITION
Pursuant to the Merger Agreement, MSAM Acquisition Inc. will be merged with
and into VKAC Holding and VKAC Holding will be the surviving corporation (the
"Acquisition"). Following the Acquisition, VKAC Holding and the Sub-Adviser will
be indirect subsidiaries of Morgan Stanley.
The Sub-Adviser anticipates that the consummation of the Acquisition will
occur by the end of November 1996, provided that a number of conditions set
forth in the Merger Agreement are met or waived. The conditions require, among
other things, that as of the closing the shareholders of certain investment
companies (including the Portfolio) and investors in certain accounts advised by
the Sub-Adviser or its affiliates, which investment companies and accounts have
aggregate assets in excess of a specified minimum amount, have approved new
investment advisory agreements or consented to the assignment of existing
investment advisory agreements. At the closing, MSAM Acquisition Inc. will pay
approximately $740 million (based on VKAC's long-term debt outstanding as of
July 31, 1996) in cash to the stockholders of VKAC Holding (excluding certain
management stockholders), and to persons owning options to purchase stock of
VKAC Holding, subject to certain purchase price adjustments set forth in the
Merger Agreement. As of July 31, 1996, VKAC had long-term debt outstanding of
approximately $410 million. To the extent that pre-tax income of VKAC prior to
the closing of the Acquisition permits the repayment of its long-term debt, the
purchase price for the equity interests in
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VKAC Holding will be increased by the amount of long-term debt repaid. The
purchase price also is subject to certain adjustments based, among other things,
on assets under management of VKAC and its subsidiaries at the time of closing.
The Sub-Adviser also contemplates that, as part of the Acquisition, certain
officers and directors of VKAC Holding and its affiliates will contribute to
MSAM Holdings II, Inc. their existing shares of common stock of VKAC Holding in
exchange for approximately $25 million of shares of preferred stock of MSAM
Holdings II, Inc. which, in turn, will be exchangeable into common stock, par
value $1.00 per share, of Morgan Stanley at specified times over a four year
period. Such shares of preferred stock will represent, in the aggregate, 5% of
the combined voting power in MSAM Holdings II, Inc., the remainder of which will
be indirectly owned by Morgan Stanley.
VKAC Holding will engage in certain preparatory transactions prior to the
Acquisition, including the distribution to stockholders of VKAC Holding of (i)
all of VKAC Holding's investment in McCarthy, Crisanti & Maffei, Inc., a wholly-
owned subsidiary engaged in the business of distributing research and financial
information, (ii) all of VKAC Holding's investment in Hansberger Global
Investors, Inc. ("HGI"), a company in which VKAC Holding made a minority
investment in May 1996, and (iii) certain related cash amounts.
There is no financing condition to the closing of the Acquisition. VKAC has
been advised by Morgan Stanley that as of August 30, 1996, no determination has
been made whether any additional indebtedness will be incurred by Morgan Stanley
and its affiliates or VKAC and its affiliates in connection with the
Acquisition. In addition, the disposition of VKAC's outstanding long-term
indebtedness (including its bank loans and senior notes) in connection with the
Acquisition has not yet been determined.
The operating revenue of VKAC and its subsidiaries for the fiscal year ended
December 31, 1995, less expenses for the same period, was more than adequate to
service VKAC's outstanding debt. VKAC prepaid $80 million of its long-term debt
in 1995, and has continued to make debt prepayments during 1996. VKAC Holding
and VKAC believe, based on the earnings experience of VKAC and its subsidiaries,
that after the Acquisition the operating revenue of VKAC and its subsidiaries
should be more than sufficient to service their debt and that VKAC and its
subsidiaries should be able to conduct their respective operations as now
conducted and as proposed to be conducted.
The Merger Agreement does not contemplate any changes, other than changes in
the ordinary course of business, in the management or operation of the
Sub-Adviser relating to the Portfolio, the personnel managing the Portfolio or
other services or business activities of the Portfolio. The Acquisition is not
expected to result in material changes in the business, corporate structure or
composition of the senior management or personnel of the Sub-Adviser, or in the
manner in which the Sub-
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Adviser renders services to the Portfolio. Morgan Stanley has agreed in the
Merger Agreement that, for a period of two years from the date of the
Acquisition, it will cause the Sub-Adviser to provide compensation and employee
benefits which are substantially comparable in the aggregate to those presently
provided. The Sub-Adviser does not anticipate that the Acquisition or any
ancillary transactions will cause a reduction in the quality of services now
provided to the Portfolio, or have any adverse effect on the Sub-Adviser's
ability to fulfill its obligations under the New Sub-Advisory Agreement or to
operate its business in a manner consistent with past business practices.
Certain officers of the Sub-Adviser and its affiliates previously entered into
employment agreements with VKAC Holding which expire from between 1997 and 2000.
Certain officers of the Sub-Adviser also previously entered into retention
agreements with VKAC Holding, which will remain in place for two years following
the consummation of the Acquisition. The Merger Agreement contemplates that
Morgan Stanley will, and will cause VKAC Holding to, honor such employment and
retention agreements. The employment agreements and retention agreements are
intended to assure that the services of the officers are available to the Sub-
Adviser for a remaining term of two to four years. As described above, certain
officers and employees of VKAC and the Sub-Adviser are expected to contribute
their existing shares of common stock of VKAC Holding to MSAM Holdings II, Inc.
in exchange for approximately $25 million of preferred stock in MSAM Holdings
II, Inc. which, in turn, will be exchangeable into common stock, par value $1.00
per share, of Morgan Stanley at specified times over a four year period. Such
shares of preferred stock will represent, in the aggregate, 5% of the combined
voting power in MSAM Holdings II, Inc.
THE SUB-ADVISORY AGREEMENTS
Consummation of the Acquisition may constitute an "assignment" (as defined in
the 1940 Act) of the sub-advisory agreement currently in effect among the
Portfolio's Sub-Adviser, the Adviser and the Trust (the "Current Sub-Advisory
Agreement"). As required by the 1940 Act, the Current Sub-Advisory Agreement
provides for its automatic termination in the event of an assignment. See "The
Current Sub-Advisory Agreement" below.
In anticipation of the Acquisition and in order for the Sub-Adviser to
continue to serve as sub-adviser to the Portfolio after consummation of the
Acquisition, a new sub-advisory agreement (the "New Sub-Advisory Agreement")
among the Sub-Adviser, the Adviser and the Trust must be approved (i) by a
majority of the Trustees of the Trust who are not parties to the New
Sub-Advisory Agreement or interested persons of any such party ("Disinterested
Trustees") and (ii) by holders of a majority of the outstanding voting
securities (within the meaning of the 1940 Act) of the Portfolio. See "The New
Sub-Advisory Agreement" below.
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THE CURRENT SUB-ADVISORY AGREEMENT. The Current Sub-Advisory Agreement for the
Portfolio was approved by a majority of the Trustees, including a majority of
the Disinterested Trustees, voting in person at a meeting called for that
purpose on April 18, 1995, for an initial period of two years. The Current
Sub-Advisory Agreement was approved by Shareholders of the Portfolio at a
meeting held on May 17, 1996.
The Current Sub-Advisory Agreement provides that in accordance with the
Portfolio's investment objective and policies and under the supervision of the
Adviser and the Trustees, the Sub-Adviser is responsible for the day-to-day
investment management of the Portfolio, makes investment decisions for the
Portfolio and places orders on behalf of the Portfolio to effect the investment
decisions made.
The Current Sub-Advisory Agreement provides that the Sub-Adviser shall not be
liable for any loss, liability, claim, damage or expense suffered by the
Portfolio in connection with the matters to which the Current Sub-Advisory
Agreement relates except a loss, liability, claim, damage or expense resulting
from willful misfeasance, bad faith or gross negligence of its obligations or
duties under the Current Sub-Advisory Agreement.
The Sub-Adviser's activities are subject to the review and supervision of the
Adviser and the Board of Trustees to which the Sub-Adviser renders periodic
reports with respect to the Portfolio's investment activities. The Current Sub-
Advisory Agreement may be terminated by either party, at any time, without
penalty, upon 60 days' written notice, and automatically terminates in the event
of its assignment (as that term is defined in Section 2(a)(42) of the 1940 Act).
The net assets of the Portfolio as of August 30, 1996, were $1,647,144.83.
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The table below sets forth the net assets as of August 30, 1996 and the rates
of compensation for services as a percentage of net assets for investment
companies advised or sub-advised by the Sub-Adviser which have similar
investment objectives to the Portfolio.
<TABLE>
<CAPTION>
NET ASSETS AS OF
FUND NAME AUGUST 30, 1996 FEE SCHEDULE
- --------- ---------------- ------------
(IN MILLIONS)
<S> <C> <C>
Van Kampen American Capital
Emerging Growth Fund..................... $2,277.8 (1)
Common Sense Trust
Common Sense Emerging Growth Fund........ 74.9 (2)
Van Kampen American Capital
Life Investment Trust Emerging Growth
Fund (the "Fund")........................ 4.6 (3)
WRL Series Fund, Inc.
Van Kampen American Capital
Emerging Growth Portfolio (the "WRL
Fund")................................... 394.4 (4)
</TABLE>
- ---------------
(1) 0.575% on the first $350 million; 0.525% on the next $350 million; 0.475% on
the next $350 million; and 0.435% on the excess over $1.05 billion.
(2) 0.65% on the first $1 billion; 0.60% on the next $1 billion, 0.55% on the
next $1 billion; 0.50% on the next $1 billion; and 0.45% on the excess over
$4 billion.
(3) 0.70% of the Fund's average daily net assets.
(4) 50% of the fees received by the investment adviser to the WRL Fund less 50%
of the amount of any excess expenses paid by the investment adviser on
behalf of the Fund.
Under the terms of the Current Sub-Advisory Agreement, the Adviser shall pay
to Sub-Adviser, as full compensation for services rendered with respect to the
Portfolio, a monthly fee at the annual rate of .50% based on the average daily
net assets of the Portfolio.
For the period January 2, 1996 (commencement of the Portfolio's operations) to
July 2, 1996, the Sub-Adviser voluntarily waived its fees.
For the period July 2, 1996 to August 31, 1996, the Sub-Adviser received
$970.17 in the aggregate as payment for services rendered under the Current
Sub-Advisory Agreement.
THE NEW SUB-ADVISORY AGREEMENT. The Board of Trustees approved a proposed New
Sub-Advisory Agreement among the Sub-Adviser, the Adviser and the Trust on
August 29, 1996. The proposed New Sub-Advisory Agreement which is attached to
this Proxy Statement as Annex A, has been marked to show changes from the
Current Sub-Advisory Agreement. THE FORM OF THE PROPOSED NEW SUB-ADVISORY
AGREEMENT IS SUBSTANTIALLY IDENTICAL TO THE CURRENT SUB-ADVISORY AGREE-
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MENT AMONG THE SUB-ADVISER, THE ADVISER AND THE TRUST, EXCEPT FOR THE DATES OF
EXECUTION, EFFECTIVENESS AND TERMINATION.
The investment sub-advisory fee as a percentage of net assets payable by the
Adviser to the Sub-Adviser will be the same under the New Sub-Advisory Agreement
as under the Current Sub-Advisory Agreement. If the investment sub-advisory fee
under the New Sub-Advisory Agreement had been in effect since commencement of
the Portfolio's investment operations, subadvisory fees paid to the Sub-Adviser
by the Portfolio would have been identical to those paid under the Current
Sub-Advisory Agreement.
The Board of Trustees of the Trust held a meeting on August 29, 1996, at which
meeting the Trustees, including the Disinterested Trustees, concluded that if
the Acquisition occurs, entry by the Trust into the New Sub-Advisory Agreement
would be in the best interests of the Trust and the Shareholders of the
Portfolio. The Board of Trustees, including the Disinterested Trustees,
unanimously approved the New Sub-Advisory Agreement for the Portfolio and
recommended such agreement be submitted for approval by the Shareholders of the
Portfolio at the Meeting. The New Sub-Advisory Agreement would take effect upon
the later to occur of (i) the obtaining of shareholder approval or (ii) the
closing of the Acquisition. The New Sub-Advisory Agreement will continue in
effect until April 30, 1997 and thereafter for successive annual periods as long
as such continuance is approved in accordance with the 1940 Act.
In evaluating the New Sub-Advisory Agreement, the Board of Trustees of the
Trust took into account that the Current Sub-Advisory Agreement and the New
Sub-Advisory Agreement, including the terms relating to the services to be
provided thereunder by the Sub-Adviser and the fees and expenses payable by the
Adviser to the Sub-Adviser, are substantially identical, except for the dates of
execution, effectiveness and termination. The Trustees also considered other
possible benefits to the Sub-Adviser and Morgan Stanley that may result from the
Acquisition, including the continued use, to the extent permitted by law, of
Morgan Stanley & Co. and its affiliates for brokerage services.
The Board of Trustees also considered the terms of the Merger Agreement and
the possible effects of the Acquisition upon VKAC's and the Sub-Adviser's
organization and upon the ability of the Sub-Adviser to provide sub-advisory
services to the Trust. The Board of Trustees considered the skills and
capabilities of the Sub-Adviser and the representations of Morgan Stanley that
no material change was planned in the current management or facilities of the
Sub-Adviser. The Board considered the financial resources of Morgan Stanley and
Morgan Stanley's representation to the Board that it will provide sufficient
capital to support the operations of the Sub-Adviser. The Board of Trustees also
considered the reputation, expertise and resources of Morgan Stanley and its
affiliates in domestic and international financial markets. The Board of
Trustees considered the continued
10
<PAGE> 14
employment of members of senior management of the Sub-Adviser and VKAC pursuant
to employment and retention agreements and the incentives provided to such
members and other key employees of the Sub-Adviser and VKAC, to be important to
help to assure continuity of the personnel primarily responsible for maintaining
the quality of investment sub-advisory and other services for the Portfolio.
The Board of Trustees considered the effects on the Trust of the Sub-Adviser
becoming an affiliated person of Morgan Stanley. Following the Acquisition, the
1940 Act will prohibit or impose certain conditions on the ability of the
Portfolio to engage in certain transactions with Morgan Stanley and its
affiliates. For example, absent exemptive relief, the Trust will be prohibited
from purchasing securities from Morgan Stanley & Co., a wholly-owned
broker-dealer subsidiary of Morgan Stanley, in transactions in which Morgan
Stanley & Co. acts as a principal, and the Trust will have to satisfy certain
conditions in order to engage in securities transactions in which Morgan Stanley
& Co. acts as a broker or to purchase securities in an underwritten offering in
which Morgan Stanley & Co. is acting as an underwriter. In this connection,
management of the Sub-Adviser represented to the Board of Trustees that it did
not believe these prohibitions or conditions will have a material effect on the
management or performance of the Portfolio.
The Board of Trustees was advised that Section 15(f) of the 1940 Act is
applicable to the Acquisition. Section 15(f) of the 1940 Act permits, in the
context of a change in control of an investment adviser to a registered
investment company, the receipt by such investment adviser, or any of its
affiliated persons, of an amount of benefit in connection with such sale, as
long as two conditions are satisfied. First, an "unfair burden" must not be
imposed on the investment company for which the investment adviser acts in such
capacity as a result of the sale of such interest, or any express or implied
terms, conditions or understandings applicable thereto. The term "unfair
burden," as defined in the 1940 Act, includes any arrangement during the
two-year period after the transaction whereby the investment adviser (or
predecessor or successor adviser), or any interested person of any such adviser,
receives or is entitled to receive any compensation, directly or indirectly,
from the investment company or its security holders (other than fees for bona
fide investment advisory and other services), or from any person in connection
with the purchase or sale of securities or other property to, from or on behalf
of the investment company (other than ordinary fees for bona fide principal
underwriting services).
Management of the Trust is aware of no circumstances arising from the
Acquisition, preparatory transactions to the Acquisition or any potential
financing that might result in the imposition of an "unfair burden" on the
Trust. Moreover, Morgan Stanley has agreed in the Merger Agreement that, upon
consummation of the Acquisition, it will take no action which would have the
effect, directly or
11
<PAGE> 15
indirectly, of violating any of the provisions of Section 15(f) of the 1940 Act
in respect of the Acquisition. In this regard, the Merger Agreement provides
that Morgan Stanley will use its reasonable best efforts to assure that (i) no
"unfair burden" will be imposed on any fund as a result of the transactions
contemplated by the Merger Agreement and (ii) except as provided in the Merger
Agreement, the investment advisory fees paid by the Portfolio will not be
increased for a period of two years from the closing of the Acquisition and
that, during such period, advisory fee waivers shall not be permitted to expire
except in accordance with their terms. The Sub-Adviser may permit a voluntary
fee waiver unilaterally adopted by it to expire at any time and no assurance can
be given that voluntary waivers will not be permitted to expire during the two
year period. During the two year period following the Acquisition, the
Sub-Adviser does not intend to change its policies with respect to the
circumstances under which voluntary fee waivers may be permitted to expire.
Following the Acquisition, to the extent permitted by applicable law, VKAC
anticipates that the Portfolio will continue to use Morgan Stanley & Co. and its
affiliates for brokerage services.
The second condition of Section 15(f) is that during the three-year period
immediately following a transaction to which Section 15(f) is applicable, at
least 75% of the subject investment company's board of directors must not be
"interested persons" (as defined in the 1940 Act) of the investment company's
sub-adviser or predecessor sub-adviser. The current composition of the Board of
Trustees of the Trust would be in compliance with such condition subsequent to
the Acquisition.
Based upon its review, the Board of Trustees concluded that the New Sub-
Advisory Agreement is in the best interest of the Trust and the Portfolio's
Shareholders. Accordingly, after consideration of the above factors, and such
other factors and information that it deemed relevant, the Board of Trustees of
the Trust, including the Disinterested Trustees, unanimously approved the New
Sub-Advisory Agreement and voted to recommend its approval to the Shareholders
of the Portfolio.
In the event that Shareholders of the Portfolio do not approve the New Sub-
Advisory Agreement and the Acquisition is consummated, the Board of Trustees of
the Trust would seek to obtain for the Portfolio interim investment advisory
services at the lesser of cost or the current fee rate either from the
Sub-Adviser or from another advisory organization. Thereafter, the Board of
Trustees of the Trust would either negotiate a new sub-advisory agreement with
an advisory organization selected by the Board of Trustees or make appropriate
arrangements, in either event subject to approval of the Shareholders of the
Portfolio. In the event the Acquisition is not consummated, the Sub-Adviser
would continue to serve as sub-adviser of the Portfolio pursuant to the terms of
the Current Sub-Advisory Agreement.
12
<PAGE> 16
SHAREHOLDER APPROVAL
To become effective, the New Sub-Advisory Agreement must be approved by a
majority of the outstanding voting securities of the Portfolio. The "vote of a
majority of the outstanding voting securities" is defined under "Voting" above.
The New Sub-Advisory Agreement was unanimously approved by the Board of Trustees
after consideration of all factors which they determined to be relevant to their
deliberations, including those discussed above. The Board of Trustees also
unanimously determined to submit the New Sub-Advisory Agreement for
consideration by the Shareholders of the Portfolio. THE BOARD OF TRUSTEES
RECOMMENDS A VOTE "FOR" APPROVAL OF THE NEW SUB-ADVISORY AGREEMENT.
13
<PAGE> 17
OTHER INFORMATION
DIRECTORS AND OFFICERS OF THE SUB-ADVISER
The following table sets forth certain information concerning the principal
executive officers and directors of the Sub-Adviser.
DIRECTORS AND OFFICERS OF THE SUB-ADVISER
<TABLE>
<CAPTION>
NAME AND ADDRESS PRINCIPAL OCCUPATION
- ---------------------------- ----------------------------------------------
<S> <C>
Don G. Powell............... President, Chief Executive Officer and a
2800 Post Oak Blvd. Director of VKAC Holding and VKAC and
Houston, TX 77056 Chairman, Chief Executive Officer and a
Director of VKAC Distributors, the
Sub-Adviser, Van Kampen American Capital
Investment Advisory Corp., Van Kampen American
Capital Management, Inc. and Van Kampen
American Capital Advisors, Inc. Chairman,
President and a Director of Van Kampen
American Capital Exchange Corporation,
American Capital Contractual Services, Inc.,
Van Kampen Merritt Equity Holdings Corp., and
American Capital Shareholders Corporation.
Chairman and a Director of ACCESS Investor
Services, Inc. ("ACCESS"), Van Kampen Merritt
Equity Advisors Corp., McCarthy, Crisanti &
Maffei, Inc., and Van Kampen American Capital
Trust Company. Chairman, President and a
Director of Van Kampen American Capital
Services, Inc. Prior to July 1996, Chairman
and Director of VSM Inc. and VCJ Inc. Prior to
July 1996, President, Chief Executive Officer
and a Trustee/Director of open-end investment
companies and closed-end investment companies
advised by the Sub-Adviser and Van Kampen
American Capital Investment Advisory Corp.
Dennis J. McDonnell......... President, Chief Operating Officer and a
One Parkview Plaza Director of the Sub-Adviser and Van Kampen
Oakbrook Terrace, IL 60181 American Capital Investment Advisory Corp.,
Van Kampen American Capital Advisors, Inc. and
Van Kampen American Capital Management, Inc.
Executive Vice President and a Director of
VKAC Holding and VKAC. President and Director
of Van Kampen Merritt Equity Advisors Corp.
Director of Van Kampen Merritt Equity Holdings
Corp. and McCarthy, Crisanti & Maffei, S.A.
Chief Executive Officer and Director of
McCarthy, Crisanti & Maffei, Inc. Chairman and
a Director of MCM Asia Pacific Company,
Limited. President and a Trustee/Director of
open-end investment companies and closed-end
investment companies advised by the
Sub-Adviser and Van Kampen American Capital
Investment Advisory Corp. Prior to July 1996,
President, Chief Operating Officer and
Director of VSM Inc. and VCJ Inc. Prior to
December, 1991, Senior Vice President of Van
Kampen Merritt, Inc.
</TABLE>
14
<PAGE> 18
<TABLE>
<CAPTION>
NAME AND ADDRESS PRINCIPAL OCCUPATION
- ---------------------------- ----------------------------------------------
<S> <C>
Ronald A. Nyberg............ Executive Vice President, General Counsel and
One Parkview Plaza Secretary of VKAC Holding and VKAC. Executive
Oakbrook Terrace, IL 60181 Vice President, General Counsel and a Director
of VKAC Distributors, the Sub-Adviser and Van
Kampen American Capital Investment Advisory
Corp., Van Kampen American Capital Management,
Inc., Van Kampen Merritt Equity Advisors
Corp., and Van Kampen Merritt Equity Holdings
Corp. Executive Vice President, General
Counsel and Assistant Secretary of Van Kampen
American Capital Advisors, Inc., American
Capital Contractual Services, Inc., Van Kampen
American Capital Exchange Corporation, ACCESS
Investors Services, Inc., Van Kampen American
Capital Services, Inc. and American Capital
Shareholders Corporation. Executive Vice
President, General Counsel, Assistant
Secretary and Director of Van Kampen American
Capital Trust Company. General Counsel of
McCarthy, Crisanti & Maffei, Inc. Vice
President and Secretary of open-end investment
companies and closed-end investment companies
advised by the Sub-Adviser and Van Kampen
American Capital Investment Advisory Corp.
Director of ICI Mutual Insurance Co., a
provider of insurance to members of the
Investment Company Institute. Prior to July
1996, Executive Vice President and General
Counsel of VSM Inc., and Executive Vice
President, General Counsel and Director of VCJ
Inc.
</TABLE>
15
<PAGE> 19
<TABLE>
<CAPTION>
NAME AND ADDRESS PRINCIPAL OCCUPATION
- ---------------------------- ----------------------------------------------
<S> <C>
William R. Rybak............ Executive Vice President and Chief Financial
One Parkview Plaza Officer of VKAC Holding and VKAC since
Oakbrook Terrace, IL 60181 February 1993, and Treasurer of VKAC Holding
through December 1993. Executive Vice
President, Chief Financial Officer and a
Director of VKAC Distributors, the Sub-
Adviser, Van Kampen American Capital
Investment Advisory Corp., and Van Kampen
American Capital Management, Inc. Executive
Vice President, Chief Financial Officer,
Treasurer and a Director of Van Kampen Merritt
Equity Advisors Corp. Executive Vice President
and Chief Financial Officer of the Van Kampen
American Capital Advisors, Inc., Van Kampen
American Capital Exchange Corporation, Van
Kampen American Capital Trust Company, ACCESS
Investor Services, Inc., and American Capital
Contractual Services, Inc. Executive Vice
President, Chief Financial Officer and
Treasurer of American Capital Shareholders
Corporation, Van Kampen American Capital
Services, Inc. and Van Kampen Merritt Equity
Holdings Corp. Chief Financial Officer and
Treasurer of McCarthy, Crisanti & Maffei, Inc.
Chairman of the Board of Hinsdale Financial
Corp., a savings and loan holding company.
Prior to July 1996, Executive Vice President,
Chief Financial Officer and a Director of VCJ
Inc., and Executive Vice President and Chief
Financial Officer of VSM Inc.
Peter W. Hegel.............. Executive Vice President of Van Kampen
One Parkview Plaza American Capital Investment Advisory Corp.,
Oakbrook Terrace, IL 60181 the Sub-Adviser, Van Kampen American Capital
Advisors, Inc., Van Kampen American Capital
Management, Inc. Executive Vice President and
Director of Sub-Adviser. Director of McCarthy,
Crisanti & Maffei, Inc. Vice President of
open-end investment companies and closed-end
investment companies advised by the Sub-
Adviser and Van Kampen American Capital
Investment Advisory Corp. Prior to July 1996,
Director of VSM Inc.
Robert C. Peck, Jr.......... Executive Vice President of Van Kampen
2800 Post Oak Blvd. American Capital Investment Advisory Corp. and
Houston, TX 77056 Van Kampen American Capital Management, Inc.
Executive Vice President and Director of the
Sub-Adviser and Van Kampen American Capital
Advisors, Inc. Vice President of open-end
investment companies advised by the
Sub-Adviser and Van Kampen American Capital
Investment Advisory Corp.
</TABLE>
16
<PAGE> 20
<TABLE>
<CAPTION>
NAME AND ADDRESS PRINCIPAL OCCUPATION
- ---------------------------- ----------------------------------------------
<S> <C>
Alan T. Sachtleben.......... Executive Vice President of Van Kampen
2800 Post Oak Blvd. American Capital Investment Advisory Corp. and
Houston, TX 77056 Van Kampen American Capital Management, Inc.
Executive Vice President and a Director of the
Sub-Adviser and Van Kampen American Capital
Advisors, Inc. Vice President of open-end
investment companies advised by the
Sub-Adviser and Van Kampen American Capital
Investment Advisory Corp.
</TABLE>
There is no individual who serves as a trustee or officer of the Trust who is
also an officer of the Sub-Adviser.
The following individuals serve as officers or trustee of the Trust and also
serve as officers of the Adviser:
<TABLE>
<CAPTION>
POSITION WITH POSITION WITH
NAME THE TRUST THE ADVISER
- --------------------- -------------------- --------------------
<S> <C> <C>
Richard W. Scott..... President, Principal President, Chief
Executive Officer, Executive Officer
Trustee and Director
Dwight L. Cramer..... Vice President and Secretary and
Secretary Director
Kurt R. Fredland..... Vice President and Chief Financial
Assistant Treasurer Officer and Director
Evelyn M. Curran..... Assistant Secretary Assistant Secretary.
</TABLE>
SUBSTANTIAL SHAREHOLDERS
As of the Record Date, WNL Separate Account A, a separate account of Western
National Life, was known to the Board of Trustees and the management of the
Trust to own of record 100% of the Shares. On that date, the officers and
trustees of the Trust owned no Variable Contracts.
17
<PAGE> 21
- ------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------
VKAC Holding will pay the expense of preparing, printing and mailing the
enclosed form of proxy, the accompanying Notice and this Proxy Statement.
If Western National Life deems it necessary to solicit additional voting
instructions from Variable Contract owners, additional solicitation may be made
by mail or telephone by representatives of Western National Life or by First
Data Investors Services Group, a solicitation firm located in Boston,
Massachusetts that has been engaged to assist in proxy solicitation at an
estimated cost of approximately $2,000.
YOU ARE REQUESTED TO FILL IN, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
Dwight L. Cramer
Vice President and Secretary
September 23, 1996
18
<PAGE> 22
ANNEX A
- ------------------------------------------------------------------------------
WNL SERIES TRUST
FORM OF PROPOSED NEW SUB-ADVISORY AGREEMENT
MARKED TO INDICATE CHANGES FROM CURRENT SUB-ADVISORY AGREEMENT
- ------------------------------------------------------------------------------
AGREEMENT dated as of [DATE], among VAN KAMPEN AMERICAN CAPITAL ASSET
MANAGEMENT, INC., a Delaware corporation (the "Sub-Adviser"), WNL INVESTMENT
ADVISORY SERVICES, INC., a Delaware corporation (the "Adviser"), and WNL SERIES
TRUST, a Massachusetts business trust (the "Trust").
WHEREAS, Adviser has entered into an Investment Advisory Agreement (referred
to herein as the "Advisory Agreement"), dated August 23, 1995, with the Trust,
under which Adviser has agreed to act as investment adviser to the Trust, which
is registered as an open-end diversified management investment company under the
Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Advisory Agreement provides that the Adviser may engage a
sub-adviser or sub-advisers for the purpose of managing the investments of the
Portfolios of the Trust; and
WHEREAS, the Adviser desires to retain Sub-Adviser, which is engaged in the
business of rendering investment management services, to provide certain
investment management services for the Van Kampen American Capital Emerging
Growth Portfolio (the "Portfolio") of the Trust as more fully described below;
and
WHEREAS, it is the purpose of this Agreement to express the mutual agreements
of the parties hereto with respect to the services to be provided by Sub-Adviser
to Adviser with respect to the Portfolio and the terms and conditions under
which such services will be rendered.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the parties hereto agree as follows:
1. Services of Sub-Adviser. The Sub-Adviser shall act as investment counsel to
the Adviser with respect to the Portfolio. In this capacity, Sub-Adviser shall
have the following responsibilities:
(a) to furnish continuous investment information, advice and
recommendations to the Adviser as to the acquisition, holding or disposition
of any or all of the securities or other assets which the Portfolio may own
or contemplate acquiring from time to time;
(b) to cause its officers to attend meetings of the Adviser or the Trust
and furnish oral or written reports, as the Adviser may reasonably require,
in
A-1
<PAGE> 23
order to keep the Adviser and its officers and the Trustees of the Trust and
appropriate officers of the Trust fully informed as to the condition of the
investment securities of the Portfolio, the investment recommendations of
the Sub-Adviser, and the investment considerations which have given rise to
those recommendations;
(c) to furnish such statistical and analytical information and reports
as may reasonably be required by the Adviser from time to time; and
(d) to supervise and place orders for the purchase, sale, exchange and
conversion of securities as directed by the appropriate officers of the
Trust or of the Adviser.
2. Obligations of the Adviser. The Adviser shall have the following
obligations under this Agreement:
(a) to keep the Sub-Adviser continuously and fully informed as to the
composition of the Portfolio's investment securities and the nature of the
Portfolio's assets and liabilities;
(b) to keep the Sub-Adviser continually and fully advised of the
Portfolio's investment objectives, and any modifications and changes
thereto, as well as any specific investment restrictions or limitations by
sending the Sub-Adviser copies of each registration statement;
(c) to furnish the Sub-Adviser with a certified copy of any financial
statement or report prepared for the Trust with respect to the Portfolio by
certified or independent public accountants, and with copies of any
financial statements or reports made by the Trust to shareholders or to any
governmental body or securities exchange and to inform the Sub-Adviser of
the results of any audits or examinations by regulatory authorities
pertaining to the Portfolio, if these results affect the services provided
by the Sub-Adviser pursuant to this Agreement;
(d) to furnish the Sub-Adviser with any further materials or information
which the Sub-Adviser may reasonably request to enable it to perform its
functions under this Agreement; and
(e) to compensate the Sub-Adviser for its services under this Agreement
by the payment of fees as set forth in Exhibit A attached hereto.
3. Portfolio Transactions. The Sub-Adviser shall place all orders for the
purchase and sale of portfolio securities for the account of the Portfolio with
broker-dealers selected by the Sub-Adviser. In executing portfolio transactions
and selecting broker-dealers, the Sub-Adviser will use its best efforts to seek
best execution on behalf of the Portfolio. In assessing the best execution
available for
A-2
<PAGE> 24
any transaction, the Sub-Adviser shall consider all factors it deems relevant,
including the breadth of the market in the security, the price of the security,
the financial condition and execution capability of the broker-dealer, and the
reasonableness of the commission, if any (all for the specific transaction and
on a continuing basis). In evaluating the best execution available, and in
selecting the broker-dealer to execute a particular transaction, the Sub-Adviser
may also consider the brokerage and research services (as those terms are used
in Section 28(e) of the Securities Exchange Act of 1934) provided to the
Portfolio and/or other accounts over which the Sub-Adviser, an affiliate of the
Sub-Adviser (to the extent permitted by law) or another investment adviser of
the Portfolio exercises investment discretion. The Sub-Adviser is authorized to
cause the Portfolio to pay a broker-dealer who provides such brokerage and
research services a commission for executing a portfolio transaction for the
Portfolio which is in excess of the amount of commission another broker-dealer
would have charged for effecting that transaction if, but only if, the
Sub-Adviser determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker-dealer viewed in terms of that particular transaction or in terms of all
of the accounts over which investment discretion is so exercised.
4. Marketing Support. The Sub-Adviser shall provide marketing support to the
Adviser in connection with the sale of Trust shares and/or the sale of variable
annuity and variable life insurance contracts issued by Western National Life
Insurance Company and its affiliates which may invest in the Trust
(collectively, the "Life Company"), as reasonably requested by the Adviser. Such
support shall include, but not necessarily be limited to, presentations by
representatives of the Sub-Adviser at investment seminars, conferences and other
industry meetings. Any materials utilized by the Adviser which contain any
information relating to the Sub-Adviser shall be submitted to the Sub-Adviser
for approval prior to use, not less than five (5) business days before such
approval is needed by the Adviser. Any materials utilized by the Sub-Adviser
which contain any information relating to the Adviser, the Life Company
(including any information relating to its separate accounts or variable annuity
or variable life insurance contracts) or the Trust shall be submitted to the
Adviser for approval prior to use, not less than five (5) business days before
such approval is needed by the Sub-Adviser.
5. Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the Commonwealth of Massachusetts.
6. Execution of Agreement. This Agreement will become binding on the parties
hereto upon their execution of the attached Exhibit A to this Agreement.
7. Compliance With Laws. The Sub-Adviser represents that it is, and will
continue to be throughout the term of this Agreement, an investment adviser
registered under all applicable federal and state laws. In all matters relating
to the performance of this Agreement, the Sub-Adviser will act in conformity
with the
A-3
<PAGE> 25
Trust's Declaration of Trust, Bylaws, and current registration statement
applicable to the Portfolio and with the instructions and direction of the
Adviser and the Trust's Trustees, and will conform to and comply with the 1940
Act and all other applicable federal or state laws and regulations.
8. Termination. This Agreement shall terminate automatically upon the
termination of the Advisory Agreement. This Agreement may be terminated at any
time, without penalty, by the Adviser or by the Trust by giving sixty (60) days'
written notice of such termination to the Sub-Adviser at its principal place of
business, provided that such termination is approved by the Board of Trustees of
the Trust or by vote of a majority of the outstanding voting securities (as that
phrase is defined in Section 2(a)(42) of the 1940 Act) of the Portfolio. This
Agreement may be terminated at any time by the Sub-Adviser by giving 60 days'
written notice of such termination to the Trust and the Adviser at their
respective principal places of business.
9. Assignment. This Agreement shall terminate automatically in the event of
any assignment (as that term is defined in Section 2(a)(4) of the 1940 Act) of
this Agreement.
10. Term. This Agreement shall begin on the date of its execution and unless
sooner terminated in accordance with its terms shall continue in effect until
April 30, 1997 and from year to year thereafter provided continuance is
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons (as the
term is defined in Section 2(a)(19) of the 1940 Act) of any such party, cast in
person at a meeting called for the purpose of voting on the approval of the
terms of such renewal, and by either the Trustees of the Trust or the
affirmative vote of a majority of the outstanding voting securities of the
Portfolio (as that phrase is defined in Section 2(a)(42) of the 1940 Act).
11. Amendments. This Agreement may be amended only with the approval by the
affirmative vote of a majority of the outstanding voting securities of the
Portfolio (as that phrase is defined in Section 2(a)(42) of the 1940 Act) and
the approval by the vote of a majority of the Trustees of the Trust who are not
parties hereto or interested persons (as that term is defined in Section
2(a)(19) of the 1940 Act) of any such party, cast in person at a meeting called
for the purpose of voting on the approval of such amendment, unless otherwise
permitted in accordance with the 1940 Act.
12. Indemnification. The Adviser shall indemnify and hold harmless the Sub-
Adviser, its officers and directors and each person, if any, who controls the
Sub-Adviser within the meaning of Section 15 of the Securities Act of 1933
("1933 Act") (any and all such persons shall be referred to as "Indemnified
Party"), against any loss, liability, claim, damage or expense (including the
A-4
<PAGE> 26
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages or expense and reasonable counsel fees incurred in connection
therewith), arising by reason of any matter to which this Sub-Advisory Agreement
relates. However, in no case (i) is this indemnity to be deemed to protect any
particular Indemnified Party against any liability to which such Indemnified
Party would otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of reckless
disregard of its obligations and duties under this Sub-Advisory Agreement or
(ii) is the Adviser to be liable under this indemnity with respect to any claim
made against any particular Indemnified Party unless such Indemnified Party
shall have notified the Adviser in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon the Sub-Adviser or such controlling persons.
The Sub-Adviser shall indemnify and hold harmless the Adviser and each of its
directors and officers and each person if any who controls the Adviser within
the meaning of Section 15 of the 1933 Act, against any loss, liability, claim,
damage or expense described in the foregoing indemnity, but only with respect to
the Sub-Adviser's willful misfeasance, bad faith or gross negligence in the
performance of its duties under this Sub-Advisory Agreement. In case any action
shall be brought against the Adviser or any person so indemnified, in respect of
which indemnity may be sought against the Sub-Adviser, the Sub-Adviser shall
have the rights and duties given to the Adviser, and the Adviser and each person
so indemnified shall have the rights and duties given to the Sub-Adviser by the
provisions of subsections (i) and (ii) of this section.
A-5
<PAGE> 27
EXHIBIT A
WNL SERIES TRUST
SUB-ADVISORY COMPENSATION
For all services rendered by Sub-Adviser hereunder, Adviser shall pay to Sub-
Adviser and Sub-Adviser agrees to accept as full compensation for all services
rendered hereunder, monthly a fee of:
VAN KAMPEN AMERICAN CAPITAL EMERGING GROWTH PORTFOLIO
.50 of 1% on an annualized basis of net assets under management.
WNL SERIES TRUST
By:
------------------------------------
Title:
WNL INVESTMENT ADVISORY SERVICES,
INC.
By:
------------------------------------
Title:
VAN KAMPEN AMERICAN CAPITAL ASSET
MANAGEMENT, INC.
By:
------------------------------------
Title:
A copy of the document establishing the Trust is filed with the Secretary of the
Commonwealth of Massachusetts. This Agreement is executed by officers not as
individuals and is not binding upon any of the Trustees, officers or
shareholders of the Trust individually but only upon the assets of each
Portfolio.
A-6
<PAGE> 28
VAN KAMPEN AMERICAN CAPITAL
EMERGING GROWTH PORTFOLIO
INSTRUCTIONS TO WESTERN NATIONAL LIFE INSURANCE COMPANY
FOR THE SPECIAL MEETING OF SHAREHOLDERS OF
WNL SERIES TRUST TO BE HELD ON OCTOBER 16, 1996
INSTRUCTIONS SOLICITED ON BEHALF OF
WESTERN NATIONAL LIFE INSURANCE COMPANY
The undersigned hereby instructs Western National Life Insurance Company (the
"Company") to vote all shares of the above-referenced Portfolio of WNL SERIES
TRUST (the "Trust") represented by shares held by the undersigned at a special
meeting of shareholders of the Trust to be held at 9:30 a.m., local time, on
October 16, 1996, at the offices of Western National Life Insurance Company,
5555 San Felipe, Suite 900, Houston, Texas and at any adjournment thereof, as
indicated on the reverse side.
Dated: 1996
-------------------------,
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing
as attorney, executor, administrator, trustee, guardian, or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please
sign the partnership name and your name. Joint owners should each sign this
proxy. Please sign, date and return.
- ---------------------------------------
Signature(s)
<PAGE> 29
IMPORTANT: PLEASE SIGN AND DATE THIS FORM ON THE REVERSE SIDE
AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
INSTRUCTIONS SOLICITED ON BEHALF OF WESTERN NATIONAL LIFE INSURANCE COMPANY
WESTERN NATIONAL LIFE INSURANCE COMPANY WILL VOTE SHARES HELD ON BEHALF OF THE
CONTRACT OWNER AS INDICATED BELOW OR FOR THE PROPOSAL IF NO CHOICE IS
INDICATED.
RECEIPT OF THE NOTICE OF THE SPECIAL MEETING AND THE ACCOMPANYING PROXY
STATEMENT IS HEREBY ACKNOWLEDGED.
IF THIS INSTRUCTION FORM IS SIGNED AND RETURNED AND NO SPECIFICATION IS MADE,
THE COMPANY SHALL VOTE FOR ALL THE PROPOSALS. IF THIS INSTRUCTION CARD IS NOT
RETURNED OR IS RETURNED UNSIGNED, THE COMPANY SHALL VOTE YOUR SHARES IN THE
SAME PROPORTION AS IT VOTES THE SHARES FOR WHICH IT HAS RECEIVED INSTRUCTIONS.
Please vote by filling in the appropriate box below, as shown, using blue or
black ink or dark pencil. Do not use red ink.
FOR AGAINST ABSTAIN FROM
[ ] [ ] [ ] 1. To approve a new
Sub-Advisory Agreement
between Van Kampen American
Capital Asset Management,
Inc., WNL Investment
Advisory Services, Inc. and
WNL Series Trust.
IMPORTANT: Please sign on the reverse side.
<PAGE> 30
PROXY
VAN KAMPEN AMERICAN CAPITAL EMERGING GROWTH PORTFOLIO
OF
WNL SERIES TRUST
SPECIAL MEETING OF SHAREHOLDERS
OCTOBER 16, 1996
KNOW ALL MEN BY THESE PRESENTS that the undersigned shareholder(s) of the Van
Kampen American Capital Emerging Growth Portfolio of WNL Series Trust ("Trust")
hereby appoints __________________, or any one of them true and lawful
attorneys, with power of substitution of each, to vote all shares which the
undersigned is entitled to vote, at the Special Meeting of Shareholders of the
Trust to be held on October 16, 1996 at the offices of Western National Life
Insurance Company, 5555 San Felipe, Suite 900, Houston, Texas at 9:30 a.m.,
local time, and at any adjournment thereof ("Meeting"), as follows:
1. To approve a new Sub-Advisory Agreement between Van Kampen
American Capital Asset Management, Inc., WNL Investment Advisory Services, Inc.
and WNL Series Trust.
FOR ( ) AGAINST ( ) ABSTAIN ( )
------------- ------------ -----------
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Meeting.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR ANY PROPOSAL
FOR WHICH NO CHOICE IS INDICATED.
Dated: , 1996
-------------------
Western National Life Insurance Company
----------------------------------------
Name of Insurance Company
----------------------------------------
Name and Title of Authorized Officer
----------------------------------------
Signature of Authorized Officer
VAN KAMPEN AMERICAN CAPITAL
EMERGING GROWTH PORTFOLIO
Name(s) of Separate Account(s)
of the Insurance Company
Owning Shares in this Portfolio:
WNL SEPARATE ACCOUNT A
TOTAL SHARES OF THIS SERIES
OWNED AND BEING VOTED BY THE
INSURANCE COMPANY:
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